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/raid1/www/Hosts/bankrupt/TCR_Public/060616.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 16, 2006, Vol. 10, No. 142 Headlines ABLE LABORATORIES: Admin. Expense Proofs of Claim Due by July 6 ABLE LABORATORIES: Plan Confirmation Hearing Set for July 13 ADELPHIA: America Channel Fights Injunction v. Timer Warner Suit ADELPHIA COMMS: Court Approves Century/ML Settlement Agreement AIRWAY INDUSTRIES: Taps Malin Bergquist & Horwath as Accountants AMES DEPARTMENT: GE Capital Wants LFD's Complaints Dismissed AMES DEPARTMENT: Judge Gonzalez Grants GE Capital Summary Judgment AMES DEP'T: Wal-Mart Wants Colonial & Broad's Protest Overruled APPLETON PAPERS: Offers to Pay More to Get Noteholders Consent ASARCO LLC: Has Until October 6 to File Plan of Reorganization ASARCO LLC: Judge Schmidt Approves Bridgeview Management Agreement ASARCO LLC: Judge Schmidt Says Right of First Refusal is Executory ATA AIRLINES: Reports May 2006 Service Traffic BANCO MERCANTIL: Inquiries on NY Agency Liquidation Due June 29 BAYTEX ENERGY: Debt Reduction Prompts S&P's Stable Outlook BLUEGRASS CONTAINER: Moody's Rates $1.1 Bil. Term Loans at Low-B BLUEGRASS CONTAINER: S&P Rates Proposed $405 Million Loan at B- BRISTOW GROUP: S&P Affirms BB Rating With Negative Outlook CATHOLIC CHURCH: Portland Files Third Modified Chapter 11 Plan CATHOLIC CHURCH: Portland Tort Panel to File Second Amended Plan CHASE MANAGEMENT: Case Summary & Largest Unsecured Creditor CHIQUITA BRANDS: High Debt Leverage Cues S&P to Affirm B+ Rating CHUM LTD: DBRS Confirms Issuer Rating at BB (High) CLEAN EARTH: Wants Courts Nod on Committee and Lender Settlement COLORADO EDUCATIONAL: Moody's Holds Ba1 Rating on Revenue Bonds CONSTITUTION MOLD: Case Summary & 20 Largest Unsecured Creditors COVANTA ENERGY: Moody's Rates New $140 Million Term Loan at B1 DANA CORP: Asks Court to Direct Sypris to Continue Parts Supply DANA CORPORATION: Demands James Tool's Continued Parts Supply DANA CORP: Panel Gets Court Okay on Information-Sharing Protocol DELPHI CORP: Equity Panel Balks at Planned GM Contracts Rejection DELPHI CORP: Shareholders Block Executives' Move to Dismiss Suit DELPHI CORP: Toledo Trustee Wants Stay Lifted to Pursue Lawsuit DELTA AIR: Court Establishes August 21 as Claims Bar Date DELTA AIR: Closes Florida and Alabama Reservation Call Centers DOMINICK GALLUZZO: Case Summary & 19 Largest Unsecured Creditors DURATEK INC: Merger Completion Cues Moody's to Withdraw Ratings EAGLE FINANCE: Case Summary & 18 Largest Unsecured Creditors EAGLE POINTE: Case Summary & 19 Largest Unsecured Creditors EATON FERRY: GE Seeks Information on Whereabouts of Collateral EATON FERRY: Judge Stocks Converts Case to Chapter 7 Liquidation EATON FERRY: Section 341 Meeting Slated for July 14 EGENE INC: Reports 2006 First Quarter Financial Results EXIDE TECHNOLOGIES: Wants Delaware Local Rule 3007-1(f)(i) Waived FULTON STREET: Fitch Affirms $6.1 Million Class C Notes' B Ratings GEO GROUP: To Use $100 Million Offering Proceeds to Pay Term Loan GIANT INDUSTRIES: Incurs $12.3 Million Net Loss in First Quarter HEARTLAND PARTNERS: Amex To Delist Securities Effective June 23 HEMOSOL CORP: Canadian Ct. OKs Plan Sponsorship Pact with Buyer HEMOSOL CORP: Proofs of Claim Due by June 29 HONEY CREEK: MuniMae Files Competing Reorganization Plan in Texas INDIAN CREEK: Case Summary & 3 Largest Unsecured Creditors INSURANCE AUTO: S&P Rates New $115 Million Term Loan at B INTELSAT LTD: PanAmSat Gets Requisite Consents for 10-3/8% Notes J.L. FRENCH: Court Extends Lease Decision Period to Sept. 8 LB-UBS COMMERCIAL: S&P Assigns Low-B Ratings to 12 Cert. Classes LEGACY COMMS: March 31 Working Capital Deficit Tops $6 Million LPATH INC: Accumulated Deficit Tops $8.8 Million at March 31 MERIDIAN AUTOMOTIVE: Court To Hear Disclosure Statement on June 27 MERIDIAN AUTOMOTIVE: Informal Committee Says Plan Unconfirmable MERIDIAN AUTOMOTIVE: Wants Aug. 22 Fixed as Confirmation Hearing MIRANT CORP: Court Approves Amended Md. & Va. Consent Decree MIRANT CORP: New York Units Ask Court to OK Haverstraw Settlement MIRANT CORP: Pirate Capital Wants Advisor Hired to Pursue Sale MONTAUK POINT: Moody's Rates $5 Mil. Class C Secured Notes at Ba2 NADER MODANLO: Dist. Court Affirms Ch. 11 Trustee Appointment NORTHWEST AIRLINES: AMFA To Provide Financial Support for Strike NVE INC: Court Extends Exclusive Plan Filing Period to August 15 NVE INC: Gets Court Approval to Hire Atkins Appraisal as Appraiser NVF CO: Panel Has Until Aug. 31 to Question Lien on DIP Loan ORIENTAL TRADING: Carlyle Group Merger Cues S&P's Negative Watch OWENS CORNING: Longacre Agrees to Cut Unsecured Claim to $696,215 OWENS CORNING: Asks Court to Approve Rights Offering Procedures OWENS CORNING: Can Hire American Appraisal as Valuation Consultant OWENS-ILLINOIS: S&P Puts BB- Rating on Proposed $250 Million Loan PARMALAT USA: Court Okays Pact Allowing Liberty's $347,625 Claim PLIANT CORP: Former CEO & Chairman Durham Objects to Ch. 11 Plan PORCH & PATIO: Anticipates Ct. Approval of Continued Sale Funding PROVIDENTIAL HOLDINGS: Forms Unit for Western Medical Purchase PWB MILLWORKS: Voluntary Chapter 11 Case Summary RADIOLOGIX INC: Moody's Pares Rating on $160 Mil. Sr. Notes to B3 REFCO INC: Chapter 11 Trustee Wants Rule 2004 Request Denied REFCO INC: Official Creditors Committee Inks Settlement with BAWAG SAFETY-KLEEN: S&P Rates $395 Mil. Senior Secured Facility at BB- SILICON GRAPHICS: Court Amends Foreign Vendor Claims Payment Order SILICON GRAPHICS: Walks Away from Three Unexpired Leases SLP ACQUISITION: Case Summary & 11 Largest Unsecured Creditors STEEL WHEELS: Case Summary & 11 Largest Unsecured Creditors TENSAR CORP: S&P Affirms B- Corp. Credit & Sr. Bank Loan Ratings TEXAS PETRO: Moody's Holds Ba3 Rating on $280 Mil. Sr. Sec. Loan TIMOTHY MOORE: Case Summary & 3 Largest Unsecured Creditors TRANSDIGM INC: Fitch Rates Senior Secured Credit Facility at BB- TRUMP ENT: Court Okays Final Distribution of World's Fair Proceeds UNITED SITE: S&P Puts Junk Rating on New $265 Million Facility UNITY WIRELESS: Posts $2.6 Million Net Loss in Qtr. Ended March 31 US AIRWAYS: Eberwein Acquires 19,799 Shares Of US Air Common Stock USA COMMERCIAL: Inks $58.4 Million Security Agreement with USAIP USG CORP: U.S. Trustee Wants Clarifications on Plan Provisions USG CORP: Wells Fargo Complains Bond Calculations are Incorrect VALLEY CLUB: Case Summary & 14 Largest Unsecured Creditors VANTAGEMED CORP: Equity Deficit Widens to $3.7 Million at March 31 VISTEON CORP: Obtains New $800 Mil. Seven-Year Secured Term Loan W.R. GRACE: Court Orders Whitehouse's Medical Records Produced W.R. GRACE: Dist. Court Dismisses Part of Libby Criminal Case W.R. GRACE: Dist. Court Upholds Indefinite Stay on Libby Lawsuit WESTERN MEDICAL: Case Summary & 19 Largest Unsecured Creditors WINN-DIXIE: Wants Bowdoin Square Claims Compromise Approved WINN-DIXIE: Wants Compromise Pact With Schreiber Foods Approved WINN-DIXIE: Wants to Reject Two Deerwood Property Leases WINN-DIXIE: IRS Wants Access to Substantive Consolidation Papers WORLDCOM INC: Court Okays Stipulation Expunging B. Ebbers' Claims YOUNG CHANG: Court Grants Chapter 15 Petition ZALE CORP: Board Ends Talks with Signet Group on Potential Merger * Law Firms Buchanan Ingersoll & Klett Rooney To Merge on July 1 * BOOK REVIEW: A Hundred Years of Medicine ********* ABLE LABORATORIES: Admin. Expense Proofs of Claim Due by July 6 --------------------------------------------------------------- The United States Bankruptcy Court for the District of New Jersey in Trenton set 5:00 p.m., on July 6, 2006, as the deadline for filing requests for the allowance and payment of administrative expense claims arising after July 18, 2005, in connection with Able Laboratories, Inc.'s bankruptcy case. Payment applications may be filed electronically at https://ecf.njb.uscourts.gov/ or with: The Office of the Clerk of the Court U.S. Bankruptcy Court District of New Jersey, Trenton Division Re: Able Laboratories, Inc. 402 E. State Street Trenton, New Jersey 08608 About Able Laboratories Headquartered in Cranbury, New Jersey, Able Laboratories, Inc. -- http://www.ablelabs.com/-- develops and manufactures generic pharmaceutical products in tablet, capsule, liquid and suppository dosage forms. The Company filed for chapter 11 protection on July 18, 2005 (Bankr. D. N.J. Case No. 05-33129) after it halted manufacturing operations and recalled all of its products not meeting FDA regulatory standards. Deborah Piazza, Esq., and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP represent the Debtor in its restructuring efforts. David H. Stein, Esq., Michael F. Hahn, Esq., and Walter J. Greenhalgh, Esq., Duane Morris LLP, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $59.5 million in total assets and $9.5 million in total debts. ABLE LABORATORIES: Plan Confirmation Hearing Set for July 13 ------------------------------------------------------------ The Honorable Raymond T. Lyons of the U.S. Bankruptcy Court for the District of New Jersey approved the First Amended Disclosure Statement explaining Able Laboratories, Inc.'s Second Amended Chapter 11 Plan. Judge Lyons determined that the Disclosure Statement contains adequate information -- the right amount of the right kind -- for creditors to make informed decisions when the Debtor asks them to vote to accept the Plan. A hearing to consider confirmation of the Debtor's plan is scheduled at 2:00 p.m., on July 13, 2006, at Courtroom #8, 402 East State Street in Trenton, New Jersey. Ballots indicating acceptances or rejections of the Plan must be submitted by 5:00 p.m., on July 6, 2006, to the Debtor's co- counsel, Lowenstein Sandler PC, at: Lowenstein Sandler PC Attn: Timothy R. Wheeler, Esq. 65 Livingston Avenue Roseland, New Jersey 07068 Any objection to confirmation of the Plan must be submitted by July 6, 2006 either: * electronically at https://ecf.njb.uscourts.gov/ or * by mail or courier to the Clerk of the Bankruptcy Court at: U.S. Bankruptcy Court District of New Jersey, Trenton Division Re: Able Laboratories, Inc. 402 E. State Street, Trenton, New Jersey 08608 Plan Overview As reported in the Troubled Company Reporter on May 16, 2006, the Debtor will fund payments due under its Plan through cash generated from the $23.1 million sale of substantially all of its assets to Sun Pharmaceutical Industries, Inc. The Plan will also be funded from the collection of outstanding account receivables, other miscellaneous assets not sold, and from proceeds from causes of actions. The Plan provides for the continuation of the Debtor's business for completion of Food and Drug Administration compliance, assisting other government agencies with inquiries regarding the Debtor, the wind up of affairs and conversion of all of the Debtor's remaining assets to cash and the distribution of the net proceeds to creditors in accordance with the priorities established by the Bankruptcy Code. Treatment of Claims and Interests In excess of 280 proofs of claim were filed in the Debtor's chapter 11 cases totaling approximately $699 million. The Debtor estimates that it will object to approximately 195 claims, in whole or in part, for an aggregate objection amount of approximately $665 million. The estimation of recoveries makes these assumptions: -- the estimated aggregate amount of allowed secured claims against the Debtor is less than $ 7 million; and -- the estimated aggregate amount of asserted unsecured claims against the Debtor is approximately $699 million. The actual amount of allowed general unsecured claims, as well as the estimated recovery of creditors holding allowed general unsecured claims will largely depend upon the outcome of certain disputed claims, including a disputed class action claim in the asserted amount of $280 million as well as the outcome of litigation with certain former employees of the Debtor. The Debtor says it cannot predict whether all or a portion of the disputed claims will be allowed. In the event all Disputed Claims are allowed, the percentage distribution to holders of Allowed General Unsecured Claims will be substantially diminished. AmerisourceBergen Corp., a secured creditor, will receive, at the Debtor's option, either: (a) full cash payment; (b) net proceeds of the sale of collateral up to the amount of the allowed claim; (c) the collateral securing the allowed claim; (4) another treatment that leaves unaltered the legal, equitable and contractual rights of AmerisourceBergen; or (5) other treatment as the Bankruptcy Court will approve in connection with confirmation of the Debtor's Plan through a "cram down" under Section 1129(b) of the Bankruptcy Code. Holders of general unsecured claims is estimated to recover 27% of their claims. Holders of claims amounting to $500 or less or those who elect to reduce their claims to $500 will be paid in full. Holders of subordinated claims and shareholders will get nothing under the Plan. About Able Laboratories Headquartered in Cranbury, New Jersey, Able Laboratories, Inc. -- http://www.ablelabs.com/-- develops and manufactures generic pharmaceutical products in tablet, capsule, liquid and suppository dosage forms. The Company filed for chapter 11 protection on July 18, 2005 (Bankr. D. N.J. Case No. 05-33129) after it halted manufacturing operations and recalled all of its products not meeting FDA regulatory standards. Deborah Piazza, Esq., and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP represent the Debtor in its restructuring efforts. David H. Stein, Esq., Michael F. Hahn, Esq., and Walter J. Greenhalgh, Esq., Duane Morris LLP, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $59.5 million in total assets and $9.5 million in total debts. ADELPHIA: America Channel Fights Injunction v. Timer Warner Suit ---------------------------------------------------------------- The America Channel, LLC, filed a complaint against Time Warner Cable, Inc., Time Warner NY Cable, LLC, Time Warner, Inc., and Comcast Corporation in the United States District Court for the District of Minnesota alleging antitrust violations. America Channel is a television programming network formed in January 2003. According to America Channel, since at least that time, Time Warner and Comcast have unlawfully monopolized, attempted to monopolize, and conspired to monopolize and unreasonably restrain trade in cable system markets in the United States and various regions by anti-competitive practices -- including acquisitions of actual and potential competitors, and swaps and horizontal divisions of markets and customers. Daniel R. Shulman, Esq., at Gray, Plant, Mooty, Mooty & Bennett, P.A., alleges that in April 2005, Time Warner and Comcast engaged in bid-rigging and price-fixing by agreeing jointly to bid for and acquire substantially all of the assets of Adelphia Communications Corporation, and then to divide the acquired assets, including cable systems in Minneapolis and St. Paul, among themselves. Mr. Shulman asserts that completion of the Adelphia acquisition and the planned division of assets will constitute further violations of Sections 1 and 2 of the Sherman Act and Section 7 of the Clayton Act; strengthen and enhance the unlawful monopolies already held by Time Warner and Comcast; and facilitate and better enable defendants to continue and perpetuate their antitrust violations in the cable network market, including specifically the exclusion of America Channel. America Channel seeks to obtain damages for the injuries it has sustained to date and will sustain up to the time of trial. America Channel asks the Minnesota District Court to: -- find that Time Warner and Comcast have violated the law; -- enter a preliminary injunction and then a permanent injunction restraining and prohibiting Time Warner and Comcast from completing the Adelphia acquisition and associated division of markets and customers; -- award it actual damages sustained as a result of Time Warner and Comcast's violations of law; -- treble those damages; -- preliminarily and then permanently enjoin Time Warner and Comcast from continuing to engage in those violations of law; and -- allow it to recover its expenses and cost of suit, including reasonable attorney's fees. Time Warner Denies Allegations Time Warner spokeswoman Susan Duffy told Bloomberg News that the allegations in America Channel's complaint "are entirely frivolous". She says Time Warner is confident that the complaint will not impede closing of the Adelphia transaction. According to Bloomberg, Comcast spokesman Tim Fitzpatrick and Adelphia spokesman Paul Jacobson declined to comment. Early this year, the Federal Trade Commission closed its antitrust investigation into the proposed sale of Adelphia's assets to Time Warner and Comcast. Time Warner is now urging the Federal Communications Commission to approve the Adelphia Transaction, which has been under review for more than a year. Bloomberg reports that Time Warner Cable expects the deal to be approved by July 31, according to spokesman Mark Harrad. ACOM's Complaint vs. America Channel, et al. The ACOM Debtors ask the Bankruptcy Court for a declaration that: -- The America Channel, LLC; Gray, Plant, Mooty, Mooty & Bennett, P.A.; and Alioto Law Firm, have impermissibly interfered with the Bankruptcy Court's jurisdiction and mandate by filing an action against Time Warner Cable, Inc., Time Warner NY Cable, LLC, Time Warner, Inc., and Comcast Corporation in the United States District Court for the District of Minnesota, which seeks, as its primary relief, a preliminary and permanent injunction enjoining the consummation of the Debtors' sale of their assets to Time Warner and Comcast; -- given the nature of the relief sought in the TAC Action, America Channel, et al., should have commenced the TAC Action, if at all, in the Bankruptcy Court; -- the TAC Action violates the automatic stay embodied in Section 362(a)(3) of the Bankruptcy Code; The ACOM Debtors also ask the Bankruptcy Court for an injunctive relief, preliminarily and permanently enjoining America Channel, et al., from interfering with the Bankruptcy Court's jurisdiction over the ACOM Debtors' Chapter 11 cases and the Sale by prosecuting the claims asserted in the TAC Action in any court other than the Bankruptcy Court. America Channel is a television programming network set to launch in late 2006. Alioto Law Firm and Gray, Plant, Mooty, Mooty & Bennett, P.A., represent America Channel in the TAC Action. According to Brian E. O'Connor, Esq., at Willkie Farr & Gallagher LLP, in New York, the TAC Action on its face value represents a blatant attempt by America Channel, et al., to coerce, at the considerable expense of the ACOM Debtors and their stakeholders, Time Warner and Comcast into carrying America Channel's programming on their cable systems. Even though the ACOM Debtors were not named as defendants in the TAC Action, the prosecution of the TAC Action and issuance of the requested injunctive relief will interfere with the Bankruptcy Court's administration of their Chapter 11 cases and will irreparably injure the ACOM Debtors and their stakeholders, Mr. O'Connor says. Mr. O'Connor contends that America Channel's accusations in the TAC Action have been summarily rejected by the Federal Trade Commissions. Judge Gerber Blocks Attempt To Stop Sale Judge Gerber preliminarily enjoins America Channel, et al., from: -- continuation of further proceedings in the TAC Action; and -- taking any other action, with the exception of any action taken in the Bankruptcy Court, to interfere with: * the Bankruptcy Court's jurisdiction over the Debtors' Chapter 11 cases; and * the sale of substantially all of the ACOM Debtors' assets to Time Warner and Comcast. America Channel, et al., Wants Order Vacated America Channel asks the Minnesota District Court to vacate Judge Gerber's order. America Channel also asks the Minnesota District Court to quash service of process on it in the New York bankruptcy proceedings. America Channel relates that until June 5, 2006, the only service of anything related to the adversary proceeding made on America Channel and its counsel was by e-mail. America Channel have told the ACOM Debtors that it does not intend to respond to the ACOM Debtors' papers or participate in any proceedings in the New York Bankruptcy Court until proper service is made. America Channel and its attorneys also informed the ACOM Debtors that they believe that the ACOM Debtors' counsel was attempting to obstruct justice and that they would move to quash any order served on them. On June 2, 2006, the ACOM Debtors served Judge Gerber's order on America Channel, through e-mail. Mr. Shulman asserts that Judge Gerber's Order should be vacated because: (1) None of the persons enjoined by the New York Bankruptcy Court is party to proceedings in that court. (2) The action filed in the Minnesota District Court is against defendants who are not parties to proceedings in the New York Bankruptcy Court. (3) America Channel has filed no action against Adelphia or any other debtor in the New York bankruptcy proceedings. (4) This is an original action to obtain relief for violations of United States antitrust laws by Time Warner and Comcast over which the Minnesota District Court has original jurisdiction. (5) The order of the New York bankruptcy court impermissibly interferes with the rights of The America Channel and its attorneys to prosecute the Antitrust Action and the jurisdiction of the Minnesota Court to hear and decide the matter. (6) The only service of papers on the parties enjoined by the New York bankruptcy court's order has been service by e-mail, which is insufficient. (7) There is no antitrust action pending in the United States bankruptcy court in New York. Debtors Want America Channel Penalized The ACOM Debtors ask the Court to find that: -- America Channel, et al., violated the Temporary Restraining Order by filing their Motion to Quash in the Minnesota District Court; and -- the commencement of the TAC Action violated the automatic stay. Mr. O'Connor asserts that the TRO clearly prohibits actions of the type taken by America Channel, et al., including the Motion to Quash. Accordingly, Mr. O'Connor contends, America Channel, et al., should be found in civil contempt and should be sanctioned in an amount not less than the ACOM Debtors' costs incurred in preparing, filing and prosecuting their Contempt Motion. About Adelphia Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 135; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADELPHIA COMMS: Court Approves Century/ML Settlement Agreement -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the Settlement Agreement and Mutual General Release Adelphia Communications Corporation and its debtor-affiliates entered into with Century/ML Cable Venture. Adelphia Communications and its wholly owned, indirect subsidiary, Century Communications Corp., entered into a Settlement Agreement and Mutual General Release on May 11, 2006, with the: -- post-confirmation bankruptcy estate of Century/ML Cable Venture; and -- ML Media Partners, LP, former co-owner of Century/ML. Century/ML is a joint venture that was owned 50% by Century and 50% by ML Media; and sold, pursuant to an Interest Acquisition Agreement dated June 3, 2005, to San Juan Cable, LLC, an entity formed by MidOcean Partners, and its partner, Crestview Partners. The sale was consummated on Oct. 31, 2005, with one-half of the net proceeds placed in an escrow account for the benefit of ML Media and the other half placed in an escrow account for the benefit of Century. Pursuant to the Settlement Agreement, ML Media will receive: a. approximately $264,000,000 in the ML Media Escrow Account; b. $87,000,000 settlement payment from Century out of the Century Escrow Account funds; and c. general releases and indemnities related to the continuing relationship with San Juan Cable, which the Debtors will provide. The Debtors, on the other hand, will receive: a. approximately $264,000,000 in the Century Escrow Account, less the $87,000,000 Settlement Payment and a $3,600,000 payment to San Juan Cable; b. $24,400,000 from ML Media's transfer of right to receive half of the Delayed Consideration. As provided by the Interest Acquisition Agreement and Century/ML's Plan of Reorganization, the Delayed Consideration consists of: -- the funds remaining in the Plan Funding Reserve, at least $6,000,000 of which will become immediately available to Century on the Settlement Agreement's consummation; -- the $25,000,000 in the Indemnity Escrow Account. Pursuant to the Settlement Agreement, Century will now be entitled to all recoveries from the Indemnity Escrow Account, half of which is scheduled to be released on June 31, 2006, and the other half on December 31, 2006; and -- the $31,500,000 Deferred Purchase Price that secures the obligations of Century/ML to pay certain tax liabilities. The deferred purchase price will be paid out in installments over several years. Pursuant to the Settlement Agreement, the Debtors will be entitled to receive ML Media's share of the Deferred Purchase Price. The Debtors presently estimate a maximum recovery of approximately $11,800,000 of the Deferred Purchase Price; and c. general releases, including those relating to claims of Century/ML, and dismissal of all litigation. A copy of the Settlement Agreement is available for free at http://ResearchArchives.com/t/s?9b4 About Adelphia Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 135; Bankruptcy Creditors' Service, Inc., 215/945-7000) AIRWAY INDUSTRIES: Taps Malin Bergquist & Horwath as Accountants ---------------------------------------------------------------- Airway Industries, Inc., asks the U.S. Bankruptcy Court for the Western District of Pennsylvania for permission to employ Malin, Bergquist & Company, LLP and Horwath Orenstein, LLP, as its accountants. Malin Bergquist and its network affiliate, Horwath Orenstein, will provide tax services to the Debtor through preparation and review of 19 tax returns for the tax reporting years 2005 and 2006. The firms' billing rates range between $70 per hour for staff accountants to $195 per hour for partners. To the best of the Debtor's knowledge, Malin Bergquist and Horwath Orenstein are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Ellwood City, Pennsylvania, Airway Industries, Inc. -- http://www.atlanticluggage.com/-- manufactures suitcases, garment bags, briefcases and other travel products and accessories. The Company filed for chapter 11 protection on Jan. 20, 2006 (Bankr. W.D. Pa. Case No. 06-20224). Joel M. Walker, Esq., at Duane Morris LLP represents the Debtor in its restructuring efforts. The U.S. Trustee appointed the Official Committee of Unsecured Creditors on Feb. 6, 2006. George Angelich, Esq., at Arent Fox PLLC, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. AMES DEPARTMENT: GE Capital Wants LFD's Complaints Dismissed ------------------------------------------------------------ In 2001, LFD Operating, Inc., commenced an adversary proceeding against General Electric Capital Corporation in the New York Supreme Court. LFD alleged that Ames Department Stores and its debtor-affiliates improperly placed funds that were property of LFD into a lockbox that was swept daily pursuant to a prepetition credit agreement between the Debtors and GE Capital. GE Capital is a lender and agent for a syndicate of banks and financial institutions, which entered into an $800,000,000 dollar credit agreement with Ames and various affiliated entities. Raymond Fitzgerald, Esq., at Butler, Fitzgerald, Fiveson & McCarthy, in New York, relates that in its complaint, LFD asserted that: (i) LFD had an agreement with Ames Department Stores pursuant to which LFD employees were permitted to sell in Ames' stores footwear owned by LFD; (ii) Ames turned over to GE Capital the proceeds Ames collected from the retail sale of LFD's merchandise by LFD's employees during the period from July 22, 2001, through Aug. 19, 2001; and (iii) GE Capital applied the funds in the reduction of the debt owed to it by Ames. LFD asserted three claims for relief: (1) a cause of action for money "had and received"; (2) a cause of action for "accounting"; and (3) a cause of action for "conversion". The complaint was later moved to the Bankruptcy Court before Judge Gonzalez. The Ames/LFD Adversary Proceeding In March 2002, Judge Gonzalez issued a ruling on a separate adversary proceeding -- the Ames/LFD Adversary Proceeding. Under the Ames/LFD Adversary Proceeding, LFD had asserted that the proceeds from the sale of its shoes in Ames stores were its property. Because the Debtors failed to pay the proceeds to LFD before they filed for Chapter 11, LFD asserted that it was entitled to a turnover of the proceeds. LFD further asserted that it was not simply an unsecured creditor of the Debtors with a claim for breach of contract. However, Judge Gonzalez dismissed all of LFD's claims against the Debtors. LFD took an appeal of Judge Gonzalez's Order to the U.S. District Court for the Southern District of New York. GE Capital Seeks Summary Judgment In light of Judge Gonzalez's ruling on the Ames/LFD Adversary Proceeding, GE Capital asked the Bankruptcy Court to issue a summary judgment dismissing the three causes of action asserted by LFD in the LFD/GE Adversary Proceeding, based on collateral estoppel. According to GE Capital, the dismissal of LFD's claims in the Ames/LFD Adversary Proceeding precludes any basis for recovery against GE Capital in the LFD/GE Adversary Proceeding. GE Capital's summary judgment request was subsequently stayed pending the outcome of LFD's appeal. In late 2004, District Judge Sidney H. Stein affirmed the Bankruptcy Court's findings and dismissed LFD's complaint for declaratory relief in the Ames/LFD Adversary Proceeding. LFD Objects On LFD's behalf, Mr. Fitzgerald argues that collateral estoppel does not apply because LFD's claim for money "had and received" is not barred by any finding in the Ames/LFD Adversary Proceeding. According to Mr. Fitzgerald, the doctrine of "collateral estoppel bars a party from relitigating in a second proceeding on an issue of fact or law that was litigated and actually decided in a prior proceeding." To apply, Mr. Fitzgerald says, the "identical issues must have been decided in the prior action and be decisive of the present action." When the allegations differ, then collateral estoppel is not a basis for dismissal. Mr. Fitzgerald points out that the issues decided in the LFS/Ames Adversary Proceeding and the issues raised by GE Capital's summary judgment request are different. Accordingly, GE Capital's request for summary judgment must be denied. GE Capital Fights Back GE Capital asserts that the Court should grant its request for summary judgment with respect to LFD's conversion and accounting claims because LFD does not oppose them. J. David Reich, Esq., at Winston & Strawn LLP, in New York, notes that the Court should also grant GE Capital's request as to LFD's remaining claim -- the action for money "had and received" -- because the Court has previously determined that "title and ownership of the Net Sales Proceeds vested in Ames upon deposit in Ames' depository accounts." Mr. Reich maintains that the Court's prior determinations preclude LFD from contending that funds the Debtors paid to GE Capital were somehow due from the Debtors to LFD. The Court also determined that the Debtors were entitled to, and did, commingle the Net Sales Proceeds and use the funds between settlement dates for purposes other than paying LFD, before making payment to LFD out of general funds provided by GE Capital. Therefore, Mr. Reich explains, any amount the Debtors paid to GE Capital was not money due from the Debtors to LFD. Against this backdrop, GE Capital asks the U.S. Bankruptcy Court for the Southern District of New York to grant its request and dismiss each of the causes of action asserted in LFD's Complaint with prejudice. About Ames Department Ames Department Stores filed for chapter 11 protection on Aug. 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $1,901,573,000 in assets and $1,558,410,000 in liabilities. (AMES Bankruptcy News, Issue No. 79; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMES DEPARTMENT: Judge Gonzalez Grants GE Capital Summary Judgment ------------------------------------------------------------------ Judge Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York holds that collateral estoppel would bar the relitigation of the issues raised by LFD Operating, Inc., in its complaint against General Electric Capital Corporation. Collateral estoppel bars relitigation of an issue if: (1) the identical issue was raised in a previous proceeding; (2) the issue was actually litigated and decided in the previous proceeding; (3) the party had a full and fair opportunity to litigate the issue; and (4) the resolution of the issue was necessary to support a valid and final judgment on the merits. According to Judge Gonzalez, the doctrine of collateral estoppel is premised on the basic concept of fairness. It protects parties from relitigating identical issues and promotes efficiency by impeding unnecessary litigation. Due process dictates that collateral estoppel cannot be used against a person who did not have a fair opportunity to litigate an issue decided in a previous proceeding, Judge Gonzalez explains. Therefore, two formal requirements must be met to invoke the doctrine of collateral estoppel: -- there must have been a full and fair opportunity to litigate the decision that now controls; and -- the issue in the prior action must be identical to and decisive of the issue in the instant action. Judge Gonzalez points out that the issues presented by LFD in the LFD/GE Adversary Proceeding are identical to, and dependent on, the issues already raised and decided in the adversary proceeding between Ames Department Stores and LFD. LFD also had fair opportunity to litigate the issues. For these reasons, Judge Gonzalez grants summary judgment in favor of GE Capital, dismissing the three causes of action asserted by LFD, particularly: (1) the cause of action for money "had and received"; (2) the cause of action for "accounting"; and (3) the cause of action for "conversion". LFD has conceded to the Court's summary judgment with respect the accounting and conversion causes of action. Money Had and Received The Second Circuit considers three factors when evaluating a claim for money had and received: (1) defendant received money belonging to plaintiff; (2) defendant benefited from the receipt of money; and (3) under principles of equity and good conscience, defendant should not be permitted to keep the money. Judge Gonzalez notes that the second element is not in dispute. As to the first element, LFD had argued that the proceeds from the sale of its shoes in Ames stores "belong" to LFD although it does not own the proceeds. LFD further argued that it has "superior possessory" right to the proceeds over that of GE Capital. In the Ames/LFD Adversary Proceeding, the Court held that the agreement between Ames and LFD did not give LFD superior right, right of immediate possession of, or ownership interest in the Proceeds. The Court decreed that the Proceeds were property of Ames. "These two determinations collaterally estop the claim LFD asserts [in the LFD/GE Adversary Proceeding]," Judge Gonzalez relates. The Court finds that LFD: * failed to establish that that it had title and ownership to the Proceeds; * held no superior claim to the funds, and the payment to GE Capital was a proper use of Ames' funds; * does not have a legal or equitable interest in the Proceeds, but only a general unsecured claim against the Ames estate; and * cannot recover from Ames based on the theory that LFD had a superior right to the Proceeds. According to Judge Gonzalez, Ames had the right to control the disposition of the funds, and GE Capital was a proper third party recipient of the funds. The Court further holds that there was no wrongful transfer and no wrongful receipt. LFD could not prevail as against GE Capital because the Court has already determined that as a matter of law, there is no claim for wrongful payment. With regards the third element -- which requires LFD to show that under principles of equity and good conscience, the defendant should not be permitted to keep the money -- Judge Gonzalez holds that finding, at this stage, that it would be inequitable for GE Capital to retain the amounts it received from Ames would run counter to the findings of the Court in the Ames/LFD Adversary Proceeding. Ames Department Stores filed for chapter 11 protection on Aug. 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $1,901,573,000 in assets and $1,558,410,000 in liabilities. (AMES Bankruptcy News, Issue No. 80; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMES DEP'T: Wal-Mart Wants Colonial & Broad's Protest Overruled --------------------------------------------------------------- On March 30, 2006, Wal-Mart Stores, Inc., disclosed that it was not going to occupy any portion of the property on which Ames Department Stores and its debtor-affiliates formerly operated Store No. 522 in Pasadena, Maryland. Instead, Wal-Mart would further sublet the Property to an undisclosed furniture retailer. Also, Wal-Mart asserted that the Ames store was not part of a shopping center because it is not yet fully developed. The U.S. Bankruptcy Court for the Southern District of New York directed parties-in-interest to submit counter-affidavits on Wal-Mart's assertions. Property Constitutes a Shopping Center On behalf of Colonial Associates, LLP, and Broad Falls, LLC, Joyce A. Kuhns, Esq., at Saul Ewing LLP, in Baltimore, Maryland, argues that the Debtors and Wal-Mart are estopped by their prior admissions and conduct from disputing the Property's status as a shopping center. Ms. Kuhns points out that the Debtors' counsel, Wal-Mart's independent engineering expert, and Wal-Mart's environmental consultant, have previously conceded that the Property constitutes a shopping center. Ms. Kuhns informs the Court that the fact that the Property is not fully-developed and not thriving as part of an integrated center today is not due to the owners' intent but because of uncontrollable circumstances, including: (i) Ames' two bankruptcy filings within a 10-year period, resulting in the absence of a viable anchor to draw other tenants into the center; (ii) the Wal-Mart negotiation process and Wal-Mart's refusal to deliver the definitive agreement under which it agreed to act as replacement anchor, tying up the redevelopment space from 2003 to the fall of 2004; and (iii) the nullification of the "go dark" provision in the Sublease under Section 365(f)(1) of the Bankruptcy Code, with the intent to allow a limited marketing, redesign and retrofitting period for a new end-user, but resulted in the shuttering of a critical anchor for three-and-a-half years, and now a proposal in which the designee is not an end-user but a trust, and the proposed occupier is not a typical anchor but a poor credit risk. "The Property constitutes a shopping center, and it would be terribly inequitable, and contrary to the Bankruptcy Code, to deprive the Property owners of the protection of a statute designed to insulate them from the happenstance of two successive bankruptcy filings by its anchor tenant and an unduly protracted "go dark" period, Ms. Kuhns asserts. This is essentially a two-party dispute with the Debtors acting largely as bystanders, Ms. Kuhns adds. The landlords, on the one hand, are seeking to preserve and protect their property interests while Wal-Mart, a stranger to the Property, seeks to misuse the designation rights process to usurp control of the center's development and quash competition. "Section 365 was never intended to be used to strip property owners of their property rights in order to further a third-party's economic self-interest, nor should it be manipulated to do so here," Ms. Kuhns maintains. Colonial Associates and Broad Falls want the Court to deny approval of the proposed transaction -- the designation of an anchor space to a non-end user and simultaneous sub-sublease to a non-anchor -- which will unnecessarily undermine the future viability of the center whose development has already been arrested. Specifically, Colonial Associates and Broad Falls ask the Court to: * deny the Debtors' proposal to assume and assign the sublease for Store No. 522 to Wal-Mart Real Estate Business Trust, with prejudice; or * terminate the designation rights period as to the Sublease to preclude its assignment. Wal-Mart Disagrees Wal-Mart Stores, Inc., and Wal-Mart Real Estate Business Trust, inform Judge Gerber that the Ames Store is not part of a "shopping center" as that term is used in Section 365(b)(3) of the Bankruptcy Code because: -- contrary to the restrictive terms contained in typical shopping center leases, the Sublease permits the Debtors to engage in lawful activity and to freely assign its rights under the lease; -- the property does not possess the traditional characteristics of a shopping center, specifically: * Colonial Associates is party to but a single lease and has but a single tenant at the premises; * Parkway Ventures, Inc., subleases a portion of the premises to the Debtors but no traditional landlord- tenant relationship exists between the Debtors and Colonial Associates; * there are no tenants on the Property other than Parkway, and neither Parkway's prime lease nor the Debtors' sublease contain the kind of use restrictions, restrictions on assignment, percentage rent provisions or termination rights that are indicative of a "shopping center"; and -- there are no retail operations at the Prime Lease Premises other than the now dark Ames Store. "If this were a shopping center, it would be an odd one: there is no place to shop here," John Longmire, Esq., at Wilkie Farr & Gallagher LLP, in New York, relates. Mr. Longmire says that even if the Court determines Store No. 522 is located in a shopping center, the assignment to Wal-Mart Trust should be approved given that the Prime Lease and the Sublease permit Store No. 522 to be occupied for any lawful use. The Debtors' interest is likewise freely assignable. Since the only other tenant in the Premises is a medical clinic operator, the Debtors' assignment to Wal-Mart and Wal-Mart's proposed sub-sublease of the Property does not impair the tenant mix from that which existed when the Debtors operated a general merchandise retail store at the Premises, Mr. Longmire adds. Wal-Mart, therefore, asks the Court to overrule the objections, and approve the proposed assignment to Wal-Mart. Ames Department Stores filed for chapter 11 protection on Aug. 