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/raid1/www/Hosts/bankrupt/TCR_Public/060424.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 24, 2006, Vol. 10, No. 96 Headlines ABB LUMMUS: Files Prepackaged Chapter 11 in Delaware ABB LUMMUS: Case Summary & 20 Largest Unsecured Creditors ACCESS WORLDWIDE: Incurs $1.4 Million Net Loss in Fourth Quarter ACE AVIATION: Financial Flexibility Prompts S&P to Lift Ratings AES IRONWOOD: Moody's Places B2 Bond Rating on Watch for Upgrade AFFINITY TECH: Conv. Debt Issue Expanded by 100% to $3 Million AIR CANADA: S&P Affirms Long-Term Corporate Credit Rating at B AIRWAY INDUSTRIES: Committee Taps Alpern Rosenthal as Advisor AIRWAY INDUSTRIES: Taps Ansel Schwartz as Special IP Counsel ALLIANCE COLLATERALIZED: Moody's Cuts Senior Notes' Rating to B2 ALLSERVE SYSTEMS: Court Okays Caspert Management as Auctioneer ALLSERVE SYSTEMS: Trustee Taps XRoads as Special Accountant AMERICAN FINANCIAL: Moody's Rates Sub. Unsecured Debt at (P)Ba1 ANCHOR GLASS: Warner Robins Wants to Discontinue Fuel Service ANCHOR GLASS: Officers Gain Access to Defense Costs Insurance ANCHOR GLASS: Bank of New York Wants Panel's Complaint Dismissed ARMOR HOLDINGS: DoJ & FTC Finish Review of S&S Merger Transaction ASARCO LLC: Court Okays Retention and Recruiting Plan Execution ASARCO LLC: Wants Until September 15 to Decide on Leases ASARCO LLC: Wants to Sell Tennessee Mines to Glencore for $40 Mil. ATA AIRLINES: C8 Airlines' Solicitation Period Extended to July 31 ATA AIRLINES: C8 Airlines' Confirmation Hearing Set for June 6 AZTAR CORP: Ameristar Ups Purchase Offer to $45 per Share BALLY TOTAL: Ronald G. Eidell Replaces Carl J. Landeck as CFO BAREFOOT RESORT: Taps Hatley Law Firm as Closing Counsel BEAR STEARNS: $7.7 Mil. Loss Cues S&P to Lower Class J Certs. to D BGF INDUSTRIES: Posts $4.9 Million Net Loss in Year Ended Dec. 31 BLACK WARRIOR: Balance Sheet Upside-Down by $15.6 Mil. at Dec. 31 BOUNDLESS MOTOR: Losses & Current Deficit Spur Going Concern Doubt CALPINE CORP: Wants Court to Approve Director Compensation Program CALPINE CORP: Wants To Continue Existing Insurance Policies CALPINE CORP: Panel Taps Morgenstern Jacobs as Conflicts Counsel CARRINGTON MORTGAGE: Moody's Rates Class M-10 Certificates at Ba1 CATHOLIC CHURCH: Portland Court Requires Claims to Be Estimated CATHOLIC CHURCH: Portland Wants Construction Contracts Approved CHASE MORTGAGE: S&P Holds Low-B Ratings on 30 Certificate Classes CHEMTURA: Selling $500M Notes to Redeem Sr. Notes & Pay Off Loans COLLINS & AIKMAN: Amends Terms of TR Associates Lease COMVERSE TECH: Delayed 10-K Filing Prompts Nasdaq Delisting Notice CONMED CORP: Foreign Units Get Access to $100-Mil. Revolving Loan COVAD COMMS: Can Borrow Up to $50 Million from Silicon Valley CREDIT SUISSE: Moody's Holds Low-B Ratings on Eight Cert. Classes DANA CORP: Court Gives Final Approval to Maintain Bank Accounts DANA CORP: Rejects Eight Nonresidential Real Property Leases DANA CORP: Utilities Argue Two-Week Cash Deposit Is Inadequate DELTA AIR: Comair Union Wants to Return to Bargaining Table DELTA AIR: Pilots' Union Leadership Ratifies Tentative Agreement DIRECT INSITE: Balance Sheet Upside-Down by $3.73 Mil. at Dec. 31 DIVERSIFIED CORP: Selling Traveling Nurse Biz to MAGIC Healthcare DOBSON COMMS: Fitch Junks Ratings on $420 Million Senior Notes DRESSER INC: Lenders Waive Financial Reporting Default Until Sept. DYNCORP INT'L: Planned IPO Cues Moody's to Review Low Ratings EASY GARDENER: Files for Chapter 11 Protection in Delaware EASY GARDENER: Case Summary & 30 Largest Unsecured Creditors EMMIS COMMS: Reports 4th Fiscal Quarter & Full Year Fin'l Results EPIXTAR CORPORATION: Hires CBIZ McClain as Accountants EPIXTAR CORPORATION: Hires McClain & Company as Auditors FDL INC: Fifth Third Wants Chapter 11 Trustee Appointed FOAMEX INTERNATIONAL: Wants $292 Million Tax NOLs Protected FREMONT HOME: Moody's Puts Low-B Ratings on Class M-9 & B-1 Certs. GENERAL MOTORS: Posts $323 Mil. Net Loss in First Quarter 2006 GENESIS WORLDWIDE: Wants Until Aug. 28 to File Chapter 11 Plan GS MORTGAGE: Moody's May Downgrade Class K-PR Cert.'s Ba1 Rating GS MORTGAGE: Moody's Upgrades Ratings on Class F & G Certificates HALUK BEKIROGLU: Case Summary & 17 Largest Unsecured Creditors HEXION SPECIALTY: Launches Cash Tender Offers for Senior Notes INTEGRATED HEALTH: IHS Liquidating Wants to Settle Nine Tax Claims INTELSAT LTD: Incurs $65.7 Million Net Loss in Fourth Quarter JEAN COUTU: Fitch Junks Rating on Senior Subordinated Notes JILL KELLY: Gets $1.765 Mil. Purchase Offer from Penthouse Media JP MORGAN: Moody's Holds Low-B Ratings on Six Certificate Classes KAISER ALUMINUM: Asks Court to Okay AIG Settlement Agreement KAISER ALUMINUM: Makes Non-Material Changes to 2005 Annual Report KNIGHT RIDDER: Moody's Downgrades Bond Ratings to Ba1 from Baa3 KNOBIAS INC: Russell Bedford Raises Going Concern Doubt LB-UBS COMMERCIAL: Moody's Holds Six Cert. Classes' Low-B Ratings MARINER ENERGY: Prices 7-1/2% Senior Unsecured Notes Due 2013 MAVERICK TUBE: S&P Rates $250 Million Senior Subor. Notes at B MCCLATCHY CO: Moody's Places Debt & Corp. Family Ratings at Ba1 NEWPAGE CORP: IPO Filing Cues S&P to Put B Rating on CreditWatch NORTH WEST TRUCKING: Case Summary & 20 Largest Unsecured Creditors OPTI CANADA: Moody's Places Debt & Corp. Family Ratings at Low-B PASCAGOULA HEALTH: Voluntary Chapter 11 Case Summary PETROHAWK ENERGY: KCS Energy Merger to Create $3.7 Billion Company PETROQUEST ENERGY: S&P Affirms CCC+ Corporate Credit Rating PHOTOCIRCUITS CORP: Hires Quisumbing Torres as Special Counsel PILLOWTEX: Inks Settlement Reducing Wachovia's $2M Claim to $616K PORTALPLAYER INC: Apple Chip Change May Adversely Impact Revenues PREMIUM PAPERS: Affiliates May Access $20 Mil. Wachovia DIP Loan PROCARE AUTOMOTIVE: U.S. Trustee Appoints Seven-Member Committee PROCARE AUTOMOTIVE: Files Schedules of Assets and Liabilities PXRE REINSURANCE: Financial Concerns Prompt Moody's to Cut Ratings SAINT VINCENTS: Agrees on Terms of Rule 2004 Investigation SAINT VINCENTS: Court Extends Time for CIR Union to File Claims SCIENTIFIC GAMES: Completes $138 Million Purchase of Global Draw SPATIALIGHT INC: Odenberg Ullakko Raises Going Concern Doubt SWIFT & CO: S&P Downgrades Corporate Credit Rating to B from BB- SOUTHERN TELECOM: Case Summary & 17 Largest Unsecured Creditors TEXAS PETROCHEMICALS: S&P Rates Proposed $280 Million Loan at B+ TXU CORPORATION: Investing $10 Billion for Texas Power Plants UBIQUITEL INC: Agrees to $1.3 Billion Sprint Nextel Purchase UNITED COMPONENTS: Proposed $155MM ASC Buy Cues S&P to Cut Ratings W.R. GRACE: Futures Rep. Replaces CIBC Piper Jaffray as Advisor W.R. GRACE: Futures Rep. Wants Orrick Herrington as Counsel W.R. GRACE: Wants to Contribute to Chicago 51st Pension Plan WARRIOR ENERGY: Expects to Raise $163.5 Million in Stock Sale WESTAR ENERGY: Moody's Reviewing Ba1 Debt Rating and May Upgrade WINDOW ROCK: Gets Court Okay to Hire Squar Milner as Accountants WINN-DIXIE: Former Employees & Retirees Want Documents Produced WINN-DIXIE: Wants Gem Cedar Lease Rejected Effective April 20 WINN-DIXIE: Wants to Ink Commercial Surety Pact With RLI Insurance WOOD RESOURCES: Canceled Offering Cues S&P to Withdraw B- Rating WORLDCOM INC: Inks Stipulation Settling Philadelphia's Tax Claims * BOND PRICING: For the week of April 17 - April 21, 2006 ********* ABB LUMMUS: Files Prepackaged Chapter 11 in Delaware ---------------------------------------------------- ABB Lummus Global Inc., filed a voluntary pre-packaged Chapter 11 Plan of Reorganization in the U.S. Bankruptcy Court for the District of Delaware on April 21. In a statement, the group said the Lummus Plan of Reorganization is aimed at satisfying current and future claims relating to asbestos. The plan was approved by 96% of claimants in September 2005. The company expects Lummus to complete the Chapter 11 proceedings in the second half of the year. In addition, the Plan of Reorganization for ABB's U.S. subsidiary, Combustion Engineering, became effective on April 1. ABB has now transferred, in accordance with the plan, the approximately 30 million shares it set aside for the CE Asbestos PI Trust. The filing came weeks after ABB finalized its $1.43 billion Combustion Engineering Reorganization Plan, which took effect Friday, April 21, 2006. ABB added, "ABB has now transferred, in accordance with the plan, the approximately 30 million shares it set aside for the CE Asbestos PI Trust." About ABB Lummus Global Headquartered in Bloomfield, New Jersey, ABB Lummus Global Inc., -- http://www.abb.com/lummus-- offers advanced process technologies, project management, engineering, procurement and construction-related services for the oil and gas, petroleum refining and petrochemical process industries. The group oversees the construction of process plants and offshore facilities. ABB LUMMUS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: ABB Lummus Global Inc. 3010 Briarpark Drive Houston, Texas 77042 Bankruptcy Case No.: 06-10401 Type of Business: The Debtor offers advanced process technologies, project management, engineering, procurement and construction-related services for the oil and gas, petroleum refining and petrochemical process industries. See http://www.abb.com/lummus The Debtor's affiliate, Combustion Engineering, Inc., filed for chapter 11 protection on February 17, 2003 (Bankr. D. Delaware, Case No. 03-10495). Chapter 11 Petition Date: April 21, 2006 Court: District of Delaware (Delaware) Debtor's Counsel: Laura Davis Jones, Esq. Pachulski, Stang, Ziehl Young, Jones & Weintraub, LLP 919 North Market Street, 16th Floor Wilmington, Delaware 19899-8705 Tel: (302) 652-4100 Fax: (302) 652-4400 Estimated Assets: More than $100 Million Estimated Debts: More than $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Englobal Engineering Inc. Accounts Payable $1,422,539 P.O. Box 671422 Dallas, TX 75267-1422 FMC International AG Accounts Payable $1,261,799 Home Mortgage Plaza, Suite 703 268 Ponce De Leon Avenue San Juan, Puerto Rico Performance Contractors Inc. Accounts Payable $1,066,288 P.O. Box 83630 Baton Rouge, LA 70884-3630 Sirz Spa Accounts Payable $442,561 Via Vo Di Placca 4 35020 Due Carrare Padova, Italy Elliott Turbomachinery SA Accounts Payable $250,716 Zurcherstrasse 4 Postfach 253 Altendorf CH 8852 Switzerland Kurvers Inc. Accounts Payable $245,041 Transoceanic Shipping Co. Inc. Accounts Payable $244,744 BASF AG Accounts Payable $228,873 Membrane Technology & Accounts Payable $129,500 Research, Inc. Van Tongeren Kennemer BV Accounts Payable $125,200 Puffer Sweiven LP Accounts Payable $80,580 Setal Engenharia Construction Accounts Payable $66,046 The Tenth Construction Company Accounts Payable $54,172 Of Sinopec Dresser-Rand Accounts Payable $34,381 Dutramex B.V. Accounts Payable $28,400 SGS Global Trade Accounts Payable $24,000 Solutions, Inc. BO-MAC Contractors, Inc. Accounts Payable $23,741 ABCO Industries, Inc. Accounts Payable $22,782 Lonza Accounts Payable $22,239 John Zink Co. LLC Accounts Payable $21,291 ACCESS WORLDWIDE: Incurs $1.4 Million Net Loss in Fourth Quarter ---------------------------------------------------------------- Access Worldwide Communications, Inc. (OTC BULLETIN BOARD: AWWC), reported its financial results for the three and twelve months ended December 31, 2005. For the Three Months Ended December 31, 2005 The Company's revenues decreased by $0.1 million, or 0.9%, to $10.6 million for the quarter ended Dec. 31, 2005, compared to $10.7 million for the quarter ended Dec. 31, 2004. Revenues for the Pharmaceutical Services Segment, which includes the company's medical education and pharmaceutical communication businesses, decreased $400,000, or 6.0%, to $6.3 million for the quarter ended Dec. 31, 2005, compared to $6.7 million for the quarter ended Dec. 31, 2004. The decrease was attributed to a decrease in programs with significant customers at both our pharmaceutical communication business and medical education division, offset by an increase in value-added billing generated by the increase in requests from pharmaceutical communication customers for additional reporting and IT analysis. Revenues for the Business Services Segment, which includes the Company's multilingual communications business and its offshore communication business, increased $300,000, or 7.5%, to $4.3 million for the quarter ended Dec. 31, 2005, compared to $4.0 million for the quarter ended Dec. 31, 2004. The increase in revenues is primarily attributed to the revenues generated by the Company's communication center in the Philippines, which became operational in the later part of 2005. The Company reported a $1.4 million net loss for the quarter ended Dec. 31, 2005, compared to a net loss of $0.6 million for the quarter ended Dec. 31, 2004. The increase in net loss was attributed to a net loss for the fourth quarter of approximately $100,000 million in the Company's Philippines communication center, which did not generate net income until December 2005, along with an increase in interest expense of approximately $200,000 million compared to the same quarter of the prior year due to increased borrowing on the Company's debt, and the increase payroll costs included in cost of revenues of approximately $400,000 million at the Company's pharmaceutical communication business due to unusually high staffing requirements for a certain inbound program. Total weighted average diluted shares outstanding for the quarters ended December 31, 2005, and December 31, 2004, were 16,609,552 and 10,546,386. For the Twelve Months Ended December 31, 2005 The Company's revenues decreased $8.6 million, or 18.1%, to $38.9 million for 2005, compared to $47.5 million for 2004. Revenues for the Pharmaceutical Segment decreased $0.6 million, or 2.4%, to $24.5 million for 2005, compared to $25.1 million for 2004. This decrease was caused primarily by a decrease in work being performed for a significant customer at the company's medical education division. The decrease in revenues from the Company's medical education division was offset by an increase in value-added billing for two significant customers in pharmaceutical communication business. This value-added billing was generated by the increase in programs and the increase in requests from these customers for additional reporting and IT analysis. Revenues for the Business Segment decreased $8.0 million, or 35.7%, to $14.4 million for 2005, compared to $22.4 million for 2004. The decrease in revenues is primarily attributed to the lead time necessary for the company's three new business development professionals to replace the revenue lost from a prior client prematurely halting its marketing programs due to court rulings and regulatory changes that made it difficult to sell bundled services to consumers. The Company is continuing to experience an increase in business activity from each of these individuals. The reduction in revenue domestically in the Company's Business Services was offset somewhat by the international revenues generated in the Company's communication center in the Philippines, which became operational in the later part of 2005. The Company reported a net loss of $5.4 million for the twelve months ended December 31, 2005, compared to a net loss of $1.4 million for the twelve months ended December 31, 2004. The increase in net loss and net basic was primarily attributed to a decrease in revenues as well as an increase in interest expense of approximately $0.5 million and a charge of approximately $0.7 million resulting from a deemed dividend relating to warrants issued to certain stockholders. Total weighted average diluted shares outstanding for the twelve months ended December 31, 2005, and 2004 respectively were 13,084,761 and 10,008,271. "We were unable to timely replace the lost revenues in our Business Services Segment and therefore our financial results for 2005 were very disappointing," remarked Shawkat Raslan, Chairman and Chief Executive Officer of Access Worldwide. "During the second half of 2005 we were successful in opening our first overseas communications center in Manila, Philippines, and are very pleased with the initial results. We have also been successful in attracting new opportunities to our Business Services Segment and expect to see increased revenues in that segment during 2006." About Access Worldwide Access Worldwide Communications, Inc. -- http://www.accessww.com/ -- is an established marketing company that provides a variety of sales, communication and medical education services. Its spectrum of services includes medical meetings management, medical publishing, editorial support, clinical trial recruitment, patient compliance, multilingual teleservices, product stocking and database management, among others. Headquartered in Boca Raton, Florida, Access Worldwide has about 1,000 employees in offices throughout the United States and the Philippines. At Dec. 31, 2005, Access Worldwide Communications, Inc.'s balance sheet showed a $5,060,322 stockholders' deficit compared to a $3,865,118 deficit at Dec. 31, 2004. ACE AVIATION: Financial Flexibility Prompts S&P to Lift Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services raised the long-term corporate credit rating on ACE Aviation Holdings Inc. to 'B+' from 'B', while affirming the 'B' long-term corporate credit rating on its wholly owned subsidiary, Air Canada. The outlook on both entities remains stable. "The upgrade on ACE reflects the enhanced financial flexibility the company has achieved through measures such as the separate public listings of its two majority-owned subsidiaries, Jazz and Aeroplan, and ACE's above-average consolidated operating performance relative to its North American airline peers," said Standard & Poor's credit analyst Kenton Freitag. The one-notch rating differential between ACE and its primary subsidiary, Air Canada, reflects: * the incrementally stronger consolidated operating performance at ACE; * the modest diversity brought by the addition of Aeroplan to the holding company; * the low amount of debt issued directly at the holding company level; and * the separation between ACE and Air Canada (as evidenced by the installation of a separate management teams and boards for both ACE and Air Canada). Nevertheless, as Air Canada is still the dominant revenue generator and the core of ACE, Standard & Poor's expects that further upgrades to the ratings on ACE would be reliant on improved operating performance at Air Canada. ACE's 2005 operating performance was generally in line with our expectations. The company was one of the few airlines in North America to produce positive net profits on the strength of: * good cost control (ex-fuel), * high load factors, and * increased passenger levels. Operating margins of 4% are low but better than most of ACE's "legacy" peers in North America. The profit outlook for 2006 is tenuous. The Canadian economy remains strong, which has spurred greater growth in travel and continuing strong load factors. Nevertheless, oil prices remain very volatile and recently have spiked higher in advance of the critical summer travel season, when the airline usually produces its strongest operating results. The outlook for the ratings is stable. Modest growth in capacity and continuing high traffic levels are balanced by the recent rise in fuel prices. The outlook could be revised to positive if the company's performance in 2006 demonstrates material improvement from 2005. Conversely, the outlook could be revised to negative if operating profitability regresses in comparison with 2005. AES IRONWOOD: Moody's Places B2 Bond Rating on Watch for Upgrade ---------------------------------------------------------------- Moody's Investors Service placed the B2 rating of the senior secured bonds of AES Ironwood, LLC, under review for possible upgrade. The review of Ironwood's rating was prompted by the review for upgrade of The Williams Companies, Inc., which guarantees the payments of its subsidiary, Williams Energy Marketing & Trading Company, under a long-term tolling agreement that expires in 2021. This tolling agreement is the principal source of cash flow for Ironwood, creating a degree of linkage between the rating of Williams and the project. However, current expectations for operating performance and cash flow coverages for the project are likely to constrain its rating to the B1 level regardless of the level of William's rating. This reflects Moody's expectations that the project will continue to have a very low dispatch rate in 2006 due to weak market conditions for gas fired power plants, and that cash flow coverage of debt service will fall below 1x in 2006, due to weak cash flow and higher capital spending. The project has sufficient cash resources to meet its projected needs in 2006 without accessing the six months of coverage provided by its debt service reserve. An upgrade to a B1 rating would look ahead to an expected debt service coverage ratio in the 1.1x to 1.2x range in 2007, which would be consistent with coverage for other B1 rated power projects with high reliability of near term cash flows. Improvement in cash flow coverage is expected after 2006 because the current capital improvement program will be completed and the dispatch rate may begin to improve due to gradual tightening of supply conditions in the wholesale power market. Ironwood is a 705 MW combined cycle gas turbine located in South Lebanon Township, Pennsylvania. AFFINITY TECH: Conv. Debt Issue Expanded by 100% to $3 Million -------------------------------------------------------------- Affinity Technology Group, Inc. (OTCBB:AFFI) reported that the holders of a majority of the outstanding principal amount of its convertible notes have agreed to allow the Company to: * expand its convertible note program to $3 million, and * issue notes convertible at a price in excess of $0.20 per share. Under the original terms of the Convertible Note Purchase Agreement, the Company could issue up to $1.5 million of its convertible notes at a conversion price of $.20. Common Stock Conversion Affinity reported that since the completion of the reexamination of U.S. Patent No. 6,105,007, holders of $137,336 in aggregate principal amount of the Company's convertible notes have converted their notes into Common Stock in accordance with the terms of the Convertible Note Purchase Agreement. "We are thankful for the continued support and cooperation we have received from our convertible noteholders," Joe Boyle, Chairman, President and Chief Executive Officer, stated. "This program has worked very well and the increase in the note program provides the Company with an attractive option for financing to pursue its lawsuits with Ameritrade Holding Corporation, Federated Department Stores, Inc. and Household International, Inc. Now that we have successfully completed the reexamination of our financial and credit account patent (U.S. Patent No. 6,105,007), our goal is to vigorously pursue our licensing program. We will also continue to evaluate other alternatives to attract additional capital and other resources that may be helpful to exploit the maximum value from our patent portfolio." About Affinity Technology Through its subsidiary, decisioning.com, Inc., Affinity Technology Group, Inc. -- http://www.affi.net/-- owns a portfolio of patents that covers the automated processing and establishment of loans, financial accounts and credit accounts through an applicant- directed remote interface, such as a personal computer or terminal touch screen. Affinity's patent portfolio includes U. S. Patent No. 5,870,721C1, No. 5,940,811, and No. 6,105,007. * * * Going Concern Doubt As reported in the Troubled Company Reporter on April 19, 2006, Scott McElveen, L.L.P., expressed substantial doubt about Affinity Technology Group, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's recurring operating losses, accumulated deficit, and certain convertible notes in default. Financials As of Dec. 31, 2005, the company's balance sheet showed total assets of $152,311 and total debts of $2,200,682. At Dec. 31, 2005, the company had an accumulated deficit of $69.2 million compared to an accumulated deficit of $68.7 million for the same period in 2004. At Dec. 31 2005, Affinity Technology's equity deficit widened to $2,048,371, from a $1,513,523 equity deficit at Dec. 31, 2004. AIR CANADA: S&P Affirms Long-Term Corporate Credit Rating at B -------------------------------------------------------------- Standard & Poor's Ratings Services raised the long-term corporate credit rating on ACE Aviation Holdings Inc. to 'B+' from 'B', while affirming the 'B' long-term corporate credit rating on its wholly owned subsidiary, Air Canada. The outlook on both entities remains stable. "The upgrade on ACE reflects the enhanced financial flexibility the company has achieved through measures such as the separate public listings of its two majority-owned subsidiaries, Jazz and Aeroplan, and ACE's above-average consolidated operating performance relative to its North American airline peers," said Standard & Poor's credit analyst Kenton Freitag. The one-notch rating differential between ACE and its primary subsidiary, Air Canada, reflects: * the incrementally stronger consolidated operating performance at ACE; * the modest diversity brought by the addition of Aeroplan to the holding company; * the low amount of debt issued directly at the holding company level; and * the separation between ACE and Air Canada (as evidenced by the installation of a separate management teams and boards for both ACE and Air Canada). Nevertheless, as Air Canada is still the dominant revenue generator and the core of ACE, Standard & Poor's expects that further upgrades to the ratings on ACE would be reliant on improved operating performance at Air Canada. ACE's 2005 operating performance was generally in line with our expectations. The company was one of the few airlines in North America to produce positive net profits on the strength of: * good cost control (ex-fuel), * high load factors, and * increased passenger levels. Operating margins of 4% are low but better than most of ACE's "legacy" peers in North America. The profit outlook for 2006 is tenuous. The Canadian economy remains strong, which has spurred greater growth in travel and continuing strong load factors. Nevertheless, oil prices remain very volatile and recently have spiked higher in advance of the critical summer travel season, when the airline usually produces its strongest operating results. The outlook for the ratings is stable. Modest growth in capacity and continuing high traffic levels are balanced by the recent rise in fuel prices. The outlook could be revised to positive if the company's performance in 2006 demonstrates material improvement from 2005. Conversely, the outlook could be revised to negative if operating profitability regresses in comparison with 2005. AIRWAY INDUSTRIES: Committee Taps Alpern Rosenthal as Advisor ------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Airway Industries, Inc.'s chapter 11 case asks the U.S. Bankruptcy Court for the Western District of Pennsylvania for permission to employ Alpern Rosenthal as its financial advisor, nunc pro tunc to February 7, 2006. Alpern Rosenthal will: (a) review and analyze the Debtor's business operations, including historical financial results and future projections, and assist the Committee in assessing the Debtor's current business and financial condition; (b) review and analyze the Debtor's cash flow projections, and other reports or analysis prepared by the Debtor or its professionals and testing the Debtor's accounts receivable in order to advise the Committee on the viability of the continuing operations and the reasonableness of projections and underlying assumptions, including the ability of the Debtor to make periodic payments pursuant to a plan of reorganization or otherwise; (c) analyze the financial ramifications of proposed transactions for which the Debtor may seek Bankruptcy Court approval, including, asset sales by the Debtor; (d) analyze the Debtor's internally prepared financial statements and related documentation in order to evaluate the performance of the Debtor as compared to projected results; (e) advise the Committee regarding strategic options available for the Debtor's business operations and assets, including the sale of the Debtor's assets or the Debtor itself as a going concern to a third party purchaser; (f) review and evaluate any asset sale proposal or any plan of reorganization filed by the Debtor, including proposed distributions to classes of claimants; (g) assist the Committee in negotiating the terms of the Debtor's plan of reorganization, including, as may be necessary, developing, evaluating, proposing, negotiating and documenting alternatives to the Debtor's plan; (h) attend and advise at meetings with the Committee, its counsel and representatives of the Debtor; and (i) provide other financial advisory services as may be requested by the Committee and agreed upon by the Firm. Karl A. Jarek, a shareholder of Alpern Rosenthal, tells the Court that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Shareholder $240 - $275 Managers and Staff $120 - $210 Support Personnel $55 - $85 Mr. Jarek assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Ellwood City, Pennsylvania, Airway Industries, Inc. -- http://www.atlanticluggage.com/-- manufactures suitcases, garment bags, briefcases and other travel products and accessories. The Company filed for chapter 11 protection on Jan. 20, 2006 (Bankr. W.D. Pa. Case No. 06-20224). Joel M. Walker, Esq., at Duane Morris LLP represents the Debtor in its restructuring efforts. The U.S. Trustee appointed the Official Committee of Unsecured Creditors on Feb. 6, 2006. George Angelich, Esq., at Arent Fox PLLC, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. AIRWAY INDUSTRIES: Taps Ansel Schwartz as Special IP Counsel ------------------------------------------------------------ Airway Industries, Inc., asks the U.S. Bankruptcy Court for the Western District of Pennsylvania for authority to employ Ansel M. Schwartz, Esq., as its special intellectual property counsel. Mr. Schwartz will: a. prepare and prosecute patent applications (including responses to office actions) in the U.S. and in foreign countries; b. prepare and prosecute trademark applications in the U.S. and in foreign countries; c. respond to inquiries, if any, regarding infringement of patents or trademarks; d. respond to inquiries, if any, regarding licensing of any intellectual property; and e. respond to questions concerning the Debtor's intellectual property in connection with the proposed sale of the Debtor's assets. The Debtor tells the Court that it will pay Mr. Schwartz $275 per hour for his services. Mr. Schwartz assures the Court that he is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Ellwood City, Pennsylvania, Airway Industries, Inc. -- http://www.atlanticluggage.com/-- manufactures suitcases, garment bags, briefcases and other travel products and accessories. The Company filed for chapter 11 protection on Jan. 20, 2006 (Bankr. W.D. Pa. Case No. 06-20224). Joel M. Walker, Esq., at Duane Morris LLP represents the Debtor in its restructuring efforts. The U.S. Trustee appointed the Official Committee of Unsecured Creditors on Feb. 6, 2006. George Angelich, Esq., at Arent Fox PLLC, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. ALLIANCE COLLATERALIZED: Moody's Cuts Senior Notes' Rating to B2 ---------------------------------------------------------------- Moody's Investors Service downgraded the rating on the $144 Million Class A-2 Senior Subordinated Floating Rate Global Notes due 2009 issued by Alliance Collateralized Holdings Ltd, a collateralized debt obligation issuer. According to Moody's, the rating action is due to deterioration of the collateral pool. Rating Action(Downgrade): * $144 Million Class A-2 Senior Subordinated Floating Rate Global Notes due 2009 Prior Rating: Baa3 Current Rating: B2 ALLSERVE SYSTEMS: Court Okays Caspert Management as Auctioneer -------------------------------------------------------------- Charles A. Stanziale, Jr., the trustee appointed in Allserve Systems Corporation's chapter 7 liquidation, sought and obtained permission from the U.S. Bankruptcy Court for the District of New Jersey to retain Caspert Management Co., Inc., as his auctioneer. Caspert Management is expected to auction the Debtor's office furniture and equipment, including desks, chairs, storage cabinets, computer terminals, and printers. Documents submitted to the Court do not indicate the Firm's compensation rates. However, the Firm has obtained a $100,000 surety bond, which it filed with the U.S. Trustee. Herbert B. Caspert, the president and auctioneer at Caspert Management, assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in North Brunswick, New Jersey, Allserve Systems Corp. is an outsourcing company for the IT industry. The Debtor filed for chapter 11 protection on November 18, 2005 (Bankr. D. N.J. Case No. 05-60401). Barry W. Frost, Esq., at Teich Groh represents the Debtor. Jeffrey Bernstein, Esq., at McElroy, Deutsch, Mulvaney & Carpenter, represents the chapter 7 trustee. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and debts between $50 million and $100 million. ALLSERVE SYSTEMS: Trustee Taps XRoads as Special Accountant ----------------------------------------------------------- Charles A. Stanziale, Jr., Trustee for Allserve Systems Corporation's chapter 7 case, asks the U.S. Bankruptcy Court for the District of New Jersey for permission to employ XRoads Solutions Group, LLC, as his special forensic accountant. XRoads Solutions will: a. prepare a preliminary assessment report of the Debtor's evidence available concerning missing leased equipment and potential fraud claims; b. meet with Allserve Systems PLC's receiver to gather information on findings with regard to UK Corporate Structure and listing of suspicious companies; c. construct a chart of all corporate and affiliated entities; d. investigate the legitimacy of corporate entities and affiliated parties; e. review original loan and financing documentation; f. trace funds associated with major financing transactions; and b. perform an anticipated future phase of forensic investigative work at the direction of the Trustee to enhance the recovery of estate assets. Holly Felder Etlin, a principal at XRoads Solutions, tells the Court that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Principals $450 - $595 Managing Directors $400 - $450 Director, Senior Consultants $275 - $375 Associate and Paraprofessionals $150 - $210 Administrators $125 Ms. Etlin assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in North Brunswick, New Jersey, Allserve Systems Corp. is an outsourcing company for the IT industry. The Debtor filed for chapter 11 protection on November 18, 2005 (Bankr. D. N.J. Case No. 05-60401). Barry W. Frost, Esq., at Teich Groh represents the Debtor. Jeffrey Bernstein, Esq., at McElroy, Deutsch, Mulvaney & Carpenter, represents the chapter 7 trustee. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and debts between $50 million and $100 million. AMERICAN FINANCIAL: Moody's Rates Sub. Unsecured Debt at (P)Ba1 --------------------------------------------------------------- Moody's Investors Service assigned a provisional (P)Baa3 senior debt rating to American Financial Group, Inc.'s unlimited shelf registration statement, which was filed in March 2006. Moody's outlook for the ratings of American Financial is stable. According to Moody's, the rating reflects American Financial's niche position in many specialty commercial lines, its focus on underwriting profitability, as well as the diversification offered by its annuity and supplemental insurance operations. Moody's believes that management has instituted a performance driven compensation structure, with a significant contingent, deferred component, which works well within the often volatile property and casualty industry. Over the past several years, the company has focused on improving its operating results and capitalization while reducing its financial leverage profile and improving the holding company's liquidity profile. The rating agency said these strengths are tempered by American Financial's relatively high financial and operational leverage compared to similarly rated peers, the potential for adverse development on core reserves, exposure to gross catastrophe losses, particularly a California earthquake, and concerns surrounding the company's corporate governance structure. In many of the group's business segments, American Financial competes with larger competitors who have greater financial and technical resources. Moody's current ratings reflect expectations that earnings and organic capital growth will continue to improve over the medium term and as demonstrated over the last few quarters. Other expectations include moderating adjusted operating leverage over the medium term, financial leverage around 30%, pretax operating earnings interest coverage of between 2 to 5x, and unrestricted dividend capacity coverage of interest above 3x. The rating agency notes that financial leverage consistently below 30%, operating leverage below 5x, and addressing our concerns surrounding the company's corporate governance structure could result in an upgrade. Conversely, failure to sustain improved earnings, adverse development in excess of 5% of reserves, increased operating leverage, financial leverage above 35%, and/or pretax operating earnings interest coverage levels below 2x could lead to a downgrade. Moody's assigned these ratings: American Financial Group, Inc. * provisional senior unsecured debt at (P)Baa3; * provisional subordinated unsecured debt at (P)Ba1; and * provisional preferred stock at (P)Ba2; American Financial Capital Trust II, III, IV * provisional preferred securities at (P)Ba1. Moody's last rating action for AFG occurred on Oct. 28, 2005, when Moody's affirmed the current ratings following the company's third quarter earnings announcement which included $121 million charge related to asbestos and environmental liabilities. American Financial, located in Cincinnati, Ohio, is a diversified holding company focused on property and casualty and life insurance. For the 2005, American Financial reported $2.4 billion in net earned premiums and net income of $207 million. As of Dec. 31, 2005, shareholders' equity was $2.5 billion. American Financial additionally holds an 82% interest in Great American Financial Resources, Inc., whose wholly owned subsidiaries include Great American Life Insurance Company. ANCHOR GLASS: Warner Robins Wants to Discontinue Fuel Service ------------------------------------------------------------- On Feb. 1, 1996, the City of Warner Robins, Georgia, agreed to supply natural gas to Anchor Glass Container Corporation pursuant to a Natural Gas Sales Agreement. The term of the Agreement was for five years, and continued year to year unless terminated by either party. The City continued to supply natural gas to Anchor Glass, and Anchor Glass continued to pay for the natural gas after the Petition Date. However, Anchor Glass owe the City $410,712, for natural gas provided prepetition. In October 2005, the U.S. Bankruptcy Court for the Middle District of Florida ruled that the City would hold $117,346, as security deposit for the postpetition extension of credit to Anchor Glass. The City continues to hold the amount as a security deposit. On March 31, 2006, Anchor Glass filed its list of executory contracts to be assumed pursuant to its Second Amended Plan of Reorganization. The list does not include the Natural Gas Supply Agreement, David W. Steen, Esq., in Tampa, Florida, notes. Thus, under the 2nd Amended Plan, the Supply Agreement is to be rejected as of the Effective Date of the Plan. Accordingly, the City asks the Court to modify the automatic stay to allow it to: a) terminate its service to Anchor Glass; and b) set off the security deposit against its rejection damages, including the prepetition debt 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. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Officers Gain Access to Defense Costs Insurance ------------------------------------------------------------- As reported in the Troubled Company Reporter on March 8, 2006, certain of Anchor Glass Container Corporation's directors and officers sought access to insurance policies that were purchased to protect them against costs and liabilities arising from their services as directors and officers of the Debtor. The Officers have been named as defendants in a series of lawsuits that allege breach of fiduciary duty and violation of various federal securities laws because of their status as directors and officers of Anchor Glass. The Hon. Alexander L. Paskay authorizes National Union Fire Insurance Company of Pittsburgh, Pennsylvania, to pay Defense Costs to Joel Asen, Darrin Campbell, James Chapman, Richard Deneau, Jonathan Gallen, George Hamilton, Timothy Price, Peter Reno, Alan Schumacher, and Lenard Tessler according to the terms of the D&O Policy. The Court directs the Officers and their counsel to submit invoices, on a monthly basis, to National Union of the Defense Costs to be paid, and to simultaneously furnish the Debtor with a statement reflecting the amounts sought. National Union will provide the Debtor a statement of the amount of Defense Costs paid. The Debtor may share the information with the Committees. The Court rules that any information concerning the Defense Costs will be treated as confidential and will be used only for litigation purposes in connection with the Debtor's bankruptcy proceeding. If the Debtor or Committees wish to submit any information to the Court, the information will be filed under seal. Neither the Debtor nor the Committees will be entitled to dispute the amount of Defense Costs that National Union has paid to the Officers, nor will the Committees be entitled to seek disgorgement of any amounts National Union has paid before the filing of any objection. The Court clarifies that the Order does not address whether or not the proceeds of the D&O Policy are property of the estate, or whether the automatic stay applies to payments by National Union. Judge Paskay denies, without prejudice, the part of the Debtor's request, seeking clarification of its indemnification obligations. 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. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANCHOR GLASS: Bank of New York Wants Panel's Complaint Dismissed ---------------------------------------------------------------- The Bank of New York, as Indenture Trustee and Collateral Agent, for the holders of $300,000,000 of 11% Senior Notes due 2013 and $50,000,000 of 11% Senior Notes due 2013 issued by Anchor Glass Container Corporation, asks the U.S. Bankruptcy Court for the Middle District of Florida to: a) dismiss the Official Committee of Unsecured Creditors' Complaint; or b) in the alternative, direct the Committee to issue a more definite statement of its allegations. As reported in the Troubled Company Reporter on Dec. 15, 2005, the Committee asked the Bankruptcy Court to enter a declaratory judgment: a) that BNY's secured claim with respect to the Mortgages is limited to the capped value of the Mortgages; b) that any claims asserted by individual Noteholders who also received any amount of the Equity Payments are due to be disallowed; d) that the Noteholders are not entitled to postpetition interest or fees; and d) regarding: -- the valid of BNY's liens; -- the assets subject to BNY's liens; and -- the amount and priority of BNY's claims if and when they are properly filed. The Committee stated that four of the real property mortgages filed by the Noteholders contain specific caps as to the amount of debt that each Mortgage secures: Real Property Mortgage Caps ------------- ------------- Scott County, Minnesota $9,360,000 Okmulgee County, Oklahoma 6,000,000 Duval County, Florida 10,704,000 Chemung County, New York 8,178,000 The Committee claims that, each Mortgage is enforceable as to its relative property only up to the amount of the cap stated and that the Noteholders are not allowed to enforce any of the four Mortgages in amounts in excess of the amount stated on the face of the Mortgages. BNY Assertions Mark D. Bloom, Esq., at Greenberg Taurig PA, in Miami, Florida, relates that the Final Noteholder Financing Order contemplated a two-step process, in which the Committee would first seek and obtain leave of Court to file an Objection, and then file an Objection. However, the Committee proceeded directly to the second step without addressing the first, and thereby failed to satisfy a condition precedent negotiated with the Noteholders and incorporated in the Financing Order, Mr. Bloom states. Absent satisfaction of the conditions in the Financing Order, the Committee lacks standing to maintain the action, and the Complaint must be dismissed with prejudice and without leave to amend. Given that the expiration of the Objection Period was Dec. 7, 2005, the Committee can no longer cure that defect. Moreover, each count of the Complaint is subject to dismissal, Mr. Bloom contends. The Committee alleged that the BNY liens and security interests on four of the Debtor's plants and fixtures should be limited to the "caps" contained in four mortgages applicable to those locations. However, the Committee failed to allege a discrepancy between the value of each of the four plants and their related collateral and the amount of the cap allegedly established in the relevant Mortgage, Mr. Bloom asserts. Without a stated difference between the amount of BNY's secured claim and the alleged caps under the applicable Mortgages, the Committee's allegation fails to raise a "substantial controversy" between the parties and is based "upon a hypothetical set of facts", Mr. Bloom argues. In addition, the Committee had more than ample time to inspect the BNY Indenture and other financing documents, all of which are either filed as a matter of public record or were furnished to them upon request, Mr. Bloom notes. Mr. Bloom points out that the Complaint fails to take into consideration the existence of any documents other than the Mortgages, which eliminate any alleged cap in respect of all or any part of the BNY collateral. The Committee's allegations that any claims asserted by Noteholders who received any amount of the Equity Payments are due to be disallowed, is utterly speculative and premature, Mr. Bloom further asserts. BNY had not yet filed its proof of claim as of the date the Complaint was filed, and there has been no adjudication that any Noteholder received an Equity Payment or any other avoidable transfer from the Debtor. The Committee's allegations that the Noteholders are not entitled to postpetition interests and fees must be dismissed, Mr. Bloom maintains. The Committee must first seek a valuation since it contends that the entitlement to the interest or fees is dependent on a valuation of the BNY collateral under Section 506(a) of the Bankruptcy Code. Mr. Bloom maintains that nothing in the Complaint offers any allegation to create an "actual controversy" regarding either the validity or priority of any of the BNY liens. 