/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060427.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, April 27, 2006, Vol. 10, No. 99 Headlines AERONAUTICAL SOLUTIONS: Case Summary & 14 Largest Unsec. Creditors AMKOR TECH: Moody's Holds Junk Rating on $479.4 Million Sub. Notes ANCHOR GLASS: Settles Property Dispute with Glenshaw and Dufftown ANCHOR GLASS: Court Okays RTS Packaging Settlement Agreement ANCHOR GLASS: U.S. Trustee Objects to 2nd Amended Plan Provisions ARROW ELECTRONICS: Good Performance Cues Fitch's Positive Outlook ASARCO: Insurer Doesn't Want to be Bound by Asbestos Estimation ASARCO LLC: Three Parties Object to Claim Filing Procedures ASARCO LLC: Permits Unions to File Omnibus Proofs of Claim ASSET BACKED: Moody's Rates Two Certificate Classes at Low-B AZTAR CORP: Ameristar's $47 Per Share Offer Tops Pinnacle's Bid B/E AEROSPACE: Earns $13.8 Million of Net Income in First Quarter BASIC ASSET: Moody's Rates Certificate Classes M-6 & M-7 at Low-B BEAR STEARNS: DBRS Rates $5.9 Million Class II-A-4 Notes at B BILLING SERVICES: Moody's Rates Two Proposed Facilities at Low-B CAMBRIAN COMMUNICATIONS: Judge Mitchell Closes Chapter 11 Cases CAMPBELL RESOURCES: Inks $15.5 Million Equity Financing Deal CARDTRONICS INC: Audit Delay Prompts S&P's Negative Outlook CLARION TECHNOLOGIES: Covenant Defaults Prompt Going Concern Doubt CLARION TECHNOLOGIES: CFO Walsh Says Bankruptcy Not an Option COLLINS & AIKMAN: Toyota's Expedited Lease Decision Request Fails COLLINS & AIKMAN: GM to Appeal Transition Plan to District Court COLLINS & AIKMAN: Court Approves Stipulation with Active Mould COMPRESSION POLYMERS: Santana Deal Cues Moody's to Hold Ratings COMPRESSION POLYMERS: S&P Affirms $245 Million Notes' B- Ratings COUNTRYWIDE ALTERNATIVE: Moody's Rates Class B-1 Certs. at Ba1 CURATIVE HEALTH: Chap. 11 Filing Cues Moody's to Withdraw Ratings DANA CORP: Taps Dorsey & Whitney as Special International Counsel DANA CORP: Selects Ernst & Young to Provide Tax Advisory Services DANA CORP: Court Approves Hiring Katten as Securities Counsel DEL MONTE: $1.2 Bil. Purchase Plans Cue Moody's Ba3 Debt Ratings DEL MONTE: S&P Rates $975 Million Senior Secured Loan at BB DELTA AIR: Chromalloy Gas Sets Off Credit Against Carrier's Debt DELTA AIR: Wachovia OKs Adjournment of Adequate Protection Request DRAKE PRINTING: Case Summary & 20 Largest Unsecured Creditors ELEVEN SOUTH: Voluntary Chapter 11 Case Summary EVANS INDUSTRIES: Case Summary & 19 Largest Unsecured Creditors FALCONBRIDGE LTD: First Quarter 2006 Net Income Rises 163% FEDERAL-MOGUL: Negotiating & Revising Chapter 11 Plan Terms GALVEX HOLDINGS: Galvex Capital Hires DiConza Law as Counsel GLATFELTER CO: S&P Removes $200 Mil. Notes' BB+ Rating from Watch GENERAL MOTORS: Antitrust Body Approves GMAC Stake Sale GSAMP TRUST: Moody's May Lower Ratings on Two Security Tranches HAMILTON SAFE: Case Summary & 20 Largest Unsecured Creditors HEALTH NET: Improved Performance Prompts S&P to Affirm BB Rating HEALTHSOUTH CORP: Incurs $446 Million Net Loss in 2005 HEARTLAND PARTNERS: Plans to Dissolve & Liquidate Under Chapter 11 HSI ASSET: Moody's Rates Cert. Classes M-10 and M-11 at Low-B INTEGRATED DISABILITY: Sells Assets to Reliance Standard for $700K INTEGRATED ELECTRICAL: Texas Court Confirms Plan of Reorganization J. CREW: S&P Rates $285 Million Term Loan at B With Positive Watch JETBLUE AIRWAYS: Posts $32 Million Net Loss in First Quarter JETBLUE AIRWAYS: Weak Financial Profile Cues S&P's Negative Watch KERZNER: Baron Cos. Buy Shares & Negotiate $3B Going-Private Deal KRATON POLYMERS: S&P Rates Proposed $365 Million Facility at B+ LBSBC SECURITIES: Moody's Rates $6.5 Million Class N3 Notes at B2 LEAR CORP: Completes New $1 Billion Financing Transaction LEVEL 3: High Leverage Cues DBRS to Hold Low-B and Junk Ratings MAGELLAN HEALTH: S&P Ups Counterparty Credit Rating to BB from B+ MLK RETAIL: Case Summary & 9 Largest Unsecured Creditors MORGAN STANLEY: S&P Raises $3 Million Class A-8 Notes Rating to B- MYCOM GROUP: Schumacher Raises Going Concern Doubt MYCOM GROUP: Sells Software Unit to Rippe & Kingston for $850,000 MURPHY OIL: Moody's Cuts Part of Shelf Rating to (P)Ba1 NASDAQ STOCK: Moody's Rates Three New Bank Facilities at Ba3 NORTHWEST AIRLINES: Wants to Assume Tokyo Property-Related Pacts NORTHWESTERN CORP: Babcock & Brown Buys Assets for $2.2 Bil. Cash O-CEDAR HOLDINGS: Court Approves RSI as Trustee's Collection Agent OGG HARDING: Case Summary & 20 Largest Unsecured Creditors OWNIT MORTGAGE: Moody's Puts Ba1 Rating on Class B-4 Certificates P&R HOLDINGS: Voluntary Chapter 11 Case Summary PANAVISION INC: Refinancing Completion Cues S&P to Up Rating to B- PERFORMANCE TRANSPORTATION: Taps Watson as Compensation Experts PLAINS EXPLORATION: Moody's May Lower Ratings After Stock Merger PLUM CREEK: Moody's Holds (P)Ba2 Preferred Stock Shelf Rating PURE FISHING: S&P Affirms B+ Rating & Revises Outlook to Negative REFCO INC: Judge Drain Freezes BAWAG's U.S. Assets REFCO INC: Ch. 7 Trustee Wants UHY Advisors to Prepare Tax Returns REFCO INC: Chapter 7 Trustee Wants to Wind Down Taiwan Unit REMINGTON ARMS: High Leverage Cues Moody's to Downgrade Ratings REPOSITORY TECH: Case Summary & 20 Largest Unsecured Creditors RESMAE MORTGAGE: Moody's Places Class B Certificates Rating at Ba1 REYNOLDS AMERICAN: Buying Conwood Sales for $3.5 Billion REYNOLDS AMERICAN: Acquisition Deal Cues Moody's to Hold Ratings REYNOLDS AMERICAN: S&P Assigns BB+ Corporate Credit Rating SALOMON BROS: S&P Downgrades Class K-WGM Certificate Rating to BB+ SHAW COMM: Moody's Rates Proposed CDN$300 Mil. Debentures at Ba2 SHAW COMMS: S&P Rates Planned CDN$300 Mil. Sr. Unsec. Notes at BB+ SIEGEL JEWELERS: Case Summary & 18 Largest Unsecured Creditors SOVEREIGN BANCORP: Moody's Rates $200MM Pref. Stock Issue at Ba2 ST. LOUIS: Moody's Holds Junk Rating on $98MM Sr. Revenue Bonds STONE ENERGY: Moody's May Upgrade Ratings Following Stock Merger SUPERIOR PLUS: S&P Affirms BB+ Rating & Revises Outlook to Neg. THREE S: Case Summary & 20 Largest Unsecured Creditors TITAN CRUISE: First American Says Disclosure is Inadequate TOWER AUTOMOTIVE: Committee Hires Cervantes as Special Counsel UNIVERSITY HEIGHTS: Court OKs Girvin Ferlazzo as Legal Counsel US AIRWAYS: Assumes Port Authority Pacts & Nixes $24 Million Claim US AIRWAYS: Completes Exchange of $112-Mil. Sr. Notes to Stock USG CORP: Balance Sheet Upside-Down by $496 Million at March 31 WINN-DIXIE: Court Approves Modified AT&T Agreements WINN-DIXIE: Wants Sedgwick Declared Not Liable in Four Lawsuits WINN-DIXIE: Res Judicata Bars Louise Clark's $3 Billion Claim YOUNG CHANG: Ch. 15 Recognition Order Objections Due on May 16 * Layne J. Albert Joins Alvarez & Marsal as Managing Director * Sheppard Mullin Taps Ethan Feffer as Partner in Orange County * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* AERONAUTICAL SOLUTIONS: Case Summary & 14 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Aeronautical Solutions, LLC P.O. Box 597 Havelock, North Carolina 28532 Tel: (252) 447-4247 Bankruptcy Case No.: 06-01250 Type of Business: The Debtor sells aircraft engines. Chapter 11 Petition Date: April 25, 2006 Court: Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: Trawick H. Stubbs, Jr., Esq. Stubbs & Perdue, P.A. P.O. Box 1654 New Bern, North Carolina 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Diners Club/Citibank Trade Debt $903,871 P.O. Box 44180 Jacksonville, FL 32231-4180 Helicopter Support Inc. Trade Debt $191,500 P.O. Box 111068 Trumbull, CT 06611-0868 GE Capital Financial Trade Debt $122,016 P.O. Box 520310 Salt Lake City, UT 84152-0310 Titanium Industries Trade Debt $45,147 Gulfstream/Gen. Dynamics Trade Debt $37,569 American Express Trade Debt $26,000 Creative Precision Trade Debt $21,800 JP Trading Trade Debt $15,750 E&O Manufacturing Trade Debt $13,758 Chevron Trade Debt $716 GDS-New Bern Trade Debt $189 Pitney Bowes Trade Debt $68 Mike McKinney Contract Labor Unknown Ed Szymzah Contract Labor Unknown AMKOR TECH: Moody's Holds Junk Rating on $479.4 Million Sub. Notes ------------------------------------------------------------------ Moody's Investors Service affirmed the corporate family and long- term debt ratings of Amkor Technology, Inc., and revised the ratings outlook to stable from negative. In addition, the speculative grade liquidity rating was upgraded to SGL-3 from SGL-4. These ratings were affirmed: * Corporate Family Rating of B3 * $300 million Senior Secured Term Loan due October 2010 of B2 * Senior Unsecured Notes with various maturities totaling $1.1 billion of Caa1 * Subordinated Notes with various maturities totaling $479.4 million of Caa3 This rating was upgraded: * Speculative Grade Liquidity Rating to SGL-3 from SGL-4 The outlook revision reflects Moody's expectations that the strong cyclical upturn in the semiconductor industry that began in the fourth quarter of 2005 will extend into 2006 and enable Amkor to generate positive free cash flow, improving the company's financial flexibility. Although the company generated negative free cash flow for the full year ended Dec. 31, 2005, it swung to positive $30 million of free cash flow in the fourth quarter, after ten consecutive quarters of negative cash flow generation. The stable outlook also reflects recent initiatives to improve working capital management and reduce fixed costs through enhanced asset utilization, headcount reductions and better manufacturing efficiencies, which should help to partially offset extended periods of ASP declines. Finally, recent financial performance demonstrates evidence of improved mix shifting to advanced products with more favorable gross margins and greater recovery of incremental raw materials costs. In view of the improving business environment, Moody's believes Amkor's ability to repay the $146 million convertible debt maturity in March 2007 from existing sources of funds or cash generation over the next several quarters has improved. Chandler, Arizona-based Amkor Technology, Inc., is one of the largest providers of contract semiconductor assembly and test services for integrated semiconductor device manufacturers as well as fabless semiconductor operators. ANCHOR GLASS: Settles Property Dispute with Glenshaw and Dufftown ----------------------------------------------------------------- Anchor Glass Container Corporation asks the U.S. Bankruptcy Court for the Middle District of Florida to approve a Settlement Agreement with GGC LLC, aka Glenshaw Glass Company, and Dufftown Real Estate Limited Partnership. Prior to filing for bankruptcy protection, the Debtor and GGC exchanged certain molds and related materials used in the container manufacturing process. Glenshaw has a pending bankruptcy petition in the United States Bankruptcy Court for the Western District of Pennsylvania. In June 2005, Glenshaw commenced an adversary proceeding against Anchor Glass in the Pennsylvania Bankruptcy Court, seeking the immediate recovery of certain glass-making molds in Anchor Glass' possession. Glenshaw also alleged that Anchor Glass was improperly using the molds. In August 2005, Glenshaw obtained from the Pennsylvania Bankruptcy Court a default judgment against Anchor Glass on the Complaint, and an order granting Glenshaw injunctive relief against Anchor Glass, as a result of Anchor Glass' alleged continued use of the molds. In October 2005, the Pennsylvania Bankruptcy Court approved the sale of substantially all of Glenshaw's assets, including the rights Glenshaw had in the subject molds, to Dufftown. On Feb. 10, 2006, Anchor Glass asked the Pennsylvania Bankruptcy Court to open and set aside the default judgment and injunction order. The Pennsylvania Bankruptcy Court held a hearing to consider Anchor Glass' request and directed the parties to resolve the matter amicably. To resolve the outstanding issues among them, Anchor Glass, Glenshaw and Dufftown agree that: (a) Anchor Glass will be permitted to retain possession of the molds allegedly belonging to Glenshaw, and Dufftown will be permitted to retain possession of the molds allegedly belonging to Anchor Glass; (b) Anchor Glass, Glenshaw and Dufftown will each file a motion seeking approval of the Settlement Agreement in the appropriate bankruptcy courts; (c) Glenshaw and Dufftown will seek to reopen the Adversary Proceeding for purposes of causing withdrawal of the complaint and injunctive motion, as well as causing the court to vacate the default judgment and injunction order; (d) Upon approval of the motions seeking approval of the Settlement Agreement, Anchor Glass will pay $115,000 to Dufftown; and (e) The parties will execute mutual releases. 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: Court Okays RTS Packaging Settlement Agreement ------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida approved the Settlement Agreement resolving Anchor Glass Container Corporation's dispute with RTS Packaging, LLC. The Settlement Agreement grants RTS an administrative claim against the Debtor for $27,500, and allows RTS to file an amended unsecured claim for $595,412. As reported in the Trouble Company Reporter on Sept. 20, 2005, RTS, a seller of cardboard partitions, asked the Bankruptcy Court to affirm its right to reclamation and grant a replacement lien with respect to certain goods ordered by the Debtor. Alternatively, RTS asked the Court to direct the Debtor to immediately pay $160,304 as an expense of administration to RTS. The Debtor said that RTS' demand for the return of goods did not sufficiently identify the goods. Also, the Debtor pointed out that any goods allegedly subject to RTS' demand were not in the Debtor's possession at time of the demand. The Debtor and RTS investigated the merits of the Complaint and the defenses asserted by the Debtor in its Answer, and agreed to compromise and settle all disputes relating to the Complaint. The Settlement Agreement provided that: (a) RTS will have an administrative claim for $27,500; (b) RTS will also file an amended unsecured claim for $595,412, reflecting the balance owed by Anchor Glass. 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: U.S. Trustee Objects to 2nd Amended Plan Provisions ----------------------------------------------------------------- The U.S. Trustee for Region 21 asks the U.S. Bankruptcy Court for the Middle District of Florida to deny confirmation of Anchor Glass Container Corporation's 2nd Amended Plan of Reorganization. The U.S. Trustee objects to the release, exculpation of liability, and indemnification provisions of the Debtor's Plan. Benjamin E. Lambers, Esq., in Tampa, Florida, relates that the Plan limits the exculpation and release of persons who have engaged in criminal conduct, willful misconduct, gross negligence, or fraud or acted in apparent breach of duty to a client. However, the Plan requires the action to be brought before the Effective Date, Mr. Lambers points out. Section 524(e) of the Bankruptcy Code generally prohibits the discharge of non-debtor third parties through the confirmation process. Mr. Lambers says that, at a minimum, the Debtor must demonstrate that a basis exists for its releases, exculpation of liability and indemnification provisions. 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) ARROW ELECTRONICS: Good Performance Cues Fitch's Positive Outlook ----------------------------------------------------------------- Fitch Ratings revised Arrow Electronics, Inc.'s Rating Outlook to Positive from Stable. The company's 'BB+' issuer default rating, and 'BB+' senior unsecured notes and senior unsecured bank credit facility are affirmed. Fitch's action affects approximately $1.2 billion of debt. The Positive Rating Outlook reflects Fitch's belief that Arrow's stronger and more consistent operating and financial performance will continue through the near term, driven by additional market share gains, particularly in Asia-Pacific, and ongoing cost containment efforts. While visibility remains limited, a healthy supply and demand balance across businesses and geographies exists and should drive sales growth in 2006 equivalent to approximately 2-3x worldwide gross domestic product. Arrow's operating results are also expected to become less volatile over time as the company increases its already substantial geographic, end market, and customer diversification by growing its APAC components business (approximately 13% of 2005 sales) and computer products (approximately 20%). Results for the quarter ended March 31, 2006 were stronger than Fitch anticipated, as organic sales increased 8% over the prior year, representing Arrow's 13th consecutive year-over-year quarter of positive sales growth. Profitability continued to expand, despite the short-term dilutive impact to operating margins of recent acquisitions and margin contraction in Arrow's computer products segment. Arrow's operating profit margin increased to 4.6% for the latest 12 month ended March 31, 2006 from 4.1% for the comparable year ago period. Fitch expects operating profit margins to remain at or above 4.5% through the near term. The Rating Outlook reflects Fitch's expectation that Arrow's working capital efficiency metrics will remain near current levels, resulting in more consistent annual free cash flow, which is likely to exceed $200 million for 2006. Due to a more rational competitive environment, Arrow has been able to maintain lower inventory levels, resulting in a working capital to sales ratio of approximately $0.20 for the last three years, versus $0.26 for 2002. As a result, the company generated more than $750 million of free cash flow while growing sales in excess of 15% over this time frame. On a normalized basis, Fitch believes the components distributors can grow sales at rates of up to 10% without using cash from operations. In addition, the components distributors generate significant cash from operations in a declining sales environment by unwinding inventories, as occurred during the information technology downturn of 2001-2002. Incorporated into the Positive Outlook is Fitch's expectation that Arrow will use a portion of annual free cash flow for further debt reduction over the next few years, consistent with Fitch's belief that components distributors do not require long-term debt to operate, particularly given Arrow's solid liquidity position and aforementioned free cash flow profile. Arrow reduced debt by approximately $170 million during the quarter ended March 31, 2006, resulting in total debt reduction of more than $800 million over the past three years. Arrow's still substantial long-term debt along with that of its main competitor, Avnet Inc. ('BB'/Positive Outlook by Fitch), reflects both companies' significant historical consolidation activity. While recognizing the company's dominant market share in North America and European components markets as a result of this consolidation, Fitch believes that Arrow's use of a similar strategy to consolidate APAC components markets or European computer products markets could result in pressured ratings. Nonetheless, anticipated debt reduction in conjunction with consistent profitability should result in ongoing strengthening of credit protection measures. Fitch expects total debt adjusted for rent expense to operating EBITDAR will remain below 3.0x compared with 2.6x for the LTM ended March 31, 2006 and 3.3x for the year ago period. Operating EBITDA to interest expense should continue to exceed 6.0x after improving to more than 6.5x in the LTM period from 6.2x in the prior year period. The ratings continue to be supported by: * Arrow's leading market positions; * meaningfully improved working capital management, as well as a demonstrated ability to generate significant cash flow from working capital during a downturn; * a well diversified supplier and small- to medium-size customer base; and * continued growth of the more stable computer products segment. In addition, Fitch believes the components distributors are increasingly important to the electronics supply chain, as suppliers have stated their intention to increase the percentage of total sales through the distribution channel, thereby efficiently reaching the highly profitable SMB market. The ratings still consider: * Arrow's exposure to the cyclical demand patterns and volatile cash flows associated with the semiconductor market (55%-60% of sales); * the significant investment levels for Arrow to increase its share in the faster growing Asia-Pacific region; and * thin operating margins for the components distributors, which Fitch believes will remain below historical levels despite ongoing efforts to expand into higher margin service offerings. As of March 31, 2006, liquidity was sufficient to meet near-term maturities and was supported by: * cash and cash equivalents of approximately $380 million; * an undrawn $600 million senior unsecured revolving credit facility expiring June 2010; and * an undrawn $550 million accounts receivable securitization facility expiring Feb. 2008. Relatively consistent annual free cash flow is also expected to support liquidity going forward, although Fitch believes Arrow is likely to use future free cash flow for a combination of debt reduction, acquisitions, and share repurchases. While Arrow has sufficient resources available to fund its current $100 million stock repurchase program authorization in 2006, significant further shareholder friendly actions could result in negative rating actions. Total debt was approximately $1.2 billion as of March, 31, 2006, consisting of: * approximately $170 million of 7% senior notes due 2007; * $200 million of 9.15% senior debentures due 2010; * $350 million of 6.875% notes due 2013; * $200 million of 6.875% senior debentures due 2018; and * $200 million of 7.5% senior debentures due 2027. ASARCO: Insurer Doesn't Want to be Bound by Asbestos Estimation --------------------------------------------------------------- As reported in the Troubled Company Reporter on April 4, 2006, ASARCO LLC asked the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi, to estimate its asbestos liabilities, if any, for derivative asbestos claims. ASARCO also asked the Court to approve its proposed claims estimation process. FFIC Objects ASARCO LLC does not propose for Fireman's Fund Insurance Company or any other party-in-interest, other than itself, the Official Committee of Unsecured Creditors and the Asbestos Subsidiary Debtors and the Future Claims Representative, to participate in the estimation proceeding. If that is the case, then FFIC cannot be bound by findings made in the estimation proceeding, Veronica Martinsen Bates, Esq., at Hermes Sargent Bates, in Dallas, Texas, asserts. FFIC does not oppose the concept and recognizes the utility of an estimation proceeding solely for plan confirmation purposes. However, Ms. Bates asserts that without FFIC's participation, the Debtors should not be allowed to use the results of the estimation proceeding as a sword against FFIC in any insurance coverage litigation. Accordingly, the FFIC asks the Court to include in any case management order governing any estimation proceedings appropriate protective "insurance neutrality" terms to the effect that any estimation of Derivative Asbestos Claims is not binding on FFIC for any insurance coverage, and may not be used against FFIC for indemnification coverage. In the alternative, FFIC asks the Court to provide it with the right to fully and meaningfully participate in any estimation proceeding. 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: Three Parties Object to Claim Filing Procedures ----------------------------------------------------------- As reported in the Troubled Company Reporter on April 4, 2006, ASARCO LLC asked the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to: (a) establish deadlines for filing of claims; (b) approve proof of claim forms; and (c) approve bar date procedures and the form and manner of notices of the Bar Dates. ASARCO asked the Court to establish June 16, 2006, as the last day by which persons and entities, including governmental units, holding prepetition claims, must file proofs of claim. ASARCO also asked the Court to set Aug. 9, 2006, as the last day for filing asbestos-related proofs of claim. Objections (1) El Paso, Texas ASARCO LLC proposed that creditors will be provided with actual bar date notice only 44 days before the Bar Date, and newspaper publication notice only 30 days before the Bar Date. H. Christopher Mott, Esq., at Gordon & Mott PC, in El Paso, Texas, argues that the notice periods are too short and provide inadequate notice to individual environmental claimants of the claims bar date. Mr. Mott notes that ASARCO and its predecessors have produced lead, zinc, copper and sulfuric acid at its smelter facility in El Paso, Texas, for over 100 years. As a result, El Paso, surrounding communities and their citizens have been exposed to contamination of lead, arsenic and other contaminants from ASARCO's smelter. Thus, Mr. Mott says, there are hundreds, if not potentially, thousands of individual environmental claimants located in the El Paso and other surrounding areas. Mr. Mott asserts that individual environmental claimants should be given adequate notice of the claims bar date in time to actually file a proof of claim. Additional time is also necessary for translation and communication issues, since Spanish is the primary language of some of the environmental claimants. Accordingly, the City of El Paso objects to the length of the proposed noticing periods in ASARCO's Bar Date Motion. (2) Asbestos Creditors Committee The Official Committee of Unsecured Creditors of the Asbestos Subsidiary Debtors complain that the proposed Bar Dates are unnecessary, impractical and inefficient. The Asbestos Committee asserts that the sole result from the imposition of an Asbestos Bar Date will be the potential denial of legal recourse and just compensation for many of the claimants poisoned by the Debtors' years of asbestos use. Bar dates are not essential to the finality of a bankruptcy case, Jacob L. Newton, Esq., at Stutzman, Bromberg, Esserman & Plifka, PC, in Dallas, Texas, contends. Indeed, the Bankruptcy Code does not require the imposition of a bar date as threshold requirements for consideration of creditors' claims. The Asbestos Committee objects to the proposed August 9, 2006 Asbestos Bar Date as it is less than four months after the request is set to be heard, and only three weeks after ASARCO distributes its subjective exemption list. The time is very short for the asbestos claimants to evaluate and digest the Bar Date Notice Package, Mr. Newton says. ASARCO's potential across-the-board objections to numerous asbestos claims will initiate separate "contested matters". Given that ASARCO has close to 100,000 asbestos claims, the individual adjudications will take years to be accomplished, Mr. Newton says. Nevertheless, the Asbestos Committee recognizes the Debtors' need for information concerning the amount of their potential asbestos exposure. Thus, the Asbestos Committee has been negotiating with the Debtors for certain modifications to the Debtors' proposed Asbestos Claims Electronic Database Instructions. The Asbestos Committee proposes these modifications to the bar date procedures: (a) The initial date for providing electronic database information to the Debtors should be extended to least until June 30, 2006. Asbestos claimants will need at least 60 days to cure any alleged deficiencies in providing the electronic database information. The period between the publication of the Exemption List and the deadline to file asbestos proofs of claim should be extended from 20 days to six weeks. (b) Rather than requiring 100% compliance, the Debtors should deem acceptable a law firm that provides relevant electronic database information for 80% of its asbestos victims. (c) Title of the cover letter should be changed to "Important Information Regarding Option to Submit Asbestos Claims Electronic Database In Lieu of the Asbestos-Related Proof of Claim Form". The Debtors' proposed title is misleading in that it suggests that the document is merely a "cover letter" when in fact it imposes important procedural hurdles. (d) Certain of the Preliminary Questions should be amended. (e) The "unique client identifier" may implicate privileged work product issues, and is irrelevant to any issue involving the Debtors. The question should be stricken from the Asbestos Claims Electronic Database. (f) The Asbestos Committee also proposes changes to the sections of the Asbestos Claims Electronic database dealing with pending lawsuits. (g) Any reference to the phrase "derivative claim" should be stricken as confusing and requiring asbestos claimants to provide a legal opinion. Without the modifications, the Asbestos Committee asks the Court to reject the proposed Bar Dates. (3) U.S. Government The United States Department of the Interior oversees mining activities on Indian lands through its Bureau of Indian Affairs, Bureau of Land Management and Minerals Management Service. The United States of America, on behalf of the Department of Interior, asks the Court to deny ASARCO's request to the extent that it seeks to exclude from the category of "Rejection Claims" any claims which might arise out of or relate to leases of Indian lands by ASARCO on the San Xavier Reservation -- Mission Mine Lease Claims -- to the extent that those leases remain subject to rejection by ASARCO. ASARCO's San Xavier Mission Mine operations are subject to two leases with BIA, acting on behalf of individual Indian landowners who were allotted land under the General Allotment Act of 1987; and 21 separate leases with the allottees themselves. John Stemplewicz, Esq., in Washington, D.C., asserts that because all Mission Mine Lease Claims are excluded from "Rejection Claims", the Bar Date Motion apparently imposes the burden of creating hypothetical claims based on theoretical rejections which may never occur if ASARCO exercises the option it retains to assume the leases. This requirement would be imposed on no other unexpired lease or executory contract. "The Motion provides no rationale for imposing this extraordinary obligation on Mission Mine lessors or for differentiating between Mission Mine Lease rejection claims and other rejection claims," Mr. Stemplewicz tells the Court. The Bar Date Motion's proposed requirement -- to file claims that do not and may never exist -- is anomalous, Mr. Stemplewicz argues. The pre-rejection claim filing requirement is not only anomalous, it is also impermissible under the Bankruptcy Code. ASARCO Seeks Protective Order In its Bar Date Motion, ASARCO asked the Court to direct asbestos claimants opting to submit a hard-copy proof of claim to include their social security number so that claims can be tracked and matched. Asbestos claimants can obtain an exemption from filing a proof of claim if they provide information, including their social security number, in electronic form. To protect the privacy interests of the asbestos claimants, ASARCO asks the Court to enter an order limiting the dissemination, access, and use of asbestos claimants' social security numbers. Specifically, ASARCO asks the Court to rule that information relating to social security numbers provided by asbestos claimants may only be used for purposes of its bankruptcy proceeding and may not be disclosed to anyone other than the attorneys for the Debtors and those experts who sign an undertaking not to disclose the social security numbers to third parties. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Permits Unions to File Omnibus Proofs of Claim ---------------------------------------------------------- Numerous groups of ASARCO LLC's employees are or have been represented for purposes of collective bargaining by labor organizations, including: * United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union and certain of its local union affiliates; * Local 2181 of International Association of Machinists and Aerospace Workers; * Locals 518, 570, and 602 of the International Brotherhood of Electrical Workers; * Local 741 of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry; * Local 627 of the International Brotherhood of Boiler Makers, Iron Ship Builders, Black Smiths, Forgers and Helpers; * Millwrights Local 1914; * the General Teamsters, State of Arizona, Local 104; and * Local 428 of the International Union of Operating Engineers. Representatives of the United Steelworkers have advised ASARCO that they intend to file an omnibus proof of claim, on behalf of their bargaining unit employees, retirees and benefit-plan dependents that it represents, concerning obligations arising under USW's current and previous collective bargaining agreements with ASARCO. Accordingly, ASARCO enters into a stipulation to authorize the United Steelworkers and other labor organizations to file omnibus proofs of claim, on behalf of their bargaining unit employees, retirees and benefit-plan dependents. The USW proof of claim will include claims for damages incurred by USW-represented retirees as asserted in the adversary proceeding titled ASARCO Incorporated, et al. v. United Steelworkers of America, et al., filed in the United States District Court for the District of Arizona, Phoenix Division. The proceeding has been transferred to United States Bankruptcy Court for the Southern District of Texas. In the event that a particular labor organization files a Union Proof of Claim, the parties agree that no other proof of claim need to be filed by a bargaining unit employee, retiree or dependent. The stipulation, however, does not preclude an employee, retiree, or dependent from filing his own proof of claim if he elects. Nor does the stipulation exempt an employee, retiree or dependent from complying with any order or notice in the Debtors' bankruptcy cases, including any notice of the deadline to file proofs of claim, with respect to any claim that is not concerning an obligation arising under ASARCO's CBAs and encompassed by a Union Proof of Claim. The stipulation will not be held to obligate any labor organization, other than the USW, to file a Union Proof of Claim. However, where a labor organization has filed a Union Proof of Claim, ASARCO will be privileged to compromise any obligation arising under that Union Proof of Claim through dealing with the labor organization that filed the proof of claim. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASSET BACKED: Moody's Rates Two Certificate Classes at Low-B ------------------------------------------------------------ Moody's Investors Service assigned Aaa rating to the senior certificates issued by Asset Backed Securities Corporation, Home Equity Loan Trust, Series OOMC 2006-HE3, and ratings ranging from Aa2 to Ba2 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. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, overcollateralization, and an interest rate swap agreement. Moody's expects collateral losses to range from 4.90% to 5.40%. Option One Mortgage Corporation will service the loans. Moody's assigned Option One its top servicer quality rating as a primary servicer of subprime loans. The complete rating actions are: Asset Backed Securities Corporation, Home Equity Loan Trust, Series OOMC 2006-HE3 * Class A1, Assigned Aaa * Class A2, Assigned Aaa * Class A3, Assigned Aaa * Class A4, Assigned Aaa * Class A5, Assigned Aaa * Class M1, Assigned Aa2 * Class M2, Assigned Aa3 * Class M3, Assigned A1 * Class M4, Assigned A2 * Class M5, Assigned A3 * Class M6, Assigned Baa1 * Class M7, Assigned Baa2 * Class M8, Assigned Baa3 * Class M9, Assigned Ba1 * Class M10, Assigned Ba2 AZTAR CORP: Ameristar's $47 Per Share Offer Tops Pinnacle's Bid --------------------------------------------------------------- Aztar Corporation's (NYSE: AZR) Board of Directors determined that a further revised definitive offer received on April 24, 2006, from Ameristar Casinos, Inc. to acquire Aztar is a superior proposal when compared to the terms of Aztar's current merger agreement, as amended, with Pinnacle Entertainment, Inc. Terms of Ameristar's Revised Offer Ameristar would acquire Aztar in a merger transaction in which the holders of Aztar common stock would receive $47 per share in cash and the holders of Aztar's Series B preferred stock would receive $497.09 per share in cash. The revised definitive offer included a signed merger agreement. Ameristar also provided a signed financing commitment letter. Ameristar stated in its revised definitive offer that the offer will remain open until, and will automatically expire if not accepted by, 2:00 p.m. (Las Vegas time) on Friday, April 28, 2006. Terms of the Aztar-Pinnacle Agreement Aztar must wait three business days before it can terminate the merger agreement with Pinnacle and enter into a merger agreement with another party. Aztar and Pinnacle amended their merger agreement on April 23, 2006 to increase the purchase price for each share of Aztar common stock to $45.00 in cash. Aztar's Board is not making any recommendation at this time with respect to the revised Ameristar offer, and there can be no assurance that Aztar's Board will approve any such transaction or that a transaction will result. About Ameristar Casinos Based in Las Vegas, Nevada, Ameristar Casinos, Inc. -- http://www.ameristarcasinos.com/-- engages in the development, ownership, and operation of casinos and related entertainment facilities in the United States. About Aztar Corporation Aztar Corp. -- http://www.aztarcorp.