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $1,901,573,000 in assets and $1,558,410,000 in liabilities. (AMES Bankruptcy News, Issue No. 80; Bankruptcy Creditors' Service, Inc., 215/945-7000) APPLETON PAPERS: Offers to Pay More to Get Noteholders Consent -------------------------------------------------------------- Appleton Papers Inc. is amending certain terms of the consent solicitation that it commenced on May 26, 2006, with respect to its 8.125% Senior Notes due 2011 and its 9.75% Senior Subordinated Notes due 2014, pursuant to a Supplement to Consent Solicitation Statement dated June 6, 2006. Appleton amended the terms of a certain proposed restricted payments covenant under each of the indentures to provide for a $45 million cap with respect to the aggregate amount of restricted payments that Paperweight Development Corp., the parent company of Appleton, may make under the covenant during any period of four consecutive fiscal quarters to satisfy its obligations to repurchase its common stock pursuant to Appleton's employee stock ownership plan and applicable law. In connection with this amendment, Appleton made other related changes to the definitions in each of the indentures. In addition, Appleton is now offering to increase the cash payment from $10 to $17.50 per $1,000 principal amount of notes held as of May 25, 2006, for which consents have been received prior to the expiration date and not validly revoked. As a result of the increase in the cash payment, the U.S. federal income tax consequences will differ for holders of senior notes for which the cash payment is received. The amended terms of the consent solicitation are more fully described in the Supplement to Consent Solicitation Statement. Except as described above, all terms and conditions of the consent solicitation remain unchanged and in full force and effect. Holders of the notes who have already properly delivered their consents with respect to any series of notes do not need to deliver new consents. Consents (whether previously or hereafter delivered) may only be revoked in the manner described in the Consent Solicitation Statement. About Appleton Headquartered in the Appleton, Wisconsin, Appleton Papers Inc. -- http://www.appletonideas.com/-- uses ideas that make a difference to create product solutions through its development and use of coating formulations and applications as well as encapsulation, security, printing and packaging technologies. The Company produces carbonless, thermal, security, and performance packaging products and provides secure and specialized print services. Appleton has manufacturing operations in Wisconsin, Ohio, Pennsylvania, Massachusetts and the United Kingdom, employs approximately 3,300 people, and is 100% employee-owned. * * * As reported in the Troubled Company Reporter on April 3, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on Appleton Papers Inc., to 'BB-' from 'BB'. The outlook is stable. At the same time, Standard & Poor's raised its recovery rating on the carbonless and specialty paper producer's secured bank facility to '2' from '3', indicating expectations of substantial recovery of principal in the event of a payment default. ASARCO LLC: Has Until October 6 to File Plan of Reorganization -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi extends ASARCO LLC and its debtor-affiliates' exclusive period to file a plan of reorganization until Oct. 6, 2006, and the exclusive period to solicit acceptances of that plan until Dec. 8, 2006. Ad Hoc Committee Comments The Ad Hoc Committee of ASARCO Noteholders, representative of the holders of the liquidated and undisputed prepetition obligations of ASARCO LLC, does not object to the extensions requested by the Debtors. However, the Ad Hoc Committee believes that the extension should be conditioned on ASARCO LLC and its debtor-affiliates' firm assurances that they will begin discussions with all relevant constituencies, including the Ad Hoc Committee, on appropriate structures for a Chapter 11 plan of reorganization during the extension period. Robin E. Keller, Esq., at Stroock & Stroock & Lavan LLP, in New York, contends that the pending litigations surrounding: (a) the estimation of ASARCO's liability for and the amount of any asbestos claims; and (b) the assertion of claims against Grupo Mexico, S.A. de C.V.; provide a framework for resolving many of the key issues of any potential Chapter 11 plan. The Ad Hoc Committee is prepared to work with the Debtors to analyze the asbestos claims and potential outcomes to structure a resolution in the context of a plan for emergence from bankruptcy, Mr. Keller informs the Court. Mr. Keller asserts that the Debtors' active pursuit of negotiations may short cut some of the delay and cost associated with any litigation that may result if the parties are unwilling to compromise their claims. "An inclusive, even mandatory process of negotiation during the extended period of exclusivity may maximize recoveries for all legitimate constituencies and preserve the long-term viability of the business." The Ad Hoc Committee asks the Court to: (a) grant the Debtors' proposed extension of the exclusive periods; and (b) direct the Debtors to begin active negotiations with all major constituencies regarding parameters for a plan of reorganization. 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. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Judge Schmidt Approves Bridgeview Management Agreement ------------------------------------------------------------------ ASARCO LLC obtained authority from The Hon. Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to enter into a property management agreement with Bridgeview Management Company, effective as of Aug. 9, 2005. As reported in the Troubled Company Reporter on May 30, 2006, Bridgeview Management Company is a wholly owned subsidiary of ASARCO LLC and is a Chapter 11 debtor. It was formed in the 1970s to manage and hold ASARCO's closed plants and leased properties in New Jersey. Since then, Bridgeview has managed certain properties of ASARCO and its affiliates. Currently, Bridgeview oversees the management of ASARCO's real property in Perth Amboy, New Jersey. Bridgeview is also responsible in the collection of rents for the Property. The Agreement provides that: (a) ASARCO will reimburse Bridgeview for any out-of-pocket expenses in connection with the Property; (b) ASARCO will provide Bridgeview with any personnel who are needed to fulfill Bridgeview's obligations under the Agreement; and (c) rental proceeds related to the Property will be transferred to ASARCO on a monthly basis. As of April 30, 2006, Bridgeview has not distributed to ASARCO $504,357 in outstanding rental proceeds. That amount, plus rentals collected after April 30, 2006, will be distributed to ASARCO upon Court approval of the Property Management Agreement. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Judge Schmidt Says Right of First Refusal is Executory ------------------------------------------------------------------ The Ho. Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi finds that all provisions of the Young Mine Tailings and Access Easement Agreement have been fully performed by ASARCO LLC and Mossy Creek Mining Company LLC, except for the provision, which gives Mossy Creek a Right of First Refusal on the Young Mine Property. Accordingly, Judge Schmidt grants ASARCO's request. The Court rules that the Right of First Refusal is executory and is rejected as of May 19, 2006. Mossy Creek can file an unsecured claim against ASARCO for any damages that it may suffer as a result of ASARCO's rejection of the Right of First Refusal Option. 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. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000). ATA AIRLINES: Reports May 2006 Service Traffic ---------------------------------------------- ATA Airlines, Inc., reported that May scheduled service passenger load factor increased 10.1 points to 75.9% representing a 15 percent increase over 2005. ATA Airlines enplaned a total of 210,981 passengers in May. Scheduled service traffic decreased 37.2 percent from 2005 to 319.8 million RPMs. Capacity decreased 45.5 percent compared to 2005 to 421.4 million ASMs. As of May 31, 2006, ATA Airlines has a fleet of 3 Boeing 737-300s, 12 Boeing 737-800s, 6 Boeing 757-200s, 4 Boeing 757-300s and 4 Lockheed L-1011s. ATA Airlines Scheduled Service Statistics May 2006 2005 Change ---- ---- ------ Revenue Passenger Miles (000s) 319,766 509,204 -37.2% Available Seat Miles (000s) 421,385 773,528 -45.5% Load Factor 75.9% 65.8% 10.1pts Passengers Enplaned 210,981 414,175 -49.1% Passenger Trip Length 1,516 1,229 23.4% Year-To-Date 2006 2005 Change ---- ---- ------ Revenue Passenger Miles (000s) 1,562,384 2,916,153 -46.4% Available Seat Miles (000s) 2,087,100 4,565,685 -54.3% Load Factor 74.9% 63.9% 11.0pts Passengers Enplaned 1,079,368 2,349,282 -54.1% Passenger Trip Length 1,447 1,241 16.6% ATA Airlines Charter Service Statistics May 2006 2005 Change ---- ---- ------ Revenue Passenger Miles (000s) 141,239 166,694 -15.3% Available Seat Miles (000s) 277,797 322,210 -13.8% Passengers Enplaned 28,927 34,080 -15.1% Year-To-Date 2006 2005 Change ---- ---- ------ Revenue Passenger Miles (000s) 636,129 891,021 -28.6% Available Seat Miles (000s) 1,296,113 1,770,030 -26.8% Passengers Enplaned 138,819 186,134 -25.4% About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. Daniel H. Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland, Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., 215/945-7000). BANCO MERCANTIL: Inquiries on NY Agency Liquidation Due June 29 --------------------------------------------------------------- Banco Mercantil, C.A. (Banco Universal) commenced the voluntary liquidation of its New York agency under the provisions of Sec. 605.11(c) of the New York State Banking Law. Upon completion of the liquidation, all related businesses will be conducted from Banco Mercantil's agency in Coral Gables, Florida. All inquiries regarding the winding up of Banco Mercantil's New York Agency should be directed to Ms. Lourdes Jordan-Caldera on or before June 29, 2006. Ms. Caldera can be reached at this number: (212) 891-7400. Headquartered in Caracas, Venezuela, Banco Mercantil, C.A. -- http://www.bancomercantil.com/-- is a universal bank with which operates under the supervision of the Superintendence of Banks and Other Financial Institutions. It has 300 branches in Venezuela, two agencies in Miami and New York, one branch in Curacao and five representative offices in United Kingdom, Brazil, Colombia, Peru and Mexico. * * * Banco Mercantil's long-term bank deposits carry Moody's B3 rating. The rating was placed on Sept. 8, 2004 with a stable outlook. Standard & Poor's assigned the bank BB long-term local and foreign issuer credit ratings and B short-term local and foreign issuer credit ratings. The ratings were placed on June 4, 1999 with a stable outlook. On Sept. 23, 2004, Fitch assigned the bank single B debt and default ratings with a negative outlook. BAYTEX ENERGY: Debt Reduction Prompts S&P's Stable Outlook ---------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Calgary, Alberta-based regional oil and gas producer Baytex Energy Trust to stable from negative. At the same time, Standard & Poor's affirmed its 'B+' long-term corporate credit and 'B-' subordinated debt ratings on the trust. "The outlook revision reflects the improvement in Baytex's financial profile with its recent debt reduction and the expectation that the trust will be able to fully fund its capital spending program and distributions through internally generated funds in the coming year, while further reducing debt levels," said Standard & Poor's credit analyst Jamie Koutsoukis. "Nevertheless, because we expect the trust will maintain its current production and reserve profile, there is little room for any incremental debt at the current rating level, should hydrocarbon prices fall and, again, cause the trust's distributions to exceed free cash flow after capital spending," Ms. Koutsoukis added. The ratings on Baytex reflect: * the trust's smaller proven reserves base and average daily production, its below-average reserve life index; * its narrow regional focus; and * high leverage in its capital structure. These factors, which hamper the ratings, are offset by the good development opportunities associated with Baytex's existing portfolio of assets and the trust's competitive operating cost profile. The stable outlook reflects Standard & Poor's expectation that Baytex will be able to fund its capital spending program and distributions through internally generated funds, while maintaining a stable production and reserve profile. A negative rating action could occur if the trust were unable to sustain current production levels and replace reserves on a yearly basis, while maintaining its current debt levels. Furthermore, increasing debt levels, without a material improvement in the trust's overall business risk profile, would also hamper the ratings. Alternatively, an outlook revision to positive, which is not likely in the near term, would require a notable improvement of Baytex's business and financial risk profiles. BLUEGRASS CONTAINER: Moody's Rates $1.1 Bil. Term Loans at Low-B ---------------------------------------------------------------- Moody's Investors Service assigned a B1 corporate family rating to Bluegrass Container Company, LLC, a Ba3 rating to its pending $760 million first lien term loan, a B3 rating to its pending $405 million second lien term loan, and a Ba3 rating to its proposed $150 million revolving credit facility. Moody's also assigned a stable outlook. Proceeds will primarily fund the purchase by Bluegrass, an affiliate of funds controlled by the Texas Pacific Group, of the Consumer Packaging Division of Smurfit-Stone Container Corporation and Bluegrass's planned acquisition of another top-10 folding carton provider and manufacturer of coated recycled boxboard. The acquisitions would create a leading manufacturer of folding carton, coated recycled board, multi-wall bag, flexible packaging, and label products. The ratings assume that the transaction will close in the amounts and along the terms as presented. After the closing of both transactions, Bluegrass will be capitalized with approximately $1.2 billion of debt and new cash equity of $295 million from funds affiliated with TPG. Key ratings and outlook factors: i) Subsequent to Bluegrass's follow-on acquisition of the additional top-10 folding carton provider and manufacturer of coated recycled boxboard, the combined company will have moderate aggregate scale and two major product lines and operations, though primarily in one market region. This provides a business profile consistent with that of a low Ba rated paper and forest products company. ii) High leverage, yielding credit protection measures consistent with a B-to-Ba rating. In the near-to-mid term, credit metrics could be adversely affected by post- acquisition execution risk and could prevent significant improvement. In order for the company to sustain its ratings, it will need to successfully harvest the business synergies at the heart of its acquisition rationale, establish positive credit momentum, and reduce debt. iii) EBITDA margins in the past have been consistent with a B-to-Ba rated paper and forest products company. Margin stability has been significantly stable, which represents a signal better than a B rated paper and forest products company. iv) Vertical integration levels remain moderate as the company will benefit from long-term supply agreements with Smurfit- Stone Container Corporation. Another important factor influencing the ratings is the fact that Bluegrass is held by a private equity fund. Moody's will track how the owner's corporate finance, business, and exit strategies impact debt holders as well as whether it opts for special dividends or stock buybacks from Bluegrass. The stable outlook reflects Moody's view that key rating factors are not likely to change in the near term. However, if the pricing environment and cost synergies strengthen, along with an established track record of the company's current financial and operating strategy, Bluegrass could improve its credit metrics on a sustainable basis by reducing current debt levels. Specifically, if the company improves its credit metrics on a sustainable basis over the next 12 to 18 months by lowering consolidated leverage on a gross debt to adjusted EBITDA basis to 4.5 times, generating significant free cash flow, and maintaining good liquidity, the ratings would likely improve. Factors that could negatively impact the ratings include a deterioration in liquidity, a weakening of credit metrics, or additional debt- financed acquisitions. Bluegrass Container Company, LLC, headquartered in the Chicago, IL, metropolitan area is a leading manufacturer of folding carton, coated recycled board, multi-wall bag, flexible packaging, and label products. BLUEGRASS CONTAINER: S&P Rates Proposed $405 Million Loan at B- --------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B+' corporate credit rating to paperboard and packaging manufacturer, Bluegrass Container Co. LLC, based in Carol Stream, Illinois. The outlook is stable. At the same time, Standard & Poor's assigned its 'BB-' senior secured bank loan rating and '1' recovery rating to the company's proposed $150 million first-lien revolving credit facility due in 2012 and $760 million first-lien term loan B due in 2013. The first-lien bank loan and recovery ratings indicate expectations of full recovery of principal in the event of a payment default. Standard & Poor's also assigned its 'B-' senior secured bank loan rating and '4' recovery rating to Bluegrass' proposed $405 million second-lien term loan due in 2013. The second-lien bank loan and recovery ratings indicate expectations of marginal (25%-50%) recovery of principal in the event of a payment default. The bank loan ratings are based on preliminary terms and conditions. "The stable outlook reflects our expectations that relatively consistent demand and gradually improving profitability will lead to steady debt reduction and leverage that is commensurate with the ratings," said Standard & Poor's credit analyst Pamela Rice. "We could revise the outlook to negative if stand-alone costs or integration issues are greater than expected, rationalization benefits fall short of expectations, the company is unable to pass higher costs on to customers, or Bluegrass adopts an aggressive acquisition strategy. We are unlikely to revise the outlook to positive without a significantly lower debt burden even if cost savings prove to be more substantial than the $30 million we have incorporated into the ratings." Proceeds from the term loans, plus $295 million of equity contributed by Texas Pacific Group, a private equity firm, will be used: * to acquire the consumer packaging division of Smurfit-Stone Container Corp. (B/Stable/B-3) for about $1 billion; * to fund working capital, certain operating expenses, and fees; and * to finance the upcoming acquisition of another top-10 U.S. folding carton producer. Pro forma for the proposed transactions, Bluegrass will have total debt, including capitalized operating leases, of about $1.2 billion, with total debt to pro forma EBITDA for the 12 months ended March 31, 2006, of 6.6x, or 5.3x including cost savings. BRISTOW GROUP: S&P Affirms BB Rating With Negative Outlook ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' rating on Bristow Group Inc. and removed the rating from CreditWatch with negative implications, where it was placed on April 27, 2005. The outlook is negative. As of March 31, 2005, Lafayette, Louisiana-based Bristow Group had $265.3 million of debt. The rating actions reflect Standard & Poor's view that the ongoing SEC investigation regarding certain improper activities in Nigeria and a country in South America may not be resolved in the near term, and therefore may not result in an immediate ratings effect. In addition, it appears unlikely at this time that any penalties associated with the investigation would be significant enough to materially impair the credit profile at the current rating level. The ratings reflect the company's fair business risk profile. (Business risk profiles range from vulnerable to excellent). Bristow is subject to the cyclicality and volatility of the oil and gas offshore exploration and production industry. Flight hours are highly correlated with levels of offshore production, as well as changes in the offshore rig count. "The negative outlook reflects the company's large fleet-expansion project, which will require external funding, as well as some lingering issues," said Standard & Poor's credit analyst Kevin L. Beicke. "These include the ongoing SEC investigation regarding improper activities in Nigeria and a country in South America, and the Department of Justice investigation regarding possible antitrust activities in the Gulf of Mexico," he continued. CATHOLIC CHURCH: Portland Files Third Modified Chapter 11 Plan -------------------------------------------------------------- The Archdiocese of Portland in Oregon delivered a third modified Plan of Reorganization and Disclosure Statement on June 12, 2006, to the U.S. Bankruptcy Court for the District of Oregon. Under the Third Amended Plan, provisions relating to conditions to the Plan's Effective Date were deleted. Creditors would no longer wait for a final resolution of any appeal of the estimation orders or confirmation order before they can receive any claim distribution, Thomas W. Stilley, Esq., at Sussman Shank LLP, in Portland, Oregon, relates. Payment of the allowed claims will begin "promptly" after confirmation, even if there are pending appeals, Mr. Stilley notes. The Effective Date of the Plan will occur on the first business day following the Court's entry of the Confirmation Order. Mr. Stilley relates that Judge Perris, in a letter dated June 2, 2006, advised the Archdiocese to modify its Plan and Disclosure Statement. Judge Perris informed the Archdiocese that she allowed claims estimation on the understanding that, "through the plan process, [Portland] would create a fund sufficient to pay 100% of the estimated claims and that, if [Portland's] plan was confirmed, [Portland] would proceed promptly to pay claim as they were allowed." Judge Perris, however, pointed out that the Archdiocese's Second Modified Plan "does not propose to pay allowed claims as they are liquidated and allowed." The Second Modified Plan, instead, delays the effective date until appeals are finally resolved. The Second Modified Plan even conditions confirmation on a final estimation order. "An appeal from either an estimation order or an order confirming a plan could conceivably take years, thereby unduly delaying administration of the estate," Judge Perris said. "If the [Archdiocese] is not willing to make [the] modifications, I may reconsider my estimation order, because liquidation of the claims through trials would take no longer than, and likely would take less time than, the estimation and confirmation process with any related appeals," Judge Perris cautioned the Archdiocese. A full-text copy of Portland Archdiocese's Third Modified Plan of Reorganization is available for free at http://researcharchives.com/t/s?b8a A full-text copy of Portland Archdiocese's Third Modified Disclosure Statement is available for free at: http://researcharchives.com/t/s?b8b The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Portland Tort Panel to File Second Amended Plan ---------------------------------------------------------------- The Tort Claimants Committee appointed in the Archdiocese of Portland's Chapter 11 case will file a second amended disclosure statement and plan of reorganization after the June 15, 2006, Disclosure Statement hearing, Albert N. Kennedy, Esq., at Tonkon Torp, LLP, in Portland, Oregon, informs the U.S. Bankruptcy Court for the District Court of Oregon. The Amendments will include: (a) removal of a provision that provides for "No discharge of [the Archdiocese]"; (b) refinement of "insurance neutrality provisions" and "super-preemptory provisions" of the Plan as they relate to the assignment of insurance rights to a claims payment trust to be established pursuant to the Plan; (c) an update of the disclosure statement to reflect recent developments, including the filing of the report of Hamilton Rabinovitz & Alschuler, Inc., and the filing of the Archdiocese's Third Amended Plan of Reorganization; and (d) address issues that will be raised at the June 15 hearing. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., 215/945-7000) CHASE MANAGEMENT: Case Summary & Largest Unsecured Creditor ----------------------------------------------------------- Debtor: Chase Management Co. II, LLC 15373 Greenfield Road, Suite 26 Detroit, Michigan 48227 Bankruptcy Case No.: 06-47617 Debtor-affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Chase Management Co. III, LLC 06-47622 Chapter 11 Petition Date: June 14, 2006 Court: Eastern District of Michigan (Detroit) Judge: Thomas J. Tucker Debtors' Counsel: Robert A. Peurach, Esq. Fitzgerald & Dakmak, P.C. 615 Griswold, Suite 600 Detroit, Michigan 48226 Tel: (313) 964-0800 Estimated Assets Estimated Debts ---------------- --------------- Chase Management $1 Million to $1 Million to Company II, LLC $10 Million $10 Million Chase Management $1 Million to $1 Million to Company III, LLC $10 Million $10 Million A. Chase Management Co. II, LLC's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ DTE Energy Electric/Gas $7,806 P.O. Box 2859 Detroit, Michigan 48260-0001 B. Chase Management Co. III, LLC's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ DTE Energy Electric/Gas $17,789 P.O. Box 2859 Detroit, Michigan 48260-0001 CHIQUITA BRANDS: High Debt Leverage Cues S&P to Affirm B+ Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Cincinnati, Ohio-based Chiquita Brands International Inc., including the 'B+' corporate credit rating. The rating outlook is negative. The bank loan rating on Chiquita Brands LLC's (CBII's operating subsidiary) recently upsized $200 million senior secured revolving credit facility and its existing term loan B ($25 million outstanding) were affirmed at 'B+' (at the same level as the corporate credit rating on CBII). The recovery rating on these two facilities was revised to '2' from '3', reflecting the pre-payment of $100 million of term loan debt in the second half of 2005, which was only partly offset by the $50 million upsized facility. The '2' recovery rating indicates the expectation for substantial recovery of principal in the event of a payment default. Borrowings on the revolving facility are expected to be used for general corporate purposes. In addition, the rating on CBL's existing $375 million term loan C facility was affirmed at 'BB-' (one notch higher than the corporate credit rating on CBII) and the recovery rating was affirmed at '1', indicating a high expectation for full recovery of principal in the event of a payment default. CBII had about $1.2 billion in consolidated lease-adjusted total debt outstanding as of Mar. 31, 2006. "The corporate credit rating on Chiquita reflects the company's high debt leverage and modestly weaker credit measures following the June 2005 Fresh Express acquisition, and its product concentration in bananas," said Standard & Poor's credit analyst Mark Salierno. "Also, the company competes in the mature fruit and vegetable industry, which faces uncontrollable factors such as global supply, politics, weather, and disease-related risks. Partially mitigating these factors are Chiquita's strong market share in bananas, good geographic diversification of its sales, and somewhat improved product mix following the Fresh Express acquisition." Chiquita is a leading producer, marketer, and distributor of bananas and other fresh and processed foods sold under the Chiquita brand name and other brand names. In addition to bananas, the company's fresh products include tropical fruits such as mangoes, pineapples, melons, and kiwi fruits. CHUM LTD: DBRS Confirms Issuer Rating at BB (High) -------------------------------------------------- Dominion Bond Rating Service confirmed the rating of CHUM Limited at BB (high). The trend is Stable. The rating is supported by CHUM's strong brands, national radio operations, which generate 30%-plus EBITDA margins, portfolio of 21 specialty television channels, and generation of consistent core net income and free cash flow. Even though the conventional television segment continues to be a challenge due to strong competition and weak margins for the segment, DBRS notes that CHUM has improved overall EBITDA margins to 19% through cost management, growth of specialty television, and continued solid performance in the radio broadcasting segment. At the same time, the Company has substantially completed the integration of Craig Media Inc. that was acquired in December 2004, and has rebranded its conventional television stations to CityTV and A-Channel. CHUM's key obstacle in the near to medium term continues to be the conventional television segment. Competition is intense, with CTV dominating the top 20 programs and increased competition from newer entrants in CHUM's core Toronto market. DBRS believes the accessibility of quality programming necessary to improve viewership meaningfully against the competition is limited in the short term. As a result, improvements for conventional television may be limited and, hence, EBITDA margins are likely to be pressured and remain near the 10% range, which suppress overall EBITDA margins. Furthermore, structural changes in the industry continue to shift viewers from conventional to specialty television and more recently to the Internet. However, DBRS believes CHUM should be able to counter these threats due to its diversification into other media, namely specialty television channels, Internet, and radio. Specialty television and radio assets assist in stabilizing overall performance. Secondly, CHUM adopted an online strategy early, which has proven successful with its core demographics. Lastly, although the acquisition of Craig Media increased CHUM exposure to conventional television, in the medium to long term it should help to improve EBITDA margins as programming costs can be spread across a larger base. DBRS expects EBITDA to continue to improve in 2006 when considering that the advertising environment remains healthy and that CHUM should be able to maintain or moderately grow viewership. Furthermore, CHUM has improved its free cash flow position, which has been used to moderately reduce debt levels and to improve liquidity. Further debt reduction, combined with continued improvements in EBITDA margins could have positive rating implications. Even so, ratings could come under pressure if the competitive environment intensifies or structural changes are greater then expected. CLEAN EARTH: Wants Courts Nod on Committee and Lender Settlement ---------------------------------------------------------------- Clean Earth Kentucky, LLC, ask the U.S. Bankruptcy Court for the Eastern District of Kentucky to approve their settlement agreement with the Official Committee of Unsecured Creditors and its secured lender, US Acquisition, LLC. On May 15, 2006, the Court allowed the Debtor to sell substantially all of its assets to Alamo Group Inc., the highest bidder. US Acquisition holds a lien in all the assets sold at the auction securing a $15 million claim. Prior to the auction sale, US Acquisition offered the Committee the opportunity to reserve a "carveout" of certain monies from the sale proceeds to be allocated to and used by the Debtor for a plan of reorganization. The Committee believed that the assets would be sold for less than US Acquisition's secured claim and that it would be better for the Debtor to have something rather than nothing. The Debtor, US Acquisition and the Committee agreed that the Debtor will get a $442,150 carveout -- 5% of the sale proceeds after reduction of the broker's fees -- for distribution to unsecured creditors and a specific reservation of $350,000 earmarked for postpetition administrative claims. US Acquisition will waive any right to participate in any distribution to the unsecured creditors and any right to a claim against the proceeds of the preference cases or avoidance actions. James Thompson, manager of debtor-affiliate Clean Earth Environmental Group, LLC, will also waive his unsecured claim of approximately $2 million. The Committee has agreed to sever the Debtor's chapter 11 case from Clean Earth Environmental's chapter 11 case and to do a joint Debtor-Committee plan of liquidation and distribution, utilizing the $792,150 carveout. Headquartered in Cynthiana, Kentucky, Clean Earth Kentucky, LLC -- http://www.cleanearthllc.com/-- manufactures specialized sewer machines, street sweepers, and refuse trucks. The Company and its affiliate, Clean Earth Environmental Group, LLC, filed for chapter 11 protection on Jan. 24, 2006. (Bankr. E.D. Ky. Case No. 06-50052). Laura Day DelCotto, Esq., at Wise DelCotto PLLC, represents the Debtors in their restructuring efforts. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from its creditors, they estimated individual assets and debts between $10 million to $50 million. COLORADO EDUCATIONAL: Moody's Holds Ba1 Rating on Revenue Bonds --------------------------------------------------------------- Moody's Investors Service affirmed the Ba1 rating of the Colorado Educational and Cultural Facilities Authority Series 2001 Charter School Revenue Bonds and revised the outlook to stable from negative affecting $15.2 million in outstanding revenue bonds. The revenue bonds are secured by annual appropriations made from charter school revenues, primarily composed of state per pupil allotment. The Ba1 rating and stable outlook reflect continued sound financial operations and state financial support for charter schools; adequate coverage levels; increasing enrollment, and the school's moderate debt profile. The Core Knowledge Project, Inc., dba Frontier Academy was formed in February 1996 as a non-profit corporation for the purpose of operating a charter school. The school's charter was approved on July 1, 1996 and was extended on Aug. 8, 2001 for a thirty-year term expiring June 30, 2031. The sponsoring school district, Weld County S.D. No. 6, is the largest in the county and serves the city of Greeley. The Frontier School is primarily funded from state aid, receiving a guaranteed minimum of 95% of the Weld County S.D. No. 6 per pupil allotment, as well as capital funding from the state. In fiscal 2005, the school received $5,929 per pupil, as well as a total of approximately $142,000 for capital funding. Combined these two state sources equaled 92% of total operating revenues. State aid is distributed by the State of Colorado to local school districts in 12 equal monthly installments. These funds are dispersed to local school districts, which are required to annually appropriate these funds to the charter schools within the district. State aid is based upon the charter school's October student count although the school district is entitled to withhold up to 5% of state aid for each school for which they have granted a charter. The bonds are secured by monthly installment payments made from Frontier charter school to the trustee. Debt service payments are subject to annual appropriation. Originally, debt service payments were made through a direct deposit mechanism directly to the trustee from the school district, which Moody's views favorably. Frontier has, however, chosen to forego this procedure and receive the funds from the school district before remitting monthly debt service payment. Additionally, bonds are secured by a first mortgage on, and security interest in, the charter schools facilities and land. Should any portion of the property be sold during the life of the bonds, proceeds must be used first for principal repayment. Moody's expects the school's finances to remain satisfactory given continued state support for charter school funding, conservative financial operations and increased enrollment. In fiscal 2005, the school increased its cash position slightly to 12.4 % of revenues from 10.6% of revenues in fiscal 2004. The increase in cash improved liquidity ratios in 2005 with a current ratio of 148.5% in fiscal 2005 from 127.2% in fiscal 2004. Despite recently improved cash levels, expenditure growth continues to put pressure on the school's annual operating flexibility. The school's operating cash flow margin decreased to 19% in fiscal 2005 from 19.7% in fiscal 2004. Unrestricted net assets are modest reaching $72,000 in fiscal 2005, or 1.6% of total operating revenues. Moody's expects debt service coverage levels will remain adequate, despite relatively large debt service expenditures and slow payout. On a total revenue basis, in fiscal 2004 and fiscal 2005 coverage remained strong at 1.90 times and 1.94 times, respectively. In fiscal 2005, debt service equaled approximately 24% of total revenues, a decline from fiscal 2003. Amortization is slow with approximately 17.7% of principal paid in ten years. Moody's expects demand for Frontier's programs will continue in the near term due to steadily increasing enrollment, a sizeable waiting list and, reportedly, minimal competition. Enrollment growth continues to be steady, averaging 13.8% annually since 2000. The school currently has 978 students with a waiting list of approximately 1,000 students. The school currently has a cap of 1,035 students and officials expect reaching the cap by 2010. Additionally, Frontier officials note competition from other charter and parochial schools in the area has not been a factor due to fee, curriculum and philosophy differences. Further, one k-8 private school has also become a feeder to the Frontier high school in recent years further complementing enrollment growth at Frontier. Moody's assigned a stable outlook to the Ba1 rating based upon continued sound financial operations and state financial support for charter schools; adequate coverage levels; increasing enrollment, and the school's moderate debt profile. Key Statistics 2005 Enrollment: 978 2006 Projected Enrollment: 975 2005 debt service coverage: 1.93x 2005 Maximum Annual Debt Service coverage: 1.93x Charter term expiration date: June 30, 2031 Payout of principal: 17.7% Final maturity: June 1, 2031 2005 Operating Cash Flow Margin: 19% 2005 Total debt service as percentage of total revenue: 23.9% Current Ratio: 148.5% CONSTITUTION MOLD: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Constitution Mold & Engineering, Inc. 56568 North Bay Drive Chesterfield, Michigan 48051 Bankruptcy Case No.: 06-47624 Type of Business: The Debtor is a leading supplier of prototype and production plastic injection molds for the automotive industry. See http://www.constitutionmold.com/ Chapter 11 Petition Date: June 14, 2006 Court: Eastern District of Michigan (Detroit) Judge: Marci B. McIvor Debtor's Counsel: Gerald L. Decker 19900 East Ten Mile Road, Suite 102 St. Clair Shores, Michigan 48080 Tel: (586) 777-1200 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ A. Finkle & Sons $46,689 2011 North Southport Avenue Chicago, IL 60614 IIG-DSS Technologies $39,900 6100 Bethuy Fair Haven, MI 48023 Mar-Kar Die & Mold $30,000 29540 Calahan Roseville, MI 48066 DTE Energy $24,000 Proto Plastics $19,845 Complete Surface Technologies, Inc. $19,725 Capital One Visa $17,200 Sescoi $16,400 Jeffrey J. Hornyak, CPA $15,700 Dunn Specialty Steel $11,000 Abacus Computer Corp. $9,705 Synventive Molding Solutions $8,200 Dasi Solutions $7,590 Reid Industries $6,820 Tenibac Graphion $4,700 HTC The Cutting Tool Specialist $4,408 VeriCore $4,092 Nitro Vac Heat Treat $3,572 Michigan Mill & Abrasive $3,425 Milltronics $3,400 COVANTA ENERGY: Moody's Rates New $140 Million Term Loan at B1 -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Covanta Energy Corporation's new $140 million delayed-draw first lien term loan facility and upgraded Covanta's Speculative Grade Liquidity rating to SGL-1 from SGL-2. In addition, Moody's affirmed the B1 rating on the Company's existing first lien bank facilities, the B2 rating on its second lien term loan, and its Ba3 Corporate Family Rating. The rating outlook is stable. In addition to the new delayed draw term loan, the first lien facilities also include a currently funded $229 million term loan, a $100 million revolver, and a $320 million synthetic letter of credit facility. The proceeds of the delayed draw term loan are being used to prepay a portion of the higher