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. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) ARMOR HOLDINGS: DoJ & FTC Finish Review of S&S Merger Transaction ----------------------------------------------------------------- The U.S. Department of Justice and the U.S. Federal Trade Commission have granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, in connection with Armor Holdings, Inc.'s pending acquisition of Stewart & Stevenson, Inc. As reported in the Troubled Company Reporter on March 2, 2006, Armor Holdings has agreed to acquire all of the outstanding stock of SVC for $35 per share in a cash merger transaction. The total value of the transaction is expected to be around $755 million after deducting SVC's net cash balance of $312 million as of January 31, 2006. The proposed transaction remains subject to the satisfaction of customary closing conditions, including approval by Stewart & Stevenson's shareholders. Stewart & Stevenson has scheduled a special meeting of shareholders for May 9, 2006, to vote upon the proposed transaction. Shareholders of record as of the close of business on April 5, 2006, will be entitled to vote at the special meeting. The transaction is expected to close promptly after the special meeting. On April 7, 2006, Stewart & Stevenson started mailing to shareholders and filed with the Securities and Exchange Commission definitive proxy materials in connection with the merger agreement. Shareholders are encouraged to read Stewart & Stevenson's definitive proxy materials in their entirety as they provide, among other things, a detailed discussion of the process that led to the proposed merger and the reasons behind the Stewart & Stevenson Board of Directors' unanimous recommendation that shareholders vote FOR the approval and adoption of the merger agreement and the merger. About Stewart & Stevenson Stewart & Stevenson Services, Inc. (NYSE: SVC), a leading manufacturer of military tactical wheeled vehicles including the Family of Medium Tactical Vehicles (FMTV), the U.S. Army's primary transport platform. About Armor Holdings Armor Holdings, Inc. (NYSE: AH) -- http://www.armorholdings.com/ -- is a diversified manufacturer of branded products for the military, law enforcement and personnel safety markets. * * * Armor Holdings, Inc.'s 8.25% Senior Subordinated Notes due 2013 carry Moody's Investor Service's B1 rating and Standard & Poor's B+ rating. ASARCO LLC: Court Okays Retention and Recruiting Plan Execution --------------------------------------------------------------- One of the most serious threats to ASARCO LLC's reorganization is the loss of skilled technical, supervisory, operating, and corporate personnel, Jack L. Kinzie, Esq., at Baker Botts LLP, in Dallas, Texas, tells the Court. The problem is especially acute given the level of specialized knowledge required to engage in ASARCO's operations and the strong competition it faces in the marketplace. Mr. Kinzie relates that ASARCO instituted a salary increase and year-end bonus as an emergency measure in an attempt to buy time to more completely address the overall compensation issue. Having significantly restored production and operations, ASARCO now has sufficient liquidity to address that critical issue with a program focused on the retention and recruitment of valued employees. Pursuant to Sections 105(a) and 363 of the Bankruptcy Code, ASARCO seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to implement a retention and recruiting plan. The Retention and Recruiting Plan is a three-pronged compensation program consisting of a salary increase, an incentive program and an employee retention plan. A. Competitive Salary Component In March 2005, ASARCO retained Watson Wyatt to conduct a study for the Company, as part of a comprehensive review of the Company's salary structure. Taking the recommendations from the Watson Wyatt Study as a base, the Competitive Salary Component provides for: -- a 3.5% increase for inflation over the past 12 months, and -- a 3.5% premium to reflect industry competitive pressures and the impact of ASARCO's bankruptcy filing. The Competitive Salary Component allows individual salary adjustments based on performance ranking, current salary, and tenure. It is expected to cost $2,600,000, on an annual basis. B. Employee Retention Component ASARCO plans to provide retention payment to 100 participants. The retention payment amount will equal to 25% or 35% of the employee's salary, depending on job grade. The Retention Payment will be paid in installments: -- 10% upon approval and implementation of the Employee Retention Component; -- 10% payable, at six-month intervals, up to a maximum of 60% of the total payment amount before the completion of ASARCO's Chapter 11 case; and -- The remaining amount is payable in two equal installments, upon confirmation of ASARCO's plan of reorganization and upon the effective date of a plan. If a participant resigns or is terminated for cause, any unpaid bonus is forfeited and pro rata bonuses will not be paid. If a participant is terminated without cause, the participant will receive the balance of any unpaid bonus provided that the employee executes a general release satisfactory to ASARCO. The Employee Retention Component is expected to cost $2,400,000 for current employees, and an additional discretionary pool of $400,000 for new hires. C. Variable Incentive Component ASARCO proposes to create an incentive pool for all salaried employees with target bonuses calculated: -- 70% on the achievement of defined business objectives for senior corporate personnel and on unit cost targets for operating personnel and other corporate personnel; and -- 30% on ASARCO's overall EBITDA performance. ASARCO's board of directors will set the targets with approval from FTI Consulting, Inc., the financial consultants to the Official Committee of Unsecured Creditors of ASARCO. If the targets are met, the Variable Incentive Plan is expected to cost $3,400,000. The Variable Incentive Component would pay higher amounts for performance in excess of targets up to a cap of $4,900,000. D. Others ASARCO also proposes to provide $1,000,000, for application at the discretion of ASARCO's board for salary, retention, and incentive payments. Without the Retention and Recruiting Plan, employees are likely to continue to leave ASARCO in the near future and pursue alternative employment, Mr. Kinzie says. The inability to retain salaried employees and hire replacements to fill crucial vacancies will severely harm ASARCO, Mr. Kinzie notes. Salaried employees are difficult to replace because experienced job candidates often find the prospect of working for a company under Chapter 11 protection is unattractive. In certain cases, ASARCO will be forced to use outside consultants and contractors at costs significantly higher than that for the former employee. If additional employees were to leave their current jobs at this point in the bankruptcy case, ASARCO likely will not be able to attract replacement employees of comparable quality, experience, knowledge, and character. Suitable new employees, even if available, will not have in-depth knowledge of ASARCO's business. The Retention and Recruiting Plan is needed now to enable ASARCO to retain the knowledge, experience, and loyalty of its salaried employees, and to help ASARCO recruit new talent to replace employees who have already departed, Mr. Kinzie maintains. Mr. Kinzie assures the Court that the proposed Retention and Recruiting Plan does not impose unnecessary burden on ASARCO's financial position now or in the future. The incentive component is designed to pay for itself and preserve the value of estate assets. Under the Variable Incentive Component, payments are made only if meaningful EBITDA and unit cost performance is achieved. As with the retention payments, incentive payments are staggered, with unit cost bonuses being paid on a quarterly basis and EBITDA-based bonuses being paid annually. Responses 1. United Steelworkers The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, together with other unions, entered into a modified collective bargaining agreement with ASARCO in November 2005. With the assistance of the Official Committee of Unsecured Creditors, ASARCO and the United Steelworkers have implemented a labor-management cooperation system that provides employer and union representatives a mechanism for discussing potential and existing disputes in a constructive and open manner. The parties have been making progress in developing a relationship that, to a greater degree, is based upon trust and open dialogue, though there remain pockets of concern. The United Steelworkers is concerned that the proposed KERP may undo the trust that has been built between the unions and ASARCO. The United Steelworkers does not object to the proposed KERP. However, the United Steelworkers is mindful of ASARCO's need to recruit and retain skilled management. In ASARCO's case where the labor relationship remains fragile and where collective bargaining will occur later in the year to replace the expiring labor agreements, Patrick M. Flynn, Esq., in Houston, Texas, asserts that it will be incumbent upon management to make certain that the KERP does not become a needless and harmful impediment to constructive dealing. "[ASARCO] can do this by visibly and earnestly recommitting to strengthening the relationship with the [United Steelworkers] and the other unions that has been nurtured by many parties, including the Committee, since last November," Mr. Flynn states. 2. Creditors Committee James C. McCarroll, Esq., at Reed Smith LLP, in Pittsburgh, Pennsylvania, relates that ASARCO has consulted extensively with the Official Committee of Unsecured Creditors' professionals regarding formulation of the proposed Retention and Recruiting Plan. The Committee has also extensively discussed the necessity for and the utility of the proposed Retention and Recruiting Plan, and its terms with ASARCO's directors and officers, as well as its professionals. According to Mr. McCarroll, the Committee has carefully considered the terms of the proposed Retention and Recruiting Plan, and believes that the facts and circumstances described in ASARCO's request amply demonstrate that it is reasonable in all respects. For these reasons, the Committee supports the approval of ASARCO's request for the implementation of the Retention and Recruiting Plan. * * * Judge Schmidt directs ASARCO's Board to implement the Retention and Recruiting Plan. All objections to ASARCO's request have been resolved, withdrawn or overruled on the merits. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Wants Until September 15 to Decide on Leases -------------------------------------------------------- ASARCO LLC and its debtor-affiliates are parties to numerous non-residential real property leases and are in the process of determining what Leases to assume or reject. However, the Debtors' ability to diligently review all of their Leases has been severely hampered by the loss of numerous skilled corporate personnel, Judith W. Ross, Esq., at Baker Botts LLP, in Dallas, Texas, says. The loss of valued employees has forced an already over-extended salaried workforce to constantly prioritize and re-evaluate tasks in an attempt to comply with the ordinary demands of operating a business of the size and complexity of ASARCO LLC. The shrinking number of salaried employees, coupled with many crises faced by ASARCO in the early stages of its bankruptcy -- including a labor strike, a severe liquidity crisis, the need to obtain DIP financing, and the necessity of quickly moving to restore operations and production following the strike -- required its employees to focus on only the most critical aspects of day-to-day operations, Ms. Ross tells the Court. The labor strike further exacerbated the problem, forcing management and salaried employees to leave their usual positions in the corporate office to work in the mines and the smelter to maintain a minimum level of production, Ms. Ross adds. Without an evaluation of the Leases, Ms. Ross contends that the Debtors would be unable to articulate factors sufficient to make the required showing to the Court that they have exercised reasonable business judgment in determining whether to assume or reject the Leases. Although ASARCO's employees have not completed the evaluation of all Leases, Ms. Ross relates that ASARCO has attempted to make progress with certain key landlords toward reaching agreements concerning ASARCO's obligations under the Leases. These attempts have included efforts to reach an agreement concerning ASARCO's obligations at the Mission Mine. ASARCO operates the Mission Mine substantially on Native American Indian lands that are leased from the Tohono O'Odham Nation San Xavier District and from certain individuals of the Nation who hold trust patent allotments of the lands. ASARCO operates the mine on these lands subject to federal regulations imposed by the U.S. Department of the Interior Bureau of Land Management and Bureau of Indian Affairs. The BLM and BIA have yet to approve the May 17, 2005, Mine Reclamation Plan and have yet to give ASARCO access to the administrative records in response to ASARCO's three Freedom of Information Act requests. Also, the meetings that ASARCO convened with the BLM and BIA in 2005 did not result in an understanding concerning ASARCO's mine reclamation obligations under the federal regulations. The question of which reclamation regulations actually apply to ASARCO must be resolved before ASARCO can make a reasonable, informed business decision whether to assume or reject the Indian Leases, Ms. Ross says. Accordingly, the Debtors further ask the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to extend the time for them to decide whether to assume or reject non-residential real property leases through Sept. 15, 2006. Ms. Ross assures the Court that the Debtors are current on all of their postpetition obligations under the Leases and will remain so until the Leases are assumed or rejected. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Wants to Sell Tennessee Mines to Glencore for $40 Mil. ------------------------------------------------------------------ ASARCO LLC seeks permission from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to: (a) sell the assets of Tennessee Mines, for $40,000,000, to Glencore Ltd., subject to higher and better offers; and (b) assume and assign certain executory contracts and unexpired leases to Glencore. The Tennessee Mines Assets included in the sale are: 1. all of Tennessee Mines' major equipment; 2. all Royalties; 3. all tangible and intangible personal property assets used solely for business; 4. all inventories, including all raw materials, finished goods, component parts and work in process; 5. all Assumed Contracts, including all of their rights, claims and obligations; 6. all machinery, equipment, vehicles, consumables, supplies, spare parts, and tools used solely for business; 7. all personal property owned or leased by ASARCO; 8. all real property leases, all patented and unpatented claims, leases and water rights; 9. all permits, registrations, approvals, licenses and certifications issued by any government agency; 10. all business records, including sales data, customer lists, accounts, bids, contracts, supplier records, but excluding corporate minute books and tax records; and 11. all authorizations, environmental permits and other permits. These Assets, however, are excluded from the sale: 1. any interest in or right to use the names "ASARCO", "ASARCO Tennessee Mines Division" or the logos, names, trademarks, trade names, or the like of ASARCO LLC; 2. all prepaid taxes, tax refunds, tax credits, and other tax assets; 3. intercompany accounts; 4. all rights under insurance policies in force before or on effective time; 5. historical tailings generated before closing which have been sold to Mossy Creek Mining Company LLC pursuant to a contract dated Aug. 13, 2002; and 6. all contracts other than the Assumed Contracts Before the Debtor filed for bankruptcy, CB Richard Ellis International Minerals & Metals Group marketed the Assets to more than 60 potential purchasers. Among the five entities who submitted bids, ASARCO determined that Glencore was the successful bidder. Asarco and Glencore entered into a purchase agreement dated April 5, 2006, for the sale of the Property. The salient terms of the Purchase Agreement are: (a) Glencore will deposit $800,000, with LandAmerica Commercial Services, as Escrow Agent; (b) Glencore will pay $40,000,000, to ASARCO for the Assets; (c) Glencore will assume seven agricultural leases, one building lease with Morrison Lowe, one active mineral lease in Middle Tennessee, and the confidentiality agreements in connection with the sale; and (d) Glencore will pay to ASARCO all other cash or consideration as a condition for declaring it the winner at the Auction. The Assets are proposed to be sold free and clear of all liens, claims, charges and encumbrances. ASARCO is not aware of any claims on the Assets except for the Permitted Encumbrances of $150,000 in property taxes that have not been paid as a result of ASARCO's bankruptcy filing. A full-text copy of the Glencore Purchase Agreement is available for free at http://ResearchArchives.com/t/s?82f To maximize the value of the Property, ASARCO will solicit higher and better offers for the Property pursuant to uniform bidding procedures approved by the Court. ASARCO will accept competing offers for the Tennessee Mines Assets not later than May 12, 2006, via facsimile or e-mail. Mossy Creek Mining Company LLC and any other potential bidder must execute a confidentiality agreement, and deliver all their current audited financial statements to ASARCO. Competing offers must be accompanied by a good faith deposit of $800,000, to be deposited with LandAmerica Commercial Services and held in an escrow account. Competing offers must also provide consideration to ASARCO's bankruptcy estate of more than $41,500,000. The Auction will be held on May 17, 2006, at 10:00 a.m. The Auction will begin with a bid of no less than $41,500,000, and continue in minimum increments of at least $100,000 higher than the previous bid. A Sale Hearing will be held on May 19, 2006, at 2:00 p.m. If ASARCO accepts an offer from another bidder, ASARCO will pay $1,200,000, to Glencore for all costs and out-of-pocket expenses in connection with its legal, environmental, accounting and business due diligence and the preparation and negotiation of the Agreement. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000). ATA AIRLINES: C8 Airlines' Solicitation Period Extended to July 31 ------------------------------------------------------------------ Judge Basil H. Lorch of the U.S. Bankruptcy Court for the Southern District of Indiana extended the exclusive period during which C8 Airlines, Inc., may solicit votes for the acceptance or rejection of its First Amended Plan of Liquidation to, and including, July 31, 2006. C8 Airlines has more time to allow for full and fair notice of issues to creditors. As previously reported, the Court approved the disclosure statement explaining the C8 Airlines' First Amended Plan of Liquidation. Judge Lorch ruled that C8's First Amended Disclosure Statement contains "adequate information" as defined in Section 1125 of the Bankruptcy Code to enable holders of claims or interests of the relevant class to make an informed judgment about the Plan. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. Daniel H. Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland, Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATA AIRLINES: C8 Airlines' Confirmation Hearing Set for June 6 -------------------------------------------------------------- Judge Basil H. Lorch of the U.S. Bankruptcy Court for the Southern District of Indiana approved the uniform noticing, balloting, voting and tabulation procedures proposed by C8 Airlines, Inc., to be used in connection with the solicitation of votes for the acceptance of its First Amended Plan of Liquidation. The Court fixed: * April 11, 2006, as the "voting record date" for determining holders of Claims entitled to: -- receive a solicitation package; and -- vote to accept or reject the Plan; * May 19, 2006, 4:00 p.m., prevailing Indianapolis time, as the "voting deadline" or the last date by which Ballots and Master Ballots for accepting or rejecting the Plan must be received by the Voting Agent so as to be counted; and * May 19, 2006, as the deadline for filing objections to confirmation of C8's Plan. Judge Lorch says the Confirmation Hearing scheduled to commence on June 6, 2006, at 9:00 a.m., may be continued from time to time. Moreover, C8's Plan may be modified pursuant to Section 1127 of the Bankruptcy Code prior to, during, or as a result of, the Confirmation Hearing, without further notice to parties-in- interest. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. Daniel H. Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland, Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000) AZTAR CORP: Ameristar Ups Purchase Offer to $45 per Share --------------------------------------------------------- Aztar Corporation received a revised definitive offer from Ameristar Casinos, Inc., to acquire Aztar in a merger transaction in which the holders of Aztar common stock would receive $45 per share in cash and the holders of Aztar's Series B preferred stock would receive $475.94 per share in cash. The revised definitive offer included a signed merger agreement. Ameristar also provided a signed financing commitment letter. Ameristar said in its revised definitive offer that the offer would expire by noon, Las Vegas time, on April 22, 2006, but that if certain conditions were met before that time, this deadline would be extended until 12:01 a.m. on April 27, 2006. The conditions required for the extension include written notification by Aztar to Ameristar before noon on April 22, 2006, that: a) Aztar's Board has determined that Ameristar's revised definitive offer constitutes a superior proposal (as defined in Aztar's amended merger agreement with Pinnacle Entertainment, Inc.) and has informed Pinnacle of that determination; b) Ameristar's revised definitive offer is the only superior proposal Aztar has received; and c) as of the time of the notice to Ameristar, Aztar has received no other takeover proposals (as defined in Aztar's amended merger agreement with Pinnacle) that are reasonably likely to result in a superior proposal. Aztar also disclosed that its Board, after consultation with its legal and financial advisors, determined that the revised definitive offer from Ameristar is reasonably likely to result in a superior proposal. Based on that determination, Aztar's Board has authorized Aztar to resume its discussions with Ameristar. Aztar also stated that its Board indicated it is unwilling to discontinue its discussions with Wimar Tahoe Corporation, dba Columbia Entertainment, the gaming affiliate of Columbia Sussex Corporation. As reported in the Troubled Company Reporter on April 19, 2006, Aztar's Board determined on April 18, 2006 that Columbia Entertainment's proposal to acquire Aztar for $47 in cash per share of Aztar common stock continued to be reasonably likely to result in a superior proposal, as defined in the amended merger agreement with Pinnacle. Aztar's Board will evaluate all aspects of the revised definitive offer from Ameristar and the proposal from Columbia Entertainment -- including any financing commitment letter yet to be provided to Aztar. Aztar's Board is not making any recommendation at this time with respect to any such offer or proposal, and there can be no assurance that Aztar's Board will approve any such transaction or that a transaction will result. On April 18, 2006, Aztar and Pinnacle amended their merger agreement to increase the purchase price for each share of Aztar common stock from $38 to $43 in cash. About Aztar Aztar Corp. -- http://www.aztar.com/-- is a publicly traded company that operates Tropicana Casino and Resort in Atlantic City, New Jersey, Tropicana Resort and Casino in Las Vegas, Nevada, Ramada Express Hotel and Casino in Laughlin, Nevada, Casino Aztar in Caruthersville, Missouri, and Casino Aztar in Evansville, Indiana. * * * As reported in the Troubled Company Reporter on March 15, 2006, Standard & Poor's Ratings Services reported that its BB rating on Aztar Corp. remains on CreditWatch with negative implications, where they were placed on Feb. 16, 2006. The CreditWatch update followed the announcement by Pinnacle that it signed a definitive merger agreement to acquire the outstanding shares of Aztar. BALLY TOTAL: Ronald G. Eidell Replaces Carl J. Landeck as CFO ------------------------------------------------------------- Bally Total Fitness Holding Corporation (NYSE: BFT) appointed Ronald G. Eidell as its chief financial officer, assuming responsibility for all finance and accounting functions. Mr. Eidell replaces former Chief Financial Officer Carl J. Landeck, who is no longer with the Company. The Company continues to expect to file its 2005 10-K report and quarterly report for the three months ended March 31, 2006, before the July 10 expiration of the waiver period recently obtained from the Company's senior bank lenders and bondholders. Mr. Eidell is a partner at Tatum, LLC, the largest and fastest-growing executive services and consulting firm in the U.S., where he is a Financial Leadership Partner in the Chicago office. Mr. Eidell brings more than 35 years of senior financial and operating experience to Bally, including helping clients improve the quality and timeliness of financial reporting, pursue strategic alternatives, and improve cash management, reporting and forecasting disciplines. The Company believes he will provide significant leadership to its strategic alternatives process, which remains on track, as well as expediting completion of the Company's audit process and filing its SEC reports. Bally Chairman and CEO, Paul A. Toback, commented, "This is the right time for this change. Ron Eidell is a well-seasoned professional with extensive experience across all areas of finance as well as significant operational experience leading successful outcomes for companies in transition. We're pleased to have an executive like Ron join our team. With his skills, knowledge and leadership ability, he will be a valuable asset to the Bally organization." Mr. Eidell serves as a Director of NeoPharm (NASDAQ:NEOL), where he is an audit committee member (and where he served as the company's interim President and CEO for most of 2005). Most recently, Mr. Eidell has been the Chief Financial Officer at a number of public or pre-IPO companies including Esoterix in Austin, Texas; and Novamed, Inc. and Metromail Corporation in Chicago. Prior to that he was Senior Vice President, Finance and Treasurer with R. R. Donnelley & Sons Co. Mr. Eidell has a Master's of Business Administration degree from the University of Chicago and a Bachelor of Science degree from Drexel University, where he serves on the Dean's Advisory Council to the University's business school. Mr. Eidell will initially hold the title of Senior Vice President for Finance. David S. Reynolds, Vice President and Controller, will assume responsibility for signing the Company's SEC filings through the completion of the Company's first quarter 2006 10-Q report. About Bally Total Bally Total Fitness -- http://www.ballyfitness.com/-- is the largest and only U.S. commercial operator of fitness centers, with approximately four million members and 390 facilities located in 29 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R) brands. * * * As reported in the Troubled Company Reporter on March 17, 2006, Standard & Poor's Ratings Services held its ratings on Bally Total Fitness Holding Corp., including the 'CCC' corporate credit rating, on CreditWatch with developing implications, where they were placed on Dec. 2, 2005. The CreditWatch update follows Bally's announcement that it will not meet the March 16, 2006, deadline for filing its annual report on SEC Form 10-K for the year ending Dec. 31, 2005. Bally currently anticipates filing its 2005 10-K in April 2006. BAREFOOT RESORT: Taps Hatley Law Firm as Closing Counsel -------------------------------------------------------- Barefoot Resort Yacht Club Villas, LLC, asks the U.S. Bankruptcy Court for the District of South Carolina for permission to employ Hatley Law Firm, LLC, as its real estate closing counsel. Barefoot Resort will perform closings on the Debtor's real estate sales. Chad B. Hatley, Esq., a member at the Hatley Law Firm, discloses that the Biddle Law Firm was already appointed by the Debtor as the closing attorney. However, due to the number of closings taking place and the need to move expeditiously, the Debtor decided to employ Mr. Hatley in order to assist the Biddle Law Firm in closing the remaining condominium sales. The Debtor tells the Court that it will pay the Firm $350 at each closing. The Debtor requests that the Firm not be required to file a fee application with the Court, since the closing fee is small. Mr. Hatley assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Columbia, South Carolina, Barefoot Resort Yacht Club Villas, LLC -- http://www.drakedevelopment.com/-- operates a resort located in North Myrtle Beach, South Carolina. Drake Development Company USA owns Barefoot Resort. The Debtor filed for chapter 11 protection on Feb. 21, 2006 (Bankr. D. S.C. Case No. 06-00640). William McCarthy, Jr., Esq., and Daniel J. Reynolds, Jr., Esq., at Robinson, Barton, McCarthy, Calloway & Johnson, P.A., represent the Debtor. When the Debtor filed for protection from its creditors, it listed $69,003,578 in assets and $60,980,655 in debts. BEAR STEARNS: $7.7 Mil. Loss Cues S&P to Lower Class J Certs. to D ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on classes B, C, and G of Bear Stearns Commercial Mortgage Securities Inc.'s commercial mortgage pass-through certificates from series 2001-TOP2. At the same time, the rating on class J is lowered to 'D' from 'CCC-', while the ratings are affirmed on eight other classes from the same transaction. The various rating actions reflect the settlement of litigation related to the 1601 McCarthy loan. The settlement resulted in a 100% principal loss of $7.7 million on the loan, which caused a principal loss to the class M and N certificates, neither of which are rated by Standard & Poor's. GMAC Commercial Mortgage Corp. (GMACCM) confirmed that as part of the settlement, no further litigation expenses will be borne by the trust. Liquidity issues related to the litigation resulted in downgrades of several subordinate classes and constrained some of the ratings on the senior classes. The resolution of the lawsuit improves the transaction's liquidity and removes a significant amount of uncertainty surrounding the deal. Specifically, the cumulative interest shortfalls on class G will be repaid next month, resulting in Standard & Poor's raising of the rating on the class to 'BB' from 'CCC+.' Standard & Poor's also expects the cumulative interest shortfall for class H to be repaid, although it may take up to a year due to potential credit issues with other assets in the transaction. The rating on class H is therefore affirmed at 'CCC,' but the rating agency will reevaluate the rating after the cumulative interest shortfalls on the class are repaid. Class J, however, is likely to carry a cumulative interest shortfall for an extended period of time, so Standard & Poor's has lowered the rating to 'D' accordingly. Should the cumulative interest shortfall of class J be repaid in full, the rating agency will reexamine the rating on the class at that time. The remaining raised and affirmed ratings reflect the settlement of the litigation as well as credit enhancement levels that provide adequate support through various stress scenarios. As of the remittance report dated April 17, 2006, the collateral pool consisted of 129 loans with an aggregate principal balance of $798.1 million, down from 140 loans totaling just over $1 billion at issuance. The master servicer, Wells Fargo Commercial Mortgage Servicing, provided year-end 2004, interim 2005, and year-end 2005 net cash flow (NCF) debt service coverage (DSC) figures for 97% of the nondefeased pool. The seven defeased loans in the transaction represent $40.6 million (5%) of the pool's collateral. Based on this information, Standard & Poor's calculated a weighted average DSC of 1.60x, which is the same as at issuance. No loans in the pool are delinquent, but two loans ($30.1 million, 4%) are with the special servicer, GMACCM. One of the loans with GMACCM has an appraisal reduction amount (ARA) in effect totaling $11.4 million. The trust has experienced five losses to date totaling $10.2 million, which includes the aforementioned loss related to the 1601 McCarthy loan settlement. The top 10 loan exposures, excluding defeased loans, have an aggregate outstanding balance of $248.3 million (31%). The weighted average DSC for the top 10 loans is 1.59x, up from 1.48x at issuance. The improved overall performance of the top 10 occurred despite significant credit issues for two of the loan exposures, one of which is on Wells Fargo's watchlist, while the other is with the special servicer. Both loan exposures are discussed in detail below. Standard & Poor's reviewed property inspections provided by the master servicer for all of the collateral properties securing the top 10 loans. All of the collateral was characterized as "excellent" or "good," except for the Bel-Air Apartments property securing the 10th-largest loan ($15 million, 2%), which was characterized as "fair." The Shops at Riverwoods is a 179,000-sq.-ft. "lifestyle center" retail property built in 1998 in Provo, Utah. The property secures the fourth-largest loan ($25.5 million, 3%) in the pool. After the property suffered a loss of tenants in 2003, including the Gap and Eddie Bauer, cash flow dropped dramatically. The loan was restructured after its transfer to GMACCM in June 2003, but it has not been transferred back to the master servicer due to ongoing poor performance, as indicated by: * a year-end 2005 DSC of 0.64x; * continued litigation against the Gap; and * the intention of Copeland's to vacate its space (40,523 sq. ft., 23% of the collateral space) in January 2007. While the loan is current, an ARA for $11.4 million is in effect on the loan based on an appraisal from June 2004. Standard & Poor's will continue to monitor the loan for changes in the collateral's performance. The other loan with the special servicer ($4.6 million) is secured by 215-227 Needham Street, a 32,269-sq.-ft. retail property built in 1960 in the Boston suburb of Needham, Massachusetts. The loan was transferred to the special servicer in January 2006 after the borrower filed for bankruptcy, primarily because three investors in the collateral property are disputing the managing partner's operation of the property (as well as four other non-collateral properties). The property continues to perform well, with 100% occupancy and a DSC of 1.79x as of year-end 2004. An appraisal from February 2006 valued the collateral at $11.2 million. The master servicer reported an April 2006 watchlist of 20 loans with an aggregate outstanding balance of $113.4 million (14%). The watchlist includes four of the seven loans that constitute the largest loan exposure ($39.9 million, 5%) in the pool. The Grand Rapids portfolio consists of a seven light industrial/office facilities near Grand Rapids, Michigan, that secure seven cross- defaulted and cross-collateralized loans. Four of the loans ($21.4 million, 3%) were added to the watchlist for significant declines in occupancy and DSC. The aggregate portfolio DSC and occupancy were 1.05x and 85% as of year-end 2004, respectively. Standard & Poor's stressed the loans on the watchlist, along with other loans with credit issues, as part of its pool analysis. The resultant credit enhancement levels support the various rating actions. Ratings raised: Bear Stearns Commercial Mortgage Securities Inc. Commercial mortgage pass-through certificates series 2001-TOP2 Rating Class To From Credit enhancement ----- -- ---- ------------------ B AA+ AA 14.36% C A+ A 10.57% G BB CCC+ 3.14% Rating lowered: Bear Stearns Commercial Mortgage Securities Inc. Commercial mortgage pass-through certificates series 2001-TOP2 Rating Class To From Credit enhancement ----- -- ---- ------------------ J D CCC- 1.40% Ratings affirmed: Bear Stearns Commercial Mortgage Securities Inc. Commercial mortgage pass-through certs series 2001-TOP2 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 17.68% A-2 AAA 17.68% D A- 9.30% E BBB 6.30% F BBB- 5.20% H CCC 2.35% X-1 AAA N/A X-2 AAA N/A N/A -- Not applicable. BGF INDUSTRIES: Posts $4.9 Million Net Loss in Year Ended Dec. 31 ----------------------------------------------------------------- BGF Industries, Inc., filed its financial result for fiscal year ended Dec. 31, 2005, with the Securities and Exchange Commission on Mar. 31, 2006. For the year ended Dec. 31, 2005, the company reported a net loss of $4,935,000 on $152,904,000 of net revenues compared to $1,897,000 of net income on $155,842,000 of net revenues in the prior year. As of Dec. 31, 2005, the company's balance sheet showed total assets of $77,510,000 and total debts of $118,972,000 resulting to a $41,462,000 stockholder's deficit. A full-text copy of BGF Industries' Annual Report ended Dec. 31, 2006, is available for free at http://researcharchives.com/t/s?81f Headquartered in Greensboro, North Carolina, BGF Industries, Inc. -- http://www.bgf.com/-- is the second largest manufacturer of woven and non-woven glass fiber fabrics in North America as well as a producer of other high performance fabrics. * * * As reported in the Troubled Company Reporter on April 12, 2006, Standard & Poor's Ratings Services raised its ratings on BGF Industries Inc., including the corporate credit rating to 'B-' from 'CCC+'. Standard & Poor's said the outlook is stable. BLACK WARRIOR: Balance Sheet Upside-Down by $15.6 Mil. at Dec. 31 ----------------------------------------------------------------- Black Warrior Wireline Corp. disclosed its financial result for fiscal year ended Dec. 31, 2005, to the Securities and Exchange Commission on Mar. 31, 2006. For the year ended Dec. 31, 2005, the company reported $8.2 million of net income on $73.7 million of net revenues compared to a net loss $1.8 million on $53.7 million of net revenues in 2004. As of Dec. 31, 2005, the company's balance sheet showed total assets of $101.7 million and total debts of $117.2 million resulting to a $15.6 million stockholder's deficit. A full-text copy of Black Warrior's Annual Report ended Dec. 31, 2006, is available for free at http://researcharchives.com/t/s?822 Headquartered in Columbus, Mississippi, Black Warrior Wireline Corp. is an oil and gas service company providing services to oil and gas well operators primarily in the United States and in the Gulf of Mexico. BOUNDLESS MOTOR: Losses & Current Deficit Spur Going Concern Doubt ------------------------------------------------------------------ Murrell, Hall, McIntosh & Co., PLLP, expressed substantial doubt about Boundless Motor Sports Racing Inc., nka Dirt Motor Sports, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's significant net losses and negative working capital. For the fiscal year ended Dec. 31, 2005, the company incurred a net loss of $3,792,256 on $1,963,297 of revenues compared to a net loss of $2,545,770 on $1,786,233 of revenues in the prior year. At Dec. 31, 2005, the Company has an accumulated deficit of $37.9 million and negative working capital of $9.0 million. As of Dec. 31, 2005, the company's balance sheet showed total assets of $13.7 million and total debts of $15.0 million resulting to a $1.2 million stockholders' deficit. A full-text copy of Boundless Motor's Annual Report is available at no charge at http://researcharchives.com/t/s?82c Boundless Motor Sports Racing Inc., nka Dirt Motor Sports, Inc., is a leading marketer and promoter of motorsports entertainment in the United States. The Company operate 6 dirt motorsports tracks in New York, Pennsylvania and Florida, and own and operate four of the premier sanctioning bodies in dirt motorsports: the World of Outlaws, DIRT Motorsports, United Midwestern Promoters (UMP) and the Mid America Racing Series (MARS). CALPINE CORP: Wants Court to Approve Director Compensation Program ------------------------------------------------------------------ Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to approve a Director Compensation Program for the non-employee directors. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, relates that the current non-employee directors of Calpine Corporation bring a diverse range of experience and business acumen to the performance of their duties. Each of Calpine's outside directors is a highly accomplished and skilled businessperson with insight and judgment critical to the success of the Debtors' reorganization. Calpine's non-employee directors are: -- Kenneth T. Derr, director of Calpine since May 2001, chairman of the Board of Calpine since November 2005, and served as Acting Chief Executive Officer of Calpine from November to December 2005; -- William J. Keese, director of Calpine since September 2005; -- David C. Merritt, director of Calpine since February 2006; -- George J. Stathakis, director since September 1996 and served as a senior advisor to Calpine from December 1994 to December 2005; -- Walter L. Revell, director since September 2005; and -- Susan Wang, director since June 2003. The Director Compensation Program has three separate components: (a) compensation for participation on the Board of Directors; (b) compensation for participation on the Audit Committee, the Nominating and Governance Committee or the Compensation Committee; and (c) expense reimbursement All fees will be paid at the end of each quarter in arrears. Board Participation Participation on the Board of Directors will be compensated at $125,000 annually, with an additional $125,000 annually for the chairperson of the Board. Each Director is also entitled to a fee of $2,000 per in-person meeting and $1,000 per telephonic meeting of the Board. Committee Participation The members of the Audit Committee will receive an additional $10,000 annual fee for his/her services on the Audit Committee, with an additional $30,000 annually for the chairperson of the Audit Committee. The chairpersons for the Nominating and Governance Committee and the Compensation Committee each will receive $15,000 in annual fees in addition to their base compensation for membership on the Board. Members of the Nominating and Governance Committee and the Compensation Committee will not receive additional compensation for participation on those Committees. However, all committee members are entitled to a $1,000 per meeting fee, whether participation is in-person or telephonic. Expense Reimbursement Calpine will reimburse all actual and reasonable out-of-pocket expenses for the Directors. Mr. Cieri asserts payment of market-based compensation to the Board of Directors is necessary to: 1. recruit and retain talented and capable Directors with a broad range of cross-industry experience; 2. provide recognition of the time commitment required of the Directors in the context of the Chapter 11 filings; and 3. recognize best practices in remuneration of the Directors. In designing the proposed Director Compensation Program, Mr. Cieri relates that the Debtors have balanced the need for market- competitive compensation with the financial constraints under which Calpine now operates. The Director Compensation Program has been tailored to provide payment commensurate with the value that the Directors contribute to the success of these Chapter 11 Cases and comparable to that provided to directors in like companies. Steven Hall & Partners, an executive compensation consulting firm, on behalf of the Debtors, examined non-employee director compensation in comparable companies to determine how Calpine's current director compensation package compared to the market. Steven Hall & Partners drew on 2004 data related to 18 comparable companies, each with $8.5 to $9.5 billion in annual revenues. Those companies include AES Corporation, Centerpoint Energy, Inc., Devon Energy Corporation, Reliant Energy, Inc., Sempra Energy, and TXU Corporation. Based on its analysis, Steven Hall & Partners concluded that Calpine's current director compensation package was significantly below market. Steven Hall & Partners recommended that Calpine shift to an all-cash compensation structure aimed at matching the median market compensation levels for directors at comparable companies as well as increase director compensation. Calpine's Board of Directors has approved the proposed Director Compensation Program. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Wants To Continue Existing Insurance Policies ----------------------------------------------------------- Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for authority to pay up to $35,000,000 currently due under the Loanback Agreement. The Debtors also ask the Court to: * continue to allow CPNIC to operate as it had prior to the Petition Date, including the processing and payment of claims; and * authorize the Debtors to make additional payments beyond $35,000,000 without Court approval, provided the Debtors obtain the consent of the Official Committee of Unsecured Creditors. As previously reported in the Troubled Company Reporter on Feb. 2, 2006, the Court deferred ruling on a final basis on the Debtors' request for authorization to repay their captive insurance company up to $35,000,000 pursuant to a prepetition Loanback Agreement. Instead, the Court granted the Debtors interim approval to repay up to $18,000,000 pursuant to the Loanback Agreement. Of the total amount outstanding under the Loanback Agreement, the Debtors estimate that CPN Insurance Corporation will need to be repaid $35,000,000 representing the amount of CPNIC's projected capital deficit which would be required to meet expected claims and expenses. Robert G. Burns, Esq., at Kirkland & Ellis LLP, in New York, relates that the Debtors acknowledge that the amounts due under the Loanback Agreement constitute prepetition debt. However, the failure to satisfy the obligation would result in even greater losses to the Debtors' estates. The failure to honor the Loanback Agreement would render CPNIC unable to pay pending claims, which would, in turn, cause CPNIC to lose its license to act as an insurer under Hawaiian law and, inevitably, to cease operating. Under these circumstances, another probable consequence is the Debtors would not be able to receive payments under the Excess Policies that provide an additional layer of coverage to the CPNIC policies, says Mr. Burns. Mr. Burns tells the Court that paying the $35,000,000 that is due and owing and continuing to utilize CPNIC going forward is the least expensive among the Debtors' options regarding the Loanback Agreement because it: (1) honors Calpine's obligations, thus reassuring the insurance markets and avoiding a demand for higher premiums; (2) avoids the financial and administrative costs inherent in rejecting or winding down CPNIC and obtaining an entirely new third-party insurance program; (3) enables the Debtors to collect the $22,500,000 due under the Excess Policies; and (4) avoids any seizures or restrictions, other than the minimum capital required by the state of Hawaii, of the bank accounts of CPNIC which hold approximately $33,000,000. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Panel Taps Morgenstern Jacobs as Conflicts Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Calpine Corp. and its debtor-affiliates' chapter 11 cases seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Morgenstern Jacobs & Blue, LLC, as its special conflicts counsel, nunc pro tunc to March 3, 2006. The Committee wants MJB to represent it in matters during the pendency of the Debtors' chapter 11 cases for which Akin Gump Strauss Hauer & Feld LLP, the Committee's counsel, has or may have a conflict of interest, or is otherwise unable to represent the Committee. MJB will advise and represent the Committee in connection with matters related to the Debtors' dealings with Rosetta Resources Inc. and claims of the Debtors against Solutia, Inc. and its affiliates that are also debtors in Chapter 11 proceedings. The Committee believes that it is necessary to employ special conflicts counsel, and that without professional assistance, it will be unable to adequately fulfill its responsibilities in the cases. William J. Patterson, the Committee's chairperson, says MJB has extensive experience and knowledge in bankruptcy and creditors' rights. It is currently counsel to the Official Committee of Equity Security Holders in the bankruptcy cases of Adelphia Communications Corp., as well as of the Official Committee of Unsecured Creditors in the 360networks (USA) Inc. case. Peter D. Morgenstern, Esq., a member of Morgenstern Jacobs & Blue, LLC, in New York, discloses that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners & Counsel $440 - $660 Associates $320 - $380 Paralegals $100 - $165 Mr. Morgenstern assures the Court that the Firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, in that it does not hold or represent any interest adverse to the Debtors' estates, the Committee, or the unsecured creditors the Committee represents. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) CARRINGTON MORTGAGE: Moody's Rates Class M-10 Certificates at Ba1 ----------------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the senior certificates issued by Carrington Mortgage Loan Trust, Series 2006-OPT1, Asset-Backed Pass-Through Certificates, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Option One Mortgage Corporation originated adjustable-rate and fixed-rate subprime mortgage loans acquired by Carrington Securities, LP. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, and overcollateralization. Moody's expects collateral losses to range from 5.25% to 5.75%. Option One Mortgage Corporation will service the loans. Moody's has assigned Option One Mortgage Corporation its top servicer quality rating as a primary servicer of subprime loans. The complete rating actions are: Carrington Mortgage Loan Trust, Series 2006-OPT1 Asset-Backed Pass-Through Certificates * Class A-1, Assigned Aaa * Class A-2, Assigned Aaa * Class A-3, Assigned Aaa * Class A-4, Assigned Aaa * Class M-1, Assigned Aa1 * Class M-2, Assigned Aa2 * Class M-3, Assigned Aa3 * Class M-4, Assigned A1 * Class M-5, Assigned A2 * Class M-6, Assigned A3 * Class M-7, Assigned Baa1 * Class M-8, Assigned Baa2 * Class M-9, Assigned Baa3 * Class M-10, Assigned Ba1 The Class M-10 certificates have been 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. CATHOLIC CHURCH: Portland Court Requires Claims to Be Estimated --------------------------------------------------------------- The Honorable Elizabeth L. Perris of the U.S. Bankruptcy Court for the District of Oregon ruled at a hearing on April 17, 2006, that she will not confirm a plan of reorganization until she is satisfied with the estimate of the costs to settle sex abuse claims against the Archdiocese of Portland in Oregon, William McCall, Associated Press business writer, reports. Judge Perris said Portland must prove it can pay those claims. Judge Perris also lifted the automatic stay to allow nearly 130 sex abuse claims to proceed to trial. The Bankruptcy Court had given Portland and alleged sex-abused claimants time to agree to a settlement. Both have drafted settlement plans but have been unable to meet at a common ground. April 17 was the deadline for deciding whether to go to court, Mr. McCall says. Erin Olson, Esq., counsel for several alleged victims, said 88 victims will bring their cases to federal courts and nearly 40 will go to state courts. Judge Perris hopes that the trials will help speed a possible settlement, Mr. McCall notes. The Court said the individual cases could be settled at any time. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Portland Wants Construction Contracts Approved --------------------------------------------------------------- The Archdiocese of Portland in Oregon and St. Mary Magdalene Church ask the U.S. Bankruptcy Court for the District of Oregon to approve certain construction contracts to remodel the Parish's playground fields. Thomas W. Stilley, Esq., at Sussman Shank LLP, in Portland, Oregon, tells the Court that the construction, named as the Madeleine Field of Dreams project, will cost $585,000. The Project will be paid with: -- the funds already raised by and held by the Parish; -- funds to be raised in the future; -- in-kind donations already pledged; and -- in-kind donations yet to be pledged or received. Mr. Stilley relates that the Madeleine Field of Dreams is a project within the St. Mary Magdalene Parish Master Site Plan approved in 2003. The Project includes renovating a blacktop area into a multi-purpose play area for the Parish and to share with the neighborhood. At its full build-out, the Project will include: (i) a synthetic turf, multi-sport field; (ii) a covered play area for all-weather recreation; and (iii) a smaller, still-to-be-defined play space. As a result of donated services, the site has been surveyed and drawings completed, Mr. Stilley further relates. Grading, drainage, construction, and retaining wall plans have all been addressed. The City of Portland has approved the plans for the project and issued permits. The approved plans now give the Parish an opportunity to bid the project for firm cost estimates. Mr. Stilley informs the Court that the Parish has already raised cash and pledges totaling $175,000 and received $220,000 in pledges for in-kind services. But the Parish still needs to raise $200,000 to cover the estimated cost to build the entire project as presented to the Parish in June 2005. If all funding is secured, the entire project will be built in one phase, Mr. Stilley says. If not, the Parish plans at least to complete the majority of the improvements, including: * demolition of the blacktop; * grading; * installation of utilities, retaining walls, fencing; and * construction of the synthetic turf, multi-sport field. As other funding is secured, the covered play area and remaining improvements will be added. In the interim, the Parish and surrounding neighborhood would enjoy a much-improved play area that is fully functional. Absent Portland's entry into the construction contracts, the funds received for the Project would have to be returned to the donors, Mr. Stilley says. However, if the additional funds are raised, in-kind donations are performed, and the Project is built, the value of the property will increase. Mr. Stilley reminds Judge Perris that the situation is much like the new construction for St. Mary, Our Lady of the Dunes Parish Church in Florence, which the Court had approved. "[A]llowing this project to proceed will benefit everyone involved, including the [Archdiocese], the Parish, the parishioners, students, and members of the surrounding community, and will have at worst a neutral, if not beneficial effect on the [Archdiocese's] estate," Mr. Stilley points out The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000) CHASE MORTGAGE: S&P Holds Low-B Ratings on 30 Certificate Classes ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on six classes of mortgage pass-through certificates from three transactions issued by Chase Mortgage Finance Trust. At the same time, ratings are affirmed on 316 classes from 22 transactions also issued by issued by Chase Mortgage Finance Trust. The raised ratings reflect adequate actual and projected credit support percentages, as well as low delinquencies and minimal realized losses. The upgraded classes in the transactions that are backed by 15-year mortgage loans (series 2002-S8 and 2003-S1) have at least 1.36x the original loss coverage levels associated with the higher ratings. The upgraded classes in the transactions that are backed by 30-year mortgage loans (series 2002-S4 and 2002-S6) have at least 2.02x the original loss coverage levels associated with the higher ratings. The appreciated credit support percentages resulted from the shifting interest structures, and the appreciation was accelerated by significant principal prepayments on the underlying collateral. Furthermore, the upgraded transactions have less than 28% of their original pool balances outstanding. As of the March 2006 remittance period, total delinquencies ranged from 1.28% to 1.82% of the current pool balances. The affirmed ratings reflect actual and projected credit support percentages that are sufficient to maintain the current ratings. Total delinquencies ranged from 0.00% to 1.92% of the current pool balances. Cumulative realized losses ranged from 0.00% to 0.01% of the original pool balances. Credit support for these transactions is provided by subordination. The underlying collateral consists primarily of conventional, fully amortizing, 15- and 30-year, fixed-rate mortgage loans, which are secured by first liens on one- to four- family residential properties. Ratings raised: Chase Mortgage Finance Trust Mortgage pass-through certificates Rating Series Class To From ------ ----- -- ---- 2002-S4 B-2 AAA AA+ 2002-S8 B-1 AAA AA+ 2002-S8 B-2 AA A+ 2003-S1 M AAA AA+ 2003-S1 B-1 AA A+ 2003-S1 B-2 BBB+ BBB Ratings affirmed: Chase Mortgage Finance Trust Mortgage pass-thru certificates Series Class Rating ------ ----- ------ 2002-S4 A-23, A-P, M, B-1 AAA 2002-S6 IA-4, IIA-1, A-X, A-P, M, B-1, B-2 AAA 2002-S8 IA-1, IA-P, IA-X, IIA-1, IIA-P, IIA-X, M AAA 2003-S1 IA-1, IA-P, IA-X, IIA-1, IIA-P, IIA-X AAA 2003-S2 A-1, A-2, A-3, A-4, A-X, A-P AAA 2003-S2 M AA 2003-S2 B-1 A 2003-S2 B-2 BBB 2003-S2 B-3 BB 2003-S2 B-4 B 2003-S3 A-1, A-2, A-3, A-4, A-5, A-8, A-9, A-10 AAA 2003-S3 A-X, A-P, M AAA 2003-S3 B-1 AA 2003-S3 B-2 A 2003-S4 IA-1, IA-2, IA-3, IA-4, IA-5, IA-6, IA-8 AAA 2003-S4 IA-9, IA-10, IA-11, IA-12, IA-13, IA-P AAA 2003-S4 IA-X, IIA-1, IIA-2, IIA-3, IIA-P, IIA-X AAA 2003-S4 M AA 2003-S4 B-1 A 2003-S4 B-2 BBB 2003-S4 B-3 BB 2003-S4 B-4 B 2003-S5 A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8 AAA 2003-S5 A-9, A-X, A-P AAA 2003-S5 B-1 AA- 2003-S5 B-2 BBB 2003-S5 B-3 BB 2003-S5 B-4 B+ 2003-S6 A-1, A-2, A-3, A-X, A-P AAA 2003-S6 M AA 2003-S6 B-1 A 2003-S6 B-2 BBB 2003-S6 B-3 BB 2003-S6 B-4 B 2003-S7 A-1, A-2, A-3, A-4, A-X, A-P AAA 2003-S7 M AA 2003-S7 B-1 A 2003-S7 B-2 BBB 2003-S7 B-3 BB 2003-S7 B-4 B 2003-S8 A-1, A-2, A-3, A-X, A-P AAA 2003-S8 M AA 2003-S8 B-1 A 2003-S8 B-2 BBB 2003-S8 B-3 BB 2003-S8 B-4 B 2003-S9 A-1, A-X, A-P AAA 2003-S9 M AA 2003-S9 B-1 A 2003-S9 B-2 BBB 2003-S9 B-3 BB 2003-S9 B-4 B 2003-S10 A-1, A-2, A-3, A-X, A-P AAA 2003-S10 M AA 2003-S10 B-1 A 2003-S10 B-2 BBB 2003-S10 B-3 BB 2003-S10 B-4 B 2003-S11 IA-1, IIA-1, IIA-2, IIA-3, IIA-4, IIA-5 AAA 2003-S11 IIA-6, IIA-7, IIA-8 IIA-9, IIA-10, IIIA-1 AAA 2003-S11 A-P, A-X AAA 2003-S11 M AA 2003-S11 B-1 A 2003-S11 B-2 BBB 2003-S11 B-3 BB 2003-S11 B-4 B 2003-S12 IA-1, IA-2, IA-3, IA-P, IIA-1, IIA-P, A-X AAA 2003-S12 M AA 2003-S12 B-1 A 2003-S12 B-2 BBB 2003-S12 B-3 BB 2003-S12 B-4 B 2003-S13 A-1, A-2, A-3, A-5, A-6, A-7, A-8, A-9 AAA 2003-S13 A-10, A-11, A-12, A-13, A-14, A-15, A-16 AAA 2003-S13 A-17, A-18, A-X AAA 2003-S13 M AA 2003-S13 B-1 A 2003-S13 B-2 BBB 2003-S13 B-3 BB 2003-S13 B-4 B 2003-S14 IA-1, IA-2, IA-3, IA-4, IA-5, IIA-1, IIA-2 AAA 2003-S14 IIA-3, IIA-4, IIA-5, IIA-6, IIA-7, IIA-8 AAA 2003-S14 IIA-9, IIA-10, IIIA-1, IIIA-2, IIIA-3 AAA 2003-S14 III-A4, IIIA-5, IIIA-6, IIIA-7, IIIA-8 AAA 2003-S14 III-A9, IIIA-10, AP, AX AAA 2003-S14 M AA 2003-S14 B-1 A 2003-S14 B-2 BBB 2003-S14 B-3 BB 2003-S14 B-4 B 2003-S15 IA-1, IA-2, IA-3, IA-4, IA-X, IIA-1, IIA-2 AAA 2003-S15 IIA-3, IIA-4, IIA-5, IIA-6, IIA-7, IIA-8 AAA 2003-S15 IIA-9, IIA-10, IIA-11, IIA-12, IIA-13 AAA 2003-S15 II-A14, IIA-15, IIA-16, IIA-17, IIA-18 AAA 2003-S15 II-AX, A-P AAA 2003-S15 M AA 2003-S15 B-1 A- 2003-S15 B-2 BBB- 2003-S15 B-3 BB 2003-S15 B-4 B 2004-S1 A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-P AAA 2004-S1 M AA 2004-S1 B-1 A 2004-S1 B-2 BBB 2004-S1 B-3 BB 2004-S1 B-4 B 2004-S2 IA-1, IA-2, IA-3, IA-4, IA-5, IIA-1, IIA-2 AAA 2004-S2 IIA-3, IIA-4, IIA-5, IIA-6, IIA-7, IIA-8 AAA 2004-S2 IIA-9, A-P, A-X AAA 2004-S2 M AA 2004-S2 B-3 BB 2004-S2 B-4 B 2005-A1 1-A-1, 1-A2, 2-A1, 2-A2, 2-A3, 2-A4, 2-A5 AAA 2005-A1 3A-1, 3-A2, 3-A3, 3-A4, A-R AAA 2005-A2 1-A1, 1-A2, 1-A3, 1-A4, 1-A5, 1-A6, 1-AX AAA 2005-A2 2-A1, 2-A2, 2-A3, 2-A4, 2-AX, 3-A1, 3-A2 AAA 2005-A2 3-A3, 3-A4, 3-A5, 3-A6, 3-AX, AAA CHEMTURA: Selling $500M Notes to Redeem Sr. Notes & Pay Off Loans ----------------------------------------------------------------- Chemtura Corporation is offering $500 million aggregate principal amount of its 6.875% notes due 2016. The Company is selling the Notes at 99.452% of face amount, increasing the yield to maturity to 6.950%. The Company expects to get $497,261,971, before deducting around $4 million of underwriters' discounts and commissions and around $500,000 of other fees and expenses. The Company will use the net proceeds to redeem all of its outstanding $164.8 million aggregate principal amount of Senior Floating Rate Notes (plus premiums and fees) and to pay off its (but not commitments) loans under its revolving credit facility. Assuming a redemption date of May 25, 2006, the Company would be required to pay around $180.3 million to redeem all of its outstanding Senior Floating Rate Notes. The underwriters are: Underwriters Amount of Notes ------------ --------------- Credit Suisse Securities (USA) LLC $267,500,000 Citigroup Global Markets Inc. $70,000,000 ABN AMRO Incorporated $32,500,000 Banc of America Securities LLC $32,500,000 Greenwich Capital Markets, Inc. $32,500,000 Morgan Stanley & Co. Incorporated $32,500,000 Wachovia Capital Markets, LLC $32,500,000 Wells Fargo Bank, N.A., is the trustee, registrar and paying agent. Terms of the Notes Interest on the notes is payable on June 1 and December 1 of each year, beginning on December 1, 2006. The notes mature on June 1, 2016. Certain of its existing and future wholly owned domestic subsidiaries would guarantee the Company's obligations under the notes. The notes will be the Company's general unsecured, unsubordinated obligations and will rank pari passu with its existing and future unsubordinated debt. The notes will be subordinated to any secured debt and will be structurally subordinated to all future and existing obligations of the Company's subsidiaries that do not guarantee the notes. Not all of the Company's subsidiaries will be guarantors of the notes. Non-guarantor subsidiaries have no obligations to pay noteholders. As a result, the notes are effectively junior in right of payment to non-guarantor subsidiaries' obligations. Holders of notes will have no recourse against non-guarantor subsidiaries. At December 31, 2005, the Company has $4.986 billion in total assets and $1.369 billion in total debts. At December 31, 2005, the Company's non-guarantor subsidiaries owed third parties around $238 million. A full-text copy of the Free Writing Prospectus is available for free at http://ResearchArchives.com/t/s?827 A full-text copy of the Registration Statement is available for free at http://ResearchArchives.com/t/s?829 Chemtura Corporation -- http://www.chemtura.com/-- is a global manufacturer and marketer of specialty chemicals, crop protection and pool, spa and home care products. Headquartered in Middlebury, Connecticut, the company has approximately 7,300 employees around the world. * * * As reported in the Troubled Company Reporter on Mar 17, 2006, Standard & Poor's Ratings Services revised its outlook on Middlebury, Connecticut-based Chemtura Corp. to positive from stable and affirmed the existing 'BB+' ratings. As reported in the Troubled Company Reporter on Sept. 26, 2005, Moody's Investors Service affirmed Ba1 ratings on all of Chemtura Corporation's outstanding $1.27 billion of senior unsecured debt obligations, and changed the outlook on the company's ratings to negative from stable. COLLINS & AIKMAN: Amends Terms of TR Associates Lease ----------------------------------------------------- Collins & Aikman Corporation and its debtor-affiliates determined that they were paying commercially unreasonable terms under a lease between TR Associates, LLC and Dura Convertible Systems, Inc., dated as of Aug. 1, 1984. The Lease was for real property at 2011 West Beecher Street, in Adrian, Michigan. After exploring alternatives, the Debtors decided to continue to use and occupy the property provided they were able to negotiate reasonable Lease terms with TR Associates. Thus, the Debtors engaged in a series of arm's-length and good faith negotiations with TR Associates to determine if the Lease could be amended. Based on these negotiations, the parties were able to arrive at a commercially reasonable amendment to the Lease. The material terms of the Amendment are: (1) The lease term is extended by 17 months up to December 31, 2010; (2) Monthly rent is reduced to $6,958 from April 1, 2006 through January 31, 2007, and $8,208 from February 1, 2007, through December 31, 2010; and (3) If Dura rejects the Lease, the effective date of the rejection will be no less than six months after the date of notification of the rejection. If Dura vacates the Property before the six-month notice, the Debtors will be required to continue to pay rent under the Lease up through the effective date of the rejection and the rents will be accorded administrative expense status under Section 503(b)(1)(A) of the Bankruptcy Code. Accordingly, the Debtors ask the U.S. Bankruptcy Court for the Eastern District of Michigan for authority to enter into the Amendment. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, points out that by entering into the Amendment, the Debtors will be able to: (a) retain the continued use of the Property under significantly reduced rent obligations; (b) avoid premature assumption or rejection of the Lease; and (c) retain the option to reject the Lease in the future if doing so later proves to be beneficial to them. "Without the Amendment, the Debtors would be forced to continue to lease the Property under the existing uneconomical rates or would be compelled to pursue less advantageous proposals from other lessors," Mr. Schrock says. 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. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000) COMVERSE TECH: Delayed 10-K Filing Prompts Nasdaq Delisting Notice ------------------------------------------------------------------ Comverse Technology, Inc. (NASDAQ: CMVT) received, on April 17, 2006, a Staff Determination letter from The NASDAQ Stock Market indicating that the Company's securities will be delisted from The NASDAQ Stock Market due to the delay in filing its Form 10-K for the year ended Jan. 31, 2006. The Company will request a hearing before the NASDAQ Panel to review the Staff Determination. There can be no assurance that the NASDAQ Panel will grant the Company's request for continued listing. Under NASDAQ Marketplace Rules, a hearing request will stay the delisting action pending the decision of the NASDAQ Panel. About Comverse Comverse, a unit of Comverse Technology, Inc. (NASDAQ: CMVT) -- http://www.comverse.com/-- is the provides of software and systems enabling network-based multimedia enhanced communication and billing services. Over 450 communication and content service providers in more than 120 countries use Comverse products to generate revenues, strengthen customer loyalty and improve operational efficiency. * * * As reported in the Troubled Company Reporter on March 17, 2006, Standard & Poor's Ratings Services placed its corporate credit and senior unsecured debt ratings on Comverse Technology Inc. on CreditWatch with negative implications. The company has S&P's 'BB-' corporate credit and senior unsecured debt ratings. CONMED CORP: Foreign Units Get Access to $100-Mil. Revolving Loan ----------------------------------------------------------------- Conmed Corporation's foreign subsidiaries can now borrow under the Company's credit facility, to as much as $89 million. The Company amended and restated its Credit Agreement with JP Morgan Chase Bank, N.A., as administrative agent, and 37 financial institutions to allow loan access to its foreign units. The $235-million Credit Facility is comprised of: -- a $100 million revolving credit facility; and -- a $135 million term loan. The Company currently owes its lenders $135 million under the term loan and $11 million under the revolving credit facility, leaving the foreign units with up to $89 million to borrow. The Amended Credit Agreement for the revolving credit loans now expire on April 13, 2011; for the term loan on April 12, 2013. Loans under the prior Agreement was supposed to expire in December 2009. The Amended Credit Agreement did not indicate the specific foreign subsidiaries allowed to borrow. It limits, however, the number of foreign units allowed to borrow at any one time to three. The Company's borrowings under the Credit Agreement will bear interest at variable rates. The loans are secured by assets and rights of the Company and certain of its subsidiaries and are subject to customary covenants. A full-text copy of the Amended and Restated Agreement is available for free at http://ResearchArchives.com/t/s?82b Conmed Corp. -- http://www.conmed.com/-- is a medical technology company with an emphasis on surgical devices and equipment for minimally invasive procedures and monitoring. The Company's products serve the clinical areas of arthroscopy, powered surgical instruments, electrosurgery, cardiac monitoring disposables, endosurgery and endoscopic technologies. They are used by surgeons and physicians in a variety of specialties including orthopedics, general surgery, gynecology, neurosurgery, and gastroenterology. Headquartered in Utica, New York, the Company's 2,800 employees distribute its products worldwide from eleven manufacturing locations. * * * As reported in the Troubled Company Reporter on March 28, 2006, Moody's Investors Service placed a Ba2 rating on ConMed Corporation's $250 million senior secured credit facility. Moody's also affirmed the Ba3 Corporate Family Rating and the B2 rating on ConMed's $150 million senior subordinated convertible notes. Moody's changed the rating outlook to negative from stable. Standard & Poor's Ratings Services also put a BB- rating on ConMed Corp.'s $250 million secured credit facility, consisting of: * a $150 million seven-year term loan; and * a $100 million five-year revolving credit facility. At the same time, Standard & Poor's affirmed the existing 'BB-' corporate credit rating on the company. S&P said the outlook is stable. COVAD COMMS: Can Borrow Up to $50 Million from Silicon Valley ------------------------------------------------------------- Covad Communications Group, Inc., and its wholly owned subsidiary, Covad Communications Company, obtained access to a $50 million revolving facility to be provided by Silicon Valley Bank under an April 13, 2006, Loan and Security Agreement. The Loan matures on April 13, 2008. The Loan incurs interest at a rate equal to SVB's prime rate or LIBOR plus specified margins, whichever Covad chooses. The Loan is secured by substantially all of the borrowers' real and personal property other than intellectual property. Under the Loan Agreement, the Borrowers and their subsidiaries cannot easily transfer all or any part of their businesses or properties, merge, or acquire all or substantially all of the capital stock or property of another company nor engage in new business. The Loan Agreement limits them. The Loan Agreement also limits their ability to: -- borrow more funds or put liens on any of their properties; -- pay dividends on their capital stock; -- invest in other companies; -- pay any subordinated debt; or -- incur capital expenses, on a consolidated basis, in excess of $25 million in 2006, and $30 million in 2007, subject to certain exceptions. In addition, the Loan Agreement requires borrowers to maintain specified liquidity ratios and tangible net worth levels. A full-text copy of the Loan and Security Agreement is available for free at http://ResearchArchives.com/t/s?81e Covad Communications Group, Inc. -- http://www.covad.com/-- provides broadband voice and data communications. The company offers DSL, Voice over IP, T1, Web hosting, managed security, IP and dial-up, and bundled voice and data services directly through Covad's network and through Internet Service Providers, value- added resellers, telecommunications carriers and affinity groups to small and medium-sized businesses and home users. Covad broadband services are currently available across the nation in 44 states and 235 Metropolitan Statistical Areas and can be purchased by more than 57 million homes and businesses, which represent over 50 percent of all US homes and businesses. Liabilities Exceed Assets At Dec. 31, 2005, Covad Communications Group, Inc.'s balance sheet showed a stockholders' equity deficit of $20,169,000 compared to a $8,635,000 shareholders' equity deficit at Dec. 31, 2004. Covad emerged from a chapter 11 restructuring in Dec. 2001 under a plan of reorganization that swapped $1.4 billion of bond debt with a combination of cash (about 19 cents-on-the-dollar) and a 15% equity stake in the company. Covad's prepetition shareholders retained an approximate 80% equity interest in the company. CREDIT SUISSE: Moody's Holds Low-B Ratings on Eight Cert. Classes ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of three classes and affirmed the ratings of 24 classes of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2003-C3: * Class A-1, $63,258,638, Fixed, affirmed at Aaa * Class A-2, $214,000,000, Fixed, affirmed at Aaa * Class A-3, $212,000,000, Fixed, affirmed at Aaa * Class A-4, $55,000,000, Fixed, affirmed at Aaa * Class A-5, $862,414,000, Fixed, affirmed at Aaa * Class A-X, Notional, affirmed at Aaa * Class A-SP, Notional, affirmed at Aaa * Class A-Y, Notional, affirmed at Aaa * Class B, $47,432,000, Fixed, upgraded to Aaa from Aa2 * Class C, $19,405,000, Fixed, upgraded to Aa2 from Aa3 * Class D, $38,808,000, Fixed, upgraded to A1 from A2 * Class E, $19,405,000, Fixed, affirmed at A3 * Class F, $19,404,000, WAC Cap, affirmed at Baa1 * Class G, $12,936,000, WAC Cap, affirmed at Baa2 * Class H, $19,404,000, WAC Cap, affirmed at Baa3 * Class J, $19,405,000, WAC Cap, affirmed at Ba1 * Class K, $12,936,000, WAC Cap, affirmed at Ba2 * Class L, $6,468,000, WAC Cap, affirmed at Ba3 * Class M, $10,780,000, WAC Cap, affirmed at B1 * Class N, $2,156,000, WAC Cap, affirmed at B2 * Class O, $4,312,000, WAC Cap, affirmed at B3 * Class 622-A, $2,508,747, Fixed. affirmed at A3 * Class 622-B, $5,950,107, Fixed, affirmed at Baa1 * Class 622-C, $5,949,117, Fixed, affirmed at Baa2 * Class 622-D, $5,950,107, Fixed, affirmed at Baa3 * Class 622-E, $17,658,256, Fixed, affirmed at Ba1 * Class 622-F, $1,585,045, Fixed, affirmed at Ba2 As of the April 17, 2006 distribution date, the transaction's aggregate principal balance has decreased by approximately 3.6% to $1.70 billion from $1.76 billion at securitization. The Certificates are collateralized by 247 loans, ranging in size from less than 1.0% to 12.1% of the pool, with the top ten loans representing 42.0% of the pool. The pool includes five shadow rated investment grade loans, which represent 30.4% of the pool. Seven loans, representing 4.8% of the pool, have defeased and are collateralized by U.S. Government securities. Two loans have been liquidated from the pool resulting in an aggregate realized loss of approximately $59,000. One loan, representing less than 1.0% of the pool, is in special servicing. Moody's is not projecting a loss from this specially serviced loan at this time. Twenty-four loans, representing 10.8% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2004 and partial or full year 2005 operating results for 99.0% and 96.0% of the performing loans, respectively. Moody's weighted average loan to value ratio for the conduit component is 88.1%, compared to 88.7% at securitization. The upgrade of Classes B, C and D is due to stable overall pool performance and increased credit support. The largest shadow rated loan is the 622 Third Avenue Loan, which represents the senior component of a $282.2 million mortgage loan. The loan is secured by a 1.0 million square foot Class A office building located in midtown Manhattan. The property is 98.9% leased, essentially the same as at securitization. The largest tenants are Interpublic Group of Companies, Canadian Imperial Bank of Commerce and TMP Worldwide. The loan sponsor is Cohen Brothers Realty Corporation, a major owner of commercial real estate in New York City. The non-pooled junior component of the loan is held within the trust and serves as security for non-pooled Classes 622-A, 622-B, 622-C, 622-D. 622-E and 622-F. The property is also encumbered by a $41.6 million B Note that is held outside the trust. Moody's current shadow rating of the senior loan component is A3, the same as at securitization. The second largest shadow rated loan is the Washington Center Loan, which represents the A Note of a $210.0 million mortgage loan. The loan is secured by a mixed-use office/hotel property located in Washington, D.C. The property consists of a 356,000 square foot Class A office building and an 888-room Grand Hyatt hotel. The office component is 98.4% occupied, compared to 100.0% at securitization. The largest tenants are Keller & Heckman, Banner & Witcoff and Computer Sciences Corp. The property's performance has improved since securitization, largely due to a significant improvement of the hotel component. RevPAR for calendar year 2005 was $161.90, compared to $121.90 at securitization. The property is also encumbered by a $35.7 million mezzanine loan. Moody's current shadow rating of the A note is Aa3, compared to A1 at securitization. The third largest shadow rated loan is the Columbiana Center Loan, which is secured by an 826,000 square foot regional mall located in Columbia, South Carolina. The center is anchored by Belk, Dillard's, Sears and Parisian. The overall occupancy is 98.0%, essentially the same as at securitization. The loan sponsor is GGP/Homart, Inc. Moody's current shadow rating is A2, compared to A3 at securitization. The fourth largest shadow rated loan is the Crossings Loan, which is secured by a 400,000 square foot factory outlet center located in the Pocono Mountains in Tannersville, Pennsylvania. The property is 100.0% occupied, the same as at securitization, with no tenant occupying more than 5.0% of the gross leaseable area. Performance has improved since securitization due to higher rental income and stable expenses. Moody's current shadow rating is A3, compared to Baa2 at securitization. The fifth largest shadow rated loan is the Great Lakes Crossing Loan, which represents a pari passu interest of the senior component of a $141.1 million mortgage loan. The loan is secured by a 1.4 million square foot value oriented super-regional mall located in Auburn Hills, Michigan, approximately 30 miles north of Detroit. Major tenants include a 25-screen movie theater, Bass Pro Shops Outdoor World, Burlington Coat Factory, Sportsmart and Bed, Bath & Beyond. The center is 88.2% occupied, compared to 91.1% at securitization. The property's financial performance has declined since securitization due to lower net operating income, however, this decline has been largely offset by amortization. The loan sponsor is Taubman Centers Inc. Moody's current shadow rating is Baa3, the same as at securitization. The top three conduit exposures represent 8.1% of the pool. The largest conduit exposure is the One Penn Center Loan, which is secured by a 682,000 square foot office building located in downtown Philadelphia, Pennsylvania. The property is 89.7% occupied, compared to 93.0% at securitization. Moody's LTV is 89.4%, compared to 90.1% at securitization. The second largest conduit exposure is the Alliance CH Portfolio, which is secured by nine multifamily properties totaling 1,527 units. All of the properties are located in Texas. The overall occupancy of the portfolio is 91.4%, compared to 94.1% at securitization. The loan is on the master servicer's watchlist due to low debt service coverage. The portfolio's performance has been impacted by a decline in occupancy, rental concessions and increased expenses. Moody's LTV is in excess of 100.0%, compared to 94.1% at securitization. The third largest conduit exposure is the Parson Educational Headquarters Loan, which is secured by an 887,000 square foot industrial property located in Cranbury, New Jersey. The property is 100.0% leased to Pearson Education Inc., under a lease expiring in August 2022. Moody's LTV is 72.7%, essentially the same as at securitization. The pool's collateral is a mix of multifamily, office, retail, industrial and self storage, lodging and U.S. Government securities. The properties are located in 36 states plus Washington, D.C. The highest state concentrations are New York, Texas, Pennsylvania, Washington, D.C., and California. All of the loans are fixed rate. DANA CORP: Court Gives Final Approval to Maintain Bank Accounts --------------------------------------------------------------- The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York permitted Dana Corporation and its debtor-affiliates on a final basis, to open and close bank accounts. As reported in the Troubled Company Reporter on Mar. 10, 2006, Judge Lifland allowed the Banks to charge, and the Debtors to pay or honor, prepetition and postpetition service and other fees, costs, charges and expenses to which the Banks may be entitled under the terms of their contractual arrangements with the Debtors. The Banks also were authorized to charge back returned items to the Bank Accounts in the normal course of business. The United States Trustee generally requires a debtor-in- possession to close all prepetition bank accounts and open new debtor-in-possession bank accounts. In addition, the United States Trustee may require a debtor-in-possession to maintain separate accounts for cash collateral and taxes. Dana Corporation and its debtor-affiliates have utilized approximately 100 Bank Accounts on a regular basis, and want to. continue using those Bank Accounts to facilitate a smooth reorganization. To protect against the possible inadvertent payment of prepetition claims, the Debtors said they will immediately advise their Banks not to honor checks issued prior to the Petition Date, except as otherwise directed. Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. The Official Committee of Unsecured Creditors has sought the retention of Kramer Levin Naftalis & Frankel LLP, as its counsel. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORP: Rejects Eight Nonresidential Real Property Leases ------------------------------------------------------------ Dana Corporation and its debtor-affiliates sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to reject eight unexpired nonresidential real property leases and related subleases, effective March 31, 2006. As reported in the Troubled Company Reporter on Mar. 23, 2006, Corinne Ball, Esq., at Jones Day, in New York, told the Court that the eight leased properties relate to locations where the Debtors no longer conduct business and that are not part of the Debtors' future business plans: Monthly Rent/ Property Lessor Term of Lease -------- ------ ------------- Office/Warehouse and Danacq Nashville LLC $203,702/ Distribution Facility 10/26/21 Antioch, Tennessee. 123,490 square foot Greate Pier B.V. $26,075/ facility 08/31/06 Fredericksburg, Virginia 50,000 square foot Kelly C. Petillo & $15,492/ building Leora Fay Petillo 05/0808 Atkins, Virginia. General Office located 2319 Hamden $13,729/ at One Hamden Center, Center I, L.L.C. 5/31/07 Hamden, CT 06518. 12,700 square foot U.S. Lodging of $13,467/ facility Indianapolis L.P. 02/20/09 Grant County, Indiana 25,000 square foot U.S. Properties Corp. $6,800/ facility 10/28/06 Anniston, Alabama. Office and Warehouse J.A. Morrin Realty $2,915/ Space 08/31/06 Holland, Ohio. Trucking Facility Steven G. Hall $6,856/ Columbia, Tenn. 04/30/07 The continued payment of rent under the Leases is economically burdensome and would constitute an unnecessary drain on the assets of the Debtors' estates, Ms. Ball said. The base rent under the Leases aggregates more than $300,000 per month. Although the Debtors have been able to enter into subleases for certain of the Leased Properties, the revenue generated by each Sublease is insufficient to satisfy the Debtors' obligations under the related Lease, Ms. Ball added. Accordingly, the Debtors propose to reject the Subleases concurrent with the Leases. About Dana Corporation Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. The Official Committee of Unsecured Creditors has sought the retention of Kramer Levin Naftalis & Frankel LLP, as its counsel. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORP: Utilities Argue Two-Week Cash Deposit Is Inadequate -------------------------------------------------------------- As reported in the Troubled Company Reporter on Mar. 24, 2006, the U.S. Bankruptcy Court for the Southern District of New York allowed Dana Corporation and its debtor-affiliates, on an interim basis, to pay 215 utility companies in order to continue access to their services. However, various utilities complain, among others, that the Debtors' adequate assurance procedures violate the express provisions of Section 366 of the Bankruptcy Code and the two-week cash deposit offered by the Debtors to a requesting utility is inadequate. The Utility Companies are: (1) American Electric Power, Virginia Electric and Power Company, doing business as Dominion Virginia Power; Dominion East Ohio; Duke Energy Corporation, doing business as Duke Power Company; Progress Energy Carolinas; Commonwealth Edison Company; PECO Energy Company; Exelon Energy Company; Union Electric Company, doing business as AmerenUE; Central Illinois Public Service Company doing business as AmerenCIPS; Pennsylvania Electric Company; Metropolitan Edison Company; and Toledo Edison Company; and (2) Carroll County Electric Department; Franklin Kentucky Electric Plant Board; City of Humboldt, Tennessee Utilities; Memphis Light, Gas and Water Division of the City of Memphis; City of Paris, Tennessee Board of Public Utilities; and Paris-Henry County Public Utility District -- Municipal Utilities; (3) Volunteer Energy Cooperative, Inc.; Decatur, Tennessee; and Upper Cumberland Electric Membership Corporation, Carthage, Tennessee; (5) Entergy Arkansas, Inc.; and (6) Electric Plant Board of Glasgow, Kentucky. Section 366(b) of the Bankruptcy Code establishes a procedure whereby a debtor is to provide a utility with adequate assurance of payment, in the form of a deposit or other security within the first 20 days of the bankruptcy proceeding. If the debtor fails to provide the utility with adequate assurance of payment that the utility believes is satisfactory within the first 30 days of the bankruptcy proceeding, Section 366(c)(2) expressly provides that the utility is entitled to alter, refuse or discontinue service to the debtor. According to Jil Mazer-Marino, Esq., at Rosen Slome Marder LLP, in Uniondale, New York, under the Adequate Assurance Procedures, a utility that finds the Debtors' two-week deposit offer insufficient must make a request for adequate assurance of payment by April 2, 2006. The Debtors then have the greater of 14 days from the receipt of an adequate assurance request from the Utilities, or 30 days -- until April 2 -- to attempt to resolve the utility's adequate assurance request. In addition to seeking to avoid the time limitations established by Section 366, the Debtors seek procedures designed to make the adequate assurance of payment process more time-consuming and burdensome. Ms. Mazer-Marino asserts that information regarding security deposits or other security, which the Utilities would be required to disclose as part of an adequate assurance request, is statutorily irrelevant pursuant to Section 366(c)(3)(B). Under the Objecting Utilities' billing cycles, the Debtors could receive over two months of unpaid service before their service could be terminated for a postpetition payment default. The American Power Parties demand two months deposits as adequate assurance of payment for their services: Prepetition Deposit Utility Accounts Claim Requested ------- -------- ----------- --------- AEP 22 $468,074 $1,079,589 DVP 5 $25,196 $54,922 DEO 1 $7,100 $14,157 Duke 2 N/A $166,785 PEC 2 $27,418 $88,065 Com. Ed. 4 $21,246 $98,125 PECO 3 $155,000 $344,000 Exelon 1 $173,966 250,000 AmerenUE 5 $119,107 $330,856 AmerenCIPS 4 $12,467 $60,331 Penelec N/A N/A N/A Met. Ed. N/A N/A N/A Toledo Ed. N/A N/A N/A The Municipal Utilities and the Electric Cooperatives also assert that providing them with deposits equal to less than 50% of the Debtors' average monthly consumption is unjustified. The Municipal Utilities' prepetition claim against the Debtors and their average monthly invoices against the Debtors are: Prepetition Average Municipal Utility Claim Consumption ----------------- ----------- ----------- Carroll $51,654 39,330 Humboldt 200,305 116,218 Franklin 73,814 50,381 City of Paris 185,000 232,107 Paris-Henry 88,500 37,534 Memphis Light N/A N/A Nicholas W. Whittenburg, Esq., at Miller & Martin PLLC, in Chattanooga, Tennessee, notes that if the Debtors are unable to satisfy their operational and financial obligations postpetition from cash flow, the Debtors' mere promise to pay the Municipal Utilities for postpetition utility consumption provides no assurance that they will be paid. The Municipal Utilities insist that they should be free to terminate utility services to the Debtors unless the Debtors furnish adequate assurance satisfactory to the Utilities on or before April 2, 2006. Moreover, the Electric Cooperatives object to the Debtors' proposal to provide them deposits totaling $15,291, given the Debtors' over $35,638average monthly consumption. Entergy demands a $245,000 cash deposit from the Debtors for approximately $120,000 of electricity consumed by the Debtors each month. Given the serious and significant negative, financial circumstances faced by the Debtors, EPB casts doubt as to whether the Debtors are capable of paying EPB's projected $200,000 monthly electric invoices. As adequate assurance of payment, EPB demands that Dana: (1) pay its $288,000 prepetition debt to EPB and make advance bimonthly payments of $100,000; (2) pay a $400,000 postpetition security deposit; or (3) pay a $150,000 postpetition security deposit plus enter into advance payment arrangement, including bimonthly advance payments of $100,000 with EPB; and allow EPB's $288,000 claim as a general unsecured claim. Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. The Official Committee of Unsecured Creditors has sought the retention of Kramer Levin Naftalis & Frankel LLP, as its counsel. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000). DELTA AIR: Comair Union Wants to Return to Bargaining Table ----------------------------------------------------------- With an overwhelming strike authorization vote in hand, and a bankruptcy judge's decision pending, Delta Comair flight attendants represented by Teamsters Local 513 called on the airline to return to the bargaining table and negotiate a good-faith settlement. "Delta Comair put out false press statements this morning, claiming that flight attendants were refusing to bargain," Local 513 president Connie Slayback said. "The truth is, Comair stonewalled in negotiations last week and rejected out of hand our good faith offer to settle this dispute. We are now asking for assurances from Comair that if we do return to the table, the airline will offer a fair settlement that includes job protection for flight attendants." A federal bankruptcy judge is expected to rule soon on the airline's motion to reject the flight attendants' contract, following hearings held in federal district court in Manhattan in late March. The Cincinnati-based Comair filed for bankruptcy protection along with Delta last year and is seeking $8.9 million in cuts from the flight attendants. "Our union has offered proposals that meet Comair's financial demands, but Comair refuses to grant essential job security protections our members need," Ms. Slayback said. "What's more, flight attendants have already saved Comair millions of dollars by deferring a pay increase. Comair's proposed deal is a no-win deal for flight attendants. Now the airline wants massive concessions that would still leave flight attendants in danger of losing our jobs." Ms. Slayback said that a job action remains possible if the judge grants Comair's motion to abrogate the flight attendants' contract. The flight attendants have voted 93 percent in favor of authorizing a job action. "Our commitment helped keep this airline flying during tough times," said Ms. Slayback. "But if Comair continues to refuse to bargain in good faith, the flying public should be aware that a strike is possible and would disrupt operations at both Comair and Delta. We hope Comair will see the light and initiate some real movement at the bargaining table." About Delta Air Lines Based in Atlanta, Ga., 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: Pilots' Union Leadership Ratifies Tentative Agreement ---------------------------------------------------------------- The Delta Master Executive Council, the governing body of the Delta pilots' union, voted to ratify the Bankruptcy Restructuring Tentative Agreement, moving it to the pilot membership for a vote in May 31, 2006. The MEC spent three days deliberating and receiving presentations from union experts, negotiators and legal counsel. Membership voting will take place from mid-May and continue through the end of the month. The agreement is the product of complicated financial negotiations between Delta and its pilots and the end result is evidence of the different goals pursued by each side over the course of negotiations. The Delta MEC believes this agreement provides Delta with the relief it needs to successfully restructure, while providing the Delta pilots with enhanced job security and the potential to share in the company's future success as it emerges from bankruptcy. MEC Chairman, Captain Lee Moak, stated in a letter to the Delta pilots on Friday, April 21, 2006 that the goal of the Delta pilots throughout the Chapter 11 process was to, "reach a consensual agreement that will lead to our working for a profitable airline with long-term viability that protects the major terms of our contract and that provides strong returns for our sacrifices. I believe this agreement meets that goal." The tentative agreement's terms and conditions provide the necessary pilot savings through a combination of changes to pay, benefits and work rules. Because the company is reorganizing through the Chapter 11 process, the tentative agreement is subject to the U.S. Bankruptcy Court's approval. If ratified by the pilots and approved by the Court, the agreement's terms and conditions will be effective June 1, 2006 and become amendable on Dec. 31, 2009. "We believe the structure and key elements of this agreement provide the competitive framework necessary for the company's successful reorganization," said Edward H. Bastian, Delta's executive vice president, chief financial officer and head of the company's in-court restructuring efforts. The four-year deal provides approximately $280 million in average annual pilot labor cost savings. The company's business plan had called for $325 million in annual pilot labor savings. "We agreed to reduce our proposal and make improvements to the overall package recognizing the likelihood the pilot pension plan would be terminated," said Mr. Bastian. Barring any disruptions, the company is on track to achieve approximately 70% of its business plan's benefits by the end of this year, with the goal of successfully emerging from bankruptcy in 2007. About ALPA Founded in 1931, the Air Line Pilots Association (ALPA) represents 62,000 pilots at 39 airlines in the U.S. and Canada. ALPA represents approximately 6,000 active Delta Air Lines pilots and 500 furloughed Delta pilots. Visit the ALPA website at http://www.alpa.organd the Delta pilots' website at http://www.deltapilots.org/. About Delta Air 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. DIRECT INSITE: Balance Sheet Upside-Down by $3.73 Mil. at Dec. 31 ----------------------------------------------------------------- Direct Insite Corp. (OTC BB:DIRI.OB) disclosed its financial results for the year ended December 31, 2005. Revenue from continuing operations increased by 17.4%, or $1,312,000, to $8,870,000 compared to revenue from continuing operations of $7,558,000 in 2004. Recurring revenues, derived from the month-after-month processing of invoices under contracts with durations of six months to ten years, increased 44.3% to $5,844,000 for the year ended December 31, 2005, compared to $4,049,000 for the year 2004. Recurring revenues from other non-EIP&P services decreased in 2005 by $490,000 (92%) to $41,000 compared to revenue from non-EIP&P services of $531,000 in 2004. Revenues from professional services were $2,985,000 for the year ended December 31, 2005, compared to revenue of $2,978,000 in 2004. Fourth quarter 2005 revenues, meanwhile, were $1,960,000 compared to revenue of $2,137,000 in the fourth quarter of 2004, a decrease of 8%. Direct Insite reduced its loss from continuing operations 38% to $974,000 for the year ended December 31, 2005, from $1,571,000 incurred during the year ended December 31, 2004. Direct Insite CEO and Chairman of the Board James A. Cannavino said, "By focusing on the basics -- strong revenue growth and best practice business operations -- we were able to achieve a grand slam performance in 2005: double digit growth in revenue, a one-third reduction in operating loss, and a dramatic 44.3% increase in recurring revenues. These results are additional proof that Direct Insite continues to build on a strong foundation of innovative products that meet the real needs of today's customers." In its financial results, Direct Insite also reports that in 2004 the Company had income from discontinued operations of $288,000 compared to a loss from discontinued operations of $17,000 in 2005. This resulted in a net loss, after taxes, for the year ended December 31, 2005, of $991,000, compared to a net loss, after taxes, of $1,283,000 for the year ended December 31, 2004. According to Mr. Cannavino, 2005 was a benchmark year for Direct Insite in achieving true global coverage for customers. "We successfully implemented the global expansion of our flagship Invoices on Line (IOL) Accounts Receivables (AR) offering, and continued diversification of our product offerings. Our Invoices on Line service was deployed in Japan supporting the Japanese character sets, language, and currency, making Direct Insite unique in the industry in its ability to deliver an invoice anywhere in the world -- the Americas, Europe, and Asia Pacific." "Responding to customer needs, we extended our accounts receivable offering so it delivers both a complementary accounts payable and electronic payment service; we call these new services Invoices on Line Accounts Payable and "e-Pay", respectively," said Mr. Cannavino. "With these portfolio additions, Direct Insite now provides both "order-to-cash" and "purchase-to-pay" solutions that address a wide range of customer needs. These solutions have received high marks from our customers. In fact, our largest customer is now a reseller of our IOL products and has begun to bid IOL into business transformation outsourcing opportunities in the finance and audit area sold across industry markets." Headquartered in Bohemia, New York, Direct Insite Corp. -- http://www.directinsite.com/-- employs a staff of 59. The Company's IOL solution is deployed in North and South America, Europe, Middle East, Africa and Asia-Pacific geographic areas. As of December 31, 2005, the Company's equity deficit widened to $3,734,000 from a $2,537,000 deficit at December 31, 2004. DIVERSIFIED CORP: Selling Traveling Nurse Biz to MAGIC Healthcare ----------------------------------------------------------------- Diversified Corporate Resources, Inc. (OTC Bulletin Board: HIRD) signed an agreement to sell its traveling nurse business, known as MAGIC Healthcare. This sale is scheduled to close in May, and comes from the Company's long-term strategic plan for reorganization and recapitalization. The Company has accepted a deposit, in the form of a loan to be repaid if closing does not occur, of more than twenty percent of the agreed sales price for an all-cash transaction in which the Company will retain all receivables. J. Michael Moore, Chairman and CEO, said "This sale will complement the refocusing of our business lines to those areas with which we are more experienced and have a history of success." Mr. Moore continued, "The proceeds from this transaction will be redeployed to continue the expansion of our profitable lines of business including our engineering placements to Department of Defense oriented companies, and experienced personnel to Pharmaceutical firms and Bio-Technological companies." Diversified Corporate Resources, Inc. is a national employment services and consulting firm, servicing Fortune 500 and larger regional companies with permanent recruiting and staff augmentation in the fields of Engineering, Information Technology, Healthcare, BioMed and Finance and Accounting. The Company currently operates a nationwide network of eight regional offices. Diversified Corporate Resources, Inc., is a national employment services and consulting firm, servicing Fortune 500 and larger regional companies with permanent recruiting and staff augmentation in the fields of Engineering, Information Technology, Healthcare, BioMed and Finance and Accounting. The Company currently operates a nationwide network of eight regional offices. As of December 31, 2005, the Company's equity deficit widened to $5,909,000 from a $1,899,000 deficit at December 31, 2004. DOBSON COMMS: Fitch Junks Ratings on $420 Million Senior Notes -------------------------------------------------------------- Fitch assigned ratings for Dobson Communications Corp. (DCEL) and its subsidiaries: Dobson Communications Corp.: -- Issuer default rating 'B-' -- $160 million senior floating rate notes 'CCC+/RR5' -- $150 million senior convertible debentures 'CCC+/RR5' -- $420 million senior notes 'CCC+/RR5' -- $136 million convertible preferred stock 'CCC-/RR6' Dobson Cellular Systems Inc. (DCS): -- Issuer default rating 'B-' -- $75 million senior secured credit facility 'BB-/RR1' -- $500 million first priority secured notes 'BB-/RR1' -- $325 million second priority secured notes 'BB-/RR1' American Cellular Corporation (AmCell): -- Issuer default rating 'B-' -- $900 million senior unsecured notes 'B+/RR2' -- $14.5 million senior subordinated notes 'CCC+/RR5' The Rating Outlook is Stable. The IDR ratings at Dobson reflect: * its current leverage; * past subscriber trends; * smaller scale as a regional operator; and * the competitive operating environment. Fitch also believes a higher level of event risk is present with potential universal service funding reform. Positive offsets to these concerns include improved leverage measures as a result of preferred stock redemptions as well as increased cash flows. In addition, materially higher subscriber ARPUs (average revenue per user) associated with GSM calling plans coupled with higher roaming revenue during the past year has led to improved financial performance. The company has sufficient liquidity with no near- term maturities and expectations for modest positive free cash flow. Subscriber trends over the past several quarters have been negative due to Dobson's GSM network migration, which has resulted in higher SG&A and network costs, along with customer service and network quality issues. For 2005, postpaid net additions were negative 100,000 with churn increasing 50 basis points to 2.5% as the company migrated approximately 400,000 subscribers to GSM, ending the year with 67% of its subscriber base on GSM plans. However, subscriber trends appear to be improving with Dobson having moved a majority of its subscribers to GSM coupled with significant coverage and quality improvements made to the company's GSM network. Accordingly, Dobson reported first-quarter 2006 postpaid customer churn of 2.1% and flat subscriber net additions for its postpaid base, which is ahead of management expectations. Total gross additions were up modestly from a year ago to 125,300. While Dobson's past subscriber trends were negative, Dobson's ARPU and roaming revenue increased considerably, which more than offset the negative subscriber trends leading to solid financial performance in 2005 as EBITDA increased by 18% to $415 million. With Dobson negotiating new roaming agreements with Cingular that lower outcollect rates in exchange for lower incollect rates, Dobson must continue to successfully grow retail ARPU to generate EBITDA growth. Fitch expects roaming revenue to be relatively stable with growth in minutes mitigating the lowered outcollect rate. Dobson has taken steps to improve its capital structure during the past several quarters with the redemption of $245 million in exchangeable preferred stock and the refinancing of approximately $300 million of 10.875% notes that resulted in interest and dividend savings of $45 million. As a result financial leverage (debt and preferred stock to EBITDA) improved to 7x at the end of 2005 (pro forma for the $33 million preferred stock redemption) compared with 8x in 2004. Rural wireless operators, including Dobson, over the past few years have identified universal service fund (USF) disbursements as an opportunity to materially increase cash flow at little to no additional cost to their operational plans. The combination of a slow-growing high-cost support fund and an ever increasing number of wireless operators making claims on the fund has created significant pressure on the program. With the USF program expiring this year, the Federal Communications Commission (FCC) and Congress are expected to undertake reform on the program. Therefore, Fitch expects wireless disbursements to face the greatest amount of event risk associated with reductions. For AmCell, high-cost support through the USF funding has risen materially since 2004 when the company collected $2 million, to 2005, when AmCell received $13 million. As a percentage of cash flow from operations, USF has risen from 5% in 2004 to 17% in 2005. For Dobson, USF as a percent of CFO is a more modest 6.8%. Fitch expects USF to become a much bigger contributor to Dobson cash flows in 2006, as the company received approval in Alaska and Minnesota, which will result in a $30 million increase in funding. Obviously, USF reform that leads to a material percentage reduction in support disbursements to Dobson could affect the company's financial strength. DCEL's liquidity is stable, albeit modest, based on its cash position and lack of near-term maturities. Cash at the end of the fourth quarter of 2005 was approximately $197 million. With the redemption of its preferred stock and the refinancing of its 10.875% notes, Dobson's nearest maturity is not until 2011. DCS has a $75 million secured credit facility that matures in October 2008, although the company cannot currently draw on the facility due to financial covenant restrictions. In addition, the indentures with Amcell's 10% senior notes will not allow restricted payments to DCEL until AmCell materially improves its cash flow. Therefore, DCS bondholders must rely on DCS cash generation to service interest payments. For 2006, Fitch expects free cash flow at DCEL to be approximately $50 million. While Fitch recognizes the lien subordination among the different classes of secured debt at DCS, the recovery ratings and notching reflects our expectation for excellent recovery prospects for the first and second priority secured notes at DCS. The 'RR5' recovery rating on the senior notes at DCS reflects Fitch's expectation for below-average recovery prospects on the $730 million of debt obligations. The 'RR2' recovery rating at AmCell reflects expectations for superior recovery on the $900 million of senior notes. Fitch's Recovery Ratings, introduced in 2005, are a relative indicator of creditor recovery on a given obligation in the event of a default. DRESSER INC: Lenders Waive Financial Reporting Default Until Sept. ------------------------------------------------------------------ Dresser, Inc.'s lenders gave the Company until September 30, 2006, to file its audited financial statements for the fiscal year ended December 31, 2005, and unaudited financial statements for the fiscal quarters ended March 31, 2006, and June 30, 2006. The Company almost defaulted on these agreements when it failed to timely file the financial reports: -- an April 10, 2001, Credit Agreement, as amended, among the Company, D.I. Luxembourg S.A.R.L., DEG Acquisitions, LLC, Dresser Holdings, Inc., the subsidiary guarantors, lenders and agents; and -- a March 1, 2004, Senior Unsecured Term Loan Agreement, as modified, among the Company, D.I. Luxembourg S.A.R.L., DEG Acquisitions, LLC, Dresser Holdings, Inc., the subsidiary guarantors, lenders and agents. The Company does not have consent to the tardy reporting from the holders of its 9-3/8% senior subordinated notes, as required by the Company's April 10, 2001, Indenture, as amended, governing the notes. Although technically a default under the 9-3/8% Indenture, the failure to file does not result in an Event of Default unless and until the Company receives a notice of default from the Trustee or the holders of at least 25% of the outstanding principal amount of the notes, and the default has not been cured within a 30-day period after the Company's receipt of the notice. As of April 19, 2006, the Company has not received any notice of default from these noteholders. About Dresser Based in Addison, Texas, Dresser, Inc. -- http://www.dresser.com/ -- designs, manufactures and markets equipment and services sold primarily to customers in the flow control, measurement systems, and compression and power systems segments of the energy industry. The Company has a comprehensive global presence, with over 8,500 employees and a sales presence in over 100 countries worldwide. * * * As reported in the Troubled Company Reporter on March 30, 2006, Moody's Investors Service placed these ratings for Dresser, Inc., under review for possible downgrade as a result of the company's inability to file its 2005 Annual Report on Form 10-K by the March 31, 2006, requirement: * Ba3 -- Corporate Family Rating; * Ba3 rated senior secured Tranche C term loan maturing 2009; * B1 rated senior unsecured term loan maturing 2010; and * B2 rated senior subordinated notes maturing 2011. DYNCORP INT'L: Planned IPO Cues Moody's to Review Low Ratings ------------------------------------------------------------- Moody's Investors Service placed the ratings of DynCorp International LLC on review for possible upgrade following the announcement by the Company's parent, DynCorp International Inc., that it plans to use a portion of proceeds raised through a planned initial public offering to reduce debt. Moody's anticipates the range of proceeds to be $375 million to $425 million. According to the amended S-1 document filed with the Securities and Exchange Commission, DynCorp's parent plans to use proceeds to repay $212.8 million of preferred stock, to pay a dividend to the current investors of $100 million, and to redeem approximately $61 million of senior subordinated notes. Moody's placed these ratings of DynCorp on review: * $90 million senior secured first lien revolving credit facility due 2010, B2 * $342.4 million senior secured first lien term loan facility due 2011, B2 * $320 million senior subordinated notes due 2013, Caa1 * Speculative Grade Liquidity Rating, SGL-3. * Corporate Family Rating, B2 Further benefiting the credit profile in addition to the modest level of debt reduction associated with the IPO is DynCorp's improved cash generation and substantial contracted backlog. DynCorp generated free cash flow of $54 million for the nine months ended Dec. 31, 2005 representing substantial improvement from a cash usage of $21 million in the prior year period. Although DynCorp's volatile working capital entails risks to free cash flow, the improved level of cash generation should, in Moody's view, result in a lower level of leverage and improved interest coverage. At Dec. 31, 2005, DynCorp exhibited a total contracted backlog of approximately $2.7 billion compared with $2.0 billion at April 1, 2005. The funded backlog remained stable at about $1.0 billion. The review for possible upgrade will focus on the expected improvement in the credit profile of the company from the planned initial public offering, related debt reduction, and sustainability of improved cash generation. Upon completion of the IPO and use of such proceeds for debt repayment, Moody's currently expects that the Corporate Family Rating and ratings on the subordinated notes could rise by one notch. Ratings on the senior secured bank facilities could rise by more than one notch due to Moody's expectations for recovery values on the secured facilities. Headquartered in Irving, Texas, DynCorp International LLC provides defense technical services and government outsourced solutions primarily to U.S. government customers throughout the United States and internationally. DynCorp is a privately held company owned by Veritas Capital. DynCorp's revenues for the fiscal year ended April 1, 2005 amounted to $1.9 billion. EASY GARDENER: Files for Chapter 11 Protection in Delaware ---------------------------------------------------------- Easy Gardener Products, Ltd., and four subsidiaries entered into an agreement to sell all of their assets to Green Thumb Acquisition Corporation, an affiliate of Bayside Capital, for $57 million. The agreement with GTAC is subject to limited, customary conditions to closing. The purchase price consists of: * $15.32 million, * plus the principal and interest owed to the Company's senior secured revolving and term lenders and * minus certain fees to be paid. Bayside Capital is an affiliate of H.I.G. Capital, an investment firm that manages more than $2.5 billion in invested capital and has invested in over 40 portfolio companies. Since December 2005, the Company has been working with Houlihan Lokey Howard & Zukin to explore its strategic alternatives. The Company ultimately concluded that a sale of the Company was in the best interest of its various constituencies, and a number of potential investors were contacted. The agreement with GTAC represents the highest and best offer received to date by the Company. "We are pleased with the proposed transaction with GTAC," Dick Grandy, Chief Executive Officer of the Company stated. "We believe the transaction will provide an opportunity to maximize value to all our stakeholders." Voluntarily Chapter 11 As required by the agreement with GTAC, on April 19, 2006, the Company filed a voluntary petition for chapter 11 reorganization with the U.S. Bankruptcy Court for the District of Delaware. The agreement with GTAC provides that the Company will conduct an auction pursuant to order of the Bankruptcy Court to determine whether there are any potential purchasers who are prepared to pay a higher and better price for the Company's assets. The Company agreed with GTAC to customary "stalking horse" bidder protections, including a break-up fee and expense reimbursement of $2 million that will be payable if the Company elects to complete a transaction with an alternative bidder, it elects to pursue an independent plan of reorganization or its chapter 11 case is dismissed or converted to a case under chapter 7 of the Bankruptcy Code. Assets Sale Proceeds The Company intends to use the proceeds of the sale of its assets to repay 100% of the outstanding principal and unpaid interest due to the Company's senior secured revolving and term lenders at the closing of the sale. The Company expects the balance of the purchase price to be used to pay amounts owed to holders of two subordinated promissory notes issued by the Company in the aggregate principal amount of $4.275 million, plus accrued interest of approximately $1 million. After paying transaction and other fees estimated to be between $2.5 million and $3.35 million, there will be between approximately $7.5 million and $6.7 million remaining for distribution to holders of the Company's 9.40% Cumulative Preferred Trust Securities due April 15, 2028. The amount ultimately paid to the holders of the Trust Preferred Shares will depend upon several contingencies, including: * the amount of transaction and other fees actually incurred in connection with the sale and the chapter 11 process, whether a higher and better price for the Company's assets can be obtained through the auction process, * the closing of the sales transaction in a timely manner with GTAC or an alternative buyer and * the consummation of a plan of reorganization in the Company's chapter 11 case. No funds will be available for payment to the Company's common equity securities. Financing Commitment The Company also received a commitment letter from the lenders under its existing senior secured revolving credit facility to provide financing for its ongoing operational needs during the pendency of its bankruptcy case. Upon the approval of the Bankruptcy Court, the Company will amend its existing senior secured revolving credit agreement to provide for an increase in the Company's line of credit from $25 million to $33 million, subject to a customary borrowing base. The amendment provides for up to $5 million of availability under "overadvances" in addition to the amounts it would normally be able to borrow under its borrowing base. Mr. Grandy stated, "We expect the revised facility to provide sufficient liquidity for the Company to complete its sale to GTAC without any interruption to operations." Senior Secured Debt Amendment The Company also amended its existing senior secured term debt agreement in contemplation of its chapter 11 filing and to modify and extend the provisions of the agreement relating to the payment of a performance fee of $2 million. The $2 million fee will now be payable in three installments: * $100,000, which will be payable upon entry of the final order approving the Company's debtor-in-possession financing (but not later than 45 days after the chapter 11 filing); * $200,000, which will be payable on June 30, 2006; and * $1.7 million, which will be payable July 31, 2006. If the Company timely pays installments of the performance fee as they come due, and the Company's obligations to its senior secured term lender are paid in full prior to the due date of the second and third installments, respectively, the Company will not be required to pay the portion of the performance fee which comes due after the date the senior secured term loan is paid in full. The Company anticipates that the proposed transaction with GTAC can be closed before June 30, 2006, and that it will not be required to pay $1.9 million of the $2 million performance fee. GTAC has agreed to assume the first $100,000 installment of the performance fee as a part of the purchase transaction. If the Company were required to pay any portion of the performance fee over $100,000, the Company anticipates that the amount of that payment would reduce amounts otherwise payable to the holders of the Trust Preferred Shares. About Easy Gardener Products, Ltd. Headquartered in Wako, Texas, Easy Gardener Products, Ltd. -- http://www.easygardener.com/-- is a leading manufacturer and marketer of a broad range of consumer lawn and garden products, including weed preventative landscape fabrics, fertilizer spikes, decorative landscape edging, shade cloth and root feeders, which are sold under various recognized brand names including Easy Gardener, Weedblock, Jobe's, Emerald Edge, and Ross. The Company markets its products through most large national home improvement and mass merchant retailers, hardware stores and garden centers. The company and four of its affiliates filed for chapter 11 protection on Apr. 19, 2006 (Bankr. Del. Case No. 06-10396). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets totaling $103,454,000 and debts totaling $107,516,000. EASY GARDENER: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Easy Gardener Products, Ltd. aka Easy Gardener, Inc. aka Landmaster Products aka Ampro Industries 3022 Franklin Avenue Waco, Texas 76710 Bankruptcy Case No.: 06-10396 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Weatherly Consumer Products Group, Inc. 06-10393 Weatherly Consumer Products, Inc. 06-10394 EG Product Management, LLC 06-10395 NBU Group, LLC 06-10397 Type of Business: The Debtors manufacture and market a broad range of consumer lawn and garden products, including weed preventative landscape fabrics, fertilizer spikes, decorative landscape edging, shade cloth and root feeders, which are sold under various recognized brand names including Easy Gardener, Weedblock, Jobe's, Emerald Edge, and Ross. See http://www.easygardener.com/ Chapter 11 Petition Date: April 19, 2006 Court: District of Delaware (Delaware) Judge: Kevin Gross Debtors' Counsel: James E. O'Neill, Esq. Laura Davis Jones, Esq. Sandra G.M. Selzer, Esq. Pachulski Stang Ziehl Young Jones & Weintraub LLP 919 North Market Street, 16th Floor P.O. Box 8705 Wilmington, Delaware 19899-8705 Tel: (302) 652-4100 Fax: (302) 652-4400 Total Assets: $103,454,000 Total Debts: $107,516,000 Debtors' Consolidated List of their 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Trustee, Property Trustee and Trust Preferred $76,631,947 Administrative Trustees Debt Easy Gardener Products Trust I Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, DE 19890-0001 Central Garden & Pet Company Subordinated Note $3,324,623 1340 Treat Boulevard, Suite 600 Walnut Creek, CA 94597 EG Broad Street Subordinated Note $1,998,281 Partners, LLC (USHG) 177 Broad Street, Suite 1150 Stamford, CT 06901 Rosti (Dallas), Inc. Trade Debt $838,223 2109 Vanco Drive Irving, TX 75061 Tredegar Inc. Trade Debt $759,618 1100 Boulders Parkway Richmond, VA 23225 Tensar Corporation Inc. Trade Debt $455,836 1210 Citizens Parkway Morrow, GA 30260 Englander Container Co. Trade Debt $416,008 P.O. Box 22067 Waco, TX 76702 F&F Composite Group, Inc. Trade Debt $412,268 715 Katy Road, Suite 110 Keller, TX 76248 Freudenberg Spunweb Co. Trade Debt $255,616 3500 Industrial Drive Durham, NC 27704 Polymer Group Inc. Trade Debt $181,539 Import Traders, Inc. Trade Debt $164,129 Miles Farm Center Trade Debt $145,618 Volm Bag Company, Inc. Trade Debt $141,389 Packaging Corp. of America Trade Debt $114,656 Dong Buk Co., Ltd. Trade Debt $113,213 Lithocraft, Inc. Trade Debt $105,588 BBA Fiberweb Trade Debt $88,555 Injecto Mold Trade Debt $88,245 Plastic Molded Trade Debt $85,622 KT America Corp. Trade Debt $84,337 Renfo Inc. Trade Debt $72,266 Southeastern Wire Trade Debt $64,431 Linq Industrial Fabrics Trade Debt $62,357 Banner Packaging Trade Debt $59,732 Intermas Nets S.A. Trade Debt $58,313 Douglas Manufacturing Trade Debt $57,001 Plastic Enterprises Inc. Trade Debt $51,759 Mardie Type Printing Trade Debt $47,194 Honeywell Trade Debt $46,433 BNS/NU-GRO Trade Debt $46,085 EMMIS COMMS: Reports 4th Fiscal Quarter & Full Year Fin'l Results ----------------------------------------------------------------- Emmis Communications Corporation (NASDAQ: EMMS) disclosed its financial results for its fourth fiscal quarter and full year ending Feb. 28, 2006. For the fourth fiscal quarter, reported net revenue was $84.5 million, compared to $80.9 million for the same quarter of the prior year, an increase of 4%. Reported net revenues for all periods presented exclude the results of Emmis' television stations and WRDA-FM, which have been classified as discontinued operations. For the fourth quarter, reported radio net revenues increased 4%, while pro forma radio net revenues (including WLUP-FM and the Emmis radio networks in Slovakia and Bulgaria for all periods) decreased 2%. Publishing net revenues increased 7%. "In the past fiscal year, we have transformed the company," said Jeff Smulyan, Emmis Chairman and CEO. "We sold 13 of our 16 television stations at higher than expected prices, and we used that money to pay down debt and buy back nearly 40% of our stock. Our balance sheet is very strong, which will allow us to invest both in our core properties and in businesses we expect to grow faster, including our interactive division." For the fourth quarter, operating losses were $35.6 million, compared to operating income of $10.1 million for the same quarter of the prior year. The decrease in operating income is principally due to the impairment charge and the bonus and severance payments discussed above. Emmis' station operating income for the fourth quarter was $19.5 million, compared to $24.4 million for the same quarter of the prior year. The decrease in station operating income was principally due to three factors: (1) lower than expected revenue growth due to a weaker than expected radio advertising environment; (2) increased promotion and programming expenses, especially in the Company's Chicago duopoly, as Emmis invests for longer-term growth; and (3) the unexpected bankruptcy of an advertiser that resulted in a $1.3 million charge. For the full year, net revenue grew to $387.4 million from $351.8 million, an increase of 10%. Operating income was $38.9 million for the year, compared to $72.6 million for the prior year. Station operating income rose to $134.2 million this year from $131.3 million in the prior year. Under the terms of Emmis Operating Company's 6.875% senior subordinated notes, Emmis Communications Corporation total consolidated debt-to-EBITDA leverage was 5.0x as of Feb. 28, 2006, compared to 5.8x a year ago. International radio net revenues and station operating expenses for the quarter ended Feb. 28, 2006 were $8.7 million and $6.2 million. Full-year consolidated net revenues and station operating income from Slager Radio, Emmis' 59.5% majority-owned radio station in Hungary, were $19.2 million (up 11%) and $7.8 million (up 16%). On Dec. 5, 2005, Emmis sold substantially all of the assets of television stations WFTX in Ft. Myers, Fla. and KGUN in Tucson, Ariz, and the tangible assets and many of the intangible assets (excluding, principally, the FCC license) of KMTV in Omaha, Neb. to Journal Communications for $225 million of cash proceeds. Emmis used the proceeds to repay outstanding debt obligations. Also on Dec. 5, 2005, Emmis entered into an LMA with Journal for KMTV. On Jan. 23, 2006, Emmis redeemed $230 million aggregate outstanding principal amount of its Floating Rate Senior Notes due in 2012, pursuant to the terms of the Indenture, dated June 21, 2005, between the Company and The Bank of Nova Scotia Trust Company of New York, as trustee. On Feb. 7, 2006, Emmis called for redemption the remaining $120 million aggregate outstanding principal amount of the Notes. This redemption occurred March 9, 2006. On Jan. 27, 2006, Emmis completed the sale of four of its television stations to the Montecito Broadcast Group, LLC (an affiliate of the Blackstone Group) for $259 million. The purchase included KOIN-TV (Ch. 6, CBS affiliate) in Portland, Ore.; KHON-TV (Ch. 2, Fox affiliate) in Honolulu; KSNW-TV (Ch. 3, NBC affiliate) in Wichita, Kan.; and KSNT-TV (Ch. 27, NBC affiliate) in Topeka, Kan. To date, Emmis has sold 13 of its 16 stations. The Company continues to own and operate KGMB-TV (Ch. 9, CBS affiliate) in Honolulu, WVUE-TV (Ch. 8, Fox affiliate) in New Orleans and WKCF-TV (Ch. 18, WB/CW affiliate) in Orlando. On April 12, 2006, Emmis determined that it will be restating its financial statements for the quarters ended August 31, 2005, and November 30, 2005, to classify its preferred stock in mezzanine rather than permanent equity on the Company's balance sheet. The restatement is due to a misinterpretation of certain technical accounting principles relating to the balance sheet classification of preferred stock that contains a redemption feature. The restatement has no impact on the statements of operations, the statements of cash flows, or any balance sheet items except stockholders' equity as mezzanine. The restatement also has no impact on the Company's operations, including the compliance with covenants under its debt instruments, other agreements or regulatory requirements. Emmis Communications Corporation -- http://www.emmis.com/-- is an Indianapolis-based diversified media firm with radio broadcasting, television broadcasting and magazine publishing operations. * * * As reported in the Troubled Company Reporter on Feb. 24, 2006, Moody's Investors Service affirmed the ratings of Emmis Communications Corporation and its wholly owned subsidiary, Emmis Operating Company, but changed the outlook to stable from positive. Emmis Operating Company: * Senior Secured Debt -- Ba2 * Senior Subordinated Notes -- B2 Emmis Communications Corporation: * Senior Unsecured Debt -- B3 * Cumulative Preferred Stock -- Caa1 * Corporate Family Rating -- Ba3 EPIXTAR CORPORATION: Hires CBIZ McClain as Accountants ------------------------------------------------------ Epixtar Corp. and its debtor-affiliates sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of Florida in Miami to employ CBIZ McClain Accounting, Tax & Advisory of South Florida, LLC, as accountants, nunc pro tunc to Jan. 10, 2006. The Debtors need CBIZ's services primarily to prepare tax returns. Michael Sahr, a member of CBIZ McClain, tells the Court that he will bill $355 per hour in this engagement. Mr. Sahr discloses that the Firm's other professionals bill between $95 and $355 per hour. Mr. Sahr assures the Court that the Firm is "disinterested" as that term is defined in Sec. 101(14) of the Bankruptcy Code. About Epixtar Based in Miami, Florida, Epixtar Corp. -- http://www.epixtar.com/ -- fdba Global Assets Holding, Inc., aggregates contact center capacity and robust telephony infrastructure to deliver comprehensive, turnkey services to the enterprise market. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 6, 2005 (Bank. S.D. Fla. Case No. 05-42040). Michael D. Seese, Esq., at Kluger, Peretz, Kaplan & Berlin, P.L., represents the Debtors in their restructuring efforts. Glenn D. Moses, Esq., at Genovese Joblove & Battista, P.A., represents the Company's Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $30,376,521 and total debts of $39,158,724. EPIXTAR CORPORATION: Hires McClain & Company as Auditors -------------------------------------------------------- Epixtar Corp. and its debtor-affiliates sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of Florida in Miami to employ McClain & Company, LC, as auditors, nunc pro tunc to Jan. 10, 2006. The Debtors told the Court that McClain started performing services on Jan. 10, 2006, as they faced delisting from NASDAQ if they failed to file their audited financial statements on Jan. 12, 2006. McClain & Company will: a) review the condensed consolidated balance sheets of Epixtar and the ISP Subsidiaries as of Sept. 30, 2005, and the related condensed consolidated statements of operations, for the three and nine month periods then ended, and the condensed consolidated statement of cash flows for the nine month period ended Sept. 30, 2005, in accordance with the standards of the Public Company Accounting Oversight Board; and b) audit the consolidated balance sheet of Epixtar as of Dec. 31, 2005, and the related consolidated statements of operations, shareholders' equity and cash flows for the year then ended in order to assist in the drafting of the Form 10-Q and Form 10-K. William Urban, a member of McClain & Company, tells the Court that he will bill $325 for this engagement. Mr. Urban discloses that the Firm's other professionals bill between $95 and $325. Mr. Urban tells the Court that the estimated cost for the review of the Sept. 30, 2005, balance sheet will be approximately between $25,000 to $30,000. Mr. Urban further tells the Court that for the audit of the Dec. 31, 2005, financial statements, the Firm has requested a $15,000 retainer. Mr. Urban assures the Court that the Firm is "disinterested" as that term is defined in Sec. 101(14) of the Bankruptcy Code. About Epixtar Based in Miami, Florida, Epixtar Corp. -- http://www.epixtar.com/ -- fdba Global Assets Holding, Inc., aggregates contact center capacity and robust telephony infrastructure to deliver comprehensive, turnkey services to the enterprise market. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 6, 2005 (Bank. S.D. Fla. Case No. 05-42040). Michael D. Seese, Esq., at Kluger, Peretz, Kaplan & Berlin, P.L., represents the Debtors in their restructuring efforts. Glenn D. Moses, Esq., at Genovese Joblove & Battista, P.A., represents the Company's Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $30,376,521 and total debts of $39,158,724. FDL INC: Fifth Third Wants Chapter 11 Trustee Appointed ------------------------------------------------------- Fifth Third Bank asks the U.S. Bankruptcy Court for the Southern District of Indiana in Indianapolis to appoint a Trustee or Examiner in FDL, Inc.'s Chapter 11 case. G. Ronald Heath, Esq., at Hoover Hull LLP, counsel of Firth Third, tells the Court that it wants a chapter 11 Trustee or Examiner to investigate the Debtor's purported dishonest practices. According to Mr. Heath, the Debtor: -- submitted cash flow projections in support of its Cash Collateral motion that contained misrepresentations of facts about its alleged agreements with Fifth Third; -- violated its credit agreement with Fifth Third by concealing the existence of an operating account at Regions Bank; and -- misappropriated pre-petition funds that should have been paid to Fifth Third; Mr. Heath adds that the Debtor has refused to provide an accounting of any monies disbursed to its president, Stephen H. Striebel. Mr. Heath says that Fifth Third wants any examiner appointed in the Debtor's case to investigate the conduct and management of the Debtor and all disbursements made to Mr. Striebel since 1999. Headquartered in Kokomo, Indiana, FDL, Inc., manufactures office and fast food metal furniture. The company filed for Chapter 11 protection on March 24, 2006 (Bankr. S.D. Ind. Case No. 06-01222). Deborah Caruso, Esq., and Erick P. Knoblock, Esq., at Dale & Eke, P.C., represent the Debtor. Elliott D. Levin, Esq., at Rubin & Levin, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it did not state its assets but estimated debts between $10 Million and $50 Million. FOAMEX INTERNATIONAL: Wants $292 Million Tax NOLs Protected ----------------------------------------------------------- Foamex International Inc. (Pink Sheets: FMXIQ) filed a motion with the U.S. Bankruptcy Court for the District of Delaware, requesting that the Court approve measures to protect the Company's federal tax net operating losses. Foamex believes the NOLs, estimated at approximately $292 million as of Jan. 1, 2006, may prove to be a valuable asset of its bankruptcy estate. Foamex is asking the Court to establish notification and hearing procedures that must be satisfied before certain transfers or trading of Foamex's equity securities are deemed effective. Under certain circumstances specified in the U.S. tax code, acquisitions by shareholders with equity holdings of 5% or more, or who could thereby become owners of five percent or more, of Foamex's common stock may give rise to an ownership change that would limit the Company's utilization of its NOLs. If granted, the relief sought will enable Foamex to closely monitor certain transfers and acquisitions of equity securities so that it can act expeditiously to prevent such transfers or acquisitions, if necessary, to preserve the value of its NOLs. Importantly, the requested relief does not bar all trading in Foamex's equity securities. The Company is seeking only to establish procedures enabling it to monitor those stock transfers or acquisitions that pose a serious risk under the U.S. tax code's "ownership change" test, so that Foamex can move quickly to block a proposed trade that, if allowed to proceed, could limit Foamex's ability to fully utilize its NOLs. Foamex reserves the right to seek further relief from the Court in the form of a motion to void or limit prior transfers or acquisitions of shares or other securities in the event that such transfers or acquisitions threaten to or actually impair the utilization of its NOLs. Any such relief could apply to transfers or acquisitions since the date of Foamex's chapter 11 filing (Sept. 19, 2005) to the date of the granting of the motion being filed today as such transfers or acquisitions could have violated the automatic stay under the Bankruptcy Code. The U.S. tax code permits corporations to carry NOLs forward to offset future income, thereby reducing federal income tax liability on such future income and significantly improving its cash position. As a result, Foamex's NOLs could prove to be a valuable asset of its estate. The Company's ability to use its NOLs, however, could be severely limited as a result of the trading and accumulation of equity securities of Foamex prior to consummation of a plan of reorganization. The motion intends to preserve the availability of the NOLs to the greatest possible extent. Foamex is asking that the motion be heard at its previously scheduled May 3, 2006 omnibus hearing. About Foamex International, Inc. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. FREMONT HOME: Moody's Puts Low-B Ratings on Class M-9 & B-1 Certs. ------------------------------------------------------------------ Moody's Investors Service assigned Aaa rating to the senior certificates issued by Fremont Home Loan Trust 2006-1, and ratings ranging from Aa2 to Ba2 to the subordinate certificates in the deal. The securitization is backed by Fremont Investment & Loan originated, adjustable-rate and fixed-rate, subprime mortgage loans acquired by Greenwich Capital Financial Products Inc. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, and overcollateralization. Moody's expects collateral losses to range from 5.60% to 6.10%. Fremont Investment & Loan will service the loans from the closing date up until June 30, 2006, and effective July 1, 2006, the servicing function will be transferred to Wells Fargo Bank NA. The complete rating actions are: Fremont Home Loan Trust 2006-1 Asset-Backed Certificates, Series 2006-1 * Class I-A-1, Assigned Aaa * Class II-A-1, Assigned Aaa * Class II-A-2, Assigned Aaa * Class II-A-3, Assigned Aaa * Class II-A-4, Assigned Aaa * Class M-1, Assigned Aa2 * Class M-2, Assigned Aa3 * Class M-3, Assigned A1 * Class M-4, Assigned A2 * Class M-5, Assigned A3 * Class M-6, Assigned Baa1 * Class M-7, Assigned Baa2 * Class M-8, Assigned Baa3 * Class M-9, Assigned Ba1 * Class B-1, Assigned Ba2 GENERAL MOTORS: Posts $323 Mil. Net Loss in First Quarter 2006 -------------------------------------------------------------- General Motors Corp. (NYSE: GM) reported significantly improved financial results for the first quarter of 2006, with operations from every automotive region in the world contributing to the turnaround efforts. "The first quarter represented an important milestone in GM and GM North America's turnaround," said GM Chairman and Chief Executive Officer Rick Wagoner. "Not only did we see significant improvement in the financial results of all our automotive units, we also announced numerous additional actions to improve our North American competitiveness and liquidity. And, we made significant progress in implementing those and previously announced initiatives, such as the UAW health-care agreement and the North American capacity plan. "We're pleased to see the significant progress in our first- quarter results and in the implementation of all four elements of our North American turnaround plan," Wagoner continued. "And we remain focused on accelerating our return to profitability and cash generation." GM reported a preliminary net loss of $323 million in the first quarter of 2006, including special items. This was more than accounted for by the inclusion of a $681 million after-tax charge, related to the recently approved health-care settlement agreement for U.S. hourly retirees. These first-quarter results represent a significant improvement from the year-ago loss of $1.3 billion. Reported revenue rose 14.1% to a record $52.2 billion in the first quarter of 2006. Excluding special items but including the effect of the $681 million health-care charge ($1 billion pretax), GM reported a preliminary adjusted loss of $529 million in the first quarter of 2006. In the year-ago quarter, GM reported an adjusted loss before special items of $988 million. The reported results for the first quarter of 2006 include special items totaling a favorable $206 million after tax. These results include a gain of $317 million from the sale of most of GM's stake in Suzuki, partially offset by restructuring charges totaling $111 million at GM North America, GM Europe and GM Latin America/Africa/Middle East. GM's results for the first quarter of 2006 are preliminary and may be revised prior to the filing of GM's first quarter report on Form 10-Q in early May, depending on factors such as the final determination of the accounting treatment for the retiree health- care settlement agreement. Health Care Agreement Reduces Liability by $15 Bil. The U.S. District Court approved the unprecedented health-care settlement between GM and its largest labor union, the United Auto Workers, on March 31, 2006. "The health-care agreement is expected to result in an immediate 25-percent reduction in GM's hourly retiree health-care liability, or about $15 billion," Wagoner said. "The court approval is an important milestone, enabling us to implement this on the schedule we had anticipated." As part of the agreement, GM will make contributions to a new independent Defined Contribution Voluntary Employees' Beneficiary Association of $1 billion in each of 2006, 2007, and 2011. GM will also make supplemental contributions to the DC VEBA related to events like profit-sharing payments and increases in the value of GM stock. Because the settlement received final court approval on March 31, the first $1 billion DC VEBA contribution is being recorded in the first quarter of 2006 even though the cost savings will not be realized until the second half of the year. Beginning July 1, the pretax savings associated with the health-care agreement will be approximately $750 million per quarter through 2011. According to the accounting treatment that GM believes is appropriate under U.S. Generally Accepted Accounting Principles, the obligation to make the contributions would be recognized in each of the three periods in which they become due and payable. Other possible accounting treatments include recognizing the present value of all three payments as expense on March 31, 2006 , which would significantly increase the amount of the first-quarter charge and eliminate any future charges. GM is currently in discussions with the U.S. Securities and Exchange Commission to determine the final accounting treatment and expects the issue to be resolved before it files its Form 10-Q. GM Automotive Operations GM's automotive operations reported an adjusted loss of $721 million in 2006, including the health-care charge, halving the year-ago adjusted loss of $1.5 billion. All of the company's automotive units reported progress in the quarter, with three out of the four units posting profitable results. Global automotive sales rose 4.4% to 2.2 million units as strong sales in GM's Asia Pacific and Latin American regions were partially offset by declines in the United States and Canada. Global market share was down slightly to 13.2% from 13.3% a year ago. GM North America Shows Improvement GM North America reported an adjusted loss of $946 million in the first quarter of 2006, including $484 million of the retiree health-care settlement charge. This compares to an adjusted loss of $1.5 billion a year ago. Higher production volumes, improved mix and better net pricing contributed $1.1 billion of improvement to GMNA operating earnings, offset in part by the health-care charge. Revenue per unit sold in GMNA was significantly higher in the quarter versus a year ago, mostly attributable to better pricing and richer mix. U.S. dealer inventories ended the quarter at 1,169,000 vehicles, down 74,000 units from the year-ago period, and well positioned for the spring selling season. GM recently increased its structural cost reduction target in North America by more than $1 billion, to $7.5 billion on a running rate basis by the end of 2006, excluding the cost of the three $1 billion DC VEBA contributions in 2006, 2007 and 2011. Approximately $4 billion of this reduction will be cash savings. GM also continues to focus on achieving the previously reported $1 billion target of material cost savings in 2006, which is under pressure due to high raw material and commodity prices. GM remains committed to revitalizing its product portfolio through an aggressive product-spending program. In 2006, GM expects capital spending to total approximately $8.7 billion. This represents an increase of approximately $800 million over 2005 levels. "We are very pleased with the market's reaction to our launch products," Wagoner said. "In the first three months of the year, our new products accounted for about 30% of our total sales - more than double where we were a couple of years ago. We're especially encouraged by the early sales of the Chevrolet Tahoe, GMC Yukon, and Cadillac Escalade. And we're pleased with the reaction last week to the new Saturn Sky and Aura at the New York Auto Show." GM is revitalizing its sales and marketing strategy by focusing on the strength of its products, emphasizing their great value and features in relation to the competition. GM is focused on improving the mix and quality of its share by reducing incentives and the volume of sales to daily rental car companies. While this may result in short-term declines in sales and market share, it also is expected to result in improved retail sales and financial performance over time. "Despite even higher incentives by many of our competitors, we think our new product-focused marketing strategy is the right one, and early results are in line with our expectations," Wagoner said. GMAC General Motors Acceptance Corporation (GMAC) earned $605 million in the first quarter of 2006, compared to $728 million in the year-ago period, reflecting improved earnings from financing operations and insurance, offset by lower mortgage earnings. "GMAC continued to post strong earnings despite lower credit ratings and higher borrowing costs," Wagoner said. "The agreement that we announced earlier this month to sell a 51% controlling interest in GMAC to a consortium of investors led by Cerberus Capital Management is expected to close later this year. Once implemented, the new ownership structure should strengthen GMAC's ability to support GM's automotive operations, improve GMAC's access to cost-effective funding and provide $14 billion in liquidity to GM over the next three years." GMAC had cash reserve balances at March 31, 2006 of approximately $22.1 billion, including $17.3 billion in cash and cash equivalents and $4.8 billion in marketable securities. This compares with cash balances of approximately $20 billion at Dec. 31, 2005. GMAC's financing operations reported earnings of $270 million in the first quarter of 2006, compared to $216 million a year ago. The increase is largely due to the effect of lower consumer credit provisions, primarily as a result of automotive whole loan activity and favorable international credit performance. ResCap earnings were $197 million in the first quarter 2006, down from the $351 million earned in the year-ago period. While revenues were strong from higher asset levels, results were negatively affected by lower net margins resulting from both pricing pressures and higher funding costs. In addition, gains on sales of loans were down due to a significant gain in the year-ago quarter from the sale of a portfolio of distressed mortgage loans. Mortgage originations were $41.6 billion for the latest quarter, representing an increase from the $36.4 billion in the year-ago period. GMAC completed the sale of approximately 78% of its equity in GMAC Commercial Mortgage on March 23, 2006, for approximately $1.5 billion in cash. At the closing, GMAC Commercial Mortgage, now named CapMark Financial Group Inc., also repaid to GMAC approximately $7.3 billion in intercompany loans, bringing the total cash proceeds from the transaction to $8.8 billion. GMAC earnings related to Commercial Mortgage were $9 million, representing operating income of $50 million and a loss on sale of $41 million, after closing costs. GMAC's insurance operations generated net income of $129 million in the first quarter of 2006, up from $94 million in the same period a year ago primarily reflecting the impact of strong underwriting results. In addition, first quarter results also benefited from the strategic acquisition of MEEMIC Insurance Co., a personal lines business that offers automobile and homeowners insurance in the Midwest. Cash and Liquidity Cash, marketable securities, and readily-available assets of the Voluntary Employees' Beneficiary Association trust totaled $21.6 billion at March 31, 2006, up from $20.4 billion on Dec. 31, 2005 and $19.8 billion on March 31, 2005. GM withdrew approximately $2 billion from the VEBA trust in the first quarter of 2006, including $1 billion from the short-term VEBA. Liquidity remains a key focus of the corporation. GM sold most of its 20-percent stake in Suzuki during the first quarter, generating approximately $2 billion in cash. Also, GM recently announced the sale of its stake in Isuzu that generated approximately $300 million in proceeds in the second quarter of 2006. In February, GM reduced its common stock dividend by 50%, which is expected to save approximately $565 million annually. Finally, the planned sale of 51-percent of GMAC is expected to provide GM with up-front cash proceeds of about $10 billion and significant ongoing cash flow from retained assets and GMAC distributions over time. Outlook GM has made significant progress to turn around its North American operations, including the UAW retiree health-care agreement, the manufacturing capacity actions, the changes to GM's U.S. salaried retiree health-care benefits and salaried pension plan benefits and the hourly accelerated attrition program. "While we are encouraged by the speed and scale of the changes we're implementing, there is clearly more work to be done," Wagoner said. "Our next key priority is to reach a consensual agreement with Delphi and its unions that makes sense for all of the parties. The agreement we recently reached with the UAW on the attrition program is a significant step in achieving this objective, but there is more important work to do." About General Motors General Motors Corp. -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader for 75 years. Founded in 1908, GM today employs about 327,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM operates one of the world's leading finance companies, GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on April 3, 2006, Moody's Investors Service lowered the ratings of General Motors Corporation: Corporate Family Rating and senior unsecured to B3 from B2 and Speculative Grade Liquidity Rating to SGL-3 from SGL-2. The outlook is negative. GMAC and ResCap are unaffected. The GM rating actions came in response to the company's disclosure that restatements of its 2002, 2003 and 2004 financial statements could result in the acceleration of as much as $3 billion in various lease obligations and in the company potentially not being be able to borrow under its $5.6 billion unused revolving credit facility. As reported in the Troubled Company Reporter on April 6, 2006, Standard & Poor's Ratings Services held all of its ratings on General Motors Corp., including its 'B' long-term and 'B-3' short- term corporate credit ratings, on CreditWatch with negative implications after the Company announced that it entered into an agreement to sell a 51% ownership stake in General Motors Acceptance Corp. to a consortium headed by Cerberus Capital Management L.P. As reported in the Troubled Company Reporter on April 6, 2006, Fitch Ratings retained General Motors Corp. Issuer Default Rating of 'B', Rating Watch Negative, following the Company's announcement of the sale of its controlling interest in GMAC. GENESIS WORLDWIDE: Wants Until Aug. 28 to File Chapter 11 Plan -------------------------------------------------------------- Genesis Worldwide, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Ohio, Western Division, to extend until Aug. 28, 2006, the time within which they have the exclusive right to file a plan of reorganization and disclosure statement. The Debtors also want the Court to extend their exclusive period to solicit plan acceptances through Oct. 24, 2006. The Debtors inform the Court that they have made significant progress during bankruptcy. They have settled more than 260 preference claims, resulting in payments due of approximately $2 million and claims waivers of $2.5 million. According to the Debtors, they are not seeking an extension in order to assert leverage against the creditors in plan negotiation but they are working closely with the Committee in an effort to recover assets for the benefit of the creditors. The extension, the Debtors say, will provide them and the Official Committee of Unsecured Creditors more time to remain focused on collecting assets for the estates, avoiding the unnecessary expenditure of limited funds in connection with the formulation of Plans. Headquartered in Dayton, Ohio, Genesis Worldwide Inc., fka The Monarch Machine Tool Company, engineers and manufactures high quality metal coil processing and roll coating and electrostatic oiling equipment. Genesis Worldwide and its debtor-affiliates filed for chapter 11 protection on September 17, 2001 (Bankr. S.D. Ohio Case No. 01-36605). Nick V. Cavalieri, Esq., at Bailey Cavalieri LLC, represents the Debtors in their chapter 11 proceedings. Daniel M Anderson, Esq., at Schottenstein Zox & Dunn represents the Official Committee of Unsecured Creditors. As of June 30, 2001, the Debtors reported assets totaling $122,766,000 and debts totaling $121,999,000. GS MORTGAGE: Moody's May Downgrade Class K-PR Cert.'s Ba1 Rating ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings of three classes, affirmed the ratings of five classes and placed one class on review for possible downgrade of GS Mortgage Securities Corporation II, Commercial Mortgage Pass-Through Certificates, Series 2005-GSFL VII: * Class A-1, $12,031,122, Floating, affirmed at Aaa * Class A-2, $119,657,000, Floating, affirmed at Aaa * Class X, Notional, affirmed at Aaa * Class B, $54,609,000, Floating, upgraded to Aaa from Aa3 * Class C, $32,123,000, Floating, upgraded to Aa3 from A2 * Class D, $16,062,000, Floating, upgraded to A2 from A3 * Class E, $26,533,000, Floating, affirmed at Baa2 * Class F, $20,425,000, Floating, affirmed at Baa3 * Class K-PR, $1,000,000, Floating, currently rated Ba1; on review for possible downgrade The Certificates are collateralized by two whole loans and three senior participation interests. The loans range in size from 5.7% to 42.8% of the pool based on current principal balances. As of the April 6, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 54.3% to $299.5 million from $655.9 million at securitization. Two loans have paid off and there was a partial release associated with The Wyndham Portfolio Loan. Moody's current weighted average loan to value ratio is 62.6%, compared to 64.7% at securitization. Moody's is upgrading classes B, C and D due to increased credit support from the loan payoffs. Moody's is placing Class K-PR on review for possible downgrade due to the poorer performance of the Pittsburgh Renaissance Hotel. The Wyndham Portfolio Loan is secured by a cross collateralized pool of 15 full-service hotels containing a total of 4,060 rooms and located in ten states. Since securitization, three of the original 18 hotels were released from the mortgage lien. The hotels are flagged under the Wyndham, Doubletree, Hyatt and Marriott brands. Reserves of $62.0 million were escrowed at closing, including $57.2 million for capital expenditures to be spent during the first 24 months of the loan term. To date, three hotels have changed flags following property improvement programs. RevPAR for calendar year 2005 for the remaining 15 hotel properties was $63.20, compared to $63.15 at securitization. Moody's LTV is 62.9%, essentially the same as at securitization. Moody's current shadow rating is Baa3, the same as at securitization. The Sands Expo and Convention Center Loan is secured by a 1.14 million square foot exposition and convention center located in Las Vegas, Nevada. The property is affiliated with and physically attached to the Venetian Hotel. Although the facilities operate separately, there is a joint marketing agreement with the Venetian whereby SECC markets the hotel as the "headquarters hotel" for SECC events and the Venetian in turn promotes the use and occupancy of the SECC. Moody's LTV is 52.7%, compared to 53.5% at securitization. Moody's current shadow rating is A3, the same as at securitization. The Hyatt Regency Bethesda Loan is secured by a leasehold interest in a 390-room full service hotel located in Bethesda, Maryland. The hotel, located above the entrance to the Bethesda Metro Station, is part of a mixed-use development known as the Bethesda Metro Center, which in addition to the hotel includes two office towers, a food court, a 1,311 space parking garage and an outdoor plaza. The property is subject to a long term ground lease with the Washington Metropolitan Area Transit Authority. RevPAR for calendar year 2005 was $139.37, compared to $120.00 at securitization. Moody's LTV is 63.3%, compared to 65.2% at securitization. Moody's current shadow rating is Baa3, the same as at securitization. The Worldgate Plaza Loan 14.4%) is secured by a four-building Class A office complex located in Herndon, Virginia. The property was built in 2000, totals 322,328 square feet of net rentable area and has direct frontage on the Dulles Toll Road. As of November 2005 the property was 75.0% leased to five tenants, the same as at securitization. The two largest tenants, Verizon Avenue and SAVVIS Communications, comprise approximately 50.0% of the total net rentable area. Moody's LTV is 68.4%, compared to 67.5% at securitization. Moody's current shadow rating is Baa3, the same as at securitization. The Pittsburgh Renaissance Loan is secured by a 300-room full- service hotel located in downtown Pittsburgh, Pennsylvania. The hotel opened in 2001, following a $50 million conversion of the landmark Fulton Building, originally constructed in 1906. RevPAR for the nine-month period ending September 2005 was $99.45, compared to $100.70 at securitization. Based on year to date operating results through September 2005 and the borrower's budget for calendar year 2006 the hotel is performing below Moody's expectations. Although RevPAR has experienced only a slight decline from securitization, food & beverage revenue is less than projected and expenses are higher than projected. Moody's is placing Class K-PR, which is secured solely by this loan, on review for possible downgrade pending receipt and review of additional information. GS MORTGAGE: Moody's Upgrades Ratings on Class F & G Certificates ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of five classes and affirmed the ratings of four classes of GS Mortgage Securities Corporation II, Commercial Mortgage Pass-Through Certificates, Series 1998-GL II: * Class A-1, $54,130,800, Fixed, affirmed at Aaa * Class A-2, $694,315,000, Fixed, affirmed at Aaa * Class X, Notional, affirmed at Aaa * Class B, $91,595,000, Fixed, affirmed at Aaa * Class C, $84,549,000, Fixed, upgraded to Aaa from Aa2 * Class D, $98,641,000, Fixed, upgraded to Aaa from A2 * Class E, $70,458,000, Fixed, upgraded to A1 from Baa2 * Class F, $63,411,000, Fixed, upgraded to Ba1 from Ba2 * Class G, $28,183,997, Fixed, upgraded to Ba2 from B2 As of the April 13, 2006 distribution date, the transaction's aggregate principal balance has decreased by approximately 15.9 % to $1.2 billion from $1.4 billion at securitization. The Certificates are collateralized by ten mortgage loans, of which three have fully defeased and two have partially defeased. The remaining non-defeased loans range in size from 8.0% to 24.7% of the current pool balance. Classes C, D, E, F and G have been upgraded due to a higher percentage of defeased loans since Moody's last full review in March 2005, the improved performance of four of the seven remaining loans and increased credit support from loan amortization. All of the loans provide for amortization on 25- year schedules except for the Green Acres and the Crystal City Pool Loans, which amortize on 30-year schedules. The URS Pool Loan is secured by 29 cold storage properties totaling 4.4 million square feet. While revenue was flat from calendar years 2002 to 2004, net operating income declined to $41.2 million from $43.7 million. Affiliates of Vornado Realty Trust, Crescent Real Estate Equity Company and The Yucaipa Companies, L.L.C. own and operate the properties. Moody's loan to value ratio is 67.7%. Moody's current shadow rating is Ba1. The Theraldson Pool Loan B is secured by 93 limited service hotels, which are located in 17 states. The portfolio contains approximately 5,951 rooms, which are flagged under the Fairfield Inn, Comfort Inn, Hampton Inn, and Residence Inn brands, as well as others. The properties are owned and managed by affiliates of Theraldson Motels, Inc. Moody's LTV is 53.9%. Moody's current shadow rating is Aaa. The Green Acres Loan is secured by the fee interest in a 1.8 million square foot regional mall and by the leasehold interest in Plaza at Green Acres, a 177,000 square foot convenience center. Green Acres Mall, which is located in Valley Stream, New York, is anchored by Macy's, J. C. Penney, Sears, and BJ's Wholesale Club. The Plaza at Green Acres is anchored by Wal-Mart. The property was 88.5% occupied as of November 2005. The mall and convenience center are owned by affiliates of Vornado Realty Trust. Moody's LTV is 52.6%. Moody's current shadow rating is Aaa. The Americold Pool Loan is a 50.0% pari passu interest in the Total Americold Pool Loan. The loan is secured by 29 cold storage properties totaling approximately 5.9 million square feet of space. While revenue for the portfolio increased by approximately 7.5% from $161.6 million in calendar year 2002 to $173.8 million in calendar year 2004, net operating income has remained flat at $49.4 million. Affiliates of Vornado Realty Trust, Crescent Real Estate Equity Company and The Yucaipa Companies, L.L.C. own and operate the properties. Moody's LTV is 67.1%. Moody's current shadow rating is Ba1. The Marriott Desert Springs Loan is secured by an 884-room resort hotel, which contains five restaurants, two golf courses, a 30,000 square foot spa and approximately 30,000 square feet of meeting space. In calendar year 2005 net cash flow was $14.9 million, compared to $20.2 million at securitization and compared to $12.4 million in calendar year 2004. The borrower is an affiliate of Host Marriott. Moody's LTV is 63.3%. Moody's current shadow rating is Baa3. The Theraldson Pool Loan A comprises approximately 8.1% of the pool balance. Since Moody's last full review approximately 53.9% of the outstanding loan balance has defeased. The loan is currently secured by 47 limited service hotels, which contain approximately 3,463 rooms flagged under the Fairfield Inn, Comfort Inn, Hampton Inn, and Residence Inn brands as well as others. The properties are owned and managed by affiliates of Theraldson Motels, Inc. Moody's LTV is 43.3%. Moody's current shadow rating is Aaa. The Crystal City Pool Loan is secured by a deed of trust on three office buildings located in Crystal City, Virginia. The properties contain approximately 585,200 square feet of office space. As of September 2005, the properties were 87.5% occupied, compared to 97.0% at securitization. Moody's LTV is 52.9%. Moody's current shadow rating is Aa2. HALUK BEKIROGLU: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------------- Debtors: Haluk Bekiroglu and Vija Bekiroglu 3470 Tidewater Drive Weeki Wachee, Florida 34607 Bankruptcy Case No.: 06-01795 Type of Business: The Debtors own four businesses: Bekiro Corporation, a Burger King franchisee; Bekiroglu Family Properties, LLC, rents five real estate properties; The Bekiroglu Realty Trust owns a single house; and OGLU Land Trust rents two real estate properties. Chapter 11 Petition Date: April 20, 2006 Court: Middle District of Florida (Tampa) Debtors' Counsel: Buddy D. Ford, Esq. Buddy D. Ford, P.A. 115 North MacDill Avenue Tampa, Florida 33609 Tel: (813) 877-4669 Fax: (813) 8775-543 Total Assets: $4,988,895 Total Debts: $2,989,788 Debtors' 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SunTrust Mortgage Homestead located $780,000 1001 Semmes Avenue at 3470 Tidewater Richmond, VA 23224 Drive, Weeki Wachee, FL 34607 Citizens Bank Home Equity Line $502,906 1 Citizens Drive of Credit for Riverside, RI 02915 Massachusetts property Chevy Chase Federal Conventional Real $307,341 Savings Bank Estate Mortgage 6200 Chevy Chase Drive for North Laurel, MD 20707 Carolina property Bank of America Mortgage Conventional Real $292,982 475 Crosspoint Parkway Estate Mortgage Getzville, NY 14068 Massachusetts Commission Civil Action $284,189 vs Discrimination & Donna Girourd Attn: John D. Burke, Esq. 14 Beacon Street, Suite 300 Boston, MA 02108 BB&T Conventional Real $213,223 P.O. Box 1847 Estate Mortgage Wilson, NC 27894 for North Carolina property Wachovia Bank NA/FTU Home Equity Line $181,201 P.O. Box 3117 of Credit for Winston Salem, NC 27102 North Carolina Property Bank of America Home Equity Line $150,068 4161 Piedmont Parkway Of Credit for Greensboro, NC 27410 Massachusetts property SunTrust Mortgage Conventional Real $102,400 Estate Mortgage BB&T Home Equity Line $80,994 of Credit Bank of America Home Equity Line $83,463 of Credit for North Carolina Property Town of Walpole Real Estate Taxes $6,000 for Massachusetts property Colgate Educational $4,488 GEMB/Care Credit Charge Account $236 Capital 1 Bank Credit Card $200 Cavalry Portfolio Services Returned Check $96 From Sears Fleet National Bank Check Line of Credit $1 HEXION SPECIALTY: Launches Cash Tender Offers for Senior Notes -------------------------------------------------------------- Hexion Specialty Chemicals, Inc. commenced cash tender offers and consent solicitations for any and all of the outstanding: (i) $328,000,000 principal amount at maturity of 13-1/2% Senior Subordinated Notes due 2010, (ii) $200,000,000 principal amount at maturity of 9-1/2% Senior Second Secured Notes due 2010 and (iii) $140,000,000 principal amount at maturity of 8% Senior Secured Notes due 2009 issued by Hexion and HSC Capital Corporation. The tender offers and consent solicitations are being made on the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated April 20, 2006 and the related Consent and Letter of Transmittal which more fully set forth the terms of the tender offers and consent solicitations. Hexion is soliciting consents to eliminate most of the restrictive covenants and certain events of default in the indentures under which the Notes were issued and to terminate the security interests that secure certain obligations under the 8% Notes and 9-1/2% Notes. The total consideration for each $1,000 principal amount of the 13-1/2% Notes tendered and accepted for purchase pursuant to the tender offer will be $1,071.25. The total consideration for each $1,000 principal amount of the 9-1/2% Notes will be $1,050.00. The total consideration for the 8% Notes tendered and accepted for purchase pursuant to the tender offer will be determined as specified in the Offer Documents, on the basis of a yield to the first redemption date equal to the sum of (i) the yield (based on the bid side price) of the 2.875% U.S. Treasury Security due Nov. 30, 2006, as calculated by Credit Suisse Securities (USA) LLC in accordance with standard market practice on the Price Determination Date, as described in the Offer Documents, plus (ii) a fixed spread of 50 basis points. Hexion will pay accrued and unpaid interest up to, but not including, the applicable payment date. Each holder who validly tenders its Notes and delivers consents on or prior to May 3, 2006 shall be entitled to a consent payment, which is included in the total consideration above, of $30 for each $1,000 principal amount of Notes tendered by such holder if such Notes are accepted for purchase pursuant to the tender offers. Holders who tender Notes are required to consent to the proposed amendments to the indentures and the collateral agreements. The tender offers by Hexion will expire at midnight, New York City time, on May 17, 2006, unless extended or earlier terminated by Hexion. The consent solicitations will expire on May 3, 2006, unless extended. Tenders of Notes prior to the Consent Date may be validly withdrawn and consents may be validly revoked at any time prior to the Consent Date, but not thereafter unless the tender offers and the consent solicitations are terminated without any Notes being purchased. Hexion reserves the right to terminate, withdraw or amend the tender offers and consent solicitations at any time subject to applicable law. Hexion expects to pay for any Notes purchased pursuant to its tender offer and consent solicitation in same-day funds on a date promptly following the expiration of its tender offer. In addition, Hexion may accept and pay for any Notes at any time after the Consent Date, in its sole discretion. Hexion's tender offer is subject to the conditions set forth in the Offer Documents including the receipt of consents of the noteholders representing a majority in aggregate principal amount of each series of Notes and is conditioned upon Hexion obtaining the financing necessary to pay for the Notes and consents in accordance with the terms of the tender offers and consent solicitations. Hexion has retained Credit Suisse Securities (USA) LLC to act as Dealer Manager in connection with the tender offers and consent solicitations. Questions about the tender offers and consent solicitations may be directed to: Credit Suisse Securities (USA) LLC Telephone (212) 538-0652 (collect) Toll Free (800) 820-1653 Copies of the Offer Documents and other related documents may be obtained from the information agent for the tender offers and consent solicitations: D.F. King & Co., Inc., Telephone (212) 269-5550 (collect) Toll Free (800) 290-6426 About Hexion Specialty Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://hexionchem.com/-- combines the former Borden Chemical, Bakelite, Resolution Performance Products and Resolution Specialty Materials companies into the global leader in thermoset resins. With 86 manufacturing and distribution facilities in 18 countries, Hexion serves the global wood and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. Hexion Specialty Chemicals is owned by an affiliate of Apollo Management, L.P. * * * Moody's Investors Service placed a B1 rating on Hexion Specialty Chemicals Inc.'s $675 million guaranteed senior secured credit facilities ($275 million revolver due 2010 & $400 million term loan due 2011), and a Caa3 rating to its $350 million preferred stock, in May 2005. INTEGRATED HEALTH: IHS Liquidating Wants to Settle Nine Tax Claims ------------------------------------------------------------------ To minimize the burden on estate assets and to avoid the necessity of extending the claims objection process to the point of litigation, Integrated Health Services, Inc., and certain of its direct and indirect subsidiaries made a concerted effort to amicably settle with claimants towards a reconciliation and settlement of the allowed amount of each of their claims. Specifically, the IHS Debtors negotiated with seven claimants, which asserted these claims: Claimant Claim No. Unsecured Priority -------- --------- --------- -------- CA Employment 12985 $18,170 $99,072 Development Program Macon-Bibb County 315 72 727 Tax Commissioner Minnesota Dept. of 5280 36,951 Economic Security New Jersey Div. 14129 182,829 of Taxation Texas Comptroller 12566 2,395,430 of Public Accounts Wisconsin Div. 8168 1,551 21,817 of Revenue 13207 1,888 33,060 Fort Worth Independent School District asserts a secured claim -- Claim No. 13957 -- for $13,296. New Jersey Division of Taxation also asserts an administrative claim -- Claim No. 14130 -- for $87,581. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that the Claims represent an aggregate liability to the IHS Debtors' estates of approximately $2,804,871, including priority claims of $2,769,890, and a secured claim of $13,296. Each of the Claims represents tax liabilities asserted against the IHS Debtors by various governmental authorities. As the IHS Debtors filed tax returns and reviewed their books and records, they arrived at dollar figures that were different from the ones listed on the proofs of claims. The Settlement Agreements Upon reaching a determination as to the correct claim amount of each asserted claim, the IHS Debtors and the Claimants executed separate settlement agreements, which immortalized the parties' settlement. By this motion, IHS Liquidating LLC, as successor to the IHS Debtors, asks the U.S. Bankruptcy Court for the District of Delaware to approve the Settlement Agreements with the Claimants. Under the Agreements, the parties agreed to these settlement amounts: Claimant Claim No. Unsecured Priority -------- --------- --------- -------- CA Employment 12985 $67,242 $50,000 Development Program Macon-Bibb County 315 0 0 Tax Commissioner Minnesota Dept. of 5280 16,384 Economic Security New Jersey Div. 14129 120,000 of Taxation Texas Comptroller 12566 1,758,709 615,000 of Public Accounts Wisconsin Div. 8168 1,551 21,626 of Revenue 13207 1,888 4,140 Fort Worth's Claim No. 13957 is reduced to $2,998 while NJ Div. of Taxation's Claim No. 14130 is reduced to $80,713. Both claims retain their claim status. Mr. Brady points out that the aggregate settlement amount of the nine Claims pursuant to the Settlement Agreements is approximately $2,659,542, of which only $827,151 is entitled to priority, and $2,998 is secured, which results in substantial savings to the estates, without incurring the costs associated with prosecuting claim objections that have already been filed, or filing new claim objections to the Claims. Mr. Brady also asserts that the priority and secured obligations against the IHS Debtors will be reduced by approximately $1,953,037. Integrated Health Services, Inc. -- http://www.ihs-inc.com/-- operated local and regional networks that provide post-acute care from 1,500 locations in 47 states. The Company and its 437 debtor-affiliates filed for chapter 11 protection on February 2, 2000 (Bankr. Del. Case No. 00-00389). Rotech Medical Corporation and its direct and indirect debtor-subsidiaries broke away from IHS and emerged under their own plan of reorganization on March 26, 2002. Abe Briarwood Corp. bought substantially all of IHS' assets in 2003. The Court confirmed IHS' Chapter 11 Plan on May 12, 2003, and that plan took effect September 9, 2003. Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D. Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP, represent the IHS Debtors. On September 30, 1999, the Debtors listed $3,595,614,000 in consolidated assets and $4,123,876,000 in consolidated debts. (Integrated Health Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., 215/945-7000) INTELSAT LTD: Incurs $65.7 Million Net Loss in Fourth Quarter ------------------------------------------------------------- Intelsat, Ltd., reported its financial results for the three months and fiscal year ended December 31, 2005. Intelsat, Ltd. and its subsidiaries, reported revenue of $294.9 million and a net loss of $65.7 million for the quarter ended December 31, 2005. The company also reported EBITDA, or Intelsat earnings before interest, taxes and depreciation and amortization, of $194.8 million, or 66% of revenue for the quarter, and the company also reported Sub Holdco Adjusted EBITDA for the same period of $212.7 million, or 72% of revenue2. For the full-year 20053, Intelsat reported revenue of $1.171 billion and a net loss of $325.3 million. EBITDA for full-year 2005 was $655.9 million, or 56% of revenue. Sub Holdco Adjusted EBITDA for the year ended December 31, 2005 was $837.9 million, or 72% of revenue. Intelsat generated free cash flow from operations of $371.5 million for 2005. Free cash flow from operations is defined as net cash provided by operating activities, less payments for satellites and other property, plant and equipment and associated capitalized interest. "Our total year results, which included 12% revenue growth and strong EBITDA and cash generation demonstrate the positive contribution of the fully integrated IGen business and improved performance in our Network Services and Telecom sector," said Intelsat Chief Executive Officer Dave McGlade. "GlobalConnex, our managed solutions offering that is popular with Voice over IP providers in overseas markets, among other uses, continues to be a positive aspect of our business, growing to an annual revenue total of $110.9 million, up 47% from total 2004 results." "Our top priority in 2006 is to close the PanAmSat acquisition and to successfully execute on the detailed integration plan that is currently being put into place," Mr. McGlade continued. "Upon closing, we plan to bring to market the enhanced services afforded by the merger quickly, and also intend to capture the cost and operational synergies as we bring the two companies together." PanAmSat Acquisition Update Intelsat provided an update on the regulatory and operational activities regarding its previously announced acquisition of PanAmSat Holding Corporation. Intelsat is not aware of any non-U.S. regulatory approvals that will be required in advance of closing the transaction, beyond those already obtained. With respect to the United States, on January 20, 2006, Intelsat was informed by the Committee on Foreign Investment in the United States that its review of the proposed acquisition was concluded, and that there were no issues of national security sufficient to warrant further investigation. There are two additional U.S. regulatory approvals required before the PanAmSat transaction may close, from the Federal Communications Commission and the Department of Justice. sWith respect to the DoJ, as previously disclosed, Intelsat and PanAmSat received so-called "second requests" for additional information and documentary materials in connection with the merger. Both the DoJ and the FCC continue to review the transaction under their normal procedures. A disciplined integration planning process has been prepared for back office and technical operations, and a number of decisions have been made regarding personnel, facilities and systems that are expected not only to generate strong operational synergies, but also to provide improved operational abilities, resulting in a stronger competitive profile as the companies combine. Mr. McGlade said, "Our integration planning is already yielding decisions regarding facilities, systems and platforms, and also regarding the people who will lead our new company. By making these decisions now, we are positioned for an accelerated start once we obtain the approvals to close the transaction. sI am pleased with our progress on the regulatory and operational fronts, and believe that we are on-track to close the transaction in the second or third quarter of 2006." Financial Results for the Three Months Ended Dec. 31, 2005 The comparison of Intelsat's results for the three-month period ended December 31, 2005 compared with the corresponding prior-year period reflects the full-quarter impact of the COMSAT General business, which the company acquired in October 2004 and integrated into its existing government business, Intelsat General. Total revenue increased $11.5 million, or 4 percent, to $294.9 million for the three months ended December 31, 2005 from $283.4 million for the three months ended December 31, 2004. The increase was primarily attributable to an increase in lease services revenue of $9.3 million, mostly from Intelsat's Network Services and Telecom sector. Channel services revenue, a product primarily sold to NS&T customers, declined by $11.7 million to $51.8 million, in line with recent trends. This decline was largely offset by an increase of $9.1 million in revenue to $32.2 million from managed solutions sold to the NS&T customers. Other revenues, primarily generated from mobile satellite services sold by IGen, totaled $16.2 million, as compared to less than $11.5 million in the prior-year period. Total operating expense of $242.3 million for the fourth quarter of 2005 was $68.2 million, or 22% lower than the $310.5 million reported for the three months ended December 31, 2004. Excluding the $84.4 million non-cash impairment charge related to the IA-7 satellite taken during the fourth quarter of 2004, operating expense for the fourth quarter of 2005 was 7% higher than for the fourth quarter of 2004. The largest component of total operating expense was depreciation and amortization expense, which increased $26.1 million to $147.2 million for the three months ended December 31, 2005, primarily due to purchase accounting treatment following the acquisition of Intelsat, Ltd. by Intelsat Holdings, Ltd. in January 2005, as well as the IA-8 satellite, which entered service in July 2005. Excluding depreciation and amortization expense, and the non-cash impairment charge, operating expense in the fourth quarter of 2005 declined to $95.1 million from $105.0 million in the three months ended December 31, 2004, reflecting lower staff costs and lower miscellaneous expense offset by incremental operating expenses associated with the COMSAT General business that is now part of IGen. Net loss for the three months ended December 31, 2005, was $65.7 million, compared with net loss of $56.9 million for the three months ended December 31, 2004. The factors, in addition to higher interest expense resulting from the financings in 2005, contributed to the slightly higher net loss in the fourth quarter of 2005. EBITDA increased $107.4 million, or 123%, to $194.8 million, or 66% of revenue, for the three months ended December 31, 2005, from $87.4 million, or 31% of revenue, for the three months ended December 31, 2004. The increase was primarily due to the reduction in 2004 EBITDA due to the IA-7 impairment charge, and the increased revenues and lower operating expenses in 2005, as described above. Sub Holdco Adjusted EBITDA for the three months ended December 31, 2005, was $212.7 million, or 72% of revenue, as compared to the $205.9 million, or 73% of revenue, for the three months ended December 31, 2004. Financial Results for the Year Ended December 31, 2005 On January 28, 2005, Intelsat, Ltd. was acquired by Intelsat Holdings, Ltd. For comparative purposes, when we refer in this press release to our results for the year ended December 31, 2005, we are referring to the Company's combined results for the period from January 1, 2005, through January 31, 2005, and for the period (post-Acquisition) from February 1, 2005 through December 31, 2005. Total year results for 2005 reflect the impact of purchase accounting treatment following the Acquisition and the full year effect of two business acquisitions, namely the acquisition of the Intelsat Americas satellites and the Comsat General Acquisition. The Intelsat Americas satellites were acquired in March 2004. Total revenue increased $127.6 million, or 12%, to $1.17 billion for the year ended December 31, 2005, from $1.04 billion for the year ended December 31, 2004. The increase was primarily attributable to an increase in lease services revenue of $68.8 million, largely consisting of new and expanded business signed by the NS&T sector and IGen, and an increase of $64.9 million in other revenues, which totaled $78.0 million, up from $13.1 million in the prior year, primarily due to mobile satellite services sold by IGen. Channel services revenue declined by $41.4 million to $223.3 million, in line with recent trends, with this decline partially offset by an increase of $35.3 million in revenue from our managed solutions, which totaled $110.9 million. Total operating expenses for the year ended December 31, 2005, were $1.08 billion, including a satellite impairment charge of $69.2 million related to the January 2005 failure of the IS-804 satellite, as compared to $878.8 million reported for the year ended December 31, 2004, including the previously described $84.4 million impairment charge