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/raid1/www/Hosts/bankrupt/TCR_Public/060622.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, June 22, 2006, Vol. 10, No. 147 Headlines ACTIVECORE TECH: Posts $1.3 Mil. Net Loss in First Quarter 2006 ACTUANT CORP: Earns $26.8 Million in Third Quarter 2006 AEOLUS PHARMACEUTICALS: Equity Deficit Tops $1.4 Mil. at March 31 AEROSOL PACKAGING: Case Summary & 20 Largest Unsecured Creditors AFFILIATED COMPUTER: Share Repurchase Plan Cues S&P to Cut Ratings AIRADIGM COMMS: Files Schedules of Assets and Liabilities AIRWAY INDUSTRIES: Creditors Have Until July 17 to File Claims ALISON GEM: Trustee Wants June 30 as Deadline to File Claims ALISON GEM: Sells Inventory to Royal Diamond & Diamond Traders ALL-AMERICAN SPORTPARK: Files Amended 2004 Annual Report ALLIANCE LAUNDRY: Sells AJAX Trademark to Sankosha for $1.2 Mil. ALLIANCE LAUNDRY: S&P Affirms B Rating on Senior Secured Loans ALLIED HOLDINGS: Teamsters Authorize Strikes If Contracts Voided ALLSERVE SYSTEMS: Trustee Can File Removal Notices Until August 4 AMCAST INDUSTRIAL: Can Employ Thompson Hine as Special Counsel AMCAST INDUSTRIAL: Court Moves Plan Filing Deadline to Sept. 27 AMERICAN MOULDING: Stancil & Company's Scope of Work Expanded BACHRACH CLOTHING: Taps Alliance Management as Financial Advisor BACHRACH CLOTHING: Has Until July 7 to File Schedules BLUE BEAR: Files Amended Joint Plan of Reorganization in Colorado BREUNERS HOME: Employs Andrew Sklar to Collect Judgments BROADCAST INT'L: Mar. 31 Balance Sheet Upside-Down by $2.5 Million BROOKS SAND: Ch. 11 Trustees Want Lease Decision Period Extended CATHOLIC CHURCH: Court Approves Portland's Disclosure Statement CATHOLIC CHURCH: Dist. Ct. Remands Property Dispute to Bankr. Ct. CATHOLIC CHURCH: Spokane Amends Tort Claim Sharing Protocol CEDAR FAIR: Moody's Puts Ba3 Rating on Sr. Sec. Credit Facility CITRUS VALLEY: Good Performance Prompts S&P to Lift Rating to BB+ COFFEE PACIFICA: Williams & Webster Expresses Going Concern Doubt COLLINS & AIKMAN: Selling Sundry Assets for $908,500 CONGOLEUM CORP: March 31 Balance Sheet Upside-Down by $44.6 Mil. CONSECO FINANCE: Moody's Reviews Rating on Cert. & May Downgrade CRYSTAL RIVER: Fitch Holds BB+ Rating on $10.75 Million Notes DELPHI CORP: Outlines Lift-Stay Request Procedures DI GIORGIO: Adequate Notes Funding Cues S&P to Withdraw Ratings DIALOG GROUP: March 31 Balance Sheet Upside-Down by $4.1 Million E*TRADE ABS: Fitch Affirms BB+ Rating on $5 Million Class D Notes E*TRADE ABS: S&P Puts Junk Ratings on Negative Watch EAGLEPICHER HOLDINGS: Has Until Sept. 3 to Decided on Leases EAST CAMERON: S&P Junks Rating on $165.67 Mil. Trust Certificates EASY GARDENER: Completes $58.7 Million Assets Sale to Green Thumb GARY RICHARDS: Case Summary & 18 Largest Unsecured Creditors GENERAL MOTORS: Fitch Rates New $4.48 Billion Facility at BB GIBRALTAR LTD: S&P Holds Rating on Class C Notes & Removes Watch GROUP 1 AUTOMOTIVE: Prices $250 Million of 2.25% Convertible Notes GROUP 1 AUTOMOTIVE: Higher Debt Levels Cue S&P's Negative Outlook HEADWATERS INC: Offering $150MM of Sr. Notes in Private Placement HEADWATERS INC: Moody's Rates Proposed $150 Million Notes at B3 HEADWATERS INC: S&P Rates Proposed $150 Million Subor. Notes at B HEATING OIL: Units Want CCAA Court to Implement Confirmation Order IRIDIUM SATELLITE: Moody's Junks Rating on Senior Sec. Facility ISORAY INC: Posts $1.6 Mil. Net Loss for 3rd Qtr. Ended March 31 IVI COMMUNICATIONS: Bagel Josephs Expresses Going Concern Doubt J.L. FRENCH: Delaware Court Confirms Plan of Reorganization KAMP RE: S&P Retains Negative Watch on CC-Rated $190 Million Note MEDIQUIP HOLDINGS: Malone & Bailey Expresses Going Concern Doubt MERRILL LYNCH: Fitch Lifts Ratings on Class B-2 & B-5 Certificates MICROFIELD GROUP: Posts $5.2 Mil. Net Loss in 2006 1st Fiscal Qtr. MIRANT CORP: Creditors Committee Objects to Professional Fees MIRANT CORP: Court Denies Shareholders' Move for Protective Order NATIONAL ENERGY: USGen Files Post-Confirmation Reports NATIONAL ENERGY: Posts $857,058 Net Sales in Qtr. Ended April 30 NVE INC: Gets Court Nod to Enter Insurance Accord with A.I.Credit OCA INC: Court Dismisses Motions Enforcing Automatic Stay OPTICAL DATACOMM: Court Converts Ch. 11 Case to Ch. 7 Liquidation OXFORD MEDIA: March 31 Working Capital Deficit Tops $4.4 Million PARMALAT USA: Grand Cayman Court Appoints Kroll as Liquidator PARMALAT USA: Creditors Approve Parmalat Brasil Sale to LatAm PENN NATIONAL: Ernst & Young Replaces BDO Seidman as Auditor PLATFORM LEARNING: Case Summary & 20 Largest Unsecured Creditors PLIANT CORP: Files Third Amended Plan of Reorganization in Del. POPE & TALBOT: Debt Refinancing Prompts Moody's to Junk Rating PREMIUM PAPERS: Sells SMART Papers to Unidentified Company PRICE OIL: Court Extends Lease Decision Period to July 20 PRIDE BUSINESS: Malone & Bailey Expresses Going Concern Doubt PRIMUS TELECOMMS: Receives Nasdaq Delisting Notice on Common Stock PROCARE AUTOMOTIVE: Wants to Use Cash Collateral to Wind Down PROCARE AUTOMOTIVE: Wants Court to Set July 17 as Claims Bar Date PRUDENTIAL COMMERCIAL: Fitch Ups Ratings on $36 Mil. Class Certs. REDMAN LLC: Case Summary & 12 Largest Unsecured Creditors REDPRAIRIE CORP: Moody's Junks Rating on $45 Million Senior Loan REPUBLIC STORAGE: Wants Court OK to Terminate Retiree Benefits RESI FINANCE: Fitch Upgrades Ratings on 17 Class Certificates RESMED INC: Notes Conversion Prompts S&P to Withdraw BB- Rating SAGAMORE HOLDINGS: April 2 Balance Sheet Upside-Down by $3.8 Mil. SCHOLASTIC CORP: Low Revenues Prompt Moody's to Downgrade Rating SEARS HOLDINGS: Fitch Affirms BB Rating on Senior Notes SILICON GRAPHICS: Gets Okay to Hire Ordinary Course Professionals SILICON GRAPHICS: Court Gives Nod on AlixPartners as Advisors SIVAULT SYSTEMS: March 31 Working Capital Deficit Tops $4.8 Mil. SMARTIRE SYSTEMS: Posts $4.2 Mil. Net Loss in Third Fiscal Quarter STATER BROS: Credit Metrics Decline Cues S&P to Cut Ratings to B+ STEVEN SHELTON: Voluntary Chapter 11 Case Summary STEWART & STEVENSON: S&P Rates $150 Million Senior Notes at B- STRIKEFORCE TECH: Incurs $1.3 Million Net Loss in First Quarter SUNSTATE EQUIPMENT: Good Performance Cues S&P's Positive Outlook SUPERCLICK INC: April 30 Balance Sheet Upside-Down by $1.5 Million THREE-FIVE SYSTEMS: Settles Claims Litigation with TFS Electronic TRANSDIGM INC: Prices $275 Million of 7-3/4% Senior Subor. Notes TRANSDIGM INC: Moody's Puts B3 Rating on Senior Subordinated Bond TRANSDIGM INC: S&P Rates Proposed $275 Million Subor. Notes at B- TRUST ADVISORS: Can Hire Heller Ehrman to Litigate v. Grafton USA COMMERCIAL: Section 341(a) Meeting Will Continue on July 12 USG CORP: Sets June 30 Record Date for Rights Offering VIPER NETWORKS: Armando Ibarra Raises Going Concern Doubt WCA WASTE: Moody's Rates Proposed $150 Million Senior Notes at B2 WCA WASTE: S&P Rates Proposed $150 Million Senior Notes at B- WINN-DIXIE: Allows Sylvania Lighting's $1.4 Million Claims * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ACTIVECORE TECH: Posts $1.3 Mil. Net Loss in First Quarter 2006 --------------------------------------------------------------- Activecore Technologies, Inc., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on June 1, 2006. The Company reported a $1,316,057 net loss on $1,654,031 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $9,123,858 in total assets, $7,061,104 in total liabilities, and $2,062,754 in positive stockholders' equity. The Company's March 31 balance sheet also showed strained liquidity with $3,595,239 in total current assets available to pay $6,304,365 in total current liabilities coming due within the next 12 months. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?bbd About ActiveCore Technologies ActiveCore Technologies, Inc. -- http://www.ActiveCore.com/-- fka IVP Technology Corporation operates a group of subsidiaries and divisions in the U.S. and Canada that offer a Smart Enterprise Suite of products and services. The Company integrates, enables, and extends functions performed by current and legacy IT systems. Its products encompass web portals, enterprise middleware, mobile data access, data management and system migration applications. Going Concern Doubt As reported in the Troubled Company Reporter on April 25, 2006, Weinberg & Company, P.A., in Boca Raton, Florida, raised substantial doubt about ActiveCore Technologies' ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditors pointed to the Company's net loss, negative cash flow from operations, working capital deficiency, and accumulated deficit. ACTUANT CORP: Earns $26.8 Million in Third Quarter 2006 ------------------------------------------------------- Actuant Corporation (NYSE:ATU) reported record sales and earnings for its third quarter ended May 31, 2006. Third quarter fiscal 2006 net earnings was $26.8 million compared to net earnings of $20.0 million for the third quarter of fiscal 2005. Net earnings for the nine months ended May 31, 2006 was $67.4 million compared to $52.1 million for the comparable prior year period, representing an increase of 29%. Third quarter sales increased approximately 17% to $316.7 million compared to $271.7 million in the prior year, driven by strong base business growth and revenues from acquired businesses. Excluding foreign currency exchange rate changes and sales from acquired businesses, third quarter sales increased approximately 11% from the comparable prior year period. Sales for the nine- months ended May 31, 2006 were $876.6 million, approximately 24% higher than the $706.7 million in the comparable prior year period, reflecting sales volume added through business acquisitions and strong base business growth. Excluding the impact of foreign currency rate changes and sales from acquired businesses, sales increased 7% for the nine-month period. Net debt at May 31, 2006 was approximately $460 million (gross debt of $479 million less approximately $19 million of cash), compared to $417 million at the beginning of the quarter. The increase in debt during the quarter was attributable to the $95 million of borrowings to fund the D.L. Ricci and Precision Sure- Lock acquisitions, partially offset by approximately $52 million of third quarter cash flow. Availability under the Company's revolving credit facility remained strong at approximately $171 million as of May 31, 2006. Third quarter Tools & Supplies segment sales were $193 million, an approximate 22% increase over fiscal 2005. Excluding foreign currency exchange rate changes and sales from acquired businesses, segment sales increased approximately 10% from the comparable prior year period, driven by continued growth in shipments to the industrial tools and electrical markets. Fiscal 2006 third quarter Engineered Solutions segment sales increased approximately 9% year-over-year to $124 million. Excluding foreign currency exchange rate changes, Engineered Solutions sales increased 11%, a significant improvement from the -1% year-over-year sales change in the second quarter, driven primarily by the substantial increase in automotive convertible top system sales. Robert C. Arzbaecher, President and CEO of Actuant, commented, "We are pleased with third quarter results, especially the 11% sales growth (excluding currency and acquisitions) and the $52 million of cash flow. We continued to see strong demand from a number of our end markets during the quarter, including industrial tools and electrical products, as well as the acceleration in automotive convertible top sales growth. The acquisitions of D.L. Ricci and Precision Sure-Lock in April also added a combined $5.3 million to third quarter revenues. These two businesses complement our existing industrial tools platforms by providing us new products and services that can be combined with our existing offerings to deliver more value to customers." "Actuant's third quarter operating profit margins improved approximately 100 basis points year-over-year, the combined result of favorable sales and acquisition mix, increased fixed cost absorption, cost reductions and increased low cost country sourcing. While we were pleased with these improvements, certain of our businesses are not meeting our margin expectations. This includes automotive due to start-up inefficiencies, European electrical due to a high cost structure, and recreational vehicle due to current industry shipment levels. In addition, a number of businesses experienced sharp increases in the cost of commodities such as electrical steel, plastic resins and copper during the quarter. While we are working hard to manage all of these issues, we expect them to reduce the year-over-year margin growth in the fourth quarter and into 2007." "We made progress during the quarter on restructuring plans for the European electrical business, and expect to begin a multi- faceted program in the next quarter to reduce costs and streamline the business, including shifting labor intensive work out of high- cost regions, outsourcing certain functions to third parties, reducing or eliminating low-margin product lines, and consolidating facilities. While the details of all actions have yet to be finalized, we expect the aggregate pre-tax restructuring costs to be in the range of $17-20 million (approximately $0.49- 0.58 per diluted share), to be recognized starting in the fourth quarter and continuing through the end of fiscal 2007. We anticipate annual pre-tax savings from the restructuring of approximately $7-8 million when fully completed, which we expect in the beginning of fiscal 2008." Arzbaecher concluded, "This brings us to our outlook for the final quarter of fiscal 2006 and our initial view on fiscal 2007. We are expecting fourth quarter results to be similar to those generated in the third quarter (excluding the third quarter tax adjustments), with sales in the range of $310-320 million and EPS of $0.73-0.78 per share, excluding European electrical restructuring costs. Fourth quarter year-over-year sales and EPS growth are forecasted to be in the 15-19% and 16-24% ranges, respectively. Based on these estimates, our fiscal 2006 full year outlook for sales is $1.187-1.196 billion and EPS is $2.92-2.97, again excluding European electrical restructuring costs. Based on an assessment of our markets and the broader economy, as well as a full year's benefit of this year's acquisitions, we anticipate continued sales and EPS growth in 2007. We anticipate fiscal 2007 sales in the range of $1.29-1.31 billion and EPS of $3.15-3.35 per diluted share, excluding European electrical restructuring costs and future acquisitions. We are optimistic about Actuant's future and believe the ongoing execution of our business model will continue to reward shareholders." About Actuant Corp Headquartered in Glendale, Wisconsin, Actuant Corp. (NYSE:ATU) -- http://www.actuant.com/-- is a diversified industrial company with operations in more than 30 countries. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools and supplies. Since its creation through a spin-off in 2000, Actuant has grown its sales from $482 million to over $1 billion and its market capitalization from $113 million to over $1.5 billion. The company employs a workforce of approximately 6,000 worldwide. Actuant Corporation trades on the NYSE under the symbol ATU. Actuant Corp.'s 2% Convertible Senior Subordinated Debentures due 2023 carry Standard & Poor's B+ rating. AEOLUS PHARMACEUTICALS: Equity Deficit Tops $1.4 Mil. at March 31 ----------------------------------------------------------------- Aeolus Pharmaceuticals, Inc., reported a $839,000 net loss on $91,000 of revenues for the three months ended March 31, 2006, compared to a $1.6 million net loss on $6,000 of revenues for the same period in 2005. At March 31, 2006, the Company's balance sheet showed $1.1 million in total assets and $2.2 million in total liabilities, resulting in a $1.4 million stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $669,000 in total current assets available to pay $2.2 million in total current liabilities coming due within the next 12 months. As of March 31, 2006, the Company's accumulated deficit widened to $149.5 million from an accumulated deficit of $147 million at Sept. 30, 2005. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?bc7 About Aeolus Aeolus Pharmaceuticals, Inc. -- http://www.incara.com/-- is developing a variety of therapeutic agents based on its proprietary small molecule catalytic antioxidants, with AEOL 10150 being the first to enter human clinical evaluation. AEOL 10150 is a patented, small molecule catalytic antioxidant that has shown the ability to scavenge a broad range of reactive oxygen species, or free radicals. Because oxygen-derived free radicals are believed to have an important role in the pathogenesis of many diseases, Aeolus' catalytic antioxidants are believed to have a broad range of potential therapeutic uses. Going Concern Doubt Haskell & White LLP expressed substantial doubt about Aeolus' ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Sept. 30, 2005. The auditing firm pointed to the Company's recurring losses from operations as well as stockholders' equity and working capital deficiencies. AEROSOL PACKAGING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Aerosol Packaging, LLC Aerosol Specialties 189 Etowah Industrial Court Canton, Georgia 30114 Tel: (770) 425-0114 Fax: (770) 425-8634 Bankruptcy Case No.: 06-67096 Type of Business: The Debtor is a manufacturer, and a private label & contract filler of aerosol, liquid filling products, durable undercoatings, paints, fabric treatments, and personal care items. See http://www.aerosolspecialties.com/ Chapter 11 Petition Date: June 21, 2006 Court: Northern District of Georgia (Atlanta) Judge: Margaret Murphy Debtor's Counsel: J. Christopher Miller, Esq. Robinson, Jampol, Schleicher & Jacobs LLP Suite 350 11625 Rainwater Drive Alpharetta, Georgia 30004 Tel: (770) 667-1290 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Aeropres Corporation Trade Debts $444,477 P.O. Box 78588 Shreveport, LA 71137-8588 United States Can Company Trade Debts $253,450 LBX 1187 Chicago, IL 60674 BWAY Corporation Trade Debts $156,270 P.O. Box 277306 Atlanta, GA 30384-7306 Crown Cork & Seal USA Inc. Trade Debts $145,116 CL&D Graphics Trade Debts $132,239 Ashland Chemical Company Trade Debts $111,136 Overnite Transport Trade Debts $111,070 Design Packaging Inc. Trade Debts $110,348 Temps Excel Inc. Trade Debts $92,722 Univar USA Inc. Trade Debts $75,366 Navigant Consulting Trade Debts $69,000 Precision Valve Corporation Trade Debts $64,501 Summit Packaging Systems Trade Debts $61,889 Newman Green Trade Debts $55,139 Seaquist Perfect Dispensing Trade Debts $53,382 Owens Corning Trade Debts $47,502 Alchem Chemical Company Trade Debts $47,255 CCL Container Trade Debts $44,829 Brenntag Mid-South Inc. Trade Debts $39,084 Losorea Trade Debts $25,638 AFFILIATED COMPUTER: Share Repurchase Plan Cues S&P to Cut Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit and senior secured ratings to 'BB' from `BB+' for Affiliated Computer Services Inc. The ratings remain on CreditWatch with negative implications, where they were placed Jan. 27, 2006. "The rating action follows the announcement that ACS' board authorized a $1 billion share repurchase program, representing about 18% of total outstanding shares at current market value; ACS has not given a timetable for when it plans to buy back these shares," said Standard & Poor's credit analyst Philip Schrank. This latest authorization comes on the heels of the $465 million share tender in March 2006. Although ACS can absorb this additional $1 billion share repurchase, the downgrade to 'BB' reflects the capacity the company has put in place to add significantly more debt through both a $1 billion debt revolver, and $3.75 billion of uncommitted accordion loans, with very flexible loan covenants. At the 'BB' rating level, S&P's expectation is that ACS will manage its debt leverage at between 3x-5x times over the intermediate term, and may pursue further repurchases or acquisitions. The $1 billion repurchase would increase debt to EBITDA to over 3x from the 2x range in March 2006. Ratings support is provided by ACS': * growing, annuity-like revenue streams; * solid historic profitability; and * stable cash-flow generation. ACS has performed better than most of its peers in the currently challenging IT spending environment and has achieved higher margins, while many competitors have experienced revenue deceleration and margin contraction. While ACS faces competitive threats from larger, more globally positioned IT providers, the company's very strong position in state and local government outsourcing services provides a measure of ratings stability. The ratings remain on CreditWatch with negative implications because of the SEC informal investigation into ACS option grants from October 1998 through March 2005. The board of directors at ACS has engaged its outside legal counsel to lead its internal investigation. S&P will continue to monitor developments in regard to the SEC investigation, pending litigation, and any changes to strategy and corporate governance practices to determine what, if any, affect they have on debt ratings. AIRADIGM COMMS: Files Schedules of Assets and Liabilities --------------------------------------------------------- Airadigm Communications, Inc., delivered to the U.S. Bankruptcy Court for the Western District of Wisconsin its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property $37,845,616 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $187,848,488 E. Creditors Holding Unsecured Priority Claims $163,822 F. Creditors