priced $400 million second lien term loan. As a result of more favorable interest rates, the company expects to save approximately $8 million in annual interest payments. The B1 and B2 ratings on Covanta's secured credit facilities reflect the deep structural subordination of the credit facilities to $1.5 billion of debt at the subsidiary waste-to-energy projects, $220 million of debt at Covanta ARC, LLC, $196 million of debt at MSW Energy Holdings LLC, and $224 million of debt at MSW Energy Holdings II LLC. The facilities are secured by a lien on substantially all of Covanta's assets. However, collateral is largely limited to stock in the company's subsidiaries as most of its hard assets are pledged to the project debt. The facilities also benefit from a guarantee from parent company, Covanta Holdings Corporation. Only a small portion of the term loan principal amortizes, exposing the company to potentially substantial refinancing risk beginning in 2010. Moody's notes that this risk is partially mitigated by a 50% cash sweep, which is expected to provide sufficient funds to repay a substantial portion of the 1st lien facility by the time it matures while enhancing financial flexibility in the interim. The upgrade of Covanta's speculative grade liquidity rating to SGL-1 reflects the company's very good expected liquidity position for the next twelve months, marked by an improvement in internal liquidity and greater expected headroom under the company's financial covenants. This change is due to an increase in Covanta's already robust level of cash on hand and an expected improvement in operating cash flow resulting from the interest savings achieved by the current transaction, as well as greater certainty regarding the availability of the company's net operating loss carryforwards, which it relies on to offset its tax obligations. Cash from operations is projected to be sufficient to support the company's capital expenditure requirements, repay a significant amount of maturing project and intermediate debt, and prepay a substantial portion of the company's first lien term loan. The company also has ample external liquidity available to it in the form of the $100 million revolving credit facility, which is currently undrawn and available for working capital needs, in addition to the $320 million synthetic letter of credit facility. The company has limited access to alternative sources of liquidity, with most of its assets pledged to its $1.5 billion of project level debt. Moody's also notes that Covanta operates in a very specialized industry niche, with a limited market for assets to be sold in a timely manner for liquidity purposes. Primarily a waste-to-energy company, Covanta has a unique business model among companies rated by Moody's. Its closest comparables are independent power producers and Covanta's Ba3 Corporate Family Rating is comparable to that of AES and NRG, but unlike those companies, Covanta participates in two distinct commodity markets, waste disposal and energy production, providing it an advantage in terms of risk and revenue diversification. While Covanta's consolidated leverage relative to cashflow is considerably higher than that of AES, its rating is supported by its highly contracted revenue stream and the strong credit quality of many of its municipal counterparties. This provides it with a high degree of financial stability and predictability which helps to compensate for the company's leverage and the inherently high capital and operating costs of waste-to-energy as a means of waste disposal. Though many of these contracts begin to expire within the next five years, the risk of contract renewal is mitigated by the relatively rapid amortization of the associated project debt, which will provide the company with an enhanced degree of financial flexibility going forward. The rating is also supported by diversification provided by the large number of facilities owned and/or operated by Covanta, as well as their strong operating histories and their generally favorable geographic distribution. Additional risks factored into the rating include the need to maintain compliance with environmental regulations, the possibility of an increase in leverage related to further acquisitions, and the company's exposure to higher risk emerging markets in which some of its power projects are located. The stable outlook on Covanta's rating reflects Moody's expectation: i) the waste-to-energy projects' contracts with the respective municipalities and utilities will remain in place through their current maturities; (ii) Covanta management will continue to operate the plants at high availability levels and maintain stability with regard to administrative, operating, and maintenance expenses; (iii) Covanta will de-lever over the next several years at the subsidiary project level; (iv) Covanta will be able to utilize all $490 million of Holding's NOLs that were available as of Dec. 31, 2005; and (v) there will be no additional debt issued by Covanta over the near term. However, the Covanta rating could be raised or lowered if dividends distributable from the projects differ from expected levels, if Covanta acquires additional waste-to-energy projects or is subject to unforeseen capital expenditure requirements at the existing projects, particularly with regard to environmental regulatory compliance, if Covanta issues additional debt, or if all or a part of Holding's NOLs become unavailable to Covanta. Ratings upgraded: * Speculative Grade Liquidity rating to SGL-1 from SGL-2 Ratings assigned: * $140 million first lien delayed draw term loan, B1 Ratings affirmed: * $229 million first lien term loan, B1 * $100 million first lien revolving credit facility, B1 * $320 million first lien synthetic letter of credit facility, B1 * $260 million second lien term loan, B2 Covanta Energy Corporation, headquartered in Fairfield, New Jersey, is primarily a waste-to-energy company with other operations in independent power production and water and wastewater treatment. Parent company Covanta Holding Corporation has additional operations in insurance. DANA CORP: Asks Court to Direct Sypris to Continue Parts Supply --------------------------------------------------------------- Dana Corporation entered into several supply contracts with Sypris Technologies, Inc.: 1. The Marion Contract -- an eight-year supply contract between the parries for the products that had been produced at Marion Forge, principally axle shaft forgings and ring gear and pinion forgings. In 2001, Dana sold its interests to Sypris in Marion Forge, which Dana had acquired in 1998 from Eaton Corporation. 2. The Morganton Contract -- an eight-year supply contract between the parties for the casting products that had previously been produced by Dana's Morganton, North Carolina, facility. Sypris purchased the Morganton facility in 2001. 3. The Toluca Contract -- an eight-year supply contract between the parties where Sypris was to supply Dana with large steer axle beams and other products, in connection with Sypris' purchase of Dana's Toluca, Mexico facility. The parties have also entered into a series of additional contracts for the purchase of certain of Dana's fixed assets. During the course their relationship, Dana and Sypris entered into a number of amendments to the Supply Contracts, Corinne Ball, Esq., at Jones Day, in New York, relates. The amendments ranged from adding additional parts to the Supply Contracts and establishing prices of the added parts to extending the term of the Marion Supply Contract through December 2014. In 2005, Sypris expressed concerns about Dana's ability to pay for the products supplied. Based on those concerns, Dana and Sypris entered into a Temporary Payment Assurances Agreement. The parties agreed that: * From Dec. 19, 2005, through April 18, 2006, Dana would pay Sypris on a weekly basis by automatic clearing house transfer; * Sypris would not suspend Dana's trade credit before Dana's Second Event of Default, which was Dana's failure to pay any invoice in accordance with Sypris's books and records within 45 days of the invoice date; * Any default of the TPAA would automatically extend the terms of the Probationary Period by 120 days; and * Sypris would provide Dana with weekly invoice registers and would work in good faith with Dana to resolve any disputes. However, on Dana and its debtor-affiliates' bankruptcy filing, Sypris informed the Debtors that it would not ship any products to Dana's facilities unless Dana agreed to certain terms. Ms. Ball informs the Court that at various times, Sypris conditioned its shipment of parts on Dana's agreement to pay for the parts in advance. At other times, Sypris demanded either that Dana pay certain prepetition claims or assume the Supply Agreements. Ms. Ball states that the Debtors' continued ability to purchase parts from Sypris is essential if they are to continue to service its customers and, ultimately, successfully emerge from Chapter 11. Dana has been and will continue to be harmed by Sypris' unilateral alteration of the TPAA, Ms. Ball emphasizes. If the Debtors do not receive parts from Sypris, the Debtors will suffer catastrophically by not being able to fulfill their contractual obligations with original equipment manufacturing customers. If the Debtors accede to Sypris' unlawful demands, they will be required to borrow substantial funds under the DIP facility in order to pay Sypris in advance, Ms. Ball says. To pay Sypris on its accelerated payment terms, the Debtors may be required to divert funds otherwise designated to be used for other necessary business purposes. Accordingly, the Debtors ask the Court to: (a) enjoin Sypris from violating the terms of the TPAA and the Supply Agreements; (b) require Sypris to ship parts to then pursuant to the TPAA and the Supply Agreements; and (c) award them actual, consequential and punitive damages as well as fees and costs. About Dana Corporation Based 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 March 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. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. 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. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORPORATION: Demands James Tool's Continued Parts Supply ------------------------------------------------------------- On Dec. 23, 2003, Dana Corporation and James Tool, Machine and Engineering, Inc., entered into a Supply Agreement. James Tool supplied Dana with parts and other products. On Nov. 5, 2005, the parties extended the terms of the Agreement through Feb. 28, 2012. Pursuant to the Agreement, James Tool may invoice Dana for each shipment of Parts and Dana will pay each invoice within 62 days after the date of that invoice. However, on Dana's bankruptcy filing, James Tool informed Dana that it would not ship any products to Dana's facilities in the United States and Mexico, unless Dana agreed to terms that were both far outside the Agreement and violative of the Bankruptcy Code, Corinne Ball, Esq., at Jones Day, in New York, argues. At various times, James Tool conditioned its shipment of parts to Dana on Dana's agreement to pay for the parts in advance, as opposed to the 62-day payment term, Ms. Ball notes. Dana often intentionally keep low levels of raw materials and component parts to minimize storage and warehousing costs and to limit the amount of funds that are tied up in the inventory, Ms. Ball relates. It is not unusual for Dana to have little or no finished inventory of a particular product on hand ready for sale and shipment to its customers. Thus, an interruption in Dana's supply chain will quickly ripple through the system and result in interruptions in the manufacturing process of Dana's original equipment manufacturing customers. Ms. Ball argues that by its attempt to unilaterally alter the terms of the Agreement and by demanding that Dana alter the terms of the Agreement by paying for Parts on a cash-in-advance basis, James Tool has: -- violated the automatic stay; and -- usurped Dana's right and violated Section 365 of the Bankruptcy Code. Section 365 gives Dana the sole discretion to assume or reject any executory contract, and provides that pending the assumption or rejection of an executory contract, the non-debtor is bound by the contract's terms. Dana and its debtor-affiliates would be irreparably harmed if James Tool were not enjoined from violating the terms of the Agreement, Ms. Ball adds. A temporary interruption in the manufacturing process would: -- permanently affect the Debtors' ability to honor existing supply agreements and contractual obligations; -- harm their relationships with their customers; and -- severely hinder their ability to successfully emerge from Chapter 11. Thus, the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to: (a) enjoin James Tool from violating the terms of the Agreement; (b) require James Tool to ship parts to them pursuant to the Agreement; and (c) award them actual, consequential and punitive damages as well as other fees and costs. About Dana Corporation Based 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. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. 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. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORP: Panel Gets Court Okay on Information-Sharing Protocol ---------------------------------------------------------------- Effective as of March 10, 2006, the Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York: (a) deems the Official Committee of Unsecured Creditors in Dana Corporation and its debtor-affiliates' chapter 11 cases to be in compliance with Section 1102(b)(3) of the Bankruptcy Code as a result of the implementation of the information-sharing procedures; and (b) finds that the Committee is not required to share the Debtors' Confidential Information with its constituents. The Debtors will assist the Committee in identifying any confidential, proprietary, or non-public information related to them that is provided to the Committee. As reported in Troubled Company Reporter on June 5, 2006, the Committee sought the Court's authority to establish and maintain a Web site to make certain non-Confidential Information available to general unsecured creditors. The information available on the Committee Web site will include: (a) the Debtors' bankruptcy filing; (b) the case number; (c) the contact information for the Debtors and any information hotlines that they establish, the Debtors' counsel and the Committee counsel; (d) the voting deadline with respect to any plan filed in the Debtors' cases; (e) access to the claims docket as and when established by the Debtors or any claims and noticing agent retained in the Debtors' cases; (f) a general overview of the Chapter 11 process; (g) press releases, if any, issued by the Committee or by the Debtors; (h) links to other relevant Web sites -- e.g. the Debtors' corporate Web site, the Bankruptcy Court Web site and the Web site of the Office of the United States Trustee; and (i) any other information that the Committee, in its sole discretion, deems appropriate, subject to certain restrictions and limitations. In addition, the Committee will establish an e-mail address to allow unsecured creditors to send questions and comments in connection with the Debtors' cases. A link to this e-mail address will be made available on the Committee Web site. Based 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. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. 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. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000). DELPHI CORP: Equity Panel Balks at Planned GM Contracts Rejection ----------------------------------------------------------------- The Official Committee of Equity Security Holders of Delphi Corporation and its debtor-affiliates object to the Debtors' request to reject their executory supply contracts with General Motors Corporation. The Committee wants to obtain discovery necessary to allow it to evaluate the Rejection Motion. As reported in the Troubled Company Reporter on April 7, 2006, the Debtors asked the U.S. Bankruptcy Court for the Southern District of New York for authority to reject the supply contracts. The Debtors are restructuring their unprofitable supply relationships with GM. After studying the deteriorating financial health of their U.S. operations, the Debtors identified 21 operational sites that generate significant, and increasing, operating losses. The sites, which primarily produce parts for GM vehicles, are projected to generate $2.1 billion in operating losses in 2006. Equity Committee Objection "The Equity Committee understands that the Debtors have taken the position that to obtain discovery a party must have filed an objection to the Motion," Bonnie Steingart, Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP, in New York, says. Ms. Steingart tells the Court that the Rejection Motion presented limited facts. The Equity Committee reserves its right to supplement the Objection. SPS Asks Court to Defer Ruling SPS Technologies, LLC, provides parts to Delphi prior to the Petition Date. As of the Petition Date, Delphi owed SPS not less than $1,100,000 in the aggregate. SPS supplies parts to Delphi pursuant to numerous purchase orders, including PO's for parts which are ultimately sold to GM. Despite its best efforts, SPS has not been able to cross reference the GM part numbers to Delphi part number to SPS part number, Robert Szwajkos, Esq., at Curtin & Heefner, LLP, in Morrisville, Pennsylvania, relates. As a result, SPS has not been able to determine if it would be affected by the rejection of the GM Contracts. SPS has written to Delphi requesting information to cross- reference the GM part numbers to the Debtors' and SPS' part numbers. Delphi is in the process of responding to the request, according to Mr. Szwajkos. Until SPS has had an opportunity to determine if SPS is affected at all by the contract rejection, the Court should take no action in respect to the GM Parts, Mr. Szwajkos asks Judge Drain. Based in Troy, Mich., Delphi Corporation --http://www.delphi.com/ -- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Shareholders Block Executives' Move to Dismiss Suit ---------------------------------------------------------------- Before Delphi Corporation and its debtor-affiliates filed for bankruptcy, Delphi Corporation's shareholders filed a class action in the United States District Court for the Eastern District of Michigan, due to alleged fraud and misrepresentation of the company's financial situation. The complaint charges Delphi and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The defendants, which include Delphi executives J.T. Battenberg and Alan Dawes, have sought to dismiss the case, Bloomberg News reports. The Defendants argue that there was no evidence of wrongdoing. The shareholders want the District Court to deny the Motion to Dismiss. "We believe the case should move forward against all of the defendants, so that all of the facts regarding the Delphi debacle can be illuminated and those investors made whole for their losses," John S. Coffey, Esq., at Bernstein Litowitz Berger and Grossmann LLP, attorney for the shareholders, told Bloomberg. The complaint was filed after Delphi reported to the Securities and Exchange Commission that it overstated cash flow and pre-tax income in their reports, Bloomberg's Margaret Cronin Fisk relates. The SEC and the United States Justice Department are currently investigating Delphi's accounting practices. Based in Troy, Mich., Delphi Corporation --http://www.delphi.com/ -- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Toledo Trustee Wants Stay Lifted to Pursue Lawsuit --------------------------------------------------------------- Ericka S. Parker asks the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay to allow her to continue asserting counterclaims against Delphi Automotive Systems, Inc., in a pending litigation before the United States Bankruptcy Court for the Northern District of Ohio. Ms. Parker was duly appointed as Chapter 7 Trustee with respect to the bankruptcy filing of Toledo Professional Temps, Inc., formerly known as Flex-Tech Professional Services, Inc. On April 8, 2004, Delphi filed an adversary proceeding against the Chapter 7 Trustee for declaratory judgment to receive a judicial determination of various issues under a certain settlement agreement by and between Delphi, Flex-Tech and an alleged affiliate of Flex-Tech known as Initial Transfer, Inc. Delphi sought a ruling that the payments due from Delphi to third parties under the Settlement Agreement are not property of the Flex-Tech bankruptcy estate. The Chapter 7 Trustee alleged that Initial Transfer was formed by Flex-Tech's principal for the sole purpose of being the fraudulent transferee of Flex-Tech with respect to all of its assets. The Settlement Agreement provided for certain payments to be made to three non-parties -- REM, Northwest, and Comptrol -- and to Initial Transfer. The Chapter 7 Trustee alleged that she was entitled to all payments due under the Settlement Agreement. Because of concerns that the Flex-Tech litigation would impact the rights of the non-parties, Delphi amended the Complaint to include an interpleader count, thereby joining creditors Northwest, Comptrol, and REM as parties to the pending adversary proceeding. In the Amended Complaint, Delphi sought relief in the nature of interpleader with respect to the amounts it agreed are due to Comptrol. Comptrol has asserted a first right to those funds. Neither Northwest nor REM has answered the Amended Complaint. The Chapter 7 Trustee reached an agreement resolving her various claims against Initial Transfer and its principal. The settlement provides that Initial Transfer has transferred to the Chapter 7 Trustee all of its rights under the Settlement Agreement, and those rights will be administered as part of Flex-Tech's bankruptcy estate. As a result of the settlement, the Chapter 7 Trustee now owns the right to enforce the Settlement Agreement on behalf of Initial Transfer. Delphi sought summary judgment in the Flex-Tech litigation on November 4, 2005. That motion is presently decisional in the Ohio Bankruptcy Court, but the Chapter 7 Trustee has advised the Ohio Bankruptcy Court of her intention to seek stay relief from the New York Bankruptcy Court. Patricia B. Fugee, Esq., at Roetzel & Andress, LPA, in Toledo, Ohio, asserts that if Delphi were free to pursue the Flex-Tech Litigation, but the Chapter 7 is limited in her ability to do so, there would, at best, be a partial resolution of the issues surrounding the underlying Settlement Agreement. In addition, it is clear that because Delphi wants to pursue the Flex-Tech Litigation, lifting the stay will not interfere with the Debtors' bankruptcy cases, Ms. Fugee notes. Ms. Fugee maintains that because the Ohio Bankruptcy Court is familiar with the Flex-Tech Litigation and related bankruptcy issues, allowing the Chapter 7 Trustee to prosecute her counterclaims in that Court would lead to an expeditious resolution of the issues raised. "Inasmuch as Delphi wishes to proceed with the Flex-Tech Litigation, the balance of the harms tips significantly in favor of ensuring that [the Chapter 7 Trustee] has a full and complete ability to counter Delphi's allegations," Ms. Fugee says. Based in Troy, Mich., Delphi Corporation --http://www.delphi.com/ -- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA AIR: Court Establishes August 21 as Claims Bar Date --------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York set August 21, 2006, at 5:00 p.m., as the deadline for all creditors owed money by Delta Air Lines, Inc., and its debtor- affiliates, on account of claims arising prior to September 14, 2006, to file their proofs of claims. Creditors must file written proofs of claim on or before the August 21 Claims Bar Date and those forms must be delivered to: United States Bankruptcy Court Southern District of New York Delta Claims Processing Center, Bowling Green Station P.O. Box 5016 New York, New York 10274-5016 or overnight courier: United States Bankruptcy Court, Southern District of New York, Delta Claims Processing Center, One Bowling Green, Room 534, New York, New York 10004-1408 About Delta Air Headquartered in Atlanta, Georgia, Delta Air Lines, Inc. -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., 215/945-7000). DELTA AIR: Closes Florida and Alabama Reservation Call Centers -------------------------------------------------------------- Delta Air Lines, Inc., will close its reservation call centers in Miramar, Florida, and Montgomery, Alabama, on Sept. 1, 2006, Gina Laughlin, Delta's spokesperson, said in an interview with Bloomberg News. The closing of the two call centers, which will affect 650 workers, will enable Delta to save about $2,700,000 a year. The affected workers can seek transfers to other jobs at Delta or accept severance packages, Ms. Laughlin said. Delta has about 6,000 employees in its reservation department. The company did not disclose the number of Florida and Alabama workers that will move to new jobs at Delta or other reservation centers. Headquartered in Atlanta, Georgia, Delta Air Lines, Inc. -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., 215/945-7000). DOMINICK GALLUZZO: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Dominick Galluzzo 145 Nedellee Drive Saddle Brook, New Jersey 07663 Bankruptcy Case No.: 06-15392 Chapter 11 Petition Date: June 15, 2006 Court: District of New Jersey (Newark) Debtor's Counsel: Bruce Levitt, Esq. Levitt & Slafkes, P.C. 76 South Orange Avenue, Suite 305 South Orange, New Jersey 07079 Tel: (973) 313-1200 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Local 282 Pension Trust Fund $338,712 2500 Marcus Avenue Lake Success, NY 11042 Mariner's Bank $187,126 721 Route 202-206 P.O. Box 1018 Somerville, NJ 08876-1018 Lumbermens Mutual Cas. Co. $136,700 Attn: Angela M. Scafuri, Esq. Bressler, Amery & Ross, P.C. 325 Columbia Turnpike Florham Park, NJ 07932 Herrick, Feinstein LLP $55,403 Tilcon of New York, Inc. $42,674 Thedore King $33,872 Sovereign Bank $29,900 Hackensack Medical Center $16,188 Englewood Hospital and $9,658 Medical Center Paragon Fed Credit Unit Automobile $9,580 California Department of Labor $8,826 Elan Financial Services Charge Account $5,939 Us Bk Rms Cc $5,856 Lvnv Funding $4,449 Elmwood Ford $3,798 Public Service Electric & Gas Co. $3,130 Cap One Bank $1,831 Hackensack Anesthesia Association $1,715 Valley Home Care, Inc. $1,503 DURATEK INC: Merger Completion Cues Moody's to Withdraw Ratings --------------------------------------------------------------- Moody's Investors Service withdrew the ratings of Duratek, Inc. Moody's withdrew these ratings following the completion of the $396 million acquisition by EnergySolutions, LLC. These ratings were affected: * The B1 rating on the $30 million secured revolving credit facility due 2008; * The B1 rating on the $69 million secured term loan B due 2009; * The B1 Corporate Family Rating. Duratek, Inc, with 2005 revenues of $281 million provides secure radioactive materials disposition and nuclear facility operations for commercial and government customers. EnergySolutions is based in Salt Lake City, Utah, and provides nuclear waste management services and solutions. The combined organization will manage over 2000 employees in 40 states and internationally. EnergySolutions is owned by a private investor group led by Lindsay Goldberg & Bessemer, Peterson Partners and Creamer Investments. EAGLE FINANCE: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Eagle Finance, LLC dba Microtel Inn and Suites 5635 Chemin de Vie, Northeast Atlanta, Georgia 30342 Bankruptcy Case No.: 06-66404 Type of Business: The Debtor offers personal loan assistance and other financial services. It previously filed for chapter 11 protection on August 29, 2003 (Bankr. N.D. Ga. Case No. 03-99310). Chapter 11 Petition Date: June 5, 2006 Court: Northern District of Georgia (Atlanta) Judge: Paul W. Bonapfel Debtor's Counsel: John M. McGovern, Esq. McGovern Law Firm 7000 Miller Court East Norcross, Georgia 30071 Tel: (678) 221-6204 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 ------ --------------- ------------ Guest Distribution Services, LLC Food & Beverage $4,479 P.O. Box 824700 Philadelphia, PA 19182 RedSky IT Software $3,961 1 Cragwood Road, Suite 202 South Plainfield, NJ 07080 Lodgenet Entertainment Corp. Satellite T.V. $2,827 P.O. Box 952141 St. Louis, MO 63195 Krispy Kreme Food & Beverage $2,142 VingCard Elsafe Security $1,565 Waffles of Georgia, Inc. Food & Beverage $1,403 Otis Spunkmeyer, Inc. Food & Beverage $1,319 Thyssenkrupp Repair Services $1,253 Rhinotek Computer Products Supplies $938 Galanti & Company Accounting and $920 Tax Services Buford Plumbing, Inc. Plumbing $730 Full Circle Rest. and Repair Services $687 Construction Services, Inc. Coffecol, Inc. Food & Beverage $548 T.C. Lock & Door, Inc. Repair Services $530 Dispensing Systems of Georgia Food & Beverage $517 MCI, Inc. Communications $413 RGI Publications, Inc. Supplies $372 Coordinated Systems & Supplies Supplies $366 EAGLE POINTE: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Eagle Pointe Ltd. Dividend Housing Association L.P. 3900 Edison Lakes Parkway, Suite 201 Mishawaka, Indiana 46545 Bankruptcy Case No.: 06-30695 Chapter 11 Petition Date: June 14, 2006 Court: Northern District of Indiana (South Bend Division) Debtor's Counsel: James E. Carlberg, Esq. Jeanette Eisan Hinshaw, Esq. Bose, McKinney & Evans LLP 2700 First Indiana Plaza 135 North Pennsylvania Street Indianapolis, Indiana 46204 Tel: (317) 684-5000 Fax: (317) 684-5173 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ TCF National Bank Secured Claim $4,909,543 401 East Liberty Street Ann Arbor, MI 48104 Arbors at Eagle Pointe Trade Debt $360,292 Apartments, LLC 3900 Edison Lakes Parkway Suite 201 Mishawaka, IN 46544 Full House Marketing Trade Debt $1,411 32780 Grand River Avenue Suite 209 Farmington, MI 48336 Alfrita Woodruff Tenant Deposit $1,142 Wilmar-Atlanta Trade Debt $727 Steve W. Lillard Tenant Deposit $638 H&R Maintenance Co. Inc. Trade Debt $625 DTE Energy Utility $586 Mohamed Farah Tenant Deposit $431 LaMarr Ashford Tenant Deposit $310 Andrew Hire Tenant Deposit $300 Paul Harbrecht Tenant Deposit $299 Poonandeep Kapoor Tenant Deposit $285 Maintenance USA Trade Debt $205 Ikon Office Solution Inc. Trade Debt $170 Donella Hale Tenant Deposit $141 Cintas Corp. - Westland Uniforms $29 Federal Express-Pittsburg Trade Debt $17 Stadium Hardware Trade Debt $10 EATON FERRY: GE Seeks Information on Whereabouts of Collateral -------------------------------------------------------------- GE Commercial Distribution Finance Corporation, fka Transamerica Commercial Finance Corporation, asks the U.S Bankruptcy Court for the Middle District of North Carolina in Durham for permission to investigate Eaton Ferry Sales & Service, Inc., and its debtor- affiliates pursuant to Rules 2004 and 9016 of the Federal Rules of Bankruptcy Procedure. GE Commercial is successor in interest to Bombardier Capital, Inc. GE Commercial wants to obtain documents and records, and conduct an examination concerning the acts, conduct, property, liabilities and financial condition of the Debtors and matters relating to the transfer of certain property of the Debtors' estates. John D. Burns, Esq., at Hunton & Williams, LLP, tells the Court that the Debtors sold over $1.3 million of GE Commercial collateral without forwarding payment to GE Commercial or providing adequate assurances that payment would be made. In an inspection made in November 2005, GE Commercial also learned that the Debtors no longer possessed a sufficient amount of the collateral to satisfy the outstanding debt due to GE Commercial. In particular, GE Commercial wants access to: a) all boat sales contracts and boat sales invoices from January 1, 2004 to present; b) 2003, 2004 and 2005 federal and state tax returns for the Debtors; c) all balance sheets and financial statements prepared by or on behalf of the Debtors from January 1, 2004 to present, whether audited or unaudited; d) all bank statements, including cancelled checks and deposit slips or receipts, for any bank accounts held in the names of any of the Debtors or used by any of the Debtors from January 1, 2004 to present; e) all QuickBooks files and other financial information for each of the Debtors; and f) All documents and records related to accounts payable or other obligations of any of the Debtors, including but not limited to any payables files, invoices, memoranda, correspondence to or from any creditors of any of the Debtors reflecting an obligation owed by any of the Debtors. In addition, GE Commercial also wants to examine Kaye Powell, who served as bookkeeper an accountant for the Debtors two years prior to their bankruptcy filing. Mr. Burns says that Ms. Powell can provide information that will allow GE Commercial to better understand what happened to its collateral and the proceeds from its collateral. The Court will convene a hearing at 9:30 a.m. on June 22, 2006, at The Durham Centre, Courtroom - First Floor, 300 West Morgan Street in Durham, North Carolina to consider GE Commercial's request. Headquartered in Littleton, North Carolina, Eaton Ferry Sales & Service, Inc. -- http://www.eatonferry.com/-- sells boats and offers boat servicing and storage. The Company and its debtor- affiliates filed for chapter 11 protection on Jan. 10, 2006 (Bankr. M.D.N.C. Case No. 06-80033). Richard M. Hutson, II, Esq., at Hutson Hughes & Powell, P.A., represent the Debtors. When the Debtors filed for protection from their creditors, they estimated assets between $1 million and $10 million and estimated debts between $10 million and $50 million. EATON FERRY: Judge Stocks Converts Case to Chapter 7 Liquidation ---------------------------------------------------------------- The Honorable William L. Stocks of the U.S. Bankruptcy Court for the Middle District of North Carolina in Durham converted Eaton Ferry Sales & Service, Inc., and its debtor-affiliates' chapter 11 bankruptcy cases into liquidation proceedings under chapter 7 of the Bankruptcy Code on June 2, 2006. At the same time, Judge Stocks appointed Sara Conti as the Debtors' chapter 7 trustee. Michael D. West, Esq., the former Bankruptcy Administrator in the Debtors' chapter 11 cases, requested for the conversion to chapter 7. Mr. West argued that neither a sale nor a plan of liquidation under Chapter 11 would be practical or an efficient means of liquidating the remaining assets of the Debtors given the enormity of their debt and the lack of business operations. He further asserted that allowing the cases to continue under chapter 11 would cause further loss and diminution of the estate. Headquartered in Littleton, North Carolina, Eaton Ferry Sales & Service, Inc. -- http://www.eatonferry.com/-- sells boats and offers boat servicing and storage. The Company and its debtor- affiliates filed for chapter 11 protection on Jan. 10, 2006 (Bankr. M.D.N.C. Case No. 06-80033). Richard M. Hutson, II, Esq., at Hutson Hughes & Powell, P.A., represent the Debtors. When the Debtors filed for protection from their creditors, they estimated assets between $1 million and $10 million and estimated debts between $10 million and $50 million. EATON FERRY: Section 341 Meeting Slated for July 14 --------------------------------------------------- A meeting of Eaton Ferry Sales & Service, Inc., and its debtor- affiliates' creditors will be held at 9:00 a.m., on July 14, 2006, at the Creditors Meeting Room, in Durham, North Carolina. This is the first meeting of creditors after the Debtors' chapter 11 case was converted to a chapter 7 proceeding. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Bankruptcy cases in North Carolina are not under the jurisdiction of the United States Trustee Program. Questions regarding bankruptcy cases filed in North Carolina should be directed to: The Administrative Office of the U.S. Courts Bankruptcy Judges Division 1 Columbus Circle, N.E., Suite 4-250 Washington, D.C. 20544 Phone: 202-502-1900 Headquartered in Littleton, North Carolina, Eaton Ferry Sales & Service, Inc. -- http://www.eatonferry.com/-- sells boats and offers boat servicing and storage. The Company and its debtor- affiliates filed for chapter 11 protection on Jan. 10, 2006 (Bankr. M.D.N.C. Case No. 06-80033). Richard M. Hutson, II, Esq., at Hutson Hughes & Powell, P.A., represent the Debtors. When the Debtors filed for protection from their creditors, they estimated assets between $1 million and $10 million and estimated debts between $10 million and $50 million. EGENE INC: Reports 2006 First Quarter Financial Results ------------------------------------------------------- eGene, Inc., reported a $164,000 net loss on $507,121 of revenues for the three months ended March 31, 2006, compared to a $266,366 net loss on $274,151 of revenues for the same period in 2005. The Company increased its revenue 85% from one year ago. In the quarter, the company used its resources for research and development applications of its HDA system platform, especially considering the current urgent need in the biological detection market. Detection of the influenza A virus (known as the avian or "bird" flu virus) is a major focus at the present time for the company. As an acute respiratory infection, rapid detection of the influenza A virus is important and the company has announced that its HDA-GT12(TM) Genetic Analyzer is capable of detecting this virus in as little as six minutes or at a sample analysis rate of two samples per minute. In addition to its own product development research, the company noted that many of the users of its system have started to publish results in peer-reviewed scientific journals that are providing third-party endorsements of the advantages of using the eGene HDA system in genetically related research work. eGene noted that total expenses for the quarter were $490,900 which was $84,142 higher than those incurred one year earlier. The major expense increases were $78,000 for non-cash expenses associated with stock option expenses and warrants issued for services. The company anticipates that selling and marketing expenses are expected to increase as it carries out its planned amplified sales effort. At March 31, 2006, the Company's balance sheet showed $1.6 million in total assets and $679,576 in total liabilities. As of March 31, 2006, the Company had an accumulated deficit of $4.7 million. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?b6f Based in Irvine, Calif., eGene, Inc. -- http://www.egeneinc.com/ -- focuses its core technologies of capillary electrophoresis, microfluidics, liquid handling and automation to develop and manufacture low-cost microfluidic, miniaturized digital analyzer systems, software and consumables for biological materials testing applications. These products detect, quantify, identify and characterize DNA and RNA at high rates of specificity and sensitivity while automating routine and non-routine laboratory and industrial procedures critical to product safety, development quality and productivity. * * * Going Concern Mantyla McReynolds LLC expressed doubt about eGene, Inc.'s ability to continue as a going concern after auditing the Company's 2005 financial statements. The auditing firm pointed to the Company's accumulated losses and recurring negative cash flows from operations at Dec. 31, 2005. At Dec 31. 