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. remained 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. B/E AEROSPACE: Earns $13.8 Million of Net Income in First Quarter ----------------------------------------------------------------- B/E Aerospace, Inc. (Nasdaq: BEAV), recorded first quarter revenues of $247.2 million. First quarter operating earnings of $31.1 million were 56.3% higher than the same period in the prior year. First quarter operating margin of 12.6% expanded by 250 basis points versus the same period in the prior year. Earnings before income taxes of $19.8 million more than quadrupled versus the same period in the prior year, despite $1.8 million charge for early debt extinguishment. Net earnings for the current quarter were $13.8 million, up $9.7 million or 237% versus $4.1 million in the same period in the prior year. Record backlog at March 31, 2006, stood at $1.3 billion, an increase of approximately 70% from backlog at March 31, 2005, and nearly 20% from December 31, 2005. Bookings for the quarter ended March 31, 2006, were in excess of $500 million, a record for any quarter in the company's history. Operating earnings for the first quarter of 2006 of $31.1 million increased by 56.3% as compared to the same period last year. The substantial increase in operating earnings was driven by continued revenue growth, earnings growth and margin expansion in each of B/E's commercial aircraft, distribution and business jet segments. Interest expense for the first quarter of 2006 of $9.5 million was $5.6 million lower than interest expense recorded in the same period in the prior year. Interest expense decreased in the first quarter of 2006 as a result of the early retirement of $250 million of senior subordinated notes in January 2006. The company recorded a $1.8 million charge in the first quarter of 2006 related to this debt prepayment. Liquidity and Balance Sheet Metrics In January 2006 the company redeemed all of its $250 million of senior subordinated notes due 2008 with the net proceeds of its successful December 2005 common stock offering. At March 31, 2006 the company's net debt-to-net capital ratio was 32%. Net debt at March 31, 2006, stood at $288 million, which represents total debt of approximately $429 million, less cash and cash equivalents of approximately $140 million. At March 31, 2006, there were no bank borrowings outstanding, and no principal payments are due on the company's long-term debt until 2010. Depreciation and amortization for the three months ended March 31, 2006, and 2005 were $7.0 million and $7.2 million. Capital expenditures for the three months ended March 31, 2006, and 2005 were $4.4 million and $3.2 million. Recent Program Wins and Record Backlog Bolster Outlook The company generated record bookings and backlog during the first quarter of 2006 driven primarily by aftermarket premium class retrofit awards, including: -- United Airlines selected the company to retrofit its entire wide-body fleet with premium class products in a program initially valued at approximately $165 million. This retrofit program, the industry's largest to date, has now been upgraded to $215 million and will begin to deliver in 2007; and -- The company was awarded over $190 million of follow-on orders from existing customers for a variety of seating products, a broad array of food and beverage preparation and storage equipment, and engineering and integration programs. Bookings for the quarter of approximately $500 million, which increased by over $200 million versus the same quarter in the prior year, drove the company's backlog to a record $1.3 billion, representing an increase of over 70% as compared to the March 31, 2005 backlog. "Bookings for the quarter set another record for the company. The United Airlines premium class retrofit award was particularly gratifying due to both its size, the industry's largest, and the scope of the project. Equally important were the numerous follow-on orders we received during the quarter from existing customers to retrofit the premium classes of their aircraft. We expect these program awards to continue to expand our market shares as these programs begin to deliver, as our customers begin to take delivery of larger numbers of new aircraft, and as they expand their existing retrofit programs to address their coach class cabins," said Amin J. Khoury, Chairman and Chief Executive Officer of B/E Aerospace. Commenting on the strength of the market, Mr. Khoury continued, "As we've mentioned before, we are particularly encouraged by the continued strong RFQ activity and ongoing discussions with our customers. The airline activity level at the recent Hamburg aircraft interiors show reinforced the strong interest by the airlines to invest in cabin interior upgrades. Virtually every major international airline is either in the process of upgrading the premium class compartments of their international fleets of twin-aisle aircraft or in discussions to do so. The upgrade discussions include reconfiguration and integration engineering programs, premium class seating, food and beverage preparation and storage equipment and mood lighting products. Additionally, the international airlines are now beginning to address premium class requirements for their new buy wide-body aircraft." "In addition, our stronger than expected bookings, our record backlog level, robust industry conditions and the high level of customer interest have bolstered our confidence and significantly increased our visibility into 2007 and 2008," concluded Mr. Khoury. About B/E Aerospace B/E Aerospace, Inc. -- http://www.beaerospace.com/-- is the world's leading manufacturer of aircraft cabin interior products, and a leading aftermarket distributor of aerospace fasteners. B/E designs, develops and manufactures a broad range of products for both commercial aircraft and business jets. B/E manufactured products include aircraft cabin seating, lighting, oxygen, and food and beverage preparation and storage equipment. The company also provides cabin interior design, reconfiguration and passenger-to-freighter conversion services. Products for the existing aircraft fleet -- the aftermarket -- generate about 60% of sales. B/E sells and supports its products through its own global direct sales and product support organization. * * * As reported in the Troubled Company Reporter on Jan. 16, 2006, Moody's Investors Service raised the ratings of B/E Aerospace, Inc., Corporate Family Rating to B1 from B3. Moody's says the ratings outlook is stable. BASIC ASSET: Moody's Rates Certificate Classes M-6 & M-7 at Low-B ----------------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the senior certificates issued by Basic Asset Backed Securities Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1, and ratings ranging from Aa2 to Ba2 to the subordinate certificates in the deal. The securitization is backed by Encore Credit Corp., Funding America, LLC, and various other originated adjustable-rate and fixed-rate subprime mortgage loans acquired by BICEP Owner Trust and BICEP Owner Trust II. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, overcollateralization, and an interest rate swap agreement. Moody's expects collateral losses to range from 5.50% to 6.00%. Ocwen Loan Servicing, LLC will service the loans and Wells Fargo Bank, N.A. will act as master servicer. Moody's assigned Ocwen its servicer quality rating of SQ2- as a primary servicer of subprime 1st-lien loans and Wells Fargo its top servicer quality rating as a master servicer. The complete rating actions are: Basic Asset Backed Securities Trust 2006-1, Mortgage Pass-Through Certificates, Series 2006-1 * Class A-1, Assigned Aaa * Class A-2, Assigned Aaa * Class A-3, Assigned Aaa * Class M-1, Assigned Aa2 * Class M-2, Assigned A2 * Class M-3, Assigned Baa1 * Class M-4, Assigned Baa2 * Class M-5, Assigned Baa3 * Class M-6, Assigned Ba1 * Class M-7, Assigned Ba2 BEAR STEARNS: DBRS Rates $5.9 Million Class II-A-4 Notes at B ------------------------------------------------------------- Dominion Bond Rating Service assigned these ratings to the group II NIM Notes, Series 2006-16, issued by Bear Stearns Structured Products Inc. NIM Trust 2006-16: * $23.4 million, Class II-A-1 -- New Rating A (low) * $2.9 million, Class II-A-2 -- New Rating BBB (low) * $1.4 million, Class II-A-3 -- New Rating BB (high) * $5.9 million, Class II-A-4 -- New Rating B The NIM Notes are backed by a 100% interest in the Class C Certificates issued by SACO I Trust, 2006-4. The underlying Class C Certificates will be entitled to receive the excess cash flows as well as prepayment charges, if any, generated by the Mortgage Loans each month after payment of all the required distributions. The NIM Notes will also be entitled to the benefits of the Underlying Swap Agreement with Bear Stearns Financial Products, Inc. Payments on the group II NIM Notes will be made on the 25th of each month commencing in April 2006. Interest and then principal will be paid sequentially to the group II Class II-A-1, II-A-2, II-A-3, and II-A-4 noteholders until the principal balance of each such class has been paid to zero. Any remaining amounts will be paid in full to the holders of the Class C Notes issued by the NIM Trust. The Class C Notes as well as groups I, III, and IV NIM Notes are not rated by DBRS. The mortgage loans in the Underlying Trust were originated or acquired by various originators, including American Home Mortgage Investment Corp. and New Century Mortgage Corp. All loans are fixed-rate, second-lien mortgage loans, which are subordinate to the senior-lien mortgage loans on the respective properties. For more information on this credit or on this industry, please visit http://www.dbrs.com/ BILLING SERVICES: Moody's Rates Two Proposed Facilities at Low-B ---------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the proposed $205 million first lien credit facility and a B3 rating to the proposed $55 million second lien credit facility of certain operating subsidiaries of Billing Services Group Limited, a publicly traded holding company. Moody's also assigned a B1 corporate family rating to BSG and concurrently withdrew the B2 corporate family rating previously assigned to Billing Concepts, Inc. The rating outlook is stable. Proceeds from the first and second lien term loans are expected to be used to refinance U.S. and European borrowings incurred in 2005 in connection with a recapitalization and the acquisition of EDS Interoperator Services GmbH, a provider of billing and clearing solutions for European wireless providers. The primary factors supporting BSG's B1 corporate family rating are the increased customer, geographic and service diversification after the EDS IOS acquisition, leading market positions, solid cash flow and leverage metrics for the ratings category and good prospects for volume growth in European wireless markets. The key factors constraining the ratings are the continuing shift towards wireless and internet telephony in the North American market, weak financial condition of certain members of its North American customer base and aggressive price competition in the European wireless market. Moody's assigned this rating to BSG: * Corporate family rating, rated B1 Moody's assigned these ratings to Billing Services Group North America, Inc., a wholly owned U.S. operating subsidiary of BSG: * $85 million first lien term loan facility due 2012, rated B1 * $15 million first lien revolving credit facility due 2011, rated B1 * $55 million second lien term loan facility due 2013, rated B3 Moody's assigned this rating to BSG Clearing Solutions GmbH, a wholly owned German operating subsidiary of BSG: * $105 million first lien term loan facility due 2012, rated B1 Moody's prospectively withdrew these ratings of Billing Concepts, Inc.: * $102 million first lien credit facility due 2010 comprised of a $10 million revolving credit facility and a $92 million term loan facility, rated B2 * $40 million second lien term loan due 2011, rated Caa1 * Corporate family rating, rated B2 The ratings are subject to the review of the final executed documents. The stable ratings outlook anticipates relatively flat revenues and operating profit in the intermediate term with free cash flow used to reduce term loan borrowings. Although BSG is expected to benefit from roaming volume growth and strong margins in Europe, price competition may limit profitability improvements. In North America, declining wireline volume should be largely offset by increased outsourcing and growth in billing for non-regulated services. Given the company's relatively small size for the rating category and concern as to whether BSG can substantially improve profitability from current levels, Moody's does not expect to upgrade the ratings in the near term. However, sustainable profitability growth over the next 18 months accompanied by accelerated debt reduction such that Debt to EBITDA declines to under 3 times could lead to a change in the outlook to positive. Such a sustained increase in profitability would demonstrate that BSG can grow despite a declining wireline market in North America and strong competition in Europe. The ratings could be downgraded if profitability declines substantially from current levels because of pricing pressures, lost customers or volume declines from existing customers. A large debt financed acquisition or recapitalization would also likely pressure the rating. The B3 rating assigned to the second lien credit facility recognizes the effective subordination of second lien debt to a substantial level of first lien debt and substantially lower expected recovery values in the event of default. BSG, with North American headquarters in Glenview, Illinois and European headquarters in Russelsheim, Germany, is a publicly traded global provider of billing, settlement, payment, clearing and risk management solutions for communication service providers. Revenues for the year ending Dec. 31, 2005, on a pro forma basis for the acquisition of EDS IOS, were $183 million. CAMBRIAN COMMUNICATIONS: Judge Mitchell Closes Chapter 11 Cases --------------------------------------------------------------- The Hon. Stephen S. Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia entered a final decree closing Cambrian Communications LLC, nka Ordivician Communications LLC and its debtor-affiliate, Cambrian Holdings LLC, nka Ordovician Holdings LLC's chapter 11 cases. The Debtors told the Court that their Plan has been substantially consummated and closing their chapter 11 cases is appropriate and is in the best interest of the Debtors and their estates. Cambrian Communications LLC, nka Ordivician Communications LLC, and its affiliate, Cambrian Holdings LLC, nka Ordovician Holdings LLC, filed for chapter 11 protection on September 20, 2002 (Bankr. E.D. Va. Case Nos. 02-84699 & 02-84700). Bradford F. Englander, Esq., at Linowes and Blocher LLP represented the Debtors. When the Debtors filed for protection from its creditors, they estimated assets between $10 million and $50 million and debts between $50 million and $100 million. The Court confirmed the Debtors' First Amended Joint Plan of Liquidation on November 17, 2003. CAMPBELL RESOURCES: Inks $15.5 Million Equity Financing Deal ------------------------------------------------------------ Campbell Resources Inc. (TSX: CCH, OTCBulletin Board: CBLRF) is preparing a Plan of Arrangement and entered into agreements for up to $15.5 million in financing. In addition, Campbell has executed a management and operating agreement with Nuinsco Resources Limited. These transactions are designed to allow Campbell to cease being subject to the Companies' Creditors Arrangement Act and to realize the value of its assets with a viable financial and operating plan. Overall, these transactions are designed to enable Campbell: -- to double production at its Copper Rand mine to 350,000 tonnes per year; -- to develop additional resources at its Cedar Bay deposit (an extension of the Copper Rand mine); -- to complete development and start up of its Corner Bay copper project; -- to more efficiently and cost effectively operate its Joe Mann gold mine; and -- to align itself with a management team at Nuinsco that has many years of mine development, operations and finance experience. Financings The financing agreements are: -- Sprott Securities Inc. will act as agent of Campbell to sell, on a best efforts private placement basis, up to 100 million special warrants, at a price of $0.08 per special warrant for gross proceeds of up to $8 million. Each special warrant will be exercisable to acquire, for no additional consideration, one unit of Campbell. -- Nuinsco has agreed to subscribe for 31,250,000 units, over and above the Brokered Placement, at the Subscription Price for gross proceeds of $2.5 million. -- Concurrent with the Brokered Placement and the Nuinsco Placement, Campbell will proceed with a rights offering to its shareholders of up to 62,500,000 units at a price of $0.08 per unit, for gross proceeds of up to $5 million. In the event that the Rights Offering is not fully subscribed, the Agent and Nuinsco will have the option to take up any shortfall on a prorata basis to their equity financings. The units to be issued pursuant to each of the three financings shall consist of one common share and one half of one common share purchase warrant. Each whole common share purchase warrant shall be exercisable at any time for one common share at a price of $0.15 per share for a period of two years following closing. Campbell shall have the right, 12 months after closing, to call the outstanding warrants should Campbell common shares trade above $0.30 for 20 consecutive trading days. The net proceeds of the Brokered Placement, the Nuinsco Private Placement and the Rights Offering will be used: -- to fund further development to expand production at the Copper Rand mine, -- to finance development of the Corner Bay deposit, -- for general working capital and -- for certain debt retirement obligations up to a maximum of $4 million. Terms of the Brokered Placement Completion of the Brokered Placement is subject to certain conditions including, but not limited to completion of satisfactory due diligence by the Agent and the receipt of all necessary regulatory approvals. The proceeds from the sale of the special warrants shall be held in escrow and will be released to Campbell upon the receipt of all required creditholder and other required approvals for the Plan of Arrangement including court approval and the expiry of the 21-day appeal period. Campbell shall pay a commission to the Agent of 6% of the gross proceeds of the Brokered Placement. In addition, the Agent will be issued on the closing date broker warrants equal to 6% of the number of special warrants purchased under the Brokered Placement. Each Broker Warrant shall be exercisable at any time for one common share at $0.08 per share for a period of two years from the closing date. Closing is scheduled to occur on or about May 17, 2006. Terms of the Rights Offering The Rights Offering will be made in all of the jurisdictions of Canada and in other jurisdictions where Campbell is eligible to make such offer. The rights, shares and warrants issuable upon exercise of the rights are not being offered to residents of the United States of America or any country other than Canada. Notwithstanding the foregoing, ineligible shareholders who establish, to the satisfaction of Campbell, that the receipt by them of rights and the issuance to them of shares and warrants upon the exercise of the rights will not be in violation of the laws of the jurisdiction of their residence, will be allowed to exercise the rights. Operating Management Agreement The Management and Operating Agreement is a key part of Campbell's plan going forward. Under the Management and Operating Agreement, Nuinsco will provide management services for Campbell's development and mining activities, including development to increase production at the Copper Rand mine, development of the Corner Bay deposit and operation of the Joe Mann gold mine. Nuinsco has completed a study and prepared a development and mining plan which could provide the additional production necessary to turn the Copper Rand mine into a profit making venture and to bring the Corner Bay deposit into production. Under the Management and Operating Agreement, Nuinsco will receive: -- 2 million common shares of Campbell upon commencement of the provision of services under the Operating Management Agreement; -- 1 million common shares of Campbell upon completion of the Brokered Placement, Nuinsco Placement and Rights Offering; -- $25,000 plus 200,000 common shares of Campbell per month, in advance (up to a maximum of 4 million common shares); and -- Two-year warrants which on exercise will equate to 20% of the issued and outstanding common shares of Campbell, on a fully diluted basis. The exercise price of the warrants will be $0.10 per share. In addition, Nuinsco shall be entitled to appoint two individuals as directors of Campbell. Sprott Securities Inc. has also been appointed a financial advisor to Campbell for this transaction. About Nuinsco Headquartered in Toronto, Ontario, Nuinsco Resources Limited -- http://www.nuinsco.com/-- is a growth-oriented, multi-commodity mineral exploration and development company focused on growth through uranium, nickel, copper, zinc and gold exploration and development in world-class mineralized belts in Canada and Turkey. Shares of Nuinsco trade on the Toronto Stock Exchange under the symbol NWI. About Campbell Resources Headquartered in Montreal, Quebec, Campbell Resources Inc. -- http://www.ressourcescampbell.com/-- is a mining company focusing mainly in the Chibougamau region of Quebec, holding interests in gold and gold-copper exploration and mining properties. CARDTRONICS INC: Audit Delay Prompts S&P's Negative Outlook ----------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Houston, Texas-based Cardtronics Inc. to negative from stable, following the company's failure to complete its 2005 fiscal year audit within the period required by its indenture. The corporate credit rating is affirmed at 'B+', and the subordinated debt is affirmed at 'B-'. "The delay in completing the audit has been caused by the time required to resolve certain accounting issues, primarily accounting for intangible assets," said Standard & Poor's credit analyst Lucy Patricola. The resolution of these issues is not expected to have an impact on revenues, EBITDA or cash flow. Lenders to the company's credit facility have extended their deadline for completion to June 30, 2006. Still, the outlook revision reflects the potential that finalized statements may be weaker than the company's preliminary, unaudited results or that an extended delay may violate covenants under the company's credit agreements. The ratings reflect: * the company's short operating history and acquisition-based growth in a mature and consolidating industry; * high leverage; and * aggressive growth-related capital spending. These factors partly are offset by its leading position in the U.S. as an independent ATM provider, and its recurring revenue streams. Cardtronics owns about 40% of its network of approximately 26,000 ATMs in the U.S., and provides services for the balance. Cardtronics' ATMs are located in nonbanking sites, typically convenience locations such as grocery stores, drugstores and retailers, in the U.S. and the U.K. Contracts run for five to seven years, providing stable and recurring revenue streams. The company's top 15 customers account for 40% of revenues. Total lease adjusted debt is about $270 million as of Dec. 31, 2005. CLARION TECHNOLOGIES: Covenant Defaults Prompt Going Concern Doubt ------------------------------------------------------------------ BDO Seidman, LLP, raised substantial doubt about Clarion Technologies, 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 points to the company's recurring losses from operations, working capital deficit, accumulated deficit and violation of certain covenants in its loan agreements. Covenant Defaults The company reports that pursuant to its Senior Loan Agreement and Senior Subordinated Loan Agreement, which became effective in January 2006, certain restrictive financial covenants were placed related to: * targets for earnings before interest, taxes, depreciation, and amortization, * fixed charge coverage ratios, * total liabilities to tangible capital fund ratios, * working capital levels, and * limits on capital expenditures. At Dec. 31, 2005, there were no restrictive financial requirements in effect, and therefore, the company was in full compliance with its loan agreements. However, as of March 31, 2006, the company defaulted on these covenants under the two loan agreements: (i) minimum EBITDA, (ii) the senior debt to EBITDA ratio, and (iii) total liabilities to tangible capital funds ratio. The company also failed to file its annual report on time, which constituted another violation under the two loan agreements. The company however says that despite these defaults, its debts have not been accelerated. The company says that it has been negotiating with its lenders to obtain default waivers and amendments to both credit facilities, but as of Apr. 21, 2006, the company has been unable to on the terms of the waivers and amendments. The company says that if it cannot reach agreement with its lenders, the defaults will allow the lenders to discontinue lending or declare all borrowings outstanding to be due and payable. The company reports that although its liquidity position is stable, its lenders expect an improvement in operations as well as increase in liquidity. 2005 Financials For the year ended Dec. 31, 2005, the company reported a net loss of $5,659,000 on net sales of $145,515,000. This compares to a net loss of $4,709,000 on net sales of $117,698,000 for the year ended Dec. 25, 2004. At Dec. 31, 2005, the company had $20,019,000 in current assets and current liabilities of the $60,814,000 resulting in a working capital deficit of $40,795,000. Accumulated deficit at Dec. 31, 2005 totaled $118,273,000. At Dec. 31, 2005, the company's balance sheet showed an $85,923,000 stockholders' deficit compared to a $67,543 deficit at Dec. 25, 2004. A full-text copy of the company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?84c About Clarion Technologies Headquartered in Grand Rapids, Michigan, Clarion Technologies, Inc. -- http://www.clariontechnologies.com/-- creates products and parts for the automotive, furniture and consumer goods industry. CLARION TECHNOLOGIES: CFO Walsh Says Bankruptcy Not an Option ------------------------------------------------------------- Edmund Walsh, chief financial officer of Clarion Technologies Inc., disclosed that the company has no plans to seek bankruptcy protection, Chris Knape of the Grand Rapids Press reports. This statement was in response to BDO Seidman LLP's raising doubts over the company's ability to continue as a going concern. The auditing firm cited recurring losses from operations from operations, working capital deficit, accumulated deficit and loan defaults. Mr. Knape reports that the company hopes to resolve the loan defaults over the next few weeks. Mr. Knape reports that the company believes its viability is not a question despite the auditor's opinion. "We certainly have some balance sheet issues to work out between our senior and junior lenders, and we fully expect those to be worked out within a short period of time." Mr. Knape quotes Mr. Walsh. Mr. Knape reports that the company has other options on the table aside from bankruptcy. About Clarion Technologies Headquartered in Grand Rapids, Michigan, Clarion Technologies, Inc. -- http://www.clariontechnologies.com/-- creates products and parts for the automotive, furniture and consumer goods industry. COLLINS & AIKMAN: Toyota's Expedited Lease Decision Request Fails ----------------------------------------------------------------- The Hon. Steven W. Rhodes of the U.S. Bankruptcy Court for the Eastern District of Michigan denied Toyota Motor Credit Corporation's renewed request to compel Collins & Aikman Corporation and its debtor-affiliates to decide whether to assume, assume and assign, and reject an equipment lease under a Master Lease Agreement dated Nov. 1, 1999. As reported in the Troubled Company Reporter on Jan. 30, 2006, the Court gave the Debtors until May 10, 2006, to decide on the Toyota lease. The Court however allowed Toyota to seek a reduction of the lease decision period. At an inspection of some of the Equipment at the Debtors' Morristown plant, Toyota discovered that Debtors have been using the Equipment for hours in excess of the agreed hours of use pursuant to the Agreement. Toyota charged that the Debtors used the Equipment in excess of 6,000 hours per year, 4,000 hours more than what was agreed. According to Toyota, the Debtors' continued use of the Equipment would cause depreciation beyond that contemplated in the Agreement. The misuse or abuse of the Equipment could also damage it and cause possible abandonment. Judge Rhodes directs the Debtors to provide Toyota with all information necessary to determine the postpetition over usage for the forklifts that are the subject of the Leases held by Toyota. Toyota will be entitled to an administrative expense claim for the Postpetition Over Usage. The Debtors will pay Toyota for the Postpetition Over Usage without further delay after the submission of an invoice by TMCC to the Debtors. 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) COLLINS & AIKMAN: GM to Appeal Transition Plan to District Court ---------------------------------------------------------------- General Motors Corporation will appeal to the United States District Court for the Eastern District of Michigan from the U.S. Bankruptcy Court for the Eastern District of Michigan's order denying Collins & Aikman Corporation and its debtor-affiliates' request to assist GM in the resourcing and transition of services. As reported in the Troubled Company Reporter on April 4, 2006, the Bankruptcy Court rejected the Debtors' request to assist GM in resolving commercial and legal issues related to the resourcing and transition of their supply agreements based on a sealed objection submitted by the Official Committee of Unsecured Creditors. The Debtors manufactured cockpit, instrument panel and center consoles for GM under a supply program. GM elected to resource the GM Program from the Debtors to another supplier and requested the Debtors to assist in the transition. Pursuant to the GM transition agreement: (a) the Debtors will cooperate with and assist GM in the resourcing of the GM Program to another supplier by providing certain transition services; (b) GM will reimburse the Debtors for expenses incurred in connection with the transition services; (c) GM will transfer and award certain existing and future business to the Debtors; (d) The Debtors will grant GM a license to use certain intellectual property necessary for the manufacture and production of certain GM programs; and (e) GM will issue tooling purchase orders to the Debtors and fund the tooling. 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) COLLINS & AIKMAN: Court Approves Stipulation with Active Mould -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan approved a stipulation resolving Collins & Aikman Corporation, its debtor-affiliates and Active Mould & Design, Ltd.'s dispute over the ownership of certain molds delivered to the Debtors prior to their bankruptcy filing. As reported in the Troubled Company Reporter on Feb. 27, 2006, Active Mould sought relief from the automatic stay to enforce its alleged statutory lien rights on the molds. The Debtors countered that Active Mould failed to establish that it holds a valid, properly and timely perfected and enforceable security interest in the molds. Stipulation To resolve their dispute, the Debtors agree, without consenting to the validity, priority or enforceability of Active Mould's liens, to make $30,655 per month adequate protection payments to Active Mould, on account of the molds. The payments will be applied to and reduce the principal amount of the alleged indebtedness. Payments will be made retroactive to December 2005. The Debtors agree to maintain insurance on the Molds in an amount reasonably sufficient to replace the Molds and no disbursement of any insurance proceedings will occur without Court order. The parties agree that the Adequate Protection Payments will continue until the earlier of: a. the Molds no longer being in the possession and use of the Debtors; b. the confirmation of a plan of reorganization for the Debtors, the terms of which supersede the Stipulation; or c. the filing and service of a Termination Notice. Active Mould or the Debtors can terminate the stipulation at any time after Aug. 1, 2006, on 30 days' prior written notice to all interested parties. The $30,655 monthly payment is an aggregate figure the Debtors derived based on their exclusive determination regarding the molds they used for programs for each of DaimlerChrysler, General Motors, and Mercedes. In the event that the Debtors cease to be in possession of all of the molds used for a particular customer program for any of DaimlerChrysler, GM and Mercedes, the $30,655 Adequate Protection Payment will be reduced by: * $10,812 with respect to DaimlerChrysler; * $13,066 with respect to General Motors; and * $6,777 with respect to Mercedes. 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) COMPRESSION POLYMERS: Santana Deal Cues Moody's to Hold Ratings --------------------------------------------------------------- Moody's Investors Service affirmed the B2 Corporate Family Rating of Compression Polymers Holding Corporation following the announcement of its pending acquisition of Santana Holdings Corporation. In March, CPHC signed a definitive letter of intent to acquire Santana for approximately $34 million in a stock purchase transaction. CPHC intends to finance the acquisition with a combination of: (i) a $30 million add-on to its existing senior unsecured floating rate notes; and (ii) borrowing under its existing $40 million revolver. The rating outlook is stable. Santana is a significant competitor in the commercial bathroom partition sector and produces a product line comprising solid synthetic partitions, shower compartments and lockers that is highly complementary to that of CPHC's Comtec(TM) line. Santana generated fiscal 2005 revenues of approximately $32 million. Moody's views the acquisition favorably as: 1) it is neutral to pro forma leverage and interest coverage and requires little additional capital; 2) significantly strengthens CPHC's competitive position in the bathroom partition market; and 3) presents, in our view, minimal integration risks given the high level of familiarity and proximity between the two companies. Pro forma for the acquisition, CPHC will have approximately $252 million in total debt, or 5.7 times LTM pro forma EBITDA of $44 million. Pro forma EBITDA would cover pro forma cash interest expense approximately 1.6 times. The company's cash flow generation is expected to be modest through 2007 given increased interest expense and significant capital spending associated with increasing production requirements to meet increased demand for AZEK(R) products. As a result, CPHC's ability to de-lever in the near term is predominantly a function of its ability to increase EBITDA. Liquidity is good, as reflected in the affirmed SGL-2 rating, with an estimated $5 million cash on hand at closing and over $30 million of availability under the $40 million revolver. Ratings Affirmed: * B2 Corporate Family Rating; * B2 for the $95 million senior unsecured floating rate notes, due 2012; and * B2 for the $150 million senior unsecured fixed rate notes, due 2013. * SGL-2 rating Stable outlook. CPHC's ratings reflect the speculative characteristics of the credit and are constrained by its: 1) modest free cash flow generation; 2) high debt leverage; and 3) dependence on plastic resin prices. At the same time, the ratings recognize: 1) the strong growth in the Company's sales, driven by the AZEK(R) product line; 2) the pricing power exhibited in the Company's branded products that mitigates the margin pressure from increasing resin prices; and 3) the potential for continued profitable growth due to the recent investments in increased capacity. The stable rating outlook reflects: 1) Moody's expectations of continued AZEK(R) volume growth as customer penetration increases; and 2) the Company's good liquidity. Moody's previous rating action on CPHC was the assignment of the B2 Corporate Family Rating in May 2005 in connection with the acquisition of the Company by AEA Investors LLC. In June 2005, Moody's assigned B2 ratings to both the Company's $65 million of senior unsecured floating rate notes and its $150 million of senior unsecured fixed rate notes, which rank pari passu with one another. Headquartered in Scranton, Pennsylvania, CPHC is a manufacturer and fabricator of engineered and branded synthetic products designed to replace wood and metal in a variety of building materials and industrial applications. Pro forma for the proposed acquisition, CPHC generated fiscal 2005 revenues of approximately $250 million. COMPRESSION POLYMERS: S&P Affirms $245 Million Notes' B- Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Moosic, Pennsylvania-based Compression Polymers Holding Corp. At the same time, based on preliminary terms and conditions, Standard & Poor's affirmed its 'B-' unsecured rating on Compression's amended: * $95 million floating rate notes due 2012; and * $150 million fixed-rate notes due 2013. The notes were issued under Rule 144a with registration rights. Compression is increasing its floating-rate notes to $95 million from $65 million and borrowing about $5 million under its revolving credit facility to purchase synthetic partition manufacturer Santana Products Inc. (unrated) for $34 million. The outlook is stable. "The affirmation reflects the low risk of integrating Santana into Compression's current operations because it will be combined with Compression's existing plastic partition manufacturing operations," said Standard & Poor's credit analyst Lisa Wright. "However, because Santana does not improve Compression's product or end-market diversity, the acquisition has no meaningful impact on Compression's business-risk profile. The affirmation also reflects the acquisition's moderate impact on debt leverage." Near-term sales prospects are favorable because of a likely increase in Compression's trimboard segment's share of the overall trim market. However, credit measures are expected to remain weak as a result of the increased debt leverage and interest expense associated with the Santana acquisition. "We are unlikely to revise the outlook to positive unless the company establishes a larger presence in the exterior trim market, which would improve its ability to withstand cyclical downturns and volatile raw-material costs while undertaking growth initiatives," Ms. Wright said. "We could revised the outlook to negative if end-market conditions weaken or if competition increases." COUNTRYWIDE ALTERNATIVE: Moody's Rates Class B-1 Certs. at Ba1 -------------------------------------------------------------- Moody's Investors Service assigned Aaa ratings to the senior certificates issued by Countrywide Alternative Loan Trust 2006-OA2 and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the securitization. The securitization is backed by first lien, adjustable-rate, negative amortization mortgage loans originated by Countrywide Home Loans Inc. The ratings are based primarily on the credit quality of the loans and on the protection from subordination. Moody's expects collateral losses to range from 1.15% to 1.35%. The mortgage loans in the securitized pool will be serviced by Countrywide Home Loans Servicing LP. The complete rating actions are: Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OA2 * Class A-1, Assigned Aaa * Class A-2A, Assigned Aaa * Class A-2B, Assigned Aaa * Class A-3, Assigned Aaa * Class A-4, Assigned Aaa * Class A-5, Assigned Aaa * Class A-6, Assigned Aaa * Class A-7, Assigned Aaa * Class X-1, Assigned Aaa * Class X-2, Assigned Aaa * Class X-1P, Assigned Aaa * Class A-R, Assigned Aaa * Class M-1, Assigned Aa1 * Class M-2, Assigned Aa2 * Class M-3, Assigned Aa2 * Class M-4, Assigned Aa3 * Class M-5, Assigned A1 * Class M-6, Assigned A2 * Class M-7, Assigned A2 * Class M-8, Assigned A3 * Class M-9, Assigned Baa1 * Class B-1, Assigned Ba1 CURATIVE HEALTH: Chap. 11 Filing Cues Moody's to Withdraw Ratings ----------------------------------------------------------------- Moody's Investors Service withdrew the ratings of Curative Health Services, Inc., following the company's March 27, 2006 filing of voluntary petition to the United States Bankruptcy Court for the Southern District of New York seeking relief under Chapter 11 of Title 11 of the Bankruptcy Code. Ratings withdrawn: * Ca corporate family rating; * Ca $185 million 10.75% senior global notes; and * SGL-4 speculative grade liquidity rating. Curative Health Services, Inc., headquartered in Nashua, New Hampshire, provides services to patients experiencing serious acute chronic medical conditions. Services are performed through its specialty infusion and wound care management business units. DANA CORP: Taps Dorsey & Whitney as Special International Counsel ----------------------------------------------------------------- Dana Corporation and its debtor-affiliates ask permission from the United States Bankruptcy Court for the Southern District of New York to employ Dorsey & Whitney LLP as special international counsel in their Chapter 11 cases. The Debtors selected Dorsey because of its experience and expertise in international mergers and acquisitions, corporate and general advisory work, Michael L. DeBacker, Esq., Dana's vice president, general counsel and secretary, tells the Honorable Burton R. Lifland. In addition, Dorsey is familiar with the Debtors' business structure. The firm has represented the Debtors and their non- debtor affiliates for more than 13 years in connection with international mergers and acquisitions, corporate, finance, intellectual property, labor and employment, taxation and bankruptcy and non-bankruptcy litigation matters in the United States, Europe and China. As special counsel, Dorsey will: (a) advise the Debtors with respect to, and assist in the negotiation and documentation of, international financing agreements and related transactions arising as a consequence of their Chapter 11 cases; (b) review the nature and validity of liens asserted against property of the Debtors or any of their non-U.S. affiliates, and advise the Debtors concerning the enforceability of the liens; (c) advise and assist the Debtors in connection with potential international divestitures of their and their non-debtor affiliates' businesses and assets in the U.K., Europe, Asia and elsewhere; (d) provide non-bankruptcy services for the Debtors and non- debtor affiliates; (e) perform all other necessary and appropriate legal services in connection with the Debtors' Chapter 11 cases for and on behalf of the Debtors; and (f) assist the Debtors' reorganization attorneys from time to time. The Debtors will pay Dorsey on an hourly basis, subject to its customary rates. They will also reimburse the firm for out-of- pocket expenses. The attorneys who will have primary responsibility for ongoing matters for the Debtors and its non-debtor affiliates are: A. U.S./European Practice Lawyer Title Location Hourly Rate ------ ----- -------- ----------- Andrew Rimmington, Esq. Partner London $616 Mark Kalla, Esq. Partner Minneapolis $430 Nadeem Khan, Esq. Partner London $581 Tom Sibert, Esq. Associate London $440 Anastasia Fowte, Esq. Associate London $422 Max Beazley, Esq. Associate London $396 Nicola Johns, Esq. Associate London $352 Deborah Wilson, Esq. Sr. Assoc. London $475 Monica Clark, Esq. Sr. Atty. Minneapolis $365 B. China Practice Lawyer Title Location Hourly Rate ------ ----- -------- ----------- Steve Nelson, Esq. Partner Hong Kong $725 Nelson Dong, Esq. Partner Seattle $660 Guanxi Zheng, Esq. Partner Hong Kong $495 Jay Yan, Esq. Partner Shanghai $530 David Richardson, Esq. Of Counsel Hong Kong $525 David Huang, Esq. Associate Hong Kong $295 Simon Chan, Esq. Associate Hong Kong $410 Kenneth Kwok, Esq. Associate Hong Kong $430 Xia Chao, Esq. Associate Shanghai $400 Amy Xu, Esq. Partner Minneapolis $495 Jaime Zheng, Ph.D. Associate Palo Alto $335 T.J. Hou, Esq. Associate Palo Alto $345 Cedric Lam, Esq. Of Counsel Hong Kong $450 H Yu, Esq. Associate Hong Kong $210 In the period from Jan. 1, 2005, to the date of their bankruptcy filing, the Debtors and their non-debtor affiliates paid Dorsey $427,576 for prepetition advice and assistance predominantly relating to the businesses and operations of the non-debtor affiliates located in Europe and China, including certain corporate and corporate-governance advice in connection with the filing of the Debtors' Chapter 11 cases. The Debtors owe Dorsey $240,577 on account of the prepetition services. Andrew Rimmington, Esq., a partner at Dorsey, assures the Court that the firm does not represent or hold any interest adverse to the Debtors or their estates with respect to the matters for which it will be employed. Mr. Rimmington discloses that Dorsey previously represented parties-in-interest in matters unrelated to the Debtors' Chapter 11 cases. He adds that partners and employees of Dorsey may own Dana stock, aggregating less than one-half of one percent of Dana's total outstanding stock. 