Holding $490,981 Unsecured Nonpriority Claims ----------- ----------- Total $37,845,616 $188,503,291 Headquartered in Little Chute, Wisconsin, Airadigm Communications, Inc. -- http://www.eisnteinpcs.com/-- provides local wireless phone services through its Einstein PCS wireless networking technology. The company filed for chapter 11 protection on July 28, 1999 (Bankr. W.D. Wis. Case No. 99-33500). The Court confirmed its plan of reorganization in 2000. The company filed a second chapter 11 petition on May 8, 2006 (Bankr. W.D. Wis. Case No. 06-10930). Kathryn A. Pamenter, Esq., and Ronald Barliant, Esq., at Goldberg, Kohn, Bell, Black, Rosenbloom & Moritz, Ltd., represent the Debtor in its new bankruptcy proceedings. No Official Committee of Unsecured Creditors has been appointed in the Debtor's new bankruptcy case. In its second bankruptcy filing, the Debtor estimated assets between $10 million to $50 million and debts of more than $100 million. AIRWAY INDUSTRIES: Creditors Have Until July 17 to File Claims -------------------------------------------------------------- The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court for the Western District of Pennsylvania in Pittsburgh established 4:00 p.m. of these bar dates as the deadline for all creditors owed money by Airway Industries, Inc., on account of claims arising prior to Jan. 20, 2006, to file their proofs of claim: (a) the General Bar Date is July 17, 2006; (b) the Amended Schedules Bar Date is 30 days after a claimant is served with notice that the Debtor has amended its Schedules, reducing, deleting, or changing the status of a scheduled claim of a claimant as the bar date for filing a proof of claim in respect of that amended scheduled claim; (c) the Rejection Bar Date is 30 days after the effective date of any order authorizing the rejection of an executory contract or unexpired lease by which a proof of claim relating to the Debtor's rejection of that contract or lease must be filed; (d) the Governmental Bar Date is July 19, 2006. Creditors must file signed original written proofs of claim on or before the Bar Dates and those forms must be delivered to: Clerk of the Bankruptcy Court Western District of Pennsylvania USX Tower, Suite 5490 600 Grant Street Pittsburgh, PA 15219 Proofs of claim submitted by facsimile or e-mail will not be accepted. 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. ALISON GEM: Trustee Wants June 30 as Deadline to File Claims ------------------------------------------------------------ Donald A. Palmieri, the Chapter 11 Trustee of Alison Gem Corp., asks the U.S. Bankruptcy Court for the Southern District of New York in Manhattan to fix 5:00 p.m. on June 30, 2006, as the deadline for all creditors, including governmental units, owed money by Alison Gem Corp. on account of claims arising prior to Jan. 25, 2005, to file their proofs of claim. The Chapter 11 Trustee also wants any entity holding a claim from the rejection of an unexpired lease or executory contract: -- to file a proof of claim on or before July 7, 2006, if the order authorizing that rejection is dated at least 10 days prior to June 30, 2006; or -- to file a proof of claim on or before July 14, 2006, if the order authorizing that rejection is dated less than 10 days prior to June 30, 2006. Creditors must file written proofs of claim on or before the June 30 Claims Bar Date and those forms must be received by: Clerk of the Bankruptcy Court Southern District of New York Alexander Hamilton Custom House, 6th Floor One Bowling Green New York, NY 10004-1408 Proofs of claim submitted by facsimile, telecopy or electronic mail will not be accepted. Headquartered in New York City, New York, Alison Gem Corp., is a manufacturer and wholesaler of jewelry goods selling both diamond and colored stone jewelry to a variety of major retailers, small local retail chains, and single family owned retail stores. The Company filed for chapter 11 protection on January 25, 2005 (Bankr. S.D.N.Y. Case No. 05-10404). Ian R. Winters, Esq., at Klestadt & Winters, LLP, represented the Debtor. Douglas J. Pick, Esq., at Pick & Saffer LLP represents the Official Committee of Unsecured Creditors. Donald A. Palmieri is the Debtor's Chapter 11 Trustee and Douglas J. Pick, Esq., at Pick & Zabicki LLP represents him. When the Debtor filed for protection from its creditors, it reported total assets of $20,600,000 and total debts of $43,000,000. ALISON GEM: Sells Inventory to Royal Diamond & Diamond Traders -------------------------------------------------------------- Donald A. Palmieri, the Chapter 11 Trustee of Alison Gem Corp., obtained approval from the Hon. James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan for the sale of inventory to: (A) Royal Diamond Co. for $542,500 for these assets: -- 560 pieces of finished jewelry costing $354,450, for $225,000; -- 1,627.99 carats of loose stones and pearls and 11,849.2 grams of castings and findings costing $216,801, for $190,000; -- scrap gold costing $246,633, for $127,500; and (B) Diamond Traders International for 574 pieces of finished jewelry costing $351,811, for $180,000. Judge Peck ordered that the Chapter 11 Trustee sell, convey, transfer and deliver the assets to Royal Diamond and Diamond Traders as free and clear of all liens, claims and encumbrances and to transfer those liens to the net proceeds of the sale of the inventory. Headquartered in New York City, New York, Alison Gem Corp., is a manufacturer and wholesaler of jewelry goods selling both diamond and colored stone jewelry to a variety of major retailers, small local retail chains, and single family owned retail stores. The Company filed for chapter 11 protection on January 25, 2005 (Bankr. S.D.N.Y. Case No. 05-10404). Ian R. Winters, Esq., at Klestadt & Winters, LLP, represented the Debtor. Douglas J. Pick, Esq., at Pick & Saffer LLP represents the Official Committee of Unsecured Creditors. Donald A. Palmieri is the Debtor's Chapter 11 Trustee and Douglas J. Pick, Esq., at Pick & Zabicki LLP represents him. When the Debtor filed for protection from its creditors, it reported total assets of $20,600,000 and total debts of $43,000,000. ALL-AMERICAN SPORTPARK: Files Amended 2004 Annual Report -------------------------------------------------------- All-American SportPark, Inc., filed an amendment to its 2004 Annual Report on Form 10-KSB/A, with the Securities and Exchange Commission on June 16, 2006. This amendment was filed to include a revised report of the Company's independent registered public accounting firm -- Piercy Bowler Taylor & Kern -- and to file the consent of Piercy Bowler relating to that report as an exhibit. Financials The Company reported a $592,516 net loss on $2,168,802 of revenues for the year ended Dec. 31, 2004, compared to a $1,653,581 net loss on $2,152,867 of revenues in 2005. At Dec. 31, 2004, the Company's balance sheet showed $1,054,053 in total assets, $7,011,886 in total liabilities, and $411,508 in minority interest, resulting in a $6,369,341 stockholders' deficit. The Company's stockholders' deficiency widened to $7,405,232 at Dec. 31, 2005. The Company's working capital deficit also widened to $1,875,279 at Dec. 31, 2005, compared to an $871,980 deficit