2005, the Company reported that it had an accumulated deficit of $4,525,240. For the year ended Dec. 31, 2005, the company reported a net loss of $857,052 compared to a net loss of $1,206,290 for the year ended Dec. 31, 2004. ENTI INC: Case Summary & 44 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Enti, Inc. 8040 East Gary Road Scottsdale, Arizona 85260 Tel: (480) 948-8686 Bankruptcy Case No.: 06-01718 Debtor-affiliate filing separate chapter 11 petition on June 14, 2006: Entity Case No. ------ -------- WJG-038 Trust 06-01758 Debtor-affiliates that filed separate chapter 11 petitions on June 13, 2006: Entity Case No. ------ -------- Entertainment 2000, LLC 06-01741 Enti Capital, LLC 06-01743 Sierra Vista 3033, LLC 06-01744 Debtor-affiliates that filed separate chapter 11 petitions on June 8, 2006: Entity Case No. ------ -------- Peak Enti, LLC 06-01702 Global Grounds Greenery, LLC 06-01701 Type of Business: William J. Galyon, Jr. is the sole shareholder and president of the Debtors. Chapter 11 Petition Date: June 9, 2006 Court: District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtors' Counsel: Alan A. Meda, Esq. Stinson Morrison Hecker LLP 1850 North Central Avenue, Suite 2100 Phoenix, Arizona 85004 Tel: (602) 279-1600 Fax: (602) 240-6925 Estimated Assets Estimated Debts ---------------- --------------- Enti, Inc. $100,000 to $10 Million to $500,000 $50 Million Peak Enti, LLC $1 Million to $500,000 to $10 Million $1 Million Global Grounds Less than $500,000 to Greenery, LLC $50,000 $1 Million Entertainment 2000, LLC $10 Million to $10 Million to $50 Million $50 Million Enti Capital, LLC Less than $10 Million to $50,000 $50 Million Sierra Vista 3033, LLC $100,000 to Less than $500,000 $50,000 WJG-038 Trust $10 Million to $10 Million to $50 Million $50 Million A. Enti, Inc., Entertainment 2000, LLC, and Sierra Vista 3033, LLC's list of their 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Alexander Henry Wick Trust Lawsuits: Unknown Paul A. Conant, Esq. 06-000478, 06-001752 2398 East Camelback Road 06-003939, 06-003534 Suite 925 06-004717 Phoenix, Arizona 85016-9002 Alyssa Wick Trust Lawsuits: Unknown Paul A. Conant, Esq. 06-000478, 06-001752 2398 East Camelback Road 06-003939, 06-003534 Suite 925 06-004717 Phoenix, Arizona 85016-9002 Torsha S. Baker - Trust Lawsuits: Unknown Martin R. Galbut, Esq. 06-000478, 06-001752 2398 East Camelback Road 06-003939, 06-003534 Suite 1020 06-004717 Phoenix, Arizona 85016-4216 Barbara Ann Wick Trust Lawsuits Unknown BDL Foundation Lawsuits Unknown The Bidstrup Foundation Lawsuits Unknown G. Peter Bidstrup Lawsuits Unknown Bralu, LLC Lawsuits Unknown Gail L. Bryan Lawsuits Unknown Bryan, Gail Lynn, Lawsuits Unknown Charitable Lead Ann II Bryan, Gail Lynn, Lawsuits Unknown Charitable Lead Annuit Mark Bryan Lawsuits Unknown CDT Investments, Inc. Lawsuits Unknown Contributory IRS Lawsuits Unknown Account of Bidstrup Cameron Danis Lawsuits Unknown Delafield Entity Lawsuits Unknown Development, LLC Gates-04, LLC Lawsuits Unknown Gates-95, LLC Lawsuits Unknown Glory Be LLC Lawsuits Unknown Brooke Susan Hart Lawsuits Unknown B. Peak Enti, LLC and Global Grounds Greenery, LLC's list of their Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hebert Schenk P.C. Attorney's Fees Unknown 4742 North 24th Street Suite 100 Phoenix, AZ 85016-4859 Lunds, Danis, WSL, et. Al. Lawsuit Unknown c/o Martin R. Galbut, Esq. 2425 East Camelback Road Suite 1020 Phoenix, AZ 85016-4216 Peter S. Davis Lawsuit Unknown Simon Consulting LLC 3200 North Central Avenue Suite 850 Phoenix, AZ 85012 Simpsons; Simpson Trust Lawsuit Unknown Bryans c/o Brian Cabianca, Esq. 40 North Central Avenue Suite 2700 Phoenix, AZ 85004-4440 C. Enti Capital, LLC and WJG-038 Trust's list of their 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Harriet D. Brewster Promissory Note $5,850,000 Foundation Robert J. Rosepink, Trustee 7373 North Scottsdale Road Suite E200 Scottsdale, AZ 85253 Marsh Family Trust Promissory Note $4,000,000 C. Douglas & Patricia A. Marsh 11884 East Charter Oak Cir. Scottsdale, AZ 85259 Ashley Limited Switzerland Promissory Note $3,539,965 Peter McQuaid 9785 East Miramonte Scottsdale, AZ 85262 TH-98R, LLC Promissory Note $3,400,000 c/o 301 East Virginia Avenue Suite 3300 Phoenix, AZ 85004-1218 Gates-04, LLC Promissory Note $2,580,000 c/o 301 East Virginia Avenue Suite 3300 Phoenix, AZ 85004-1218 Sights & Sounds LLC Promissory Note $2,108,500 Sallye B. Schumacher 8101 North Mummy Mountain Road Paradise Valley, AZ 85253 Invest-97, LLC Promissory Note $1,720,000 c/o 301 East Virginia Avenue Suite 3300 Phoenix, AZ 85004-1218 Gail Lynn Bryan CLAT - II Promissory Note $1,000,000 Gail L. Bryan, Trustee 22 Biltmore Estates Phoenix, AZ 85016 Virginia M. Simpson Promissory Note $1,000,000 Family Trust Harold A. Simpson 6378 Camino De La Costa La Jolla, CA 92037 Gates-95, LLC Promissory Note $900,000 c/o 301 East Virginia Avenue Suite 3300 Phoenix, AZ 85004-1218 McQuaid, Peter & First Promissory Note $785,187 International Bank & Trust Peter McQuaid IRA 9785 East Miramonte Drive Scottsdale, AZ 85262 Greening 1999 Charitable Promissory Note $750,000 Remainder Trust 7373 North Scottsdale Road Suite E200 Scottsdale, AZ 85253 Silverlynx Development LLC Promissory Note $650,000 Lawrence W. Crawford 6861 Terre Vista Tucson, AZ 85750 Manuel N. and Promissory Note $600,000 Sandra J. Rodriquez Revocable Trust M. Rodriquez, Trustee 10401 North 100th Street Suite #7 Scottsdale, AZ 85258 Barbara and Henry Wick III Promissory Note $550,000 6601 East Indian Bend Road Scottsdale, AZ 85253 OSC-95, LLC Promissory Note $540,000 c/o 301 East Virginia Avenue Suite #3300 Phoenix, AZ 85004-1218 Donald A. Simpson CLAT Promissory Note $500,000 Gail L. Bryan, Trustee 22 Biltmore Estates Phoenix, AZ 85016 Gail Lynn Bryan CLAT - I Promissory Note $500,000 Gail L. Bryan, Trustee 22 Biltmore Estates Phoenix, AZ 85016 Rhode Island LLC Promissory Note $500,000 Robert J. Rosepink 7373 North Scottsdale Road Suite 3200 Scottsdale, AZ 85253 Robert W. Simpson CLAT Promissory Note $500,000 Gail L. Bryan, Trustee 22 Biltmore Estates Phoenix, AZ 85016 EXIDE TECHNOLOGIES: Wants Delaware Local Rule 3007-1(f)(i) Waived ----------------------------------------------------------------- Exide Technologies and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to waive Local Rule 3007-1(f)(i) so that they may file a "Common Issue Objection" against more than 150 claims, if the claims share a common defect or threshold issue. Rule 3007-1(f)(i) of the Local Rules of Bankruptcy Practice and Procedure of the U.S. Bankruptcy Court for the District of Delaware provide that a substantive objection may be filed with respect to no more than 150 claims. The Debtors say that it wants Local Rule 3007-1(f)(i) waived in order to streamline claim objections and improve the efficiency of the claims reconciliation process,. Sandra G. M. Sezer, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in Wilmington, Delaware, relates that the relief requested will: -- allow for a faster disposition of the Common Issue Claims; -- give the Reorganized Debtors more time and resources to devote to the disposition of remaining claims; and -- preserve the resources of the Court as it will be spared from using multiple, duplicative rulings spread out over months pertaining to identical legal principles. About Exide Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- is the worldwide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represented the Debtors in their successful restructuring. Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 86; Bankruptcy Creditors' Service, Inc., 215/945-7000) FULTON STREET: Fitch Affirms $6.1 Million Class C Notes' B Ratings ------------------------------------------------------------------ Fitch Ratings affirmed six classes of notes issued by Fulton Street CDO, Ltd. and its co-issuer Fulton Street CDO Funding Corp. -- $178,202,156 class A-1A notes at 'AAA' -- $146,521,773 class A-1B notes at 'AAA' -- $34,000,000 class A-2 notes at 'AA' -- $9,000,000 class B-1 notes at 'BBB' -- $10,000,000 class B-2 notes at 'BBB' -- $6,106,859 class C notes at 'B'/'DR1' Fulton is a collateralized debt obligation that closed March 27, 2002, and is managed by Clinton Group, Inc. Fulton ended its revolving period on April 20, 2006. The collateral supporting the CDO is comprised of: * a diversified portfolio of residential mortgage-backed securities; * commercial mortgage-backed securities; * asset-backed securities; * corporate debt securities; and * collateralized debt obligations. Fitch's affirmations are the result of stable portfolio performance measures, such as overcollateralization ratios and weighted average rating factor. According to the most recent trustee report dated May 15, 2006, the class A-1, A-2, and B OC tests have decreased but continue to pass their respective triggers. The failure of the class C OC test, according to the most recent trustee report, aids the senior notes by triggering a paydown to the A-1 notes. As of the most recent trustee report dated May 15, 2006, the WARF remains stable in the 'BBB/BBB-' category. The ratings on the class A-1A, A-1B and A-2 notes address the timely payment of interest and principal; the ratings on the class B-1, B-2 and C notes address the ultimate payment of interest and principal. The class A-1A and A-1B notes have a legal final maturity of April 2032; the class A-2, B-1, B-2, and C notes have a legal final maturity of April 2037. Fitch will continue to monitor and review this transaction for future rating adjustments. GEO GROUP: To Use $100 Million Offering Proceeds to Pay Term Loan ----------------------------------------------------------------- The GEO Group, Inc. (NYSE: GGI) closed a follow-on public offering of 3,000,000 shares of its common stock at $35.46 per share. The underwriters in the offering have a 30-day period to exercise an option to purchase an additional 450,000 shares of GEO common stock to cover potential over-allotments. Approximately 12,971,002 shares of common stock are outstanding after the offering. GEO intends to use the aggregate net proceeds from the offering of approximately $100 million to repay $74.6 million in debt outstanding under the term loan portion of its senior secured credit facility. In addition, GEO may use proceeds from the offering, along with existing cash, to finance the planned expansion of GEO's Val Verde Correctional Facility in Del Rio, Texas. GEO plans to use any remaining proceeds from the offering for general corporate purposes, which may include working capital, capital expenditures and potential acquisitions of complementary businesses and other assets. In addition, GEO may use up to $5 million of the proceeds of the offering to purchase from certain directors, executive officers and employees stock options that are currently outstanding and exercisable. Lehman Brothers Inc. acted as the sole book-runner for the offering. A copy of the final prospectus supplement relating to the offering may be obtained from: Lehman Brothers Inc. Attn: ADP Financial Services Prospectus Fulfillment 1155 Long Island Avenue Edgewood, NY 11717 Fax (631) 254-7268 or The GEO Group, Inc. One Park Place, Suite 700 621 Northwest 53rd Street Boca Raton, Florida, 33487 About The GEO Group Headquartered in Boca Raton, Florida, The GEO Group, Inc. -- http://www.thegeogroupinc.com/-- is a world leader in the delivery of correctional, detention, and residential treatment services to federal, state, and local government agencies around the globe. The Company offers a turnkey approach that includes design, construction, financing, and operations. The Company represents government clients in the United States, Australia, South Africa, Canada, and the United Kingdom. GEO's worldwide operations include 62 correctional and residential treatment facilities with a total design capacity of approximately 51,000 beds, inclusive of facilities under management, facilities for which GEO has received contract awards but which have not yet opened, and inactive facilities. The Geo Group, Inc.'s 8-1/4% Senior Notes due 2013 carry Moody's Investors Service's and Standard & Poor's single-B rating. GIANT INDUSTRIES: Incurs $12.3 Million Net Loss in First Quarter ---------------------------------------------------------------- Giant Industries, Inc., reported a $12.3 million net loss on $863 million of revenues for the three months ended March 31, 2006, compared to $10 million of net income on $711.7 million of revenues for the same period in 2005. At March 31, 2006, the Company's balance sheet showed $989.8 million in total assets and $600.7 million in total liabilities. A full-text copy of the Company's 2006 Quarterly Report is available for free at http://researcharchives.com/t/s?b60 Headquartered in Scottsdale, Arizona, Giant Industries, Inc. -- http://www.giant.com/-- is a refiner and marketer of petroleum products. Giant owns and operates one Virginia and two New Mexico crude oil refineries, a crude oil gathering pipeline system based in Farmington, New Mexico, which services the New Mexico refineries, finished products distribution terminals in Albuquerque, New Mexico and Flagstaff, Arizona, a fleet of crude oil and finished product truck transports, and a chain of retail service station/convenience stores in New Mexico, Colorado, and Arizona. Giant is also the parent Company of Phoenix Fuel Co., Inc. and Dial Oil Co., both of which are wholesale petroleum products distributors. * * * Giant Industries' 8% Senior Subordinated Notes due 2014 carry Standard & Poor's Ratings Services' B- rating. HEARTLAND PARTNERS: Amex To Delist Securities Effective June 23 --------------------------------------------------------------- The American Stock Exchange LLC reported its final determination to remove the Class A Limited Partnership Units of Heartland Partners, L.P. from listing on the Exchange, and filed an application on Form 25 to strike the Securities from listing with the Securities and Exchange Commission. The delisting will become effective on June 23, 2006 unless postponed by the SEC. Pursuant to its rules, the Exchange provided notice to Heartland Partners, L.P. of the decision to delist the Securities and an opportunity to appeal the decision to a panel designated by the Exchange's Board of Governors. Headquartered in Chicago, Illinois, Heartland Partners, LP, (Amex: HTL) is a 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. The company and four of its affiliates filed for chapter 11 protection on Apr. 28, 2006 (Bankr. N.D. Ill. Case No. 06-04764). Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC, represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed total assets of $4,375,000 and total debts of $3,951,000. The Debtors' consolidated list of 20 largest unsecured creditors however showed more than $30 million in environmental litigation claims. HEMOSOL CORP: Canadian Ct. OKs Plan Sponsorship Pact with Buyer --------------------------------------------------------------- The Superior Court of Justice of Ontario approved the plan sponsorship agreement between PricewaterhouseCoopers Inc., in its capacity as interim receiver for Hemosol Corp and Hemosol LP and the party that had expressed an interest in acquiring all of Hemosol's business, on June 8, 2006. The effectiveness of the Agreement is conditioned on the occurrence of a number of events, including: -- the completion and implementation of either a plan of arrangement with the creditors of Hemosol pursuant to the Companies' Creditors Arrangement Act; -- a plan of arrangement of the share capital of Hemosol Corp. pursuant to the Business Corporations Act (Ontario); -- a purchase of the assets of Hemosol, or a combination of one of more of the foregoing; and -- the approval of the Court and the creditors, as required under the provisions of the CCAA. The Agreement, subject to the satisfaction of these currently contemplates a closing date at the beginning of August. If an OBCA Plan of Arrangement is implemented pursuant to the Agreement, it is anticipated that such OBCA Plan of Arrangement will result in a substantial dilution of the equity of Hemosol held by the shareholders existing at the time of implementation. About Hemosol Hemosol Corp. (NASDAQ: HMSLQ, TSX: HML) -- http://www.hemosol.com/ -- is an integrated biopharmaceutical developer and manufacturer of biologics, particularly blood-related protein based therapeutics. Information on Hemosol's restructuring is available at http://www.pwc.com/ca/eng/about/svcs/brs/hemosol.html Hemosol Corp and Hemosol LP filed a Notice of Intention to Make a Proposal Pursuant to section 50.4 (1) of the Bankruptcy and Insolvency Act on Nov. 24, 2005. The Company had defaulted in the payment of interest under its $20 million credit facility. Hemosol said that it would require additional capital to continue as a going concern and is in discussions with its secured creditors with respect to its current financial position. On Dec. 5, 2005, PricewaterhouseCoopers Inc. was appointed interim receiver of the Companies. HEMOSOL CORP: Proofs of Claim Due by June 29 -------------------------------------------- The Superior Court of Justice of Ontario approved a process for the determination of claims of the creditors of Hemosol Corp. Pursuant to the claims determination process, PricewaterhouseCoopers Inc., in its capacity as Hemosol's interim receiver, will send to all creditors identified on the books of Hemosol, by June 9, a notice stating the amount that is owed to them by Hemosol according. Claimants who disagree with the information sent by PwC must file a dispute with the receiver on or before June 26, 2006. Anyone who believes they have a claim, but does not receive a notice, should file with the Receiver a proof of claim on or before June 26, 2006. Proof of Claims must be sent to: PricewaterhouseCoopers Inc. Interim Receiver for Hemosol Corp. and Hemosol LP Attn: Cheryl Meads 77 King Street West, P.O. Box 82, Suite 3000 Royal Trust Tower, TD Centre Toronto, Ontario M5K 1G8 Phone: (416) 869 1130 Ext. 14289 Fax: (416) 814-3219 About Hemosol Hemosol Corp. (NASDAQ: HMSLQ, TSX: HML) -- http://www.hemosol.com/ -- is an integrated biopharmaceutical developer and manufacturer of biologics, particularly blood-related protein based therapeutics. Information on Hemosol's restructuring is available at http://www.pwc.com/ca/eng/about/svcs/brs/hemosol.html Hemosol Corp and Hemosol LP filed a Notice of Intention to Make a Proposal Pursuant to section 50.4 (1) of the Bankruptcy and Insolvency Act on Nov. 24, 2005. The Company had defaulted in the payment of interest under its $20 million credit facility. Hemosol said that it would require additional capital to continue as a going concern and is in discussions with its secured creditors with respect to its current financial position. On Dec. 5, 2005, PricewaterhouseCoopers Inc. was appointed interim receiver of the Companies. HONEY CREEK: MuniMae Files Competing Reorganization Plan in Texas ----------------------------------------------------------------- MuniMae Portfolio Services, LLC, submitted, on June 6, 2006, an alternative Plan of Reorganization and accompanying Disclosure Statement for the resolution of creditors' claims and equity holders' interests, if any, in Honey Creek Kiwi, LLC's chapter 11 case. MuniMae acts as the authorized servicing agent for The Bank of New York Trust Company, NA, as indenture trustee under a $20,485,000 bond issued by the Texas Department of Housing and Community Affairs to secure a loan owed by the Debtor. Creditor Plan Overview MuniMae's reorganization plan is anchored on the surrender of the equity in the Debtor to the Bond Trustee and the payment in full of all other allowed Claims except for the claims of insiders. Under MuniMae's Plan, old equity interests will be canceled and new equity interests will be created and distributed to the Bond Trustee. In contrast, MuniMae says certain creditors will not be paid in full under the Debtor's own reorganization plan. Recoveries under the Debtor's plan will depend on the generation of income in excess of operating expenses, other expenses of the Debtor and necessary reserves. Treatment of Claims The Bond Trustee holds secured and unsecured claims against the Debtor of approximately $21.3 million as of Aug. 24, 2005. Repayment of this obligation is secured by substantially all of the Debtor's assets. Under MuniMae's Plan, the Bond Trustee will receive: -- the New Equity Interest in the Reorganized Debtor; -- the existing liens and encumbrances on the Assets. The Bond Documents and the Bond Obligations will remain in full force and effect; -- all Net Proceeds of Causes of Action collected after the closing date; and -- the excess of any reserves beyond amounts necessary to pay the allowed claims for which reserves are established. Vendor claims, secured by Mechanic's Liens and Materialman's Liens, totaling approximately $108,687, will be paid in full. Unsecured Priority Tax Claims of approximately $1,191 as well as General Unsecured Claims aggregating $182,868 will also be paid in full. The $1.1 million unsecured claim of insider Alternative Building Concepts Group is impaired and will not be paid under MuniMae's plan. MuniMae claims that the insider obligation to ABC was not authorized because the Debtor had agreed not to incur any debt without MuniMae's consent. Alternative Building's sole membership interest in Honey Creek Kiwi, LLC, will be cancelled on the effective date of the plan. A copy of the Disclosure Statement explaining MuniMae's Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=060615213243 The Court will convene a hearing at 9:00 a.m. on July 14, 2006, to consider confirmation of the MuniMae's competing plan. MuniMae's Objection to Debtor's Disclosure As reported in the Troubled Company Reporter on June 5, 2006, Honey Creek, amended the Disclosure Statement explaining its Amended Plan of Reorganization on May 9, 2006. The amended disclosure statement added MuniMae's position regarding the Debtor's narrative of its financial troubles. MuniMae had argued that it was unfairly characterized as partly responsible for the Debtor's financial distress. MuniMae disputed much of the Debtor's claims and in particular disputed the suggestion that it is responsible for the Debtor's litigation with its former management company, Shelter Corporation. MuniMae also discounted the Debtor's own $15.75 million valuation of the Honey Creek Apartments and claimed that the value of the apartments is in excess of $22.6 million. A copy of the amended Disclosure Statement is available for a fee at: http://www.ResearchArchives.com/bin/download?id=060602035200 Headquartered in Mesquite, Texas, Honey Creek Kiwi LLC owns a 656-unit apartment complex known as the Honey Creek Apartments. The company filed for chapter 11 protection on August 24, 2005 (Bankr. N.D. Tex. Case No. 05-39524). Richard G. Grant, Esq., at Roberts & Grant, P.C., represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. INDIAN CREEK: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Indian Creek Vineyard Estates, LLC 36000 Carmel Valley Road Carmel Valley, California 93924 Bankruptcy Case No.: 06-51053 Chapter 11 Petition Date: June 14, 2006 Court: Northern District of California (San Jose) Judge: Arthur S. Weissbrodt Debtor's Counsel: Henry Barron Niles, III, Esq. 340 Soquel Avenue, Suite 105 Santa Cruz, California 95062 Tel: (831) 457-4545 Fax: (831) 457-4555 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million Debtor's 3 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Terry Bishop Trade Debt $103,072 17105 Cachagua Road Carmel Valley, CA 93924 First Hawaiian Bank Line of Credit $42,000 1580 Kapiolani Boulevard Honolulu, HI 96814 John Murray, Esq. Legal Services $9,000 Murray & Murray 19400 Stevens Creek Boulevard Suite 200 Cupertino, CA 95014-2548 INSURANCE AUTO: S&P Rates New $115 Million Term Loan at B --------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Westchester, Illinois-based Insurance Auto Auctions Inc. to negative from stable. The 'B' corporate credit rating on the company was affirmed. Standard & Poor's also assigned its 'B' secured debt rating and '2' recovery rating to IAAI's new $115 million term loan, reflecting the expectation that lenders will receive a substantial recovery of principal (80%-100%) in the event of a payment default. Pro forma for the new term loan, IAAI will have total debt of about $520 million, including the present value of operating leases. "We revised the outlook because of the company's high debt levels, which will increase following several planned acquisitions," said Standard & Poor's credit analyst Martin King. IAAI operates 83 salvage vehicle auctions in the U.S. The company will use the proceeds from the new term loan to finance the acquisition of several additional auctions across the U.S. The purchases will increase IAAI's geographic coverage, allowing it to better serve large national vehicle sellers, primarily the increasingly concentrated auto insurance industry. "The negative outlook reflects a financial profile that is weak for the ratings. Debt leverage will remain high in the near term, until acquisitions are integrated, the pace of expansion slows, and cash flow generation improves," Mr. King said. "We could lower the ratings if operating problems prevent the company from generating sufficient earnings and cash flow improvements to reduce debt leverage. We could revise the outlook to stable within the next two years if benefits from the acquisitions and other growth initiatives result in a stronger financial profile." INTELSAT LTD: PanAmSat Gets Requisite Consents for 10-3/8% Notes ---------------------------------------------------------------- Intelsat, Ltd., reported that PanAmSat Holding Corporation disclosed the results of its offer to purchase and consent solicitation for any and all of their outstanding 10-3/8% Senior Discount Notes due 2014. PanAmSat received the requisite consents to adopt the proposed amendments to the indenture pursuant to which the Notes were issued and that a supplemental indenture to effect the proposed amendments has been executed. The proposed amendments, which will eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in the indenture, will become operative when, and if, the tendered Notes are accepted for purchase by PanAmSat. In connection with the contemplated acquisition of PanAmSat by Intelsat (Bermuda), Ltd., a wholly-owned subsidiary of Intelsat, Ltd., and in addition to other financing transactions, PanAmSat intended to offer approximately $725 million of senior notes due 2016. As reported in the Troubled Company Reporter on June 14, 2006, if PanAmSat's tender offer for the Notes is consummated, PanAmSat will not issue the senior notes due 2016 and Intelsat (Bermuda), Ltd. will issue additional senior notes to fund the tender offer and consent payments for the Notes, as well as the balance of the Acquisition merger consideration. About Intelsat Intelsat, Ltd. - http://www.intelsat.com/-- offers telephony, corporate network, video and Internet solutions around the globe via capacity on 25 geosynchronous satellites in prime orbital locations. Customers in approximately 200 countries rely on Intelsat's global satellite, teleport and fiber network for high- quality connections, global reach and reliability. * * * As reported in the Troubled Company Reporter on June 13, 2006, Moody's Investors Service affirmed the B2 corporate family rating of Intelsat, Ltd., and downgraded the corporate family rating of PanAmSat Corporation to B2, given the greater clarity regarding the final capital structure and the near-term completion of the PanAmSat acquisition by Intelsat. J.L. FRENCH: Court Extends Lease Decision Period to Sept. 8 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware allowed J.L. French Automotive Casting, Inc. and its debtor-affiliates to decide on their unexpired leases until Sept. 8, 2006. The unexpired leases include many of the Debtors' primary warehousing and sales office facilities. The Debtors told the Court that they needed additional time to determine whether to assume or reject those leases due to their large and complex chapter 11 cases. The Debtors assure the Court that the extension will not harm lessors but will merely preserve the status quo while they decide on the leases. Headquartered in Sheboygan, Wisconsin, J.L. French Automotive Castings, Inc. -- http://www.jlfrench.com/-- is a global supplier of die cast aluminum components and assemblies with nine manufacturing locations around the world including plants in the United States, United Kingdom, Spain, and Mexico. The company has fourteen engineering/customer service offices to support its customers near their regional engineering and manufacturing locations. The Company and its debtor-affiliates filed for chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del. Case No. 06-10119 to 06-06-10127). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. Ricardo Palacio, Esq., and William Pierce Bowden, Esq., at Ashby & Geddes, PA, represents the Official Committee Of Unsecured Creditors. When the Debtor filed for chapter 11 protection, it estimated assets and debts of more than US$100 million. LB-UBS COMMERCIAL: S&P Assigns Low-B Ratings to 12 Cert. Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to LB-UBS Commercial Mortgage Trust 2006-C4's $1.98 billion commercial mortgage pass-through certificates series 2006-C4. The preliminary ratings reflect the credit support provided by: * the subordinate classes of certificates; * the liquidity provided by the trustee; * the economics of the underlying mortgage loans; and * the geographic and property type diversity of the loans. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.35x, a beginning LTV of 98.0%, and an ending LTV of 91.5%. Preliminary Ratings Assigned: LB-UBS Commercial Mortgage Trust 2006-C4 Preliminary Recommended credit Class Rating amount support ----- ------ ----------- ------------------ A-1 AAA $30,000,000 30.000% A-2 AAA $38,000,000 30.000% A-3 AAA $23,000,000 30.000% A-AB AAA $67,000,000 30.000% A-4 AAA $815,337,000 30.000% A-1A AAA $414,294,000 30.000% A-M AAA $198,233,000 20.000% A-J AAA $148,675,000 12.500% B AA+ $17,345,000 11.625% C AA $24,779,000 10.375% D AA- $17,346,000 9.500% E A+ $14,867,000 8.750% F A $24,779,000 7.500% G A- $19,824,000 6.500% H BBB+ $14,867,000 5.750% J BBB $27,257,000 4.375% K BBB- $27,257,000 3.000% L BB+ $7,434,000 2.625% M BB $9,912,000 2.125% N BB- $4,955,000 1.875% P B+ $7,434,000 1.500% Q B $4,956,000 1.250% S B- $4,956,000 1.000% T NR $19,823,524 0.000% HAF-1* NR $2,544,000 N/A HAF-2* NR $4,887,000 N/A HAF-3* NR $5,865,000 N/A HAF-4* NR $5,866,000 N/A HAF-5* NR $9,775,000 N/A HAF-6* NR $9,776,000 N/A HAF-7* NR $7,821,000 N/A HAF-8* NR $7,818,000 N/A HAF-9* NR $9,777,000 N/A HAF-10* NR $7,821,000 N/A HAF-11* NR $14,345,000 N/A SBC-1* AA $487,466 N/A SBC-2* AA- $359,036 N/A SBC-3* A+ $359,036 N/A SBC-4* A $359,036 N/A SBC-5* A- $359,036 N/A SBC-6* BBB+ $359,036 N/A SBC-7* BBB $359,036 N/A SBC-8* BBB- $538,554 N/A SBC-9* BB+ $1,346,385 N/A SBC-10* BB $1,346,385 N/A SBC-11* BB- $538,554 N/A SBC-12* B+ $538,554 N/A SBC-13* B $538,554 N/A SBC-14* B- $538,554 N/A SBC-15* NR $5,692,778 N/A R-I** NR N/A N/A R-II** NR N/A N/A R-III** NR N/A N/A R-LR** NR N/A N/A X-CP** AAA $1,810,266,000*** N/A X-CL** AAA $1,982,330,524*** N/A * The HAF classes are specific to the nonpooled portions of the 70 Hudson Street loan, the AMLI of North Dallas loan, and the Fountains at Miramar loan. The SBC classes are specific to the nonpooled portions of the Sturbridge Commons loan. ** Interest-only class. *** Notional amount. NR -- Not rated. N/A -- Not applicable. LEGACY COMMS: March 31 Working Capital Deficit Tops $6 Million -------------------------------------------------------------- Legacy Communications Corporation incurred a $606,684 net loss on $28,500 of revenues for the three months ended March 31, 2006, compared to a $232,029 net loss on $7,474 of revenues for the same period in 2005. At March 31, 2006, the Company's balance sheet showed $2.5 million in total assets and $6.4 million in total liabilities, resulting in a $3.9 million stockholders' equity deficit. The Company's March 31 balance sheet also showed strained liquidity with $388,695 in total current assets available to pay $6.4 million in total current liabilities coming due within the next 12 months. As of March 31, 2006, the Company's accumulated deficit widened to $9 million from an accumulated deficit of $8.4 million at Dec. 31, 2006. Going Concern HJ & Associates, LLC, expressed doubt about Legacy Communications' ability to continue as a going concern after auditing the Company's 2005 financial statements. The auditing firm pointed to the Company's working capital deficit and stockholders' equity deficit at Dec. 31, 2005. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?b72 Headquartered in St. George, Utah, Legacy Communications Corp. develops, buys, operates and sells radio stations and auxiliary services. LPATH INC: Accumulated Deficit Tops $8.8 Million at March 31 ------------------------------------------------------------ Lpath, Inc., incurred a $1.3 million net loss on $129,475 of revenues for the three months ended March 31, 2006, compared to a $128,025 net loss on $137,959 of revenues for the same period in 2005. At March 31, 2006, the Company's balance sheet showed $5.9 million in total assets and $669,057 in total liabilities. As of March 31, 2006, the Company's accumulated deficit widened to $8.8 million from an accumulated deficit of $7.5 million at Dec. 31, 2006. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?b73 Headquartered in San Diego, California, Lpath, Inc. -- http://www.lpath.com/-- formerly known as Lpath Therapeutics, Inc., operates as a drug discovery company in the United States. The company develops therapeutics for diseases, which involve changes in the activity and/or production of sphingolipids. * * * Going Concern Levitz, Zacks & Ciceric expressed doubt about Lpath, Inc.'s ability to continue as a going concern after auditing the Company's 2005 financial statements. The auditing firm pointed to the Company's recurring losses from operations at Dec. 31, 2005. MERIDIAN AUTOMOTIVE: Court To Hear Disclosure Statement on June 27 ------------------------------------------------------------------ As reported in the Troubled Company Reporter on May 29, 2006, Meridian Automotive Systems, Inc., and its eight debtor-affiliates filed, on May 26, 2006, its First Amended Joint Plan of Reorganization and a Disclosure Statement with the U.S. Bankruptcy Court for the District of Delaware. The Debtors ask the Court to approve the Disclosure Statement as containing adequate information within the meaning of Section 1125 of the Bankruptcy Code. The Court will convene a hearing on June 27, 2006, to consider the Disclosure Statement. Edward J. Kosmowski, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, notes that Section 1125 requires the Court to approve a written disclosure statement prior to allowing a debtor to solicit acceptances for a plan of reorganization. To approve a disclosure statement, the Court must find that the disclosure statement contains adequate information defined as: "information of a kind, and in sufficient detail . . . that would enable a hypothetical reasonable investor typical of holders of claims or interests [of the Debtors] . . . to make an informed judgment about the plan." Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERIDIAN AUTOMOTIVE: Informal Committee Says Plan Unconfirmable --------------------------------------------------------------- Kathleen M. Miller, Esq., at Smith, Katzenstein & Furlow LLP, in Wilmington, Delaware, notes that during the April 10, 2006, hearing on the Third Extension Motion, Meridian Automotive Systems, Inc., and its debtor-affiliates' financial advisor and chief executive officer each testified that a consensual plan appeared imminent. Unfortunately, the Debtors' forecast that a fully consensual plan would materialize after the third extension of the Debtors' exclusivity periods has not been realized. Ms. Miller points out that the only progress achieved since the U.S. Bankruptcy Court for the District of Delaware approved the Debtors' previous request to extend their plan exclusivity is an agreement with the Official Committee of Unsecured Creditors, which has now agreed to participate as a co-proponent of the First Amended Joint Plan of Reorganization in exchange for a sliver of contingent consideration. According to Ms. Miller, once the Third Extension Motion was granted, the Debtors substantially ceased communicating with members of the Informal Committee of First Lien Secured Lenders until the business day prior to the filing of the First Amended Plan. Moreover, the Debtors' First Amended Plan did not move toward an agreement with the members of the Informal Committee, Ms. Miller informs the Court. Instead, the Plan adversely changed the treatment of the holders of Prepetition First Lien Claims. The proposed treatment is inconsistent with the Debtors' central contention that holders of Prepetition First Lien Claims are vastly oversecured, Ms. Miller asserts. The members of the Informal Committee, which collectively hold approximately 47% of the Prepetition First Lien Claims, remain opposed to each of the alternative plan treatments proposed in the Amended Plan and will vote to reject it, according to Ms. Mille. "A plan that does not satisfy applicable requirements for confirmation under the Bankruptcy Code cannot be confirmed even if it is only plan on file with the Court," Ms. Miller says. "Thus, it is imperative that the Debtors understand that pursuing a non-consensual plan that includes material confirmation risks, while at the same time precluding alternatives, carries with it a risk of prolonging their bankruptcy cases and delaying their exit from Chapter 11." If prolonging these cases would result in any harm to the Debtors' businesses, the Debtors should reconsider their reliance on a single controversial plan, Ms. Miller maintains. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERIDIAN AUTOMOTIVE: Wants Aug. 22 Fixed as Confirmation Hearing ---------------------------------------------------------------- Meridian Automotive Systems, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to establish uniform procedures for the solicitation and tabulation of votes to accept the First Amended Joint Plan of Reorganization Proposed filed by the Debtors, the Official Committee of Unsecured Creditors, Camulos Master Fund LP, DK Acquisition Partners, L.P., and Stanfield Capital Partners LLC, on May 26, 2006. Solicitation Packages After the Court approves the Disclosure Statement, the Debtors propose to distribute or cause to be distributed solicitation packages to those Holders of Claims in Classes entitled to vote on the Plan, containing copies of: (a) a CD-ROM containing the Disclosure Statement, together with the Plan and other exhibits; (b) the Solicitation Order, excluding its exhibits; (c) a notice of the Confirmation Hearing; (d) a ballot together with a return envelope; and (e) other materials as the Court may direct or approve, including supplemental solicitation materials the Debtors may file with the Court. With respect to any transferred Claim, the Debtors propose that the transferee will be entitled to receive a Voting Solicitation Package and cast a ballot on account of the transferred Claim only if: (a) all actions necessary to effect the Claim transfer have been completed by the Record Date; or (b) the transferee files, not later than the Record Date: * the required documentation to evidence that transfer; and * a sworn statement of the transferor supporting the validity of the transfer. In the event a Claim is transferred after the transferor has executed and submitted a ballot to the voting agent, The Trumbull Group, LLC, the transferee will be bound by any vote made on the ballot by the Holder as of the Record Date of the Transferred Claim. Holders of Claims in the Unimpaired Non-Voting Classes will receive : (a) the Confirmation Hearing Notice; and (b) a notice of their non-voting status under the Plan. The Debtors propose that they not be required to transmit a solicitation package to the Rejecting Class, as that Class is presumed to have rejected the Plan. The Debtors expect to commence distribution of the Voting Solicitation Packages, Unimpaired Notices of Non-Voting Status, and the Rejecting Class Notices no later than 14 days after the Court approves the proposed Solicitation Procedures. Any party wishing to obtain a copy of the Disclosure Statement and the Plan can do so by accessing the documents on the Internet, free of charge, at http://www.trumbullgroup.com/or by contacting the Voting Agent to obtain a copy of the documents at the Debtors' expense. Record Date The Debtors ask the Court to establish June 27, 2006, as the record date for purposes of determining which Holders of Claims and Prepetition Meridian Interests are entitled to receive solicitation packages or notices, as applicable, and vote on the Plan. Ballot Forms The Debtors propose to distribute to creditors one or more ballot forms based on Official Form No. 14, but have been modified to address the particular aspects of the Debtors' Chapter 11 cases. The appropriate ballot forms, along with return envelopes, will be distributed to the Voting Classes: Class Type of Claim ----- ------------- 3 Prepetition First Lien Claims 4 Prepetition Second Lien Secured Claims 5 Prepetition Second Lien Deficiency Claims 6 General Unsecured Claims 7 Prepetition Subordinated Claims The Plan designates four claim categories as unclassified for purposes of voting on and receiving distributions under the Plan. The Holders of these unclassified Claims are not entitled to vote to accept or reject the Plan. The Unclassified Claims include: 1. Administrative Expense Claims, 2. DIP Claims, 3. Priority Tax Claims, and 4. Professional Compensation Claims. Voting Deadline The Debtors ask the Court to fix August 10, 2006, at 4:00 p.m. Eastern Time, as the deadline by which all original ballots must be properly executed, completed, delivered to, and received by the voting agent. Ballot Tabulation The Debtors propose that if any party wishes to have its Claim allowed for voting purposes, that party must serve on the Debtors and file with the Court no later than 10 days before the Voting Deadline a motion temporarily allowing the Claim for purposes of voting. Accordingly, the Debtors ask the Court to fix August 7, 2006, as the date to consider all those motions. With respect to ballots cast by Holders of Claims in Class 3, any Holders that fail to return a ballot or fail to elect one of the treatment options on its ballot will receive: (i) the Cash/Equity Treatment, if Class 3 accepts the Plan; or (ii) the Cash/Note Treatment, if Class 3 rejects the Plan. Confirmation Hearing The Debtors ask the Court to fix Aug. 22, 2006, at 10:30 a.m. Eastern Time, as the confirmation hearing for the Debtors' Joint Plan of Reorganization, which may be continued from time to time without further notice to creditors or other parties-in-interest. The Debtors propose to publish the Confirmation Hearing Notice in The Detroit Free Press, USA Today, and the national edition of The Wall Street Journal, not less than seven days after the Solicitation Commencement Date. Confirmation Objection Deadline The Debtors ask the Court to fix Aug. 10, 2006, at 4:00 p.m. Eastern Time, as the last date for filing and serving written objections to the confirmation of the Plan. Objections, if any, to the confirmation of the Plan must: (i) be made in writing; (ii) state the name and address of the objecting party and the nature of the Claim or the party's interest; (iii) state with particularity the legal and factual basis and nature of any objection to the Plan; and (iv) be filed with the Court, together with proof of service and served so that they are received on or before the Objection Deadline by: * the Debtors' counsel, * the United States Trustee, * the Creditors' Committee's counsel, and * counsel to Camulos Master Fund, LP, DK Acquisition Partners, L.P. and Stanfield Capital Partners LLC, as co-proponents under the Plan. About Meridian Automotive Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000). MIRANT CORP: Court Approves Amended Md. & Va. Consent Decree ------------------------------------------------------------ As previously reported, Mirant Potomac, LLC, and Mirant Mid-Atlantic, LLC, on the one hand, and the U.S. Environmental Protection Agency and the states of Maryland and Virginia, on the other hand, entered into a Consent Decree in September 2004. The Mirant Parties sought Judge Lynn's approval of the Consent Decree in March 2005. According to Craig H. Averch, Esq., at White & Case LLP, in Miami, Florida, the Consent Decree aimed to: * resolve certain disputes surrounding operation during the summer of 2003 of Mirant Potomac's coal-fired electricity producing plant located on the Potomac River in Virginia; * provide for the installation of certain pollution control systems at the Mid-Atlantic Coal-Fired Fleet; * allow the plants comprising the Mid-Atlantic Coal-Fired Fleet to reduce nitrogen oxide emissions on a fleet-wide basis, as opposed to on a plant-by-plant basis; and * establish greater future operational certainty for the Mid- Atlantic Coal-Fired Fleet. On September 27, 2004, the United States of America and the states of Maryland and Virginia commenced a lawsuit with the United States District Court for the Eastern District of Virginia, against Mirant Potomac and MIRMA. The District Court issued an order advising the parties that it had reviewed, and was prepared to approve, the Consent Decree, once the Debtors had secured the approval of the Bankruptcy Court, provided that "there would not be sufficient opposition so as to require the United States to withdraw the Original Consent Decree." As a result of certain objections, the parties agreed to amend the original Consent Decree. The Amended Consent Decree reflects the possibility that Mirant Mid-Atlantic might reject or otherwise lose one or more of its leasehold interests in the plants located in Morgantown and Dickerson, and cease to operate one or both of the plants. The Amended Consent Decree was filed with the District Court. A full-text copy of the Amended Consent Decree is available for free at http://ResearchArchives.com/t/s?b6a The material terms of the Amended Consent Decree are: (a) Installation of certain pollution control systems at the Potomac River and Morgantown Plants; (b) Operation of the Mid-Atlantic Coal-Fired Fleet must comply with the certain emission standards; (c) Resolution of the alleged violations provided in the enforcement proceedings against Mirant Potomac in connection with the issuance of the notice of violations by the Department of Environmental Quality of the State of Virginia and the EPA; (d) Mirant Potomac, Mirant Chalk Point and Mirant Mid- Atlantic would be required to make a one-time penalty payment of $500,000 as an allowed administrative expense, as well as invest $1,000,000 in supplemental programs designed to reduce dust and particulate matter at the Potomac River Plant; (e) Mirant Mid-Atlantic, Mirant Potomac, and Mirant Chalk Point are required to provide semi-annual reports to the EPA, the MDE and Virginia DEQ demonstrating compliance with the terms of the Amended Consent Decree; (f) The Amended Consent Decree contains provisions for remedies and stipulated fines for failure to comply; and (g) Any disputes arising under the Amended Consent Decree are to be resolved pursuant to an alternative dispute resolution procedure. The terms of the Amended Consent Decree are substantially similar to the terms of the Original Consent Decree. However, Mirant Chalk Point, which was not a party to the Original Consent Decree, is now a party to the Amended Consent Decree. In addition, the Amended Consent Decree adds a Nox annual cap of 3,700 tons for the Potomac River Plant. The Amended Consent Decree also provides that if Mirant Mid- Atlantic rejects or otherwise loses one more of its leasehold interests in the Morgantown and Dickerson Plants and ceases to operate one or both of the plants, MIRMA, Mirant Chalk Point and Mirant Potomac will: -- notify the EPA, Virginia DEQ and the MDE; -- provide a written agreement of the new owner or operator of the plant to be bound by the obligations of the Amended Consent Decree; -- make a written offer to any and all prospective owners or operators of the Morgantown Plant to pay for completion of engineering, construction and installation of the SCRs required by the Amended Consent Decree. The Amended Consent Decree will release MIRMA, Mirant Chalk Point or Mirant Potomac from the obligations if a new owner accepts the offer and agree to be bound by the terms of the Amended Consent Decree. The Amended Consent Decree also obligates MIRMA, Mirant Chalk Point or Mirant Potomac to install an alternative suite of controls at the plants they continue to own if the new owner operators reject the offer of the New Mirant Entities and then releases MIRMA, Mirant Chalk Point or Mirant Potomac from the provisions of the Amended Consent Decree applicable to the plants they no longer own. Out of an abundance of caution, the New Mirant Entities ask the Bankruptcy Court to approve the Amended Consent Decree. Court Approval Judge Lynn approves the parties' Amended Consent Decree. The Bankruptcy Court permits Mirant Potomac, Mirant Chalk Point and MIRMA to enter into the Amended Consent Decree, subject to the approval by the District Court. Judge Lynn authorizes the Mirant Parties to perform all obligations and take all actions necessary to effectuate the Amended Consent Decree. MIRMA agrees to provide advance notice to the MIRMA Landlords of any proposed material modifications to the Amended Consent Decree prior to any presentation to the District Court. Nothing in the Order will adversely affect any rights that the City of Alexandria may have to oppose approval of the Amended Consent Decree by the District Court. Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on January 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. Shearman & Sterling LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 99; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services placed a 'B+' corporate credit rating on Mirant Corporation and said the outlook is stable. MIRANT CORP: New York Units Ask Court to OK Haverstraw Settlement ----------------------------------------------------------------- These Mirant Corporation debtor-affiliates commenced tax certiorari proceedings in the Supreme Court of the State of New York, County of Rockland, challenging the assessed tax valuations on certain of their facilities: * Mirant Bowline, LLC, * Mirant Lovett, LLC, * Hudson Valley Gas Corporation, and * Mirant New York, Inc. Jeff P. Prostok, Esq., at Forshey & Prostok LLP, in Fort Worth, Texas, relates that in the tax proceedings, the New York Debtors allege that certain New York taxing authorities owe them $195,000,000 plus interest in refunds. The Amount is based on erroneous equalized assessed values for real property tax purposes, which ranged from: * $717,730,536 in 1999 to $1,029,685,393 in 2003 for Mirant Bowline; and * $356,941,867 in 2000 to $481,713,514 in 2003 for Mirant Lovett. Rockland County relates that as a result of its obligations to pay the New York Debtors' unpaid ad valorem taxes, it paid $170,000,000 for the tax roll years 2004 through 2006, excluding interest and penalties. Hence, Rockland asserts, the New York Debtors owe Rockland County more than $170,000,000. The New York Taxing Authorities are: * county of Rockland; * town of Haverstraw; * Haverstraw-Stony Point Central School District; * village of Haverstraw; * village of West Haverstraw; and * town of Stony Point. In 2003, the Debtors asked the Bankruptcy Court for a determination of their tax liability. Certain of the New York Taxing Authorities objected to the Section 505 Action. Rockland filed three proofs of claim against the NY Debtors. The School District also filed proofs of claim against Mirant Corporation and the NY Debtors. The Bankruptcy Court abstained from hearing the 505 Action in favor of the New York court. In 2005, the Debtors asked the Bankruptcy Court to estimate the claims filed by Rockland County and the School District. But the Bankruptcy Court adjourned the hearings on the claim objection and the estimation application to allow the New York Court to address the pending tax certiorari proceedings. Proposed Settlement Agreement To put an end to their disputes, the New York Debtors and the New York Taxing Authorities entered into a proposed settlement agreement. Mr. Prostok tells Judge Lynn that neither the NY Debtors' management nor the New York Taxing Authorities have given final approval of the Proposed Settlement. If all parties approve the Proposed Settlement, Mr. Prostok notes, its implementation must occur before the end of June 2006. In anticipation, the NY Debtors believe it necessary to seek approval of the Proposed Settlement Agreement to obtain a hearing date and to provide notice so they may be ready implement the Proposed Settlement by the end of June. By this motion, the NY Debtors ask the Bankruptcy Court to approve the Proposed Settlement and for authority to perform their obligations under the Proposed Settlement Documents. The Proposed Settlement would provide for the payment of substantial refunds by the New York Taxing Authorities to Mirant Bowline and Mirant Lovett. Thereafter, the NY Debtors would make settlement payments to the County, as trustee, for deposit in a trust account benefiting the School District and Haverstraw. Additionally, the New York Taxing Authorities, Mirant Bowline and Mirant Lovett would enter into PILOT Agreements to structure a defined tax obligation for the next seven years. A. Bowline PILOT Agreement At its core, the Proposed Settlement regarding the Bowline Facility contemplates a lease or leaseback transaction involving the County of Rockland Industrial Development Agency. Specifically, the Agency would acquire from Mirant Bowline and Hudson Valley a leasehold interest in the Bowline Facility and pipeline pursuant to that certain Company Lease between Mirant Bowline, Hudson Valley and the Agency. Concurrently with the execution of the Bowline Company Lease, the Agency, Mirant Bowline and Hudson Valley would execute a Lease Agreement whereby Mirant Bowline and Hudson Valley would sublease from the Agency the very property leased to the Agency under the Bowline Company Lease for the purposes of maintaining operation and control of the Bowline Facility and pipeline. Financial assistance, pursuant to Section 854(14) of the New York General Municipal Law, would be provided by the Agency in the form of an exemption from real property taxes in relation to the Bowline Facility. Pursuant to Section 412(a) of the Real Property Tax Law of the State of New York, the Agency would not be required to pay real property taxes upon property under its jurisdiction, supervision, or control. Rather, Mirant Bowline would make certain scheduled payments in lieu of taxes, over a seven-year period directly to the relevant taxing jurisdiction. The Bowline Base Payments would be: * $12,000,000 for years one, two, and three; * $14,000,000 for years four and five; and * $15,500,000 for years six and seven. Concurrently, the Proposed Settlement would establish a mechanism providing for: (i) the refund to Mirant Bowline of certain overpaid real property taxes totaling $17,600,000; and (ii) the payment of additional refunds to Mirant Bowline for overpaid real property taxes totaling $96,000,000. The Bowline Remaining Refunds would remain free and clear of any liens, claims or encumbrances of any nature, including now existing debtor-in-possession credit facilities for the NY Debtors or creditors of and lenders to the New Mirant Entities. The Proposed Settlement would also establish a mechanism for: (a) the payment by Mirant Bowline of more than $22,000,000 of certain back taxes and other related settlement payments that are, or may be, due and owing to the Haverstraw Taxing Authorities, the Rockland County, and other tax jurisdictions; (b) the elimination of certain penalties and interest accrued on any back taxes; and (c) the dismissal of the tax certiorari proceedings related to the Bowline Facility assessments in accordance with that certain Stipulation of Settlement and Order to be entered by the NY Court. B. Lovett PILOT Agreement Structurally, the Proposed Settlement for the Lovett Facility would be identical to the Proposed Settlement for the Bowline Facility in that it would provide for a lease/leaseback transaction with the Agency. The Lovett Base Payments would be $7,000,000 for years one and two and $6,500,000 for years three through seven. Concurrently, the Proposed Settlement would establish a mechanism providing for: (i) the refund to Mirant Lovett of certain overpaid real property taxes totaling $12,900,000; and (ii) the payment of additional refunds to Mirant Lovett for overpaid real property taxes totaling $15,000,000. The Proposed Settlement would also establish a mechanism for: (a) the payment by Mirant Lovett of more than $13,000,000 in certain back taxes and other related settlement payments that are, or may be, due and owing to the Stony Point Taxing Authorities and the County; (b) the elimination of certain penalties and interest accrued on any back taxes; and (c) the dismissal of the tax certiorari proceedings related to the Lovett assessments in accordance with that certain Stipulation of Settlement and Order to be entered by the New York Court. Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on January 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. Shearman & Sterling LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 99; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services placed a 'B+' corporate credit rating on Mirant Corporation and said the outlook is stable. MIRANT CORP: Pirate Capital Wants Advisor Hired to Pursue Sale --------------------------------------------------------------- Pirate Capital LLC informed Mirant Corporation, in a letter dated June 12, 2006, that it intends to request for a special meeting of stockholders if Mirant has not publicly abandoned its bid to acquire NRG Energy Inc. and announced the engagement of an investment bank to pursue the prompt sale of the company by June 14, 2006. The purpose of the special meeting would be to: a) increase the size of the board of directors to fifteen members; b) elect six new directors to the board; and c) remove at least four of the nine incumbent directors. A copy of Pirate Capital's letter to the Board is available for free at http://researcharchives.com/t/s?b7b As reported in the Troubled Company Reporter on June 14, 2006, Mirant withdrew its proposal to acquire NRG Energy. NRG had earlier rejected Mirant's hostile offer and declined to enter into talks because the proposal allegedly undervalues NRG. Commenting on the NRG Deal, Mirant's Chairman and Chief Executive Officer, Edward R. Muller, said, "We are disappointed that NRG was unwilling to sit down with us to discuss what would have been a compelling opportunity to create significant value for both companies' shareholders. It is clear, however, that a long and contested pursuit is not in the best interests of Mirant and its shareholders and, as a result, we are withdrawing our proposal to acquire NRG. We will continue our efforts to create value for Mirant's shareholders." Pirate Capital, as the investment advisor to Jolly Roger Fund LP and Jolly Roger Offshore Fund LTD, is the beneficial owner of approximately 5 million shares, or 1.6%, of Mirant's common stock. About Mirant Corp. Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on January 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. Shearman & Sterling LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services placed a 'B+' corporate credit rating on Mirant Corporation and said the outlook is stable. MONTAUK POINT: Moody's Rates $5 Mil. Class C Secured Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned ratings to the notes issued by Montauk Point CDO II, Ltd. * Aaa to $340,000,000 Class A-1S Senior Secured Floating Rate Notes due 2046; * Aaa to $34,250,000 Class A-1J Senior Secured Floating Rate Notes due 2046; * Aa2 to $50,000,000 Class A-2 Senior Secured Floating Rate Notes due 2046; * Aa3 to $15,000,000 Class A-3 Senior Secured Floating Rate Notes due 2046; * A2 to $15,500,000 Class A-4 Secured Deferrable Floating Rate Notes due 2046; * Baa2 to $20,500,000 Class B Secured Deferrable Floating Rate Notes due 2046; * Ba2 to $5,000,000 Class C Secured Deferrable Floating Rate Notes due 2046; * Aaa $24,000,000 Combination Securities The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments as provided by the Notes' governing documents, and are based on the expected loss posed to holders relative to the promise of receiving the present value of such payments. The Moody's rating of the Combination Securities addresses the ultimate receipt of the initial Combination Securities Rated Balance, and is based on the credit quality of the Treasury Strip component of the Combination Securities. The Moody's rating of the Combination Securities does not address any other amounts payable in respect of the Combination Securities. Fortis Investment Management USA, Inc. will manage the selection, acquisition and disposition of collateral on behalf of the issuer. NADER MODANLO: Dist. Court Affirms Ch. 11 Trustee Appointment ------------------------------------------------------------- The Hon. Deborah K. Chasanow of the U.S. District Court for the District of Maryland affirmed the Bankruptcy Court's decision to appoint Christopher B. Mead as the chapter 11 trustee for Nader Modanlo's estate. Michael H. Ahan, co-equal owner of Final Analysis, Inc. and a creditor of the Debtor's estate, sought for the appointment of a chapter 11 trustee. The Debtor founded Final Analysis, an engineering company, with Ahan in the early 1990s. The two are embroiled in battle over the management of Final Analysis. Bankruptcy Judge Nancy V. Alquist found there was cause to appoint a trustee. Her reasons included "[T]he debtor's wearing of multiple hats and holding of multiple and perhaps conflicting duties to the creditors or shareholders of different companies as well as to the creditors of this estate; the debtor's lack of business operations and the licenses necessary to conduct those businesses; the inattention, neglect or other inappropriate treatment of the replevin action in this case that may have led to the loss o[r] diminution in value of this estate's largest assets; and the loss of confidence in the debtor by the creditor in this case and the U.S. Trustee. The Debtor made several challenges to the bankruptcy court's findings of mismanagement. The Debtor attempted to question many of the individual factual findings, but, according to District Court Judge Chasanow, the Debtor was unable to demonstrate that the bankruptcy court erred. The bankruptcy court did not abuse its discretion when it appointed a trustee in Debtor's Chapter 11 case, Judge Chasanow opined. Nader Modanlo of Potomac, Maryland, is the President of Final Analysis Communication Services, Inc. Mr. Modanlo filed for chapter 11 protection on July 22, 2005 (Bankr. D. Md. Case No. 05-26549). Joel S. Aronson, Esq., at Ridberg Sherbill & Aronson LLP, represents the Debtor. When the Debtor filed for protection from his creditors, he listed total assets of $776,237 and total debts of $106,002,690. Christopher B. Mead is the chapter 11 Trustee for the Debtor's estate. Richard M. Goldberg, Esq., at Shapiro Sher Guinot & Sandler, represent the chapter 11 trustee. NORTHWEST AIRLINES: AMFA To Provide Financial Support for Strike ---------------------------------------------------------------- The National Executive Council of the Aircraft Mechanics Fraternal Associations reported that their locals throughout the U.S. have voted unanimously to provide financial support indefinitely for AMFA's ongoing strike against Northwest Airlines. "The mechanics and related employees at our other airlines recognize that Northwest is attempting to implement a very risky and reckless business model by shifting most of their aircraft maintenance to foreign repair facilities and utilizing unlicensed labor to perform mechanics' work in this country," AMFA Assistant National Director Steve MacFarlane said. AMFA represents over 12,000 members at carriers including Alaska Airlines, United Airlines, Southwest Airlines, Northwest Airlines, ATA, Horizon and Mesaba Airlines. "Northwest still has a legal obligation to negotiate with AMFA in good faith and will not have a competent and reliable maintenance department until they settle with their striking employees," Mr. MacFarlane said. "This airline was mismanaged into bankruptcy, has the oldest fleet in the industry and came in dead last in 2005 for customer satisfaction. At some point, Northwest will need to become competitive again by improving quality, service and safety. As part of that effort, they'll need to upgrade their maintenance capabilities to match the rest of the industry. We'll be ready to talk when that time comes." The National Executive Council of the Aircraft Mechanics Fraternal Associations -- http://www.amfanatl.org/-- is the nation's largest union representing aircraft mechanics and related employees. AMFA's credo is "Safety in the air begins with Quality Maintenance on the Ground". About Northwest Airlines Northwest Airlines Corporation (OTC: NWACQ) -- 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. NVE INC: Court Extends Exclusive Plan Filing Period to August 15 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey extended, until Aug. 15, 2006, NVE Inc.'s time to file a chapter 11 plan of reorganization. The Court also extended, until Oct. 15, 2006, the Debtor's time to solicit acceptances of that plan. The Debtor tells the Court that it has reached an agreement on a claims resolution process with the Official Committee of Unsecured Creditors and other parties. Under that claim resolution process, the universe of claims against the Debtor will be fixed in approximately 60 days, after which the product liability claimants will be required to submit substantial backup documentation to the Debtor and certain Plaintiff representatives. The Debtor says that the parties intend to use the information obtained in the context of a global mediation of all claims. The Debtor reminds the Court that it has already filed a motion for the Court to approve the agreement and will also file a motion for the appointment of a mediator and sharing of the expenses of mediation. The Debtor contends that until the claims resolution process and the global mediation has progressed further, it will be unable to file a meaningful chapter 11 plan. The Debtor hopes that the claims resolution and mediation process will result in agreements that will be incorporated in the plan. Headquartered in Andover, New Jersey, NVE Inc., dba NVE Pharmaceuticals, Inc., manufactures dietary supplements. The Debtor is facing lawsuits about its weight-loss products which contain the now-banned herbal stimulant, Ephedra. The Company filed for chapter 11 protection on August 10, 2005 (Bankr. D. N.J. Case No. 05-35692). Daniel Stolz, Esq., Leonard C. Walczyk, Esq., Michael McLaughlin, Esq., and Steven Z Jurista, Esq., at Wasserman, Jurista & Stolz, represent the Debtor in its restructuring efforts. Derek John Craig, Esq., at Brown Raysman Millstein Felder & Steiner LLP, and David J. Molton, Esq., at Brown Rudnick Berlack Israels LLP, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $10,966,522 in total assets and $14,745,605 in total debts. NVE INC: Gets Court Approval to Hire Atkins Appraisal as Appraiser ------------------------------------------------------------------ NVE Inc. obtained permission from the U.S. Bankruptcy Court for the District of New Jersey for permission to employ A. Atkins Appraisal Corporation, as its independent appraiser. Atkins Appraisal will: a) conduct a physical inventory and appraisal of the Debtor's physical assets; and b) provide the Trustee with a written appraisal report. Alan Atkins will bill at $200 per hour for his services. Mr. Atkins discloses that the firm's professionals bill: Designation Hourly Rate ----------- ----------- Senior Appraiser $175 Staff Member $100 Mr. Atkins assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Andover, New Jersey, NVE Inc., dba NVE Pharmaceuticals, Inc., manufactures dietary supplements. The Debtor is facing lawsuits about its weight-loss products which contain the now-banned herbal stimulant, Ephedra. The Company filed for chapter 11 protection on August 10, 2005 (Bankr. D. N.J. Case No. 05-35692). Daniel Stolz, Esq., Leonard C. Walczyk, Esq., Michael McLaughlin, Esq., and Steven Z Jurista, Esq., at Wasserman, Jurista & Stolz, represent the Debtor in its restructuring efforts. Derek John Craig, Esq., at Brown Raysman Millstein Felder & Steiner LLP, and David J. Molton, Esq., at Brown Rudnick Berlack Israels LLP, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $10,966,522 in total assets and $14,745,605 in total debts. NVF CO: Panel Has Until Aug. 31 to Question Lien on DIP Loan ------------------------------------------------------------ The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware gave the Official Committee of Unsecured Creditors appointed in NVF Co. and its debtor-affiliates' chapter 11 cases until August 31, 2006, to question the lien granted to Victor Posner. Mr. Posner is the Debtors' sole equity owner. The Court gave the Debtors permission to borrow as much as $4 million from Mr. Posner. Mr. Posner's claim against the Debtors' estate was granted superpriority status. The Debtors said they need the DIP funds to continue making their traditional products and commence the production of a new vulcanized fiber product known as "Yorkite Veneer." Based in Yorklyn, Delaware, NVF Company -- http://www.nvf.com/-- manufactures thermoset composites (glass, Kevlar), vulcanized fiber, custom containers, circuitry materials, custom fabrication, and welding products. The Company along with its wholly owned subsidiary, Parsons Paper Company, Inc., filed for chapter 11 protection on June 20, 2005 (Bankr. D. Del. Case Nos. 05-11727 and 05-11728). Rebecca L. Booth, Esq., at Richards, Layton & Finger, P.A., represents the Debtors in their restructuring efforts. Elizabeth A. Wilburn, Esq., and Jason W. Staib, Esq., at Blank Rome LLP represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets between $10 million to $50 million and estimated debts of more than $100 million. ORIENTAL TRADING: Carlyle Group Merger Cues S&P's Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B+' corporate credit rating, on Omaha, Nebraska-based direct marketer Oriental Trading Co. Inc. on CreditWatch with negative implications. This rating action follows the announcement that the company will be acquired by The Carlyle Group. "Although terms of the transaction have not been disclosed, we believe the transaction is likely to result in a weaker financial profile for Oriental Trading due to the potential for additional debt on the company's capital structure," said Standard & Poor's credit analyst Ana Lai. "We will resolve the CreditWatch listing after a meeting with management and a review of the company's new capital structure and financial policy." OWENS CORNING: Longacre Agrees to Cut Unsecured Claim to $696,215 ----------------------------------------------------------------- Arkema Inc., formerly known as Atofina Chemicals, Inc., filed Claim No. 6994 for $2,049,892 against Owens Corning and its debtor-affiliates. On Dec. 15, 2004, the Claim was transferred to Longacre Master Fund, Ltd. The Debtors and Longacre held certain discussions concerning the allowed amount and status of the Claim. In a stipulation, the parties agree that the Claim will be allowed against Owens Corning as a general unsecured non-priority claim for $696,215. Additionally, the parties agree to allow the Claim against Exterior Systems, Inc., as a general unsecured non-priority claim for $1,214,552. Except as to the stipulated allowance, the Claim will be deemed disallowed in its entirety. Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 131; Bankruptcy Creditors' Service, Inc., 215/945-7000). OWENS CORNING: Asks Court to Approve Rights Offering Procedures --------------------------------------------------------------- One of the key components of the Sixth Amended Plan of Reorganization filed by Owens Corning and its debtor-affiliates is the rights offering where some holders in Classes A5, A6-A and A6-B will be offered the opportunity to subscribe for 72,900,00 shares of the New OCD Common Stock at $30 per share. As previously reported, the Debtors entered into an Equity Commitment Agreement with J.P. Morgan Securities Inc. to facilitate the Rights Offering. In connection with the implementation of the Rights Offering, Owens Corning has agreed to distribute a set of instructions outlining the process and terms and conditions of the Rights Offering and a related subscription acceptance form. The Debtors ask the U.S. Bankruptcy Court for the District of Delaware to approve their proposed rights offering subscription procedures, distribution procedures and forms of certain subscription documents. Rights Offering Procedures A. "Eligible Claim" and "Eligible Holder" In accordance with the Sixth Amended Plan, the Rights Offering will be made to "Eligible Holders" of "Eligible" claims in Classes A5, A6-A and A6-B, rather than simply to allowed claims in those classes. For purposes of the Rights Offering, the Debtors propose these criteria for determination of Eligible Claims and Eligible Holders entitled to participate in the Rights Offerings: a. An "Eligible" claim will mean: -- an allowed claim, as of the Rights Offering Record Date, in Classes A5, A6-A or A6-B; -- all Claims in Class A5, which will be deemed to be $1.389 billion in the aggregate for purposes of the Rights Offering; and -- any Claim for which a proof of claim has been filed as non-contingent, undisputed and liquidated and: * if an objection to the proof of claim has been filed, then the claim will only be "Eligible" to the extent of any undisputed portion; or * if an objection to the claim has not been filed and no amount is reflected in the Debtors' schedules of assets and liabilities but Owens Corning does not dispute all or a portion of the claim amount, then the claim will only be "Eligible" to the extent of its undisputed portion; or * if an objection to the claim has not been filed and the corresponding claim listed in the Debtors' Schedules is different than the amount asserted in claim and the Court has not entered an order to the contrary, then the claim will only be "Eligible" to the extent of the lesser of the amounts listed on the Schedules and the claim, unless Owens Corning does not dispute all or a portion of the claim amount, in which case the undisputed portion will be the amount of the "Eligible" Claim for purposes of participation in the Rights Offering. b. An "Eligible Holder" will mean the holder of an Eligible Claim, solely in its capacity as the holder of an Eligible Claim. B. Rights Participation Amount The Debtors further propose that the Eligible Holders in Classes A6-A and A6-B will be assigned a "Rights Participation Amount" which will be used to determine the maximum number of shares for which they may subscribe. To assist the Eligible Holders to determine their Rights Participation Amounts and to provide them with a reasonable opportunity to review and respond to the amounts, the Debtors prepared a list of the Rights Participation Amount for each Eligible Holder of a claim in Classes A6-A and A6-B. A full-text copy of the List of the Rights Participation Amount is available for free at http://ResearchArchives.com/t/s?b85 If any holder of a claim in Classes A6-A or A6-B disputes the Rights Participation Amount, the holder must file a written objection no later than 4:00 p.m. Eastern Time on June 29, 2006. All holders of claims in Classes A6-A and A6-B will be bound by the Rights Participation Amounts unless they timely file an objection and the Court enters an order modifying the Rights Participation Amount. With respect to a small number of claims in Classes A6-A and A6-B, the Debtors dispute the amount of the claim submitted by the holder, but acknowledge that some amount may be owed. In those instances, the Debtors have listed the Rights Participation Amounts at zero to avoid making any admission as to liability and the value of the claim. The holders of those claims who wish to participate in the Rights Offering may file an objection. With respect to Class A5, all holders of OCD Bondholders Claims are treated as Eligible Holders. The Debtors estimate that the aggregate amount of claims in Class A5 is around $1.389 billion for purposes of the Rights Offering. However, there are various face amounts and accrued interest amounts for each issuance of bonds in Class A5. Therefore, the Debtors and their financial advisor Lazard Freres & Co. LLC developed a formula to determine each Class A5 Eligible Holder's "Rights Participation Amount" that is linked to the principal amount of the particular bond in question. The Right Participation Amount for each issuance will be divided by the aggregate Rights Participation Amounts of all Eligible Holders in Classes A5, A6-A and A6B to produce a "Pro Rata Multiplier." The maximum number of Rights Offering Shares allocated to each issuance will be determined by multiplying the Pro Rata Multiplier by the total number of available Rights Offering Shares for Classes A5, A6-A and A6-B. The holders of bonds within a particular issuance will then be entitled to subscribe for their Pro Rata share of the maximum number of Rights Offering Shares allocated to their issuance. The Rights Participation Amounts and Maximum Share Amounts for Eligible Holders of Claims in Class A5 will be calculated by the Debtors wherever possible and will be listed on the appropriate Subscription Acceptance Form. The formula to determine the Maximum Share Amount for Classes A6-A and A6-B is similar to that for Class A5. The holder's Rights Participation Amount will be divided by the aggregate number of all Rights Participation Amounts for Classes A5, A6-A and A6-B to produce a Pro Rata Multiplier. The Pro Rata Multiplier will then be multiplied by the total number of Rights Offering Shares, with the resulting number being rounded down to the next lowest whole number, which will be the Maximum Share Quantity. The Debtors currently estimate that the Maximum Share Amount will be approximately 42 Rights Offering Shares per $1,000 of Rights Participation Amount. Eligible Holders may subscribe for any number of Rights Offering Shares up to the Maximum Share Quantity at the price of $30 per share. The Debtors will provide each Eligible Holder with a set of the Instructions that includes a step-by-step formula to be used to determine the Subscribed Share Quantity and the Total Purchase Price. C. Subscription Acceptance Form To validly exercise its right to participate in the Rights Offering, once each Eligible Holder determines its Subscribed Share Quantity and Total Purchase Price, it must also complete and execute a "Subscription Acceptance Form." Each Subscription Acceptance Form: -- identifies the Eligible Holder; -- provides a table to assist the Eligible Holder in calculating its Total Purchase Price; -- contains a certification that the signatory is authorized to execute the form on behalf of the Eligible Holder, that the Eligible Holder is authorized to participate in the Rights Offering and agrees to be bound by the terms of the Subscription Acceptance Form and Instructions; and -- contains certain other standard acknowledgments relative to potential securities laws and related exculpation issues. To validly exercise its right to participate in the Rights Offering, each Eligible Holder of a Class A5 Claim must return a duly executed Subscription Acceptance Form to Financial Balloting Group LLC and tender the Total Purchase Price to Owens Corning before 2:00 p.m. Pacific Time on the same day as the Plan Voting Deadline -- Subscription Expiration Time. Each Eligible Holder of a Class A6-A and A6-B Claim must return a duly executed Subscription Acceptance Form to Omni Management Group LLC and tender the Total Purchase Price to Owens Corning before the Subscription Expiration Time. The Debtors intend to provide Each Eligible Holder with instructions outlining the general terms and conditions under which the Rights Offering is being made. Distribution Procedures The Debtors also propose procedures that govern the distribution of the Subscription Documents to each of the Eligible Holders in Classes A5, A6-A and A6-B. Because Class A5 is comprised of nine different issuances of Prepetition Bonds that are held in different manners, special Instructions and Subscription Acceptance Forms are required for each type of issuance. In addition to procedures relating to Classes A6-A and A6-B, the Debtors came up with three different distribution procedures for Class A5 to accommodate the different manner in which the Prepetition Bonds are held: A. Class A5 1. Registered Bondholder The Subscription Documents for Eligible Holders in Class A5 will be sent directly to the Prepetition Bonds' registered owners that are identified in the Debtors' books and records as of the Rights Offering Record Date. If those holders wish to participate in the Rights Offering, they must complete and return their Subscription Acceptance Forms directly to the Financial Balloting Group and make their subscription payments directly to Owens Corning. 2. Street Name Bond The Financial Balloting Group will also act as agent in connection with the Rights allocated with respect to any bonds held in street name through the Depository Trust Company. The Debtors expect that DTC will allocate the Rights through its Automated Subscription Offer Program in accordance with the Pro Rata Multiplier for each issuance of bonds. A sufficient number of Subscription Documents will be provided to the Nominees. The Nominees will then distribute the Subscription Documents to the beneficial holders of the Prepetition Bonds. If the beneficial holders wish to participate in the Rights Offering, they must return their properly completed Subscription Acceptance Form to their Nominees, in turn, will submit instructions through ASOP, and DTC will provide ASOP instructions to the Financial Balloting Group and will arrange for proper payment to Owens Corning. 