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. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). 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. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORP: Selects Ernst & Young to Provide Tax Advisory Services ----------------------------------------------------------------- Dana Corporation and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Ernst & Young LLP as their risk advisory, due diligence and tax advisory services providers, nunc pro tunc to their chapter 11 filing date. Michael L. DeBacker, Esq., Dana's vice president, general counsel & secretary, relates that Ernst & Young is familiar with the Debtors' businesses and financial affairs. Since Feb. 5, 2004, E&Y has assisted the Debtors with their compliance efforts under Section 404 of the Sarbanes-Oxley Act of 2002, and has provided risk advisory services in conjunction with Dana's internal audit and corporate functions. As risk advisory service providers, Ernst & Young will: (i) provide ongoing advisory services with respect to compliance with Section 404 of the Sarbanes-Oxley, including assistance with global project management, controls documentation and testing and gap analysis; (ii) provide advisory resources to the Debtors in accordance with their global internal audit function and provide recommendations for improving the Debtors' internal audit function; (iii) consult on the Debtors' strategies for remediation of any deficiencies in their internal controls over financial reporting for their significant accounts and finances; (iv) support the Debtors' business transformation initiatives, including the centralization and standardization of global processes, for identification of controls and industry- wide best practices; (v) providing controls-focused perspective and best practices regarding the implementation of software applications; (vi) provide ongoing assistance in information technology control compliance, including application controls and security, security technology solutions and overall information technology risk management; (vii) evaluate and identify controls with respect to strategic outsourcing initiatives; and (viii) assist in bankruptcy reporting and information gathering to support to the Debtors as needed. Ernst & Young will be paid for its risk advisory services, based on these hourly rates: Level U.S. UK & German Other Int'l Specialists ----- ---- ----------- ----------- ----------- Partner, $380 $525 $418 $490 to $650 Principal or Executive Director Sr. Manager $290 $370 $319 $300 to $550 Manager $240 $310 $264 $250 to $300 Senior $190 $245 $209 $200 to $375 Staff $130 $160 $143 $145 to $180 The hourly rates will increase by 5% on May 1, 2006. As due diligence providers, Ernst & Young will: (1) provide financial (excluding tax services), human capital and information technology due diligence advisory services designed to assist the Debtors in preparing carved-out pro forma financial information for the Debtors' engine hard parts and fluids routing businesses in connection with their potential divestiture; (2) address pro forma adjustments to as-reported operating results and balance sheets as of, and for the periods ended December 31, 2003, 2004 and 2005 for the Businesses; (3) assess forecasted operating results for the Businesses for the years ending December 31, 2006, 2007 and 2008; (4) analyze stand-alone and transitional service requirements for the Businesses; (5) with respect to the Businesses, assist with accumulating information for data rooms, prepare confidential information memoranda and related management presentations, address requests of prospective buyers, related purchase agreements and any required pre- or post- closing analyses. Ernst & Young will be paid for its due diligence services at these hourly rates: Non-U.K. Level U.S. U.K. European ----- ---- ---- -------- Partner $475 $570 $522 Principal $425 $510 $468 Sr. Manager $375 $450 $413 Manager $325 $390 $358 Senior $225 to $240 $290 $264 Staff $150 $180 $165 As tax advisory service providers, Ernst & Young agrees to: (i) work with the Debtors' personnel in developing an understanding of the tax issues and options related to their Chapter 11 cases, including an understanding of the reorganization and restructuring alternatives with respect to existing bondholders and other creditors; (ii) assist and advise the Debtors in developing an understanding of the tax implications of their restructuring alternatives and post-bankruptcy operations, including, as needed, research and analysis of Internal Revenue Code sections, Treasury regulations, case law and other relevant tax authority; (iii) provide tax advisory services regarding: (A) availability, limitations and preservation of tax attributes -- net operating losses and alternative minimum tax credits; (B) reduction or deferral of tax costs in connection with stock or asset sales, if any; (C) tax issues arising in the ordinary course of the Debtors' businesses, including ongoing assistance with U.S. Internal Revenue Service or state and local tax examinations; and (D) federal, state and local income and franchise tax issues arising during the Debtors' Chapter 11 cases; (iv) provide tax advisory services regarding the validity of tax claims and tax advisory support in securing tax refunds; (v) analyze legal and other professional fees incurred during the Debtors' Chapter 11 cases to determine the deductibility of the costs for U.S. federal, state and local income taxes; (vi) document, as appropriate or necessary, tax analysis, opinions, recommendations, conclusions and correspondence for any proposed restructuring alternative, bankruptcy tax issue or other tax matters; (vii) provide advisory services regarding foreign tax credit planning, including analyzing cash and other repatriation alternatives; foreign source income analysis and forecasts; overall foreign loss computations, earnings and profits; and foreign tax pools and related items; (viii) perform valuations of assets pursuant to Treasury Regulation 1.861-9T(g)(2); (ix) analyze the tax aspects of financial projections; (x) assist with federal income tax return compliance, including analyzing schedule M-1 adjustments and federal estimated tax payments, inputting financial information and tax adjustments into the Debtors' tax return preparation software, providing tax return reconciliations in connection with the preparation of the tax return, and performing research that may be required; (xi) analyze and perform research related to acquisitions and divestitures and tax-efficient domestic and foreign restructurings; (xii) provide advisory services regarding the Debtors' transfer pricing policy, including preparation of requisite documentation required under 26 U.S.C. Section 482; and (xiii) provide "on-call," routine tax advice and assistance concerning issues as requested by the Debtors' tax department when the projects are not covered by a separate project addendum and do not involve significant tax planning or projects. Ernst & Young will be paid for its tax services based on its customary rates: Level Hourly Rate ----- ----------- Executive Director, Principal or National Partner $640 to $840 Executive Director, Principal or Partner $480 to $600 Manager or Senior Manager $345 to $480 Staff or Senior $160 to $320 During the 90 days immediately preceding their bankruptcy filing, the Debtors paid Ernst & Young $8,267,844 for services rendered prepetition. As a condition of its employment by the Debtors, E&Y will waive the $787,011 outstanding balance due from the Debtors for the prepetition services. Before the Debtors' bankruptcy filing, Ernst & Young subcontracted with certain other member firms of Ernst & Young Global Limited to provide services to the Debtors. At the Debtors' request, E&Y will continue to subcontract with member firms of EYGL to provide the services set forth in the Engagement Letters. The Debtors and Ernst & Young agree that any controversy or claim with respect to, in connection with, arising out of or in any way related to the Engagement Letters or the services provided will be brought in the Court. To the fullest extent permitted by applicable law, the Debtors and their estates will indemnify and hold harmless the E&Y Entities from and against all claims and causes of action by third parties, and liabilities and losses in connection with the risk advisory and due diligence services provided. Michael Kennedy, a partner at Ernst & Young, discloses that the E&Y Entities previously provided, or currently provide, services to various parties-in-interest. However, none of the services rendered to parties-in-interest have been in connection with Debtors or their Chapter 11 cases. E&Y will not accept any engagement that would require it to represent an interest materially adverse to the Debtors. Mr. Kennedy assures the Court that Ernst & Young (a) does not hold or represent any interest adverse to the Debtors or their estates and (b) is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). 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. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORP: Court Approves Hiring Katten as Securities Counsel ------------------------------------------------------------- Dana Corporation and its debtor-affiliates sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to hire Katten Muchin Rosenman LLP as their special securities and litigation counsel, nunc pro tunc to their chapter 11 filing date. As reported in the Troubled Company Reporter on Apr. 5, 2006, Michael L. DeBacker, Dana Corporation's vice president, general counsel and secretary, told the Court that Katten is well qualified to represent the Debtors. Katten's attorneys have played significant roles in an array of securities litigation cases, including Basic, Inc. v. Levinson, NTL Securities Litigation; Cross Media Securities Litigation; In re Kmart, Inc. Securities Litigation; Alloy Securities Litigation; Exide Technologies Securities Litigation; Enterasys Networks Inc. Securities Litigation; Goodyear Tire & Rubber Co. Derivatives Litigation; and In re OM Group, Inc. Securities and Derivative Litigation. For more than 15 years, Katten has provided legal advice to the Debtors with respect to various securities matters, including the issuance of the Debtors' securities, and the preparation and filing of reports required under the Securities and Exchange Act of 1934. More recently, Katten has been representing Dana; Michael Burns, Dana's chief executive officer; and Mr. Robert Richter, Dana's former chief financial officer, in connection with numerous class actions consolidated under John Johnson v. Dana Corporation, et al., currently pending in the United States District Court for the Northern District of Ohio. Dana has also been named as a nominal defendant in various shareholder derivative actions pending before the U.S. District Court for the Northern District of Ohio (Case Nos. 3:05-CV-7464; 3:06-CV-7038; 3:06-CV-7044; 3:06-CV-7068; and 3:06-CV-7069). Additionally, the SEC commenced a formal investigation concerning Dana's compliance with certain disclosure obligations under the federal securities law. Katten will: (a) assist in the preparation of the Debtors' SEC filings and provide legal services related to the Debtors' outstanding securities, including assisting in the negotiation of the terms, and the issuance, of any securities that may be issued in connection with a plan of reorganization; (b) take all necessary actions to defend the Debtors, and certain of their officers, in the pending securities litigation matters and, if requested by the Debtors, in any similar lawsuits that may be filed; (c) give legal advice and representation to the Debtors and any of their officers with respect to the current SEC investigation against the Debtors and, if requested by the Debtors, in any similar SEC investigations that may be commenced; (d) prepare on the Debtors' behalf all motions, applications, answers and papers necessary to defend any actions commenced against the Debtors in connection with the issuance of securities or any alleged violation of federal securities laws; and (e) appear before the Ohio District Court and any other courts or regulatory bodies in connection with the defense of any securities litigation matter to the extent the matters are not stayed. The Debtors will pay Katten on an hourly basis, based on these customary hourly rates: Professional Hourly Rate ------------ ----------- Partners $445 to $765 Associates $255 to $465 Special Counsel $420 to $525 Of Counsel $365 to $650 Paralegal $140 to $205 The Debtors will also reimburse the firm for out-of-pocket expenses. On February 23, 2006, Dana paid Katten $100,000 in respect of fees incurred but not billed before the Petition Date. Robert L. Kohl, Esq., a member of Katten, disclosed that the firm currently represents or has recently represented parties-in- interest in matters unrelated to the Debtors' bankruptcy cases. Mr. Kohl assured the Court that Katten does not hold or represent any interest adverse to the Debtors' estates in the matters for which it is to be engaged. He assures the Court that no conflict of interest exists between the Debtors and Messrs. Burns and Richter with respect to the Johnson Litigation. Should a conflict develop between any positions adopted by the Parties, Katten will terminate its representation of Messrs. Burns and Richter. 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. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). 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). DEL MONTE: $1.2 Bil. Purchase Plans Cue Moody's Ba3 Debt Ratings ---------------------------------------------------------------- Moody's Investors Service confirmed Del Monte Corporation's Ba3 senior secured debt and corporate family ratings, as well as its B2 subordinated debt rating. Moody's also assigned Ba3 ratings to two new senior secured term B loans being established by the company, as well as a Ba3 rating to a $50 million step-up in its senior secured revolving credit facility. The rating actions follow the company's announcements that it will acquire the Meow Mix Company for approximately $705 million in cash and the Milk Bone pet treat business from Kraft Foods for approximately $580 million in cash. The rating outlook is stable. The rating action concludes the review for possible downgrade announced on March 17, 2006. These ratings have been assigned: * $330 million senior secured term B loan maturing 2012 at Ba3 * $595 million senior secured term B loan maturing 2012 at Ba3 * $50 million increase in a senior secured revolving credit facility expiring 2011 at Ba3 These ratings have been confirmed: * Corporate family rating at Ba3 * $450 million senior secured term loan A, maturing 2011 at Ba3 * $148.9 million senior secured term loan B, maturing 2012 at Ba3 * $250 million 6.75% senior subordinated notes, maturing 2015 at B2 * $450 million 8.625% senior subordinated notes, maturing 2012 at B2 This rating is affirmed: Speculative grade liquidity rating of SGL-2 The confirmation of Del Monte's ratings follows the company's announcements that it was acquiring the Meow Mix Company and the Milk-Bone pet treat business in two separate transactions for a combined purchase price of approximately $1.3 billion in cash with a portion of the transactions to be funded with approximately $930 million of new debt. The confirmation reflects: 1) Del Monte's ability to and history of delevering in a timely manner following past debt-financed acquisitions; 2) Moody's comfort with management's ability to successfully integrate acquisitions; and 3) Del Monte's well known and diverse brand portfolio that spans several food categories. Moody's views these acquisitions as making strategic sense. By adding these two companies, Del Monte continues its strategic initiative of becoming a higher margin branded consumer packaged foods company. It does, however, result in higher leverage, integration risk, and limits the company's financial flexibility over the near term. The affirmation of Del Monte's speculative grade liquidity rating of SGL-2 is based on our view that the company's near term liquidity will remain good over the next year. Moody's notes, however, that as the progress of integrating the acquisitions -- including their impact on Del Monte's capital structure and liquidity -- become clear, the company's SGL rating could change. The outlook on Del Monte's ratings is stable, reflecting Moody's view that the company will maintain its current strong operating performance, and will successfully integrate the Meow Mix and Milk-Bone businesses. It also assumes that the company will focus on reducing leverage from its currently inflated level to a range more appropriate for its current rating category. Del Monte Corporation is the primary operating subsidiary of Del Monte Foods Company. Del Monte Foods Company, with headquarters in San Francisco, California, is a major manufacturer of branded packaged food and pet food products. DEL MONTE: S&P Rates $975 Million Senior Secured Loan at BB ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' bank loan ratings and '1' recovery ratings to Del Monte Corporation's proposed $975 million add-on to its existing senior secured term loan facilities, indicating the expectation of full (100%) recovery of principal in the event of a payment default. (The facility could be downsized to $900 million at closing). The ratings are based on preliminary terms and are subject to review upon final documentation. At the same time, Standard & Poor's affirmed its ratings on the food processor, including its 'BB-' long-term and 'B-1' short-term corporate credit ratings. The ratings outlook is negative. San Francisco, California-based Del Monte is expected to have about $2.4 billion of lease-adjusted total debt outstanding at closing. The funds will be used along with about $400 million of cash on- hand (including proceeds from the recently closed divestiture of its soup & infant feeding business) to fund the acquisitions of Milk-Bone brands from Kraft Foods Inc. (A-/Stable/A-2) for about $580 million and Meow Mix Holdings for $705 million. DELTA AIR: Chromalloy Gas Sets Off Credit Against Carrier's Debt ---------------------------------------------------------------- As reported in the Troubled Company Reporter on Dec. 22, 2005, Chromalloy Gas Turbine Corporation asked the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay in Delta Air Lines, Inc., and its debtor-affiliates' chapter 11 cases to exercise its prepetition rights of recoupment, or in the alternative, exercise its rights to set off. Chromalloy Agreement Chromalloy Gas and Delta Air are parties to a Letter Agreement, dated Oct. 15, 2004, wherein, among other things, Chromalloy agreed to reduce pricing for parts and repairs by 8%. On Dec. 17, 2004, the Agreement was amended to specifically provide that the 8% price reduction would be given by Chromalloy on certain specified parts and repairs via the issuance of a credit memorandum, applicable to the purchase of goods and services from Chromalloy. The credit memorandum was to be issued within 15 business days after the end of the quarter, and based upon paid invoices during the quarter. The Amendment further specified that in the event Delta filed for bankruptcy protection after the rebate period began, unpaid rebates would be offset against unpaid invoices. Christopher J. Battaglia, Esq., at Halperin Battaglia Raicht, LLP, in New York, relates that, as of the Sept. 14, 2005, Delta owed Chromalloy $908,607 in unpaid invoices for parts and services for the third quarter, which invoices are subject to the Agreement, as amended by the Amendment. On the other hand, Chromalloy owed Delta $368,650 in rebates for invoices paid for the third quarter. Chromalloy has not issued a credit memorandum to Delta for the rebate. Instead, Chromalloy has temporarily placed the funds in an administrative hold. Settlement Agreement Delta Air and Chromalloy Gas entered into a Court-approved Stipulation wherein the parties agreed that Chromalloy Gas will be permitted pursuant to Sections 362(d)(1) and 553(a) of the Bankruptcy Code to set off the Credit against the Delta Debt. Chromalloy will continue issuing credits for invoices paid by Delta since the Sept. 14, 2005, until the Agreement expires, is rejected, or until further Court order. About Delta Air Lines Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000). DELTA AIR: Wachovia OKs Adjournment of Adequate Protection Request ------------------------------------------------------------------ Delta Air Lines, Inc., and its debtor-affiliates and Wachovia Bank, N.A., fka First Union National Bank, reached an agreement in connection with Wachovia's request for adequate protection of its interest in 65 Bombardier CRJ CL-600-2B19 and eight Domier FRJ 328-300 aircraft and related engines. Wachovia agrees to adjourn the Adequate Protection Motion indefinitely, subject to its right to set the matter for hearing by providing the Debtors with 10 days' notice prior to any regularly scheduled omnibus hearing date. Adequate Protection Wachovia Bank, as the indenture trustee, holds interests in the Aircraft, including, without limitation, all related documents, rents, profits, revenues, and the proceeds thereof, as applicable. To prevent diminution in the value of its interest in the Aircraft, Wachovia asked the U.S. Bankruptcy Court for the Southern District of New York to require the Debtors to: (a) comply with the requirements of the regulations issued under the Federal Aviation Act and any other laws with respect to the Aircraft; (b) comply with all provisions of the Wachovia Agreements concerning the operation, maintenance and use of the Aircraft; (c) continue to carry and maintain, at their own expense, valid and collectible insurance on the Leased Equipment in amounts as required under the Wachovia Agreements; (d) be enjoined from removing or replacing any component parts from the Aircraft except in accordance with the Wachovia Agreements; (e) pay postpetition interest and other payments owing under the Wachovia Agreements; (f) provide access within 3 business days of a written request to all maintenance records with respect to the Aircraft; (g) pay Wachovia's fees and expenses in accordance with the terms of the Wachovia Agreements; (h) confirm whether the Aircraft continue to be used in the Debtors' revenue service, and if not, provide evidence that the storage and maintenance of the Aircraft are consistent with commercially reasonable industry practices and the terms of the Wachovia Agreements; (i) comply with all contractual return conditions with respect to any leases that are being rejected; (j) pay, on a monthly basis, cash sufficient to fund maintenance reserves in respect of the operation of the Aircraft from the Petition Date forward: (i) airframe reserves toward the next scheduled hearing, structural and systems check based on the Debtors' FAA-approved maintenance program at a rate to be determined by the Court; (ii) engine reserves on each engine toward their next shop visit for their performance restoration and life limited parts replacement based on industry averages at a rate to be determined by the Court; (iii) engine reserves on each engine toward their next shop visit for life limited parts replacement, based on scheduled replacement of life limited parts at a rate to be determined by the Court; (iv) landing gear reserves on each landing gear based on time between overhaul in the Debtors' FAA approved maintenance program at a rate to be determined by the Court; and (v) APU reserves based on the Debtors' typical shop visit interval for performance restoration for similar APUs in its fleet at a rate to be determined by the Court. As adequate protection for the postpetition diminution in the value of the Aircraft, Wachovia also asked the Court to grant it a superpriority administrative claim pursuant to Section 507(b) of the Bankruptcy Code, higher in priority than all administrative claims. About Delta Air Lines Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000). DRAKE PRINTING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Drake Printing Co., Inc. 115 South Munger Street Pasadena, Texas 77506 Bankruptcy Case No.: 06-31669 Type of Business: The Debtor is engaged in commercial printing. Chapter 11 Petition Date: April 24, 2006 Court: Southern District of Texas (Houston) Judge: Wesley W. Steen Debtor's Counsel: Richard L. Fuqua, II, Esq. Fuqua & Keim, LLP 2777 Allen Parkway, Suite 480 Houston, Texas 77019 Tel: (713) 960-0277 Fax: (713) 960-1064 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Lynne Meiers $484,657 115 Munger Pasadena, TX 77506 American Express $96,295 P.O. Box 360002 Fort Lauderdale, FL 33336-0002 Wells Fargo Business Line $95,275 P.O. Box 54349 Los Angeles, CA 90054-0349 J.L. Wood Electric $52,398 Pasadena Paper LLC $50,000 Smurfit-Stone $49,809 Moreme $40,000 MRS Industrial Staffing $37,170 Bruce Temporary Services, LLC $30,795 Washington Mutual $24,750 Pasadena Skid and Pallet $23,998 Pitman Company $23,985 Ken Williams $23,471 Advanta Bank $17,740 GE Capital Financial $16,844 Drake Container $14,934 MBNA America $13,180 Sound Financial Solutions $12,000 Zions Bank $11,630 Humana, Inc. $11,181 ELEVEN SOUTH: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Eleven South LaSalle Associates, LLC 11 South LaSalle Street, Suite 1710 Chicago, Illinois 60603 Bankruptcy Case No.: 06-04563 Chapter 11 Petition Date: April 24, 2006 Court: Northern District of Illinois (Chicago) Judge: Susan Pierson Debtor's Counsel: Mark E. Leipold, Esq. Christopher J. Horvay, Esq. Gould & Ratner 222 North LaSalle Street Chicago, Illinois 60601 Tel: (312) 899-1651 Fax: (312) 236-3241 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million The Debtor did not file a list of its 20 largest unsecured creditors. EVANS INDUSTRIES: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Evans Industries, Inc. 1255 Peters Road P.O. Box 68 Harvey, Louisiana 70059 Bankruptcy Case No.: 06-10370 Type of Business: The Debtor manufactures and distributes steel drums. See http://www.evansindustriesinc.com/ Chapter 11 Petition Date: April 25, 2006 Court: Eastern District of Louisiana (New Orleans) Debtor's Counsel: Eric J. Derbes, Esq. Melanie M. Mulcahy, Esq. The Derbes Law Firm, LLC 3027 Ridgelake Avenue P.O. Box 8176 Metairie, Louisiana 70011-8176 Tel: (504) 837-1230 Fax: (504) 837-2214 Estimated Assets: $500,000 to $1 Million Estimated Debts: $10 Million to $50 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SK Global America, Inc. $1,489,813 400 Poydras Street New Orleans, LA 70130 Con-Tech International $1,310,831 1046 Annunciation Street New Orleans, LA 70130 US Environmental $1,238,764 Protection Agency 1445 Ross Avenue, Suite 1200 Dallas, TX 75202-2733 Enron Energy Services, Inc. $966,651 1221 Lamar, Suite 1600 Houston, TX 77010 Internal Revenue Service Taxes $628,329 P.O. Box 660308 Dallas, TX 75266-0308 Chevron Texaco $486,056 P.O. Box 740348 Dallas, TX 75373-0348 Evans Industries, Inc. $339,612 401K Plan 1255 Peters Road Harvey, LA 70058 Steel Resources, Inc. $336,382 7330 Northwest 12th Street Suite 750 Miami, FL 33126 AFCO Insurance $182,594 American Flange & Mfg. $182,593 Mobile Paint Manufacturing $173,448 Entergy $166,676 Great West Life $137,477 Sheriff Harry Lee $136,147 Techintrade Corp. $127,705 Udo Pooch $124,167 Self Industries, Inc. $116,370 Paul Gariepy $114,000 DEQ Financial Service $104,188 FALCONBRIDGE LTD: First Quarter 2006 Net Income Rises 163% ---------------------------------------------------------- Falconbridge Limited earned $462 million of net income during the first quarter of 2006, a 163% increase from $176 million of net income earned for the same period in 2005. Revenues for the first quarter of 2006 were $2.9 billion, 51% higher than revenues of $1.9 billion in the same period of 2005. The increase was mainly due to higher realized metal prices and copper and nickel sales volumes, increased revenue contribution from by-product molybdenum credits and improved copper concentrate treatment and refining terms charged by Falconbridge copper smelters. Business unit revenues were 83% higher for copper, 9% higher for nickel, 67% higher for zinc and 14% higher for aluminum. Operating expenses totaled $2.1 billion in the first quarter, compared to $1.4 billion in the same period last year, primarily due to the higher value of raw material feeds. Mining, processing and refining costs increased to $743 million from $595 million in the first quarter of 2005 due to higher levels of copper anode and copper cathode production, increased refined nickel production, higher energy and supplies/consumables costs, and the impact of a weaker U.S. dollar on operating costs at all Canadian and South American operations. The average value of the Canadian dollar increased 6% to US$0.87 from US$0.82 during the first quarter of 2005. Income generated by operating assets for the first quarter was $739 million, 61% higher than $459 million in the first quarter of 2005. Income generated by operating assets increased 112% to $489 million in the copper business, decreased 24% to $148 million in the nickel business, increased from $6 million to $64 million in the zinc business and increased 34% to $47 million in the aluminum business. Consolidated assets totaled $12.9 billion as at March 31, 2006, compared with $12.4 billion at the end of 2005. The increase is primarily due to the investment of additional capital in advancing brownfield and greenfield expansion development projects, higher working capital levels due to increasing metals prices and cash retained in the business generated by higher earnings. "Falconbridge is off to a great start for 2006 as we took advantage of the strong fundamentals of our business during the first quarter," said Derek Pannell, Chief Executive Officer of Falconbridge. "Metals prices continued to climb and overall, our operations have performed well, resulting in another quarter of outstanding financial results. As we move into the second quarter, we look forward to benefiting from further upside at our operations and from the high metal price environment, as LME prices at the beginning of the second quarter have already exceeded the first quarter average." "We continue to work with Inco to seek U.S. and European regulatory approval for the proposed combination of Inco and Falconbridge. Discussions with officials at both the U.S Department of Justice and the European Commission continue to be constructive as we await approvals from both regulatory bodies." Liquidity and Capital Initiatives Falconbridge maintains long-term credit arrangements and relationships with a variety of financial institutions and investors in order to facilitate its ongoing access to domestic and international financial markets to meet its funding needs. The Company's committed bank facilities, which expire in 2010, total $780 million. At March 31, 2006, these lines were essentially undrawn. Cash generated from operations, before the net change in accounts receivables, payables and inventories, was $668 million during the first quarter of 2006. Total liquidity remains strong, with over $1.8 billion of cash and undrawn lines at March 31, 2006. Long- term debt was $2.5 billion at quarter end excluding preferred share liabilities. Falconbridge's net-debt-to-capitalization ratio stood at 33.3% at the end of the quarter, a reduction of 300 basis points since the end of 2005. On March 16, 2006, Falconbridge announced its plans to redeem a total of 20 million shares, or $500 million, of its outstanding Junior Preference Shares, on April 26, 2006, based upon shareholders of record on March 22, 2006. Falconbridge has benefited from high earnings and cashflow generation and will utilize existing cash balances to fund the redemption. Investments in new production capacity such as the Nickel Rim South and Koniambo nickel projects totaled $98 million during the first quarter. For 2006, the Company's projected capital investments are approximately $315 million for sustaining capital expenditures and other smaller projects and approximately $435 million in new copper and nickel investments. Labor Agreements During the quarter, labor agreements were achieved at the Falcondo ferronickel operation in the Domincan Republic, the Horne smelter in Rouyn, Quebec and with supervisory and administrative personnel at the St. Ann bauxite mine in Jamaica. Negotiations at the Brunswick Mine, Brunswick Smelter and Bulk Handling Operations in New Brunswick, as well as General Smelting in Quebec, are ongoing. In the second quarter of 2006, these collective agreements are up for renewal: -- Raglan Mine in Quebec, Canada on April 30; -- Lomas Bayas in Chile on April 30; and -- Nikkelverk in Norway on May 31. Inco Offer On Oct. 11, 2005, Inco Limited announced an offer to acquire all outstanding common shares of Falconbridge. The offer was comprised of part cash and part Inco common shares, which when pro-rated subject to the maximum amounts offered would provide Cdn$7.50 and 0.524 Inco shares for each Falconbridge common share. (At the closing market price of Inco's stock on April 24, 2006, the offer is valued at approximately Cdn$40.67 per Falconbridge common share). Both Boards of Directors unanimously endorsed the acquisition offer and the Falconbridge Board recommended the Company's shareholders tender their shares to the offer, which remains open for acceptance to June 30, 2006. The combined organization, which would be known as Inco Limited, would be one of the world's premier mining and metals companies. It would be the world's largest producer of nickel and eighth- largest producer of copper, and would also operate integrated zinc and aluminum businesses. The new company would have one of the mining industry's most attractive portfolios of low-cost, profitable growth projects and would benefit from estimated annual synergies of approximately $350 million - with this run rate beginning in mid-2008. Inco has obtained regulatory clearances from the Canadian Competition Bureau and it continues to proceed to meet all information and other requests from the U.S. Department of Justice and the E.U. competition authorities. Junior Preference Shares Redemption On March 16, 2006, Falconbridge announced its plans to redeem a total of 20 million shares, or $500 million, of its outstanding Junior Preference Shares, on April 26, 2006, based upon shareholders of record on March 22, 2006. Falconbridge will utilize existing cash balances to fund the redemption. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Limited (TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/-- produces nickel products. The Company owns nickel mines in Canada and the Dominican Republic and operates a refinery and sulfuric acid plant in Norway. It is also a major producer of copper (38% of sales) through its Kidd mine in Canada and its stake in Chile's Collahuasi and Lomas Bayas mines. Its other products include cobalt, platinum group metals, and zinc. * * * Falconbridge's CDN$150 million 5% convertible and callable bonds due April 30, 2007, carries Standard & Poor's BB+ rating. FEDERAL-MOGUL: Negotiating & Revising Chapter 11 Plan Terms ----------------------------------------------------------- The proponents of the chapter 11 plan of Federal-Mogul Corporation and its debtor-affiliates -- the Debtors, the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Unsecured Creditors, the Official Committee of Equity Security Holders, the Legal Representative for Future Asbestos Claimants, and JPMorgan Chase Bank, as administrative agent under Federal- Mogul Corporation's $1.932 billion prepetition credit facility -- are working to resolve the remaining issues in the Debtors' Chapter 11 cases and propose a further amended plan in short order. The Debtors made the disclosure is a status report to the U.S. Bankruptcy Court for the District of Delaware. A full-text copy of the Debtors' Status Report is available for free at http://ResearchArchives.com/t/s?84a James E. O'Neill, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub, LLP, in Wilmington, Delaware, reminds the Court that the Plan Proponents have resolved in 2005 their potentially multi-billion dollar issues with the administrators of the U.K. Debtors and the trustees of the T&N Retirement Benefits Scheme (1989). The resolution allowed substantial progress to be made in the recent months towards the conclusion of the U.K. Debtors' administration proceedings in the near term. "The Debtors and the other Plan Proponents have not yet ascertained the scope or necessity of any renoticing or resolicitation of the Plan in light of the amendments to the Plan that will be made to take account of the various settlements of Plan-related issues that have been achieved since votes on the Plan were originally solicited," Mr. O'Neill says. "The Debtors are hopeful, however, that they will be in a position to approach this Court in the near term for approval of a supplemental disclosure document and, if necessary, procedures for soliciting or resoliciting votes of certain limited constituencies on the Plan." Pending Confirmation Objections Thirty-two objections to confirmation of the Plan were received prior to the November 3, 2004, deadline for submitting objections. After discovery and negotiations, several confirmation objections were resolved on a consensual basis. The Plan Proponents are optimistic that consensual resolutions of additional confirmation objections may be achieved in the future. Two environmental claims-related objections have been withdrawn. About 26 confirmation objections remain. Twelve of them are pro se objections principally relating to dissatisfaction with the treatment of the T&N Pension Scheme. These objections pre-date the U.K. Global Settlement Agreement, which addresses those claims. Estimation of T&N's Asbestos Liabilities The District Court issued an opinion on September 13, 2005, estimating T&N's liability for U.S. asbestos personal injury claims at $9 billion. The Asbestos PD Committee has appealed the estimation decision of the District Court, which appeal is presently pending. Company Voluntary Arrangements in the Works It is currently anticipated that the U.K. Administrators will propose company voluntary arrangements for approximately 51 of the U.K. Debtors in the very near term, Mr. O'Neill relates. A hearing before the English court concerning the procedures for noticing and soliciting proxies on the CVAs occurred on April 6 and 7, 2006, and a order on the Administrators' application was issued on April 12, 2006. The English court's order effectively approved the Administrators' proposed procedures for giving notice of and soliciting proxies on the CVA, pursuant to which the Administrators will mail the CVAs to creditors and publish notice in accordance with U.K. law and the directions received from the English court. The mailing will include a solicitation of proxies for creditors and shareholders to vote on the CVAs during a 42-day notice period. The proxies, together with any in-person votes cast on the CVAs by creditors and shareholders, will be tabulated at creditors' meetings convened by the Administrators. Assuming the CVAs are approved at the creditors' meetings, and a subsequent notice period passes with no legal challenge to the CVAs being sustained, the CVAs will become effective and the administration proceedings for the U.K. Debtors covered by the CVAs will be concluded. Settlement Talks with Cooper Industries Mr. O'Neill discloses that the Debtors, the Asbestos Committee and the Futures Representative have continued to negotiate to reach an acceptable agreement with Cooper Industries, Ltd., and Pneumo Abex Corporation. The parties had reached an agreement resolving disputed claims in excess of $400 million that Cooper asserted against certain of the Debtors relating to Pneumo Abex asbestos claims. But Judge Lyons denied the request for a preliminary injunction that was part of that agreement. Negotiations with PD Committee & Insurers The Plan Proponents are also participating in negotiations with the Asbestos PD Committee and most of the insurers. However, in the event those negotiations do not reach a successful conclusion in the near term, Mr. O'Neill says, the Debtors intend to pursue and achieve confirmation of the Plan over the objections of the Asbestos PD Committee and the insurers. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some US$6 billion. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed US$10.15 billion in assets and US$8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. (Federal-Mogul Bankruptcy News, Issue No. 107; Bankruptcy Creditors' Service, Inc., 215/945-7000) GALVEX HOLDINGS: Galvex Capital Hires DiConza Law as Counsel ------------------------------------------------------------ Galvex Capital, LLC, obtained authority from the U.S. Bankrupt Court for the Southern District of New York to employ DiConza Law, P.C. as its bankruptcy counsel, nunc pro tunc to Feb. 17, 2006. Galvex Capital tells the Court that it wants DiConza Law to handle matters that Winston & Strawn LLP cannot handle because of a conflict of interest or, alternatively, which can be more efficiently handled by DiConza Law. Galvex Capital contends that this will avoid unnecessary litigation and reduce the overall expense of administering its chapter 11 case. DiConza Law will: (a) advise Galvex Capital in connection with its claims against Galvex Holdings Limited, Galvex Estonia, Galvex Intertrade and Galvex Trade Limited; (b) negotiate with representatives of creditors and other parties in interest, including the landlord on Galvex Capital's office lease; (c) take necessary action to protect and preserve Galvex Capital's estate, including prosecuting actions on behalf of Galvex Capital; (d) advise Galvex Capital of its rights, powers, and duties as debtor in possession under chapter 11 of the Bankruptcy Code; (e) prepare on behalf of Galvex Capital, motions, applications, schedules, answers, orders, reports and papers necessary to the administration of the estate; (f) advise Galvex Capital in reviewing, estimating, and resolving claims asserted against its estate; (g) appear before the Court and any appellate courts and protect the interests of Galvex Capital and its estate; and (h) perform other necessary legal services and provide other necessary legal advice to Galvex Capital in connection with its chapter 11 case. Gerard DiConza, Esq., a principal of DiConza Law, tells the Court that he will bill $350 per hour for this engagement. Mr. DiConza assures the Court his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. DiConza can be reached at: Gerard DiConza, Esq. DiConza Law, P.C. 630 Third Avenue, Seventh Floor, New York, New York 10017. Tel: (212) 682-4940 Fax: (212) 682-4942 http://www.diconzalawpc.com/ About Galvex Holdings Headquartered in New York City, New York, Galvex Holdings Limited -- http://www.galvex.com/-- and its affiliates operate the largest independent galvanizing line in Europe. The Debtors have offices in New York, Tallinn, Bermuda, Finland, Ukraine, Germany and the United Kingdom. The company and four of its affiliates filed for chapter 11 protection on Jan. 17, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10082). Galvex Capital, LLC, is represented by David Neier, Esq., at Winston & Strawn LLP, and Gerard DiConza, Esq., at DiConza Law, P.C. Galvex Holdings Ltd. and the other debtor-affiliates are represented by David Neier, Esq., at Winston & Strawn LLP, and Lori R. Fife, Esq., Marcia L. Goldstein, Esq., and Shai Waisman, Esq., at Weil, Gotshal & Manges, LLP. John P. McNicholas, Esq., and Thomas R. Califano, Esq., at DLA Piper Rudnick Gray Cary US LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. GLATFELTER CO: S&P Removes $200 Mil. Notes' BB+ Rating from Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services removed its 'BB+' rating on the proposed $200 million senior unsecured notes of Glatfelter (P.H.) Co. (BB+/Stable/--) from CreditWatch, where it was placed with negative implications on April 4, 2006. The CreditWatch placement reflected the rating agency's concerns about whether the proposed notes would receive guarantees as effective as and similar enough to the company's $300 million credit facility, also rated 'BB+', to eliminate structural subordination. "While the rating on the proposed notes is the same as that of the credit facility, the notes are somewhat disadvantaged because certain foreign subsidiaries that do not guarantee the notes can borrow under the company's revolving credit facility," said Standard & Poor's credit analyst Dominick D'Ascoli. "We assume that revolving credit facility borrowings at these foreign subsidiaries will be no more than $125 million and that no foreign subsidiary directly borrowed any proceeds from the $100 million of term loans issued under the company's credit facility. Given these assumptions, the disadvantaged position of the note holders is not significant enough to warrant a lower rating. The rating on the proposed notes is based on preliminary terms and conditions." The company will use proceeds from the proposed $200 million senior unsecured note offering to refinance the 6.875% notes due in 2007 and to repay outstanding balances under the new revolving credit facility. The corporate credit rating on York, Pennsylvania-based Glatfelter reflects its position as a moderate-size paper producer with modest free cash flows in a competitive and cyclical industry. The ratings also reflect a value-added niche product mix and moderate financial policies. GENERAL MOTORS: Antitrust Body Approves GMAC Stake Sale ------------------------------------------------------- The U.S. Federal Trade Commission approved General Motors Corp.'s move to sell its 51% controlling interest in General Motors Acceptance Corp. to a consortium of investors led by Cerberus Capital Management, LP, Reuters reports. GM is selling a majority stake in GMAC, its wholly owned financial services subsidiary, to raise cash. As reported in the Troubled Company Reporter on April 4, 2006, GM expects to receive approximately $14 billion in cash from the sale over a three-year period, including distributions from GMAC, with an estimated $10 billion by closing. According to GM, the transaction is designed to: -- strengthen GMAC's ability to support GM's automotive operations; -- improve GMAC's access to cost-effective funding; and -- provide significant liquidity to GM. The stake sale will also allow GM to continue participating in the profitability of GMAC over the long term through its remaining 49% ownership stake. About Cerberus Headquartered in New York City, Cerberus Capital Management, LP - http://www.cerberuscapital.com/-- is one of the world's leading private investment firms with $18 billion in assets under management for individual and institutional investors, including state and corporate pension funds, insurance companies, foundations and endowments. Through its team of more than 275 investment and operations professionals, Cerberus specializes in providing both financial resources and operational expertise to help transform undervalued companies into industry leaders for long-term success and value creation. About GMAC General Motors Acceptance Corporation and its subsidiaries, operating under the umbrella GMAC Financial Services -- http://www.gmacfs.com/-- provide automotive financing, commercial finance, insurance and mortgage products, banking, and real estate services, and have a presence in more than 40 nations. GMAC has extended more than $1.4 trillion in credit to finance more than 162 million vehicles. 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 7, 2006, Moody's Investors Service reviews for possible downgrade General Motors Acceptance Corporation's Ba1 long-term rating. Moody's retained Residential Capital Corporation's Baa3 long-term and Prime-3 short-term ratings. The action followed General Motors's decision to sell a 51% stake in GMAC to a consortium led by Cerberus Capital Management L.P.. As reported in the Troubled Company Reporter on April 5, 2006, Standard & Poor's Ratings Services held its ratings on General Motors Acceptance Corp. (GMAC; 'BB/B-1') and on GMAC's subsidiary, Residential Capital Corp. (ResCap; 'BBB-/A-3'), on CreditWatch with developing implications after General Motors Corp. disclosed the proposed sale of its 51% ownership stake in GMAC to a consortium headed by Cerberus Capital Management L.P. GSAMP TRUST: Moody's May Lower Ratings on Two Security Tranches --------------------------------------------------------------- Moody's Investors Service placed on review for possible upgrade one tranche issued by GSAMP Trust 2003-SEA2. The underlying collateral is comprised of fixed-rate, subprime mortgage loans which were seasoned at issuance. Moody's also placed two tranches from GSAMP Trust 2004-SEA2 on review for possible downgrade. The deal was issued with seasoned, subprime mortgage loans, some of which experienced delinquency prior to securitization. The 2003-SEA2 transaction has suffered low cumulative losses to date, prompting Moody's to review the M-1 class for possible upgrade. The tranches from 2004-SEA2 are being placed on review for downgrade based upon weaker than anticipated performance of the underlying pool of mortgage loans, which has resulted in deterioration of credit enhancement. Complete rating actions are: Issuer: GSAMP Trust 2003-SEA2 * Class M-1; Currently A2, under review for possible upgrade Issuer: GSAMP Trust 2004-SEA2 * Class B-1; Currently Baa3, under review for possible downgrade * Class B-2; Currently Ba1, under review for possible downgrade HAMILTON SAFE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Hamilton Safe PR, Inc. P.O. Box 361295 San Juan, Puerto Rico 00936 Bankruptcy Case No.: 06-01234 Type of Business: The Debtor manufactures security and storage devices such as vaults, safe deposit boxes, teller lockers, and depositories. See http://www.hamiltonsafe.com/ Chapter 11 Petition Date: April 25, 2006 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Jose Raul Cancio Bigas, Esq. 134 Mayaguez Street Hato Rey, Puerto Rico 00917 Tel: (787) 763-1940 Fax: (787) 758-9238 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 ------ --------------- ------------ Hamilton Air Equipment $88,325 3143 Production Drive Fairfield, OH 45014 Hamilton Safe Equipment $43,648 3143 Production Drive Fairfield, OH 45014 ADI Equipment $40,119 A Street #15 Julia Industrial Park San Juan, PR 00920 Banco Popular de PR Overdraft $39,000 Triple S Services $22,036 Bufete Cuevas & Lajara Services $20,000 Interlink Construction, Inc. Services $19,613 Cingular Wireless Services $11,867 Verizon Wireless Services $10,964 Progressive Finance Loan $10,683 United Hospital (Fenco) Equipment $7,471 World Net Services $5,229 Laboratorio Clinico Noy Services $2,741 Signal Tech Supplies $2,046 Juan Jacobo Garcia Services $2,000 UPS Services $1,823 TMI Supplies $1,459 Gemasco Equipment Lease $1,325 Edgar Bengoa Equipment Lease $1,119 Fleming's Transport Services $1,087 HEALTH NET: Improved Performance Prompts S&P to Affirm BB Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Health Net Inc. (NYSE:HNT) and Health Net's various operating subsidiaries to positive from stable because of the companies' significantly improved operating performance and successful provider-recontracting initiative. Standard & Poor's also said that it affirmed its 'BB' counterparty credit rating on Health Net and its counterparty credit and financial strength ratings on Health Net's operating subsidiaries. Health Net's core subsidiaries are rated 'BBB-', and its strategically important subsidiaries are rated 'BB+'. "The ratings are based on the group's well-established competitive position, improved profitability, and conservative debt leverage as well as the earnings and cash-flow diversity that its Government Services Division provides," said Standard & Poor's credit analyst Neal Freedman. "Offsetting these positive factors are the challenges Health Net faces in stabilizing commercial membership losses in its core California marketplace, its limited product scope, and its diminished competitive standing in the Northeast." Standard & Poor's expects Health Net's 2006 consolidated pretax GAAP earnings to be $560 million-$570 million, reflecting an ROR of about 4%. Excluding the impact of the Universal Care Inc. acquisition, Standard & Poor's expects Health Net's 2005 health plan enrollment base of 3.4 million members to increase by about 320,000 members in 2006. This increase consists of the addition of about 300,000 Medicare Part D prescription drug plan members and about 20,000 Medicare Advantage members. The capital adequacy ratio is expected to be 150%-160%. If Health Net meets or exceeds these expectations, the ratings will likely be raised by one notch. Conversely, if the company does not meet these expectations, Standard & Poor's will likely revise the outlook back to stable. Health Net operates one of the largest HMOs in California, which is characterized by a relatively concentrated population. The company's insured membership in California totaled about 2.25 million at year-end 2005, which constituted 65% of insured membership as of Dec. 31, 2005. The California operations have contributed significantly to the company's ability to provide liquidity for the parent and fund growth internally. HEALTHSOUTH CORP: Incurs $446 Million Net Loss in 2005 ------------------------------------------------------ HealthSouth Corporation incurred a $446 million net loss for the year ended Dec. 31, 2005, compared with a loss of $174.5 million in 2004. The increased loss, according to HealthSouth, principally resulted from: * the $215 million non-cash charge relating to a global, preliminary agreement in principle with the lead plaintiffs in the federal securities class actions and the derivative actions, as well as with insurance carriers, to settle litigation filed against the company, certain former directors and officers, and certain other parties; * a decrease in operating revenue as a result of declining volumes in each of the company's operating segments, particularly declines in its Inpatient Division due to the continuing negative effects of the 75% Rule and changes in the prospective payment system for inpatient rehabilitation facilities as well as the classification of two previously consolidated inpatient facilities as managed facilities as described below; -- The company has classified two Massachusetts inpatient facilities, which were previously consolidated, as managed facilities as a result of a change in ownership of the facilities due to the termination of the lease by the landlord. Consequently, the company's net operating revenues and operating earnings were negatively impacted by approximately $106.3 million and $3.6 million, respectively, in 2005. * higher other operating expenses, primarily related to increased professional fees associated with projects related to the company's compliance with Section 404 of the Sarbanes-Oxley Act of 2002, strategic consulting and other similar services from accounting and consulting firms; * increased interest expense, due primarily to amortization of consent fees and bond issue costs associated with the company's 2004 consent solicitation and 2005 refinancing transactions; and * an increase in the provision for income taxes despite a higher loss. Additionally, the company explained that the negative effects were partially offset by a $37.9 million recovery of bad debt in 2005 associated with the Meadowbrook transaction and the company's effective management of labor-related costs during periods of declining volume. Consolidated Adjusted EBITDA The company's Consolidated Adjusted EBITDA was $629.1 million in 2005 versus $698.8 million in 2004, representing a decrease of $69.7 million or 9.9%. The decline, the company said, was primarily due to declining volumes experienced by the company's operating segments and increased operating expenses associated with professional service fees, as discussed above. Internal Controls HealthSouth noted that its 2005 Form 10-K filing includes an unqualified opinion from PricewaterhouseCoopers LLP, the company's independent auditor, as to the fair presentation of the financial statements included in the Form 10-K. The company further noted that the 2005 Form 10-K contains an unqualified opinion with respect to the company's assessment of its internal control over financial reporting but contains an adverse opinion with respect to the effectiveness of the company's internal control over financial reporting, which is consistent with the company's assessment. Since Dec. 31, 2004, the company said it has significantly reduced the number of material weaknesses. Its improvements in internal controls include improved company-wide policies and procedures over the financial close and reporting process, implementation of an anti-fraud program, substantial improvements to the corporate governance process and updated and enhanced procedures with respect to the review, supervision, and monitoring of accounting operations at the facility level. Headquartered in Birmingham, Alabama, HealthSouth Corporation -- http://www.healthsouth.com/-- provides outpatient surgery, diagnostic imaging and rehabilitative healthcare services, operating facilities nationwide. * * * Moody's assigned HealthSouth's debt and corporate family ratings at B2 and B3 respectively. The ratings were placed on April 18, 2006, with a stable outlook. On April 11, 2006, Standard & Poor's placed the company's long term local and foreign issuer credit ratings at B with a stable outlook. HEARTLAND PARTNERS: Plans to Dissolve & Liquidate Under Chapter 11 ------------------------------------------------------------------ Heartland Partners, L.P. (Amex: HTL) and its affiliates plan on dissolving and liquidating by filing voluntary petitions under the provisions of Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court, Northern District of Illinois. Heartland Partners, L.P. is a Chicago-based real estate limited partnership with properties, primarily in the upper Midwest and northern United States. CMC Heartland is a subsidiary of Heartland Partners, L.P. and is the successor to the Milwaukee Road Railroad, founded in 1847. HSI ASSET: Moody's Rates Cert. Classes M-10 and M-11 at Low-B ------------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the senior certificates issued by HSI Asset Securitization Corporation Trust 2006-OPT3, Mortgage Pass-Through Certificates, Series 2006-OPT3, and ratings ranging from Aa1 to Ba2 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 HSBC Bank USA, N.A. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, overcollateralization, an interest rate cap agreement, and an interest rate swap agreement. Moody's expects collateral losses to range from 4.95% to 5.45%. Option One Mortgage Corporation will service the loans and Wells Fargo Bank, N.A. will act as master servicer. Moody's has assigned Option One Mortgage Corporation its top servicer quality rating as a primary servicer of subprime loans. Moody's has also assigned Wells Fargo Bank, N.A. its top servicer quality rating as a master servicer. The complete rating actions are: HSI Asset Securitization Corporation Trust 2006-OPT3 Mortgage Pass-Through Certificates, Series 2006-OPT3 * Class I-A, Assigned Aaa * Class II-A, Assigned Aaa * Class III-A-1, Assigned Aaa * Class III-A-2, Assigned Aaa * Class III-A-3, Assigned Aaa * Class III-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 * Class M-11, Assigned Ba2 INTEGRATED DISABILITY: Sells Assets to Reliance Standard for $700K ------------------------------------------------------------------ The Honorable Barbara J. Houser of the U.S. Bankruptcy Court for the Northern District of Texas gave Integrated DisAbility Resources, Inc., permission to sell substantially all of its assets to Reliance Standard Life Insurance, Inc., for $700,000. The Court allowed the Debtor to sell the assets free and clear of all liens, claims and encumbrances and interests. Reliance has made a $140,000 refundable down payment and will pay the balance of the purchase price at closing. Headquartered in Irving, Texas, Integrated DisAbility Resources, Inc. -- http://www.myidr.com/-- provides disability plans and ongoing health and productivity services to claimants and employees. The Debtor filed for chapter 11 protection on Feb. 10, 2006 (Bankr. N.D. Tex. Case No. 06-30575). Cynthia Williams Cole, Esq., and Vincent P. Slusher, Esq., at Godwin Pappas Langley Ronquillo LLP, represent the Debtor in its restructuring efforts. The United States Trustee for Region 6 wasn't able to form an official committee of unsecured creditors for lack of interest and lack of attendance during the creditors' meeting on March 21, 2006. When the Debtor filed for protection from its creditors, it estimated $1 million to $10 million in assets and $10 million to $50 million in debts. INTEGRATED ELECTRICAL: Texas Court Confirms Plan of Reorganization ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division confirmed the second amendment reorganization plan of Integrated Electrical Services, Inc., on April 26, 2006. The Plan had previously been approved by a vote of the company's subordinated note holders, senior convertible note holders and equity interest holders. The approval of the Plan affirms that all reorganization requirements have been met under the United States Bankruptcy Code, and IES expects to emerge from Chapter 11 protection in the first half of May 2006. Terms of the Plan Each holder of the company's approximately $173 million outstanding Senior Subordinated Notes will receive, in exchange for their total claim (including principal and interest), a pro rata portion of 82% of the new IES Common Stock to be issued pursuant to the Plan. Each holder of IES' currently outstanding Common Stock (as described in the Plan) will receive their pro rata portion of 15% of the new IES Common Stock to be issued pursuant to the Plan. Certain members of the company's management will receive restricted shares of new IES Common Stock equal to 3% of the new IES Common Stock to be issued pursuant to the Plan (in each case before giving effect to the new options issued pursuant to the company's 2006 Equity Incentive Plan, which are expected to be exercisable for up to 10% of the new IES Common Stock on a fully diluted basis). Lender Talks The company is conducting ongoing negotiations with term and revolving credit facility lenders, and it is contemplated that the company will enter into revolving and term exit agreements upon their emergence from Chapter 11. The revolving exit credit facility is expected to provide the company with liquidity for working capital and other general corporate purposes, and substantially all of the proceeds of the term exit credit facility are expected to be used to refinance the company's $50 million outstanding Senior Convertible Notes and related business unit guarantees. The company is also in negotiations with its existing surety bond providers regarding post- emergence surety bonding for the company. Pending the company's emergence from Chapter 11, the company will continue to pay its vendors in the ordinary course of business as has been done throughout the bankruptcy. The company's emergence from Chapter 11 remains subject to several conditions set forth in the Plan, including: -- the closing of the company's exit credit facilities (which are still being negotiated), -- the refinancing of the Senior Convertible Notes, and -- the confirmation order becoming a final order (which would occur after the 10-day appeal period runs without any appeal or the dismissal of any appeal that is made). There is no assurance as to when these conditions will be met. "I am very happy to announce that we have completed this critical step in our reorganization process," Byron Snyder, IES' chairman, president, and chief executive officer, said. "We believed all along that we could get through this process fairly quickly, and thanks to the hard work of many people, including our outside advisors, we have achieved our goals." About Integrated Electrical Headquartered in Houston, Texas, Integrated Electrical Services, Inc. -- http://www.ielectric.com/and http://www.ies-co.com/-- is an electrical and communications service provider with national roll-out capabilities across the U.S. Integrated Electrical Services offers seamless solutions and project delivery of electrical and low-voltage services, including communications, network, and security solutions. The Company provides everything from system design, installation, and testing to long-term service and maintenance on a wide array of projects. With approximately 140 locations nationwide, the Company is prepared to seamlessly manage and deliver all your electrical, security, and communication requirements. The Debtor and 132 of its affiliates filed for chapter 11 protection on Feb. 14, 2006 (Bankr. N.D. Tex. Lead Case No. 06-30602). Daniel C. Stewart, Esq., and Michaela C. Crocker, Esq., at Vinson & Elkins, L.L.P., represent the Debtors in their restructuring efforts. Marcia L. Goldstein, Esq., and Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, represent the Official Committee of Unsecured Creditors. As of Dec. 31, 2005, Integrated Electrical reported assets totaling $400,827,000 and debts totaling $385,540,000. J. CREW: S&P Rates $285 Million Term Loan at B With Positive Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services' assigned its 'B' rating and '3' recovery rating to J. Crew Operating Corp.'s $285 million term loan and listed that rating on CreditWatch with positive implications. The '3' rating indicates that lenders can expect meaningful (50%-80%) recovery of principal in the event of a payment default or bankruptcy. The 'B' corporate credit rating for J. Crew Group remains on CreditWatch with positive implications due to the planned recapitalization of the company, which includes an IPO of its common stock and debt refinancing. The company's announced that it plans to use proceeds from the new term loan and about $27 million in cash to refinance the company's $275 million 9 3/4% senior subordinated notes and about $22 million of its remaining outstanding 13-1/8% senior discount debentures. J. Crew has made substantial progress in turning around its operating performance for the past several quarters. This reflects management's successful merchandising initiative and operating discipline. Comparable-store sales rose 15.9% in the nine months ended Oct. 29, 2005, while direct sales increased 27% for the same period. Profitability has recovered because of lower markdowns and positive sales leverage. Despite the recent improvement, the company faces difficult comparisons over the next few quarters and has only a relatively short track record of operating performance at the current level. Cash flow generation has strengthened, with EBITDA increasing to $90 million for the nine months ended Oct. 29, 2005, from only $46 million one year ago. As a result, credit protection measures improved with total debt to EBITDA declining to about 6.1x for the 12 months ended Oct. 29, 2005, from more than 8x at fiscal year ended Jan. 29, 2005. Liquidity remains good, with good availability under its $170 million revolving credit facility. Assuming the completion of the planned recapitalization, Standard & Poor's expects to raise its corporate credit rating on J. Crew to 'B+', and remove the rating from CreditWatch, at which time the rating outlook is expected to be stable. The prospective rating action reflects the significant improvement in the financial profile because of a material reduction in debt leverage, as well as a streamlined capital structure and enhanced financial flexibility. JETBLUE AIRWAYS: Posts $32 Million Net Loss in First Quarter ------------------------------------------------------------ JetBlue Airways Corporation incurred a $32 million net loss for the first quarter of 2006, compared to first quarter 2005 net income of $6 million. Operating revenues for the quarter totaled $490 million, representing growth of 31.4% compared to the first quarter of 2005, on 27.2% more capacity. For the first quarter, revenue passenger miles increased 24.8% from the first quarter of 2005 to 5.5 billion. Yield per passenger mile was 8.37 cents, up 4% compared to 2005. Operating revenue per available seat mile increased 3.3% year-over-year to 7.46 cents. Available seat miles grew 27.2% to 6.6 billion. "We are disappointed to report our second consecutive quarterly loss," said David Neeleman, JetBlue's Chairman and CEO. "As we face what might be the 'new normal' for fuel prices, we have developed a comprehensive 'Return to Profitability' plan that includes right-sizing capacity, revenue enhancements and cost reductions. We are focusing on diversifying our route network with an emphasis on medium- and short-haul flights, revamping our fare structures to meet the sustained high fuel prices and right- sizing capacity in our trans-continental markets. The first action of this strategy is to adjust our fleet plan by deferring 12 aircraft previously scheduled for delivery in 2007 through 2009 to 2011 through 2012, and seeking a buyer for at least two of our Airbus A320 aircraft currently in revenue service. Taking these actions now allows us to continue to grow at a less accelerated rate, while still preserving our ability to take advantage of market opportunities now and in the future." JetBlue achieved a completion factor of 99.0% of scheduled flights in the first quarter, compared to 98.6% in 2005. On-time performance, defined by the U.S. Department of Transportation as arrivals within 14 minutes of schedule, was 70.6% in the first quarter compared to 65.6% in the same period in 2005. The Company attained a load factor in the first quarter of 2006 of 84.2%, a decrease of 1.6 points on a capacity increase of 27.2% over the first quarter of 2005. Dave Barger, President and COO, commented: "JetBlue's crewmembers again met the challenges of operating in the congested Northeast airspace, especially given the disruption caused by the blizzard in February. In addition, the performance of our E190 fleet has improved steadily since introducing this new aircraft type in November 2005. With six months of operating experience, E190 reliability is performing within the range of expectations on all our routes, including our initial route between New York's JFK and Boston's Logan airport. To further improve system-wide operational performance we revitalized our 'BlueTurn' process, designed to obtain better labor efficiencies for our airport crewmembers, while keeping aircraft ground time to an absolute minimum. Our crewmembers' enthusiasm and commitment to keeping the JetBlue Experience unique for our customers was recognized with the 'Best Domestic Airline' by Travel + Leisure's readers, 'Passenger Service Award" by Air Transport World Magazine and the number 1 ranking in the Wichita State University and University of Nebraska Airline Quality Rating for the third straight year." Return to Profitability Plan As part of its Return to Profitability Plan, JetBlue's leadership team completed an extensive evaluation, which identified opportunities to decrease costs, increase labor efficiencies and improve revenue performance, while keeping the JetBlue Experience unique and continuing to meet customer expectations. Specific initiatives of this plan will be rolled out throughout 2006 and include a variety of revenue enhancement initiatives, more efficient fuel usage and conservation efforts, more rigorous supply chain management and a broad review of all expenses throughout the organization. Under the plan, JetBlue will reduce capacity in certain trans- continental markets, increase trans-continental flying in higher performing markets and shift flying to shorter haul markets as a result of the high cost of fuel. Supporting this initiative, JetBlue introduced new service between the following city pairs since the beginning of the year: Short-Haul Medium-Haul ---------- ----------- Boston - Washington New York/JFK - Austin, TX New York/JFK- Richmond, VA Boston - Austin, TX Boston - Richmond, VA Boston - Nassau As part of the airline's capacity-adjustment plan for 2006, JetBlue intends to sell at least two of its existing Airbus A320 aircraft that are currently in revenue service. JetBlue projects 2006 ASM growth, which had previously been projected at 28-30% over 2005, will be reduced to 20-22% for the full year over 2005. JetBlue will also defer 12 Airbus A320 aircraft originally scheduled for delivery between 2007-2009 to 2011-2012. To preserve the airline's ability to take advantage of market opportunities, JetBlue has increased A320 options from two aircraft to four aircraft in both 2009 and 2010. The Embraer E190 delivery schedule remains unchanged. Second Quarter Outlook For the second quarter of 2006, JetBlue expects to report an operating margin between 4% and 6% assuming an all in aircraft fuel cost per gallon of $2.10. For the second quarter, CASM is expected to increase between 19% and 20% over the year-ago period, at the assumed $2.10 aircraft fuel cost per gallon. Excluding fuel, CASM in the second quarter is expected to increase between 9% and 11% year over year. Capacity is expected to increase between 22% and 24% over the same period last year. For the full year 2006, JetBlue expects to report an operating margin between 3% and 5% based on an assumed aircraft fuel cost per gallon of $2.10, net of hedges. CASM for the full year is expected to increase between 13% and 15% over full year 2005, at the assumed $2.10 aircraft fuel cost per gallon. Excluding fuel, CASM in 2006 is expected to increase between 6% and 8% year over year. Capacity for the full year 2006 is expected to increase between 20% and 22% over 2005. Based on these assumptions, the company expects to report net income in the second quarter and a net loss for the full year 2006. About JetBlue Based in Forest Hills, New York, JetBlue Airways Corporation (Nasdaq:JBLU) -- http://www.jetblue.com/-- provides passenger air transportation services primarily in the United States. As of Feb. 14, 2006, the Company operated approximately 369 daily flights serving 34 destinations in 15 states, Puerto Rico, the Dominican Republic, and the Bahamas. The Company also provides in-flight entertainment systems for commercial aircraft, including live in-seat satellite television, digital satellite radio, wireless aircraft data link service, and cabin surveillance systems and Internet services, through its wholly owned subsidiary, LiveTV, LLC. JETBLUE AIRWAYS: Weak Financial Profile Cues S&P's Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on JetBlue Airways Corp., including the 'B+' corporate credit rating, on CreditWatch with negative implications. "The CreditWatch placement reflects the company's weakened financial profile due to its $32 million loss incurred in the first quarter of 2006, in conjunction with its $42 million loss incurred in the fourth quarter of 2005," said Standard & Poor's credit analyst Betsy Snyder. "Although JetBlue expects to report a profit in the second quarter of 2006, it anticipates a loss for full-year 2006." JetBlue's profitability has been hard hit by continuing high fuel prices. As a result, it has developed a "Return to Profitability" plan that includes right-sizing capacity, revenue enhancements, and cost reductions. The plan calls for the deferral of 12 A320 deliveries originally scheduled for the 2007 to 2009 period to the 2009 to 2012 period, and the sale of two A320's from its current fleet; the airline will also focus more on short- to medium-haul flying while reducing certain longer-haul flights. In 2005, JetBlue lost $20 million after several years of profitability, a period when most U.S. airlines were unprofitable. However, the company has minimal fuel hedging in place