at Dec. 31, 2004. Going Concern Doubt Piercy Bowler Taylor & Kern in Las Vegas, Nevada, raised substantial doubt about All-American SportPark, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2004, and 2003. The auditor pointed to the Company's recurring operating losses, negative working capital, and substantial shareholders' deficiency. Piercy Bowler also issued a going concern doubt opinion on All-American 's 2005 Annual Report, citing the same concerns. Full-text copies of All-American SportPark financial statements are available for free at: Amended 2004 Annual Report http://ResearchArchives.com/t/s?bc3 2005 Annual Report http://ResearchArchives.com/t/s?bc4 About All-American SportPark All-American SportPark, Inc., manages and operates Callaway Golf Center(TM). The CGC includes the Divine Nine par 3 golf course fully lighted for night golf, a 110-tee two-tiered driving range, a 20,000 square foot clubhouse which includes the Callaway Golf fitting center and Pro Shop and two tenants, the Saint Andrews Golf Shop retail store and a restaurant. In the January/February 2006 issue of GOLF RANGE MAGAZINE, the CGC was named as the second best Pro Shop in America. ALLIANCE LAUNDRY: Sells AJAX Trademark to Sankosha for $1.2 Mil. ---------------------------------------------------------------- Alliance Laundry Systems LLC agreed on June 15, 2006, to sell to Sankosha Engineering Co. Ltd. certain intellectual property, including the AJAX trademark and trade name, associated with the Company's line of AJAX pressing and finishing equipment for $1.2 million. The Company may continue to sell pressing and finishing equipment and accessories using the AJAX trademark or trade name until Oct. 31, 2006, and may sell service and repair parts using the AJAX trademark or trade name for 10 years from the date of the Asset Purchase Agreement. Alliance disclosed on March 26, 2006, a material impairment in the value of Alliance's AJAX trademark due to the discontinuance of the sale of AJAX finished goods and the Company's belief that the impairment of the AJAX trademark would not result in any future cash expenditures. Alliance recorded a $1.4 million non-cash charge for impairment in the three month period ended March 31, 2006, in connection with that discontinuance. Alliance Laundry Systems LLC - http://www.comlaundry.com/-- is a leading North American manufacturer of commercial laundry products and provider of services for laundromats, multi-housing laundries and on-premise laundries. Alliance offers a full line of washers and dryers for light commercial and consumer use as well as large frontloading washers, heavy-duty tumble dryers, and finishing equipment for heavy commercial use. The Company's products are sold under the well-known brand names Speed Queen(R), UniMac(R), and Huebsch(R). ALLIANCE LAUNDRY: S&P Affirms B Rating on Senior Secured Loans -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' rating and its recovery rating of '3' on Ripon, Wisconsin-based Alliance Laundry Systems LLC's senior secured credit facilities following its proposed $65 million add-on credit facilities. The 'B' bank loan rating remains at the same level as the corporate credit rating; this and the '3' recovery rating, indicate that the secured lenders can expect meaningful (50%-80%) recovery of principal in the event of default. The bank loan rating and accompanying analysis are based on preliminary documentation and subject to review once final documentation has been received. "The existing ratings on the company, including its 'B' corporate credit rating, have been affirmed; the outlook is stable," said Standard & Poor's credit analyst Jean Stout. Net proceeds from the $60 million add-on term loan, together with about $23 million of equity will be used to finance the purchase of substantially all of Laundry System Group NV's Commercial Laundry Division operations for approximately EUR59 million. CLD, headquartered in Wevelgem, Belgium, markets commercial washer- extractors, tumbler dryers, and ironers worldwide under the Ipso and Cissell brand names. Pro forma for the transaction, Alliance Laundry would have about $427 million of debt outstanding. The rating incorporates Alliance Laundry's narrow product portfolio, high debt leverage and thin credit protection measures. ALLIED HOLDINGS: Teamsters Authorize Strikes If Contracts Voided ---------------------------------------------------------------- Nearly 3,700 Teamster members working for Allied Holdings, Inc. in the United States have overwhelmingly authorized a strike in the event that the U.S. Bankruptcy Court for the Northern District of Georgia allows the vehicle-hauling company to reject its labor contract. Allied, the largest motor carrier in North America specializing in the delivery of automobiles and light trucks, distributes new vehicles for the "Big Three" automakers, import manufacturers, thousands of local auto dealerships and rental car companies. "Allied's management should not expect our members to pay for their mistakes," said Teamsters General President James P. Hoffa. "Our members' priority is to protect their families." Teamster drivers, yard personnel and maintenance employees perform skilled and dedicated professional service in a physically demanding, time-sensitive industry. Between June 13 and 20, members working at Allied at jurisdictions including: * Local 25 in Boston; * Local 41 in Kansas City, Missouri; * Local 63 in Covina, California; * Local 79 in Tampa, Florida; * Local 120 in St. Paul, Minnesota; * Local 312 in Chester, Pennsylvania; * Local 364 in South Bend, Indiana; * Local 385 in Orlando, Florida; * Local 414 in Ft. Wayne, Indiana; * Local 449 in Buffalo, New York; * Local 509 in Cayce, South Carolina; * Local 20 in Toledo, Ohio; * Local 5 in Baton Rouge, Louisiana; * Local 512 in Jacksonville, Florida; * Local 528 in Atlanta; * Local 745 in Dallas; and * Local 710 in Chicago, attended specially-called meetings. Members at the meetings showed overwhelming support for a resolution authorizing strike action if Allied uses the bankruptcy court to reject and void Allied's participation in the National Master Automobile Transporters Agreement and Supplements. These authorizations follow the similar support received from the members of Local 332 in Flint, Michigan on June 4. "We are working with our members and stand solid and united to protect the contract," said Fred Zuckerman, Director of the Teamsters Carhaul Division. Founded in 1903, the Teamsters Union represents more than 1.4 million hardworking men and women in the United States and Canada. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. ALLSERVE SYSTEMS: Trustee Can File Removal Notices Until August 4 ----------------------------------------------------------------- Charles A. Stanziale, Jr., the chapter 7 trustee overseeing the liquidation of Allserve Systems Corp., obtained authority from the U.S. Bankruptcy Court for the District of New Jersey to file notices of removal until Aug. 4, 2006. The Chapter 7 Trustee told the Court that since his appointment came less than a month prior to the February 18, 2006 removal deadline, the extension will allow him to complete his determination of whether there are any existing litigation matters that require a Notice of Removal. Headquartered in North Brunswick, New Jersey, Allserve Systems Corp. is an outsourcing company for the IT industry. Allserve filed for chapter 11 protection on November 18, 2005 (Bankr. D. N.J. Case No. 05-60401). Barry W. Frost, Esq., at Teich Groh represented the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. On Jan. 18, 2006, the Debtor's chapter 11 case was converted into a chapter 7 liquidation proceeding. Kelly Beaudin Stapleton, the U.S. Trustee for Region 3 named Charles A. Stanziale, Jr., Esq., at McElroy, Deutsch, Mulvaney & Carpenter, as chapter 7 Trustee for the Debtor. Jeffrey Bernstein, Esq., and Jeffrey Thomas Testa, Esq., at McElroy, Deutsch, Mulvaney, & Carpenter, LLP serve as the Chapter 7 Trustee's attorneys. When the Debtor filed for protection from its creditors, it estimated assets between 10 million to $50 million and debts between $50 million to $100 million. AMCAST INDUSTRIAL: Can Employ Thompson Hine as Special Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana for allowed Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc., to employ Thompson Hine LLP as their special counsel. The Debtors told the Court that Thompson Hine was Amcast Industrial's lead bankruptcy counsel in Amcast Industrial's previous chapter 11 filing. Thompson Hine will: a) prosecute objections to alleged secured, priority and administrative claims in Case No. 04-40504 as necessary; b) work towards the settlement and dismissal, or prosecution, if necessary, of an adversary proceeding pending in the Ohio Court against Clean Earth, Incorporated to avoid a $1 million mechanics lien against property in Stowe, Pennsylvania which is subject to a contract to sell to a third party for approximately $1 million; c) review documents and create a privilege log, in connection with a demand for production of documents served by the Liquidating Trustee under Old Amcast's confirmed Plan relating to claims against Old Amcast's former officers and directors arising from certain supplemental executive retirement plans and defined benefit pension plans, which claims are now the subject of an adversary proceeding commenced in the Ohio Court; d) work towards the settlement or dismissal without prejudice of an adversary proceeding pending in the Ohio Court against three liability insurers and a number of tort claimants to obtain a declaratory judgment that the insurers are obligated to defend product liability claims of the tort claimants and that any claims the insurers had under the self-insured retention provisions of the policies are unsecured claims and not the responsibility of New Amcast; and e) perform any other legal services which may be appropriate. Alan R. Lepene, Esq., partner at Thompson Hine, tells the Court that for this engagement, he will bill $575 per hour. Mr. Lepene discloses that the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $295 - $575 Associates $185 - $290 Paralegals $150 - $175 Professional Hourly Rate ------------ ----------- Alan R. Lepene, Esq. $575 Scott King, Esq. $325 Jeremy Campana, Esq. $245 Jennifer Maffett, Esq. $230 Renee Davis, Esq. $220 Marcia Burston $165 The Debtors relate that they have paid Thompson Hine a $50,000 retainer. Mr. Lepene assures the Court that his firm does not represent nor hold any interest adverse to the Debtors or their estates. About Amcast Industrial Headquartered in Fremont, Indiana, Amcast Industrial Corporation, manufactures and distributes technology-intensive metal products to end-users and suppliers in the automotive and plumbing industry. The Company and four debtor-affiliates filed for chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court for the Southern District of Ohio confirmed the Debtors' Third Amended Joint Plan of Reorganization on July 29, 2005. The Debtors emerged from bankruptcy on Aug. 4, 2005. Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc., filed for chapter 11 protection a second time on Dec. 1, 2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman, Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C., represent the Debtors in their restructuring efforts. Henry A. Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP, represent the Official Committee of Unsecured Creditors. Kevin I. Dowd at Berkeley Square Group LLC serves as Amcast's financial advisor. The Creditors' Committee receives financial advice from Thomas E. Hill at Alvarez & Marsal, LLC. When the Debtor and its affiliate filed for protection from their creditors, they listed total assets of $97,780,231 and total liabilities of $100,620,855. AMCAST INDUSTRIAL: Court Moves Plan Filing Deadline to Sept. 27 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana, in Indianapolis, extended Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc.'s exclusive periods to file a chapter 11 plan until Sept. 27, 2006. The Court also gave the Debtors until Nov. 26, 2006, to solicit acceptances of the plan. In their request, the Debtors told the Court that the extension will give them more time to resolve their dispute with General Motors Corporation. The Debtors are negotiating the terms of their contractual pricing with GM, their largest customer and revenue source. The Debtors seek for certain pricing concessions from GM so that they can continue to operate profitably. The Debtors explained that the result of the pricing negotiations with GM will impact the details and very core of any plan of reorganization they will propose. Headquartered in Fremont, Indiana, Amcast Industrial Corporation, manufactures and distributes technology-intensive metal products to end-users and suppliers in the automotive and plumbing industry. The Company and four debtor-affiliates filed for chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court for the Southern District of Ohio confirmed the Debtors' Third Amended Joint Plan of Reorganization on July 29, 2005. The Debtors emerged from bankruptcy on Aug. 4, 2005. Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc., filed for chapter 11 protection a second time on Dec. 1, 2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman, Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C., represent the Debtors in their restructuring efforts. Henry A. Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP, represent the Official Committee of Unsecured Creditors. Kevin I. Dowd at Berkeley Square Group LLC serves as Amcast's financial advisor. The Creditors' Committee receives financial advice from Thomas E. Hill at Alvarez & Marsal, LLC. When the Debtor and its affiliate filed for protection from their creditors, they listed total assets of $97,780,231 and total liabilities of $100,620,855. AMERICAN MOULDING: Stancil & Company's Scope of Work Expanded ------------------------------------------------------------- The Honorable Christopher M. Klein of the U.S. Bankruptcy Court for the Eastern District of California in Sacramento authorized American Moulding and Millwork Company to expand the scope of work of Stancil & Company as its accountant. Judge Klein also approved the payment of an additional retainer to Stancil. The Bankruptcy Court authorized on Feb. 21, 2006, the employment of Stancil to analyze the tax impact of the sale of the Debtor's manufacturing facility in Stockton, California, and the payment of a $25,000 retainer. The Debtor needs to expand Stancil's scope of work to include the preparation of the Debtor's 2006 tax returns. Stancil will: -- assist in assembling the financial records required to file the final tax return, including the final liquidation transactions, sale of all equipment and inventory, and sale of real estate owned by the Debtor; -- determine the proper reporting for any cancellation of debt that may occur as a result of the Debtor's bankruptcy; and -- provide tax planning services with the objective of minimizing any adverse tax consequences during the liquidation process. Stancil anticipates that the 2006 final income tax return will report income for the Debtor that can be offset by suspended losses of previous years. Stancil says it is essential that the Debtor be liquidated and Mr. Kent's shares cancelled within the calendar year 2006 in order to prevent potential adverse tax consequences. Kenneth P. Martin, a partner of Stancil, discloses that the Firm requests an additional $15,000 retainer to perform these services. Mr. Martin will bill $175 per hour for his services. Other professionals of the Firm will bill: Designation Hourly Rate ----------- ----------- Partner $175 Manager $110 Staff $75 Mr. Martin assures the Court that his firm does not hold nor represent any interest materially adverse to the Debtor and its estate. Headquartered in Sanford, North Carolina, American Moulding and Millwork Company -- http://www.amfurniture.com/-- is a supplier of real wood furniture and cabinetry. The Company filed for chapter 11 protection on Oct. 6, 2005 (Bankr. E.D. Calif. Case No. 05-34431). Thomas A. Willoughby, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi LLP represents the Debtor in its restructuring efforts. Lawyers at Parkinson Phinney represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $17,663,776 in assets and $18,481,093 in debts. BACHRACH CLOTHING: Taps Alliance Management as Financial Advisor ---------------------------------------------------------------- Bachrach Clothing, Inc., asks the U.S. Bankruptcy Court for the Northern District of Illinois for permission to employ Alliance Management, Inc., as its consultant and financial advisor. Alliance Management will: a. provide the Debtor with general financial restructuring advice; b. assist the Debtor in the preparation of all required filings in the Court including bankruptcy schedules, statement of financial affairs, monthly operating reports, and cash collateral budgets; c. assist the Debtor's management in valuing and selling the Debtor's assets; d. market the Debtor's assets to potential purchasers and evaluate any and all purchase offers for those assets; e. prepare and present information to interested parties and its advisors; f. review financial information generated by the Debtor, including monthly operating reports, budgets and other analyses, for consistency and accuracy, and provide advice relating to financial and business issues; g. assist and advise the Debtor in developing, evaluating, structuring or negotiating the terms and conditions of a Chapter 11 plan; h. provide the Debtor with other financial advisory services as the Debtor may require during the course of its Chapter 11 case; and i. provide testimony in the Court. James Cullen, a management consultant at Alliance Management, tells the Court that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Consultants $250 - $295 Support Staff $135 Mr. Cullen assures the Court that the Firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Chicago, Illinois, Bachrach Clothing, Inc. -- http://www.bachrach.com/-- manufactures and retails formal men's wear and accessories. The company filed for chapter 11 protection on June 6, 2006 (Bankr. N.D. Ill. Case No. 06-06525). Robert M. Fishman, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it disclosed estimated assets and debts between $10 million and $50 million. BACHRACH CLOTHING: Has Until July 7 to File Schedules ----------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois gave Bachrach Clothing, Inc., until July 7, 2006, to file its schedules of assets and liabilities, executory contracts and unexpired leases, and statements of financial affairs. The Debtor tells the Court that assembling information from its various books and records, reports, agreements, tax returns, and other sources will be time consuming, given the size, scope and complexity of the Debtor's business. The Debtor says that it will require at least an additional two weeks within which to file the schedules. Headquartered in Chicago, Illinois, Bachrach Clothing, Inc. -- http://www.bachrach.com/-- manufactures and retails formal men's wear and accessories. The company filed for chapter 11 protection on June 6, 2006 (Bankr. N.D. Ill. Case No. 06-06525). Robert M. Fishman, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it disclosed estimated assets and debts between $10 million and $50 million. BLUE BEAR: Files Amended Joint Plan of Reorganization in Colorado ----------------------------------------------------------------- Blue Bear Funding, LLC, fka 1st American Factoring, LLC, and the Official Committee of Unsecured Creditors delivered to the U.S. Bankruptcy Court for the District of Colorado their amended joint plan of reorganization and an accompanying disclosure statement explaining that Plan. Treatment of Claims Under the Modified Plan, all Allowed Administrative Claims other than Operating Administrative Claims, will be paid in full on Sept. 3, 2006, the anticipated effective date of the Plan. Priority Tax Claims, will also be paid in full on the Effective Date, unless Reorganized Blue Bear elects to pay any of the Priority Tax Claims in installments. All Allowed Secured Tax Claims and Priority Wage Claims will be paid in full on the Effective Date. Cache Bank & Trust's DIP Claim, Robert and Joyce Clayton's DIP Claim and Other DIP Claims will be paid pursuant to the loan documents currently in effect. The nature, validity, extent and amount of the Secured Claims of Silver Mountain Financial, LLC, and Business Resources, LLC, as well as the Claims of the Independent Factoring Companies will be determined by the Court and treated under the Plan provisions. Other Secured Claims, if any, will receive, at the option of Reorganized Blue Bear: * the property subject to the security interest or lien, * payment to the extent of the value of the Claim Holder's interest in the property subject to the lien, or * the amount applicable, whichever is lesser, or as otherwise determined by the Court. Unsecured Claims are divided into two classes: 1. Administrative Convenience Class -- comprised of claimants holding claims of under $4,000 in the aggregate or claimants who elect to be part of this Class by reducing their Claims to $4,000 or less; and 2. General Unsecured Class -- consists of all other Unsecured Claims, including trade Claims and Investor Claims. Allowed Administrative Convenience Claims will be paid 20% of their Allowed Claims in cash on the initial distribution date. Allowed General Unsecured Claims will receive Common