3. Bearer Bond With respect to Eligible Holders in Class A5, the Debtors are unaware of the identities of most of the holders. Therefore, the Debtors plan to provide publication notice regarding the Rights Offering so that the holders will have notice of the Rights Offering and instructions on where to obtain the Subscription Documents. The holders of the bearer bonds must return the applicable Subscription Acceptance Document to Financial Balloting Group, deposit their bonds in an acceptable depositary and transfer the subscription payment directly to Owens Corning. B. Classes A6-A and A6-B With respect to the Eligible Holders in Classes A6-A and A6-B, the Subscription Documents will be sent directly to each Eligible Holder in this category. The holders must return the applicable Subscription Acceptance Form to Omni Management and transfer the subscription payment directly to Owens Corning. Form of Subscription Documents The Debtors will provide each Eligible Holder in Classes A5, A6-A and A6-B with (a) a set of Instructions and (b) a Subscription Acceptance Form. The Debtors believe that their proposed forms of Subscription Documents are: -- fair and reasonable; -- fairly designed to enable an Eligible Holder to determine whether or not to exercise its Rights to participate in the Rights Offering; -- consistent with other documents approved in other large chapter 11 cases. The Debtors seek the Court's permission to distribute the Subscription Documents to Eligible Holders together or concurrently with the Solicitation Packages, if necessary, or at a later time prior to the Effective Date as may be deemed appropriate by the Debtors, the other Plan Proponents and J.P. Morgan. Given the nature of the Subscription Documents, the Debtors further ask the Court to supplement the Solicitation Procedures Motion to: -- include the procedures for distributing the Subscription Documents to Eligible Holders concurrently with the Solicitation Packages in the solicitation procedures, if and as necessary; -- include the procedures for determining the extent to which the holders of claims in Classes A5, A6-A and A6-B that have not yet been determined to be Allowed Claims may participate in the Rights Offering; and -- permit the Debtors to distribute the forms of the Subscription Documents in accordance with those procedures. About Owens Corning Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 132; Bankruptcy Creditors' Service, Inc., 215/945-7000). OWENS CORNING: Can Hire American Appraisal as Valuation Consultant ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware gave Owens Corning and its debtor-affiliates permission to employ American Appraisal Associates, Inc., as their valuation consultants, nunc pro tunc to Feb. 10, 2006. The Debtors need American Appraisal to provide valuation services required to assist them in achieving compliance with some Financial Accounting Standards Board regulations. In preparation for their emergence from Chapter 11, the Debtors are required to value the assets and liabilities of each of their operating units at fair market value, as of the date of emergence. American Appraisal is expected to: a. assist Owens Corning in meeting its financial reporting requirements for fresh start accounting by providing an independent and objective opinion of the fair market value of tangible and intangible assets by operating segments; b. analyze the Assets, including, but not limited to researching relevant economic, industry and company specific factors, conduct site visits and interviews, determine preliminary asset values, and allocate asset values to operating segments and reporting units; c. prepare, present and deliver preliminary reports and issue final reports; d. assist with the preparation fresh start balance sheets and impairment testing by reporting unit; e. assist with data management and SAP conversion; and f. perform all other necessary services to the Debtors in connection the fresh start accounting and the appraisal of the Assets. American Appraisal's hourly billing rates are: Senior Vice President $650 Managing Principal $575 Principal $450 Engagement Director $325 Senior Appraiser $275 Staff Appraiser $225 Associate Appraiser $150 Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 129; Bankruptcy Creditors' Service, Inc., 215/945-7000). OWENS-ILLINOIS: S&P Puts BB- Rating on Proposed $250 Million Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating and its recovery rating of '2' to Owens-Illinois Inc.'s proposed $250 million senior secured term loan D due 2013. The ratings are based on preliminary terms and are subject to review of final documentation. The rating on the proposed term loan D is the same as the corporate credit rating; this and the recovery rating of '2' indicate that lenders can expect substantial recovery of principal in the event of a payment default. Additional changes in the proposed credit facilities include an increase to the company's proposed senior secured revolving credit facility to $900 million from $850 million, and a decrease in the proposed term loan B to $200 million from $300 million. Proceeds from the term loan D will be used to repay the existing credit facilities and proceeds from the term loan B will be used to repay a portion of the existing senior secured notes due 2009. The bank loan rating on Owens-Illinois' proposed $1.7 billion senior secured bank facilities is 'BB-' and the recovery rating is '2', indicating our expectation of substantial recovery of principal in the event of a payment default. The corporate credit rating on Owens-Illinois is 'BB-'. The rating outlook is negative. Toledo, Ohio-based Owens-Illinois' total debt was $5.3 billion at March 31, 2006. "The ratings on Owens-Illinois and related entities reflect its highly leveraged financial profile, subpar credit measures, and meaningful concerns regarding its asbestos liability. These factors are partially offset by a satisfactory business position and attractive profitability," said Standard & Poor's credit analyst Liley Mehta. Ratings List: Owens-Illinois Inc.: Corporate credit rating: BB-/Negative/-- $250 million sr secured term loan D: BB- (Recovery rtg: 2) Senior secured credit facilities*: BB- (Recovery rtg: 2) Senior unsecured debt*: B Preferred stock: B- Owens-Brockway Glass Container Inc.: Senior secured notes: BB- (Recovery rtg: 2) * Guaranteed by Owens Illinois Group Inc. PARMALAT USA: Court Okays Pact Allowing Liberty's $347,625 Claim ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the stipulation between Farmland Dairies LLC, a Parmalat USA Corporation debtor-affiliate, and Liberty Mutual Group allowing Liberty's claim against the Debtor. Liberty asserted Claim No. 365 against Farmland for $259,577. The Farmland Unsecured Creditors' Trust objected to the Claim. Subsequently, Liberty filed Claim No. 1038 for $347,625, amending Claim No. 365. The Farmland Trust and Liberty stipulate that in complete satisfaction of the Claims, Liberty will be allowed a $347,625 general unsecured claim against Farmland. The Trust withdraws with prejudice its Claim Objection. Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. (Parmalat Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., 215/945-7000) PLIANT CORP: Former CEO & Chairman Durham Objects to Ch. 11 Plan ---------------------------------------------------------------- On June 10, 2004, Richard P. Durham and Pliant Corporation and its debtor-affiliates entered into a separation agreement terminating Mr. Durham's employment as the Debtors' chief executive officer and chairman of the Board of Directors. Mr. Durham is now the manager of Durham Capital, LLC. Pursuant to the terms of his separation agreement and employment agreement, Mr. Durham exercised a put option that obligated the Debtors to pay for the outstanding capital stock and other equity interests he owned. The Debtors were not able to pay the full amount then owing to Mr. Durham as a result of his exercise of the put option due to restrictions imposed by certain covenants in their credit facilities. According to Mr. Durham, the Debtors owe him $11,747,513. Mr. Durham timely filed a proof of claim asserting a general unsecured claim for the Payment Obligation. Mr. Durham, through Durham Capital, also holds an additional 4,833 shares of common stock, which are subject to a non-recourse promissory note of $2,430,798, dated May 31, 2000, and which were pledged by the Debtors to their lenders under the terms of their credit facility. Mr. Durham notes that the Debtors' Plan of Reorganization provides, in pertinent part, that "any Claim arising from the exercise of put or repurchase rights shall be subordinated pursuant to section 510(b) of the Bankruptcy Code as Class 11 Outstanding Common Stock Interests." Under the Plan, allowed Class 11 interests are to receive a Pro Rata share of New Equity Common Stock. The Plan further provides that "[e]ach Holder of an Allowed Outstanding Common Stock Interest resulting from the subordination under section 510(b) of the Bankruptcy Code of a Claim shall be only entitled to receive a distribution of New Equity Common Stock in respect of the capital stock held by such Holder that is related to such Claim." Mark Minuti, Esq., at Saul & Ewing LLP, in Wilmington, Delaware, argues that confirmation of the Debtors' Chapter 11 Plan should be denied because the Plan: (1) improperly attempts to limit the Durham Claim as subordinated; (2) cannot alter Durham's defenses to the Debtors' Claims, if any; and (3) may not be feasible. Section 510(b) permits, under certain circumstances, the subordination of claims, but there is no provision of the Bankruptcy Code which would permit the Debtors to alter or dilute the value of the Durham Claim once subordinated, Mr. Minuti contends. If the Claim is subordinated under Section 510(b), then Mr. Durham is entitled to share in the Class 11 distributions based on the value of the Claim and not based on the number of shares of stock repurchased, but not paid for, by the Debtors. The Plan, therefore, has not been proposed in good faith and violates Sections 1129(a)(l), (2) and (3) of the Bankruptcy Code, Mr. Minuti asserts. Mr. Minuti further argues that while the subordination of Mr. Durham's Claim is a condition to the Plan going effective, the Plan provides the Debtors with the ability to waive this condition. When the Debtors fail to subordinate the Durham Claim, and in the unlikely event that the Debtors were to waive this condition, it is not at all clear how the Debtors will pay the Durham Claim in full, Mr. Minuti says. Headquartered in Schaumburg, Illinois, Pliant Corporation -- http://www.pliantcorp.com/-- produces value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Debtor and 10 of its affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy counsel. The Ontario Superior Court of Justice named RSM Richter, Inc., as the Debtors' information officer in their restructuring proceeding under Companies Creditors Arrangement Act in Canada. Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C., serves as counsel to the Official Committee of Unsecured Creditors. Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is local counsel to the Creditors' Committee. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. (Pliant Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) PORCH & PATIO: Anticipates Ct. Approval of Continued Sale Funding ----------------------------------------------------------------- Parties involved with the Chapter 11 bankruptcy case of Porch & Patio, Inc., confirmed that the U.S. Bankruptcy Court for the District of Connecticut in New Haven is expected to approve an order for the ongoing use of funds required to continue Porch & Patio's going out of business sale. The Court's approval is important because without such an order, the Debtor would not be authorized to spend its funds to conduct the sale. Parties familiar with the case report that the secured lender, the Attorney General and the U.S. Trustee are all expected to support the continuation of the funding for the going out of business sale. With an inventory valued at approximately $2 million, the Debtor's management and secured lender knew that there was a good inventory of porch and patio furniture to liquidate at this going out of business sale. The challenge was "to structure the sale in a way that would allow the company to offer the best value to the public and the company's creditors while offering the greatest protection for consumers." explained Porch & Patio's lead bankruptcy counsel, Myles Alderman. Inventory has been selling faster than initially anticipated and public response to the sale has been very positive. The Debtor's president, Ben Fronsaglia commented "I think that the great public response to this sale shows what can happen when a retailer with a quality product works with the state and federal authorities to structure a bankruptcy sale that can deliver true value." Porch & Patio's entire inventory of outdoor furniture and fireplace accessories is on sale from 10:00 a.m. to 7:00 p.m., Mondays through Saturdays, and from 12:00 noon to 5:00 p.m. on Sundays. The Debtor's stores are located at: a) 363 Post Road, Rt. 1 Orange, Connecticut (at exit 41 off I-95) Phone: (203) 795-4599 b) 898 Silas Deane Highway, Rt. 99 Wethersfield, Connecticut Phone: (860) 513-4599. "Everything in the stores is being sold at no less than 40% off the manufacturer's suggested retail price. All kinds of furniture, fireplace accessories and patio sets will be on sale," said Mr. Fronsaglia. Consumers with deposits on furniture at Porch and Patio were able to bring their receipts to the Porch & Patio store in Wethersfield or Orange, CT. If the furniture for which they placed a deposit was available, their purchase was completed and they picked up their furniture. Consumers that made deposits for furniture that was not available were given the choice of a store coupon for 50% of their deposit, or filing a proof of claim. The majority chose to accept coupons that they could use to purchase other product on sale. About Porch & Patio With retail locations in Wethersfield and Orange, Connecticut, Porch and Patio, Inc. -- http://www.porchandpatio.com-- manufactured high-quality outdoor and casual furniture and accessories. The Company filed for chapter 11 protection on May 5, 2006, (Bankr. D. Conn. Case No. 06-30626). Myles H. Alderman, Jr., Esq., at Alderman & Alderman represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated its assets and debts at $1 to $10 million. PROVIDENTIAL HOLDINGS: Forms Unit for Western Medical Purchase -------------------------------------------------------------- Providential Holdings Inc. (OTCBB:PRVH) formed "Providential Western Medical Inc.," a wholly owned subsidiary of the company, for the acquisition of key assets of Western Medical Inc., an Arizona corporation engaged in the business of selling durable medical equipment and providing related services, with headquarters in Phoenix and locations in Prescott and Tucson, Ariz. According to the asset purchase agreement signed by both companies on June 2, 2006, Providential Holdings will purchase key assets, valued at approximately $15 million, of Western Medical Inc. for $5.25 million in cash. As reported in the Troubled Company Reporter on June 9, 2006, Western Medical is expected to file a Chapter 11 Petition shortly following the execution of the asset purchase agreement and move for the authority to sell the assets to Providential and provide for the assumption and assignment of certain executory contracts to Providential under the terms of the agreement. Both companies understand such sale will be subject to higher and better bids that may be asserted and approved by the Bankruptcy Court. The closing of this transaction is subject to the approval of the Bankruptcy Court and other conditions as described in the asset purchase agreement, and is expected to occur on an agreed-upon date no later than 10 business days following entry of a final Sale Order by the Bankruptcy Court. About Providential Basedin Huntington Beach, California, Providential Holdings, Inc. (OTCBB:PRVH) -- http://www.phiglobal.com/-- specializes in mergers and acquisitions and invests in international markets. The Company acquires and consolidates special opportunities in selective industries to create additional value, acts as an incubator for emerging companies and technologies, and provides financial consultancy and M&A advisory services to U.S. and foreign companies. * * * Going Concern Doubt As reported in the Troubled Company Reporter on Dec. 14, 2005, Kabani & Company, Inc., raised substantial doubt about Providential Holdings, Inc.'s ability to continue as a going concern after it audited the Company's financial results for the year ended June 30, 2005. The auditors pointed to the Company's accumulated deficit and losses in the years ended June 30, 2005, and 2004. At March 31, 2006, the Company's balance sheet showed accumulated deficit of $18,970,157. The company posted a $186,050 net loss for the period ended March 31, 2006. PWB MILLWORKS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: PWB Millworks, LLC 6175 Hickory Flat Highway, Suite 110-354 Canton, Georgia 30115 Bankruptcy Case No.: 06-66877 Chapter 11 Petition Date: June 14, 2006 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Lawrence E. Burke, Esq. Lawrence E. Burke, P.C. 367 Atlanta Street Marietta, Georgia 30060 Tel: (770) 421-1297 Fax: (770) 218-5525 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. RADIOLOGIX INC: Moody's Pares Rating on $160 Mil. Sr. Notes to B3 ----------------------------------------------------------------- Moody's Investors Service downgraded Radiologix, Inc.'s credit ratings, concluding a rating review initiated on February 16, 2006. Following this rating action, the outlook is negative. Ratings downgraded: * $160 million, 10.5% senior unsecured notes due 2008, to B3 from B2 * Corporate Family Rating, to B2 from B1 * The ratings outlook is negative. The downgrades primarily reflect Moody's expectation that the company will experience material reductions in revenues and cash flows as a result of forthcoming changes in Medicare reimbursements for its diagnostic imaging services. The impact of the Medicare changes will be substantial given that roughly 26% of RGX's payor mix is derived from Medicare and that it is exclusively a non-hospital based, fixed-site provider, with all of the sites receiving current reimbursements for the technical component under the Medicare Part B schedule. This, combined with the expectation of significant capital expenditures required to remain competitive, is reflected in the B2 corporate family rating and underscored by the negative ratings outlook. On Feb. 8, 2006, the Deficit Reduction Act of 2005 was passed, which provides that reimbursement for the technical component of imaging services in non-hospital based freestanding facilities will be capped at the lesser of the Medicare Part 'B' Physician Fee Schedule or the Hospital Outpatient Prospective Payment System. Services impacted by this portion of the legislation will exclude diagnostic and screening mammography. The new rules will go into effect on Jan. 1, 2007. Changes in Medicare reimbursement for imaging services under the DRA will also result in the reduction in reimbursement for multiple images on contiguous body parts. Currently, Medicare reimburses at a level of 100% of the technical component of each procedure. Under the new rules, Medicare will pay 100% of the technical component of the higher priced imaging procedure with payments for additional scans performed on contiguous body parts to be reduced by 25% for 2006 and 50% for 2007 and beyond. Moody's estimates that the implementation of the contiguous body part portion of the DRA changes will negatively impact revenues, cash flows and pre-tax earnings by at least $5 million during 2006 and 2007. In addition, Moody's anticipates that the fee schedule changes mandated by the DRA will unfavorably impact sales, cash flows and earnings by $12 million or more in 2007. The negative outlook reflects Moody's expectation that the company's revenues and cash flow will come under further pressure as a consequence of the DRA changes. Ten percent of the company's managed care revenues are linked to the Medicare fee schedule, hence this payor group may be expected to move reimbursement levels down gradually as contracts come up for renewal, in tandem with the Medicare cuts. In addition, other managed care providers may adjust their reimbursements in parallel to the new Medicare changes. Further downward rating pressure could develop if there is a decline in the company's ratio of adjusted free cash flow to debt below roughly 2% or if the ratio of adjusted total debt to EBITDA increases above 6x. Upward rating pressure could materialize if the ratio of adjusted free cash flow to debt improves within a range of 5% to 10% or if the ratio of adjusted total debt to EBITDA drops below 4.5x or if the DRA changes are in some way modified or repealed. RGX is a leading provider of diagnostic imaging services, owning and operating multi-modality diagnostic imaging centers that use advanced technologies such as positron emission tomography, magnetic resonance imaging, computed tomography and nuclear medicine, as well as other modalities. RGX owned or operated 71 diagnostic imaging centers across 7 states as of Dec. 31, 2005. For the twelve months ended March 31, 2006, the company recognized revenue of roughly $254 million. REFCO INC: Chapter 11 Trustee Wants Rule 2004 Request Denied ------------------------------------------------------------ Marc S. Kirschner, the Chapter 11 trustee of the estate of Refco Capital Markets, Ltd., asks The Hon. Robert Drain of the United States Bankruptcy Court for the Southern District of New York to deny Russia Growth Fund, Ltd.'s request for a Rule 2004 examination on RCM. Mr. Kirschner contends that Russia Growth's request for customer- specific information regarding its account at RCM implicates "Estate Property Issue". The request for discovery is also contrary to the Bankruptcy Court's order staying "Estate Property Issue" proceedings. To the extent Russia Growth's request for information related to a prepetition margin call does not technically fall within the scope of the Stay Order, the Court should exercise its discretion to deny the request at this time, Mr. Kirschner says. Mr. Kirschner explains that he continues to be mired with the review of the RCM case. The review includes analysis of complex claims by and against each of the debtor entities as well as analysis in respect of issues relevant to assisting with the development of a plan of reorganization. As RCM's books and records reflect thousands of separate accounts, Mr. Kirschner fears that allowing Russia Growth to conduct discovery will cause the RCM estate to be inundated with similar discovery requests. Mr. Kirschner says those requests, on a case-by-case basis, would significantly impair his ability to evaluate the RCM estate rationally and otherwise continue efforts to develop an acceptable reorganization plan. The Chapter 11 trustee also notes that Russia Growth's request was initially scheduled for hearing in January 2006. Prior to the Initial Hearing, the Refco Debtors provided Russia Growth (i) access to an electronic data room and (ii) courtesy copies of certain e-mail correspondence related to a prepetition margin call and a statement of Russia Growth's account. Since the Initial Hearing Date, the Debtors have provided additional information to Russia Growth as a courtesy. Rule 2004 Request Russia Growth Fund, Ltd. is a hedge fund that since 1995, has maintained an account consisting of cash and securities with Debtor RCM Capital Management, Inc. David Wander, Esq., at Wander & Associates, P.C., in New York, tells the Court that Russia Growth actively trades its account, and many of the trades include the sale of put options. Based on various trades relating to put options that were in place as of the Petition Date, various securities should have been delivered to the RGF Account on the third Friday in October, November and December 2005. Mr. Wander adds that there is also a margin account associated with the RGF Account. Immediately prior to RCM Capital's self- imposed trading moratorium two weeks before the Petition Date, Russia Growth was instructed by an RCM Capital account executive to provide an additional $1,000,000 in its margin account, as requested from RCM Capital's credit department. Although Russia Growth was unaware of any margin calls at that time and did not understand the need for the additional funds, nonetheless, it wired an additional $650,000 to RCM Capital for the RGF Account. By Nov. 28, 2005 letter, Russia Growth asked the Debtors to obtain whatever information they have regarding RCM Capital's request that RGF wire an additional $1,000,000 to the margin account and to preserve any related documentation. Russia Growth also inquired whether a similar request for additional funds to a margin account was made around the same time to any other RCM Capital customers. Pursuant to Bankruptcy Rule 2004, Russia Growth asked Judge Drain to: (a) direct the examination of RCM; and (b) require the Debtors to produce certain documents pertaining to the RGF Account, specifically: -- RCM' Capital's request for additional funds to Russia Growth's margin account shortly before RCM Capital's self-imposed trading moratorium in October 2005; -- any postpetition trading activity relating to the RGF Account; -- the delivery of securities relating to put options in place before the Petition Date; and -- the manner in which RCM Capital has credited the postpetition increase in the net portfolio value of the RGF Account, as well as the specific securities in the account. Mr. Wander maintains that Russia Growth only seeks a very limited examination of RCM, notwithstanding the broad and unfettered scope of Bankruptcy Rule 2004. 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. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000). REFCO INC: Official Creditors Committee Inks Settlement with BAWAG ------------------------------------------------------------------ Following arm's-length and good-faith negotiations conducted in New York, London, and Vienna, the Official Committee of Unsecured Creditors appointed in Refco Inc. and its debtor-affiliates chapter 11 cases, BAWAG P.S.K. Bank fuer Arbeit und Wirtschaft und Oesterreichische Postsparkasse Aktiengesellschaft, and the Debtors and their subsidiaries reached an agreement in principle to settle the adversary proceeding commenced against certain of the Debtors and third parties, including the Creditors Committee's counterclaim against BAWAG. The complaint asserted claims relating to BAWAG's loan of approximately $430,000,000 to the Phillip R. Bennett Three Year Annuity Trust, Refco Group Holdings Inc., and other alleged entities, on October 10, 2005. The terms of the settlement agreement were put on record in a sealed courtroom on May 1, 2006, and subsequently memorialized in a proposed stipulation. Integrated Settlement with USAO Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, tells the U.S. Bankruptcy Court for the Southern District of New York that the Proposed Settlement was inextricably intertwined with resolution of the competing interests of the Office of the United States Attorney for the Southern District of New York. Contemporaneous with the execution of the Stipulation, the USAO entered into a Non-Prosecution Agreement with BAWAG and its shareholders, composed of: (i) Anteilsverwaltung BAWAG P.S.K. Aktiengesellschaft, which directly or indirectly owns 100% of BAWAG's equity; (ii) Osterreichische Gewerkschaftliche Solidaritat Privatstiftung, which holds 771,677 shares; (iii) Osterreichischer Gewerkschaftsbund -- OGB -- which holds 72,000 shares; and (iv) OGB Vermogensverwaltungsgesellschaft m.b.H., which holds 731,323 shares, the sole shareholder of which is Die OGB Beteiligungsgesellschaft m.b.H., which in turn is owned by OGB. Under the Non-Prosecution Agreement, the USAO will refrain from prosecution of BAWAG and related parties in return for settlement payments on the same terms and conditions as BAWAG has agreed to provide the Creditors Committee, including: -- a $75,000,000 initial payment; -- a $262,500,000 deferred payment; and -- a contingent payment of 15% of the amount by which the transaction value of a sale transaction exceeds EUR1,800,000,000, on the understanding that the contingent payment to the USAO will not exceed $100,000,000. To induce the Creditors Committee to enter into the Proposed Settlement, the USAO agreed, as memorialized in a Letter Agreement, dated June 2, 2006, to transfer to the Refco Group Ltd. estate not less than 50% of the USAO Settlement Funds forfeited by BAWAG in connection with the Non-Prosecution Agreement and any related proceeding. The USAO may seek to share some of the 25% of the overall settlement proceeds it retains with alleged victims of the Bennett receivables fraud. To the extent that the "victims" include Thomas H. Lee Partners, L.P. and certain of its affiliates and co-investors, the Creditors Committee reserves all its rights as to the THL Entities' entitlement to receive those funds. BAWAG Settlement Agreement The principal terms of the Proposed Settlement, as embodied in the Stipulation, are: (1) Guaranteed Settlement Amount BAWAG will cause the $75,000,000 Initial Payment to be irrevocably transferred to RGL within 10 days of the Stipulation becoming a final order. BAWAG will cause the $262,500,000 Deferred Payment plus interest to be irrevocably transferred to RGL on the date that is the earliest to occur of: * the consummation of a sale or merger involving BAWAG or any of its subsidiaries with a Transaction Value equal to or greater than $500,000,000; * June 2, 2007; and * the commencement of an insolvency or similar proceeding. Nothing in the Stipulation will prevent the Deferred Payment from being satisfied in full and in cash in lieu of posting a "direct pay" letter of credit or surety bond drawn in RGL's favor to be issued by a U.S. financial institution, which: -- is unaffiliated with BAWAG; -- has a credit rating by Standard & Poor's of not lower than "AA;" and -- is otherwise reasonably acceptable to the Creditors Committee and Refco. The Acceptable Surety will be payable immediately on demand on the Deferred Payment Date, or sooner under certain circumstances. (3) Contingent Sale Participation Right If BAWAG or the BAWAG Shareholders consummate a Sale Transaction that provides for a Transaction Value in excess of EUR1,800,000,000, BAWAG and the BAWAG Shareholders will pay the RGL estate the Contingent Payment. (4) Mutual Dependence on Non-Prosecution Agreement The Proposed Settlement is integrated with, and dependent on, the corresponding settlement by BAWAG with the USAO, which will generate the USAO Distribution for RGL's benefit. The execution of the Non-Prosecution Agreement and any required approvals of the USAO Distribution, as well as the Bankruptcy Court's approval of the Stipulation, are conditions precedent to effectiveness of both agreements. Any failure to satisfy the monetary obligations will be a breach of both transactions. (5) Matters Concerning BAWAG Forfeited Funds Given that the Creditors Committee is not a party to the Non-Prosecution Agreement, yet stands to receive material benefits from the BAWAG Forfeited Funds, the Creditors Committee negotiated for certain protections if BAWAG does not perform for the USAO as anticipated or the USAO relieved BAWAG of its obligations under the Non- Prosecution Agreement. BAWAG will pay RGL 50% of the USAO's shortfall in the event that: -- the BAWAG Forfeited Funds consists of payments less favorable to the USAO than the Initial Payment, the Deferred Payment, or the Contingent Payment, taken individually; or -- the portion of the BAWAG Forfeited Funds that corresponds to the Contingent Payment is not delivered to the USAO within 30 days of the date RGL receives the Contingent Payment. BAWAG will not be required to specifically guarantee the USAO's faithful performance under the Letter Agreement, but in the event the BAWAG Forfeited Funds is less than expected, BAWAG will ensure that RGL receives the anticipated total guaranteed consideration of $506,250,000. (6) Condition to Distribution of RGL Payments Any creditor of the Debtors that receives any portion of the Initial Payment, the Deferred Payment, the Contingent Payment, or the USAO Distribution, whether pursuant to a plan of reorganization, liquidation or otherwise, will be required to provide to the BAWAG Parties a release of all claims or actions arising from or related to transactions involving Refco or the RGHI Entities. Implementation of that condition to distribution may include creditors making an election on the ballot or in other document as may be approved by the Bankruptcy Court, or on other means as is necessary to accomplish the same result in the event one or more of the Debtors' bankruptcy cases is or becomes a case under Chapter 7 of the Bankruptcy Code or is dismissed. Any portion of the RGL Payments that would have been made to the Debtors' creditors, but for their election not to receive their share of the RGL Payments, will be returned to BAWAG. (7) No Claim by BAWAG Parties The BAWAG Parties will not file, and will withdraw with prejudice, any proof of claim in any of the Debtors' Chapter 11 cases. (8) Exchange of Releases The Refco Parties and the BAWAG Parties will exchange mutual releases on BAWAG's satisfaction of the Guaranteed Settlement Amount and the USAO Distribution. (9) Claims Reduction and Bar Order In the event that any of the Refco Parties sues a third party asserting a Claim Over -- a claim for contribution, indemnification, or reimbursement -- against any of the BAWAG Parties, the Refco Parties will insulate the BAWAG Parties from liability. This protection may be accomplished by judgment reduction, partial or complete release, settlement credit, setoff, election to recover exclusively under an award for which there is no claim, or such other method as may be permitted by applicable law at the election of Refco or the Debtors. All Unnamed Parties will be permanently barred and enjoined from commencing or prosecuting any action against the BAWAG Parties based on a Claim Over. To make a bar reciprocal, the BAWAG Parties will be permanently barred and enjoined from commencing any action against the Unnamed Parties for recovery of the equivalent of a Claim Over by the BAWAG Parties for any amounts paid pursuant to the Proposed Settlement. (10) Protection from Subsequent Challenge As part of the Proposed Settlement, the Creditors Committee and BAWAG seek that the Bankruptcy Court find that the stipulations and agreements contained in the Stipulation, the Initial Payment, the Deferred Payment, the Acceptable Surety, and the Contingent Payment will not be subject to subsequent challenge, avoidance, disgorgement, or turnover, on any theory, under the law of any relevant jurisdiction, without regard to any contrary result dictated by comity or similar considerations. (11) Dissolution of the Attachment Order The Bankruptcy Court's ex parte order of attachment and temporary restraining order, which was further amended by an agreement on May 11, 2006, will be dissolved upon: (i) receipt of the Initial Payment and the Acceptable Surety for the Deferred Payment by RGL; and (ii) receipt of the equivalent of the Initial Payment and the Acceptable Surety for the Deferred Payment by or as directed by the USAO. (12) Third Party Approval The Stipulation is subject to approval of all estate representatives and the Debtors' non-debtor affiliates. The Creditors Committee has discussed the terms and conditions of the Proposed Settlement with all parties and has been advised that each party supports the compromises embodied by the Stipulation. The Creditors Committee believes all approvals will be provided within the 15-day review period contemplated by the Stipulation. (13) Austrian Financial Market Approval The Stipulation is also subject to a 15-day waiting period during which time the Austrian Financial Market Authority may consider the Proposed Settlement. A full-text copy of the Proposed Settlement is available for free at http://ResearchArchives.com/t/s?b86 Settlement Promotes Global Public Interests Mr. Despins asserts that the Proposed Settlement benefits the Debtors and their estates on extremely favorable terms because: (a) The Proposed Settlement encompasses up to in excess of $1,000,000,000 in value. (b) Of that total, one or more of the Debtors are guaranteed to be the recipients of more than $506,000,000 within approximately a year's time, plus up to more than $13,000,000 in interest on the deferred component of that amount. (c) One or more of the Debtors could also receive up to another $150,000,000 if BAWAG or any of its subsidiaries is sold or otherwise recapitalized under certain circumstances within two years. (d) BAWAG will give up claims of at least $480,000,000. Mr. Despins tells Judge Drain that the Proposed Settlement also serves the best interests of three separate constituencies: (i) RGL, its affiliated Debtors, and their estates and creditors; (ii) the BAWAG Parties, the BAWAG Shareholders and customers; and (iii) the U.S. and Austrian governmental authorities. Furthermore, BAWAG and the BAWAG Shareholders will: (i) receive the benefit of "global peace" from Refco; (ii) obtain the prompt dissolution of the Amended Attachment Order, which the Committee had obtained with respect to more than $1,000,000,000 in BAWAG's U.S. assets; and (iii) be afforded the opportunity to stabilize their business, rehabilitate their reputation, and enhance the prospects for a sale of BAWAG's business in a manner that preserves substantial value for BAWAG's direct or indirect stakeholders. Accordingly, the Creditors Committee asks the Bankruptcy Court to approve the Proposed Settlement in its entirety pursuant to Sections 105 and 363 of the Bankruptcy Code and Rule 9019(a) of the Federal Rules of Bankruptcy Procedure. Refco LLC Trustee Seeks to Consummate Settlement Albert Togut, the duly appointed Chapter 7 trustee for Refco, LLC's estate, supports the Creditors Committee's request. The Chapter 7 Trustee seeks Judge Drain's consent to consummate the Proposed Settlement with respect to reciprocal releases. Mr. Togut believes that the Proposed Settlement will not prejudice the Refco LLC estate in any way. 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. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000). SAFETY-KLEEN: S&P Rates $395 Mil. Senior Secured Facility at BB- ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating and stable outlook to Plano, Texas-based parts cleaning, oil recycling and re-refining, and industrial waste management company Safety-Kleen Systems Inc. At the same time, Standard & Poor's assigned its 'BB-' bank loan rating and recovery rating of '3' to Safety-Kleen's $395 million senior secured credit facility. The credit facility will consist of: * a $100 million revolving credit facility due 2012; * a $65 million letter of credit facility due 2013; and * a $230 million term loan B due 2013. The 'BB-' bank loan rating is the same as the corporate credit rating. This and the '3' recovery rating indicate that lenders can expect meaningful (50%-80%) recovery of principal in the event of a payment default. "The ratings on Safety-Kleen reflect its aggressive capital structure without the benefit of a track record regarding financial policies," said Standard & Poor's credit analyst Robyn Shapiro. "They also reflect the company's relatively low profitability, and pricing and volumes that are somewhat vulnerable to industry cycles." These factors are partially mitigated by the company's leading market positions in niche markets and its diversified customer base. The company will use proceeds of the proposed term loan, together with proceeds of an equity rights offering of $115 million, to repay some outstanding balances, redeem some preferred equity, and pay related fees and expenses. The prefunded letter of credit facility will replace the company's existing letter of credit facility. SILICON GRAPHICS: Court Amends Foreign Vendor Claims Payment Order ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York amended its May 9, 2006, order and rules that no payment to a Foreign Creditor for prepetition claims will be made unless Silicon Graphics, Inc., and its debtor-affiliates have a good faith basis to believe that the harm that would be caused to their estates from a failure to pay the Foreign Creditor exceeds the harm to the Debtors' estates caused by making a prepetition payment. The Court directs the Debtors to provide the Committee with weekly updates of the amounts paid to Foreign Creditors and the basis for the payments. As reported in the Troubled Company Reporter on May 24, 2006, the Court allowed the Debtor to pay their prepetition obligations owed to foreign vendors, suppliers, service providers, and other entities in various jurisdictions outside of the United States in the ordinary course of business. Committee Wants Order Amended Before the Court's amended order, the Official Committee of Unsecured Creditors contends that the Foreign Creditors Order should be amended to provide additional safeguards and to ensure that the payments are necessary to preserve the assets of the Debtors' estate. Specifically, the Committee asks the Court to rule that: * No payment to a Foreign Creditor for prepetition claims will be made unless the Debtors have a good faith basis to believe that the harm that would be caused to their estates from a failure to pay the Foreign Creditor exceeds the harm caused by making a prepetition payment; * Nothing in the Order will be construed as impairing the Committee's or the Debtors' right to contest the validity or amount owed to the Foreign Creditors, and all of the Committee's and the Debtors and their estates' rights are reserved; and * The Debtors and other parties-in-interest retain all of their rights and remedies under the Bankruptcy Code and other applicable law to pursue any cause of action against any Foreign Creditor, including, seeking to hold them in contempt of court for a violation of the automatic stay pursuant to Section 362(a) of the Bankruptcy Code. About Silicon Graphics Headquartered in Mountain View, California, Silicon Graphics, Inc. (OTC: SGID) -- http://www.sgi.com/-- offers high-performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. The Debtor and 13 of its affiliates filed for chapter 11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Winston & Strawn LLP, as their counsel in the Debtors' cases. When the Debtors filed for protection from their creditors, they listed total assets of $369,416,815 and total debts of $664,268,602. (Silicon Graphics Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) SILICON GRAPHICS: Walks Away from Three Unexpired Leases -------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York allowed Silicon Graphics, Inc., and its debtor-affiliates to reject three unexpired non-residential real property leases and their subleases, effective on the later of the Debtors' filing for bankruptcy or the date that the Debtors surrender possession of the leased property. As reported in the Troubled Company Reporter on May 25, 2006, the three unexpired leases were: Lessee Lessor Property Location ------ ------ ----------------- Silicon OTR - MCC LLC Morris Corporate Center 1 Graphics, Inc. 300 Interpace Parkway, 3d Floor Parsippany, New Jersey 07054 Silicon Great Lakes 1750 East Golf Road, Suite 295 Graphics, Inc. REIT L.P. Schaumburg, Illinois 60173 Aeronet, Inc. Silicon 1750 East Golf Road, Suite 295 (sublessee) Graphics, Inc. Schaumburg, Illinois 60173 (sublessor) Silicon Seattle Seattle Tower Graphics, Inc. Landmark LLC 1218 Third Avenue, Suite 800 Seattle, Washington 98101 Network Silicon Seattle Tower Clarity, Inc. Graphics, Inc. 1218 Third Avenue, Suite 800 (sublessee) (sublessor) Seattle, Washington 98101 About Silicon Graphics Headquartered in Mountain View, California, Silicon Graphics, Inc. (OTC: SGID) -- http://www.sgi.com/-- offers high-performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. The Debtor and 13 of its affiliates filed for chapter 11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Winston & Strawn LLP, as their counsel in the Debtors' cases. When the Debtors filed for protection from their creditors, they listed total assets of $369,416,815 and total debts of $664,268,602. (Silicon Graphics Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) SLP ACQUISITION: Case Summary & 11 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: SLP Acquisition Corp. fka Service West Delivery Express 1438 West 12th Place Tempe, Arizona 85281 Bankruptcy Case No.: 06-01764 Chapter 11 Petition Date: June 14, 2006 Court: District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Donald W. Powell, Esq. Carmichael & Powell, P.C. 7301 North 16th Street, Suite 103 Phoenix, Arizona 85020 Tel: (602) 861-0777 Fax: (602) 870-0296 Total Assets: $293,400 Total Debts: $1,486,272 Debtor's 11 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Martin Swainston $88,131 11237 North Buffalo Drive Fountain Hills, AZ 85268 Shell Credit Card Center $27,007 P.O. Box 9081 Phoenix, AZ 85012 Wright Express $23,350 P.O. Box 639 Portland, ME 04104 Bank of America $12,056 SCF Arizona $4,308 SFERS Real Estate Corp. $3,665 Fleet Direct $3,284 Cowley Companies $3,187 TCI Tire Store $2,483 Transportation Safety Consultants $925 Fiesta Printed Products $321 STEEL WHEELS: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Steel Wheels Transport, LLC Dundee Yard 95 Passaic Street Passaic, New Jersey 07055 Tel: (973) 458-9977 Bankruptcy Case No.: 06-15377 Debtor-affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Team G Loading, LLC 06-15378 Type of Business: The Debtors offer transportation and logistics services. Chapter 11 Petition Date: June 14, 2006 Court: District of New Jersey (Newark) Judge: Donald H. Steckroth Debtors' Counsel: James S. Weiss, Esq. 55 Simpson Avenue Pitman, New Jersey 08071 Tel: (856) 582-6242 Fax: (856) 582-6544 Total Assets Total Debts ------------ ----------- Steel Wheels $287,125 $4,319,501 Transport, LLC Team G Loading, LLC $0 $540,501 Debtors' Consolidated List of their 11 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Israel I. Tyberg $187,500 123 Avenue J Brooklyn, NY 11230 Moshe Y. Tyberg $187,500 2130 57th Street Brooklyn, NY 11204 A&L Salvage $180,000 Dominion Tower Suite 3100 625 Liberty Avenue Pittsburgh, PA 15222 Canadian National Railway $152,000 Yitzchak Mandel $137,500 Ray Lakafsky $125,001 American Express $125,000 Norfolk Southern Rail $105,000 New York & Greenwood Lake Railway $28,000 BFI $28,000 Metals USA $25,000 TENSAR CORP: S&P Affirms B- Corp. Credit & Sr. Bank Loan Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating and 'B-' senior secured bank loan ratings on Tensar Corp. At the same time, Standard & Poor's lowered its recovery rating to '3' from '2' on the $40 million first-lien revolving credit facility and $226.6 million first-lien term loan of TCO Funding Corp. "The $25 million increase in first-lien debt resulted in a reduction in the expected recovery in the event of a payment default to a meaningful likelihood from a substantial likelihood," said Standard & Poor's credit analyst Kenneth L. Farer. TCO is an orphan special-purpose entity formed for the sole purpose of entering into the credit agreement and a corresponding sale-leaseback arrangement and commodities purchase-facility arrangement with Tensar Corp. and a Luxembourg-based subsidiary of Tensar (Luxco). The structure of the current financing and the proposed transaction complies with Islamic financing rules (Shari'ah). To fund the acquisition of unrated Tensar Group Ltd. and its subsidiaries, including unrated Tensar International Ltd., TCO will increase the borrowing capacity under the revolving credit facility by $10 million to have total borrowing capacity of $40 million and increase the first-lien term loan by $80 million to total outstanding first-lien term loan borrowings of $226.6 million. The revolving credit facility increase will be passed on to Tensar by increasing one of the commodities purchase facilities in place between TCO and Tensar, and the term loan will be passed on to Luxco in the form of a new $80 million commodities purchase facility. The ratings are based on preliminary terms and conditions and are subject to review once final documentation is received. Ratings Lowered: TCO Funding Corp.: * Senior secured BLR recovery rating to 3 from 2 Ratings Affirmed: Tensar Corp.: * Corporate credit rating at B-/Stable/-- TCO Funding Corp.: * Senior secured BLR at B- TEXAS PETRO: Moody's Holds Ba3 Rating on $280 Mil. Sr. Sec. Loan ---------------------------------------------------------------- Moody's Investors Service affirmed Texas Petrochemicals LP's Ba3 corporate family rating and Ba3 rating on its $280 million seven year senior secured term loan facilities. The debt financing will fund TPC upcoming purchase of Huntsman's U.S. butadiene and MTBE business. TPC is also establishing a $115 million five-year senior secured revolving credit facility, which is not rated. Moody's rated TPC for the first time following its emergence from bankruptcy, in April 2006. The current rating action on the $280 million seven year senior secured term loan facilities incorporates changes made to TPC's financing as a result of renegotiated acquisition terms for the Huntsman assets. The outlook remains stable. The ratings reflect TPC's narrow product line, concentrated operational and geographic profile, single operating division structure and increased capital expenditures needed to bring facilities into NOx compliance. Supporting the rating are its modest pro forma leverage, and cash flow and capitalization metrics, some of which would map to a "Baa" rating using Moody's chemical industry methodology. Moody's expects that TPC will enjoy more stable earnings due to contract pricing with a majority of its customers, which contractually insulates sales from feedstock, sales price and energy price fluctuations. Moody's believes that the integration of the acquired Huntsman assets should not be troublesome given TPC's familiarity with the business and experience operating similar plant assets. In the past methyl tertiary butyl ether has been a significant portion of revenues and earnings for TPC as well as the acquired Huntsman assets. TPC's and the entire industry's sales of MTBE are expected to drop sharply due to the lack of liability protection for MTBE producers and the move to a renewable fuels standard in the Energy Policy Act of 2005. TPC will likely cease production at their Houston facility and the purchased Huntsman facility in the next one to two years. Moody's notes there is risk associated with managing this decline in the MTBE business. The notching of the senior secured term loan at the corporate family rating reflects the fact that secured debt makes up the vast majority of TPC's debt. The term loan is secured by a first priority lien on substantially all real property of the borrower other than cash, inventory, accounts receivable, contract rights and certain intellectual property, and a second priority lien on cash, inventory, accounts receivable, contract rights and certain intellectual property. The revolving credit facility has a first priority lien on the cash, inventory, accounts receivable, contract rights and certain intellectual property. The term loan agreement will not contain any financial covenants. The stable outlook reflects Moody's expectation that the company will continue to grow its sales and that free cash flow will be sufficient to pay down debt. Under the terms of the $280 million seven year senior secured term loan facilities, at the closing of the financing, TPC will borrow $210 million as a Term Loan B to finance a $199 million payment to Huntsman for the purchase of Huntsman's U.S. butadiene and MTBE business. The $70 million balance of the facilities will held as cash in escrow to back a pre-funded letter of credit, which can be drawn by Huntsman, if it fulfills certain obligations in connection with delivery of crude C4's to TPC. Huntsman's Port Arthur, Texas light olefins plant is currently shutdown and not producing crude C4's following a fire at the plant on April 29, 2006. If the letter of credit is drawn, the Term Loan B amount will be increased by $70 million. Texas Petrochemicals, LP is a processor of C4 hydrocarbons, and MTBE. TPC emerged from bankruptcy in May 2004 and many of its current shareholders are former holders of the predecessor firm's distressed debt. As of the fiscal year ended June 30, 2005, TPC had sales of $936 million. TIMOTHY MOORE: Case Summary & 3 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Timothy Moore dba M&M Properties 905 Spruce Street Augusta, Arkansas 72006 Tel: (870) 347-5953 Bankruptcy Case No.: 06-12410 Chapter 11 Petition Date: June 14, 2006 Court: Eastern District of Arkansas (Helena) Debtor's Counsel: Andrew L. Clark, Esq. Clark & Byarlay 120 South Cross Street Little Rock, Arkansas 72201 Tel: (501) 376-0550 Fax: (501) 376-7447 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtor's 3 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Citifinancial Furniture $10,000 605 Munn Road P.O. Box 70918 Charlotte, NC 28272-0918 American General Furniture $3,174 6736 Winchester Road Memphis, TN 38115-4408 Wells Fargo Financial $1,835 P.O. Box 98784 Las Vegas, NV 89193-8784 TRANSDIGM INC: Fitch Rates Senior Secured Credit Facility at BB- ---------------------------------------------------------------- Fitch Ratings expected to assign a 'BB-/RR2' rating to TransDigm Inc.'s senior secured revolving credit facility and senior secured first lien term loan associated with the recapitalization of both TDI and TransDigm Group. Fitch also affirmed these Issuer Default Ratings: TDG: -- Issuer Default Rating 'B'. TDI: -- Issuer Default Rating 'B'. The Rating Outlook is Stable. Fitch expects to withdraw the ratings of the existing TDG senior unsecured loan and the existing TDI senior secured facilities upon retirement. Approximately $1.05 billion of debt is covered by the ratings. The change in capital structure will allow TDG to retire higher cost debt, extend maturities and increase liquidity. The new revolving credit facility and term loan will both have lower margins than the existing loan at TDG, the revolving credit facility at TDI and the term loan at TDI. Maturities will be extended with the facilities expiring in 2013 versus the current 2010. Liquidity will be enhanced with the revolver increasing in size to $150 million from $100 million. The difference in size between the proposed term loan and the existing TDG loan and the existing TDI term loan is expected to be utilized for retiring a portion of the existing TDI senior subordinated notes and fees and expenses associated with the recapitalization. (The tender offer was priced yesterday for all these notes.) TDG's ratings reflect: * strong consolidated free cash flow; * high margins; * diverse portfolio of products providing components on most commercial jet aircraft, as well as a number of U.S. military platforms; * barriers to entry for competitors due to proprietary designs for most TDG products and the costs to original equipment manufacturers to certify these components; * role as a sole-source provider for the bulk of sales; * significant commercial aftermarket business, which along with military sales helps offset the cyclicality of commercial jet manufacturing; and * management's history of successful acquisitions and managing a leveraged business. Concerns focus on TDG's high leverage, acquisition strategy, and the potential for exogenous shocks to the commercial aerospace market. Lesser concerns include the possibility of lower margin contracts on some of its military business, the possibility of pricing pressures from original equipment manufacturers, and the potential for cost overruns on fixed price contracts. The Stable Outlook reflects the current strong environment for commercial and military aircraft production and continued growth in the commercial aftermarket due to increasing air travel and a continued high operational tempo for the U.S. military. The Recovery Ratings and notching in the debt structure reflect Fitch's recovery expectations under a scenario in which distressed enterprise value is allocated to the various debt classes. The recovery rating for TDI's proposed senior secured revolving credit facility and the proposed senior secured first lien term loan ('RR2', expected 71%-90% recovery) reflects significant recovery as it is secured by substantially all the assets of TDI and its subsidiaries. (This recovery rating and the associated issue rating could be changed should TDI raise up to an additional $250 million permitted under its secured facilities that would be pari passu with the proposed secured facilities.) Recovery should also benefit from significant, albeit reduced from the existing capital structure, cushions of subordinated debt and equity. TRUMP ENT: Court Okays Final Distribution of World's Fair Proceeds ------------------------------------------------------------------ The Hon. Judith Wizmur of the United States Bankruptcy Court for the District of New Jersey approves Robino Stortini Holdings LLC's request and orders that: (i) Trump Entertainment Resorts, Inc., fka Trump Hotels & Casino Resorts, Inc., and its debtor-affiliates are authorized and directed to make a final distribution of the World's Fair Escrow Funds pursuant to the terms of the confirmed Plan, after payment of the expenses and time charges of not more than $5,000 to The Bayard Firm for its services as escrow agent; and (ii) The Bayard Firm is authorized and directed, after payment of the Escrow Expenses, to release to the Debtors any and all remaining funds held in the World' Fair Escrow in order for the Debtors to make the distribution. Background As reported in the Troubled Company Reporter on Sept. 22, 2005, the Court approved the sale of the World's Fair Site in Atlantic City, New Jersey, to BET Investments, Inc., for $25,150,000. However, the proceeds of the World's Fair Sale could not be distributed in view of a Court order prohibiting distributions to beneficial owners of Old THCR Common Stock under the Debtors' confirmed Plan of Reorganization. As reported in the Troubled Company Reporter on Jan. 23, 2006, Daniel K. Astin, Esq., at The Bayard Firm, in Wilmington, Delaware, notes that the Order Prohibiting Distributions was a result of a request filed by 17 shareholders asking the Court to enforce its previous orders concerning the record distribution date. The shareholder group alleged that the first distribution made by the Debtors to non-affiliated shareholders did not conform to the terms of the Plan. Pursuant to the Order Prohibiting Distributions, The Bayard Firm served as escrow agent with respect to the World's Fair Sale Proceeds. The Sale Proceeds could not be distributed until the Court gives further order regarding the record date and distribution issues. As of Dec. 20, 2005, The Bayard Firm holds $24,518,791 in an interest bearing escrow account as the World's Fair Sale Proceeds. Robino Stortini Holdings LLC asked the Court to direct the Debtors to make an interim distribution of the World's Fair Escrow Funds until the resolution of the distribution issues. RSH was previously a member of the Equity Committee. RSH, however, resigned prior to the sale of the World's Fair Site. Mr. Astin explained that the Sale Proceeds have been held in escrow for almost four months. Thousands of shareholders have not received their full distributions pursuant to the Plan. Mr. Astin pointed out that regardless of how the Court decides the record date and distribution issues, the non-prevailing party will appeal the decision to the U.S. District Court for the District of New Jersey. Any appeal would further delay a distribution to the remaining non-affiliated shareholders, Mr. Astin explains. RSH suggested that a reserve be established pending the account of the record date and distribution litigation. Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino Resorts, Inc., nka Trump Entertainment Resorts, Inc. -- http://www.thcrrecap.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The Company and its debtor-affiliates filed for chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A. Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N. Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano, P.A., represent the Debtors in their successful chapter 11 restructuring. When the Debtors filed for protection from their creditors, they listed more than $500 million in total assets and more than $1 billion in total debts. The Court confirmed the Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005, and the plan took effect on May 20, 2005. (Trump Hotels Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., 215/945-7000). * * * As reported in the Troubled Company Reporter on Nov. 10, 2005, Moody's Investors Service affirmed the ratings of Trump Entertainment Resorts, Inc.'s $200 million senior secured revolver due 2010 at B2; $150 million senior secured term loan due 2012 at B2; $150 million senior secured delayed draw term loan due 2012 at B2; $1.25 billion second lien senior secured notes due 2015 at Caa1; Speculative grade liquidity rating at SGL-3; and Corporate family rating at B3. Moody's says the rating outlook is stable. UNITED SITE: S&P Puts Junk Rating on New $265 Million Facility -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Westborough, Massachusetts-based United Site Services Inc., which rents and services portable restrooms. The outlook is stable. At the same time, based on preliminary terms and conditions, Standard & Poor's assigned a 'B+' senior secured debt rating and a recovery rating of '1' to the company's proposed $100 million first-lien revolving credit facility. These ratings indicate the rating agency's expectation that bank lenders would experience full recovery of their principal in the event of a payment default. Standard & Poor's also assigned a 'CCC+' rating with a recovery rating of '3' to a proposed $265 million second-lien term loan facility, indicating the expectation for a meaningful recovery of principal (50%-80%) in the event of a payment default. "The ratings reflect United Site Services' modest revenue base and narrow product offering, participation in a highly fragmented industry, and vulnerability to the cyclicality of residential and commercial construction," said Standard & Poor's credit analyst Robyn Shapiro. Other constraints include: * the company's limited geographic diversity of revenues; * limited operating track record; * very aggressive acquisition program; and * highly leveraged capital structure, with initial debt of $385 million, including a mezzanine loan. This vulnerable business risk profile is slightly tempered by some strengths. "These include the company's position as a meaningful provider of portable sanitation in the U.S.; cost-efficient business model; respectable operating margins; rising earnings; and ability to bolster discretionary cash flows in an industry downturn through a pullback of acquisition-related spending," the analyst added. Portable sanitation for residential, commercial, and government construction markets accounts for 65%-70% of United Site Services' revenues, with the balance of sales derived from the provision of temporary sinks, power generation, and fencing, as well as sanitation needs for special events and emergency situations. Within its seven operating regions, United Site Services has the largest market shares by a wide margin compared to its competitors. United Site Services' existing base of repeat customers, competitive advantages in the form of scale and route density of its operations, and increasing revenues from nonconstruction markets and complementary services (temporary fencing and temporary electrical equipment) enhance prospects for stable credit quality. However, initial debt leverage is very high, especially given the current business risk profile, and upside rating prospects are tempered by financial policies that favor the aggressive use of debt for multiple acquisitions annually. Strengthening of the ratio of funds from operations to total adjusted debt toward the 15% level, which is considered appropriate for a modest upgrade to a 'B' corporate credit rating, would be necessary for Standard & Poor's to consider revising the outlook to positive from stable. UNITY WIRELESS: Posts $2.6 Million Net Loss in Qtr. Ended March 31 ------------------------------------------------------------------ Unity Wireless Corporation reported a $2.6 million net loss on $1.1 million of revenues for the three months ended March 31, 2006, compared to a $1.2 million net loss on $2 million of revenues for the same period in 2005. At March 31, 2006, the Company's balance sheet showed $5.1 million in total assets and $6.6 million in total liabilities, resulting in a $1.4 million stockholders' deficit. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?b6d Headquartered in Bellingham, Washington, Unity Wireless Corporation -- http://www.unitywireless.com/-- is a developer of wireless subsystems and coverage-enhancement solutions for wireless communications networks. * * * Going Concern KPMG LLP expressed doubt about Unity Wireless' ability to continue as a going concern after auditing the Company's 2005 financial statements. The auditing firm pointed to the Company's recurring losses from operations at Dec. 31, 2005. US AIRWAYS: Eberwein Acquires 19,799 Shares Of US Air Common Stock ------------------------------------------------------------------ In a regulatory filing with the Securities and Exchange Commission dated May 30, 2006, Elise R. Eberwein, senior vice-president for corporate communications of US Airways Group, Inc., disclosed that on May 26, she acquired 19,799 shares of US Airways Group Common Stock: Amount of Securities Price Acquired Per Share ---------- --------- 9,487 $25.6 10,312 $12.44 On the same day, Ms. Eberwein disposed of the 19,799 shares of US Airways Group Common Stock. As a result, Ms. Eberwein now beneficially owns 16,200 shares. Ms. Eberwein also derived stock options or the right to buy shares of US Airways Group Common Stock: Amount of Derivative Securities Price Expiration Acquired Per Share Date ---------- --------- ---------- 9,487 $12.44 03/10/2015 10,312 $25.6 02/25/2014 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. 122; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on June 14, 2006, Standard & Poor's Ratings Services affirmed its 'B-' corporate credit and other ratings on US Airways Group Inc., and revised the outlook to stable from negative. USA COMMERCIAL: Inks $58.4 Million Security Agreement with USAIP ---------------------------------------------------------------- USA Commercial Mortgage Company reported significant progress in the efforts made by the Company and its affiliated bankruptcy debtors to reorganize under Chapter 11 of the U.S. Bankruptcy Code since the filing of their voluntary petitions on April 13, 2006. $58.4 Million Obligation Agreement USACM successfully negotiated an acceptable security agreement and promissory note with Joe Milanowski on behalf of USA Investment Partners, LLC (USAIP) to pledge USAIP's ownership interests in certain real estate projects as security for a set of receivables owed USACM. The agreement converts the receivables into a loan with an interest rate, maturity date, default provisions, and provides security for $58.4 million obligations owed by USAIP. USACM has filed a motion seeking approval of the agreement, which has been set for hearing on June 21, 2006. Planned Court Motions Mesirow Financial, the Company's crisis manager, will have completed its account reconciliation for each direct lender and each fund member by early July. The Company expects to file a motion with the Bankruptcy Court to be heard on July 25 for authority to make appropriate payments to investors from the money held in the Collection account and to begin regular payments to investors on performing loans. USACM will also seek authority to pay investors on non-performing loans as USACM collects on these loans. "We are very aware of the impact on our investors of the stoppage of interest payments," Thomas J. Allison, president and chief restructuring officer for USACM, said. "We will be ready to make appropriate distributions to investors after that date, subject to court approval. We look forward to working with the committees and the Court on the steps necessary to move the process along expeditiously from that point." Allison added that he plans to file a reorganization plan for USACM in July. Collection of Principal and Unpaid Interest USACM reported that since the bankruptcy petitions were filed, $48.3 million in principal has been collected from performing and non-performing loans, as well as $8.6 million in previously uncollected interest payments. The Company continues to aggressively pursue Borrowers on all non-performing loans to recover all monies owed on loans serviced by USACM. Several loans have repaid since the filing and are listed on the Loan Summary Report as of May 26, 2006, which was filed with the Court and posted on the USACM website. Bundy Canyon $8.9MM Funds to be Returned The Bankruptcy Court, at a May 18, 2006 hearing, approved USACM's motion to return funds held in escrow for the Bundy Canyon $8.9 million loan, which was not funded. The Court's written order approving the motion was signed and entered on June 9, 2006. USACM currently is working with the escrow company to get the funds released as ordered by the Court so that the funds can be promptly distributed to the investors in this unfunded loan. USACM's best estimate for release of the funds is the week of June 12-16, 2006. About USA Commercial Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba USA Capital (USACM) -- http://www.usacapitalcorp.com/-- provides more than $1 billion in short-term and permanent financing to homebuilders, commercial developers, apartment owners and institutions nationwide. The Company and its debtor-affiliates filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev. Case Nos. 06-10725 to 06-10729). Lenard E. Schwartzer, Esq., at Schwartzer & Mcpherson Law Firm, represents the Debtors. When the Debtors filed for protection from their creditors, they estimated assets of more than $100 million and debts between $10 million and $50 million. USG CORP: U.S. Trustee Wants Clarifications on Plan Provisions -------------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, wants clarification on certain provisions of the First Amended Joint Plan of Reorganization filed by USG Corporation and its debtor-affiliates. She disputes the permissibility of two provisions dealing with releases of former directors and officers of the Debtors and attorneys of various entities. According to trial attorney David M. Klauder, Esq., in Wilmington, Delaware, there are identical provisions for the Class 4 Senior Note Claims and Class 5 Industrial Revenue Bond Claims that indicate that "in lieu of any claim for substantial contribution by or on behalf of any [Senior Note or Industrial Revenue Bond] Industrial Trustee, the Debtors or Reorganized Debtors, as applicable, shall pay to any [such] Indenture Trustee cash in an amount equal to the reasonable and documented fees and expenses (including reasonable legal fees) of such . . . Indenture Trustees." Mr. Klauder tells Judge Fitzgerald that the U.S. Trustee was initially concerned that the provision eliminated the need for indenture trustees that may seek substantial contribution claims, or any administrative claim under Section 503(b) of the Bankruptcy Code, from obtaining court approval for a claim. Mr. Klauder says that the Debtors have represented that the provision does not contemplate that scenario, but is only meant to explain their contractual rights to the indenture trustees. However, he argues that the language appears confusing and should be clarified to eliminate the possibility that an entity like an indenture trustee may seek an administrative claim under Section 503(b) without court approval. In addition, the U.S. Trustee wants the terms regarding general releases of holders of claims and interests clarified. This release binds each holder that votes in favor of the Plan. Mr. Klauder states that because every class of claims -- except the Class 7 Asbestos Personal Injury Claims -- is unimpaired and deemed to have voted in favor of the Plan, the question arises whether those claimants and interest holders who have not voted, but are deemed to vote in favor, are subject to that release. Mr. Klauder notes that a fair reading of relevant case laws indicates that the release is only valid as to those claimants who affirmatively vote in favor of the Plan. Furthermore, the U.S. Trustee objects to the Debtors' release of claims in favor of their former directors and officers. The U.S. Trustee contends that the release is too broad in scope and does not meet the relevant standard specifically set out by the court in In re Zenith Electronics, 241 B.R.92, 111 Bankr. D. Del. 1999. Mr. Klauder relates that the court in Zenith adopted a five-part test, enunciated in "Master Mortgage Inv. Fund, Inc., 168 B.R. 930," to determine whether a release by a debtor of a third party as a part of a plan of reorganization is permissible. These factors are: (1) an identity of interest between the debtor and the third party; (2) substantial contribution by the non-debtor of assets to the reorganization; (3) the essential nature of injunction to the reorganization to the extent that there is little likelihood of success; (4) an agreement by a substantial majority of creditors to support the injunction, specifically if the impacted class "overwhelmingly" votes to accept the plan; and (5) provision in the plan for payment of all claims of a certain class affected by the injunction. Mr. Klauder points out that some parties may qualify for the protection afforded by the Plan provision and some may not. In the USG case, the release of former officers and directors does not meet the requisite standard set out in Zenith, specifically that the former officers and directors made a substantial contribution of assets to the reorganization. In fact, Mr. Klauder says, it can be stated that the former officers and directors provided no contribution to the reorganization. "Because that particular factor of the Zenith test is not met, it is axiomatic that the release cannot be approved." The U.S. Trustee also objects to the provision that deals with the permissibility of a release of conduct of attorneys under the Plan. To the extent that attorneys seek to be exculpated and released by their clients, it has long been accepted that it is unethical for an attorney to seek or accept any type of waiver or indemnification that would relieve that attorney of the duty to exercise reasonable care in rendering services to that client or limit his liability for failure to do so. Mr. Klauder maintains that attorneys are bound by the relevant rules of professional conduct and should not receive the favor of exculpation and release clauses that violate the rules of professional conduct by limiting their liability. Accordingly, the U.S. Trustee asks Judge Fitzgerald to issue a ruling commensurate with her objection. About USG Corp. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 112; Bankruptcy Creditors' Service, Inc., 215/945-7000) USG CORP: Wells Fargo Complains Bond Calculations are Incorrect --------------------------------------------------------------- Wells Fargo Bank, National Association, is the trustee with respect to indentures, dated as of September 1, 1977, between: (i) Town of Shoals, Indiana, and Wells Fargo Bank, N.A., pursuant to which Shoals issued Economic Development Revenue Bonds (United States Gypsum Company Project), of which $1,000,000 in aggregate principal amount is outstanding; and (ii) City of Fort Dodge, Iowa, and National City Bank of Indiana, pursuant to which Fort Dodge issued Industrial Development Revenue Bonds (United States Gypsum Company Project), of which $1,000,000 in aggregate principal amount is outstanding. Wells Fargo is the successor indenture trustee to the National City Bank with respect to the Fort Dodge Indenture. The Indentures provide that the bonds will bear interest at 5.90% rate per annum until the principal is due and payable, and at a 6.9% rate on overdue payments until paid. Wells Fargo is also a successor trustee under 12 indentures providing for the issuance of municipal bonds by various municipalities, payment for which municipal bonds was made from loan payments by USG Corporation or U.S. Gypsum, under related loan or financing agreements. The Debtors' First Amended Joint Plan of Reorganization provides that bondholder claims under the indentures will be unimpaired. Specifically, the Plan provides that: (a) any claims slated to be paid in full will be "paid in full in cash, including any applicable prepayment premium, plus an interest compounded semi-annually on the interest payment dates, accruing at a contractual rate of interest; and (b) any claims slated to be reinstated will be reinstated in accordance with indenture terms. James S. Carr, Esq., at Kelley Drye & Warren LLP, in New York, however, contends that the Plan improperly treats the claims filed on behalf of the bondholders under the Shoals Indenture and the Fort Dodge Indenture. Mr. Carr explains that the Debtors' calculations regarding the amounts due under the Shoals and Fort Dodge Indentures are incorrect because the postpetition interest is computed based on the pre-default rate. Mr. Carr maintains that the bondholders are entitled to a 6.9% interest rate on overdue principal. The Plan provides no justification for a departure from the terms of the Indentures. The Plan proposes that $650,440 is due for postpetition accrued interest as of March 31, 2006. Mr. Carr insists that $803,696 is actually due for the two series of bonds. About USG Corp. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 112; Bankruptcy Creditors' Service, Inc., 215/945-7000) VALLEY CLUB: Case Summary & 14 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Valley Club Investment Group III, LLC 415 Route 24 Chester, New Jersey 07930 Bankruptcy Case No.: 06-00879 Type of Business: The Debtor offers financial services. Chapter 11 Petition Date: June 14, 2006 Court: Eastern District of North Carolina (Raleigh) Debtor's Counsel: Jason L. Hendren, Esq. Brady, Nordgren, Morton & Malone, PLLC 2301 Sugar Bush Road, Suite 450 Raleigh, North Carolina 27612 Tel: (919) 782-3500 Fax: (919) 573-1430 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Eugene J. Long Loan $892,933 16 Springcroft Road Far Hills, NJ 07931 Sea Jade Holdings, LLC Loan $79,727 12 Charlotte Hill Drive Bernardsville, NJ 07840 Jerome Kienlen Loan $61,147 19 Oakridge Drive Basking Ridge, NJ 07920 Oak Ridge, LLC Loan $56,746 Alex Spagnuolo Loan $34,562 James Flaherty Loan $18,062 Ronald and Kimberly Heyman Loan $10,317 Lisa Schmidlin Loan $10,204 Lee County Tax Collector Taxes $9,014 Anthony Sposaro Legal Fees $8,300 Robert Casse Loan $7,911 Rotenberg, Meril & Soloman Accounting Fees $6,000 Anthony Fioretti Loan $5,214 NJS Division of Taxation Taxes $4,800 VANTAGEMED CORP: Equity Deficit Widens to $3.7 Million at March 31 ------------------------------------------------------------------ VantageMed Corporation reported a $390,000 net loss on $2.9 million of revenues for the three months ended March 31, 2006, compared to a $1.2 million net loss on $4.3 million of revenues for the same period in 2005. The Company had $493,000 of cash and cash equivalents, had negative working capital of $3.8 million and used $695,000 of cash in its operations for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $1.7 million in total assets and $5.4 million in total liabilities, resulting in a $3.7 million stockholders' deficit. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?b6c VantageMed Corporation -- http://www.vantagemed.com/-- is a provider of healthcare software products and services to more than 18,000 physician, anesthesiologist and behavioral health providers nationwide. VantageMed's core products include ChartKeeper Computerized Medical Records software, RidgeMark, Northern Health Anesthesia, and Helper family of Practice Management products. All these products are supported by SecureConnect electronic transaction services. Its suite of software products and services automates administrative, financial, clinical and management functions for physicians and other healthcare providers as well as provider organizations. * * * Going Concern Farber Hass Hurley & McEwen LLP expressed doubt about VantageMed Corporation's ability to continue as a going concern after auditing the Company's 2005 financial statements. The auditing firm pointed to the Company's recurring losses from operations, had an accumulated deficit of $81.2 million and a stockholders' deficit of $3.4 million at Dec. 31, 2005. VISTEON CORP: Obtains New $800 Mil. Seven-Year Secured Term Loan ---------------------------------------------------------------- Visteon Corporation (NYSE: VC) closed on a new seven-year secured term loan of $800 million. Most of the proceeds from the loan were used to repay amounts outstanding under the company's existing credit facilities that were scheduled to expire in June 2007, including a $350 million 18-month term loan and a $241 million delayed draw term loan. Additionally, Visteon repaid $50 million of borrowings under the company's $771 million multi-year secured revolving credit facility and reduced the amount available under that facility to $500 million. Visteon expects to eliminate the multi-year revolver upon completion of new U.S. and European five-year revolving credit facilities. The company has received commitments for these facilities totaling $700 million from JPMorgan Chase Bank, N.A. and Citigroup Global Markets Inc., and expects to complete the transactions over the next several weeks. "We are following through on our plan to refinance on a longer term basis all of our near-term credit facilities that expire in June 2007," James F. Palmer, Visteon executive vice president and chief financial officer, said. "This is an important step in Visteon's three-year improvement plan." Headquartered in Van Buren Township, Michigan, Visteon Corporation -- http://www.visteon.com/-- is a leading global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. With corporate offices in the Michigan (U.S.); Shanghai, China; and Kerpen, Germany; the company has more than 170 facilities in 24 countries and employs approximately 50,000 people. * * * As reported in the Troubled Company Reporter on June 2, 2006, Moody's Investors Service assigned a B1 rating to Visteon Corporation's new $800 million secured term loan and affirmed the company's B2 Corporate Family and B3 Senior Unsecured ratings. W.R. GRACE: Court Orders Whitehouse's Medical Records Produced -------------------------------------------------------------- Having acknowledged the relevance of Dr. Alan C. Whitehouse's medical records in asbestos personal injury claims estimation proceeding against W.R. Grace & Co., the U.S. Bankruptcy Court for the District of Delaware rules that the medical records for 700 claimants injured by exposure to tremolite asbestos from Grace's operations in and near Libby, Montana, which are not included in the 550 patients in Dr. Whitehouse's database, will be produced in unredacted form. In the event U.S. District Judge Donald Molloy decided that the medical records for the 550 Whitehouse Database Patients produced in a criminal proceeding against Grace in Montana cannot be used in the Estimation Proceeding and produced by Grace to: * the Debtors; * the Official Committee of Unsecured Creditors; * the Official Committee of Equity Holders; * the Official Committee of Asbestos Personal Injury Claimants; * the Official Committee of Property Damage Claimants; * David Austern, the Court-appointed legal representative for future asbestos claimants; and * the Libby Claimants, Judge Fitzgerald directs the Parties to make other arrangements for Grace and other parties-in-interest to obtain discovery in respect of the 550 Whitehouse Database Patients. If the Parties cannot reach agreement as to how that discovery will be provided, all interested parties reserve the right to seek appropriate relief from the Bankruptcy Court. The Libby Claimants, the U.S. government and other Parties will support Grace's request to Judge Molloy for production to other Parties and use of the medical records for the 550 Whitehouse Database Patients by all Parties in the Estimation Proceeding, provided that a protective order relating to discovery of medical records is also issued by the Bankruptcy Court. Within 30 days after receiving the redacted medical records of the 550 Whitehouse Database Patients, counsel for the Libby Claimants will identify which of those patients are Libby Claimants and which filed a lawsuit against Grace before April 1, 2001. Subject to the Protective Order, all Parties reserve the right to petition the Bankruptcy Court, with notice to the Government, for identification of the Libby Claimants who are part of the 550 Whitehouse Database Patients, if the identity of those Libby Claimants becomes relevant to any expert opinion relating to the Libby Claimants' contentions. Judge Fitzgerald says there will be no other fact discovery of Dr. Whitehouse in connection with the Estimation Proceeding, except that these rights are reserved: (a) all Parties' rights concerning any potential deposition of Dr. Whitehouse, provided that any request to depose Dr. Whitehouse will be made on reasonable advance notice to the Government and all Parties; (b) all Parties' rights pursuant to Rule 26 of the Federal Rules of Civil Procedure to seek discovery of Dr. Whitehouse in his capacity as an expert witness for the Libby Claimants, other than discovery of medical records with respect to the 550 Whitehouse Database Patients and the Libby Claimants; and (c) all Parties' right to raise before Judge Molloy issues related to whether the medical records of the 550 Whitehouse Database Patients are properly redacted to exclude the patient's name, address, contact information, insurance information, and social security number, but not to remove medically relevant information. As to medical records of 800 individuals who are not represented by counsel in the Debtors' proceeding and have been diagnosed with Libby tremolite asbestos disease at the Center for Asbestos Related Disease, all Parties will seek mediation by Judge Roger M. Whelan before serving discovery relating to those records. Judge Fitzgerald further directs the Parties to cooperate concerning the timing and logistics of producing the medical records, provided that all reasonable costs of reproducing medical records will be paid by Grace. In addition, the reasonable costs of the CARD Clinic's staff to assemble the records, and to reassemble its files after copying, will be paid by Grace in advance. However, all Parties reserve the right to raise before the Discovery Mediator in the first instance any issues related to the reasonableness of the proposed costs before they are incurred. All records of the Libby Claimants not among the 550 Whitehouse Database Patients will be produced on a rolling basis with the production completed by July 14, 2006. The medical records produced pursuant to the Discovery Order will be: -- subject to the Protective Order; -- subject to any subsequent orders issued by Judge Molloy governing the use of medical records in the Montana Criminal Case; and -- limited to the Estimation proceeding. Judge Fitzgerald defers to Judge Molloy the issue whether there will be any restriction placed on Grace's use of the Libby Claimants' medical records in the Montana Criminal Case and any questions, other than those expressly addressed in the Protective Order, related to individual privacy. The Discovery Order will in no way be construed to impose any obligation on the Government in the Debtors' case or broaden the scope of the Government's discovery obligations in the Montana Criminal Case. Terms of Protective Order In conjunction with the Discovery Order, Judge Fitzgerald also rules that the right to access documents and records being produced or disclosed is limited to: * the Parties; * medical and scientific experts, whose review of the Records is necessary for the presentation the Parties' cases, or who will provide expert testimony on the Parties' behalf; and * law clerks, investigative agents, paralegals, and secretaries employed by the Parties' attorneys and agents, whose review of that material is required for the presentation of the Parties' cases. The Protective Order is intended to protect the confidentiality of the documents produced by Dr. Whitehouse in a manner consistent in principle with the protections detailed in Judge Molloy's orders in the Montana Criminal Case. Judge Fitzgerald rules that the Records will be maintained by the Authorized Individuals and will be used exclusively in connection with the Estimation Proceeding. Within 60 days after an order that has the effect of concluding the Estimation Proceeding becomes final and non-appealable, each Authorized Individual will dispose of a copy of the Records by causing all Records to be destroyed, and certifying to the Bankruptcy Court that the destruction has been accomplished, except that the Libby Claimants will retain one copy of the Records and Grace will certify and return a copy of the Records to counsel for the Libby Claimants, who will retain those Records until further order of the Bankruptcy Court. If any Party in the Estimation Proceeding requires introduction into evidence of any of the Records, the Party may introduce that Record in a form that has been redacted to remove the Patient Identifying Information. Instead, the Party redacting that Record will assign the patient a number that will be used to identify that patient in the Estimation Proceeding. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan LLP represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., and Nathan D. Finch, Esq., at Caplin & Drysdale represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP to represent it. Lexecon, LLP, provided asbestos claims consulting services to the Official Committee of Equity Security Holders. W.R. GRACE: Dist. Court Dismisses Part of Libby Criminal Case ------------------------------------------------------------- The U.S. District Court for the District of Montana grants a request of W.R. Grace & Co. and seven former officers to dismiss part of a criminal case relating to Grace's former vermiculite mining and processing operations in Libby, Montana. Count I of a 10-count grand jury indictment charges that from 1976 until 2002, Grace and its former officers conspired to conceal and misrepresent the hazardous nature of the tremolite asbestos-contaminated vermiculite, and obstruct federal agency proceedings to increase the company's profits and avoid liability. The Indictment says the defendants misled the government and prevented the government from using its authorities to protect against risks to human health and the environment associated with the manufacture, processing, distribution, use, handling, and disposal of tremolite asbestos-contaminated vermiculite. The defendants argued that the "knowing endangerment object" is time-barred because the Indictment does not allege an act in furtherance of the knowing endangerment object within the five- year statute of limitations period. The Montana Court has previously determined that the limitations period stretches back to November 3, 1999. The U.S. government opposed the defendants' request as untimely and argues that the post-1999 acts of concealment alleged in the Indictment are acts done in furtherance of both the defrauding object and the knowing endangerment object of the conspiracy. District Judge Donald Molloy agrees that the five-year statute of limitation had expired. "In this case the Defendants have the better argument," he says. A full-text copy of the Montana Court order is available for free at http://ResearchArchives.com/t/s?b6b About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan LLP represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., and Nathan D. Finch, Esq., at Caplin & Drysdale represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP to represent it. Lexecon, LLP, provided asbestos claims consulting services to the Official Committee of Equity Security Holders. W.R. GRACE: Dist. Court Upholds Indefinite Stay on Libby Lawsuit ---------------------------------------------------------------- The U.S. District Court for the District of Delaware dismissed an appeal filed by W.R. Grace & Co. claimants to overturn an indefinite stay order issued by the Bankruptcy Court. Claimants injured by exposure to tremolite asbestos from W.R. Grace's operations in and near Libby, Montana, have taken an appeal from Judge Fitzgerald's order enjoining them from prosecuting tort claims against the state of Montana before the Montana District Courts for Lincoln, Cascade, Lewis and Clark counties. Judge Fitzgerald entered an order temporarily staying lawsuits against Montana pending the Bankruptcy Court's decision on the Debtors' request to expand the preliminary injunction to include actions against Montana. Judge Fitzgerald did not provide any deadline for the temporary stay. The Libby Claimants said the Bankruptcy Court has indicated that the decision on the Debtors' injunction motion could take over a year. The Debtors sought dismissal of the appeal. According to District Court Ronald L. Buckwalter, the matter is remanded to the Bankruptcy Court so that it can advise parties of a specific date on or before which it expects to render a decision on the Debtors' request. The state of Montana is a defendant in at least 120 lawsuits involving the Debtors' mining operations in Montana. In June 2005, Montana asked the Bankruptcy Court to lift the automatic stay so it can name the Debtors as third-party defendants in 83 asbestos cases currently pending against the State in Lincoln County, Cascade County, and Lewis and Clark County. Montana asserts indemnification and contribution claims from Grace for any sum that may be adjudged against the State in the tort suits. The Debtors and the statutory committees appointed in the bankruptcy cases -- the Official Committee of Unsecured Creditors, the Official Committee of Asbestos Personal Injury Claimants, and the Official Committee of Asbestos Property Damage Claimants -- objected to the Lift Stay Motion. The Debtors and the Committees argued that Montana is attempting to do an end run around the Debtors and the bankruptcy process. The Debtors would incur substantial prejudice if the automatic stay were modified. In their request to expand preliminary injunction, the Debtors argued that allowing those actions to proceed against the State could have detrimental effect on the bankruptcy estates. The Debtors said they could be subject to additional fixed and liquidated indemnity claims. They also run the risk that the record established in those actions could adversely affect their ultimate defenses with respect to any asbestos claims against them. In his two-page memorandum, Judge Buckwalter notes that the indefinite nature of the Bankruptcy Court's stay order presents an exceptional circumstance for the District Court to entertain an interlocutory appeal. According to Judge Buckwalter, a time frame in which the Bankruptcy Court will render its decision on the Debtors' request to expand the preliminary injunction to include actions against Montana would be appropriate in light of the indefinite stay order. However, Judge Buckwalter says the Bankruptcy Court is best suited to determine that time frame. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan LLP represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., and Nathan D. Finch, Esq., at Caplin & Drysdale represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott L. Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP to represent it. Lexecon, LLP, provided asbestos claims consulting services to the Official Committee of Equity Security Holders. WESTERN MEDICAL: Case Summary & 19 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Western Medical, Inc. 805 Miller Valley Road Prescott, Arizona 86301 Bankruptcy Case No.: 06-01784 Type of Business: The Debtor sells and distributes medical and hospital equipment such as wheelchairs, walkers, hospital beds, medical & surgical supplies, respiratory aids, and others. See http://www.westernmedicalinc.net/ Chapter 11 Petition Date: June 15, 2006 Court: District of Arizona (Phoenix) Judge: Redfield T. Baum Debtor's Counsel: Brenda K. Martin, Esq. Osborn Maledon, P.A. The Phoenix Plaza 2929 North Central Avenue, Suite 2100 Phoenix, Arizona 85012-2794 Tel: (602) 640-9346 Fax: (602) 664-2043 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service 2003 & 2004 $771,782 Ogden, UT 85201 941 Taxes McKesson Med-Surg Acct. Goods & Services $504,059 Minn Supply Inc. P.O. Box 27100 Golden Valley, MN 55427-0100 Pride Mobility Products Corp. Goods & Services $196,562 c/o Carmichael & Powell, P.C. 7301 North 16th Street Suite 103 Phoenix, AZ 85020-5297 Hill-ROM Co. Inc. Goods & Services $182,166 PRAXAIR Goods & Services $96,444 RX Positive aka PRN Goods & Services $81,301 Convaid Products Inc. Goods & Services $78,689 Stat-Med Inc. Goods & Services $74,303 Dex Media, Inc. Goods & Services $73,202 Airgas Puritan Medical Goods & Services $71,760 Bankers Leasing Co. Goods & Services $63,467 Wright Express Fleet Fueling Goods & Services $63,406 DVI Goods & Services $57,424 Regency Medical Equipment Goods & Services $54,086 Alltel Goods & Services $50,384 Animas Corporation Goods & Services $45,771 AZ CPM Goods & Services $44,192 Crown Goods & Services $44,150 Balboa Credit Corp. Equipment Lease $38,513 WINN-DIXIE: Wants Bowdoin Square Claims Compromise Approved ----------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida to approve a compromise of claims filed by Bowdoin Square, LLC: (a) Claim No. 9939 for $1,267,412 against Winn-Dixie Stores, Inc.; and (b) Claim No. 9940 for $1,267,412 against Winn-Dixie Montgomery, Inc. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that in 2002, Bowdoin filed an action in the Circuit Court of Mobile County, Alabama, alleging that the Debtors breached their obligations under a lease and guaranty. The Debtors defended the State Court Action and asserted that the lease has been terminated when the use of the property changed. The Debtors prevailed at trial, but the verdict was overturned on appeal and the case was remanded for a new trial. Before the second trial was to commence, the Debtors and the Claimant agreed to settle the State Court Action. Pursuant to the settlement agreement, Bowdoin agreed to accept $400,000 in full satisfaction of the claims asserted in the State Court Action. However, before the settlement payment could be made, the Debtors' Chapter 11 petitions were filed. In accordance with the Settlement Agreement, the parties have agreed to compromise the Claims: (a) Each of the Claims will be allowed as an unsecured non- priority claim for $400,000 to be treated in accordance with a confirmed plan of reorganization in the Debtors' Chapter 11 cases; (b) In the event that the Debtors' cases are not substantively consolidated, Bowdoin will not receive distributions from the Debtors having an aggregate value that exceeds $400,000; (c) If the Debtors' cases are substantively consolidated for purposes of distribution under a confirmed plan of reorganization, the plan may provide that no distributions will be made in connection with claims that are based on guarantees and, in that event, no distribution will be made on Claim No. 9939; and (d) Bowdoin will dismiss with prejudice the action pending in the Circuit Court of Mobile County, Alabama. 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. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Wants Compromise Pact With Schreiber Foods Approved --------------------------------------------------------------- To resolve all issues in dispute between them, including pending litigation, past and future business relationship issues, and associated bankruptcy claims, Winn-Dixie Stores, Inc., and its debtor-affiliates and Schreiber Foods, Inc., ask the U.S. Bankruptcy Court for the Middle District of Florida to approve a compromise with these terms: (a) Dismissal with prejudice of the lawsuit entitled Winn-Dixie Stores, Inc., v. Schreiber Food, Inc., pending in the Eastern District of Wisconsin, Green Bay Division, including all issues raised in the complaint, the counterclaim and other filings. (b) Rejection of the Supply Agreement between Winn-Dixie Stores, Inc., and Schreiber, dated April 2, 2002, including any amendments. (c) Execution of a new supply agreement in the name of Winn-Dixie Procurement, Inc., that will have: * A three-year duration; * No liability termination right in favor of the Debtors in the event the Debtors' Chapter 11 plan of reorganization is not confirmed or does not become effective; * Exclusivity for Schreiber as the Debtors' sole Winn-Dixie branded cheese supplier; * No minimum volume purchase obligations on the part of the Debtors, but price incentives (discounts) in favor of the Debtors based on the pounds of product purchased; * Agreed upon pricing and agreed terms for packaging and promotion; and * Credit terms for the Debtors of net 15 EFT. (d) Disallowance of Claim No. 10961 against Winn-Dixie Stores, Inc., for $4,066,838, when the Debtors' confirmed Chapter 11 plan of reorganization becomes effective. However, if the new supply agreement is terminated because the Debtors' chapter 11 plan of reorganization is not confirmed or does not become effective, then Claim No. 10961 will be allowed as a general unsecured claim for $4,066,838. (e) Waiver by Schreiber of all claims it had or may have had against the Debtors as of May 10, 2006, including, without limitation, any claim for liquidated damages arising from early termination of the Original Contract or any claim for rejection damages arising from the rejection of the Original Contract. (f) Waiver by the Debtors of all claims they had or may have had against Schreiber as of May 10, 2006, including, without limitation, any claim under Chapter 5 of the Bankruptcy Code. Mr. Baker asserts that in the absence of the compromise, the parties would incur costs in the continuing Litigation and the Debtors would be forced to: (i) reject the Original Contract and incur the potential disruption of finding an alternative supplier, along with a significant rejection damage claim; or (ii) assume the Original Contract with all of its burdens and incur cure obligations that would have administrative claim status. Background Schreiber Foods, Inc., is a manufacturer and distributor of various food products, including natural and processed cheese. On April 2, 2002, Schreiber purchased from the Debtors a cheese manufacturing facility. As part of the transaction, Schreiber and the Debtors: (a) entered into a 10-year supply agreement, under which Schreiber agreed to supply cheese products to the Debtors; and (b) settled patent infringement allegations made by Schreiber relating to a machine the Debtors used at the manufacturing facility, with the Debtors agreeing to make payments or provide credits to Schreiber not to exceed $6,000,000, depending on contingencies. At the time of the transaction, Schreiber was involved in patent litigation against the manufacturer of the machine at issue. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, tells the Court that the Debtors agreed to the Patent Settlement only because Schreiber had successfully obtained on appeal the reinstatement of a $26,000,000 jury verdict against the machine manufacturer. Nevertheless, Winn-Dixie's $6,000,000 obligation was structured to be contingent upon further developments in Schreiber's patent litigation against the manufacturer. However, the trial court later vacated the reinstated jury verdict on which the Debtors relied in agreeing to the Patent Settlement. Although the appeals court agreed that the jury verdict was properly vacated, it held that Schreiber was entitled to a new trial. As of May 26, 2006, no new trial has ensued, due in part to Schreiber's waiver of its damage claim against the machine manufacturer, Mr. Baker tells the Court. Litigation The Debtors have paid $2,300,000 of the $6,000,000 owed under the Patent Settlement and Schreiber was seeking to collect the balance. Upon learning of the events in Schreiber's patent litigation, the Debtors filed a lawsuit against Schreiber in the United States District Court for the Eastern District of Wisconsin, Green Bay Division: (a) alleging material misrepresentation in the negotiation of the Patent Settlement; and (b) seeking a return of amounts paid and cancellation of further obligations owed. Schreiber counterclaimed for the remaining amount due under the Patent Settlement. As of the Petition Date, the Litigation was pending and the Original Contract continued in effect with a remaining term of six years. Schreiber filed in the Debtors' Chapter 11 cases proofs of claim against the Debtors for: -- $4,066,838, representing remaining amounts allegedly owed under the Patent Settlement; and -- $2,200,408, representing prepetition amounts allegedly owed under the Original Contract for sales of product by Schreiber to the Debtors. On Oct. 7, 2005, Schreiber also sought to compel the Debtors to assume or reject the Original Contract. 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. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Wants to Reject Two Deerwood Property Leases -------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Middle District of Florida to reject two Deerwood Property Leases effective as of June 15, 2006. The Debtors lease two buildings in Jacksonville's Deerwood area as part of their headquarters operations, D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates. The Debtors lease the Deerwood Property under a lease dated: (i) March 1, 2003, between Winn-Dixie Stores, Inc., and Koger Equity, Inc.; and (ii) May 15, 2003, between WD Stores and Watch Holdings, LLC. Mr. Baker tells the Court that the Debtors have decided to consolidate their business operations into their headquarters office at Edgewood Court in Jacksonville. Mr. Baker says if the Debtors reject the Leases, they will save more than $1,200,000 annually. 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. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: IRS Wants Access to Substantive Consolidation Papers ---------------------------------------------------------------- The Internal Revenue Service wants access to papers filed by trade creditors of Winn-Dixie Stores, Inc., in their bid to substantively consolidate the chapter 11 cases of the supermarket chain and its 23 units. In a court filing Tuesday, the IRS said the trade group hasn't shown a need to block public access to the supporting documentation, or to restrict access by creditors and other parties in the case, who could be directly affected by a substantive consolidation. The group, holding about $55 million in trade claims against the company, wants the U.S. Bankruptcy Court in the Middle District of Florida in Jacksonville to substantively consolidate the chapter 11 cases, so that the assets of Winn-Dixie and its units can be pooled to pay creditors. The IRS claims the company owes it about $82 million and says it can't take a stand on the consolidation request until it receives supporting documentation from the trade group. The trade group, however, has said the documentation is based, in part, on "non-public, confidential and proprietary information" about the company and has asked the court to allow it to keep those information under seal, disclosing it to creditors only if they sign confidentiality agreements. "The paucity of the motion to file under seal is particularly troubling in light of the importance of the underlying motion to consolidate," the IRS said. Another Winn-Dixie creditor, Lassiter Properties Inc., also objected to the trade group's request. The group hasn't provided any summary or privilege lists that would enable creditors to determine whether the documents and information truly are confidential or are being withheld improperly, Lassiter said in a May 25 filing. Creditors, Lassiter said, are being denied access even to the legal authority on which the trade group is basing its request for substantive consolidation. "Denied the barest explanation or description as to the nature of the alleged confidential materials, Lassiter and other creditors are unable to protect their interests against the sweeping and significant relief requested," the creditor said. It thus asked the Bankruptcy Court to reject the trade group's bid to keep documents under wraps. 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. WORLDCOM INC: Court Okays Stipulation Expunging B. Ebbers' Claims ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New York approved the settlement agreement between WorldCom, Inc. and Bernard J. Ebbers disallowing and expunging Mr. Ebber's Claim Nos. 20659 and 36383 in their entirety. As reported in the Troubled Company Reporter on May 31, 2006, on January 22, 2003, former WorldCom Chief Executive Officer Bernard J. Ebbers filed Claim No. 20659, asserting administrative expense claims and general unsecured claims for: -- amounts allegedly due or that become due under a certain Separation Agreement between Mr. Ebbers and the Debtors; -- the Debtors indemnification and related expense reimbursement obligations under the Restated Bylaws of MCI, Inc.; and -- the Debtors' obligations under a guaranty and letter agreements executed in connection with it. In October 2003, Mr. Ebbers filed Claim No. 36383, asserting a $12,166,752 unsecured non-priority claim on account of stock options that the Debtors rejected. Since April 2002, various actions were filed in, or transferred to, the United States District Court for the Southern District of New York, by and on behalf of persons who purchased or otherwise publicly traded securities of WorldCom. Mr. Ebbers is named defendant in the Securities Litigation. The United States Attorney for the Southern District of New York facilitated a three-way settlement discussion among the Debtors, the Class and Mr. Ebbers. About WorldCom Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and on Apr. 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 119; Bankruptcy Creditors' Service, Inc., 215/945- 7000) YOUNG CHANG: Court Grants Chapter 15 Petition ---------------------------------------------- The Honorable Judge Paul Snyder of the U.S. Bankruptcy Court for the Western District of Washington in Tacoma entered an order recognizing Young Chang Company Limited's bankruptcy proceedings at the Incheon District Court in Korea, as a foreign main proceeding pursuant to Chapter 15 of the U.S. Bankruptcy Code. Young Chang, through its foreign representative, Ho Seok Lee, filed for relief under Chapter 15 with the U.S. Bankruptcy Court on Jan. 13, 2006. The foreign debtor asked for recognition of its corporate reorganization proceeding in Korea to prevent Samsong Manufacturing Co., Ltd., from pursuing a civil action against the Company in the Pierce County Superior Court. Through the civil action, Samsong hoped to seize certain of Young Chang's U.S. receivables as payment for the Debtor's KRW2.1 billion debt to Samsong. In his order, Judge Snyder suspended any right of any party-in- interest, other than the foreign representative, to transfer, encumber or otherwise dispose of Young Chang assets. Judge Snyder rules that the administration and realization of all or part of the Debtor's assets within the United States is entrusted to the foreign representative. 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. ZALE CORP: Board Ends Talks with Signet Group on Potential Merger ----------------------------------------------------------------- Zale Corporation (NYSE:ZLC) was approached by Signet Group regarding a potential business combination. After careful consideration, Zale's board of directors has terminated the discussions, having concluded that its shareholders are best served by continuing as an independent company. Zale's board said that it remains focused on driving shareholder value as its first and foremost goal. "We are putting the pieces in place to regain market share and improve profitability and have strengthened leadership in key operating units," Betsy Burton, Acting Chief Executive Officer, commented. "Our management team is fully focused on preparing the Company for the 2006 Holiday Season, having developed a sound 'back to basics' plan for accomplishing its key strategic objectives." Ms. Burton went on to say that given the Company's strong potential as a stand-alone business, executing its strategy offers the best prospect for enhancing shareholder value. The Company also indicated that it intends to announce the results of its CEO search within the next several weeks. Zale Corporation further reiterated its policy of not commenting on market rumors. Headquartered in Irving, Texas, Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is North America's largest specialty retailer of fine jewelry operating approximately 2,345 retail locations throughout the United States, Canada and Puerto Rico. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Bailey Banks & Biddle, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Through its ZLC Direct organization, Zale also operates online at http://www.zales.com/ and http://www.baileybanksandbiddle.com/ * * * As reported in the Troubled Company Reporter on April 12, 2006, Zale Corporation reported that the Securities and Exchange Commission initiated a non-public investigation relating to various accounting and other matters related to the Company, including accounting for extended service agreements, leases, and accrued payroll. Subpoenas issued in connection with the SEC investigation ask for materials relating to these accounting matters as well as to executive compensation and severance, earnings guidance, stock trading, and the timing of certain vendor payments. Zale believes that its accounting complied with generally accepted accounting principles and is reviewing the matter. The Company will cooperate fully with the SEC's investigation. * Law Firms Buchanan Ingersoll & Klett Rooney To Merge on July 1 ---------------------------------------------------------------- Buchanan Ingersoll PC and Klett Rooney Lieber & Schorling announced today that their firms will merge to form Buchanan Ingersoll & Rooney, effective July 1, 2006. Buchanan Ingersoll is one of the largest full service law firms in the country and Klett Rooney is a 130-attorney firm with offices that mirror much of Buchanan's existing footprint in cities that include Philadelphia, Harrisburg, Pittsburgh and Wilmington, Delaware. The deal will likely boost the combined firm to become one of the 80 largest law firms in the United States, with estimated gross revenues of $265 million and a head count of more than 525 attorneys and government relations professionals. The transaction comes almost exactly one year after Buchanan's June 1, 2005, addition of the 55 attorneys and patent professionals of the nationally known IP firm Burns Doane. Buchanan CEO Tom VanKirk, who was recently re-elected to lead the firm through at least 2009, said, "This is the largest combination our firm has ever done, and it was an obvious match for us in terms of culture, practice area and the continued development of our strategic plan. Strengthening our Mid-Atlantic presence better enables us to continue to pursue our goal of being a strong national firm operating as one unified entity." Jack Barbour, who is the managing shareholder of Klett Rooney and will serve as an executive shareholder at the combined firm, said his firm chose to join Buchanan for a number of reasons, including similarities in culture and strategic plans: "I've known Tom VanKirk, Fran Muracca and Buchanan Ingersoll for many years, so it was easy to see how we could create a strong partnership out of our two firms. The geography fit. Our clients fit. The practices fit. This was one of those rare decisions in life that almost makes itself." In total, 250 Klett Rooney attorneys, government affairs professionals and staff members will join Buchanan. Klett Rooney has a national client base and serves companies such as Chubb Insurance, UPMC Health Systems, The Pittsburgh Steelers, Reliant Energy and Verizon. Howard Scher, head of Buchanan's Philadelphia office, added that the benefits of this merger will be particularly noticeable in the Delaware Valley since the combination adds depth to practice areas such as traditional labor and creditors' rights. He said, "This combination gives us nearly 90 attorneys in the region, and that will help us offer increased services to all of our clients. It also enables us to attract and recruit the highest caliber attorneys who are looking for the resources of a national firm to serve their clients and to grow their practices. And it's clearly a benefit to recruiting the best and brightest from law schools and judicial clerkships." Klett Rooney brings particularly strong real estate, government affairs, litigation and labor practices that mesh well with Buchanan's work in those areas. It also has significant bankruptcy, corporate, gaming, international business, higher education and general liability defense practices, as well as a strong PUC practice in Harrisburg that fills a Buchanan need in that area. The Klett Rooney combination is the latest in a series of additions that Buchanan has undergone since 2005. The firm added more than 100 attorneys and government relations professionals last year, including: * the attorneys and professionals from the IP firm Burns Doane Swecker & Mathis in Alexandria, Virginia, and San Diego and Silicon Valley, California; * government relations boutique Hill Solutions in Philadelphia and Washington, D.C.; * a group of nine litigators from Saul Ewing in Philadelphia; * tax, transactional and immigration attorneys from Steel Hector in Miami; and * the national litigation boutique of Slotnick, Shapiro & Crocker in New York. A New Name After nearly three decades as Buchanan Ingersoll, the new firm will change its name to Buchanan Ingersoll & Rooney. The Rooney name belongs in this case to Arthur J. Rooney, II, a former managing shareholder of Klett Rooney who currently serves as of counsel at the firm and as president and general counsel of the Pittsburgh Steelers. He was also recently named NFL Executive of the Year. He will continue as of counsel at Buchanan. Mr. VanKirk says the addition of the Rooney name will help the firms integrate and move forward as one organization as quickly as possible. From Mr. Barbour's perspective, the name change also signals a combination of two strong firms. He said, "The Rooney name is known and respected throughout the country, and having that name combined with Buchanan Ingersoll sends a message of unity and excellence to our clients." About Klett Rooney Klett Rooney Lieber & Schorling is a business law firm with 130 lawyers and a national client base. In addition to its Pittsburgh headquarters, the firm has offices in Philadelphia, Harrisburg, Wilmington, Newark, New Jersey, and Washington, D.C. The firm can be traced to a sole practitioner who began practicing in 1902 with a focus on tax law. During the first half of the 20th century, the firm expanded its offerings to business clients throughout Western Pennsylvania to include securities, mergers and acquisitions, and other corporate legal matters. By the 1960s, it was one of Pittsburgh's largest business law firms. In 1986, the firm opened an office in Harrisburg to better serve clients throughout Pennsylvania. The 1990s brought more growth with the implementation of a strategic plan to become a Mid- Atlantic regional law firm. In 1994, the firm opened an office in Philadelphia, followed by a fourth office three years later in Wilmington, DE. In 2001, the firm further expanded its Mid- Atlantic presence with the opening of an office in Newark, New Jersey, as well as an office in Washington, D.C. About Buchanan Ingersoll Buchanan Ingersoll PC is one of the largest law firms in the nation. Following the combination with Klett Rooney, the firm has more than 525 attorneys and government relations professionals practicing throughout the United States, with principal offices in the cities of Pittsburgh, Philadelphia, Washington, D.C., Alexandria, New York, Princeton, Harrisburg, Miami, Tampa, Wilmington, Cleveland, Newark, Silicon Valley and San Diego. The firm's attorneys have experience in a range of industries as entertainment and media, pharmaceuticals and biomedicine, technology, financial institutions, construction, franchise and real estate. Within these and other industries, Buchanan attorneys focus on more than 65 practice areas, including Corporate Finance, Litigation, Tax, Government Relations, Labor & Employment, Intellectual Property and Health Care. The firm serves national and international clients that include Fortune 500 corporations, start-ups, technology companies and financial institutions. * BOOK REVIEW: A Hundred Years of Medicine ------------------------------------------ Author: C. D. Haagensen and Wyndham E.B. Lloyd Publisher: Beard Books Paperback: 504 Pages List Price: $34.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1587980878/internetbankrupt A Hundred Years of Medicine is presented in four parts. Part I discusses the historical background of modern medicine, which is considered to have begun in England around the middle of the 1700s. About half of the chapters in Part II on the history of infectious disease remain, for the most part, as Lloyd wrote them. The other half of Lloyd's chapters in Part II and all of Part III, "Surgery During the Last Hundred Years," and Part IV, "New Social Aspects of Medicine," have been entirely rewritten by Haagensen. Haagensen's extensive 2000 update of Lloyd's original 1943 work is in keeping with that author's original intention that his "historical essay may prove to be of value not only to the layman [its primary audience] . . . but also to those medical practitioners and students who have not found time for any specialized study of the history of medicine." This book is not presumed nor intended to be comprehensive. Lloyd remarks in the preface to the original edition that his intent is to present the subject matter in a manner that is not "too technical [for] the non-medical reader." However, A Hundred Years of Medicine does provide a thorough discussion of medical issues, including advances in surgery during this time, that the reader is certain to find fascinating. Part I, a general history of medicine titled "Medicine Up to a Hundred Years Ago," demonstrates the progress that has been made in the medical field, including the contributions of its primary professionals (doctors) and institutions (hospitals). Hospitals, which became prevalent in the eighteenth century, were not only centers for the treatment of medical problems, but also served as places for conducting scientific and research studies that would further the field of medicine. Part I also contains a broad historical section that sets the context for the advances in understanding and treatment of disease and the major improvements in surgical procedures during the nineteenth and early twentieth centuries. In the second and third parts, on diseases and surgery respectively, the reader learns that "important medical advances are not made in a single day but are generally the result of a laborious series of steps made by a number of different workers over long periods of years." It is here that the book moves from a historical treatise to a discussion of particular medical conditions and their treatments. Lloyd and Haagensen illuminate the developments in chronological order so the reader can appreciate the challenges, breakthroughs, and notable junctures in medical and surgical achievements. The authors also follow, however, parallel developments in other areas of medicine that, taken together, portray the forward movement of the entire medical field. In line with this approach, the general subject of disease in Part II is delineated into chapters on the three main areas of developments of germ theory: ineffective organisms, germs outside the body, and germs inside the body. Also found in this part are separate chapters on the introduction of chemotherapy; the campaigns to combat tuberculosis, diabetes, and anemia; and the role of vitamins in preventive medicine. The nineteenth century was notable for the large strides made in the recognition, diagnosis, and treatment of disease. At the core of this advancement was the discovery of the animal cell. This, in turn, led to the conception of the living body as a vast organization consisting of millions of tiny individual cells. This view, which came to be known as Cell Theory, quickly spread throughout the medical field because it answered centuries-old medical mysteries and gave doctors scientifically-based guidance for identifying and treating diseases. Eventually it led to developments in disease prevention and public sanitation for individuals and governments. First posited little more than one hundred years ago, Cell Theory remains the basic principal of today's medical field by which doctors are educated and trained and diseases are treated. In recent decades, Cell Theory has led to remarkable progress in the treatment of cancer and one day may result in a cure for it, as tuberculosis and polio were cured in earlier times. The authors similarly cover the historical turning point in the field of surgery. Surgery is considered the "opening of the great cavities of the body, the abdomen and chest...to operate upon the viscera." Before the early 1800s, medical treatment had been limited to dealing with wounds and diseases on the "surface of the body and in the extremities." There were no doctors called surgeons as such. But in 1809 in his home in Danville, Kentucky, where he had begun his practice in 1795, 38-year old Ephraim McDowell removed a 22.5 lbs. ovarian tumor from a woman in what was the first surgery lasting 25 minutes without anesthesia. It was seven years before McDowell performed another ovariotomy, and not until the 1820s before other doctors performed the operation. With the introduction of anesthesia in the early 1840s, surgery quickly moved into new areas and developed rapidly. With such engaging, sometimes-dramatic material and portrayals of the pioneers of medicine, A Hundred Years of Medicine offers a readable and memorable history of medicine. ********* 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 G. Lopez, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q. Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., 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 ***