for the IA-7 satellite. Depreciation and amortization expense increased $116.1 million to $573.5 million for the year ended December 31, 2005, primarily due to: purchase accounting treatment following the Acquisition; the IS-10-02 and IA-8 satellites that entered service in September 2004 and July 2005 respectively; and a full year of depreciation recorded on the Intelsat Americas satellites compared with approximately nine months in the prior year. These factors were offset in part by the write-off of the IS-804 satellite and the write-down of the IA-7 satellite. Direct costs of revenue exclusive of depreciation and amortization increased $65.3 million to $243.5 million for the year ended December 31, 2005, from $178.2 million for the year ended December 31, 2004. The increase was principally due to increases in cost of third-party satellite capacity and other communications services in connection with revenues generated by the IGen business and additional leased fiber capacity costs due to growth in our managed solutions offerings. Selling, general and administrative expenses increased $42.5 million, or 28%, to $194.6 million for the year ended December 31, 2005, from $152.1 million for the year ended December 31, 2004. The increase was due primarily to increases in professional fees of $46.2 million, incurred mainly in connection with the Acquisition, and employee related costs for severance and equity and other compensation related to the Acquisition, totaling approximately $31.8 million. These increases were offset by a $15.9 million decrease in bad debt expense, due in part to payments of past due amounts from customers who are also former shareholders of the company following their receipt of proceeds from the Acquisition, and in part to customer payments in connection with bankruptcy settlements. Net loss for the year ended December 31, 2005, was $325.3 million, as compared to $38.7 million for the year ended December 31, 2004, primarily due to higher operating expenses as described above and higher interest expense resulting from financings in 2005. These higher expenses were partially offset by higher revenue attributable to full year contributions of the Intelsat Americas assets and the IGen business. EBITDA increased $79.7 million to $655.9 million, or 56% of revenue, for the year ended Dec. 31, 2005, from $576.2 million, or 55% of revenue for the year ended December 31, 2004. The increase in EBITDA reflected stronger revenues overall and the full year contributions of the Intelsat Americas assets and the IGen business, offset somewhat by the IS-804 write-off and Acquisition-related charges. Sub Holdco Adjusted EBITDA for the year ended December 31, 2005, of $837.9 million, or 72% of revenue, compared favorably to the $826.6 million, or 79% of revenue, for the year ended December 31, 2004. At December 31, 2005, Intelsat's backlog, representing expected future revenue under contracts with customers, was $3.8 billion. At September 30, 2005, Intelsat's backlog was also $3.8 billion. Intelsat, Ltd., offers telephony, corporate network, video and Internet solutions around the globe via capacity on 25 geosynchronous satellites in prime orbital locations. Customers in approximately 200 countries rely on Intelsat's global satellite, teleport and fiber network for high-quality connections, global reach and reliability. * * * As reported in the Troubled Company Reporter on April 11, 2006, Standard & Poor's Ratings Services held all ratings on fixed satellite services provider Intelsat Ltd. (BB-/Watch Neg/--) on CreditWatch with negative implications. JEAN COUTU: Fitch Junks Rating on Senior Subordinated Notes ----------------------------------------------------------- Fitch Ratings initiated coverage of The Jean Coutu Group Inc. with these ratings: -- Issuer Default Rating 'B-' -- Senior Secured Revolving Credit Facility 'BB-/RR1' -- Senior Secured Term Loans 'BB-/RR1' -- Senior Unsecured Notes 'B+/RR2' -- Senior Subordinated Notes 'CCC+/RR5' The Rating Outlook is Stable. Approximately $2.5 billion of debt is affected by these actions. The ratings reflect: * Jean Coutu's ongoing integration of 1,549 Eckerd stores; * the company's significant leverage; and * the highly competitive drug retailing operating environment. Also considered is: * the company's good market positions and brand name recognition; * its convenient store locations; and * positive industry fundamentals. In August 2004, Jean Coutu acquired 1,549 Eckerd stores from J.C. Penney Company, Inc. located primarily in the highly competitive mid-Atlantic market of the U.S. for $2.493 billion. The acquisition more than tripled Jean Coutu's store base from 655 stores in the fiscal year ending May 31, 2004, to 2,173 stores as of Feb. 25, 2006, and substantially increased its revenues from $3.0 billion to $11.0 billion over the same period. The company financed the Eckerd acquisition with a combination of: * bank borrowings, * a senior unsecured debt issue, and * a senior subordinated debt issue. As a result of increased debt, credit metrics significantly weakened. While the previous owner spent sizeable capital expenditures on the stores, the acquired stores were posting weak same store sales that trailed those of the large competitors. Since the acquisition 20 months ago, Jean Coutu has: * updated the product mix by rationalizing low margin consumables; * lowered prices on approximately 10,000 items; * re-instituted loss prevention activities; and * changed aisle displays. However, the integration of this acquisition, which was of a much larger scale than the company's previous acquisitions, remains 12 months behind plan, due in part to the lack of systems integration as well as supply chain issues. Since January 2006, Jean Coutu has formed a dedicated team which has developed an integration plan that the company expects to execute during calendar 2006. This includes: * implementing various internal systems in both the pharmacy and front-end departments; * rationalizing the distribution network; and * updating the merchandising and pricing strategy. While these efforts combined with positive U.S. industry fundamentals are expected to benefit the company's store network, Jean Coutu will continue to be challenged by ongoing pressures from competitive growth as well as the impact of industry trends such as lower reimbursement rates. In addition, effect of Medicare Part D on Jean Coutu's future operating performance remains uncertain. Fitch anticipates that Jean Coutu's operating results and credit measures will continue to be challenged given the remaining integration efforts and competitive marketplace. Future improvement in credit statistics are contingent on managements ability to execute the integration plan and drive store traffic. For the latest twelve month period ending Feb. 26, 2006, total adjusted debt/EBITDAR was 6.2x and EBITDAR coverage of interest plus rents was 1.8x. The ratings of the various classes of debt listed above reflect their respective recovery prospects. Fitch's recovery analysis assumes an enterprise value of $2.6 billion in a distressed scenario. Applying this value across the capital structure results in outstanding recovery prospects (over 90%) for the $350 million revolving credit facility and the $1.7 billion term loans, which have a first priority security interest on essentially all the company's existing and future assets, and a first priority pledge of the capital stock of the subsidiaries inventories and receivables. The $350 million of senior unsecured notes have above average recovery prospects (70-90%) and the $850 million senior subordinated notes have below average recovery prospects (11-30%). Fitch's Recovery Ratings, introduced in 2005, are a relative indicator of creditor recovery on a given obligation in the event of a default. JILL KELLY: Gets $1.765 Mil. Purchase Offer from Penthouse Media ---------------------------------------------------------------- Jill Kelly Productions, Inc. received an offer from Penthouse Magazine to acquire the Company's significant assets for $1.765 million. Competitors Playboy and New Frontier Media also participated at the California bankruptcy court auction. The $1.765 million acquisition will further expand Penthouse's multi-media platform, which includes: publishing, television, Internet and mobile services and will make Penthouse an even bigger player in the adult DVD arena. "The JKP assets contain a treasure trove of over 400 high-quality adult feature films and compilations, including over 60 as-yet- unreleased titles," says Penthouse CEO Marc H. Bell. "In this case, Jill Kelly's devoted fan base will drive viewership and sales of adult products and services to the mutual benefit of Penthouse and its mobile licensees, Internet webmasters and cable and satellite television affiliates." "Platform wise, the acquisition will have a positive impact across the board," says Penthouse President of Entertainment, Jim English, "but will provide the greatest boost to our Penthouse TV broadcast network. The JKP library of movies will be a welcome addition to our much anticipated adult line-up of original programs and movies." About Penthouse Media Group Inc. Headquartered in Boca Raton, Florida, Penthouse Media Group Inc. -- http://www.penthouse.com/-- is an international, multimedia entertainment company. Founded in 1965, Penthouse is globally recognized as one of the premier brands in adult entertainment and publishes one of the most widely circulated groups of men's lifestyles publications. The company also operates a popular adult entertainment website and provides adult video entertainment and a broad array of products and services via its numerous licensees. About Jill Kelly Headquartered in Hollywood, California, Jill Kelly Productions, Inc. -- http://www.jillkellyproductions.com/-- is an adult entertainment company specializing in the production, development and distribution of high-quality films, pictures, and other related adult oriented content on a world-wide basis. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. C.D. Calif. Case No. 05-15389). Todd B. Becker, Esq., represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $1 million and $10 million. JP MORGAN: Moody's Holds Low-B Ratings on Six Certificate Classes ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of two classes and affirmed the ratings of 20 classes of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2003-CIBC6: * Class A-1, $176,427,182, Fixed, affirmed at Aaa * Class A-2, $653,188,000, Fixed, affirmed at Aaa * Class X-1, Notional, affirmed at Aaa * Class X-2, Notional, affirmed at Aaa * Class B, $31,189,000, Fixed, upgraded to Aa1 from Aa2 * Class C, $32,488,000, Fixed, upgraded to A1 from A2 * Class D, $11,696,000, Fixed, affirmed at A3 * Class E, $14,295,000, Floating, affirmed at Baa1 * Class F, $10,396,000, Floating, affirmed at Baa2 * Class G, $12,996,000, Floating, affirmed at Baa3 * Class H, $15,594,000, Fixed, affirmed at Ba1 * Class J, $5,198,000, Fixed, affirmed at Ba2 * Class K, $7,797,000, Fixed, affirmed at Ba3 * Class L, $5,198,000, Fixed, affirmed at B1 * Class M, $3,899,000, Fixed, affirmed at B2 * Class N, $1,300,000, Fixed, affirmed at B3 * Class AC-1, $1,916,061, Fixed, affirmed at Baa1 * Class AC-2, $2,874,091, Floating, affirmed at Baa2 * Class AC-3, $2,874,091, Floating, affirmed at Baa3 * Class BM-1, $3,954,838, Floating, affirmed at Aa3 * Class BM-2, $6,426,612, Floating, affirmed at A2 * Class BM-3, $4,449,193, Floating, affirmed at A3 As of the April 12, 2006 distribution date, the transaction's aggregate principal balance has decreased by approximately 3.8% to $1.02 billion from $1.06 billion at securitization. The Certificates are collateralized by 129 loans, ranging in size from less than 1.0% to 8.2% of the pool, with the top ten loans representing 34.2% of the pool. The pool includes two shadow rated investment grade loans, which represent 14.0% of the pool. Six loans, representing 5.3% of the pool, have defeased and are collateralized by U.S. Government securities. To date there have been no realized losses to the pool. One loan, representing less than 1.0% of the pool, is in special servicing. Moody's is not projecting any losses from the specially serviced loan at this time. Twenty-two loans, representing 11.1% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2004 and partial or full year 2005 operating results for 98.6% and 38.1% of the performing loans, respectively. Moody's weighted average loan to value ratio for the conduit component is 88.8%, compared to 89.6% at securitization. The upgrade of Classes B and C is due to stable overall pool performance and increased credit support. The largest shadow rated loan is the Battlefield Mall Loan, which represents the senior component of a $99.0 million mortgage loan. The loan is secured by a 1.2 million square foot regional mall located in Springfield, Missouri. It is the only mall in its trade area and is anchored by J.C. Penney, Dillard's, Famous-Barr, Dillard's Womens and Sears. In-line space is 94.8% occupied, essentially the same as at securitization. The subordinate note is held within the trust and is the security for non-pooled Classes BM-1, BM-2 and BM-3. The loan sponsor is Simon Property Group, Inc. Moody's current shadow rating of the senior loan component is Aa2, the same as at securitization. The second shadow rated loan is the One Alliance Center Loan, which represents the senior component of a $67.2 million mortgage loan. The loan is secured by a leasehold interest in a 550,000 square foot Class A office building located in the Buckhead submarket of Atlanta, Georgia. The property is 99.9% occupied, compared to 94.2% at securitization. The major tenants are S1, an integrated financial services and software company and Towers Perrin Corporation. S1 currently occupies approximately two- thirds of its leased square footage and subleases the remaining space. The tenant has the option to return a portion of its space at the 60th month of its lease with the payment of a termination fee. The subordinate note is held within the trust and is the security for non-pooled Classes AC-1, AC-2 and AC-3. The loan sponsor is Trizec Properties, Inc. Moody's current shadow rating of the senior loan component is A3, the same as at securitization. The top three conduit loans represent 9.3% of the pool. The largest conduit loan is the International Paper Center Loan, which is secured by a leasehold interest in a 214,000 square foot Class A office building located in Memphis, Tennessee. The property is one of three identical office towers that serve as the headquarters for International Paper Company. The lease with International Paper expires in April 2017 and the tenant has two five-year renewal options. Moody's LTV is 90.8%, compared to 91.9% at securitization. The second largest conduit loan is the Deerfield Mall Loan, which is secured by a 372,000 square foot retail center located in Deerfield Beach, Florida. Major tenants include Publix, TJ Maxx, an eight-screen movie theater, Marshall's and OfficeMax. The center is 99.0% occupied, compared to 96.0% at securitization. Moody's LTV is 90.3%, compared to 94.6% at securitization. The third largest conduit loan is the Shelbyville Road Plaza Loan, which is secured by a 250,000 square foot community shopping center located in Louisville, Kentucky. Major tenants are Linens- n-Things, Circuit City, Wild Oats Market and Borders. The center is 100.0% occupied, the same as at securitization. Moody's LTV is 82.2%, compared to 86.1% at securitization. The pool's collateral is a mix of retail, office, multifamily, industrial and self storage and U.S. Government securities. The highest state concentrations are California, Georgia, New York, Missouri, and New Jersey. All of the loans are fixed rate. KAISER ALUMINUM: Asks Court to Okay AIG Settlement Agreement ------------------------------------------------------------ AIG Member Companies issued certain insurance policies insuring Kaiser Aluminum & Chemical Corporation. These policies are at issue in a products coverage action and a premises coverage action KACC instituted against certain insurers in the Superior Court of California for the County of San Francisco in 2000. The insurance coverage at issue in the Products Coverage Action spans the period from 1959 to 1985 and involves more than 300 insurance policies. In the Products Coverage Action, KACC seeks a declaratory judgment that the Insurers are obligated to cover the asbestos-related bodily injury products liability claims that have been asserted against KACC. The Products Coverage Action also seeks damages for breach of contract and breach of the covenant of good faith and fair dealing against several of the Insurers. If successful, the Products Coverage Action would establish KACC's rights, and the Insurers obligations, with respect to the Asbestos Products Claims and would allow KACC to recover its costs from the Insurers in connection with the defense and settlement of the Asbestos Products Claims. In general, a product claim is a claim for injury resulting from a product KACC manufactured or sold, while a premises claim is a claim for injury resulting from exposure to an allegedly hazardous product or condition at a facility KACC owned and operated. The AIG Parties issued certain other policies, which are not at issue in the Coverage Actions. KACC and the AIG Parties have reached a settlement that resolves all claims against the AIG Parties with respect to the Subject Policies, including coverage for Channeled Personal Injury Claims, as well as other present and future liabilities, and all Tort Claims against the AIG Parties with respect to the Other AIG Parties Policies. The principal terms of the Settlement Agreement are: (a) The AIG Member Companies will pay 37.5% of trust expenses and the liquidation values of Asbestos Personal Injury Claims liquidated by the PI Asbestos Trust and Silica Personal Injury Claims liquidated by the PI Silica Trust, subject to (i) certain quarterly caps and associated rollover provisions, and (ii) an aggregate cap of $567,885,590. The AIG Member Companies will pay the Settlement Amount to the Funding Vehicle Trust. (b) The AIG Parties have specifically contracted to receive all of the benefits of being designated as Settling Insurance Companies in the Plan, including, but not limited to, the PI Channeling Injunctions. (c) KACC Parties agree to release all of their rights under the Subject Policies and certain other rights under the Other AIG Parties Policies and to dismiss each of the AIG Member Companies from the Coverage Actions. (d) The Settlement Agreement covers all claims that might be covered by the Subject Policies. KACC will sell the Subject Policies back to the AIG Member Companies, and the AIG Member Companies will buy back the Subject Policies, free and clear of all liens, claims or interests, with the AIG Member Companies' payment of the Settlement Amount constituting the consideration for the buy-back. (e) If any claim is brought against any of the AIG Parties that is subject to a PI Channeling Injunction, the Funding Vehicle Trust will exercise its reasonable best efforts to establish that those claims are enjoined as to the AIG Parties by the PI Channeling Injunction. (f) The AIG Parties will not seek reimbursement of any payments that the AIG Member Companies are obligated to make under the Settlement Agreement. A full-text copy of the AIG Settlement Agreement is available for free at http://bankrupt.com/misc/kaiser_AIGsettlement.pdf The effect of the Settlement Agreement is to: (a) eliminate KACC's continuing costs of prosecuting the Coverage Actions against the AIG Member Companies; (b) eliminate uncertainty regarding future payments by the AIG Member Companies; and (c) secure the payment over time of a substantial aggregate amount from the AIG Member Companies without further delay and cost to KACC. Thus, the Debtors ask the Court to: -- approve the Settlement Agreement; -- authorize the sale of the Subject Policies to the AIG Member Companies free and clear of liens, claims, interests and other encumbrances; and -- enjoin all Claims against the AIG Parties relating to or attributable to the Subject Policies, including, but not limited to, any Claims in the nature or sounding in tort, contract, warranty or any other theory of law, equity or admiralty. About Kaiser Aluminum 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. 94; Bankruptcy Creditors' Service, Inc., 215/945-7000) KAISER ALUMINUM: Makes Non-Material Changes to 2005 Annual Report ----------------------------------------------------------------- Kaiser Aluminum Corporation filed with the Securities and Exchange Commission an amendment to its Annual Report on Form 10-K for the fiscal year ended December 31, 2005, to modify certain of the language included in Item 9A Controls and Procedures. Kaiser disclosed that an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures was performed as of the end of 2005 under the supervision of and with the participation of the Company's management, including the principal executive officer and principal financial officer. Based on that evaluation, the Company's principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures were not effective. According to Jack A. Hockema, KAC president and chief executive officer, the Company did not have any change in its internal controls over financial reporting during the last quarter of 2005 that has materially affected, or is reasonably likely to materially affect, its internal controls over financial reporting. However, Mr. Hockema says, the Company does not believe its internal control environment is as strong as it has been in the past. Mr. Hockema relates that the Company's relocation of its corporate headquarters from Houston, Texas, to Foothill Ranch, California, and the resignation of a couple of key personnel have made the year-end accounting and reporting process more difficult. A full-text copy of the Amendment is available for free at http://ResearchArchives.com/t/s?830 About Kaiser Aluminum 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. 94; Bankruptcy Creditors' Service, Inc., 215/945-7000) KNIGHT RIDDER: Moody's Downgrades Bond Ratings to Ba1 from Baa3 --------------------------------------------------------------- Moody's Investors Service lowered Knight Ridder's bond ratings to Ba1 from Baa3, and assigned a Ba1 Corporate Family Rating. The commercial paper rating was lowered to Not Prime from Prime-3. The rating actions conclude the review for downgrade initiated on Nov. 29, 2005, and continued on March 29, 2005 in connection with its announced sale to The McClatchy Company for $6.5 billion. The outlook is stable. The rating actions reflect that the combined company of McClatchy and Knight Ridder will have debt-to-free cash flow and debt-to- EBITDA leverage consistent with speculative-grade levels upon completion of the acquisition. Moody's expects debt-to-free cash flow to remain at levels between 11x and 15x over the intermediate term despite the company's plans to reduce debt from divestitures and cash from operations. Moody's believes the combined company's concentration in a single industry creates vulnerability to the increasing level of competitive market share and pricing risk facing newspapers. The Ba1 rating reflects Moody's concern over the company's elevated financial leverage in combination with growing business and execution risk. The stable rating outlook reflects Moody's expectation that the company's focus on markets with above average growth prospects, increased size and scale, and good operational and cost control will result in revenue growth and margins exceeding the industry average. Moody's anticipates that the company will refrain from share repurchases and significant acquisitions in the intermediate term and utilize cash flow to reduce debt. Knight Ridder Inc., headquartered in San Jose, California, is currently the second largest newspaper publisher in the U.S. based on circulation with regional concentrations in California, Pennsylvania, Florida, Texas, the Carolinas, and the Midwest. Downgrades: Issuer: Knight Ridder, Inc. * Issuer Rating, Downgraded to Ba1 from Baa3 * Senior Unsecured Commercial Paper, Downgraded to NP from P-3 * Senior Unsecured Regular Bond/Debenture, Downgraded to Ba1 from Baa3 * Senior Unsecured Shelf, Downgraded to (P)Ba1 from (P)Baa3 Assignments: * Corporate Family Rating, Assigned Ba1 Outlook Actions: * Outlook, Changed To Stable From Rating Under Review KNOBIAS INC: Russell Bedford Raises Going Concern Doubt ------------------------------------------------------- Russell Bedford Stefanou Mirchandani LLP expressed substantial doubt about Knobias, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's recurring operating losses. In its annual report for the year ended Dec. 31, 2006 on Form 10-K, submitted with the Securities and Exchange Commission on April 4, 2006, Knobias reported a $2.64 million net loss on $2.12 million of total revenue. Subscription revenues increased $157,309, or 8%, in 2005. The increase is attributable to increases in users of the Company's new pipeTrac service, which increased from no customers to forty subscriptions in December 2005. The Company's balance sheet at Dec. 31, 2005, showed $388,895 in total assets and 3,011,199 in total liabilities, resulting in a stockholders' deficit of $2,622,304. At Dec. 31, 2005, the Company had a working capital deficit of $2,815,612. A full-text copy of the regulatory filing is available for free at http://researcharchives.com/t/s?825 About Knobias Knobias, Inc. - http://www.knobias.com/-- provides complete financial information solutions for institutional market participants, corporations and industry professionals. Actionable data is delivered via high-quality applications consisting of proprietary products; analytics; streaming information; financial data; fundamental research; and third-party research. Primarily through its wholly owned subsidiary, Knobias.com, LLC, it markets its products to individual investors, day-traders, financial oriented websites, public issuers, brokers, professional traders and institutional investors. LB-UBS COMMERCIAL: Moody's Holds Six Cert. Classes' Low-B Ratings ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of five classes and affirmed the ratings of 22 classes of LB-UBS Commercial Mortgage Trust 2002-C3, Commercial Mortgage Pass-Through Certificates, Series 2003-C3: * Class A-1, $110,338,092, Fixed, affirmed at Aaa * Class A-2, $275,000,000, Fixed, affirmed at Aaa * Class A-3, $150,000,000, Fixed, affirmed at Aaa * Class A-4, $550,837,000, Fixed, affirmed at Aaa * Class X-CL, Notional, affirmed at Aaa * Class X-CP, Notional, affirmed at Aaa * Class X-WC, Notional, affirmed at Aaa * Class X-MM1, Notional, affirmed at Aaa * Class B, $20,044,000, WAC Cap, upgraded to Aaa from Aa1 * Class C, $20,044,000, WAC Cap, upgraded to Aaa from Aa2 * Class D, $13,363,000, WAC Cap, upgraded to Aa2 from Aa3 * Class E, $13,363,000, WAC Cap, upgraded to Aa3 from A1 * Class F, $23,384,000, WAC Cap, upgraded to A1 from A2 * Class G, $10,023,000, WAC Cap, affirmed at A3 * Class H, $20,044,000, WAC Cap, affirmed at Baa1 * Class J, $10,022,000, WAC Cap, affirmed at Baa2 * Class K, $13,363,000, WAC Cap, affirmed at Baa3 * Class L, $11,692,000, WAC Cap, affirmed at Ba1 * Class M, $6,681,000, WAC Cap, affirmed at Ba2 * Class N, $6,682,000, WAC Cap, affirmed at Ba3 * Class P, $1,670,000, WAC Cap, affirmed at B1 * Class Q, $8,352,000, WAC Cap, affirmed at B2 * Class S, $3,341,000, WAC Cap, affirmed at B3 * Class MM-1, $6,800,000, Fixed, affirmed at Baa1 * Class MM-2, $5,300,000, Fixed, affirmed at Baa2 * Class MM-3, $4,567,108, Fixed, affirmed at Baa3 * Class X-MM2, Notional, affirmed at Aaa As of the April 17, 2006 distribution date, the transaction's aggregate principal balance has decreased by approximately 3.7% to $1.30 billion from $1.35 billion at securitization. The Certificates are collateralized by 110 loans, ranging in size from less than 1.0% to 11.1% of the pool, with the top ten loans representing 60.9% of the pool. The pool includes four shadow rated investment grade loans, which represent 37.4% of the pool. Ten loans, representing 10.2% of the pool, have defeased and are collateralized by U.S. Government securities. The pool has not experienced any losses to date. One loan, representing less than 1.0% of the pool, is in special servicing. Moody's is not projecting a loss from this specially serviced loan at this time. Sixteen loans, representing 7.9% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2004 and partial or full year 2005 operating results for 98.7% and 93.3% of the performing loans, respectively. Moody's weighted average loan to value ratio for the conduit component is 87.7%, compared to 89.9% at securitization. The upgrade of Classes B, C, D, E and F is due to stable overall pool performance, a relatively high percentage of defeased loans and increased credit support. The largest shadow rated loan is the Westfield Shoppingtown West County Loan, which represents the A Note of a $162.8 million mortgage loan. The loan is secured by a 1.3 million square foot regional mall located in Des Peres, Missouri in the St. Louis MSA. The mall is anchored by J.C. Penney, Nordstrom, Lord & Taylor and Famous-Barr. The property is 97.8% leased, essentially the same as at securitization. The loan sponsor is Westfield America Inc. The property is also encumbered by a $19.8 million B Note that is held outside the trust. Moody's current shadow rating of the A Note is A1, the same as at securitization. The second largest shadow rated loan is the Polaris Fashion Place Loan, which represents the A Note of a $143.7 million mortgage loan. The loan is secured by a 1.6 million square foot regional mall located in Columbus, Ohio. The mall is anchored by Kaufmann's, Sears, Macys, J.C. Penney, Saks Fifth Avenue, Van Maur and The Great Indoors. The property is 98.9% leased, essentially the same as at securitization. The loan sponsor is Glimcher Realty Trust. The property is also encumbered by a $24.8 million B Note that is held outside the trust. Moody's current shadow rating of the A Note is A2, compared to A3 at securitization. The third largest shadow rated loan is the Monroeville Mall Loan, which represents the A Note of a $129.0 million mortgage loan. The loan is secured by a 1.3 million square foot regional mall located in Monroeville, Pennsylvania, in the Pittsburgh MSA. The mall is anchored by Kaufmann's, Macys and J.C. Penney. The overall occupancy is 99.0%, compared to 95.7% at securitization. The loan sponsor is CBL & Associates Properties, Inc. The property is also encumbered by a $16.7 million B Note that is held within the trust and serves as security for non-pooled Classes MM-1, MM-2, MM-3 and X-MM2. Moody's current shadow rating of the A Note is A3, the same as at securitization. The fourth largest shadow rated loan is the Pembroke Lakes Mall Loan, which represents the A Note of a $137.6 million mortgage loan. The loan is secured by a 1.1 million square foot regional mall located in Pembroke Pines, Florida in the Fort Lauderdale MSA. The mall is anchored by Macys, J.C. Penney, Dilliard's, Sears and Dillard's Men. The property is 100.0% occupied, compared to 98.1% at securitization. Performance has improved since securitization due to higher rental income and stable expenses. The loan sponsor is General Growth Properties, Inc. The property is also encumbered by a $30.6 million B Note that is held outside the trust. Moody's current shadow rating is Aa1, compared to Aa2 at securitization. The top three conduit exposures represent 17.8% of the pool. The largest conduit exposure is the Washington Harbour Loan, which is secured by a 537,000 square foot office complex located in the Georgetown submarket of Washington, D.C. The property is 97.4% occupied, compared to 99.0% at securitization. The loan has a five-year term and is interest-only. Moody's LTV is 84.6%, essentially the same as at securitization. The second largest conduit exposure is the Lembi Portfolio, which is comprised of seven cross-collateralized/cross defaulted loans secured by 25 multifamily properties totaling 511 units. All of the properties are located in the City of San Francisco, California. The portfolio's overall occupancy is 93.6%, compared to 96.3% at securitization. Two loans are on the master servicer's watchlist due to low debt service coverage. The portfolio's performance has been impacted by the decline in occupancy and increased expenses. Moody's LTV is 98.2%, compared to 93.4% at securitization. The third largest conduit exposure is the Broadcasting Square Loan, which is secured by a 468,000 square foot retail shopping center located in the Reading, Pennsylvania area. The center is anchored by Weis Markets, Dick's Sporting Goods, Marshall's and Babies R'Us, in addition to being shadow anchored by Target. Moody's LTV is 88.3%, compared to 91.3% at securitization. The pool's collateral is a mix of retail, office, multifamily, U.S. Government securities, industrial and self storage and lodging. The properties are located in 25 states plus Washington, D.C. The highest state concentrations are Pennsylvania, California, Florida, Missouri and Ohio. All of the loans are fixed rate. MARINER ENERGY: Prices 7-1/2% Senior Unsecured Notes Due 2013 ------------------------------------------------------------- Mariner Energy, Inc. (NYSE:ME) reported the pricing, on April 19, 2006, of $300 million of its 7-1/2% senior unsecured notes due 2013, priced to yield 7.75% to maturity. Mariner plans to use the net proceeds from the offering to repay debt under its secured bank credit facility. The delivery of the notes is expected to occur on April 24, 2006. Mariner may redeem the notes at any time prior to April 15, 2010 at a price equal to the principal amount redeemed plus a make- whole premium, using a discount rate of the Treasury rate plus 0.50% and accrued but unpaid interest. Mariner may redeem the notes from time to time, in whole or in part, at the prices (expressed as percentages of the principal amount redeemed) plus accrued but unpaid interest beginning on April 15 of the years: * 2010 at 103.750% * 2011 at 101.875% * 2012 and thereafter at 100% In addition, prior to April 15, 2009, Mariner may redeem up to 35% of the notes with the proceeds of equity offerings at a price equal to 107.50% of the principal amount of the notes redeemed. About Mariner Energy, Inc. Headquartered in Houston, Texas, Mariner Energy, Inc. -- http://www.mariner-energy.com/-- is an independent oil and gas exploration, development and production company with principal operations in the Gulf of Mexico and the Permian Basin in West Texas. As of March 31, 2006, Mariner had 86,100,994 shares of common stock issued and outstanding. * * * As reported in the Troubled Company Reporter on April 13, 2006 Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to independent exploration and production company Mariner Energy Inc. At the same time, Standard & Poor's assigned its 'B-' senior unsecured debt rating to Mariner's proposed $250 million senior unsecured notes due 2013. Proceeds from the notes will be used to repay outstanding borrowings on Mariner's credit facility. The outlook is stable. MAVERICK TUBE: S&P Rates $250 Million Senior Subor. Notes at B -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Maverick Tube Corp. Standard & Poor's also assigned its 'B' subordinated debt rating to the company's $250 million 1.875% senior subordinated convertible notes due Nov. 15, 2025. The outlook is stable. The ratings on Chesterfield, Missouri-based Maverick Tube reflect: * its exposure to the very volatile oil and gas markets; * exposure to volatile steel costs; and * competition from imports. The ratings also reflect: * a low degree of operating leverage; * its good position in oil-country tubular goods; and * currently strong industry conditions. "Current strong industry conditions bode well for Maverick Tube to continue generating positive free cash flow and relatively strong credit-protection measures in the near future," said Standard & Poor's credit analyst Dominick D'Ascoli. "We could revise the outlook to positive if the company reduces debt levels through the use of free cash flow. We could revise the outlook to negative if industry conditions significantly soften or the company decides to maintain higher leverage through a cycle." Maverick produces welded tubular steel products for the oil and natural gas industries and for use in various electrical applications. Current industry conditions have enabled industry participants, including Maverick Tube, to implement price increases to offset higher steel costs. Moreover, as a steel processor, the company has a lower degree of operating leverage than a steel manufacturer and can reduce expenses during periods of weak demand. "We expect market conditions to remain strong over the short term, which should allow the company to reduce its debt level or build cash," Mr. D'Ascoli said. MCCLATCHY CO: Moody's Places Debt & Corp. Family Ratings at Ba1 --------------------------------------------------------------- Moody's Investors Service assigned a Ba1 Corporate Family Rating to The McClatchy Company and a Ba1 rating to McClatchy's proposed $3.75 billion senior unsecured bank credit facility, and lowered its commercial paper rating to Not Prime from Prime-3. The rating actions conclude the review for downgrade initiated on March 13, 2006 in connection with the company's announced $6.5 billion acquisition of Knight-Ridder. The rating outlook is stable. Assignments: * Corporate Family Rating, Assigned Ba1 * Senior Unsecured Bank Credit Facility, Assigned Ba1 Downgrades: * Senior Unsecured Commercial Paper, Downgraded to NP from P-3 Outlook Actions: * Outlook, Changed To Stable From Rating Under Review The downgrade to Ba1 and the assignment of the Ba1 rating to the proposed bank facility reflect Moody's expectation for McClatchy's debt-to-free cash flow and debt-to-EBITDA leverage to increase significantly upon completion of the acquisition. Moody's expects the acquisition, which it regards as highly likely to close, will result in debt-to-free cash flow remaining in an 11x - 15x range over the intermediate term despite the company's plans to reduce debt from divestitures and cash generated from operations. Moody's believes McClatchy's concentration in a single industry creates vulnerability to the increasing level of competitive market share and pricing risk facing newspapers. The Ba1 rating reflects Moody's concern over the company's elevated financial leverage in combination with this growing industry and execution risk. The stable rating outlook reflects Moody's expectation that the company's focus on markets with above average growth prospects, the significantly increased size and scale, and good operational and cost control will result in revenue growth and margins exceeding the industry average. Moody's anticipates that the company will refrain from share repurchases and significant acquisitions in the intermediate term and utilize cash flow to reduce debt. Moody's anticipates that McClatchy will assume the obligations under Knight Ridder's indentures and that the bonds and the proposed $3.75 billion credit facility will rank pari passu with all senior unsecured and unguaranteed obligations of McClatchy. The Ba1 rating assigned to the proposed $3.75 billion bank credit facility is thus rated at the CFR. Moody's confirmed the Baa3 rating for McClatchy's existing $500 million revolver and will withdraw the rating upon completion of the merger and closing of the proposed credit facility. The McClatchy Company, headquartered in Sacramento, California, currently publishes 12 daily and 17 non-daily newspapers located in western coastal states, North and South Carolina and the Twin Cities of Minneapolis/St. Paul. NEWPAGE CORP: IPO Filing Cues S&P to Put B Rating on CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on NewPage Corp., including the 'B' corporate credit rating, on CreditWatch with positive implications. The CreditWatch placement follows NewPage Holding Corp.'s IPO filing. Although the actual amounts are to be determined, the company will use the IPO proceeds to redeem all of its outstanding holding company payment-in-kind notes, which totaled $122 million at Dec. 31, 2005, repay certain debt obligations, and fund a distribution to its equity sponsor. "An upgrade could occur if debt reduction associated with the IPO proceeds in conjunction with the sale of its carbonless paper segment and hydroelectric facilities results in leverage at or below 5.0x," said Standard & Poor's credit analyst Kenneth L. Farer. The company also intends to refinance its bank facility and initiate a quarterly dividend. At Dec. 31, 2005, total debt, including capitalized operating leases and the holding company payment-in-kind notes, was $1.7 billion, resulting in a very aggressive debt to EBITDA of 6.8x. Standard & Poor's business risk assessment of NewPage indicates that the company can support slightly higher ratings with less aggressive capitalization and financial policies. In resolving the CreditWatch listing, Standard & Poor's will meet with NewPage's management to review its future operating strategies and financial policy. Standard & Poor's could raise the ratings by one notch if the IPO is successfully completed and leverage is sufficiently reduced. NORTH WEST TRUCKING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: North West Trucking Association, Inc. P.O. Box 2548 Isabela, Puerto Rico 00662 Tel: (787) 830-1395 Bankruptcy Case No.: 06-01121 Chapter 11 Petition Date: April 18, 2006 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Frederic Chardon Dubos, Esq. Frederic Chardon Dubos Law Office Hc 3 Box 9551 Moca, Puerto Rico 00676-9556 Tel: (787) 997-4628 Fax: (787) 896-7400 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Federal $652,973 San Patricio Office Center Withholding Tax 7 Calle Tabonuco Guaynabo, PR 00968-3002 Departamento de Hacienda State Income $180,298 50 Calle Nenadich W, Suite 271 Taxes Mayaguez, PR 00660-3662 Municipio Autonomo De Moca Municipal & $45,495 Apartado 1571 City Taxes Moca, PR 00676 BBVA Banco Commercial Loan $39,210 Refrigeracion 2000, Inc. Supplier $27,500 GE Capital Corp. Conditional Sales $20,531 CFSE Workmen's $19,799 Compensation Insurance CRIM Property Tax $17,036 EXEL Supplier $9,050 AFLAC Supplier $8,767 New Century Finance Supplier $6,826 COSVI Arrearage on $6,708 Executory Contract TEXACO Supplier $6,526 JCA Fuel Supplier $6,468 Manuel Amador Hernandez Supplier $3,622 Empress Realty Rent in Arrears $3,200 Cingular Wireless Utility Bills $3,180 Cummins de PR Inc. Supplier $2,539 Montemar Wholesale Supplier $2,427 Barnes Distribution Supplier $2,330 OPTI CANADA: Moody's Places Debt & Corp. Family Ratings at Low-B ---------------------------------------------------------------- Moody's assigned a Ba2 Corporate Family Rating to OPTI Canada Inc., and a Ba3 rating to its pending $400 million 7-year senior secured Term Loan B loan facility. The rating outlook is stable. Through wholly owned OPTI Long Lake L.P., OPTI is a 50/50 working interest partner with Nexen Inc. in the four phased greenfield development of three oil sands leases in Alberta, Canada. OPTI and Nexen are deep in Phase I development of an integrated oil sands project involving steam-assisted gravity drainage production of bitumen, the upgrading of bitumen into light sweet synthetic crude oil, and a cogeneration plant. The partners have also begun spending for the nearly identical Phase II. Moody's believes that, in light of the fact that Phases II, III, and IV will be nearly identical to Phase I, and given Phase I's current cost estimates, Moody's believes Phases II, III, and IV will cost at least CDN$4 billion each, possibly considerably more. OPTI's 50% share of Phase I proven undeveloped and probable bitumen reserves is approximately 455 million barrels. OPTI expects Phase I first synthetic crude oil production in second half 2007 and full Phase I production and cash flow reached during 2008. The ratings are also restrained by: -- substantial front-end leverage and risk of completing Phases I and II on time and on budget; -- very high front-end capital costs and complexity of integrated oil sands/upgrader projects; -- characteristic project start-up risks; -- the challenge of keeping all key interrelated units online once in commercial operations; -- considerable uncertainty about the pivotal ultimate sustainable steam/oil ratio; -- exposure to far higher SAGD production costs if the upgrader's asphaltene gasification unit is down; and -- the inability of the upgrader to run if the gasification unit is down. The future scale of bitumen production, and operating and capital costs of that production, face the inherent risk across the areal extent of OPTI/Nexen's acreage of inconsistent reservoir rock homogeneity, quality, and reservoir thickness; existence of permeability barriers that can impede steaming and production; and amount of steam needed per barrel of produced bitumen. Also, the upgrader's sustainable synthetic crude yield per bitumen barrel, unit production costs, and unscheduled downtime pattern will not be clear until it has been operating for several quarters. The ratings are supported by: -- almost CDN$1.4 billion of first-in cash common equity; -- a very large world scale resource base engineered by a major third-party engineering firm; -- the deep pockets, managerial, operational, and technical depth, services sector influence, and synthetic crude oil marketing capacity of investment grade 50% partner Nexen Inc.; -- a narrowing of the reservoir risk band through evaluation of drilling and subsurface information derived from 78 Phase I horizontal steam injection and production well pairs, 95 other delineation wells in the Leismer leases, and 60 other delineation wells in Cottonwood; and -- surface project technology and design that is deemed to not encompass inordinate or insurmountable risk to completion or ongoing performance of the project. The ratings are also supported by: -- a 2 ½ year TLB interest reserve account, an up to 50% cash sweep, and sound TLB covenant package, -- OPTI's call on $C202 million of contingent equity from certain private investors; -- a third party technical evaluation of OPTI's drilling program, including well pair location, well string architecture and drilling procedures, and indicating reasonably low drilling risk across a large established reserve base; and -- SAGD technology is more than 7 years into commercial status after 20 years of pilot project experience in the region. TLB's rating is notched to Ba3 to reflect structural subordination to the CDN$800 million Opco project financing facility which matures the earlier of two years after project completion or June 30, 2010. There is no debt at the joint venture project level. TLB is first-secured by OPTI's 0.01% general partner and 99.9% limited partner ownership units in OPTILP and by 2 fallow 224 square mile sections on the Cottonwood and Leismer leases, and additional non-proven resource leases at Long Lake. OPTILP also provides a subordinated secured guarantee of the parent's TLB. TLB's first lien on the Long Lake resource leases is subordinated to the OPTILP project lenders' springing first lien. TLB's first liens on Cottonwood and Leismer can also be reduced to second liens if the first lien is granted later to subsequent non- recourse project lenders for future development phases. TLB is second secured by the Phase I Long Lake oil sands project assets and leases. To maintain its stable rating outlook, OPTI will need to reasonably attain its development pace, completion, cost, and performance goals and oil and natural gas market conditions during commercial ramp-up and sustained commercial operations would need to remain historically strong until leverage is reduced. TLB proceeds would primarily fund expanded Phase I project costs, repay existing OPTI parent company debt, a roughly $75 million interest expense reserve fund and fund additional land purchases and advanced funding for OPTI's 50% share of Phase II development costs. To date, OPTI has funded its corporate costs and 50% share of Phase I costs with almost CDN$1.4 billion of common equity and an unrated CDN$800 million senior secured project financing facility at the OPTILP level. Assuming Phases II, III, and IV are sanctioned, we expect OPTI's 50% share of capital spending to peak and hold at CDN$1 billion or more in 2010 through 2013. In an oil market characteristic with $45 per barrel of West Texas Intermediate oil prices, debt would rise to CDN$4.5 billion or more by 2013 unless OPTI issues equity. We believe OPTI would issue equity one or more times if Phases II, III, or IV are sanctioned. OPTI Canada Inc., is headquartered in Calgary, Alberta, Canada. PASCAGOULA HEALTH: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Pascagoula Health Care, Inc. 9218 Pontotoc Place Olive Branch, Mississippi 38654 Bankruptcy Case No.: 06-20534 Chapter 11 Petition Date: April 20, 2006 Court: Northern District of Georgia (Gainesville) Judge: Robert Brizendine Debtor's Counsel: William L. Rothschild, Esq. Ellenberg, Ogier & Rothschild, P.C. 170 Mitchell Street, Southwest Atlanta, Georgia 30303-3424 Tel: (404) 525-4000 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. PETROHAWK ENERGY: KCS Energy Merger to Create $3.7 Billion Company ------------------------------------------------------------------ Petrohawk Energy Corporation (NASDAQ: HAWK) and KCS Energy, Inc. (NYSE: KCS) entered into a definitive agreement to merge the companies and create a leading onshore oil and gas producer with an enterprise value of approximately $3.7 billion. The combined company will continue to be known as Petrohawk Energy Corporation and will be headquartered in Houston, Texas. On a pro forma basis, the Company will have estimated proved reserves of approximately one trillion cubic feet of natural gas equivalents of which approximately 68% would be classified as proved developed and approximately 82% would be natural gas. Under the terms of the agreement, KCS stockholders will receive $9 per share in cash and 1.65 shares of Petrohawk common stock for each share of KCS common stock they own. This represents consideration to KCS stockholders of $31.41 per share based on the closing price of Petrohawk shares on April 20, 2006. Following the transaction, KCS stockholders will own approximately 50% of the combined company. The transaction positions Petrohawk as one of the top independent exploration and production companies in the U.S. The combination will also create one of the most concentrated and high impact set of domestic oil and natural gas assets amongst independent E&P companies, primarily focused in the east Texas / north Louisiana, onshore Gulf Coast, Permian and Anadarko / Arkoma regions. Floyd Wilson will continue his role as the Company's Chairman, President and CEO. KCS's James Christmas will serve as Vice Chairman and William Hahne as Executive Vice President and Chief Operating Officer of the combined company. Following the completion of the merger, the Company will have nine directors, five nominated by Petrohawk, including Floyd Wilson, and four nominated by KCS, including James Christmas. "The asset quality and fit derived from this transaction are unparalleled in my experience," stated Floyd C. Wilson, Chairman, President, and Chief Executive Officer of Petrohawk. "KCS is a proven operator; and we believe our combined properties have extraordinary development and exploration potential. We feel the collective staff of Petrohawk and KCS is uniquely qualified to create value from the tremendous upside potential inherent to both companies. Jim Christmas will be Vice Chairman and continue to play a key role in the Company. In addition, we hope to retain the majority of the talented KCS staff. This combination creates the company we originally set out to build." "We have been impressed by the job that Floyd Wilson and his team have done in building Petrohawk to its current position in very short order through a series of high quality, strategic acquisitions that have made it a formidable competitor in the areas we operate. By combining KCS, which has grown rapidly through drilling, and Petrohawk, we are creating an even stronger company with proved oil and gas reserves of nearly 1 Tcfe, current daily production of over 290 Mmcfe and very significant additional potential in our core operating areas," said James W. Christmas, Chairman and Chief Executive Officer of KCS. "We believe that this combination not only delivers immediate value to the stockholders of both companies, but also creates a company well positioned to deliver above average growth in value going forward." Petrohawk, a company grown primarily through strategic acquisitions, and KCS, which has grown predominantly through successful exploration and development activities, are expected to utilize expertise from each company to realize the substantial upside potential within the combined portfolio. Combination Rationale: -- Creates a leading independent onshore producer which on a combined basis possesses nearly 1 Tcfe of proven reserves, current production of 291 million cubic feet equivalent per day and an enterprise value of approximately $3.7 billion; -- Unites experienced technical staffs to enhance the development and exploration potential from a virtual overlay of core operating areas; -- Combined position in the Elm Grove and Caspiana fields represents a premier, operated core asset in the fast growing north Louisiana natural gas basin; -- Immediate accretion to cash flow, production and NAV on a per share basis; -- Pro forma capital budget of $525 million exposes the Company to a prolific set of drilling opportunities; -- Combined asset base includes over 4,000 identified non- proved drilling locations, as well as approximately 900 proved drilling locations; -- The Company will have over 2 Tcfe of additional resource potential; Combined Capital Budget: The combined capital program for 2006 represents record activity levels in core operating areas and includes over 500 planned wells, including over 200 non-proved locations. Pro Forma 2006 Capital Expenditure Budget ($ millions): HAWK KCS Pro Forma % --------------------------------------- East Texas/ North Louisiana $51 $158 $209 40 Onshore Gulf Coast 110 88 198 38 Permian 18 41 59 11 Anadarko/Arkoma 31 28 58 11 --------------------------------------- Total $210 $315 $525 100 Merger Agreement: Pursuant to the terms of the agreement, KCS stockholders will receive $9 per share in cash and 1.65 shares of Petrohawk common stock for each share of KCS common stock they own, or collectively $450 million in cash and approximately 84 million Petrohawk common shares, not including outstanding KCS stock options. KCS stock options will convert into Petrohawk options pursuant to the terms of the merger agreement. The transaction is subject to the approval of the stockholders of Petrohawk and KCS. The boards of directors of both companies have unanimously approved the merger agreement, which is subject to customary conditions, including approval of listing of the Petrohawk shares to be issued in the merger on NASDAQ and regulatory approvals. The transaction is expected to be completed during the third quarter of 2006. Harris Nesbitt acted as financial advisor, Hinkle Elkouri Law Firm LLC and Thompson & Knight LLP acted as legal advisors and Petrie Parkman provided a fairness opinion for Petrohawk. Morgan Stanley acted as exclusive financial advisor and rendered a fairness opinion to KCS in connection with the transaction. Andrews Kurth LLP acted as legal advisor and Griffis & Associates, LLC acted as technical advisor to KCS. About KCS KCS Energy -- http://www.kcsenergy.com/-- is an independent energy company engaged in the acquisition, exploration, development and production of natural gas and crude oil with operations in the Mid-Continent and Gulf Coast regions. About Petrohawk Petrohawk Energy Corporation -- http://www.petrohawk.com/-- is an independent energy company engaged in the acquisition, production, exploration and development of oil and gas, with properties concentrated in the South Texas, Mid-Continent, East Texas, Arkoma, Permian and Gulf Coast regions. * * * As reported in the Troubled Company Reporter on Aug. 17, 2005, Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Petrohawk Energy Corp. and withdrew its 'B-' corporate credit rating on Mission Resources Inc., upon Petrohawk's acquisition of Mission. The outlook is stable. In addition, Standard & Poor's removed Mission's outstanding $130 million senior unsecured notes due 2011 from CreditWatch with negative implications and affirmed its 'CCC' rating on the notes. Mission's senior notes will be assumed and guaranteed by Petrohawk after the Mission acquisition. The two-notch differential between the notes and Petrohawk's corporate credit rating reflects significant priority bank debt. PETROQUEST ENERGY: S&P Affirms CCC+ Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'CCC+' corporate credit rating on PetroQuest Energy Inc. and revised the outlook on the company to positive from stable. As of Dec. 31, 2005, the Lafayette, Louisiana-based company had $160 million of debt outstanding. "The revised outlook reflects good operating performance in 2005 and improving credit measures," said Standard & Poor's credit analyst Paul Harvey. Despite these favorable trends, the speculative-grade rating on PetroQuest reflects: * its still very high debt leverage; * aggressive growth strategy; * elevated cost structure; * exposure to volatile hydrocarbon prices; and * limited reserve base. PHOTOCIRCUITS CORP: Hires Quisumbing Torres as Special Counsel -------------------------------------------------------------- Photocircuits Corporation sought and obtained permission from the U.S. Bankruptcy Court for the Eastern District of New York to employ Quisumbing Torres, as its special counsel. As reported in the Troubled Company Reporter on Mar. 8, 2006, Quisumbing Torres is expected to: a) render legal advice; b) draft and prepare all relevant sale and purchase agreements; c) assist in obtaining all government approvals and registrations; d) advise the Debtor on the transaction's tax implications under Philippine law; and e) attend the closing of the Proposed Sale transaction. Cornelio B. Abuda, Esq., a member at Quisumbing Torres, disclosed the Firm's professionals' billing rates: Professional Hourly Rate ------------ ----------- Partners $220 - $225 Associates $115 - $185 Legal Assistants $65 Mr. Abuda assured the Court that Quisumbing Torres is a "disinterested person" as that term is defined in section 101(14) of the bankruptcy code. Headquartered in Glen Cove, New York, Photocircuits Corporation -- http://www.photocircuits.com/-- was the first independent printed circuit board fabricator in the world. Its worldwide reach comprises facilities in Peachtree City, Georgia; Monterrey, Mexico; Heredia, Costa Rica; and Batangas, Philippines. The Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. E.D.N.Y. Case No. 05-89022). Gerard R. Luckman, Esq., at Silverman Perlstein & Acampora LLP, represents the Debtor in its restructuring efforts. Ted A. Berkowitz, Esq., and Louis A. Scarcella, Esq., at Farrell Fritz, P.C., represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated more than $100 million in assets and debts. PILLOWTEX: Inks Settlement Reducing Wachovia's $2M Claim to $616K ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a settlement agreement between Pillowtex Corporation and Wachovia Bank National Association as successor by merger to SouthTrust. The Settlement Agreement reduces Wachovia Bank's $2,999,548 general unsecured claim to $616,000. The claim stemmed from Pillowtex's unpaid obligation to SouthTrust during Pillowtex's first bankruptcy filing. SouthTrust's $1,584,000 claim in Pillowtex's first bankruptcy filing was based on Pillowtex's obligation to Duke Energy Royal LLC under a Master Energy Services Agreement. This debt was assigned to SouthTrust before Pillowtex filed the chapter 11 plan under its first bankruptcy filing. Under that Plan, which was confirmed on 2002, SouthTrust was to receive cash to satisfy the secured portion of the debt and an equity interest in the reorganized Pillowtex to satisfy the unsecured portion of their respective claims. Pillowtex didn't pay the cash portion until it had to file its second bankruptcy petition. Headquartered in Dallas, Texas, Pillowtex Corporation -- http://www.pillowtex.com/-- sold top-of-the-bed products to virtually every major retailer in the U.S. and Canada. The Company filed for Chapter 11 protection on November 14, 2000 (Bankr. Del. Case No. 00-4211), emerged from bankruptcy under a chapter 11 plan, and filed a second time on July 30, 2003 (Bankr. Del. Case No. 03-12339). The second chapter 11 filing triggered sales of substantially all of the Company's assets. David G. Heiman, Esq., at Jones Day, and William H. Sudell, Jr., Esq., at Morris Nichols Arsht & Tunnel, represent the Debtors. On July 30, 2003, the Company listed $548,003,000 in assets and $475,859,000 in debts. PORTALPLAYER INC: Apple Chip Change May Adversely Impact Revenues ----------------------------------------------------------------- PortalPlayer, Inc., disclosed on Apr. 19, 2006, that the latest version of its PP5021 System-on-Chip will not be used in Apple Computer, Inc.'s new mid-range and high-end flash-based iPods. The Company however believes that its chips will still be used in other members of the iPod family. Apple's decision could hurt the California-based chipmaker since it generates approximately 93% of its revenue from Inventec and Hon Hai, which both buy chips from PortalPlayer to, in turn, manufacture products for Apple. PortalPlayer had stated in its 2005 annual report that any disruption in its contracts with the Apple suppliers will harm its business and financial position. According to Reuters, PortalPlayers' shares fell to their lowest levels since going public in 2004 in the wake of the Apple supply setback. "We are shipping in today's video iPod's, (but) the visibility for us has become more clouded," Reuters quotes the Company's Chief Executive Gary Johnson as saying. System-on-Chips are integrated circuits that include a central processing unit, memory interfaces and other components. The chips permit the transfer of digital information from computers to digital music players. About PortalPlayer Headquartered in San Jose, California, PortalPlayer (NASDAQ: PLAY) -- http://www.portalplayer.com/-- develops semiconductor, firmware and software platforms for portable multimedia products such as personal media players and secondary display enabled notebook computers. PortalPlayer products empower consumers to quickly and easily manage, enjoy and have access to multimedia content and other forms of information. The Company's balance sheet showed $252,126,000 in total assets and $54,668,000 in liabilities. PREMIUM PAPERS: Affiliates May Access $20 Mil. Wachovia DIP Loan ---------------------------------------------------------------- The Honorable Christopher S. Sonchi of the U.S. Bankruptcy Court for the District of Delaware gave Smart Papers LLC and PF Papers LLC interim access to a $20 million debtor-in-possession credit facility provided by Wachovia Bank, National Association, successor by merger to Congress Financial Corporation (Florida). Smart Papers and PF Papers are debtor affiliates of Premium Papers Holdco, LLC. Smart Papers and PF Papers will use the proceeds from the DIP loan as working capital to continue operating their businesses and pay its employees and suppliers. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, told the Court that the Debtors do not have sufficient liquidity to continue their businesses as a going concern. Absent access to immediate financing would spur them to curtail or terminate their businesses. Smart Papers and PF Papers wanted access to as much as $46 million. The Court will consider their request on April 28, 2005. When they filed for bankruptcy protection, the Debtors owe Wachovia $41,077,000, $28,577,000 of it was borrowed under a February 9, 2001, Loan and Security Agreement, as amended. The Debtors also borrowed $12,500,000 under a Term Loan, evidenced by a May 18, 2005, Promissory Note. These obligations are secured by a first priority lien on substantially all of the Debtors' assets. A full-text copy of the financing agreement is available for a fee at http://www.ResearchArchives.com/bin/download?id=060420050643 Headquartered in Hamilton, Ohio, Premium Papers Holdco, LLC -- http://www.smartpapers.com-- manufactures and markets a wide variety of premium coated and uncoated printing papers, such as Kromekote, Knightkote, and Carnival. The Company and two of its affiliates filed for chapter 11 protection on March 21, 2006 (Bankr. D. Del. Case No. 06-10269). Ian S. Fredericks, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they did not disclose their total assets but estimated debts between $10 million and $50 million. PROCARE AUTOMOTIVE: U.S. Trustee Appoints Seven-Member Committee ---------------------------------------------------------------- The U.S. Trustee for Region 9 appointed seven creditors to serve on an Official Committee of Unsecured Creditors in ProCare Automotive Service Solutions, LLC's chapter 11 cases: 1. Genuine Parts Company Dba Napa Auto Parts c/o Grant Morris 2665 W. Dublin Granville Rd. Columbus, Oh 43235 Tel: (614) 766-1182 Fax: (614) 766-5181 Fax 2. Valvoline, a Division of Ashland Inc. c/o Terry Nicholson P.O. Box 2219 5200 Blazer Parkway Dublin, Oh 43017 Tel: (614) 790-3009 Fax: (614) 790-3702 3. Auto Zone c/o Pam Mclain P.O. Box 2198, Dept. 2003 Memphis, Tn 38101 Tel: (901) 495-7693 Fax: (901) 495-8470 4. Voltz Family Trust c/o Frederick G. Voltz, Jr., Trustee 3214 Spyglass Drive Bellingham, Wa 98226 Tel: (360) 738-2292 5. East Penn Manufacturing Co. c/o Robert A. Bashore Deka Road Lyon Station, Pa 19536 Tel: (610) 682-6361 Ext. 2549 Fax: (610) 682-4212 6. Smythe Automotive c/o Lynette Smithson 4275 Mt. Carmel - Tobacco Rd. Cincinnati, Oh 45244 Tel: (513) 528-0061 Ext. 2122 Fax: (513) 528-6057 7. JTCO Creditor Trust c/o Bruce Zaret, Trustee 12221 Merit Drive, Suite 1400 Dallas, TX 75251 Tel: (972) 448-9232 Fax: (972) 448-8321 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 Independence, Ohio, ProCare Automotive Service Solutions, LLC -- http://www.procareauto.com/-- offers maintenance and repair services to all makes and models of foreign, domestic, light truck, and commercial-fleet vehicles. ProCare operates 82 retail locations in eight metropolitan areas throughout three states. The Debtor filed for chapter 11 protection on March 5, 2006 (Bankr. N.D. Ohio Case No. 06-10605). Alan R. Lepene, Esq., Jeremy M. Campana, Esq., and Sean A. Gordon, Esq., at Thompson Hine LLP, represent the Debtor. The Debtor estimated its assets and debts at $10 to $50 million when it filed for bankruptcy protection. PROCARE AUTOMOTIVE: Files Schedules of Assets and Liabilities ------------------------------------------------------------- ProCare Automotive Service Solutions, LLC, delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Northern District of Ohio, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $754,200 B. Personal Property $3,697,052 C. Property Claimed as Exempt D. Creditors Holding $10,048,759 Secured Claims E. Creditors Holding $1,691,542 Unsecured Priority Claims F. Creditors Holding $14,365,066 Unsecured Nonpriority Claims ----------- ----------- Total $4,451,252 $26,305,367 Based in Independence, Ohio, ProCare Automotive Service Solutions, LLC -- http://www.procareauto.com/-- offers maintenance and repair services to all makes and models of foreign, domestic, light truck, and commercial-fleet vehicles. ProCare operates 82 retail locations in eight metropolitan areas throughout three states. The Debtor filed for chapter 11 protection on March 5, 2006 (Bankr. N.D. Ohio Case No. 06-10605). Alan R. Lepene, Esq., Jeremy M. Campana, Esq., and Sean A. Gordon, Esq., at Thompson Hine LLP, represent the Debtor. The Debtor estimated its assets and debts at $10 to $50 million when it filed for bankruptcy protection. PXRE REINSURANCE: Financial Concerns Prompt Moody's to Cut Ratings ------------------------------------------------------------------ Moody's Investors Service lowered the insurance financial strength rating of PXRE Reinsurance Company to Ba2 from Baa3 and the debt rating of PXRE Capital Trust I to Caa1 from B3. This rating action follows continuing concerns regarding PXRE's financial flexibility including continued counter-party cancellations with respect to the company's assumed reinsurance book. The outlook on the ratings is stable. Subsequently, Moody's will withdraw PXRE Reinsurance Company's Ba2 financial strength rating for business reasons, while maintaining the Caa1 debt rating of PXRE Capital Trust. According to Moody's, the downgrade reflects the erosion of the company's business franchise and its weak competitive position as clients continue to cancel in-force contracts, 75% of which are subject to cancellation provisions. In mid-March, the company disclosed that it had received cancellation notices on one third of its in-force book. Although these cancellations represent a decrease in the company's aggregate limits in force, the risk of adverse selection in the company's remaining book of business could result in significant geographic or line-of-business concentrations, which creates the potential for outsized volatility. Other concerns include the company's weak financial flexibility, the potential for adverse reserve development, and the inherent volatility of its property retrocessional business. The stable outlook reflects Moody's expectation that the company's liquid investment portfolio, current level of capitalization along with the favorable tax and regulatory environment in Bermuda will permit the company to satisfy its immediate obligations. The last rating action occurred on Feb. 28, 2006, when Moody's downgraded the ratings of PXRE Reinsurance Co. and PXRE Capital Trust I, and left the ratings on review for possible further downgrade. That action followed the company's announcements that it had significantly increased its 2005 storm loss estimates. PXRE Group Ltd. is a publicly-traded reinsurance holding company providing reinsurance products and services to a worldwide marketplace. For the year ended Dec. 31, 2005, PXT reported net premiums earned of $388 million and a net loss of $705 million. As of Dec. 31, 2005 shareholders' equity was $465 million. SAINT VINCENTS: Agrees on Terms of Rule 2004 Investigation ---------------------------------------------------------- As reported in the Troubled Company Reporter on March 29, 2006, Great American Insurance Company asked the U.S. Bankruptcy Court for the Southern District of New York to compel Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates to produce documentation and information related to: (a) restricted use accounts or other set asides or accounts purportedly created by the Debtors relevant to two judgments in favor of: * Patsy Merola, in the action entitled Patsy Merola, as Administrator of the Estate of Wanda Merola v. Catholic Medical Center of Brooklyn & Queens, Inc., doing business as St. John's Hospital, et al., commenced in the Supreme Court of the State of New York, Queens County; and * Sondra Lowery, in the action entitled Sondra Lowery v. Henry Lamaute, M.D., et al., commenced in the Supreme Court of the State of New York, Queens County; and (b) the insurance and self-insurance programs implemented by the Debtors with respect to their medical malpractice liabilities. In a Court-approved stipulation, the Debtors and Great American Insurance Company agree that: (a) information provided by the Debtors to GAIC through the examinations will also be provided to the Official Committee of Unsecured Creditors and to Patsy Merola, as administrator of the estate of Wanda Merola; (b) the Information will be treated as non-public, confidential and proprietary in nature. GAIC will employ reasonable measures to control duplication of, access to, and distribution of copies of the Information; (c) GAIC may not disclose the Information to any other party without prior written request to the Debtors. The Information will not be used or disclosed for any purpose other than: -- to evaluate its effect on any claim that GAIC may have in the Debtors' Chapter 11 cases; and -- in connection with claims asserted by or against the Debtors or other parties that relate to the GAIC Appeal Bonds or to the Merola Judgment, either in the Bankruptcy Court or in other jurisdictions. However, to the extent GAIC cites or discloses any Information in a filing with the Bankruptcy Court or any other jurisdiction, the filing must be made under seal with advisement to the Bankruptcy Court or any other jurisdiction that the Information is confidential; and (d) within 30 days after the conclusion of the Debtors' Chapter 11 cases or, in the alternative, the due resolution of any claim or case GAIC may have against the Debtors in their Chapter 11 cases, all Information will be returned to the Debtors or destroyed. Neither GAIC nor the Bankruptcy Court has conducted any inquiry, or made any findings, regarding whether the Information is non- public, confidential, or proprietary in nature. GAIC's right to challenge the confidential or proprietary nature of any of the Information is reserved. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT VINCENTS: Court Extends Time for CIR Union to File Claims --------------------------------------------------------------- Pursuant to a collective bargaining agreement, the Committee of Interns and Residents/Service Employees International Union is the recognized collective bargaining representative for Interns, Residents, and Fellows employed by the Debtors at: * St. Vincent's Hospital, Manhattan, * St. John's Queens Hospital, * St. Joseph's Hospital, * Mary Immaculate Hospital, and * St. Mary's Hospital. Pursuant to New York State Law, the statute of limitations on potential malpractice claims against current and former House Staff Officers may not expire until after they have graduated or left the Residency Program or completed their Fellowship. Accordingly, the Debtors and CIR agree to amend the Bar Date Order to provide that any former House Staff Officer that has or may have a claim against the Debtors for indemnification, contribution, subrogation, or reimbursement will not be required to file a proof of claim by the March 30, 2006 Bar Date. The Stipulation and Order will inure to the benefit of any House Staff Officer who was an employee of the Hospitals under the terms of the CBA or part of the SVM collective bargaining unit. The U.S. Bankruptcy Court for the Southern District of New York approved the parties' stipulation in its entirety. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) SCIENTIFIC GAMES: Completes $138 Million Purchase of Global Draw ---------------------------------------------------------------- Scientific Games Corporation (Nasdaq: SGMS) completed the purchase of Global Draw Limited and certain related companies for $183 million. Global Draw is a leading United Kingdom supplier of fixed odds betting terminals and systems, and interactive sports betting systems. Scientific Games will pay an earn-out to the principal selling shareholder and contingent bonuses to certain members of the existing management team, based on the financial performance of the business. Revenues of Global Draw's U.K. gaming and betting machine operations for the fiscal year ended March 31, 2006, on an unaudited basis, exceed the GBP32 million (or about $55 million) reported for the fiscal year ended March 31, 2004, the most recent period for which audited financial statements are publicly available. Global Draw is also extending its central determination, fixed odds system into European video lottery markets, a process Scientific Games plans to accelerate. Scientific Games will finance the acquisition through a combination of borrowings under its existing revolving credit facility, which has been increased by $50 million, and $100 million of new term loans bearing interest at LIBOR plus 125 basis points. The Company expects the acquisition to be accretive to earnings beginning in the second quarter of 2006. "We're going to build on the work Global Draw has already done as a leading U.K. and European gaming business," said Lorne Weil, Chairman and CEO of Scientific Games. "Global Draw strengthens our role in the worldwide sports betting and video lottery business. We are all looking forward to working with the existing management of Global Draw to execute our growth strategy." Steve Frater, Managing Director of Global Draw, hailed the combination of the two firms' technologies, expertise and business relationships. "We plan to use all these resources to develop the European VLT business, to further develop our position in the U.K. betting and gaming market and to enter new markets. Scientific Games' confidence in our management team and its strategy should assure our customers of both continuity and powerful new resources at their disposal. And the performance-based bonus plan gives management a strong incentive to remain committed to the success of the business for the long term." "I too look forward to adding the capabilities and culture of Scientific Games to Global Draw," said principal selling shareholder Walter Grubmuller. "This marriage will vastly enhance our position in the evolving European markets and I look forward to being a partner with Scientific Games." About Global Draw Headquartered in London, England, Global Draw Limited -- http://www.theglobaldraw.com/-- is a leading supplier of fixed odds betting terminals and systems, and interactive sports betting terminals and systems, through which it manages over 50 million betting transactions per month. The group supplies its products and services on the basis of profit participation to customers who are licensed bookmaking operators in the U. K. The group also operates terminals and betting systems in Austria and is in the process of marketing its systems and products to other parts of Europe. The Global Draw group develops and maintains all its systems, software, and games in-house. The group is in the process of modifying and licensing its systems and terminals for use as video lottery products in various European markets. About Scientific Games Headquartered in New York City, Scientific Games Corporation -- http://www.scientificgames.com/-- is the leading integrated supplier of instant tickets, systems and services to lotteries, and the leading supplier of wagering systems and services to pari-mutuel operators. It is also a licensed pari-mutuel gaming operator in Connecticut and the Netherlands and is a leading supplier of prepaid phone cards to telephone companies. Scientific Games' customers are in the United States and more than 60 other countries. * * * As reported in the Troubled Company Reporter on April 3, 2006, Moody's Investors Service assigned a Ba2 rating to Scientific Games Corporation's amended credit facilities and affirmed the company's Corporate Family, senior and subordinated ratings at Ba2, Ba2 and B1, respectively. The rating outlook is stable. The amended bank facilities will encompass a $50 million increase to the existing $250 million senior secured guaranteed multi- currency revolving credit facility and a new $100 million senior secured guaranteed term loan, each due Dec. 23, 2009. The increased facilities will be used to provide financing for the recent acquisition of EssNet AB and the potential acquisition of The Global Draw, Ltd. SPATIALIGHT INC: Odenberg Ullakko Raises Going Concern Doubt ------------------------------------------------------------ Odenberg, Ullakko, Muranishi & Co. LLP expressed substantial doubt about SpatiaLight, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's recurring operating losses, negative cash flows from operations, negative working capital position and stockholders' deficit. Odenberg Ullakko also raised substantial doubt about SpatiaLight's ability to continue as a going concern based on these factors: a) the Company received notices from certain of its Senior Secured Convertible Noteholders calling for immediate redemption of their convertible notes based on alleged events of default. if the Noteholders prevail in calling the convertible notes, the entire debt obligation could become due and payable immediately, including the related amounts of redemption premium and liquidated damages, and the Company would be forced to refinance or repay the debt obligations or seek other alternative financing. b) in the event the Company is unable to ramp up delivery volumes to their major customer by the end of July 2006, management believes that the major customer may discontinue actively doing business with the Company. c) the Company is subject to a U.S. Securities and Exchange Commission investigation relating to the filing of unauthorized consents of its predecessor auditor in certain registration statements, and may be subject to certain penalties and claims. In its 2005 annual report on Form 10-K filed with the Securities and Exchange Commission on April 11, 2006, SpatiaLight posted a $14,024,639 net loss on $237,724 of revenues, compared to a $9,367,001 net loss on $1,160,978 of revenues in the prior year. Revenues significantly decreased from 2004 to 2005 because of problems the Company experienced in the manufacturing of its T-3 LCoS Sets. The T-3 LCoS is a variant of the Company's high- resolution liquid crystal display products. The Company's balance sheet at Dec. 31, 2005, showed $11,552,476 in total assets and $14,969,930 in total liabilities, resulting in a stockholders deficit of $4,443,828. A full-text copy of the regulatory filing is available for free at http://researcharchives.com/t/s?826 About SpatiaLight SpatiaLight, Inc. -- http://www.spatialight.com/-- founded in 1989, manufactures high-resolution Liquid Crystal on Silicon microdisplays for use in high definition televisions and other display applications. The company manufactures its products at its facility in South Korea. SWIFT & CO: S&P Downgrades Corporate Credit Rating to B from BB- ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on meat processor Swift & Co., including its corporate credit rating 'B' from 'BB-'. In addition, the ratings were removed from CreditWatch with negative implications where they were originally placed on Oct. 21, 2005. About $890 million of debt (adjusted for capitalized operating leases and debt at Swift Foods) of Greeley, Colorado-based Swift was outstanding at Feb. 26, 2006. The outlook is negative. The downgrade reflects Standard & Poor's expectation that credit protection measures will not materially return to previous levels in the near term and that company's financial profile will remain aggressive. Swift's credit protection measures have weakened due to the challenges related to the limited supply of cattle available for slaughter in the U.S and the continued closure of many key export markets to U.S. beef. Results from Swift's pork processing and Swift's Australian (beef) segments have mitigated to an extent the weakness in Swift's U.S. beef operations, but even those segments have been affected by industry conditions. Pork processing has seen lower pricing due to the glut of proteins on the market, and Australian beef operations have been affected by extreme weather conditions in their grass fed operations. It is Standard & Poor's expectation that although beef supply is increasing in the U.S., market conditions will remain very challenging in the near term. Standard & Poor's views the company's financial policy as aggressive given that the board of directors has authorized a large dividend (a return on investment to shareholders) in fiscal 2005. The increase in debt (both at Swift and Swift Foods) to pay for this dividend has negatively affected the company during the current downturn. Standard & Poor's does not expect that the company's financial policy will change in the intermediate term. SOUTHERN TELECOM: Case Summary & 17 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Southern Telecom Network, Inc. P.O. Box 1161 Mountain Home, Arkansas 72654 Tel: (870) 425-6473 Bankruptcy Case No.: 06-70722 Type of Business: The Debtor provides telecommunication services. Chapter 11 Petition Date: April 20, 2006 Court: Western District of Arkansas (Harrison) Debtor's Counsel: Jason N. Bramlett, Esq. Friday, Eldredge & Clark, LLP 3425 North Futrall Drive, Suite 103 Fayetteville, Arkansas 72703 Tel: (479) 695-1102 Fax: (501) 244-5372 Financial Condition as of March 31, 2006: Total Assets: $883,484 Total Debts: $1,593,494 Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Southwestern Bell Trade Debt $599,748 P.O. Box 650516 Dallas, TX 75265-0516 American Express Credit Card $85,316 P.O Box 650448 Dallas, TX 75265-0448 Verisign Inc. Trade Debt $45,401 P.O. Box 849985 Dallas, TX 75284-9985 First Security Bank Taxes $40,203 Touch Tone Communications Trade Debt $39,475 NetLogic 1000 Trade Debt $37,758 Internal Revenue Service Taxes $34,065 ACR Quality Communications Trade Debt $27,749 Opex Communications Inc. Trade Debt $13,944 Illinois Department of Revenue Taxes $13,375 SBC Communications Inc. Trade Debt $11,498 MCI Trade Debt $9,888 Departments of Finance & Taxes $9,333 Administration Falcon Communications Inc. Trade Debt $4,822 Xspedius Communications LLC Trade Debt $4,463 DJF Enterprizes Inc. Trade Debt $4,095 XO Communications Trade Debt Unknown TEXAS PETROCHEMICALS: S&P Rates Proposed $280 Million Loan at B+ ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Texas Petrochemicals LP (TPC). At the same time, Standard & Poor's assigned its 'B+' bank loan rating and its recovery rating of '2' to the company's proposed $280 million first-lien term loan. The term loan, together with an unrated $115 million revolving credit facility, comprises a proposed $395 million package of senior secured credit facilities. The term loan rating is based on preliminary terms and conditions. The outlook is stable. "The ratings reflect TPC's narrow product range, concentration of revenue and earnings in a few customers and products, potential for cyclicality of some earnings, and uncertainty in demand growth in key markets," said Standard & Poor's credit analyst Paul Kurias. Standard & Poor's also notes the considerable integration and execution risks associated with the acquisition of a large butadiene facility from Huntsman Corp. and conversion of existing methyl tertiary butyl ether (MTBE) facilities to produce high value products. These risk factors are partly offset by: * the company's moderate leverage, although without the benefit of proven financial policies; * stability in margins in key products resulting from favorable contractual terms with suppliers of crude C4 feedstocks; and * a favorable competitive position with leading market shares in key products. Houston, Texas-based TPC, along with its operating subsidiaries, processes petrochemical feedstocks (crude C4) to produce commodity chemicals including butadiene. The company's main product, butadiene, is an input in synthetic rubber production in the U.S., most of which is consumed by the domestic tire industry. TPC also currently produces MTBE, a fuel additive, whose sales are expected to decline sharply in the near-term future following legislation that no longer requires refineries to add oxygenates into fuel, and following environmental concerns with the product. TPC plans to convert its MTBE facilities to produce specialty high-value products (therefore future contributions from MTBE have not been assumed as part of the business plan). The other chemicals produced by TPC have applications in areas including plastic resins, fuel additives, and in other industrial applications, many of which have commodity-like characteristics. The company will have the largest crude C4 processing capacity in the U.S. when its planned acquisition of Huntsman's butadiene assets is completed as scheduled in May 2006. Domestic U.S. butadiene production is constrained by the availability of the feedstock, which is a co-product of ethylene production. Still, TPC has supply contracts and longstanding relationships with its major feedstock suppliers, many of whom have limited viable alternative uses for the crude C4 they generate. TXU CORPORATION: Investing $10 Billion for Texas Power Plants ------------------------------------------------------------- TXU Corp. (NYSE:TXU) disclosed a plan to invest $10 billion in power generation to provide lower-cost, secure and stable power, introduce new consumer and business service offerings, and fund the largest voluntary emissions reduction program of its type in the nation. "Texans want ample generation supply, access to lower electric prices, and better air quality, and TXU will deliver all three," said C. John Wilder, TXU chairman and CEO. "Our new service offerings and this massive investment in power infrastructure will save consumers money, add reliable electric generating capacity to reduce dependence on high cost natural gas, create jobs, and lower key emissions -- all at the same time." The future growth of the now vibrant economy could be dampened by volatile and rising energy commodity prices. Texas has one of the fastest growing economies in the country and is projected to add nearly 6 million residents within a decade. At the same time, Texas electric power reserve margins are compressing rapidly and are expected to fall below levels deemed reliable by 2010. Texas relies heavily on natural gas for power generation, with 72% of the state's generation capacity depending on natural gas for fuel, compared to the U.S. average of 45%. The reliance causes substantial challenges because natural gas prices have quadrupled and most experts believe the low gas prices of the 1990s will not return. At the same time, U.S. reliance on imported natural gas is increasing significantly; over the next 20 years, U.S. imports are expected to increase five-fold. "There is no quick fix," said Wilder. "There is no easy solution to reduce U.S. dependence on foreign energy sources and to reduce power prices. To address these challenges, TXU has a three-part plan. We will invest in lower cost power supplies, innovate with new service offerings that enable customers to save money and improve air quality by reducing emissions." Power Supplies Investment TXU will invest up to $10 billion in state-of-the-art technologies to provide near-term solutions to meet Texas' growing need for power. This plan encompasses 11 new generation units at nine existing TXU Power sites. Air permit applications were filed today with the Texas Commission on Environmental Quality for eight of these units, totaling 6,400 megawatts of net capacity. The new units will be located at existing power plant sites in Fannin, Freestone, McLennan, Mitchell, Rusk, and Titus Counties. If approved, the new units are expected to be operational by 2010. TXU previously announced the other three units, totaling 2,200 MW of net capacity, at Oak Grove and Sandow, located in Robertson and Milam Counties. To manage the complexity of the effort and reduce engineering, procurement, and construction costs, TXU will work in exclusive partnerships with two of the leading engineering and construction firms in the world, Bechtel Power and Fluor Corp. Bechtel and Fluor have built more of the world's coal-fired power plants over the past 20 years than any other firms. "After extensive review, we selected sites that maximize opportunities to leverage existing infrastructure, minimize costs, and enable a more efficient construction timeline," Wilder said. "We are pleased to partner in this program with two of the best engineering and construction firms in the world." This endeavor will increase energy reliability and independence by expanding reserve margins and diversifying supply. In aggregate, this plan will add an estimated 10% to the ERCOT supply, enough to serve 6.5 million homes. This increase should be sufficient to meet Texas' growing demand through 2015. In addition, TXU is launching a new company, TXU Renew, to double its renewable energy portfolio by 2011. TXU Renew will focus on the growing renewable energy market by investing in renewable power facilities. This will bring TXU's total renewable energy portfolio to approximately 1,400 MW, enough wind energy to power about 275,000 homes. To help find innovative solutions to Texas' long-term power needs, TXU also plans to invest up to $2 billion in the development and commercialization of the next horizon of cleaner power plant technology, including integrated gasification combined cycle technology. New Service Offerings Spurred by the competitive Texas market, TXU Energy is introducing a set of new, innovative service offerings that substantially increase the options that consumers have to manage their electricity consumption. Texans will now have access to the most innovative assortment of retail electricity options in the U.S. The new plans offer consumers the option to save money today, secure long-term price certainty, and take more control over their energy usage. Some of the new options in the Peace of Mind program include: Time of Use - Empowers customers to use electricity efficiently and wisely while saving as much as 20% during off peak periods, allowing customers to save money if they shift power usage to lower cost, off peak periods. SummerSavings 24SM - Offers immediate summer savings when customers use the most electricity due to the Texas heat - 10% savings in the summer months plus a rate that is lower than the current Price-to-Beat rate during the other months over a two year period. SureValue SM - Provides savings, certainty, and up to 10% off current Price to Beat rates, for a full five year period. TXU Wholesale will offer large business customers the 'Stable and Secure Power' program. Large customers, including industrial companies, will have the opportunity to participate in the economics of these large-scale, coal-fired power plants through a combination of equity investments or upfront payments. These customers could enjoy power prices that reflect the marginal economics and costs of coal-fired power. "For our customers, the 'Peace of Mind' and 'Stable and Secure Power' programs provide short- and long-term solutions, lower- priced electricity and tools to better control electricity consumption," added Wilder. New Environmental Standards TXU will set a new environmental standard - more than offsetting key emissions from the new units by reducing emissions at existing facilities. With this plan, TXU will double its solid-fuel generation capacity and at the same time will reduce key emissions by 20% from where they are today. This will be the largest voluntary program of its type in the nation, lowering total emissions while simultaneously bringing significant new capacity into the market. If all other plant construction follows this standard, Texas will be able to serve its growing power needs while improving air quality for the future. TXU's plan includes up to $500 million for voluntary emission reductions, accomplished through fuel switching and retrofitting state-of-the-art emission controls at existing units. These actions will reduce TXU's current mercury emissions by more than 50%, well beyond current regulatory requirements, and make substantial reductions in sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions as well. TXU's planned investment also includes up to $2 billion for installation of the best available control technology to minimize emissions at the 11 expansion units. The new plants will have among the lowest SO2, NOx, and mercury emissions rates in the nation and will be 80% cleaner than the average U.S. coal plant. Overall, these actions will more than offset the SO2, NOx, and mercury emissions from the new coal plants. TXU will reduce at least 1.5 pounds of these key emissions for every one pound from the new units - equal to an overall reduction of 20% relative to current levels. "TXU recognizes the need for unprecedented action," said Wilder. "TXU is introducing new service offerings to give our customers more choices, tools and savings. In addition, our massive infrastructure investment will create more low-cost supply, thousands of jobs, and improved air quality for the future. In short, TXU will 'Power the Future' of Texas." About TXU Corp Based in Dallas, Texas, TXU Corp. -- http://www.txucorp.com/-- is an energy company that manages a portfolio of competitive and regulated energy businesses in North America. In TXU Corp.'s unregulated business, TXU Energy provides electricity and related services to 2.5 million competitive electricity customers in Texas, more customers than any other retail electric provider in the state. TXU Power has over 18,300 megawatts of generation in Texas, including 2,300 MW of nuclear and 5,837 MW of lignite/coal- fired generation capacity. The company is also one of the largest purchasers of wind-generated electricity in Texas and North America. TXU Corp.'s regulated electric distribution and transmission business, TXU Electric Delivery, complements the competitive operations, using asset management skills developed over more than one hundred years, to provide reliable electricity delivery to consumers. TXU Electric Delivery operates the largest distribution and transmission system in Texas, providing power to more than 2.9 million electric delivery points over more than 99,000 miles of distribution and 14,000 miles of transmission lines. TXU Corp.'s 6.55% Senior Notes due 2034 carry Moody's Investors Service's Ba1 rating and Standard & Poor's BB+ rating. UBIQUITEL INC: Agrees to $1.3 Billion Sprint Nextel Purchase ------------------------------------------------------------ Sprint Nextel Corp. (NYSE: S) and UbiquiTel Inc. (NASDAQ: UPCS) inked an agreement for Sprint Nextel to acquire UbiquiTel for approximately $1.3 billion, including the assumption of about $300 million of net debt. The transaction value represents 9.4x projected 2006 Adjusted Operating Income Before Depreciation and Amortization. Under the terms of the agreement, Sprint Nextel will acquire all of UbiquiTel's outstanding common shares for $10.35 per share in an all-cash merger. The acquisition is subject to the approval of UbiquiTel shareholders and customary regulatory approvals, and is expected to be completed in the second quarter of 2006. As part of the agreement, Sprint Nextel and UbiquiTel will seek an immediate stay of litigation pending in the Delaware Court of Chancery with a final resolution to become effective upon closing of the acquisition. Sprint Nextel's financial advisor for the transaction was Citigroup Global Markets Inc. Its principal legal advisor was King & Spalding LLP. UbiquiTel's financial advisor was Bear, Stearns & Co. Inc. and its principal legal advisor was Kirkland & Ellis LLP. About Sprint Sprint Nextel -- http://www.sprint.com/-- offers a comprehensive range of communications services bringing mobility to consumer, business and government customers. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks offering industry leading mobile data services; instant national and international walkie-talkie capabilities; and an award-winning and global Tier 1 Internet backbone. About UbiquiTel UbiquiTel -- http://www.ubiquitelpcs.com/-- based in Conshohocken, Pa., provides Sprint PCS services in mid-size markets in California, Idaho, Indiana, Kentucky, Nevada, Tennessee, Utah, Washington and Wyoming, covering 8.3 million people. As of March 31, 2006, the company served approximately 452,000 direct wireless subscribers and 151,000 wholesale subscribers. UbiquiTel employs about 425 people and had revenues for the 12 months ended Dec. 31, 2005 of $422.7 million. * * * As reported in the Troubled Company Reporter on Dec. 19, 2005, Standard & Poor's Rating Services raised its ratings on UbiquiTel including its corporate credit rating, which was raised to 'B-' from 'CCC+', and its senior unsecured debt rating, which was raised to 'B-' from 'CCC'. The outlook is positive. The ratings on these entities were removed from CreditWatch, where they were placed with positive implications on Nov. 2, 2005, because of strengthening operating and financial performance. UNITED COMPONENTS: Proposed $155MM ASC Buy Cues S&P to Cut Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on automotive aftermarket supplier United Components Inc. (UCI) to 'B+' from 'BB-' and its rating on UCI's $230 million senior subordinated notes to 'B-' from 'B'. Standard & Poor's also assigned its 'BB-' rating to the Evansville, Ind.-based UCI's proposed $330 million term loan D senior secured credit facility and assigned a recovery rating of '1'. The ratings were removed from CreditWatch, where they had been placed on March 9 with negative implications. Standard & Poor's expects to withdraw the rating on the company's senior secured term loan C when it is repaid as part of the proposed transaction. The outlook is stable. "The downgrade reflects UCI's proposed, debt-financed acquisition of ASC Industries for $155 million," said Standard & Poor's credit analyst Nancy C. Messer. "UCI's financial profile will be highly leveraged following the transaction. Not only will the company be burdened with acquisition-related debt, but its EBITDA was weaker than our expectations for the 12 months ended Dec. 31, 2005, and we believe that any prospective improvements would not be sufficient to justify the previous rating." UCI plans to fund the acquisition largely with the new $330 million term loan D issued under its existing senior secured credit facility. Proceeds from the issue will also be used, in part, to pay off the existing $217 million term loan C facility. Although the acquisition of ASC is consistent with UCI's previously articulated business strategy, the purchase will be funded with an incremental $115 million of secured borrowings. As a result, pro forma lease-adjusted leverage at Dec. 31, 2005, would be about 5x, and the company will remain highly leveraged through the year following the business combination. Taking the proposed transaction into account, UCI's pro forma debt as of Dec. 31 would be $568 million. In Standard & Poor's view, the acquisition should enhance UCI's business position, somewhat alleviating difficult market conditions that have eroded the company's margins in recent quarters. The purchase will also allow UCI to accelerate its planned expansion of sourcing from low-cost countries. As one of UCI's most effective rivals in the water pump segment of its business, ASC has also now been eliminated as a competitor. It has a solid market position, a long-standing manufacturing presence in low-cost China, and proven experience with lean manufacturing methods. Integration risks should be reduced by the fact that ASC will remain an independently operated unit within UCI and that both companies currently manufacture virtually the same water pump product. The combination will provide opportunities for UCI to achieve operating cost synergies in the next two years estimated to reach about $12 million. However, in the near term, the deal increases the company's financial risk at a time when auto aftermarket conditions have become more competitive. In addition, the planned synergies will require near-term investments of an amount equal to the annual savings. W.R. GRACE: Futures Rep. Replaces CIBC Piper Jaffray as Advisor --------------------------------------------------------------- As previously reported, the U.S. Bankruptcy Court for the District of Delaware approved the retention of CIBC World Markets Corp as financial advisor for David T. Austern, the Court-appointed legal representative for future asbestos claimants. Effective February 10, 2006, the FCR terminated CIBC's employment. Joseph J. Radecki, Jr., Jonathan Brownstein, Ritwik Chatterjee and other financial advisors primarily responsible for representation at CIBC have joined Piper Jaffray & Co. effective as of February 13, 2006. By this application, the FCR asks Judge Fitzgerald's permission to retain Piper Jaffray as his financial advisor, nunc pro tunc to February 13, 2006. The FCR believes that the continued representation of the Former CIBC Professionals is essential to its role in the Debtors' cases because the Professionals are already familiar with the Debtors' complicated industry and other issues important to the FCR and to asbestos personal injury claimants who may assert claims or demands in the future. The engagement agreement between the FCR and Piper Jaffray is substantially the same in all material respects as the terminated engagement agreement between the FCR and CIBC, particularly the indemnification provisions. As the FCR's financial advisor, Piper Jaffray will: (a) assist the FCR in analyzing and reviewing the acts, conduct, assets, liabilities and financial condition of the Debtors; (b) familiarize itself to the extent appropriate with the operation of the Debtors' businesses, advise the FCR with respect to the Debtors' proposed restructuring and implementation of a trust, including analyzing, negotiating and effecting a plan of reorganization or recapitalization for the Debtors, and, to the extent necessary, performing valuation analyses on the Debtors and their assets; (c) evaluate the financial effect of the implementation of any plan of reorganization on the Debtors' assets or securities; and (d) render any other tasks as mutually agreed on with the FCR. Pursuant to the Engagement Agreement, Piper Jaffray will be paid: -- a $100,000 monthly cash fee for the initial one year of the engagement, starting on the effective date of the Engagement Agreement, payable monthly in arrears; and -- a negotiable fee that is mutually acceptable to the parties, following the initial one-year period, subject to Court approval, for each month up through the effective date of a plan of reorganization or termination of the Engagement Agreement, whichever first occurs. In addition, the Engagement Agreement provides for reimbursement of reasonable out-of-pocket expenses incurred in connection with the provision of Piper Jaffray's services. Joseph J. Redecki, Jr., managing director of the Financial Restructuring Group of Piper Jaffray & Co., attests that the firm does not have any connection with the FCR, the Debtors and other parties-in-interest, and does not represent or hold an adverse interest with respect to which it is to be employed. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan LLP represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., and Nathan D. Finch, Esq., at Caplin & Drysdalerepresent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP to represent it. Lexecon, LLP, provided asbestos claims consulting services to the Official Committee of Equity Security Holders. W.R. GRACE: Futures Rep. Wants Orrick Herrington as Counsel ----------------------------------------------------------- As previously reported, the U.S. Bankruptcy Court for the District of Delaware authorized David Austern, the Court-appointed legal representative for future asbestos claimants, to retain Swidler Berlin LLP, as his bankruptcy counsel. Effective as of February 6, 2006, Roger Frankel, Richard Wyron, Jonathan Guy, Debra Felder, and other lawyers representing Swidler joined Orrick Herrington & Sutcliffe LLP. To avoid delaying the Chapter 11 proceeding and the exercise of his duties, the Futures Representative seeks Judge Fitzgerald's approval to continue to engage those lawyers by retaining Orrick Herrington as his new bankruptcy counsel, nunc pro tunc to February 6, 2006. The Futures Representative tells Judge Fitzgerald that the Former Swidler Attorneys are already familiar with the Debtors' cases and with the concerns and issues important to him and to the asbestos personal injury claimants who may assert claims or demands in the future. Specifically, Orrick Herrington will: (a) provide legal advice and representation with respect to the Futures Representative's powers and duties in connection with the Debtors' cases; (b) prepare and file all applications, motions, responses, objections and other pleadings in the Debtors' proceedings as may be necessary; (c) appear and represent the Futures Representative at hearings and other meetings, as appropriate; (d) represent and advise the Futures Representative with respect to any contested matter, adversary proceeding, lawsuit or other proceeding in which he may become a party or otherwise appear in connection with the Chapter 11 proceedings; (e) represent and advise the Futures Representative with respect to any plan or plans of reorganization; and (f) perform all other necessary legal services that the Futures Representative authorizes and requests as may be Appropriate. Currently, Phillips, Goldman & Spence, P.A., is employed as the Futures Representative's Delaware co-counsel and will continue to serve as co-counsel with Orrick Herrington. The Futures Representative expects the two firms to coordinate their work to avoid any duplication of effort. Orrick Herrington intends to apply for compensation for professional services on an hourly basis, and for reimbursement of actual and necessary expenses incurred. In light of confidentiality considerations, Orrick Herrington reserves the right to redact its time and expense records as it believes appropriate. With respect to U.S.-based professionals, Orrick Herrington's current standard hourly rates are: Roger Frankel $725 Richard Wyron 645 Jonathan Guy 605 Monique Almy 525 Mary Wallace 500 Matthew Cheney 490 Kathleen Orr 430 Debra Felder 405 Kimberly Neureiter 375 Katherine Thomas 325 Debra Fullem 210 Rachael Barainca 140 Orrick Herrington will utilize other attorneys and paraprofessionals as necessary. Mr. Frankel attests that Orrick Herrington does not have any connection with the Futures Representative, the Debtors, and other parties-in-interest, and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan LLP represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., and Nathan D. Finch, Esq., at Caplin & Drysdalerepresent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP to represent it. Lexecon, LLP, provided asbestos claims consulting services to the Official Committee of Equity Security Holders. W.R. GRACE: Wants to Contribute to Chicago 51st Pension Plan ------------------------------------------------------------ James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, in Wilmington, Delaware, relates that the manufacturing facility located at 6050 W. 51st Street, in Chicago, Illinois, is one of the largest "Darex" plants of W.R. Grace & Co. and its debtor-affiliates. Darex produces metal can sealants, "soda-sorb" and other products. Darex is part of the Debtors' Grace Performance Chemicals business. At Chicago 51st Street, the Debtors employ approximately 150 hourly and salaried employees. The steelworkers union represents 68 of the employees. Mr. O'Neill tells Judge Fitzgerald that the collective bargaining agreement with the Union was scheduled to expire on January 22, 2006. To avoid any possibility of a work stoppage, a new agreement to replace the prior agreement was needed to be finalized on that date. In anticipation of the expiration of the prior collective bargaining agreement, the Debtors made a final offer that became the 2006 Union Agreement when the Union Employees ratified the final offer on January 24, 2006. The Debtors' objective regarding the negotiations with the Union were: -- to increase Union members' contributions towards medical premiums from 20% to 30% of the total cost; -- sign a four-year labor agreement that would include a "no strike" clause; and -- cross-train certain Union employees to enhance efficiency and productivity at the work site. The Union Agreement accomplished those objectives in a cost effective manner, Mr. O'Neill says. The average annual percentage increase for wages and benefits is 2.5% per year, exclusive of pension expense. During the negotiations, the Debtors rejected the Union's demands for concessions in many areas, including more holidays, more vacation, and a $30 increase in monthly pension benefits, spread over 3 years. However, the Debtors agreed to amend the Union Pension Plan to increase monthly pension benefits by $10 over four years, provided that the Debtors could secure the requisite approval from the Court. Union Pension Plan and the Pension Amendments Mr. O'Neill explains that the trust funding the Retirement Plan of W.R. Grace & Co.-Conn. Chemical Group (Chicago Dewey & Almy Plant) is a defined-benefit pension plan, which satisfies the qualification requirements under Section 401(a) of the Internal Revenue Code. The "plan year" applicable to the Plan is a calendar year. The Pension Plan is funded with employer contributions that are in the trust that is tax-exempt. In addition, the Pension Plan does not require employee contributions. As of January 1, 2006, the fair market value of the assets held in trust to provide Pension Plan benefits aggregated $2,800,000. According to Mr. O'Neill, the Pension Plan is a so-called "flat- dollar unit benefit plan," which provides a specific dollar amount for each year of service, commencing at age 65, that is paid in the form of an annuity over the life of the retired employee. Mr. O'Neill ascertains that the most significant aspect of the Pension Amendments is that the monthly pension benefit for any Union Employee who retires on or after February 1, 2006, would be increased from $35 per year of service to this applicable amount: Retirement Date Monthly Pension --------------- --------------- 2/1/2006 $36 2/1/2007 39 2/1/2008 42 2/1/2009 45 Aside from the Pension Amendments, the only other material cost to the Debtors as a result of the 2006 Union Agreement is a moderate wage increase of 3% per year. Funded Exception Section 401(a)(33) of the IRC generally prohibits the adoption of any amendment to enhance benefits under a defined benefit pension plan during the period that the employer sponsoring that plan is a Chapter 11 debtor, unless one of the exceptions provided by that statute is satisfied. According to Mr. O'Neill, the exception that is most relevant to the circumstances regarding the Union Pension Plan is specified in subpart (B)(i) of Section 401(a)(33), which provides that certain amendments may be adopted where "the plan, were such amendment to take effect, would have a funded current liability percentage of 100% or more." $904,815 Required Contribution To implement the Pension Amendments, the Debtors propose to make a one-time, lump sum contribution of $904,815 -- but in no event more than $1,300,000 -- to the Union Pension Plan, or $1,228,542 if the Pension Funding Equity Act is not extended by no later than September 15, 2006. In that case, the Required Contribution would be deemed to have been made on December 31, 2005, to calculate the "funded current liability percentage" for the 2005 plan year. The Debtors also seek to effectuate the Pension Amendments in accordance with their obligations under the 2006 Union Agreement. The Pension Amendments would be adopted effective on or after January 1, 2006, to which the Funded Exception would be satisfied. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan LLP represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., and Nathan D. Finch, Esq., at Caplin & Drysdalerepresent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP to represent it. Lexecon, LLP, provided asbestos claims consulting services to the Official Committee of Equity Security Holders. WARRIOR ENERGY: Expects to Raise $163.5 Million in Stock Sale ------------------------------------------------------------- Warrior Energy Services Corporation fka Black Warrior Wireline Corporation is offering 7,627,534 shares of its common stock at $23.50 per share. Twenty-two shareholders are also selling off 592,466 shares of their holdings. The Company expects to net, after deducting estimated expenses and underwriting discounts and commissions and the transaction fee, around $163.5 million. The Company will use the proceeds to: -- to repurchase or repay $133.9 million of the Company's existing equity securities; and -- to repay $29.6 million of the Company's outstanding indebtedness (including pre-payment penalties). The Company will buy back the stockholdings of St. James Partnerships and the Underbrink Family Entities after this transaction. St. James will receive $133.9 million for its shares. The Company will pay Underbrink Family Entities $18.5 million for their shares. The registration statement on the offer did not indicate how the Company intends to fund additional $18.5 million it needs to buy back all the stock it promised to buy. The Company will not receive any of the proceeds from the sale of common shares by the selling shareholders. The Company's common shares are listed in the Nasdaq with the symbol "WARR" The Company's share price rose from $22.50 at the start of the month to $31.01 at closing on April 19, 2006. A full-text copy of the Registration Statement is available for free at http://ResearchArchives.com/t/s?82e Warrior Energy Services Corporation fka Black Warrior Wireline Corporation is a natural gas and oil well services company that provides cased-hole wireline and well intervention services to E&P companies. The Company has applied to list the common stock on the Nasdaq National Market under the symbol "WARR". The current trading symbol for the common stock on the over-the-counter market is "WGSV". As of December 31, 2005, the Company's equity deficit narrowed to $15,571,447 from a $25,208,634 deficit at December 31, 2004. WESTAR ENERGY: Moody's Reviewing Ba1 Debt Rating and May Upgrade ---------------------------------------------------------------- Moody's Investors Service placed the debt ratings of Westar Energy and its subsidiary Kansas Gas & Electric under review for possible upgrade. The ratings placed under review include Westar's Ba1 Issuer Rating, Baa3 senior secured bonds, Ba1 senior unsecured debt, and Ba3 preferred stock. The ratings placed under review for Kansas Gas & Electric include its Baa3 senior secured bonds and Baa3 senior secured lease obligation bonds. The review for upgrade recognizes: 1) The recent electric rate order from the Kansas Corporate Commission, which includes the reinstatement of an adjustment clause for more timely recovery of fuel and purchased power costs, and provides for recovery of environmental spending and other on-going costs without the need to file a general rate case. 2) Lower overall business risk following the divestiture of non-core assets 3) Stronger financial results in 2005, including a ratio of funds from operations to debt of 17% and a ratio of FFO to interest of 3.8x in accordance with Moody's standard global adjustments. If sustainable, these ratios would be consistent with a Baa3 rating for a utility with an average to below average regulatory environment and an overall risk category in the medium range as defined in Moody's rating methodology for global regulated electric utility companies. 4) Improvements made in the areas of corporate governance and management oversight practices and settlement of shareholder lawsuits related to the activities of the previous top management team. Moody's review will consider the company's ability to sustain its improved financial performance while funding increased capital spending to increase its generating flexibility and satisfy rising environmental standards. Through 2008, Moody's anticipates significant increases in capital spending for environmental upgrades related to the company's coal facilities and to add peaking capacity. Westar Energy is an integrated electric utility headquartered in Topeka, Kansas. The company, along with its principal subsidiary, Kansas Gas & Electric, serves approximately 660,000 customers in the state. WINDOW ROCK: Gets Court Okay to Hire Squar Milner as Accountants ---------------------------------------------------------------- Window Rock Enterprises, Inc., sought and obtained permission from the U.S. Bankruptcy Court for the Central District of California to employ Squar, Milner, Reehl & Williamson, LLP, as its accountants. As reported in the Troubled Company Reporter on Jan. 31, 2006, Squar Milner will: 1) consult with the Debtor regarding tax matters and assist in preparing its federal and state income tax returns and in preparing financial reports, including the reports required to be submitted to the Office of the U.S. Trustee; 2) assist the Debtor in preparing pleadings in connection with plan confirmation proceedings in its chapter 11 case and in expert testimony as needed by the Debtor; 3) provide accounting support in litigation affecting the Debtor and its reorganization and assist in settlement negotiations related to its chapter 11 case; and 4) perform all other accounting services to the Debtor that are necessary in its chapter 11 case. Stephen P. Milner, C.P.A., a managing partner at Squar Milner, disclosed that his Firm received a $108,000 retainer. Mr. Milner reports that Squar Milner will also be paid on a monthly basis for its professionals' fees and expenses after the retainer is exhausted. Squar Milner assured the Court that it does not represent any interest materially adverse to the Debtor pursuant to Section 327(a) of the Bankruptcy Code. Headquartered in Brea, California, Window Rock Enterprises Inc. -- http://windowrock.net/-- manufactures and sells all-natural dietary and nutritional supplements. The Debtor is also producing its own TV, radio and print advertising campaigns for nutritional and dietary supplements and has distribution in over 40,000 Food Drug Mass Clubs as well as Health and Fitness Channels. The Company filed for chapter 11 protection on Nov. 23, 2005 (Bankr. C.D. Calif. Case No. 05-50048). Robert E. Opera, Esq., Winthrop Couchot, PC represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million and estimated debts of more than $100 million. WINN-DIXIE: Former Employees & Retirees Want Documents Produced --------------------------------------------------------------- Richard Ehster, Gary Osborne, Scott Hunt, Stan Timbrook and John Gardner are former Winn-Dixie employees and retirees with claims based on their interests in the Debtors' "MSP" retirement plan. Mr. Ehster holds Claim Nos. 934, 4490, and 11919. Mr. Osborne holds Claim Nos. 9309 and 12270. Mr. Hunt holds Claim Nos. 5709 and 12041. Stan Timbrook holds Claim No. 6842. Mr. Gardner holds Claim Nos. 9306, 9315, 11923 and 11924. The Claimants anticipate that the Debtors may eventually propose a plan of reorganization, which seeks to pay their claims, as well as those of all other former retirees with MSP claims similar to theirs, at some fraction of their total amount, or not at all. The Claimants seek to examine, pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure: (a) dividends paid and other transfers to shareholders of the Debtors; (b) the Debtor's "MSP" retirement plan; (c) life insurance policies owned by the Debtors; and (d) communications between Debtors and other persons, which concern, reflect or in any way relate to dividends, the retirement plan and life insurance policies. The Claimants also ask the U.S. Bankruptcy Court for the Middle District of Florida to direct Winn-Dixie Stores, Inc., and its debtor-affiliates to produce all documents, which in any way refer to, reflect, or relate to any fact within the scope of the topics of inquiry. 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. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Wants Gem Cedar Lease Rejected Effective April 20 ------------------------------------------------------------- On Nov. 21, 1997, Winn-Dixie Raleigh, Inc., and Gem Cedar, L.L.C., entered into a lease for Store No. 997. Pursuant to the terms of the Lease, WD Raleigh pays Gem Cedar $503,782 in annual rent. On Aug. 21, 2002, WD Raleigh subleased the premises to Cornerstone Christian Church. Under the Sublease, Cornerstone Christian is required to pay WD Raleigh monthly rent at graduated rates in the range between $8,298 and $23,744. Cornerstone Christian defaulted under the Sublease by failing to pay the correct prepetition rent due. Cornerstone Christian also stopped paying any rent since the Petition Date, D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, tells the Court. WD Raleigh notified Cornerstone Christian of the default. Cornerstone Christian failed to cure the default. As a result, WD Raleigh terminated the Sublease effective March 14, 2006. As of March 14, 2006, Cornerstone Christian owes WD Raleigh $405,780 in past due rent. The Debtors now have no subtenant in the store and have exited the Chesapeake, Virginia, market area. The Debtors therefore have no further need for the Lease and by rejecting it, will save the estates $500,000 a year. Accordingly, Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Middle District of Florida to: (a) reject the Lease effective April 20, 2006; and (b) establish a bar date for Gem Cedar to file any rejection damage claim arising in connection with the Lease. 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. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Wants to Ink Commercial Surety Pact With RLI Insurance ------------------------------------------------------------------ In order to comply with various federal and state laws and regulations, as well as various utility provider requirements, Winn-Dixie Stores, Inc., and its debtor-affiliates must post, or have a surety post, bonds or other forms of security including bonds: -- under the federal Perishable Agricultural Commodities Act regulations in order for the Debtors to purchase agricultural goods and services on credit; -- to comply with federal and state workers' compensation insurance regulations; and -- to maintain or establish water, waste, telephone and electric utility accounts. Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Middle District of Florida to enter into a commercial surety agreement with RLI Insurance Company. After lengthy negotiations, the Debtors and RLI have agreed that: 1. RLI, in its sole discretion, will issue bonds on the Debtors' behalf of up to $10,000,000 and pay any claims made against the bonds; 2. the Debtors will indemnify RLI for any losses incurred as a result of the issuance; 3. the Debtors will pay RLI a percentage of each bond issued and a minimum annual payment -- the Premium Commitment; 4. the Debtors will post letters of credit, obtained from the DIP Lender, as collateral under the bonds; and 5. the Debtors will pay RLI reasonable attorneys' fees incurred in negotiating, documenting and obtaining approval of the Surety Agreement. Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida, asserts that the Surety Agreement is beneficial to the Debtors and their estates because: 1. RLI has agreed to a financial fee of 2% of the principal amount of any bond issued, with a minimum fee of $100 for each bond, which is competitive with other surety's rates; 2. RLI will only require a collateral of 100% of any bond issued unlike other sureties that require posting of collateral of 125% of the face amount of the bond; 3. RLI has agreed to a $120,000 Premium Commitment compared to other sureties, which require the Debtors to make a Premium Commitment of $250,000 or more; and 4. establishing a relationship with a surety willing to help the Debtors meet the demands of the marketplace will assist the Debtors greatly as they prepare to exit from bankruptcy. 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. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000). WOOD RESOURCES: Canceled Offering Cues S&P to Withdraw B- Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Greenwich, Connecticut-based Wood Resources LLC, including the 'B-' corporate credit rating, and on its co-issuer, Wood Resources Finance Corp., at the company's request. "The request came in connection with Wood Resources' decision not to pursue its proposed debt offering," said Standard & Poor's credit analyst Kenneth L. Farer. WORLDCOM INC: Inks Stipulation Settling Philadelphia's Tax Claims ----------------------------------------------------------------- On January 22, 2003, the City of Philadelphia filed Claim Nos. 18486, 18487, 18488, 18489, 18490, 18491, 18492, and 18493 against WorldCom, Inc., and its debtor-affiliates. The Debtors objected to the Original Claims and thereafter, the Claims were expunged, paid or settled. In September 2005, the City filed motions for: -- the payment of an administrative expense claim; and -- the allowance of claims and filing of returns. On October 3, 2005, the City filed Claim No. 38595, asserting the same prepetition and administrative tax liabilities that are the subject of its Motions. To settle their dispute, the Debtors and the City agree that: (a) the Debtors will pay $432,634, to the City in full and complete satisfaction of all of the City's unsecured, priority and administrative tax claims against the Debtors. The Amount is to be paid as an administrative expense priority tax claim under Section 503(b) of the Bankruptcy Code for taxes and interest only; (b) the Debtors will pay the Settlement Amount, without delay, by check made payable to The City of Philadelphia and sent to: Carolyn Hochstadter Dicker, Klehr, Harrison, Harvey, Branzburg & Ellers LLP, 260 S. Broad Street, Philadelphia, PA 19102-5003 (c) the non-filer liability listed in Claim No. 38595 for tax periods ending on or before December 31,1998, has been resolved through settlement of the Original Claims; (d) the Stipulation resolves all outstanding claims and tax liabilities between the Parties; (e) the Released Parties agree that any and all tax claims they may have against the City are also resolved by the Stipulation for any tax period ending on or before December 31, 2004; and (f) the City agrees that the overpayment shown on the 2004 Business Privilege Tax Return filed by MCI WorldCom Communications, Inc., for $334,673, is available to be used as a credit against the Debtors' 2005 Business Privilege Tax liability, assuming that the return is duly filed, as required. About WorldCom Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 116; Bankruptcy Creditors' Service, Inc., 215/945-7000) * BOND PRICING: For the week of April 17 - April 21, 2006 --------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 01/15/04 0 Acme Metals Inc 10.875% 12/15/07 0 Adelphia Comm. 3.250% 05/01/21 2 Adelphia Comm. 6.000% 02/15/06 1 Adelphia Comm. 7.500% 01/15/04 48 Adelphia Comm. 7.750% 01/15/09 49 Adelphia Comm. 7.875% 05/01/09 49 Adelphia Comm. 8.125% 07/15/03 48 Adelphia Comm. 8.375% 02/01/08 51 Adelphia Comm. 9.250% 10/01/02 49 Adelphia Comm. 9.375% 11/15/09 52 Adelphia Comm. 9.500% 02/15/04 50 Adelphia Comm. 9.875% 03/01/05 49 Adelphia Comm. 9.875% 03/01/07 47 Adelphia Comm. 10.250% 06/15/11 53 Adelphia Comm. 10.250% 11/01/06 50 Adelphia Comm. 10.500% 07/15/04 62 Adelphia Comm. 10.875% 10/01/10 50 Advanced Access 10.750% 06/15/11 74 AHI-Dflt07/05 8.625% 10/01/07 68 Albertson's Inc. 6.520% 04/10/28 73 Allegiance Tel. 11.750% 02/15/08 40 Allegiance Tel. 12.875% 05/15/08 41 Amer & Forgn Pwr 5.000% 03/01/30 67 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 Antigenics 5.250% 02/01/25 56 Anvil Knitwear 10.875% 03/15/07 57 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 75 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 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 22 Atlas Air Inc 8.010% 01/02/10 61 Autocam Corp. 10.875% 06/15/14 61 Avado Brands Inc 11.750% 06/15/09 1 Aviation Sales 8.125% 02/15/08 44 Avondale Mills 10.250% 07/01/13 70 Banctec Inc 7.500% 06/01/08 75 Bank New England 8.750% 04/01/99 9 BBN Corp 6.000% 04/01/12 0 Big V Supermkts 11.000% 02/15/04 0 Burlington North 3.200% 01/01/45 54 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 73 Charter Comm Hld 9.625% 11/15/09 73 Charter Comm Hld 10.000% 04/01/09 73 Charter Comm Hld 10.000% 05/15/11 56 Charter Comm Hld 11.125% 01/15/11 58 Charter Comm Inc 5.875% 11/16/09 69 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 55 CIH 10.000% 05/15/14 54 CIH 11.125% 01/15/14 59 Ciphergen 4.500% 09/01/08 72 Clark Material 10.750% 11/15/06 0 Collins & Aikman 10.750% 12/31/11 33 Comcast Corp. 2.000% 10/15/29 40 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 37 CPNL-Dflt12/05 6.000% 09/30/14 26 CPNL-Dflt12/05 7.625% 04/15/06 60 CPNL-Dflt12/05 7.750% 04/15/09 58 CPNL-Dflt12/05 7.750% 06/01/15 23 CPNL-Dflt12/05 7.875% 04/01/08 59 CPNL-Dflt12/05 8.500% 02/15/11 37 CPNL-Dflt12/05 8.625% 08/15/10 37 CPNL-Dflt12/05 8.750% 07/15/07 57 CPNL-Dflt12/05 10.500% 05/15/06 58 Cray Inc. 3.000% 12/01/24 72 Cray Research 6.125% 02/01/11 33 Cummins Engine 5.650% 03/01/98 71 Curative Health 10.750% 05/01/11 62 Dal-Dflt09/05 9.000% 05/15/16 26 Dana Corp 5.850% 01/15/15 74 Dana Corp 7.000% 03/01/29 75 Dana Corp 7.000% 03/15/28 74 Decorative Home 13.000% 06/30/02 0 Delco Remy Intl 9.375% 04/15/12 47 Delco Remy Intl 11.000% 05/01/09 53 Delphi Corp 6.500% 08/15/13 63 Delphi Trust II 6.197% 11/15/33 39 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 24 Delta Air Lines 7.900% 12/15/09 26 Delta Air Lines 8.000% 06/03/23 25 Delta Air Lines 8.187% 10/11/17 61 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 43 Delta Air Lines 8.540% 01/02/07 60 Delta Air Lines 8.950% 01/12/12 70 Delta Air Lines 9.200% 09/23/14 69 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 24 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 51 Delta Air Lines 10.000% 06/05/11 59 Delta Air Lines 10.000% 06/05/13 59 Delta Air Lines 10.000% 08/15/08 26 Delta Air Lines 10.060% 01/02/16 66 Delta Air Lines 10.080% 06/16/07 59 Delta Air Lines 10.125% 05/15/10 26 Delta Air Lines 10.125% 06/16/09 61 Delta Air Lines 10.125% 06/16/10 60 Delta Air Lines 10.375% 02/01/11 25 Delta Air Lines 10.375% 12/15/22 31 Delta Air Lines 10.500% 04/30/16 75 Discovery Zone 13.500% 08/01/02 0 Diva Systems 12.625% 03/01/08 1 Dura Operating 9.000% 05/01/09 55 Dura Operating 9.000% 05/01/09 57 DVI Inc 9.875% 02/01/04 13 Dyersburg Corp 9.750% 09/01/07 0 Eagle Family Food 8.750% 01/15/08 74 Eagle-Picher Inc 9.750% 09/01/13 70 Encompass Service 10.500% 05/01/09 0 Encysive Pharmacy 2.500% 03/15/12 72 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 69 Federal-Mogul Co. 7.375% 01/15/06 49 Federal-Mogul Co. 7.500% 01/15/09 48 Federal-Mogul Co. 8.160% 03/06/03 40 Federal-Mogul Co. 8.250% 03/03/05 44 Federal-Mogul Co. 8.330% 11/15/01 47 Federal-Mogul Co. 8.370% 11/15/01 38 Federal-Mogul Co. 8.370% 11/15/01 43 Federal-Mogul Co. 8.800% 04/15/07 45 Finova Group 7.500% 11/15/09 35 FMXIQ-DFLT09/05 13.500% 08/15/05 75 Foamex L.P.-DFLT 9.875% 06/15/07 69 Ford Motor Co 6.500% 08/01/18 68 Ford Motor Co 6.625% 02/15/28 66 Ford Motor Co 7.125% 11/15/25 67 Ford Motor Co 7.400% 11/01/46 67 Ford Motor Co 7.500% 08/01/26 69 Ford Motor Co 7.700% 05/15/97 69 Ford Motor Co 7.750% 06/15/43 69 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% 02/20/15 73 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 11/20/14 73 Ford Motor Cred 6.000% 11/20/14 73 Ford Motor Cred 6.000% 11/20/14 73 Ford Motor Cred 6.050% 02/20/15 71 Ford Motor Cred 6.050% 03/20/14 75 Ford Motor Cred 6.050% 04/21/14 74 Ford Motor Cred 6.050% 12/22/14 71 Ford Motor Cred 6.050% 12/22/14 73 Ford Motor Cred 6.100% 02/20/15 73 Ford Motor Cred 6.150% 01/20/15 73 Ford Motor Cred 6.150% 12/22/14 74 Ford Motor Cred 6.200% 03/20/15 74 Ford Motor Cred 6.200% 04/21/14 74 Ford Motor Cred 6.250% 01/20/15 71 Ford Motor Cred 6.250% 03/20/15 73 Ford Motor Cred 6.250% 12/20/13 75 Ford Motor Cred 6.300% 05/20/14 73 Ford Motor Cred 6.550% 12/20/13 74 Ford Motor Cred 7.500% 08/20/32 71 Gateway Inc. 2.000% 12/31/11 71 General Motors 7.125% 07/15/13 73 General Motors 7.400% 09/01/25 65 General Motors 7.700% 04/15/16 71 General Motors 8.100% 06/15/24 66 General Motors 8.250% 07/15/23 71 General Motors 8.375% 07/15/33 72 General Motors 8.800% 03/01/21 71 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 72 GMAC 5.350% 01/15/14 75 GMAC 5.700% 10/15/13 74 GMAC 5.750% 01/15/14 75 GMAC 5.900% 01/15/19 71 GMAC 5.900% 01/15/19 72 GMAC 5.900% 10/15/19 75 GMAC 6.000% 02/15/19 73 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 73 GMAC 6.000% 03/15/19 73 GMAC 6.000% 04/15/19 73 GMAC 6.000% 09/15/19 72 GMAC 6.000% 09/15/19 73 GMAC 6.050% 08/15/19 73 GMAC 6.050% 08/15/19 73 GMAC 6.050% 10/15/19 73 GMAC 6.100% 09/15/19 73 GMAC 6.125% 10/15/19 73 GMAC 6.150% 08/15/19 73 GMAC 6.150% 09/15/19 72 GMAC 6.150% 10/15/19 74 GMAC 6.200% 04/15/19 74 GMAC 6.250% 04/15/19 74 GMAC 6.250% 05/15/19 74 GMAC 6.250% 07/15/19 74 GMAC 6.250% 12/15/18 74 GMAC 6.300% 08/15/19 74 GMAC 6.300% 08/15/19 74 GMAC 6.350% 04/15/19 75 GMAC 6.350% 07/15/19 74 GMAC 6.400% 11/15/19 73 GMAC 6.400% 12/15/18 75 GMAC 6.500% 12/15/18 75 Golden Books Pub 10.750% 12/31/04 0 Graftech Int'l 1.625% 01/15/24 71 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 HNG Internorth 9.625% 03/15/06 29 Inland Fiber 9.625% 11/15/07 60 Insight Health 9.875% 11/01/11 52 Insilco Corp 12.000% 08/15/07 0 Iridium LLC/CAP 10.875% 07/15/05 26 Iridium LLC/CAP 11.250% 07/15/05 25 Iridium LLC/CAP 13.000% 07/15/05 25 Iridium LLC/CAP 14.000% 07/15/05 27 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 53 Kaiser Aluminum & Chem. 10.875% 10/15/06 55 Kaiser Aluminum & Chem. 10.875% 10/15/06 58 Kaiser Aluminum & Chem. 12.750% 02/01/03 8 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 7 Kmart Corp. 9.350% 01/02/20 7 Kmart Funding 9.440% 07/01/18 70 Lehman Bros Hldg 10.000% 10/30/13 65 Liberty Media 3.250% 03/15/31 74 Liberty Media 3.750% 02/15/30 57 Liberty Media 4.000% 11/15/29 61 Lifecare Holding 9.250% 08/15/13 61 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 Missouri Pac RR 5.000% 01/01/45 74 Mosler Inc 11.000% 04/15/03 0 Movie Gallery 11.000% 05/01/12 49 MSX Int'l Inc. 11.375% 01/15/08 64 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 67 New World Pasta 9.250% 02/15/09 8 Northern Pacific RY 3.000% 01/01/47 53 Northern Pacific RY 3.000% 01/01/47 53 Northwest Airlines 6.625% 05/15/23 42 Northwest Airlines 7.039% 01/02/06 5 Northwest Airlines 7.625% 11/15/23 41 Northwest Airlines 7.875% 03/15/08 42 Northwest Airlines 8.130% 02/01/14 69 Northwest Airlines 8.700% 03/15/07 44 Northwest Airlines 8.875% 06/01/06 42 Northwest Airlines 8.970% 01/02/15 41 Northwest Airlines 9.875% 03/15/07 42 Northwest Airlines 10.000% 02/01/09 40 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 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 44 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 60 Primus Telecom 3.750% 09/15/10 40 Primus Telecom 8.000% 01/15/14 68 Primus Telecom 12.750% 10/15/09 75 Radnor Holdings 11.000% 03/15/10 66 Read-Rite Corp. 6.500% 09/01/04 14 Refco Finance 9.000% 08/01/12 63 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 70 Safety-Kleen Crp 9.250% 06/01/08 0 Salton Inc. 12.250% 04/15/08 67 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 Summit Secs Inc 9.500% 09/15/05 0 Tekni-Plex Inc. 12.750% 06/15/10 65 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 71 Trism Inc 12.000% 02/15/05 1 Triton Pcs Inc. 8.750% 11/15/11 73 Triton Pcs Inc. 9.375% 02/01/11 72 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. 10.900% 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 36 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 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, Joel Anthony Lopez, 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 ***