and has not been able to increase fares enough to offset continuing high fuel prices. The airline has also been plagued by operational performance issues and integration problems related to its new Embraer 100-seat regional jet. Standard & Poor's will evaluate the company's business and financial prospects with management to resolve the CreditWatch review in the near future. KERZNER: Baron Cos. Buy Shares & Negotiate $3B Going-Private Deal ----------------------------------------------------------------- Ronald Baron, Chairman of the Board and Chief Executive of these companies, directed the purchase of 5,313,000 shares of Kerzner International Limited's common stock for $154,732,879: * Baron Capital Group, Inc.; * BAMCO, Inc.; * Baron Asset Fund; and * Baron Capital Management, Inc. Investment advisory clients for BAMCO, Inc., bought the shares at Mr. Baron's advice. Baron Asset Fund bought 2,400,000 of those shares for $77,808,281. Baron Capital Management's investment advisory clients bought 339,145 of those shares for $8,897,033. An investment partnership under the control of Baron Capital also bought 135,000 of those shares for $3,043,497. These entities now beneficially own these Kerzner shares: Baron Entity # of Shares % of Stake ------------ ----------- ---------- Baron Capital Group 5,787,145 15.8% BAMCO 5,313,000 14.5% Baron Asset Fund 2,400,000 6.5% Baron Capital Management 474,145 1.3% Ronald Baron 5,787,209 15.8% Going Private Deal Baron's companies bought the shares as Kerzner mulls a $3.6 billion going-private deal. An investor group -- led by the Company's Chairman, Sol Kerzner and its Chief Executive Officer, Howard "Butch" Kerzner -- offers to buy majority of the Company's shares for $76 in cash per share. The investor group also includes: * Istithmar PJSC, a significant Kerzner shareholder; * Whitehall Street Global Real Estate Limited Partnership 2005; * Colony Capital LLC, Providence Equity Partners, Inc.; and * The Related Companies, L.P., which is affiliated with one of the Company's directors. The transaction includes the assumption of $599 million of net debt as of Dec. 31, 2005. Negotiating Terms of the Deal Mr. Baron told Howard Kerzner he does not support the proposed $76 per share going-private transaction. Mr. Baron asserted this position during their meetings with Baron Capital Group's general counsel on April 19 and April 20, 2006. Mr. Baron said he carried the voice of investment advisory clients of his firms. Mr. Baron said the group headed by Mr. Kerzner should raise their offer to $80 per share. At that price, Mr. Baron is certain his clients would support the deal. Mr. Baron's clients, he said, also want to invest at least $200 million of equity in Kerzner. Mr. Baron subsequently spoke to Eric Siegel, the head of Kerzner's special committee charged with evaluating this transaction, and Mr. Siegel's counsel by telephone. During that telephone call, Mr. Baron reiterated his stand. He also informed Mr. Siegel that he was not interested in investing in Kerzner as a privately owned business on behalf of clients if that company were managed by anyone but Mr. Kerzner and his father, Solomon Kerzner. Mr. Baron told Mr. Siegel that, in his considered judgment, a transaction with the Kerzner family continuing as management not only offered Kerzner prospects for further growth but provided a high degree of certainty that this proposed transaction could be completed rapidly. Financials As of Dec. 31, 2005, Kerzner has $2,276,622 in assets, $1,111,097 in debts and $1,161,762 in equity. At Dec. 31, 2005, Kerzner has $269.72 million of current assets to pay off $253.94 million of current debts. Kerzner has been profitable in the past three years. In 2005, it earned $721.52 million in net income. Kerzner burned $64.39 million of its cash. Moody's Investors Service and Standard & Poor's Ratings Services are reviewing their ratings on Kerzner. Moody's puts Ba3 Corporate Family Rating and B2 Guaranteed Senior Subordinate Ratings on Kerzner. Kerzner International North America, Inc. got Moody's B2 Guaranteed Senior Subordinate shelf rating. Kerzner has S&P's 'BB-' corporate credit rating. About Kerzner International Kerzner International Limited -- http://www.kerzner.com/-- through its subsidiaries, is a leading international developer and operator of destination resorts, casinos and luxury hotels. The Company is also a 37.5% owner of BLB Investors, L.L.C., which owns Lincoln Park in Rhode Island and pari-mutuel racing facilities in Colorado. In the U.K., the Company is currently developing a casino in Northampton and received a Certificate of Consent from the U.K. Gaming Board in 2004. In its luxury resort hotel business, the Company manages ten resort hotels primarily under the One&Only brand. The resorts, featuring some of the top-rated properties in the world, are located in The Bahamas, Mexico, Mauritius, the Maldives and Dubai. An additional One&Only property is currently in the planning stages in South Africa. KRATON POLYMERS: S&P Rates Proposed $365 Million Facility at B+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating and its recovery rating of '2' to Kraton Polymers LLC's proposed $365 million senior secured term loan facility, based on preliminary terms and conditions. At the same time, Standard & Poor's affirmed all ratings on Kraton and its parent, Polymer Holdings LLC, including its 'B+' corporate credit rating. The rating on the senior secured credit facility is the same as the corporate credit rating; this and the recovery rating of '2' indicate that bank lenders can expect substantial (80% to 100%) recovery of principal in the event of a payment default. "The ratings on Kraton reflect its weak business risk profile derived from its narrow focus on the styrenic block polymers (SBCs) market," said Standard & Poor's credit analyst George Williams. "The ratings also reflect a difficult raw-material environment and a highly leveraged financial profile." Houston, Texas-based Kraton is a leading producer of SBCs with about $975 million in annual sales and approximately $565 million of debt outstanding (excluding operating leases and unfunded postretirement benefits). The company produces both unhydrogenated SBCs and hydrogenated SBCs, sold under the Kraton D and Kraton G brand names, respectively. SBCs offer flexibility, resilience, strength, and durability to a wide range of products in a number of end-use markets, including: (1) paving and roofing; (2) adhesive, sealants and coatings; (3) compounding channels; (4) packaging and films; and (5) personal care. The SBC market is estimated at $3 billion and is expected to grow by about 6% a year, with faster growth expected in HSBCs, which are primarily used in compounding and polymer systems. USBC growth is typically slower because of some concentration of sales to the more mature footwear market. Still, demand for both USBCs and HSBCs will show some cyclicality with economic conditions. Kraton accounts for the largest share of SBC industry sales -- more than twice that of its nearest competitor -- and holds the leading share in both USBCs and HSBCs. The company's focus on products and end-use markets that are more difficult to produce and require higher performance characteristics, leads to value- added pricing and better margins. These products offer a good trade-off between cost and performance, which supports demand and limits substitution risk (although a higher pricing environment due to elevated raw-material costs may begin to test this strength). Kraton has the top share in the remaining three key end markets. Still, barriers to entry are moderate, so competitors are expected to gradually reduce the company's sizable share advantage. LBSBC SECURITIES: Moody's Rates $6.5 Million Class N3 Notes at B2 ----------------------------------------------------------------- Moody's Investors Service assigned ratings to three classes of notes of the LBSBC Net Interest Margin Securities, Series 2006-1 transaction issued by LBSBC NIM Company 2006-1. The transaction represents a securitization of certain residual certificates issued by Lehman Brothers Small Balance Commercial, Series 2005-2. Primary collateral for the Net Interest Margin Notes consists of the Class X certificates and Class P certificates from the Underlying Transaction. The Underlying Transaction in turn is collateralized by a pool of small business loans secured by commercial real estate being serviced by Lehman Brothers Bank, a subsidiary of Lehman Brothers, Inc. Complete rating actions: Issuer: LBSBC Net Interest Margin Securities, Series 2006-1 * $12,205,000 Class N1 Notes, rated Baa2 * $7,323,000 Class N2 Notes, rated Ba2 * $6,509,000 Class N3 Notes, rated B2 The ratings are based on the anticipated cash flows to be received from the Class X and Class P Certificates, as well as in the case of the Class N1 and Class N2 Notes, their respective reserve accounts. The Class X and Class P Certificates hedge each other to some degree, insofar as lower levels of prepayments and prepayment fee collections should result in higher levels of excess interest, while higher levels of prepayments, while reducing future excess interest should result in higher prepayment fee collections. However it should be noted that the prepayment fees on the underlying loans decline or run off over time so that after five years there will be only limited benefit available from the Class P Certificates in respect of loan prepayments. The notes were sold in privately negotiated transactions without registration under the Securities Act of 1933. The issuance has been designed to permit resale under Rule 144A. LEAR CORP: Completes New $1 Billion Financing Transaction --------------------------------------------------------- Lear Corporation (NYSE: LEA) completed a $1 billion term loan facility, the proceeds of which will be used to refinance upcoming debt maturities. The term loan facility will mature in April 2012 and is in addition to the Company's currently existing $1.7 billion revolving credit facility. "The new credit facility addresses Lear's 2007 debt maturities and a portion of our 2008/2009 debt maturities," said Bob Rossiter, Lear's chairman and chief executive officer. "By addressing those debt maturities early, investors can be assured that the Company is focused on improving our longer-term operating performance." In connection with the new term loan facility, the Company amended and restated its prior credit facility to: -- provide additional collateral for both the Company's existing revolving credit facility and the new term facility, -- increase the interest rates applicable to the revolving credit facility and -- modify the financial covenants to provide additional flexibility. Headquartered in Southfield, Michigan, Lear Corporation -- http://www.lear.com/-- is one of the world's largest suppliers of automotive interior systems and components. Lear provides complete seat systems, electronic products and electrical distribution systems and other interior products. With annual net sales of $17.1 billion, Lear ranks #127 among the Fortune 500. The Company's world-class products are designed, engineered and manufactured by a diverse team of 115,000 employees at 282 locations in 34 countries. Lear is traded on the New York Stock Exchange under the symbol [LEA]. * * * As reported in the Troubled Company Reporter on April 21, 2006, Standard & Poor's affirmed the 'B+' rating on the $1 billion first-lien term loan. Standard & Poor's corporate credit rating on Lear Corp. is B+/Negative/B-2. The speculative-grade rating reflects the company's depressed operating performance caused by severe industry pressures. LEVEL 3: High Leverage Cues DBRS to Hold Low-B and Junk Ratings --------------------------------------------------------------- Dominion Bond Rating Service confirmed the ratings of Level 3 Communications Inc.'s Senior Unsecured Notes at CCC and its Subordinated Notes at C. In addition, DBRS confirmed the ratings of Level 3 Financing Inc.'s Senior Secured Credit Facility at B (low) and its Senior Unsecured Notes at CCC. All trends remain Stable. Rating actions: * Senior Secured Credit Facility -- Confirmed B (low) * Senior Unsecured Notes -- Confirmed CCC * Subordinated Notes -- Confirmed C Level 3's ratings remain confined at their current levels and continue to reflect the high degree of leverage that exists at the Company, along with the expectation of continued free cash flow deficits given the challenging environment that faces alternate communication providers. DBRS changed the trend on Level 3's ratings to Stable from Negative back in December 2005 reflecting the acquisition of WilTel Communications, LLC, which should help improve Level 3's cash flow from operations along with the Company's improved liquidity position through the recent debt exchange offer. This exchange reduced the amount of debt maturing in 2008 from approximately $1.3 billion to just under $600 million, thus alleviating DBRS's concerns about these upcoming maturities. Although DBRS notes that the Company's recent issuance of $700 million in new debt will increase interest expense, it does provide Level 3 with the flexibility to either call back further 2008 notes that can be redeemed in 2006 or pursue further acquisitions that could potentially help Level 3 accelerate the reduction in its free cash flow deficits. Given its current configuration, Level 3 is still challenged by pricing declines in certain product areas, although it appears that pricing pressures are starting to moderate. Additionally, the Company is also facing a shift in its business mix into new growth areas related to Voice over Internet Protocol and Video over Broadband to alleviate the declines in its managed modem business and the elimination of DSL revenues. DBRS believes uncertainty remains over the timing of consumer adoption of these new growth services, a factor that Level 3 has no control over. As a result, it remains unclear on exactly when these new services will begin to meaningfully contribute to Level 3's cash flow from operations. DBRS does acknowledge that both the recent WilTel and Progress Telecom, LLC acquisitions should materially reduce free cash flow deficits, although the full benefits will likely not be realized until 2007. MAGELLAN HEALTH: S&P Ups Counterparty Credit Rating to BB from B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its counterparty credit rating on Magellan Health Services Inc. (NASDAQ:MGLN) to 'BB' from 'B+'. The outlook is stable. The upgrade reflects Magellan's improved credit profile, which can be attributed to sustained earnings strength, continued streamlining of operations, and materially improved balance-sheet quality linked to a significant debt reduction in 2005. "Magellan has made significant operational progress since emerging from bankruptcy in January 2004," said Standard & Poor's credit analyst Joseph Marinucci. "It has done so by focusing mostly on internal initiatives while enhancing its financial profile and building a sustainable core business model." Key drivers for 2005 included: * better-than-anticipated contract retention; * favorable utilization; and * stepped-up cost-reduction initiatives. Magellan's fundamentals are conservative for the rating, but Standard & Poor's position about its credit profile remains tempered by prospective qualitative considerations related to competitive dynamics and Magellan's plans for growth in compatible and new markets. Magellan's core business profile is good, though new opportunities in its Health Plan Division are limited. "We believe that Magellan's strategic objectives will need to become more externally focused to build and grow the business, which increases the potential for greater operational/financial risk," Mr. Marinucci added. "This is reflected in the current rating assignment." The ratings also reflect Magellan's: * established competitive position, * good earnings profile, and * good financial flexibility. Offsetting factors include: * competitive conditions in its core market, * an acquisition-oriented growth strategy, and * client concentration. Standard & Poor's expects Magellan to place greater emphasis on efforts to diversify its business profile organically and through acquisition over the near to intermediate term. The stable outlook reflects Standard & Poor's expectations that the company's growth and return objectives can be met without jeopardizing operational focus or the company's improved financial condition. The outlook could be revised to positive if Magellan materially exceeds the rating agency's expectations for 2006 and its acquisition-based growth strategy is adequately managed from a risk perspective. Conversely, the outlook could be revised to negative if profitability were to materially erode or if the company made an acquisition that significantly pressured its capital structure. MLK RETAIL: Case Summary & 9 Largest Unsecured Creditors -------------------------------------------------------- Debtor: MLK Retail Plaza, LLC dba MLK Retail Plaza Chevron 2456 Martin Luther King Jr. Drive Atlanta, Georgia 30311 Tel: (404) 696-5012 Bankruptcy Case No.: 06-64405 Type of Business: The Debtor operates a convenience store and gasoline station complex. Chapter 11 Petition Date: April 20, 2006 Court: Northern District of Georgia (Atlanta) Judge: Mary Grace Diehl Debtor's Counsel: Rodney L. Eason, Esq. The Eason Law Firm Suite 200 6150 Old National Highway College Park, Georgia 30349-4367 Tel: (770) 909-7200 Fax: (770) 909-0644 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 9 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Georgia DOR Sales & Use Tax Sales Tax $983,672 Taxpayer Services Division P.O. Box 105499 Atlanta, GA 30348-5499 Indore Oil Company Trade Debt $82,972 1000 Main Street, Suite D Stone Mountain, GA 30083 SunTrust Bank, NA Bank Loan $49,970 P.O. Box 26202 Richmond, VA 23260 Core-Mark Int. Inc. Trade Debt $14,066 Internal Revenue Service Federal Tax $7,992 Home Depot Credit Services Credit Card $3,295 City of Atlanta Business License $2,984 SunTrust Bank, NA Credit Card $1,875 Georgia Department of Revenue State Tax $400 MORGAN STANLEY: S&P Raises $3 Million Class A-8 Notes Rating to B- ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its rating on class A-8 of Morgan Stanley ACES SPC's secured fixed-rate notes from series 2006-8. At the same time, the rating on class A-14 is placed on CreditWatch with negative implications. The upgrade of class A-8 reflects the March 29, 2006, raising of the rating on the underlying securities, the $500 million 6.875% notes issued by Dynegy Holdings Inc. The placement of the class A-14 rating on CreditWatch reflects the March 29, 2006, placement of the rating on the underlying securities, the $250 million 5.25% senior notes issued by American Axle & Manufacturing Holdings Inc., on CreditWatch with negative implications. This issue is a swap-independent synthetic transaction that is weak-linked to the reference obligations on the underlying collateral for each class. Rating raised: Morgan Stanley ACES SPC Series 2006-8 $3 million secured fixed-rate notes (Referenced Obligation Dynegy Holdings Inc. senior unsecured debt) Rating Class To From ----- -- ---- A-8 B- CCC+ Rating placed on creditwatch negative: Morgan Stanley ACES SPC Series 2006-8 $3.5 million secured fixed-rate notes (Referenced Obligation American Axle & Manufacturing Inc. senior unsecured debt) Rating Class To From ----- -- ---- A-14 BBB-/Watch Neg BBB- MYCOM GROUP: Schumacher Raises Going Concern Doubt -------------------------------------------------- Auditors working for Schumacher & Associates, Inc., in Denver, Colorado, raised substantial doubts about Mycom Group, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2004, and 2005. The auditors pointed to the company's losses from operations, debt covenants default, and working capital and equity deficit. Debt Covenants Default First Financial Bank, National Association, the Company's primary lender, provides Mycom with a renewable line of credit for $650,000 due Nov. 20, 2006, that bears interest at a rate of 1/2% point above the Bank's Prime rate. The amount due on that line of credit at Dec. 31, 2005, was $584,353. First Financial Bank also provides the Company with a $400,000 long-term note due April 1, 2011, that bears interest at the prime rate, with $3,333.33 monthly payment for principal and interest. The principal balance on the long-term note at Dec. 31, 2005, was $317,138. As of Dec. 31, 2005, the Company was in default of its debt covenants. Financials Mycom Group, Inc., filed its consolidated financial statements for the year ended Dec. 31, 2005, with the Securities and Exchange Commission on April 12, 2006. The company reported a $700,882 net loss on $4,021,772 of revenues for the year ending Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $596,150 in total assets and $2,505,506 in total liabilities, resulting in a $1,909,356 in stockholders' equity deficit. The company's Dec. 31 balance sheet also showed strained liquidity with $558,414 in total current assets available to pay $2,023,163 in total current liabilities coming due within the next 12 months. A full-text copy of the company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?847 Headquartered in Cincinnati, Ohio, Mycom Group, Inc., has a wholly owned subsidiary, Broughton International that specializes in reselling third-party software solutions to businesses, schools and government agencies. MYCOM GROUP: Sells Software Unit to Rippe & Kingston for $850,000 ----------------------------------------------------------------- Mycom Group, Inc., sold its Software Sales Division to Rippe & Kingston Systems, Inc., for $850,000 on April 17, 2006. Rippe & Kingston will pay $122,000 in cash, assume $528,000 of liabilities and pay an additional $200,000 in the future. A full-text copy of the asset purchase agreement is available for free at http://ResearchArchives.com/t/s?848 Headquartered in Cincinnati, Ohio, Mycom Group, Inc., has a wholly owned subsidiary, Broughton International that specializes in reselling third-party software solutions to businesses, schools and government agencies. MURPHY OIL: Moody's Cuts Part of Shelf Rating to (P)Ba1 ------------------------------------------------------- Moody's Investors Service downgraded Murphy Oil Corporation's long-term ratings to Baa2 from Baa1. The action concludes Moody's review of Murphy's ratings that was initiated on Feb. 21, 2006. The downgrade primarily reflects Moody's concerns regarding Murphy's operational performance, particularly continued low reserve replacement rates and high finding and development costs. The ratings outlook is negative. Over the last several years, there has been a notable shift in Murphy's business strategy to emphasize high-impact exploration. For an E&P company of Murphy's size, high-impact exploration and long lead time offshore projects inevitably results in lumpy reserves replacement and F&D costs, even when measured on a three- year average basis. As of the end of 2005, Murphy's as-reported three-year average reserves replacement was approximately 74% and its three-year average F&D costs are in excess of $25.00 per barrel of oil equivalent. Moody's recognizes that these figures reflect the impact of long lead time projects, in particular the Kikeh project in Malaysia, for which proved reserves have not been fully booked. However, these figures also reflect the absence of any notable discoveries in recent years, particularly in 2005, during which nearly all of the potentially high-impact prospects drilled by the company were unsuccessful. Moody's E&P rating methodology emphasizes cost structure, particularly F&D costs and full-cycle economics. Based on as-reported data, Murphy's predicted rating under Moody's rating methodology is currently lower than Baa2. However, Moody's has positioned Murphy's rating higher than what the rating methodology would indicate primarily in recognition of its long history and strong balance sheet. Moody's believes that Murphy's high degree of financial flexibility gives it the ability to address its lagging operational performance, should it choose to do so. In addition to a strong balance sheet, Murphy's downstream operations provide some measure of debt capacity, as well as an element of diversification. The negative rating outlook reflects the possibility of another downgrade should Murphy continue to struggle with capital productivity. Moody's believes that absent a change in business strategy or a series of discoveries that provide visible contributions to production and proved reserves, continued lumpy reserves replacement rates and F&D costs are likely. While Murphy's Kikeh project should boost production and add to proved reserves in late 2007 and in the years following, Moody's believes that the development of this project is not, by itself, sufficient to support a Baa2 rating. A firming of the rating will require progress in other areas and evidence of significantly improved capital productivity through reserves replacement at competitive F&D costs. Ratings downgraded include Murphy's senior unsecured notes, from Baa1 to Baa2, and its shelf registration from (P)Baa1/(P)Baa2/(P)Baa3 to (P)Baa2/(P)Baa3/(P)Ba1. Murphy Oil Corporation is headquartered in El Dorado, Arkansas. NASDAQ STOCK: Moody's Rates Three New Bank Facilities at Ba3 ------------------------------------------------------------ Moody's Investors Service withdrew its ratings on The Nasdaq Stock Market, Inc.'s $750 million Six Year Senior Secured Term Loan and the $75 million Senior Secured Revolving Credit Facility. Both facilities have been repaid and terminated. Moody's also assigned ratings to three new bank facilities of Nasdaq: a $750 million Senior Secured Term Loan B, a $1,100 million Secured Term Loan C, and a $75 million Senior Secured Revolving Credit Facility. Each facility is rated Ba3 with a negative outlook. On April 12, 2006, Moody's lowered Nasdaq's long-term corporate family rating to Ba3 from Ba2 and also lowered the outlook to negative from stable. The rating action was prompted by NASDAQ's announcement that it had acquired for approximately 1,175 pence per share 38.1 million shares of the London Stock Exchange plc. Total consideration paid by NASDAQ for its 14.87% stake in the LSE was approximately GBP447.7 million. In explaining its rating action, Moody's noted the material increase in the issuer's leverage and erosion of debt service coverage as a result of the acquisition of the LSE stake, as well the likely additional deterioration of Nasdaq's credit metrics in the event it decided to pursue and was able to accomplish the full acquisition of the LSE. The funds raised through New Term Loan B were used by Nasdaq to pay off Old Term Loan A, which was originally used to finance the INET acquisition in October of 2005. The proceeds from New Term Loan C in the amount of approximately $790 million were used to finance the acquisition of the LSE stake, with the remaining balance likely to be used for any additional incremental purchases of LSE shares, in the event that Nasdaq chooses to pursue such a strategy. On April 24, 2006, Nasdaq announced a follow-on equity offering, the proceeds of which will be used to repay its existing indebtedness under New Term Loan C. While this measure is viewed positively by Moody's as a way of reducing Nasdaq's elevated amount of indebtedness, the rating agency noted that, to the degree that Nasdaq continues to pursue strategic acquisitions, involving the LSE or other exchanges, that the funding structures of those prospective deals and the resultant credit metrics of the issuer will remain a critical driver of the issuer's ratings. These ratings were withdrawn: * $750 Million Six Year Senior Secured Term Loan * $75 Million Senior Secured Revolving Credit Facility Both facilities were rated Ba3 with a negative outlook. These new ratings were assigned: * $750 Million Six Year Senior Secured Term Loan B -- Ba3; negative * $75 Million Five Year Senior Secured Revolving Credit Facility -- Ba3; negative * $1,100 Million Six Year Secured Term Loan C -- Ba3; negative NASDAQ operates The NASDAQ Stock Market and provides securities listing trading and information products and services. NASDAQ reported $880 million of revenues and $62 million of net income for 2005. NORTHWEST AIRLINES: Wants to Assume Tokyo Property-Related Pacts ---------------------------------------------------------------- Northwest Airlines Corp. and its debtor-affiliates ask the United States Bankruptcy Court for the Southern District of New York for authority to assume agreements signed in connection with their two real estate properties located in Tokyo, Japan: (i) Amended and Restated Loan Agreements, dated April 15, 2005, and effective as of June 20, 2006; and (ii) Ground Leases, dated April 15, 2005, and effective as of June 20, 2006. According to Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, in April 2005, the Debtors entered into a series of transactions to monetize the value of their properties located at 17-10, Sarugaku-Chu, Shibuya-ku, and 4-10, Minami Azabv, Minato, both in Tokyo, in the most cost and tax efficient manner. In the first part of the transactions, the Debtors entered into an interim financing arrangement comprised of: (i) an JPY8.5 billion senior loan; and (ii) a JPY2.5 billion junior loan, totaling approximately $100,000,000. Each of the loans is secured by a pledge of the Debtors' obligations under a pre-existing loan agreement and indirectly by a mortgage on the Japanese Properties. The Interim Financing matures on June 20, 2006. In April 2005, the Debtors also entered into two Amended and Restated Loan Agreements with Airline Funding, LLC, which are to replace the Interim Financing on June 20, 2006. The Long-Term Financing will provide the Debtors with a 25-year term loan in the amount of JPY11 billion, equivalent to approximately $100,000,000. The Long-Term Financing is secured by first mortgages on the Japanese Properties and a pledge of rents owing under the Ground Leases. Mr. Petrick relates that the Long-Term Financing is non-recourse to the Debtors. As part of the Long-Term Financing, the Debtors agreed to lease the Japanese Properties to Secured Capital Japan Co. Ltd. and Rockpoint Fund I Acquisitions L.L.C., or their designees, at market term rates for a 60-year term. The Long- Term Financing and the Ground Leases are cross-defaulted, in which any liabilities arising as a result of a default on the loan or leases by any party could be offset by a corresponding rent or interest payment. The Long-Term Financing and Ground Leases will result in a very low net after tax cost of financing of the Japanese Properties to the Debtors, Mr. Petrick tells Judge Gropper. The Long-Term Financing and the Ground Leases will replace and relieve the Debtors of any obligations under the Interim Financing. Forbearance Agreement As a result of their concern over the Debtors' financial condition, on Sept. 14, 2005, prior to the commencement of the Debtors' Chapter 11 cases, the lenders to the Interim Financing entered into a forbearance agreement with the Debtors. Pursuant to the Forbearance Agreement, the Lenders agreed to waive the Debtors' filing for relief under Chapter 11 as an event of default under the terms of the Interim Financing, provided that the Debtors assume the Ground Leases and Amended and Restated Loan Agreements. Pursuant to the Forbearance Agreement, the Debtors also prepaid JPY500,000,000 in principal owing under the Interim Financing. This amount will be restored under the Long-Term Financing, and the outstanding principal amount of the loan will increase from JPY10.5 billion under the Interim Financing to JPY11 billion under the Long-Term Financing. The Debtors have thoroughly analyzed all available options with respect to the Japanese Properties and have concluded that the transactions reflected in the agreements are more beneficial to the Debtors' estates than any presently available alternative, Mr. Petrick relates. The long term Financing will enable the Debtors to continue to monetize a substantial portion of the Japanese Properties' value at a low cost and in a tax efficient manner. About Northwest Airlines Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 215/945- 7000). NORTHWESTERN CORP: Babcock & Brown Buys Assets for $2.2 Bil. Cash ----------------------------------------------------------------- The Board of Directors of NorthWestern Corporation, dba NorthWestern Energy (Nasdaq: NWEC), reported that the Company reached a definitive agreement with Babcock & Brown Infrastructure under which BBI will acquire NorthWestern in an all-cash transaction at $37 per share, valuing the Company at $2.2 billion. The transaction is subject to regulatory and shareholder approvals. BBI is a utility infrastructure company based in Sydney, Australia and listed on the Australian Stock Exchange (ASX: BBI). It owns and manages on a long-term basis, utility and infrastructure companies and assets around the world. BBI owns companies in electricity transmission and distribution, gas transmission and distribution, and transport infrastructure, and has ownership interests in thermal and renewable power generation. BBI's energy sector management is utility executives with an average of more than 25 years experience in the electric and gas transmission and distribution business. BBI has committed to maintaining existing employee and customer service levels. Additionally, NorthWestern will have access to BBI's capital base and experience with the development of new transmission, wind power and coal projects. The transaction will not increase NorthWestern's debt. "BBI is extremely pleased to have the opportunity to team with this well run, locally based utility and to further expand BBI's involvement in the United States," Steven Boulton, Chief Executive Officer of Babcock & Brown Infrastructure said. "There are many parallels between the NorthWestern business and BBI's complementary businesses in Australia, New Zealand and Europe. Each of the businesses operates distribution and transmission assets in locally regulated environments with geographically large service territories. We look forward to meeting with the regulators and other state and local public officials to share details of our plans to ensure that NorthWestern will continue to improve service, stabilize rates and provide exceptional customer care in Montana, South Dakota and Nebraska." "We are pleased that our strategic review process has yielded an extremely positive outcome for all our stakeholders -- one that is far superior to the unsolicited proposals received during 2005, and which represents the best value for stockholders of the proposals we received as part of the process," E. Linn Draper, Chairman of the Board of NorthWestern, said. "In its review of the proposals, the Board recognizes that BBI provides the experience and stability that the local community demanded, while offering the highest value for stockholders. Additionally, the transaction will not increase NorthWestern's debt and includes adequate protections for NorthWestern's stockholders." BBI and NorthWestern are committed to maintaining strong relationships with the communities and the regulators in Montana, South Dakota and Nebraska. BBI has indicated an intention to ensure local management accountability with a focus on a continuation of excellent customer service. The transaction is subject to the approval of NorthWestern's shareholders and customary regulatory approvals, and is expected to be completed in 2007. Upon closing NorthWestern will cease to be a publicly traded company and will become a locally managed subsidiary of BBI. Sale Process In mid-2005, following its emergence from a successful reorganization under Chapter 11 and several quarters of improving financial performance, NorthWestern received several informal proposals from parties who were interested in buying the Company. In keeping with its fiduciary duties, NorthWestern's Board of Directors in November 2005 directed senior management and its financial advisor to commence an evaluation of all strategic alternatives to maximize value for all stockholders. In connection with the review, NorthWestern identified and invited interested parties, including Montana Public Power and Black Hills Corporation, to submit formal proposals to acquire NorthWestern. All interested parties were invited to perform due diligence, and the Board's financial advisor and senior management actively engaged with the bidders as they considered their final offers. The Board established an M&A Committee of independent directors to oversee the process. After a thorough review and analysis of the final proposals, the Board determined that a sale of the Company was the best means of maximizing stockholder value. The Board reviewed the most attractive proposals, and in early April had its advisors engage with the interested parties in an effort to obtain the best possible outcome for the Company and its stakeholders. The agreed upon acquisition price represents a 15.3% premium to NorthWestern's share price of $32.09 upon market close April 25, 2006. The transaction will be fully taxable to NWEC shareholders. NorthWestern was advised by Credit Suisse and Manatt, Phelps & Phillips LLP. The Blackstone Group, as financial advisor, rendered a fairness opinion in connection with the transaction to the Board of Directors of NorthWestern. About Babcock & Brown Infrastructure Based in Sydney, Australia, Babcock & Brown Infrastructure -- http://www.bbinfrastructure.com/-- is a utility investment company that provides investors access to a diversified portfolio of quality infrastructure assets. BBI's strategy focuses on identifying, acquiring and operating quality utility and infrastructure investments worldwide. Its investments include: * Powerco - the second largest electricity and gas distribution business in New Zealand; * IEG - a natural gas and LPG distribution and supply business in the United Kingdom, Channel Islands, Isle of Man and Portugal; * Cross Sound Cable - a high voltage direct current transmission cable, which links the electricity grids of New York and Connecticut; * Dalrymple Bay Coal Terminal - one of the worlds largest coal export facilities, located in Queensland, Australia; * PD Ports - the second largest port operator and the owner of the largest port in the industrial north-east of the United Kingdom; * Ecogen - a 50% equity stake in gas-fired electricity generation plants in Victoria, Australia; * Redbank - a 50% equity stake in a coal tailings-fired electricity generation plant in New South Wales, Australia; and * B&B Wind Partners - a 16.5% equity stake in a portfolio of 15 wind energy farms in the US, Spain, Germany, and Australia. BBI has a current enterprise value of approximately $4.5 billion. About NorthWestern Energy NorthWestern Energy -- http://www.northwesternenergy.com/-- is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving more than 628,500 customers in Montana, South Dakota and Nebraska. * * * As reported in the Troubled Company Reporter on April 12, 2006, Moody's assigned a Ba1 underlying rating to the senior secured pollution control revenue refunding bonds, consistent with the Ba1 rating on Northwestern Corporation's existing first mortgage bonds. The underlying rating considers that the obligation of NorthWestern to provide funds for repayment of the pollution control revenue refunding bonds will be secured and rank pari-passu with NorthWestern's other senior secured debt. The company's Corporate Family Rating continues to be Ba1. The lack of notching between the CFR and the senior secured rating considers that a substantial majority of the company's debt is senior secured. Northwestern's rating outlook continues to be positive. O-CEDAR HOLDINGS: Court Approves RSI as Trustee's Collection Agent ------------------------------------------------------------------ Jeoffrey L. Burtch, the chapter 7 Trustee overseeing the liquidation of O-Cedar Holdings, Inc. and its debtor-affiliates' estates, obtained authority from the U.S. Bankruptcy for the District of Delaware to employ Recovery Services Inc., as his collection agent, nunc pro tunc to Feb. 15, 2006. As reported in the Troubled Company Reporter on March 27, 2006, Mr. Burtch told the Court that he obtained default judgments in 11 adversary proceedings. Mr. Burtch wants RSI to assist him in collecting on those default judgments as well as other judgments entered in adversary proceedings where collection services are needed. Larry Waslow, Secretary & Treasurer of RSI, tells the Court that the firm will receive 30% of each judgment recovery received by the trustee. Mr. Waslow assures the Court that his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Springfield, Ohio, O-Cedar Holdings, Inc., through its debtor-affiliate, manufactures brooms, mops, and scrub brushes for household and industrial use. The Company filed for chapter 11 protection on August 25, 2003 (Bankr. Del. Case No. 03- 12667). Curtis A. Hehn, Esq., at Pachulski Stang Ziehl Young & Jones, represents the Debtor. Bradford J. Sandler, Esq., at Adelman Lavine Gold and Levin, P.C., represents the Official Committee of Unsecured Creditors. When the Company filed for protection from its creditors, it listed over $50 million in both assets and debts. On May 26, 2004, the cases were converted to chapter 7 and Jeoffrey L. Burtch was appointed trustee. OGG HARDING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Ogg Harding Machine, LLC dba Harding Machine 13060 SR 287 East Liberty, Ohio 43319 Bankruptcy Case No.: 06-44936 Type of Business: The Debtor manufactures screws from steel, brass, aluminum, stainless steel and plastics. The Debtor also provides heat treating, annealing, plating and a variety of metal finishes. The Debtor previously filed for bankruptcy protection on Feb. 3, 2004 (Bankr. E.D. Mich. Case No. 04-42858). See http://www.hardingmachine.com/ Chapter 11 Petition Date: April 20, 2006 Court: Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtor's Counsel: Christopher Lievois, Esq. McDonald Hopkins Co., LPA 30150 Telegraph Road, Suite 225 Bingham Farms, Michigan 48025 Tel: (248) 646-5070 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chase Brass & Copper Trade Debt $341,753 12570 Collections Center Drive Chicago, IL 60693 Stainless Steel & Aluminum Trade Debt $260,910 P.O. Box 79001-1759 Detroit, MI 48279-1759 Nelson Steel Company Trade Debt $191,468 9400 Belomont Avenue Franklin Park, IL 60131-6833 Baron Drawn Steel Corporation Trade Debt $157,239 P.O. Box 92432 Cleveland, OH 44193 Midwest Metals, Inc. Trade Debt $115,541 Steinberg Shapiro & Clark Trade Debt $60,817 S & S Health Care Strategies Employee $52,969 Benefit Claims Corey Steel Company Trade Debt $46,752 Mueller Brass Co. Trade Debt $43,332 Engineering Sales Trade Debt $35,845 Strong Tool Co. Trade Debt $34,810 Earle M. Jorgenson Company Trade Debt $33,448 Chicago Extruded Metals, Inc. Trade Debt $27,851 Locke Brothers Trade Debt $27,088 Holbrook & Manter Trade Debt $24,953 Central Steel & Wire Co. Trade Debt $22,633 Lincolnshire Machine, LLC Trade Debt $22,196 Addecco Employment Trade Debt $20,455 IMC Supply Co. Trade Debt $20,269 Cutting Tools, Inc. Trade Debt $19,568 OWNIT MORTGAGE: Moody's Puts Ba1 Rating on Class B-4 Certificates ----------------------------------------------------------------- Moody's Investors Service assigned Aaa rating to the senior certificates issued by Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-3, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Ownit Mortgage Solutions Inc. originated adjustable-rate and fixed-rate subprime mortgage loans acquired by Merrill Lynch Mortgage Lending Inc. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, overcollateralization, and an interest rate swap agreement. Moody's expects collateral losses to range from 4.65% to 5.15%. Litton Loan Servicing LP will service the loans. Moody's assigned Litton its top servicer quality rating as a primary servicer of subprime 1st-lien loans. The complete rating actions are: Ownit Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-3 * Class A-1, Assigned Aaa * Class A-2A, Assigned Aaa * Class A-2B, Assigned Aaa * Class A-2C, Assigned Aaa * Class A-2D, Assigned Aaa * Class 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 B-1, Assigned Baa1 * Class B-2, Assigned Baa2 * Class B-3, Assigned Baa3 * Class B-4, Assigned Ba1 P&R HOLDINGS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: P&R Holdings of Brooklyn, LLC 4902 New Utricht Avenue Brooklyn, New York 11219 Tel: (718) 438-6944 Bankruptcy Case No.: 06-41255 Chapter 11 Petition Date: April 26, 2006 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Miriam Lazofsky, Esq. 103-14 Avenue M Brooklyn, New York 11236-4510 Tel: (718) 531-1478 Fax: (718) 251-2155 Total Assets: $0 Total Debts: $1,055,190 The Debtor does not have any creditors who are not insiders. PANAVISION INC: Refinancing Completion Cues S&P to Up Rating to B- ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Panavision Inc. to 'B-' from 'CCC', following the completion of the company's $345 million refinancing transaction. The rating was removed from CreditWatch, where it had been placed on March 29, 2006, with developing implications. The outlook is stable. Standard & Poor's also affirmed the first-lien bank loan rating of 'B' and second-lien bank loan rating of 'CCC'. The recovery ratings on the $230 million first-lien credit facility and $115 million second-lien loan are '1' and '5', respectively. As of Dec. 31, 2005, the Woodland Hills, California-based designer and manufacturer of motion picture camera systems had $348 million in debt, including operating leases, pro forma for the refinancing transaction. "The ratings reflect Panavision's uncertain growth prospects, high leverage, and potential for tightening liquidity," said Standard & Poor's credit analyst Tulip Lim. Panavision's revenue and EBITDA, linked to recent acquisitions and higher production volumes, increased in 2005 from 2004. Although the company has invested in new initiatives -- such as its film- quality, high-definition "Genesis" camera -- it is uncertain whether they will fuel earnings growth to the extent the company has planned. PERFORMANCE TRANSPORTATION: Taps Watson as Compensation Experts --------------------------------------------------------------- Performance Transportation Services, Inc., and its debtor- affiliates ask the U.S. Bankruptcy Court for the Western District of New York for permission to hire Watson Wyatt & Company as their compensation experts. As reported in the Troubled Company Reporter on Feb. 20, 2006, the Debtors sought to implement a performance-based bonus program for three of their management personnel. The International Brotherhood of Teamsters and the Official Committee of Unsecured Creditors objected. Both the Teamsters and the Creditors Committee assert that the terms of the Program are in excess of "market" terms and will provide certain executives with unreasonable compensation. On March 15, 2006, the Debtors' Chief Financial Officer, one of the proposed beneficiaries under the Program, resigned from his position to pursue other employment opportunities. In view of the objections and the recent resignation, the Debtors believe that it is appropriate to re-examine the Incentive Program and make any modifications necessary to ensure that its terms are fair and reasonable when compared to the marketplace. As compensation experts, Watson Wyatt will: a. assist the Debtors in reviewing and modifying the terms of the Program; and b. provide expert testimony regarding its opinion of the modified Program's reasonableness. Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York, tells Judge Kaplan that Watson Wyatt's professionals are familiar with the Program's original form and have begun to work towards modifying the Program so that it achieves optimal results for the Debtors. Watson Wyatt's work on the Program, and any expert testimony, will be critical in addressing the Objections and securing Court approval of the Program, Mr. Graber says. The Debtors maintain that Watson Wyatt's extensive experience in designing compensation programs demonstrates that they are uniquely qualified to assist the Debtors in connection with implementing a Program that will help maximize the value of the estates. The Debtors will pay Watson Wyatt's professionals according to the firm's customary hourly rates: Position Rate -------- ---- Senior Consultants $700 Associates $360 Analysts/Research $285 Watson Wyatt will seek reimbursement for reasonable and necessary expenses incurred in connection with the engagement, including but not limited to, travel expenses. The Debtors agree to indemnify and hold Watson Wyatt, its employees, agents and alliance partners harmless from any third- party claim or liability arising from or in connection with the services performed by the firm or the Debtors' use of those services except if the claim or liability arises from the firm's willful misconduct or gross negligence. Mr. Graber says Watson Wyatt is not a "professional" as that term is used in Section 327. The firm will not play a central role in the administration of the Chapter 11 cases and will not address issues concerning the Debtors' Chapter 11 plan or the disposition of the Debtors' assets. It will focus solely on discrete management compensation issues. About Performance Transportation Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) PLAINS EXPLORATION: Moody's May Lower Ratings After Stock Merger ---------------------------------------------------------------- Moody's Investors Service placed Plains Exploration & Production's ratings under review for downgrade. Moody's also placed Stone Energy's ratings on review for upgrade. These actions follow PXP's and SGY's announced stock-for-stock merger placing SGY's equity market valuation in the range of $1.4 billion and enterprise value in the range of $1.9 billion including the assumption of approximately $483 million of SGY debt. Moody's places PXP's pro-forma year-end 2005 debt at $2.145 billion, after funding substantial transaction fees and the $600 million peak upcycle unwinding of underwater crude oil collars on 22,000 barrels per day of crude oil not scheduled to roll off until year-end 2008. These figures are not updated for first quarter 2006 bank revolver activity. In the unwinding of the collars, PXP effectively crystallized the major opportunity cost of the collars at hefty prices but will term out the negative cash flow impact over the life of a forthcoming long term non- amortizing note. While the PXP and SGY merger affords considerably more reinvestment flexibility and potential within the merged property base, the merged business must first reverse the underperforming momentum of both property bases before mounting positive momentum. SGY has been especially challenged over the last few years, a situation that was exacerbated by a still shut-in major proportion of its production due to hurricane damage. Exploration and production is a highly capital-intensive depleting asset business. Accordingly, under Moody's global rating methodology for independent exploration and production companies, approximately 70% of the rating is driven by expected quantitative and qualitative operational considerations, 20% by two categories of expected leverage on reserves, and 10% by expected leverage on retained cash flow after sustaining capital spending. The pro- forma expected operating, leverage, and financial strategy profile of the merged PXP and SGY business bases warrants a review for a downgrade of PXP's ratings at this time. SGY's review for upgrade reflects its currently low rating relative to the stronger profile of the pro-forma PXP or SGY business, seasoned management and operational teams of the merged business, and a very strong oil and gas price environment fueling strong pre-capex pro-forma cash flow with which to tackle the combined operating challenges, mount a larger more diversified reinvestment program, and service debt. PXP's review for downgrade anticipates the new PXP's equity strategies; ongoing operational disappointments and challenges of both PXP and SGY; high cost structures; reinvestment focus towards short lived Gulf of Mexico shallow water and high cost, high risk, long lead time deepwater GOM exploration and development activity; and inherent risks of a major portfolio transition may require the greater flexibility of a lower debt rating. This would accommodate higher sustained leverage, ongoing high costs and inherent challenges of turning capital productivity around, operational risks, and the wide range of potential operating outcomes. Given still record high oil prices, the unwinding of the collars boosts current cash flow available for reinvestment, stock buybacks, and debt reduction. Moody's assumes a small degree of debt reduction prior to equity buybacks. Moody's also believes that, given the performance challenges of the merged business as well as equity market expectations, PXP will retain equity buybacks as a potentially active tool in managing capital allocation and its equity strategy. While the SGY acquisition adds proportionally significant new prospect opportunities, including two nascent potentially key Rocky Mountain plays, Moody's believes PXP has also adopted a strategy of sustained higher leverage into its equity strategy and we believe opportunistic share buybacks will continue to be a basic tool in PXP's equity strategy and tactics. Moody's also notes PXP's disappointing production response to substantial capital reinvestment in its California plays, driving all unit costs higher. The added leverage will almost double interest expense. SGY has faced major operational challenges, very week capital reinvestment productivity, and the de-booking of 20% of its proven reserves, and is undergoing an SEC review of prior reserve booking practices. On a pro-forma basis, Moody's estimates that PXP will have approximately 500 million of proved reserves including approximately 339 of proven developed reserves. PXP has historically carried a proven developed reserve life of over 10 years while, before a major proportion of its production was shut- in due to hurricane damage, SGY carried a proven developed reserve life of 5.2 years. According to the company's estimates, approximately 15% of pro-forma reserves will be located in the Gulf of Mexico, 77% in California, and 8% in the Mid-Continent. Plains Exploration & Production Company is headquartered in Houston, Texas. PLUM CREEK: Moody's Holds (P)Ba2 Preferred Stock Shelf Rating ------------------------------------------------------------- Moody's Investors Service affirmed the Baa3 senior unsecured rating of Plum Creek Timberlands, L.P., the operating partnership of Plum Creek Timber Company, Inc. The Baa3 rating also applies to the recent $200 million reopening of the 5.875% notes due 2015. The rating outlook is stable. According to Moody's, the rating reflects the REIT's leadership as the largest private owner of US timberlands with diverse species, location and age, as well as its entirely unencumbered timber asset base. In addition, Plum Creek maintains a solid fixed charge coverage and virtual absence of secured debt. Plum Creek's credit challenges include volatility associated with the manufacturing and real estate segments, in addition to high total leverage in relation to cash flow characteristics and a low EBITDA margin relative to similarly-rated REITs. Plum Creek is issuing the additional notes to refinance near term maturities and for general corporate purposes. The notes do not contain customary terms and conditions found in typical REIT senior debt issues, including debt limitations, maintenance of unencumbered assets and minimum debt service coverage requirements. However, covenants limit secured debt to 10% of assets. The stable rating outlook reflects Moody's expectation that Plum Creek will continue to grow its timberlands portfolio and maintain relatively steady cash flow from this core business. In addition, Moody's expects the REIT to continue its successful redeployment of funds from non-strategic timberlands and sales of HBU properties into the core portfolio. Moody's anticipates that manufacturing operations will be a positive contributor to the REIT's operating income through the cycle. The REIT's vast portfolio of unencumbered timberlands is an important rating factor, which is reinforced by the debt provisions limiting secured debt. Moody's noted that upward rating movement would be predicated on a decrease in Plum Creek's leverage to 35% of gross assets and sustained improvement in EBITDA margin to above 40%. Further growth in size and diversity of timberland holdings would also be a plus. Ratings pressure is likely to result from a severe downturn in timber and timberland prices, a decline in the unencumbered timberlands portfolio to below 90% of gross assets, a drop in fixed charge coverage to below 3.5X, or a deterioration in manufacturing operations. Moody's maintains these ratings on Plum Creek with a stable outlook: * Plum Creek Timber Company, Inc. -- Preferred stock shelf at (P)Ba2. * Plum Creek Timberlands, L.P. -- Senior unsecured notes at Baa3; senior unsecured shelf at (P)Baa3; subordinated unsecured shelf at (P)Ba1. In its last rating action with respect to Plum Creek, Moody's assigned a Baa3 senior unsecured rating to the notes issued in November 2005. Plum Creek Timber Company, Inc., headquartered in Seattle, Washington, USA is the largest private timberland owner in the nation, with over eight million acres of timberlands in major timber producing regions of the United States and ten wood products manufacturing facilities in the Pacific Northwest. PURE FISHING: S&P Affirms B+ Rating & Revises Outlook to Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on fishing tackle manufacturer Pure Fishing Inc. to negative from stable. At the same time, Standard & Poor's affirmed its 'B+' corporate credit and senior secured bank facility ratings on the Spirit Lake, Iowa-based company. As of Dec. 31, 2005, the company had about $190 million of total debt outstanding, which excludes operating lease obligations. "The revised outlook reflects weaker-than-expected operating performance in fiscal 2005 and the resulting limited cushion on the company's bank loan financial covenants," said Standard & Poor's credit analyst Mark Salierno. PFI's recent performance was challenged by revenue softness in the European and Asian markets, which offset improved performance in North America. In addition, earnings were adversely affected from rising commodity prices and logistics expenses related to streamlining the supply chain and the start-up of the company's European distribution center. Despite challenging operating conditions, margins have remained at historical levels, as the company has improved its product mix by focusing on more premium brands and higher-margin product categories. REFCO INC: Judge Drain Freezes BAWAG's U.S. Assets -------------------------------------------------- The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York entered an order freezing BAWAG P.S.K. Group's $1.3 billion in U.S. assets, the Wall Street Journal reports. The order blocks BAWAG from utilizing the assets for any use other than ordinary business purposes. The Court is currently overseeing the disposal of Refco Inc.'s assets and repayment of its creditors. Refco creditors are seeking more than US$1.3 billion from Austrian bank BAWAG for allegedly abetting its collapse, WSJ relates. According to the report, the creditors accused BAWAG of aiding a five-year fraud orchestrated by former Refco Chief Executive Phillip Bennett that drove the group into bankruptcy. The creditors said BAWAG continued to assist Mr. Bennett in "consummating the transactions as a means of accomplishing BAWAG's own payday" despite being "fully aware of the harm that Bennett was inflicting" on Refco. Mr. Bennett allegedly hid hundreds of millions of dollars in losses off the books, thus guising the group's true financial state prior to its IPO in August 2005. Refco filed for bankruptcy on Oct. 17, just eight days after it declared a shortfall in its books. The creditors also accuses BAWAG of once owning a stake in Refco several times larger than the 10% disclosed in the group's prospectus filed before it went public in August 2005, WSJ relates. According to the creditors' complaint, the one-time stake was valued at around US$1.3 billion. BAWAG, formally known as Bank Fuer Arbeit und Wirtschaft AG, already filed a suit in November against Refco and Mr. Bennett, for fraud, unjust enrichment and deception in an attempt to recover EUR350 million in credit. BAWAG claimed Mr. Bennet, who is awaiting trial on criminal securities fraud charges, misled and victimized the bank. About Refco Inc. Based in New York, New York, Refco Inc. -- http://www.refco.com/- - is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. REFCO INC: Ch. 7 Trustee Wants UHY Advisors to Prepare Tax Returns ------------------------------------------------------------------ Albert Togut, the interim Chapter 7 trustee of the estate of Refco, LLC, asks the United States Bankruptcy Court for the Southern District of New York for permission to employ UHY Advisors NY, Inc., nunc pro tunc to Feb. 16, 2006, to provide professional tax preparation services for the Trustee and the Debtor's estate. UHY Advisors will: -- prepare final federal, state and local income tax returns on Refco LLC's behalf; -- communicate with taxing authorities concerning any issues regarding the tax returns and possibly seek filing extensions to review Refco LLC's books and records and complete the tax returns; and -- perform other necessary services and provide other tax- related advice to the Trustee in connection with the case, as the Trustee may request. Mr. Togut tells the Court that Refco, Inc., and debtor-affiliates under chapter 11 have also engaged UHY to provide similar services. Mr. Togut selected UHY because of its expertise and knowledge, at a reasonable cost, in preparing tax returns for corporations and partnerships. UHY is the 14th largest accounting firm in the United States. Its managing directors have significant experience from the "Big 4" accounting firms -- that is PricewaterhouseCoopers, Ernst & Young, LLP, KPMG LLP and Deloitte & Touche USA LLP. UHY will be paid a $400,000 fixed fee for services relating to the preparation of tax returns for all of the Debtors. Mr. Togut says Refco LLC's share of the fixed fee will be determined in consultation with the Chapter 11 Debtors. For services regarding tax audits and bookkeeping assistance that are not included in the tax preparation services, UHY will render those services at its standard hourly rates, at a discount to be determined. UHY's hourly rates range from $490 for managing directors to $150 for first year staff. Michael Greenwald, managing director at UHY, assures the Court that the firm does not have any interest materially adverse to the interest of Refco LLC's estate, any class of creditors or equity security holders, any other party-in-interest, or their attorneys and accountants. UHY is a "disinterested person," as that phrase is defined in Section 101(14) of the Bankruptcy Code and as modified by Section 1107(b). About Refco Inc. Based in New York, New York, Refco Inc. -- http://www.refco.com/- - is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. (Refco Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000). REFCO INC: Chapter 7 Trustee Wants to Wind Down Taiwan Unit ----------------------------------------------------------- Albert Togut, the interim Chapter 7 trustee for Refco LLC's Estate, asks the U.S. Bankruptcy Court for the Southern District of New for authority to complete the wind-down of Refco Taiwan's business in accordance with the laws of Taiwan, and to pay expenses necessary to complete the wind-down process in compliance with Taiwanese law. In particular, Mr. Togut wants authority to direct actions necessary and appropriate to complete the liquidation and wind-up of Refco Taiwan, including, without limitation: -- preparation of accounting reports, statements of receipts and disbursements and income statements; -- preparation and lodging of final tax returns; -- appearances before the supervising Taiwanese court for purposes of seeking approval of the liquidation and wind- down of Refco Taiwan's operations and authorization for the transfer of Refco Taiwan's remaining funds to the Trustee; and -- adjudication and resolution in the Taiwanese court, or otherwise, of any claims asserted against Refco Taiwan during the notice period and, if necessary, authorization for payment of any allowed claims from Refco Taiwan's remaining funds to the extent required by Taiwanese law. Refco Taiwan Mr. Togut tells the Court that prior to filing for chapter 7 liquidation, Refco, LLC, operated a branch office in Taiwan. Refco Taiwan is not a separate legal entity. Mr. Togut informs the Court that approximately $3 million remains in Refco Taiwan's bank accounts that were not novated to Man Financial, Inc. Funds that are property of the Debtor's estate. Mr. Togut, however, relates that when he attempted to transfer those funds to United States bank accounts controlled by him, he was advised that the funds constituted capital under the laws of Taiwan that could not be delivered to United States bank accounts without the approval of governmental authorities. According to Mr. Togut, it initially appeared that process of obtaining Taiwanese governmental approval would be a relatively informal process, and that he simply needed to designate a representative in Taiwan to act as "liquidator" on his behalf to request the transfer of the funds. Accordingly, Mr. Togut designated the Debtor's local branch manager in Taiwan to act in that capacity. The Trustee now has been informed that even though Refco Taiwan is not an independent legal entity, the operations of the Refco Taiwan branch need to be wound down in accordance with Taiwanese law before Refco Taiwan's funds can be delivered to the Trustee. More particularly, the Trustee understands that the process of winding down Refco Taiwan's operations will include: (a) a notice must be published advising potential claimants that they have three months to submit claims against Refco Taiwan; (b) upon expiration of the notice period, the liquidator will produce accounting reports, lodge final tax returns and prepare an accounting of Refco Taiwan's assets and liabilities; and (c) a Taiwanese court will then enter an order concerning the payment of claims and the return of any excess capital to the Trustee. Mr. Togut further relates that Refco LLC's local branch manager in Taiwan, as liquidator, has caused a three-month creditor notice to be published in Taiwan. Mr. Togut reports that the total cost of the wind-down, including salaries for remaining Taiwan employees undertaking the actions, should not exceed $100,000. About Refco Inc. Based in New York, New York, Refco Inc. -- http://www.refco.com/- - is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. (Refco Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000) REMINGTON ARMS: High Leverage Cues Moody's to Downgrade Ratings --------------------------------------------------------------- Moody's Investors Service lowered Remington Arms Company, Inc.'s corporate family rating to B3 from B2. Moody's also lowered the rating on the company's senior unsecured notes to Caa1 from B3. The downgrades reflect Remington's high leverage for the ratings category, credit metrics that were weaker than Moody's anticipated, and negative cash flows stemming from the impact of rising metal and energy costs and the company's inability to fully offset these with price increases through 2005. Nevertheless, the ratings also recognize continued support from Remington's lenders as it recently secured a new amended and restated credit agreement that increased the asset-based revolving credit facility commitment to $140 million from $101 million, extended the maturity to 2010 from 2008, and reset financial covenant levels and applicable interest rates. Additionally, revenue trends remain favorable as evidenced by improvements in the company's backlog, which increased to approximately $100 million as of February 2006 from $76 million the same period last year. Wal-Mart's recent announcement that it would stop selling guns at roughly a third of its U.S. stores was not a material factor in the ratings downgrade as Moody's believes this pending action will not affect Remington's near-term operating performance. However, over the longer-term, the company may need to expand business with other customers to compensate for a potential loss of revenues from Wal-Mart. The ratings outlook remains negative. Key factors currently influencing Remington's ratings include: 1) weak financial metrics and negative cash flows; 2) continuing regulatory and product liability risks; 3) the discretionary nature of its products; 4) its long-standing, leading market shares in key categories as developed over its 189-year history; and 5) only moderate customer concentration with no customer, besides Wal-Mart, accounting for more than 10% of revenues. The negative ratings outlook reflects Moody's concern that elevated metal and energy costs will continue to pressure Remington's earnings and working capital requirements, implying the potential for continued weak credit metrics. The outlook also considers Moody's concern that the company needs to raise prices during a time when consumer spending for discretionary items may be pressured by rising gasoline costs, although recognizing that prior increases have not negatively affected consumer demand to date. Headquartered in Madison, North Carolina, Remington Arms Company, Inc., designs, manufactures, and markets rifles, shotguns, ammunition, and hunting and gun care accessories under the Remington name. The company's products are sold through independent dealers, Wal-Mart, and sporting goods retailers. The company reported sales of $410 million in 2005. REPOSITORY TECH: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Repository Technologies Inc. 1001 Warrenville Road, #104 Lisle, Illinois 60532 Bankruptcy Case No.: 06-04582 Type of Business: The Debtor develops and markets customer- support, problem-tracking and -resolution systems. See http://www.rti-software.com/ Chapter 11 Petition Date: April 25, 2006 Court: Northern District of Illinois (Chicago) Judge: Jack B. Schmetterer Debtor's Counsel: David K. Welch, Esq. Crane Heyman Simon Welch & Clar 135 South Lasalle Street, Suite 3705 Chicago, Illinois 60603 Tel: (312) 641-6777 Fax: (312) 641-7114 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Allscripts Healthcare Solutions $41,727 Attn: Kiessel, Lisa 2401 Commerce Drive Libertyville, IL 60048-4664 Sungard Corbel LLC $31,634 Attn: Harlow, Leslie 1660 Prudential Drive, Suite 400 Jacksonville, FL 32207 Cummings Properties $30,846 200 West Cummings Park 01801-6396 Woburn, MA 01801-6396 Columbia Ultimate Systems $28,029 IEX Corp, A Tekelec Company $21,628 Endeavor Information Systems, Inc $13,749 Karmak Inc. $12,636 VECTORsgi, Inc. $11,674 SXC Health Solutions, Inc. $11,547 Seismic Micro Technology $11,361 SunGard Asset Management Systems $10,506 DataScan Technologies, LLC $9,308 Harris Data $8,836 TouchNet Information Systems $8,143 Convedia Corp. $7,621 Decade Software Company LLC $6,770 Help Desk Now $6,763 Unimax Systems Corporation $6,544 CLINICARE Corporation $5,590 Frictionless Commerce, Inc. $5,328 RESMAE MORTGAGE: Moody's Places Class B Certificates Rating at Ba1 ------------------------------------------------------------------ Moody's Investors Service assigned Aaa rating to six of the senior certificates issued by ResMAE Mortgage Loan Trust 2006-1 and ratings ranging from Aa1 to Ba1 to the mezzanine and subordinate certificates in the deal. The securitization is backed by Residential Mortgage Assistance Enterprise, LLC originated one- to four-family, adjustable-rate and fixed-rate subprime mortgage loans secured by first liens and second liens on residential real properties. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, excess spread, and an interest rate swap agreement. Moody's expected loss on the deal is approximately 5.55% to 6.05%. Ocwen Loan Servicing LLC will service the loans. Ocwen is rated SQ2- by Moody's as a primary servicer of sub-prime first lien loans. The complete rating actions are: ResMAE Mortgage Loan Trust 2006-1 ResMAE Asset-Backed Pass-Through Certificates, Series 2006-1 * Class A-1A, rated Aaa * Class A-1B, rated Aaa * Class A-2A, rated Aaa * Class A-2B, rated Aaa * Class A-2C, rated Aaa * Class A-2D, rated Aaa * Class M-1, rated Aa1 * Class M-2, rated Aa2 * Class M-3, rated Aa3 * Class M-4, rated A1 * Class M-5, rated A2 * Class M-6, rated A3 * Class M-7, rated Baa1 * Class M-8, rated Baa2 * Class M-9, rated Baa3 * Class B, rated Ba1 REYNOLDS AMERICAN: Buying Conwood Sales for $3.5 Billion -------------------------------------------------------- Reynolds American Inc. will acquire a holding company that owns Conwood Sales Co., LP, the nation's second largest manufacturer of smokeless tobacco products, for $3.5 billion. Business interests of the Pritzker family own the holding company. "Conwood provides us with a significant, strategic platform within the growing moist snuff category that would have taken years to build," said Susan M. Ivey, chairman and chief executive officer of Reynolds American. "The moist snuff category has been growing at 4% to 5% for the past five years. Clearly, we're excited by this unique opportunity to gain immediate scale and strength in the category." Tom Pritzker, chairman and CEO of The Pritzker Organization, said: "We are very proud of what our team has accomplished. Having achieved a strong position in the market, we felt that a strategic buyer would be in the best position to continue the growth of the company. In Reynolds American, we found a management team that is both compatible with our management team and, in our view, has the vision and capabilities to capitalize on what we have achieved." Conwood, headquartered in Memphis, Tenn., had 2005 annual net sales of more than $450 million and operating income of nearly $250 million, which represents an operating margin of about 55%. Over the past five years, Conwood has delivered very strong compound annual growth in net sales and operating income of approximately 8% and 10%, respectively. "This transaction is expected to be accretive to earnings in both the short and long term, and enhances shareholder value," said Dianne M. Neal, RAI's executive vice president of finance and chief financial officer. "Conwood's strong growth and high margins should make it an important driver of RAI's future profitability." Conwood is the only company to compete in all five segments of the U.S. smokeless tobacco industry, manufacturing moist and dry snuff; and loose leaf, plug and twist chewing tobaccos. Conwood holds the No. 1 or No. 2 position in every segment of the smokeless tobacco market. Moist snuff accounts for more than 70% of Conwood's sales, led by both its premium-priced Kodiak brand and its rapidly growing value-priced Grizzly brand. Conwood, which traces its roots back to the 1782 founding of the Garrett Snuff Company, operates seven facilities and employs about 900 people in Tennessee, Kentucky and North Carolina. Reynolds American is also the parent company of R.J. Reynolds Tobacco Company; Santa Fe Natural Tobacco Company, Inc.; R.J. Reynolds Global Products, Inc.; and Lane Limited. Conwood will operate as a subsidiary of Reynolds American. Bill Rosson, Conwood's chief executive officer, will report to Jeffrey A. Eckmann, Reynolds American's executive vice president of strategy and business development. Santa Fe Natural Tobacco Co., R.J. Reynolds Global Products and Lane Limited also report to Eckmann. "Conwood's management team has an excellent record of delivering growth and building strong brands," said Eckmann. "They have doubled their share of the moist snuff market over the last five years. Their commitment to product innovation and brand building is an excellent fit with the strategic direction of all of RAI's operating companies," he said. Reynolds American will combine its Lane Limited subsidiary with Conwood in order to consolidate and drive the companies' portfolio of other tobacco products. Lane markets a wide range of specialty tobacco products, including cigars and little cigars; roll-your- own and pipe tobaccos; and Dunhill and other premium international cigarettes. The headquarters of the newly combined companies will be located in Memphis, and full integration is expected to be completed by the end of 2007. The transaction will require regulatory approval by the Federal Trade Commission. The acquisition is expected to close by the end of the second quarter. The transaction provides Reynolds American with the opportunity to leverage its strong balance sheet to create shareholder value. RAI will fund the acquisition with $3.2 billion in new debt and $300 million in cash. The company has received financing commitments from Lehman Brothers Inc. and JPMorgan Chase Bank, N.A. for the debt necessary to complete the transaction. Reynolds American said it does not plan to revise its 2006 earnings guidance or its year-end balance sheet forecast until the transaction has closed and the company has had a period of time to gain additional clarity on Conwood's potential contribution to RAI current-year earnings. Lehman Brothers Inc. advised Reynolds American on the Conwood transaction. About Conwood Conwood -- http://www.cwdlp.com/-- makes the Grizzly and Kodiak brands of moist tobacco. Conwood also makes loose-leaf tobacco, including Morgan's, Levi Garrett, and Taylor's Pride brands, snuff Garrett, Dental, and Tube Rose brands, and an assortment of other smokeless tobacco products. About Reynolds American Based in Winston-Salem, North Carolina, Reynolds American Inc. (NYSE: RAI) - http://www.ReynoldsAmerican.com/-- is the parent company of R.J. Reynolds Tobacco Company, Santa Fe Natural Tobacco Company, Inc., Lane Limited and R.J. Reynolds Global Products, Inc. R.J. Reynolds Tobacco Company, the second-largest U.S. tobacco company, manufactures about one of every three cigarettes sold in the country. The company's brands include five of the 10 best-selling U.S. brands: Camel, Kool, Winston, Salem and Doral. Santa Fe Natural Tobacco Company, Inc. manufactures Natural American Spirit cigarettes and other tobacco products for U.S. and international markets. Lane Limited manufactures several roll- your-own, pipe tobacco and little cigar brands, and distributes Dunhill tobacco products. R.J. Reynolds Global Products, Inc. manufactures, sells and distributes American-blend cigarettes and other tobacco products to a variety of customers worldwide. REYNOLDS AMERICAN: Acquisition Deal Cues Moody's to Hold Ratings ---------------------------------------------------------------- Moody's Investors Service affirmed Reynolds American's ratings and negative outlook following the company's announcement that it had reached agreement to acquire the Conwood Company, a privately held manufacturer of smokeless tobacco products, for approximately $3.5 billion in cash. The ratings affirmation reflects: 1) the strategic benefits of the transaction, which despite the full price being paid will broaden the company's product portfolio and enhance its growth potential; and 2) the substantial cushion in RAI's financial profile which can accommodate the additional $3.2 billion of debt at the current rating level. The rating outlook remains negative based on ongoing uncertainties associated with the litigation environment that RAI faces, as well as the very limited scope for any additional incurrence of debt at the current rating level. Ratings affirmed: * Corporate family rating, Ba2; * Senior secured bonds, Ba2; * Senior unsecured bonds, B2; * Speculative grade liquidity rating, SGL-3. RAI's Ba2 corporate family rating is supported by the financial strength exhibited by the company's most recent annual operating results and the overall market strength of the company's cigarette brands, as well as the diversification, growth and margin benefits from the purchase of the Conwood Company. While the additional $3.2 billion of debt can be accommodated at the Ba2 rating level, this transaction will leave little cushion at the Ba2 level to cover any unanticipated material disruptions in the company's operations. Ratings could also be downgraded if any of the lawsuits in which the company is involved significantly increase the financial risk it faces. Conversely, the rating outlook could be stabilized if Moody's assessment of recent litigation developments, as well as other litigation in which Reynolds is involved, continues to suggest diminished legal risk. Moody's notes that RAI intends to utilize $300 million in cash and $3.2 billion of debt to finance the acquisition and that the company has received financing commitments from Lehman Brothers Inc., and JPMorgan Chase Bank, N.A. to complete this transaction. If the final financing structure results in a significant increase in higher priority debt at RAI, the ratings on the company's unsecured, guaranteed notes could be lowered modestly. Based in Winston-Salem, North Carolina, Reynolds American is the parent company of RJR Tobacco Company, the second largest cigarette company in the United States. Headquartered in Memphis, Tenn., the Conwood Company is the nation's second largest manufacturer of smokeless tobacco products. REYNOLDS AMERICAN: S&P Assigns BB+ Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its existing 'BB+' corporate credit rating on domestic cigarette manufacturer RJ Reynolds Tobacco Holdings Inc., wholly-owned subsidiary of Reynolds American Inc., and assigned its 'BB+' corporate credit rating to RAI. At the same time, Standard & Poor's assigned its 'BBB-' bank loan rating and its '1' recovery rating to RAI's proposed $4.0 billion of senior secured credit facilities. The credit facilities are rated one notch higher than the corporate credit rating, this and the '1' recovery rating indicate that lenders can expect full recovery of principal in the event of payment default. All ratings are based on preliminary offering statements and are subject to review upon final documentation. In addition, Standard & Poor's placed its senior secured and senior unsecured debt ratings on RJR's existing notes on CreditWatch with negative implications, because priority obligations ahead of them increase as a result of the proposed senior secured credit facilities. Standard & Poor's also placed its existing preliminary 'BB+/BB/BB-' senior secured/senior unsecured/subordinated debt ratings on RJR's shelf registration for debt securities on CreditWatch with negative implications for the same reasons. Proceeds from the new credit facilities will be used in part to finance the company's announced acquisition of the Conwood Companies (unrated) for $3.5 billion. The company intends to finance the acquisition with $300 million in cash and $3.2 billion in new debt, consisting of term loan borrowings and proceeds from a planned private offering of senior secured notes. Standard & Poor's does not have sufficient information at this time to assign ratings to the proposed senior secured notes. The affirmation of RJR's existing corporate credit rating reflects Standard & Poor's belief that the transaction will strengthen RAI's business risk profile, providing some diversification of sales and EBITDA into higher-margin smokeless tobacco products, as well as providing the company with additional growth opportunities. Furthermore, RAI had maintained a conservative balance sheet and strong credit protection measures which provided moderate debt capacity at the current ratings. The outlooks for both RAI and RJR are negative and reflect Standard & Poor's ongoing concerns about litigation. SALOMON BROS: S&P Downgrades Class K-WGM Certificate Rating to BB+ ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on two classes and lowered its ratings on six classes of Salomon Bros. Mortgage Securities VII Inc.'s commercial mortgage pass-through certificates series 2003-CDC1. Concurrently, the ratings on two other classes from the same transaction are affirmed. The raised and affirmed ratings reflect Standard & Poor's analysis of the remaining loan in the pool, as well as increased credit enhancement levels resulting from the payoff of loans. The lowered rating reflects the decline in performance of the Westgate Mall loan. As of April 17, 2006, the transaction included the one loan's senior pooled interest balance of $37.5 million, down from 11 loans with an aggregate balance of $381.8 million at issuance. There are also subordinate raked classes totaling $10.5 million. The remaining loan is indexed to 30-day LIBOR and is subject to an interest rate cap agreement. An 886,805-sq.-ft. mall in Amarillo, Texas, secures the Westgate Mall loan. The mall is anchored by Mervyn's, Dillard's, Bealls, Sears, and J.C. Penney. The collateral for the loan consists of 517,707 sq. ft., and only Dillard's and Bealls are part of the collateral. Mervyn's will be terminating its lease and closing its store. The loan matures in January 2007 and has no extensions remaining. Based on year-end 2005 financial statements, Standard & Poor's calculated a net cash flow of $5.2 million for the property, down from $6.7 million at issuance. The decrease in net cash flow can be attributed primarily to the decline in the in-line mall occupancy, which is currently 83% (compared with 89% at issuance), and the increase in real estate taxes due to recent tax assessments done at the property. Ratings raised: (Pooled interests) Salomon Bros. Mortgage Securities VII Inc. Commercial mortgage pass-through certificates series 2003-CDC1 Rating Class To From ----- -- ---- C AAA AA+ D AA+ AA Ratings lowered: (Nonpooled interests) Salomon Bros. Mortgage Securities VII Inc. Commercial mortgage pass-through certificates series 2003-CDC1 Rating Class To From ----- -- ---- G-1-WGM A A+ G-2-WGM A- A G-3-WGM BBB+ A- H-WGM BBB BBB+ J-WGM BBB- BBB K-WGM BB+ BBB- Ratings affirmed: (Pooled interests) Salomon Bros. Mortgage Securities VII Inc. Commercial mortgage pass-through certificates series 2003-CDC1 Class Rating ----- ------ E AA- F A+ X-1 AAA X-2A AAA X-2B BBB- X-3CDC AAA SHAW COMM: Moody's Rates Proposed CDN$300 Mil. Debentures at Ba2 ---------------------------------------------------------------- Moody's Investors Service affirms ratings of Shaw Communications Inc., and assigned a senior unsecured rating of Ba2 to the company's proposed CDN$300 million senior unsecured debenture issue which is to be used to retire bank debt. The outlook for all ratings is stable. Shaw's Corporate Family Rating of Ba2 is supported by its strong operating capabilities, which underlie its highly effective response to the competitive landscape, including its launch of cable telephony, and improving financial strength. The rating is constrained by Shaw's small scale relative to global peers, by management's high risk tolerance, evidenced by its willingness to distribute all free cash flow to shareholders rather than reduce debt, by the company's weak free cash flow-to-debt metric, and by net governance weaknesses. The outlook is stable. Moody's recognizes Shaw's good and improving performance, but expects increased capital expenditures and ongoing shareholder payments to limit meaningful improvements in the relationship of cash flows to debt. The ratings affected are: Issuer: Shaw Communications Inc. * Senior Unsecured Regular Bond/Debenture, Assigned Ba2 Shaw Communications Inc. is a cable and satellite operator headquartered in Calgary, Alberta, Canada. SHAW COMMS: S&P Rates Planned CDN$300 Mil. Sr. Unsec. Notes at BB+ ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB+' debt rating to Shaw Communications Inc.'s proposed CDN$300 million senior unsecured notes due 2016. The final amount could be increased modestly. Proceeds will be used to refinance existing bank debt and for working capital. At the same time, Standard & Poor's affirmed its 'BB+' long-term corporate credit rating on Calgary, Alta.-based Shaw. The outlook is stable. "The ratings reflect the risk profile of the company's consolidated subsidiaries, namely, its cable TV subsidiaries and its satellite subsidiary, Canadian Satellite Communications Inc. (Cancom)," said Standard & Poor's credit analyst Madhav Hari. "Shaw has an investment-grade business risk profile, which is supported by the strength of its core cable TV and Internet operations," he added. Nevertheless, the ratings are constrained by an aggressive financial risk profile characterized by high leverage and an improving, but still aggressive financial policy. Shaw's satellite operations and direct-to-home video operator (Star Choice Communications Inc.), are not material drivers, and therefore have an overall neutral effect on the ratings at this time. Shaw's cable TV business represents a significant proportion of the company's revenues (72%) and reported EBITDA (82%) and therefore remains the primary driver of the overall credit rating. Operating momentum in the cable TV segment continues to be robust as witnessed by good growth in subscriber metrics, revenues, and EBITDA. Specifically, in the three months ended Feb. 28, 2006, Shaw reported year-over-year basic subscriber growth of 1.9%, broadband growth of 14.3%, and digital TV growth of 11.7%. Consequently, cable TV revenues and reported EBITDA improved 13.0% and 7.1% from previous year levels; management raised its EBITDA guidance for fiscal 2006 (year ended Aug. 31) by CDN$20 million to CDN$1.045 billion-CDN$1.055 billion, which is reasonable in light of Shaw's performance in the first half of fiscal 2006. Although the pace of subscriber additions for newly launched telephony service slowed sequentially, Shaw continues to make good progress in this area. Customer loyalty and satisfaction remain at industry-leading levels as witnessed by low and improving churn levels across most offerings. Noteworthy is Shaw's ability to expand its broadband customer base, despite an industry-leading 58% penetration of basic cable customers. Future growth, however, is likely to moderate given market saturation and potentially increased competition. Nonetheless, Shaw should continue to generate good growth in the medium term at its digital TV and telephony offerings, given low penetration levels of 30% and 5%, respectively. The outlook is stable, reflecting expectations for a stable balance sheet and continued improvement in operating performance. The company's credit metrics will likely improve at a modest pace in the medium term, as discretionary cash flow will continue to be used for share repurchases, at least through the end of fiscal 2006. Should the company commit to a policy of debt reduction in fiscal 2007, while maintaining strong operating performance and free operating cash flow, the outlook could be revised to positive. Conditions that could lead to a revision in the outlook to negative are less likely, but could include an unexpected and material deterioration in operating performance. SIEGEL JEWELERS: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Siegel Jewelers, Inc. aka S.J. Marketing 2700 - 29th Street P.O. Box 6465 Grand Rapids, Michigan 49516 Bankruptcy Case No.: 06-01734 Type of Business: Siegel Jewelers, Inc., is a family owned and operated company that sells jewelry. See http://www.diamondsrforever.com/ Chapter 11 Petition Date: April 19, 2006 Court: Western District of Michigan (Grand Rapids) Debtor's Counsel: Robert A. Stariha, Esq. Stariha Law Offices, P.C. 48 West Main Street, Suite 6 Fremont, Michigan 49412 Tel: (231) 924-3761 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bernard M. Siegel Personal Loan $674,387 P.O. Box 6465 Grand Rapids, MI 49516 Rego Manf Inc. Trade debt $555,329 P.O. Box 838 Bucyrus, OH 44820 Woodland Rent $286,309 Department 53101 P.O. Box 67000 Detroit, MI 48267 B. Miller & Dorothy W. Siegel Personal Loan $237,022 P.O. Box 6465 Grand Rapids, MI 49516 Inter LR/Ema-Rama ABR Trade debt $93,910 Alfred Butler Inc. Trade debt $69,313 Dejager Construction Remodeling $61,362 of business I Starck Company Trade debt $46,520 Citibank Business Credit card $38,242 Ideal Printing Company Inc. Trade debt $34,419 Citi AA Business Card Credit card $32,814 Candela Jewelry Inc. Trade debt $32,433 Richard Krementz Gemstone Trade debt $32,156 Spark Creations Inc. Trade debt $31,755 MBNA Repayment Services Credit cards $31,305 Grandville, LLC Rent $31,236 dba Rivertown Crossing Mall Bernard M. Siegel Personal Loan $30,000 Kwiat, Inc. Trade debt $27,766 SOVEREIGN BANCORP: Moody's Rates $200MM Pref. Stock Issue at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned a rating of Ba2 to Sovereign Bancorp's issuance of $200 million of Perpetual Preferred Stock, which is being issued as part of the financing for Sovereign's pending acquisition of Independence Community Bank Corp. Based on current expectations, Moody's expects the ratings of the aforementioned Perpetual Preferred Stock issuance as well as other existing credit ratings of Sovereign Bancorp and its affiliates to be affirmed following the acquisition of Independence. The company expects the transaction to close later this quarter. Sovereign Bancorp currently has a Baa3 Senior Unsecured and its lead thrift is rated Baa1/P-2 for deposits. The outlook on all ratings is stable. Sovereign Bancorp is a thrift holding company headquartered in Philadelphia, Pennsylvania with assets of $63.7 billion as of Dec. 31, 2005. Independence Community Bank Corp., is a thrift holding company headquartered in Brooklyn NY with assets of $19.1 billion as of Dec. 31, 2005. ST. LOUIS: Moody's Holds Junk Rating on $98MM Sr. Revenue Bonds --------------------------------------------------------------- Moody's Investors Service affirmed the Caa2 rating on the St. Louis Industrial Development Authority's $98 million in senior lien hotel revenue bonds. The rating remains on Watch list for possible downgrade given the potential for a default on an interest payment due June 15. Legal Security: Net revenues of the headquarters hotels for the America's Center Convention Center in downtown St. Louis. Net revenues are generated from the 165-room Renaissance Suites that opened for business in April 2002, and the 918-room Renaissance Grand that opened for business in February 2003. Pledged revenues also include a debt service reserve fund and mortgage interest in the project. Derivatives: None Strengths: * Equity holder Kimberly-Clark Corporation, acting through its affiliate Housing Horizons LLC, has financial incentives to make additional contributions to the project if needed through 2006; however, beyond 2006 financial incentives begin to dwindle and the project will likely need to support itself. * Marriott International, the hotel operator, has achieved high market penetration, despite weak market fundamentals. Challenges: * The project hotels are under severe credit stress, with weak operating and financial performance since opening; * Hotel net revenues have not been sufficient to support debt service, and the project has nearly depleted its debt service reserve fund. Other standby support has been fully exhausted; * Due to weak market fundamentals and a mismatch between supply and demand break even analysis indicates the hotel is likely several years away from fully supporting its operating expenses and debt service costs, suggesting that a payment default could occur as early as June 2006. Recent Developments: The 165-room Renaissance Suites and 918-room Renaissance Grand hotels project moderately improved operating and financial performance in 2006 but remains highly stressed and could default on the $3.5 million debt service payment due June 15. Year-to- date figures through February 2006 show cash available for debt service of $53,000 and $177,000 remaining in the debt service reserve fund, although available cash should improve slightly before the June 15 payment with receipts from the busier spring months. Operating profit is expected to generate enough cash to pay approximately 67% of annual debt service payments due in 2006. Equity-holder Kimberly-Clark Corporation has some financial incentives to make additional cash contributions to the project in the future. Acting through its affiliate Housing Horizons, LLC, Kimberly-Clark is expected, although not obligated, to continue to subsidize operations as long as their benefits from the substantial federal tax credits associated with the project outweigh their required financial contribution to the hotel. Based on current projections, Moody's expects these tax credits will remain significantly larger than the required financial contribution through 2006. The rating remains on Watchlist for possible downgrade based on our expectation that the hotels' financial performance will likely remain weak and could require a judicial restructuring, a non- judicial refinancing with consent of bondholders, or additional equity contributions from key interested parties to avoid default. On April 19, interested parties met to discuss possible restructuring options but no plan was announced. A financial workout plan may be possible outside of a judicial restructuring, but Moody's remains concerned that project revenues are insufficient to continue to meet interest and principal obligation, absent a contribution from Kimberly-Clark. In order to balance its cash flow and obligations, a bankruptcy filing may be inevitable. If the project defaults, or files for bankruptcy protection, Moody's analysis will focus on whether bondholders will eventually be paid and how much they will recover. In doing so, we will seek to understand the legal standing of the obligations as well as the value of assets that may be used to repay bondholders. If the project were to file for bankruptcy protection, the bond rating would likely remain in the Caa rating level or fall lower if full and timely debt service payments are in question. The hotels exhibited overall weak operating and financial performance in 2005, although average occupancy and daily room rates trended more favorably in 2005, compared to 2004 and 2003, and are expected to continue improving in 2006. In 2006 the hotels are expected to generate $4.7 million in net revenues, an increase from actual revenues in 2005 of $1.6 million, although short of the $7 million needed to cover annual debt service in 2006. The hotels' occupancy rate equaled 62% in 2005 and the average daily rate was $117. Despite relatively weak financial performance, the hotels have outperformed their direct competitors in the downtown St. Louis market. While the hotels' market penetration rate was an impressive 119%, indicating that the hotels are capturing more than their fair share of demand, the citywide average room rates remain far below levels needed for breakeven operations. Furthermore, new leadership at the Convention and Visitors Commission may have positive long-term effects but likely will do little to improve the hotels financial position in the near term. Moody's breakeven analysis indicates that the weighted average occupancy rate for the combined hotels would need to increase to over 65% and average daily rates would need to reach in excess of $150 in order to generate revenues sufficient to cover both operating expense and debt service in 2006. An updated consultant's study completed in the summer of 2005 forecasted that the hotels would generate enough cash to pay debt service payment by 2010. Project Background: The project bonds were issued in 2000 to finance a portion of the costs of construction and renovation of the headquarters hotels for the America's Center Convention Center in downtown St. Louis. The hotels' poor operating and financial performance stems from a number of national and local contributing factors. National factors include the disruption of the hotel industry as a result of the impact of the September 2001 terrorist attacks on travel; a national and regional economic slowdown; a general deterioration of hotel market conditions, both nationally and in the St. Louis regional market; a decline in business spending on meetings and conventions, and softening nationally in convention bookings and attendance in recent years. An additional factor was American Airlines' significant reduction in air service at Lambert-St. Louis International Airport, which has not been fully restored. Local factors include the inability of the CVC to obtain the anticipated convention activity at the American's center. The CVC and the market feasibility consultant concluded that the city could significantly improve the number of conventions if they had a properly sized headquarters hotel adjacent to the St. Louis America's Convention Center. The market study forecasted that group room nights generated from the increased conventions would increase to 800,000 group room nights in 2004, compared to an actual 410,000. The Idea Institute's August 2004 study concluded that the overwhelming reason for missing the room rate target was the poor national image of St. Louis as a destination. Other factors include the high cost labor work rules, lack of political support and the governance structure of the CVC. Outlook: The Caa2 rating remains on Watchlist for a possible downgrade. Moody's review over the next three months will focus on whether bondholders will eventually be paid and how much they will recover. What Would Change The Rating Up: Upward pressures on the rating could arise from significant and sustained increases in local convention business that generates higher occupancy and average room rates at the hotels and provides sufficient revenue to pay for debt service and other required expenses. What would change the rating down: The rating could deteriorate if the project defaults on its debt payments and ultimate bondholder recovery appears significantly diminished. Key Indicators: Rooms: 1,083 total Occupancy rate, 2005: 61.7% Average daily rate, 2005: $117 Net hotel revenues, FY2005 (Unaudited): $1.6 million Debt service coverage, FY2005 (Unaudited): 0.23 Net hotel revenues, FY2006 (projected): $4.7 million Debt service coverage, FY2006 (projected): 0.66 Rated Debt: Senior Lien Revenue Bonds, Series 2000A, $98 million STONE ENERGY: Moody's May Upgrade Ratings Following Stock Merger ---------------------------------------------------------------- Moody's Investors Service placed Plains Exploration & Production's ratings under review for downgrade. Moody's also placed Stone Energy's ratings on review for upgrade. These actions follow PXP's and SGY's announced stock-for-stock merger placing SGY's equity market valuation in the range of $1.4 billion and enterprise value in the range of $1.9 billion including the assumption of approximately $483 million of SGY debt. Moody's places PXP's pro-forma year-end 2005 debt at $2.145 billion, after funding substantial transaction fees and the $600 million peak upcycle unwinding of underwater crude oil collars on 22,000 barrels per day of crude oil not scheduled to roll off until year-end 2008. These figures are not updated for first quarter 2006 bank revolver activity. In the unwinding of the collars, PXP effectively crystallized the major opportunity cost of the collars at hefty prices but will term out the negative cash flow impact over the life of a forthcoming long term non- amortizing note. While the PXP and SGY merger affords considerably more reinvestment flexibility and potential within the merged property base, the merged business must first reverse the underperforming momentum of both property bases before mounting positive momentum. SGY has been especially challenged over the last few years, a situation that was exacerbated by a still shut-in major proportion of its production due to hurricane damage. Exploration and production is a highly capital-intensive depleting asset business. Accordingly, under Moody's global rating methodology for independent exploration and production companies, approximately 70% of the rating is driven by expected quantitative and qualitative operational considerations, 20% by two categories of expected leverage on reserves, and 10% by expected leverage on retained cash flow after sustaining capital spending. The pro- forma expected operating, leverage, and financial strategy profile of the merged PXP and SGY business bases warrants a review for a downgrade of PXP's ratings at this time. SGY's review for upgrade reflects its currently low rating relative to the stronger profile of the pro-forma PXP or SGY business, seasoned management and operational teams of the merged business, and a very strong oil and gas price environment fueling strong pre-capex pro-forma cash flow with which to tackle the combined operating challenges, mount a larger more diversified reinvestment program, and service debt. PXP's review for downgrade anticipates the new PXP's equity strategies; ongoing operational disappointments and challenges of both PXP and SGY; high cost structures; reinvestment focus towards short lived Gulf of Mexico shallow water and high cost, high risk, long lead time deepwater GOM exploration and development activity; and inherent risks of a major portfolio transition may require the greater flexibility of a lower debt rating. This would accommodate higher sustained leverage, ongoing high costs and inherent challenges of turning capital productivity around, operational risks, and the wide range of potential operating outcomes. Given still record high oil prices, the unwinding of the collars boosts current cash flow available for reinvestment, stock buybacks, and debt reduction. Moody's assumes a small degree of debt reduction prior to equity buybacks. Moody's also believes that, given the performance challenges of the merged business as well as equity market expectations, PXP will retain equity buybacks as a potentially active tool in managing capital allocation and its equity strategy. While the SGY acquisition adds proportionally significant new prospect opportunities, including two nascent potentially key Rocky Mountain plays, Moody's believes PXP has also adopted a strategy of sustained higher leverage into its equity strategy and we believe opportunistic share buybacks will continue to be a basic tool in PXP's equity strategy and tactics. Moody's also notes PXP's disappointing production response to substantial capital reinvestment in its California plays, driving all unit costs higher. The added leverage will almost double interest expense. SGY has faced major operational challenges, very week capital reinvestment productivity, and the de-booking of 20% of its proven reserves, and is undergoing an SEC review of prior reserve booking practices. On a pro-forma basis, Moody's estimates that PXP will have approximately 500 million of proved reserves including approximately 339 of proven developed reserves. PXP has historically carried a proven developed reserve life of over 10 years while, before a major proportion of its production was shut- in due to hurricane damage, SGY carried a proven developed reserve life of 5.2 years. According to the company's estimates, approximately 15% of pro-forma reserves will be located in the Gulf of Mexico, 77% in California, and 8% in the Mid-Continent. Plains Exploration & Production Company is headquartered in Houston, Texas. SUPERIOR PLUS: S&P Affirms BB+ Rating & Revises Outlook to Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook to negative from stable on Calgary, Alta.-based Superior Plus Inc. At the same time, Standard & Poor's affirmed its 'BB+' long-term corporate credit and 'BBB-' senior secured debt ratings on the company. The revised outlook reflects the company's weaker-than- expected operating performance. As a result, Superior has announced a strategic review of its operations that is intended to maximize shareholder value and Standard & Poor's will evaluate any negative repercussions for the company's credit profile. "The ratings on Superior reflect the company's aggressive financial profile with limited financial flexibility," said Standard & Poor's credit analyst Bhavini Patel. "Furthermore, the company's acquisition-related growth strategy into new business lines introduces a source of uncertainty to the credit profile," Ms. Patel added. These weaknesses are alleviated by the strong market positions of the propane distribution and specialty chemicals businesses and the diversity of the company's assets, on a consolidated basis, across end markets, products, and customers. Superior is a wholly owned subsidiary of Superior Plus Income Fund, a limited-purpose, unincorporated trust (the fund). All of the fund's revenues and cash flows are derived from Superior, the operating company, and these cash flows are used to service the fund's consolidated debt, including secured debt at Superior and convertible debentures of the fund, and trust unit distributions. Standard & Poor's takes a consolidated approach to the ratings and focuses on the consolidated financial results of the fund. Consistent with Standard & Poor's rating methodology, Superior's secured notes are rated one notch higher than the long-term corporate credit rating due to the amount of collateral securing the debt. The company owns and operates five distinct business divisions: * Superior Propane, the largest propane distributor in Canada; * ERCO Worldwide, a specialty chemicals producer; * the recently acquired JW Aluminum, a specialty flat-rolled aluminum manufacturer; * Winroc, a North American building products distributor; and * Superior Energy Management, a fixed-price natural gas marketer. The propane distribution, specialty chemical, and flat-rolled aluminum businesses collectively contribute the bulk (close to 85%) of operating income. The outlook on Superior is negative. Softening demand and cost pressures at ERCO will result in weak operating results in the next 12 months. A negative rating action is possible if Superior is unable to improve its financial profile within that timeframe. Furthermore, a significant divesture of any business line as a result of the company's strategic review could also pressure the ratings. An outlook revision to stable would require more clarity of the company's direction regarding its strategic options or a sustainable improvement in credit metrics. THREE S: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: Three S Delaware, Inc. aka Steele Software Systems Corp. aka 3S/Real Serv Corp. 5700 Executive Drive Baltimore, Maryland 21228 Tel: (410) 719-1233 Bankruptcy Case No.: 06-10413 Type of Business: The Debtor is a residential real estate information provider. See http://www.steelesoft.com/ Chapter 11 Petition Date: April 26, 2006 Court: District of Delaware (Delaware) Judge: Peter J. Walsh Debtor's Counsel: Edwin J. Harron, Esq. Young, Conaway, Stargatt & Taylor, LLP The Brandywine Building 1000 West Street, 17th Floor P.O. Box 391 Wilmington, Delaware 19899-0391 Tel: (302) 571-6600 Fax: (302) 571-1253 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ DataQuick Information Litigation $6,218,284 Systems, Inc. c/o Venable, LLP 2 Hopkins Plaza, Suite 1800 Baltimore, MD 21201 Harry Pappas, Jr. $889,000 P.O. Box 5394 Baltimore, MD 21209 Nicholas Andrews Debenture $142,855 3256 South Parkway Golden Beach, FL 33160 William Salladin Debenture $142,855 Calvin Hubbard Debenture $114,284 Tom Andrews Debenture $57,142 Richard Andrews Debenture $57,142 BB&T Equipment Leases $45,819 Bernie Stansbury Debenture $28,571 Nicholas Cortezi Debenture $28,571 Jack Lassen Debenture $28,571 Martha Dickinson Debenture $28,571 Lora Salladin Debenture $28,571 Mary Salladin Debenture $28,571 Elizabeth Ayres Debenture $25,571 Thomas & Libowitz Legal $10,000 St. John Properties Lease $1,386 American Arbitration Assoc. Litigation $1,250 XO Communications Telephone Bills $602 Services, Inc. Nationwide Trust Administrator Fee $500 TITAN CRUISE: First American Says Disclosure is Inadequate ---------------------------------------------------------- First American Bank, N.A., asks the U.S. Bankruptcy Court for the Middle District of Florida to deny approval of the Disclosure Statement explaining Titan Cruise Lines and Ocean Jewel Casino & Entertainment, Inc.'s Joint Chapter 11 Plan of Reorganization. First American is the Debtors' DIP lender. First American tells the Court that the Debtors' disclosure statement does not contain the right amount of the right kind of information for creditors to make informed decisions when asked to vote whether to accept or reject the Plan. First American contends that the disclosure statement does not: (a) provide the amount of any cash payment secured creditors are to receive under Plan; (b) identify the timing or amount of post-confirmation payments any will receive; (c) identify the dividend, or even the possible range of potential dividends, creditors are to receive under the Plan; (d) include a distribution percentage that creditors should expect to receive under the Plan; and (e) have any financial analysis or projections sufficient to educate a reasonable investor on whether to vote to accept or reject the Plan. Terms of the Plan Under the Plan, Administrative Claims, Priority Tax Claims, Priority Claims, Tax Lien Claims will be paid in full. Secured Maritime Claims will be paid in full from the proceeds of the sale of specific vessels to which Maritime's lien is attached. The secured claim of First American Bank will be paid, through interim distribution, using the remaining balance in the Secured Creditor Fund after payment of all Secured Maritime Claims, Administrative Professionals' Claims and Disputed Secured maritime Claims. Unsecured creditors will receive their pro rata share of the remaining amount in the Carve-Out Fund after: * paying the expenses of the Reorganized Debtors; * funding the Reorganized Debtors Reserve; and * paying administrative claims, priority tax claims, and priority claims. Holders of equity interests in the Debtors will receive their pro rata share of the funds remaining in the Carve-Out Fund after all other claims are paid. A full-text copy of the Debtors Joint Chapter 11 Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=060426031414 The Court will convene a hearing at 1:30 p.m., on May 3, 2006, to determine the adequacy of the Debtor's disclosure statement. About Titan Cruise Headquartered in Saint Petersburg, Florida, Titan Cruise Lines and its subsidiary owns and operates an offshore casino gaming operation. The Company and its subsidiary filed for chapter 11 protection on August 1, 2005 (Bankr. M.D. Fla. Case Nos. 05-15154 and 05-15188). Gregory M. McCoskey, Esq., at Glenn Rasmussen & Fogarty, P.A., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. TOWER AUTOMOTIVE: Committee Hires Cervantes as Special Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Tower Automotive, Inc., and its debtor-affiliates' chapter 11 cases sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Cervantes, Aguilar- Alvarez Y Sainz, S.C., as its counsel in Mexican Law in connection with the Debtors' Chapter 11 cases. As special counsel, Cervantes is expected to: (a) advise the Committee with respect to their powers and duties as creditors regarding Mexican Law; (b) attend meetings and negotiate with representatives of debtors and other parties-in-interest when Mexican Law advice is necessary; (c) take all necessary action to protect and preserve the Committee's estates, including prosecuting actions on the Committee's behalf, defending any action commenced against the Committee, and representing the Committee's interests in negotiations concerning all litigation in which it is involved, but exclusively as to Mexican Law; (d) prepare all motions, applications, answers, orders, reports, and papers necessary of the Committee when Mexican Law advice is necessary; (e) advise the Committee in connection with any Debtor's potential sale of assets in Mexico; (f) appear before the Court, any appellate courts, and the United States Trustee, and protect the interests of the Committee before those Courts and the United States Trustee when Mexican Law advice is necessary; (g) consult with the Committee regarding legal matters in Mexico; and (h) perform all other necessary legal services and provide all other necessary legal advice to the Committee exclusively in connection with Mexican Law. The Debtors tell the Court that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $220 - $350 Associates $120 - $175 Legal Trainees $70 - $100 The Debtors disclose that the professionals who will be working in this specific assignment bill: Professional Hourly Rate ------------ ----------- Luis A. Cervantes Muniz, Esq. $350 Alejandro Sainz Orantes, Esq. $260 Alejandro Campillo Talavera $175 Manuel Ruiz de Chavez Gutierrez de Velasco, Esq. $175 Daniel Alejandro Diaz Alvarez, Esq. $170 Hugo Lopez Coll, Esq. $140 Miguel Alfonso Valenzuela Monforte $75 Alejandro Sainz Orantes, Esq., a member of the firm, assures the Court that Cervantes is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code. About Tower Automotive Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. Ira S. Dizengoff, 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 $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000). UNIVERSITY HEIGHTS: Court OKs Girvin Ferlazzo as Legal Counsel -------------------------------------------------------------- University Heights Association, Inc., obtained authority from the U.S. Bankruptcy Court for the Northern District of New York to employ Girvin & Ferlazzo, P.C., as its legal counsel, nunc pro tunc to Feb. 13, 2006. Girvin Ferlazzo will: a) provide special litigation and bond counsel to the Debtor, as well as counsel to other matters within its expertise as the Debtor's general counsel; b) provide legal advice with respect to its duties, responsibilities and powers in this case; c) assist in preparing schedules and statement of affairs and other necessary filings; d) assist in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtor; e) advise with respect to the Debtor's proposed plans of reorganization, the Debtor's proposed plans with respect to prosecution of claims against various third parties, and any other matters relevant to the case, or to the formulation of a plan; f) assist regarding the meeting of creditors, defense of motions to lift stay, protection of leasehold interests and other contracts, utility deposit negotiations with creditor's committees, formulation of a disclosure statement and plan of reorganization, assumption and rejection of executory contracts and leases, sale of property, if necessary, and such other matters as may be relevant in the Debtor's continued operation of its business; and g) perform other legal services required by the Debtor. The Debtor discloses that Girvin & Ferlazzo was paid a retainer fee of $125,000. The Debtor further discloses that the Firm's professionals bill: Professionals Hourly Rate ------------- ----------- Partners $200 - $275 Associates $150 - $195 Paraprofessionals $85 Patrick J. Fitzgerald III, Esq., a principal at Girvin & Ferlazzo, assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Mr. Fitzgerald can be reached at: Patrick J. Fitzgerald III, Esq. Girvin & Ferlazzo, P.C. 20 Corporate Woods Boulevard Albany, New York 12211 Tel: (518) 462 0300 Fax: (518) 462 5037 http://www.girvinlaw.com/ Headquartered in Albany, New York, University Heights Association Inc. -- http://www.universityheights.org/-- is composed of four educational institutions that aim to enhance the economic vitality and quality of life of its immediate community. The company filed for chapter 11 protection on Feb 13, 2006 (Bankr. N.D.N.Y. Case No. 06-10226). Peter A. Pastore, Esq., at McNamee, Lochner, Titus & Williams, PC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and liabilities between $10 million and $50 million. US AIRWAYS: Assumes Port Authority Pacts & Nixes $24 Million Claim ------------------------------------------------------------------ US Airways, Inc., its debtor-affiliates and the Port Authority of New York and New Jersey were parties to several agreements for three airports: Airport Agreement Date ------- --------- ---- LaGuardia Airport Lease 06/02/1989 Lease 03/17/1977 Lease 02/21/1978 Flight Fee 01/01/2004 Space Permit 03/01/1989 Space Permit 02/01/1992 Privilege Permit 09/04/2000 Newark Library Lease 12/20/1968 International Privilege Permit 04/01/1979 Airport John F. Kennedy Lease 03/01/1992 International Airport The Debtors and the Port Authority of NY and NJ were also parties to these agreements for the Newark Airport: -- a letter agreement for employee parking lot; -- a privilege permit to store aviation fuel; -- a parking permit; and -- a letter agreement for vending machines. On Jan. 28, 2005, the Port Authority of NY & NJ filed Claim No. 2723 for $24,801,209 asserting a general unsecured claim against the Debtors. The Reorganized Debtors objected to the Claim. In September 2005, the Court confirmed the Debtors' Plan of Reorganization. The Reorganized Debtors assumed their Agreements with the Port Authority of NY & NJ under the Plan. The Reorganized Debtors are also paying their cure obligations to the Port Authority pursuant to a letter agreement dated Aug. 19, 2005. In a stipulation, the Reorganized Debtors and the Port Authority of NY & NJ agree that: (a) Claim No. 2723 is withdrawn in its entirety; (b) The stipulation is without prejudice to their rights and obligations under any of the Agreements that are Assumed Contracts, or the Cure Obligations with respect the Assumed Contracts, or the Letter Agreement; and (c) Any claims and obligations related to building deficiencies and environmental remediation for the properties covered by the Agreements will survive and continue and will not be effected by the bankruptcy case, the Plan, or the stipulation, with the parties reserving all rights and defenses related to any of the claims and obligations. The Stipulation is deemed effective without further Court order. About US Airways Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News, Issue No. 116; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on April 25, 2006, Fitch Ratings revised its outlook on US Airways Group to 'Positive' from 'Negative'. In addition, Fitch placed a 'B' rating on US Airways Group's (NYSE: LCC) $1.25 billion secured term loan facility administered by General Electric Capital Corporation -- GECC. Fitch also affirmed US Airways Group's Issuer Default Rating of 'CCC' and senior unsecured rating of 'CC'. On March 31, 2006, Moody's Investors Service placed a B2 rating on US Airways' $1.1 billion secured credit facility. Moody's also assigned a B3 corporate family rating. The outlook has been changed to stable. US AIRWAYS: Completes Exchange of $112-Mil. Sr. Notes to Stock -------------------------------------------------------------- US Airways Group, Inc. (NYSE: LCC), completed the redemption of approximately $112 million in principal amount of America West Holdings, Inc.'s 7.5% convertible senior notes due 2009. Holders of the notes could elect, on or prior to April 11, 2006, to convert the notes into shares of US Airways Group common stock at a rate of 34.376 shares per $1,000 principal amount rather than receive the cash redemption payment. Other than a modest payment for accrued interest and unconverted notes, the transaction did not result in a cash outlay for the Company; rather the holders of over 99 percent of the notes converted their notes into US Airways common stock, resulting in the issuance of an aggregate of approximately 3.86 million shares. Following the conversion, there were approximately 86 million primary shares of common stock outstanding. The notes were originally issued to aircraft lessors in January 2002 as part of America West's restructuring in exchange for rent reductions. The reduction of debt will lower interest expense by $8.4 million annually. "We continue to build on the momentum of the positive US Airways story. Today's transaction helps further our goal to reduce debt and reaffirms our commitment as a low cost carrier by taking advantage of opportunities to lower costs wherever possible," said US Airways Chief Financial Officer Derek Kerr. About US Airways Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News, Issue No. 118; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on April 25, 2006, Fitch Ratings revised its outlook on US Airways Group to 'Positive' from 'Negative'. In addition, Fitch placed a 'B' rating on US Airways Group's (NYSE: LCC) $1.25 billion secured term loan facility administered by General Electric Capital Corporation -- GECC. Fitch also affirmed US Airways Group's Issuer Default Rating of 'CCC' and senior unsecured rating of 'CC'. On March 31, 2006, Moody's Investors Service placed a B2 rating on US Airways' $1.1 billion secured credit facility. Moody's also assigned a B3 corporate family rating. The outlook has been changed to stable. USG CORP: Balance Sheet Upside-Down by $496 Million at March 31 --------------------------------------------------------------- USG Corporation (NYSE:USG) reported first quarter net sales of $1.5 billion. Net sales increased $292 million, or 25%, from net sales of $1.2 billion reported in the first quarter of 2005. Operating profit more than doubled to $256 million, compared with operating profit of $124 million reported in last year's first quarter. The quarter's strong results reflect record gypsum wallboard shipments, as well as strong performance of key complementary products in the North American Gypsum and Building Products Distribution operating segments. "We are very pleased with our record first quarter results - all three of USG's businesses are performing very well," commented USG Corporation Chairman and CEO William C. Foote. "We achieved the highest net sales for any quarter in our 104-year history. U.S. Gypsum shipped more SHEETROCK(R) Brand gypsum wallboard in the first quarter than ever before. Our Building Products Distribution Business achieved record shipments and the Worldwide Ceilings business exhibited strong operating profit improvement." A net loss of $141 million was recorded for the first quarter of 2006. The loss included an after-tax charge of $300 million for post-petition interest and fees related to pre-petition obligations (primarily debt and trade payables) that are expected to be paid upon the corporation's planned emergence from bankruptcy later this year. Net earnings of $77 million were recorded in the first quarter of 2005. "USG is positioned for long-term growth," Mr. Foote continued. "Our strategies of investing in and strengthening our businesses have facilitated the corporation's plan to emerge from bankruptcy later this year. Our record-setting operating performance reflects strong industry leadership, efficient, low-cost manufacturing operations, expansion of our distribution business and a commitment of resources and capital for providing customers with innovative building solutions and excellent service." Core Business Results North American Gypsum USG's North American Gypsum business recorded first quarter 2006 net sales of $931 million, an increase of $206 million, or 28%, from the first quarter of 2005. Operating profit increased by $104 million to $211 million. United States Gypsum Company realized first quarter 2006 net sales of $834 million and operating profit of $189 million. Net sales increased by $180 million, or 28%, and operating profit more than doubled compared with the first quarter of 2005. The increases in net sales and operating profit reflect improved selling prices and record shipments of SHEETROCK Brand gypsum wallboard. Favorable performance for the company's complementary product lines also contributed to higher sales and operating profit. In addition, U.S. Gypsum achieved strong pricing and volume for market leader SHEETROCK Brand joint compound and record shipments of FIBEROCK(R) Brand gypsum fiber panels, which further improved the company's performance during the quarter. Benefits from these results were partially offset by higher energy and raw material costs. U.S. Gypsum's nationwide average realized price of gypsum wallboard was $170.77 per thousand square feet during the first quarter, an increase of 28%, compared with the first quarter last year. The robust level of activity in the new housing and residential repair and remodel markets, which together account for nearly two-thirds of all demand for gypsum wallboard, and near-capacity utilization rates for the industry, have resulted in strong demand and higher selling prices for gypsum wallboard. U.S. Gypsum's wallboard shipments in the first quarter were a record for any quarter in its history. U.S. Gypsum shipped 2.96 billion square feet of wallboard, 10 percent higher than the 2.69 billion square feet of wallboard shipped in last year's first quarter. U.S. Gypsum's wallboard plants operated at 99% of capacity during the quarter. The gypsum division of Canada-based CGC Inc. reported first quarter 2006 net sales of $86 million and operating profit of $12 million. Net sales increased by $11 million, or 15%, while operating profit was unchanged versus the first quarter of 2005. Higher shipments of SHEETROCK Brand gypsum wallboard, as well as the favorable effects of currency translation, were offset by higher manufacturing costs. Worldwide Ceilings USG's Worldwide Ceilings business reported first quarter net sales of $186 million, an increase of $16 million, compared with the first quarter of 2005. Operating profit in the first quarter of 2006 was $20 million, an increase of $8 million, compared with the same period last year. USG's domestic ceilings business, USG Interiors, reported net sales and operating profit of $127 million and $14 million, respectively. This compared with net sales of $117 million and operating profit of $6 million in the first quarter of 2005. Improved selling prices for ceiling tile and higher shipments of ceiling grid were partially offset by higher manufacturing costs for ceiling tile. The gains reflect a rebound in the commercial construction market, which has benefited from declining office vacancy rates, job growth and improved corporate investment. USG International reported net sales and operating profit of $54 million and $3 million, respectively, in the first quarter of 2006. This compared with net sales of $51 million and operating profit of $3 million for the same period a year ago. Net sales increased 6 percent from the first quarter of 2005 due primarily to increased demand for gypsum-related products in Europe, Latin America and the Pacific region, partially offset by lower sales of ceiling tile products. Operating profit was unchanged as higher overhead costs offset the profit contribution from increased sales. The ceilings division of Canada-based CGC Inc. reported net sales of $16 million and $3 million in operating profit. Net sales and operating profit for the same period a year ago were $13 million and $3 million, respectively. Building Products Distribution L&W Supply, USG's building products distribution business, reported first quarter 2006 net sales of $604 million, a record for any quarter in its history. This represented an increase of $148 million, or 32%, versus the first quarter of 2005. Operating profit reached an all-time high, more than doubling to $53 million from $26 million reported in last year's first quarter. The improved results reflect record shipments for gypsum wallboard and complementary building products, such as drywall metal, ceiling products and joint compound. Results also benefited from higher prices for gypsum wallboard. Selling prices for L&W Supply's gypsum wallboard increased 28% versus the first quarter of 2005. Sales of products other than gypsum wallboard were up 14 percent compared with last year's first quarter. Business Outlook The corporation continues to focus its attention and capital investments on improving customer service, manufacturing costs and operating efficiencies, as well as strategic investments to grow its businesses. In addition, the corporation is keenly focused on its reorganization plan and is on track to emerge from Chapter 11 proceedings this summer. The outlook for the corporation's markets in 2006 remains very positive, despite the recent moderation in some demand indicators. Lower levels of housing affordability and rising mortgage interest rates, for example, suggest that demand from both the new housing and residential remodeling markets, which have been at record levels, may soften in the latter part of the year. The fundamentals for nonresidential building remain solid, and modest growth is expected in this market in 2006. In addition, the corporation's operating subsidiaries, like many other companies, face many ongoing cost pressures, particularly in the areas of energy and raw materials. Other Consolidated Information First quarter 2006 selling and administrative expenses totaled $99 million, an increase of $10 million, or 11%, year-over-year. Expenses were higher in the 2006 period due primarily to increased levels of compensation and benefits and funding for growth initiatives. Selling and administrative expenses as a percent of net sales were 6.8%, down from 7.6% in the comparable 2005 period. USG incurred Chapter 11 reorganization expenses of $2 million in the first quarter of 2006, compared with $1 million in the last year's first quarter. For the first quarter of 2006 and 2005, respectively, these expenses consisted of $14 million and $6 million in legal and financial advisory fees, partially offset by bankruptcy-related interest income of $12 million and $5 million, respectively. Under AICPA Statement of Position 90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code," interest income on USG's bankruptcy-related cash is offset against Chapter 11 reorganization expenses. During the quarter, the corporation recorded interest expense of $486 million. Of this amount, $484 million ($300 million after-tax) represented a charge for post-petition interest and fees from June 25, 2001, through March 31, 2006, related to pre-petition obligations, which are expected to be paid upon emergence from bankruptcy as outlined in the plan of reorganization. Interest expense of $1 million was recorded in the first quarter of 2005. In accordance with SOP 90-7, virtually all of the corporation's outstanding debt has been classified as liabilities subject to compromise, and from the Petition Date through December 31, 2005, interest expense on this debt and other pre-petition obligations had not been accrued or recorded. As of March 31, 2006, USG had $1.5 billion of cash, cash equivalents, restricted cash and marketable securities on a consolidated basis. This compared with $1.2 billion reported on March 31, 2005 and $1.6 billion reported on December 31, 2005. Capital expenditures in the first quarter of 2006 were $52 million, compared with $33 million in the corresponding 2005 period. As of March 31, 2006, USG's balance sheet showed a $496,000,000 equity deficit. About USG Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. WINN-DIXIE: Court Approves Modified AT&T Agreements --------------------------------------------------- As reported in the Troubled Company Reporter on April 11, 2006, Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida to: (a) approve their assumption of the Modified AT&T Agreements; (b) enforce AT&T's waiver of the requirements of Section 365(b)(1); (c) allow the Prepetition Claim for $1,129,758; and (d) provide that the Prepetition Claim will not be paid as cure but will instead retain the status of a prepetition unsecured non-priority claim. Judge Funk approved the Debtors' request. The Debtors and AT&T Corp. were parties to: * the AT&T Master Agreement, * the AT&T Service Order Attachment-Voice/Data Service, and * the Addendum to AT&T Service Order Attachment-Voice/Data Service. The Prepetition Agreements provided the Debtors with data frame relay network services that allow them to transport critical data, including point of sale authorizations, inventory inquiries and sales reports, between their various locations. The Prepetition Agreements contain, among other problematic terms, contract-pricing provisions, intended to guarantee a return to AT&T that will satisfy a "minimum annual revenue commitment" or "MARC" that is based on the number of stores previously operated by the Debtors. With the Debtors' decision to sell or close in excess of 300 stores, they are now unable to satisfy the MARC. Moreover, the Debtors' ability to adjust contract pricing based on the existing "business downturn" provision in the Prepetition Agreements has been exceeded. As a result, the Debtors are subject to a shortfall penalty or a rate increase. The Debtors have been engaged in negotiations with AT&T to modify the MARC and address other problematic terms in the Prepetition Agreements. The negotiations have produced an agreement in principal that is substantially reflected in: * the Addendum #1 to AT&T Master Agreement, * the amended and restated AT&T Service Order Attachment- Voice/Data Service, and * the amended and restated Addendum to AT&T Service Order Attachment-Voice/Data Service. Under these Postpetition Amendments: (a) the Debtors' MARC will be reduced from $3.48 million per year to $1.68 million per year; (b) the business downturn provision will permit a further 15% reduction in commitment before a rate increase is triggered; (c) the early termination penalties applicable to the last two years of the contract term will be reduced; and (d) the Debtors will be entitled to credits of $138,300 during the first month and, if agreed terms are satisfied, $276,000 in the 45th month of the amendment term. The agreement in principle contemplates that the Debtors will assume the Prepetition Agreements as modified by the Postpetition Amendments, pursuant to Section 365(a) of the Bankruptcy Code. In conjunction with the assumption of the Modified Agreements, the Debtors have agreed that the prepetition unsecured non-priority claim asserted by AT&T for $1,129,758, as evidenced by Claim No. 833, will be allowed in full. AT&T will facilitate the assumption by agreeing that: (a) the Debtors will not be required to pay the amount of the Prepetition Claim as cure under Section 365(b)(1)(A) of the Bankruptcy Code; (b) it will waive in full the requirements of Section 365(b)(1); (c) the Prepetition Claim will not have administrative expense status as a result of the assumption of the Modified Agreements or for any other purpose; and (d) the Prepetition Claim will retain the status of a prepetition unsecured non-priority claim. 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 Sedgwick Declared Not Liable in Four Lawsuits --------------------------------------------------------------- Before Winn-Dixie Stores, Inc., and its debtor-affiliates filed for bankruptcy, Sedgwick Claims Management Services, Inc., served as the Debtors' claims agent and continues in that role postpetition. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that Sedgwick was authorized to negotiate settlements of claims against the Debtors and to issue settlement checks drawn on a bank account maintained for the sole purpose of paying settled claims against the Debtors. The Settlement Account was at all times funded solely by the Debtors. In its capacity as the Debtors' claims agent, Sedgwick negotiated prepetition settlements of claim against the Debtors asserted by: -- Rita Ferguson, -- Elizabeth Whitbeck, -- Ann Wiggins and Ralph Wiggins, and -- Carol Schweitzer. In connection with the settlement, Sedgwick issued prepetition checks from the Settlement Account. Sedgwick's representative capacity on behalf of the Debtors was stated on the Check. After the bankruptcy filing, in accordance with their obligations under the Bankruptcy Code, the Debtors stopped payment on all outstanding checks, including those checks issued by Sedgwick from the Settlement Account. As a result, the checks issued in settlement of prepetition claims were dishonored, including the Check issued to: -- Ms. Ferguson, -- Ms. Whitbeck, -- the Wigginses, and -- Ms. Schweitzer. Ms. Ferguson has commenced litigation against Sedgwick in an attempt to recover from Sedgwick the full amount of her prepetition settlement with the Debtors in the Circuit Court for Talladega County, Alabama, seeking damages for $35,000. Ms. Whitbeck and her attorneys, Dell & Schaefer, P.A., commenced and are prosecuting an action against Sedgwick in the Circuit Court for Palm Beach County, Florida, in which they are attempting to recover from Sedgwick the full amount of the prepetition settlement with the Debtors of $100,000, together with treble damages of $300,000, and costs and attorneys' fees. The Wigginses and the Law Offices of Blake Maislin, LLC, have commenced litigation against Sedgwick in the Municipal Court for Clermont County, Ohio, seeking damages totaling $6,000 for the full amount of the prepetition settlement with the Debtors. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, asserts that the Wigginses and Maislin intentionally filed the Action with full knowledge of the Debtors' Chapter 11 cases and continued to prosecute the Action against the Debtors after being notified that the actions violated the automatic stay. As a result, the Debtors incurred attorneys' fees and costs in the Action and in the Adversary Proceeding. Ms. Schweitzer has commenced litigation against Sedgwick in an attempt to recover from Sedgwick the full amount of her prepetition settlement with the Debtors in the United States District Court for the Southern District of Ohio, Western Division, seeking damages of $85,000, plus attorneys' fees and costs. Sedgwick demands that the Debtors defend and indemnify it in the Actions. The Debtors believe that there exists an actionable controversy within the meaning of Section 2201(a) of the Judiciary Procedures Code between the Debtors and the Claimants and Sedgwick, regarding the alleged liability of Sedgwick and the Debtors to the Claimants. For these reasons, Winn-Dixie Stores, Inc., and its debtor- affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida for a judgment declaring that: (a) Sedgwick has no liability to the Claimants as to the Actions; (b) as a result of their prepetition settlement with the Debtors: -- Ms. Ferguson holds an unsecured non-priority claim for $35,000, represented by Claim No. 5158, which will be allowed against Winn-Dixie Montgomery, Inc.; -- Ms. Whitbeck holds an unsecured non-priority Claim for $100,000, represented by Claim No. 2012, which will be allowed against Winn-Dixie Stores, Inc.; -- the Wigginses hold an unsecured non-priority claim for $6,000, represented by Claim No. 12720, which will be allowed against Winn-Dixie Raleigh, Inc.; and -- Ms. Schweitzer holds an unsecured non-priority claim for $85,000, represented by Claim No. 5158, which will be allowed against Winn-Dixie Raleigh, Inc.; and (c) the Claimants hold no other prepetition claims against any of the Debtors. Winn-Dixie Raleigh also asks Judge Funk to: (1) declare that the Wigginses and Maislin's commencement and prosecution of the State Court Action constituted a violation of the automatic stay; (2) hold the Wigginses and Maislin in contempt of court for violation of the automatic stay; (3) sanction the Wigginses and Maislin for their contempt by ordering them to pay WD Raleigh's attorneys' fees and costs incurred in connection with the State Court Action and the adversary proceeding; (4) enjoin the Wigginses and Maislin from prosecuting the State Court Action and from taking any further action in violation of the automatic stay; and (5) sanction the Wigginses and Maislin for their contempt by fining them a fixed sum each day until the State Court Action is dismissed. 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: Res Judicata Bars Louise Clark's $3 Billion Claim ------------------------------------------------------------- As reported in the Troubled Company Reporter on April 18, 2006, Judge Funk of the U.S. Bankruptcy Court for the Middle District of Florida sustained Winn-Dixie Stores, Inc., and its debtor- affiliates' objection to Louise Clark's $3,000,000,000 claim. Louise Clark's claim for personal injury damages was twice asserted and twice dismissed, with prejudice, in the North Carolina State Courts. Accordingly, the Court finds that the issue presented is whether res judicata bars Ms. Clark from reasserting that personal injury claim in the Bankruptcy Court for the Middle District of Florida. Because the prior dismissals occurred in North Carolina State Courts, the Bankruptcy Court must look to North Carolina law to determine the preclusive effect of those prior dismissals on Ms. Clark's claim. Under North Carolina law, preclusive effect is given under the doctrine of res judicata, to judicial acts, which meet three requirements: (1) a final judgment on the merits in an earlier suit; (2) an identity of the causes of action in both the earlier and the later suit; and (3) an identity of the parties or their privies in the two suits. Judge Funk says that these requirements have been established. Because Ms. Clark is barred by res judicata from re-litigating her claim under North Carolina law, the Bankruptcy Court is precluded by Section 1738 of the Judicial Procedures Code from retrying her Claim in the Debtors' Chapter 11 cases. Because Ms. Clark's claim is barred by res judicata, the Bankruptcy Court need not decide whether Ms. Clark's claim is barred by the applicable statute of limitations. For these reasons, Judge Funk concludes that Ms. Clark's claim is barred by the doctrine of res judicata. Thus, the Debtors' objection is sustained and the Claim is disallowed. 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). YOUNG CHANG: Ch. 15 Recognition Order Objections Due on May 16 -------------------------------------------------------------- The Hon. Judge Paul Synder of the U.S. Bankruptcy Court for the Western District of Washington set May 16, 2006, as the deadline for parties to object to Young Chang Co. Ltd.'s chapter 15 petition. Judge Synder also ordered that any party objecting to the Debtor's chapter 15 petition must appear before the Court at 10:30 a.m. on May 25, 2006. On Jan. 25, 2006, the U.S. Bankruptcy Court entered an order requiring objecting parties to show cause why the foreign main proceeding should not be recognized and to appear for a hearing on March 2, 2006. Young Chang requested the Court to extend and continue the show cause hearing. Chapter 15 Update In early 2004, Samick Korea -- the parent of Samsong Manufacturing Co., Ltd. -- acquired 26.5% of Young Chang's stock, while Samsong acquired a 22.08% stake, giving Samick control over Young Chang. In September 2004, however, the Korean Fair Trade Commission, citing violation of Korea's antitrust laws, unwound Samick's takeover of Young Chang. Young Chang then filed for bankruptcy under Korea's Company Reorganization Act at the Incheon District Court, Department of Bankruptcy, Republic of Korea, and was declared insolvent. The Company also defaulted on a KW460 million (US$400,000) debt. On Jan. 13, 2006, Ho Seok Lee, Young Chang's court-appointed manager, filed a petition under Chapter 15 of the United States Bankruptcy Code with the U.S. Bankruptcy Court for the Western District of Washington. Mr. Lee wanted to have Young Chang's bankruptcy proceedings in Korea recognized in order to prevent Samsong Manufacturing from pursuing a civil action in the Pierce County Superior Court. Through its civil action, Samsong sought to seize United States-based accounts receivable owed to Young Chang as payment for Young Chang's KW2.1 billion debt to Samsong. More information on the Young Chang's Chapter 15 proceeding is available at http://www.chapter15.com/ Headquartered in Incheon, Korea, Young Chang Co. Ltd. -- http://www.youngchang.com/-- manufactures several brands of pianos, including Bergmann, Young Chang, and Pramberger Signature Series, which are sold in more than 45 countries throughout the world. Ho Soek Lee, the Young Chang Co. Ltd.'s foreign representative, filed a chapter 15 petition on Jan. 13, 2006 (Bankr. W.D. Wash. Case No. 06-40043). Jason T. Dennet, Esq., at Carlson & Dennett, P.S., represents Mr. Lee in the Debtor's ancillary proceedings. When Mr. Lee filed the Debtor's chapter 15 petition, he estimated the Debtor's assets and debts between $50 million and $100 million. * Layne J. Albert Joins Alvarez & Marsal as Managing Director ------------------------------------------------------------- Alvarez & Marsal Tax Advisory Services, LLC, reported that Layne J. Albert, Esq., has joined the firm as managing director in the Houston office. In his role with Alvarez & Marsal, Mr. Albert will advise clients on federal and state tax matters related to business operations and transactions. With more than 16 years of experience, Mr. Albert has restructured the tax departments of two public companies. He has extensive experience in identifying, understanding and managing federal and state tax issues related to mergers and acquisitions as well as managing federal and state tax controversies. Mr. Albert also assists clients with tax department design and operations, including assistance with Sarbanes-Oxley compliance. "Layne is an invaluable addition to our growing team of world- class tax professionals," said Robert N. Lowe, Jr., CEO of Alvarez & Marsal Tax Advisory Services. "His experience in managing and restructuring the tax function of two large public companies makes him uniquely qualified to respond to the needs of our clients." Prior to joining Alvarez & Marsal, Mr. Albert served as vice president of tax at Dynegy, which recruited him in 2003 to lead the restructuring of the company's tax department. Previously, he was vice president of tax at Encompass Services. Earlier in his career, Mr. Albert also served as Tax Counsel at Tenneco and was an attorney with law firm Chamberlain, Hrdlicka, White, Williams & Martin. He earned a B.B.A. in Accounting from The University of Texas at Austin, a J.D. from South Texas College of Law, and a LL.M. in Taxation from the University of Houston. About Alvarez & Marsal Alvarez & Marsal Tax Advisory Services, LLC, an affiliate of Alvarez & Marsal -- http://www.alvarezandmarsal.com/-- a leading global professional services firm, is an independent tax group comprised of experienced tax professionals dedicated to providing customized tax advice to clients in a broad range of industries. Its professionals extend Alvarez & Marsal's commitment to offering clients a choice in tax advisors free from audit-based conflicts of interest, serving clients with knowledge, experience and a commitment to excellence in client service. Alvarez & Marsal Tax Advisory Services, LLC, is a founding member of the Taxand global alliance, which is comprised of independent tax firms in countries around the world which provide our multinational clients with international tax advice. With more than 1,000 global tax professionals worldwide, Tax and provides clients with an alternative to the Big Four audit firms for global tax services. * Sheppard Mullin Taps Ethan Feffer as Partner in Orange County --------------------------------------------------------------- Ethan D. Feffer, Esq., has joined the Orange County office of Sheppard, Mullin, Richter & Hampton LLP. Mr. Feffer, most recently with Pillsbury Winthrop Shaw Pittman in Orange County, joins as a partner in the firm's Corporate practice group. Mr. Feffer focuses on venture capital financings, private equity fund formation, mergers and acquisitions, 144A institutional private placements, and public offerings. He represents publicly traded and privately held companies, and investors, in a variety of industries, including financial services, real estate, life sciences, electronics and software. Mr. Feffer has completed over $10 billion in financings and mergers and acquisitions for clients such as Bank of America, CalPERS, Friedman, Billings, Ramsey & Co., Keefe, Bruyette & Woods, Piper Jaffray, Wells Fargo, The Carlyle Group, Pequot Capital, Schroder Ventures and Versant Ventures. He has also assisted privately held companies in transactions with large public companies, including Boston Scientific, E*TRADE, Guidant, Medtronic and Novartis. In addition to his transactional work, Mr. Feffer has extensive experience in public company reporting for NASDAQ and NYSE listed companies, including assisting them in complying with the Sarbanes-Oxley Act and related stock exchange requirements. He serves as general counsel to publicly traded and privately held companies, where he advises boards of directors and handles the companies' day-to-day legal needs. "Ethan brings to the firm a strong corporate practice and public company expertise," said Guy Halgren, chairman of the firm. "His skills and experience add considerable depth to the Orange County transactional team." "Sheppard Mullin's Corporate practice group had a strong year in 2005," Mr. Feffer said. "I'm excited to join a successful group and look forward to growing the Orange County practice with my new colleagues." Mr. Feffer earned his law degree from University of California, Hastings College of Law in 1992 and graduated from University of California at Berkeley, with a B.A. in 1987. In 2005, he was named one of the "Top 20 Under 40" in the Daily Journal's annual survey of the top lawyers in California under 40 years old. Additionally, in 2004 and 2005, Feffer was named a "Rising Star" in Los Angeles magazine's Super Lawyers survey, where he was listed as one of the top securities and venture finance lawyers in Southern California under the age of 40. About Sheppard, Mullin, Richter & Hampton LLP Sheppard, Mullin, Richter & Hampton LLP is a full service AmLaw 100 firm with more than 480 attorneys in nine offices located throughout California and in New York and Washington, D.C. The firm's California offices are located in Los Angeles, San Francisco, Santa Barbara, Century City, Orange County, Del Mar Heights and San Diego. Sheppard Mullin provides legal expertise and counsel to U.S. and international clients in a wide range of practice areas, including Antitrust, Corporate; Entertainment, Media and Communications; Finance and Bankruptcy; Government Contracts; Intellectual Property; Labor and Employment; Litigation; Real Estate/Land Use; Tax/Employee Benefits/Trusts & Estates; and White Collar Defense. The firm was founded in 1927. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent chapter 11 cases filed with assets and liabilities below $1,000,000: In re Clayton F. Mayo Bankr. W.D. Tenn. Case No. 06-10820 Chapter 11 Petition filed April 19, 2006 See http://bankrupt.com/misc/tnwb06-10820.pdf In re Ketzler Associates, Incorporated Bankr. E.D. Mich. Case No. 06-30735 Chapter 11 Petition filed April 19, 2006 See http://bankrupt.com/misc/mieb06-30735.pdf In re Automatic Art, LLC Bankr. D. Ariz. Case No. 06-01106 Chapter 11 Petition filed April 20, 2006 See http://bankrupt.com/misc/azb06-01106.pdf In re B&F Venture, LLC Bankr. S.D. Fla. Case No. 06-11454 Chapter 11 Petition filed April 20, 2006 See http://bankrupt.com/misc/flsb06-11454.pdf In re David Gary Funeral Home, Inc. Bankr. S.D. Ohio Case No. 06-51751 Chapter 11 Petition filed April 20, 2006 See http://bankrupt.com/misc/ohsb06-51751.pdf In re Heritage Motor Corp Bankr. S.D.N.Y. Case No. 06-10829 Chapter 11 Petition filed April 20, 2006 See http://bankrupt.com/misc/nysb06-10829.pdf In re King Security and Investigation, Inc. Bankr. S.D.N.Y. Case No. 06-22197 Chapter 11 Petition filed April 20, 2006 See http://bankrupt.com/misc/nysb06-22197.pdf In re Lake County Transportation Systems, Inc. Bankr. N.D. Ill. Case No. 06-04453 Chapter 11 Petition filed April 20, 2006 See http://bankrupt.com/misc/ilnb06-04453.pdf In re Malik-Josiah LLC Bankr. S.D. Ohio Case No. 06-51752 Chapter 11 petition filed April 20, 2006 See http://bankrupt.com/misc/ohsb06-51752.pdf In re Delau and Daughters Construction, Inc. Bankr. E.D. Mich. Case no. 06-30757 Chapter 11 Petition filed April 21, 2006 See http://bankrupt.com/misc/mieb06-30757.pdf In re Family Vision Center, Inc. Bankr. D. P.R. Case No. 06-01182 Chapter 11 Petition filed April 21, 2006 See http://bankrupt.com/misc/prb06-01182.pdf In re Hatcher Enterprises, Inc. Bankr. D. Md. Case No. 06-12280 Chapter 11 Petition filed April 21, 2006 See http://bankrupt.com/misc/mdb06-12280.pdf In re Parnell Distribution Center, L.L.C. Bankr. N.D. Ala. Case No. 06-40543 Chapter 11 Petition filed April 21, 2006 See http://bankrupt.com/misc/alnb06-40543.pdf In re Reed Demolition, LLC Bankr. E.D. Mich. Case No. 06-44951 Chapter 11 Petition filed April 21, 2006 See http://bankrupt.com/misc/mieb06-44951.pdf In re Shallowford Family Medical Center, Inc. Bankr. M.D. N.C. Case No. 06-50505 Chapter 11 Petition filed April 21, 2006 See http://bankrupt.com/misc/ncmb06-50505.pdf In re Efes, Inc. Bankr. N.D. Ga. Case No. 06-64481 Chapter 11 Petition filed April 23, 2006 See http://bankrupt.com/misc/ganb06-64481.pdf In re Dobbs Sales Company Bankr. S.D. Ill. Case No. 06-40400 Chapter 11 Petition filed April 24, 2006 See http://bankrupt.com/misc/ilsb06-40400.pdf In re Fille Et Fils, Inc. Bankr. M.D. Ga. Case No. 06-30254 Chapter 11 Petition filed April 24, 2006 See http://bankrupt.com/misc/gamb06-30254.pdf In re M&R Equipment Company LP Bankr. S.D. Tex. Case No. 06-31647 Chapter 11 Petition filed April 24, 2006 See http://bankrupt.com/misc/txsb06-31647.pdf In re The Health Spa II, Inc. Bankr. D. N.J. Case No. 06-13454 Chapter 11 Petition filed April 24, 2006 See http://bankrupt.com/misc/njb06-13454.pdf In re Worldwide Mortgage Corporation Bankr. W.D. Tenn. Case No. 06-22867 Chapter 11 Petition filed April 24, 2006 See http://bankrupt.com/misc/tnwb06-22867.pdf In re B & B Farms, Inc. Bankr. S.D. Ohio Case No. 06-30975 Chapter 11 Petition filed April 25, 2006 See http://bankrupt.com/misc/ohsb06-30975.pdf In re Bond Construction, LLC Bankr. E.D. Penn. Case No. 06-11671 Chapter 11 Petition filed April 25, 2006 See http://bankrupt.com/misc/paeb06-11671.pdf In re Complete Gourmet Inc. Bankr. N.D. Ill. Case No. 06-04580 Chapter 11 Petition filed April 25, 2006 See http://bankrupt.com/misc/ilnb06-04580.pdf In re Gemini Printing, Inc. Bankr. S.D. Tex. Case No. 06-20251 Chapter 11 Petition filed April 25, 2006 See http://bankrupt.com/misc/txsb06-20251.pdf In re Ginther Services, Inc. Bankr. S.D. Tex. Case No. 06-10257 Chapter 11 Petition filed April 25, 2006 See http://bankrupt.com/misc/txsb06-10257.pdf In re Indianapolis Ballet Theatre, Inc. Bankr. S.D. Ind. Case No. 06-01942 Chapter 11 Petition filed April 25, 2006 See http://bankrupt.com/misc/insb06-01942.pdf In re Taska, Inc. Bankr. D. Nebr. Case No. 06-80526 Chapter 11 Petition filed April 25, 2006 See http://bankrupt.com/misc/neb06-80526.pdf ********* 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 ***