Stock in Reorganized Blue Bear from the escrow established on the Effective Date in accordance with the Modified Plan in exchange for the surrender and cancellation of the Claims, with one share of Common Stock for every $1,000 of their Allowed Claim. The Common Stock will, however, be restricted and not freely tradable in any market. Current members of Debtor will receive nothing under the Plan on account of their membership interests and these interests will be cancelled. Post-Confirmation Matters On the Effective Date, Debtor will convert from a Colorado limited liability company to a Colorado corporation under subchapter C of the Internal Revenue Code, with the designees of the Committee compromising all but one of the members of the initial Investor Committee. The Investor Committee will be authorized but not required to (a) liquidate Reorganized Blue Bear, in the event certain financial and business development benchmarks are not met, and (b) determine and make dividends to Stockholders upon review of Reorganized Blue Bear's financial performance. Stockholder Recovery Projections Stockholders will receive dividends from Reorganized Blue Bear from: -- from operating profits on or about December 2010, based on financial projections; -- from litigation recoveries financed by the Creditors' Litigation Fund -- a fund to be established with the reserves of certain IFCs in accordance with a proposed separate settlement agreement being negotiated among Debtor, the Committee, certain Investors and such IFCs -- once litigation recoveries exceed $1,500,000, net of any fees and expenses; and -- from time to time as determined by the Investor Committee, the source of which may include recovery of bad debt, litigation recoveries funded by sources other than the Creditors' Litigation Fund and from operating profits. In addition, the Plan provides for an early "cash-out" option, if so determined by the Investor Committee. The Projections do not include any litigation recoveries other than recoveries from bad debt. Accordingly, based on the Projections, the estimated discounted liquidation value available to Stockholders is approximately 13.5% of their claims on or about December 2010. The Debtor anticipates confirmation of the Plan on Aug. 4, 2006, with a corresponding initial distribution date of Oct. 4, 2006. A full-text copy of the amended joint reorganization plan is available for a fee at: http://www.researcharchives.com/bin/download?id=060621204104 A full-text copy of the amended disclosure statement explaining that Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=060621203909 About Blue Bear Headquartered in Windsor, Colorado, Blue Bear Funding, LLC -- http://www.bluebearfunding.com/-- provides invoice factoring services. The Company filed for chapter 11 protection on Aug. 22, 2005 (Bankr. D. Colo. Case No. 05-31300). Alice A. White, Esq., and Douglas W. Jessop, Esq., at Jessop & Company, P.C., represent the Debtor in its restructuring efforts. Erin L. Connor, Esq., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debts between $10 million and $50 million. BREUNERS HOME: Employs Andrew Sklar to Collect Judgments -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware allowed Montague S. Claybrook, the chapter 7 trustee overseeing the liquidation of Breuners Home Furnishings Corp. and its debtor- affiliates, to hire the law office of Andrew Sklar, P.C., as his special counsel to assist him in the specific task of collecting judgments. Fox Rothschild LLP filed and prosecuted numerous actions pursuant to Section 547 of the Bankruptcy Code and obtained several judgments in favor of the estate, in behalf of the chapter 7 trustee. The Trustee seeks to retain Sklar as his special counsel because of Sklar's extensive experience and knowledge in the field of collection law. The chapter 7 trustee proposes to pay Sklar a contingency fee based on 40% of collected judgments, plus reimbursement of all costs. Andrew Sklar, Esq., a shareholder at the firm, assured the Court that his firm and its professionals do not hold material interest adverse to the Debtor's estate and are "disinterested" as defined in Section 101(14) of the Bankruptcy Code. Headquartered in Lancaster, Pennsylvania, Breuners Home Furnishings Corp. -- http://www.bhfc.com/-- is one of the largest national furniture retailers focused on the middle the upper-end segment of the market. The Company and its debtor- affiliates, filed for chapter 11 protection on July 14, 2004 (Bankr. Del. Case No. 04-12030). Bruce Grohsgal, Esq., and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors. Great American Group, Gordon Brothers, Hilco Merchant Resources, and Zimmer-Hester were brought on board within the first 30 days of the bankruptcy filing to conduct Going-Out-of-Business sales at the furniture retailer's 47 stores. The Bankruptcy Court converted the case to a Chapter 7 liquidation on Feb. 8, 2005. Montague S. Claybrook serves as the Chapter 7 Trustee. Mr. Claybrook is represented by Michael G. Menkowitz, Esq., at Fox Rothschild LLP. When the Debtors filed for chapter 11 protection, they reported more than $100 million in estimated assets and debts. BROADCAST INT'L: Mar. 31 Balance Sheet Upside-Down by $2.5 Million ------------------------------------------------------------------ Broadcast International, Inc., incurred a $4.3 million net loss on $2.7 million of revenues for the three months ended March 31, 2006, compared to a $794,047 net loss on $977,652 of revenues for the same period in 2005, the company disclosed in a Form 10-QSB filed with the U.S. Securities and Exchange Commission. At March 31, 2006, the Company's balance sheet showed $5.6 million in total assets and $8.1 million in total liabilities, resulting in a $2.5 million stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $4.2 million in total current assets available to pay $6.6 million in total current liabilities coming due within the next 12 months. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?bd2 Going Concern Doubt HJ & Associates, LLC, in Salt Lake City, Utah, raised substantial doubt about Broadcast International's ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's operating losses and working capital deficiency. Headquartered in Salt Lake City, Utah, Broadcast International, Inc., provides communication network and related services for large retailers and other organizations with widely dispersed locations and operations. As an integrator of broadband delivery technologies, including satellite, Internet streaming and WiFi, the Company offers turnkey communication solutions based on the specific needs of its customers. Companies such as Caterpillar, Albertsons, Safeway, Sprint Communications, Chevron and other customers use the Company's services to communicate with their personnel and others regarding training programs, product announcements, news releases and other applications. BROOKS SAND: Ch. 11 Trustees Want Lease Decision Period Extended ---------------------------------------------------------------- J. Bruce Miller, Esq., and Kenneth C. Henry, the chapter 11 trustees appointed in the chapter 11 cases of Brooks Sand & Gravel, LLC and its debtor-affiliate, Smith Mining & Materials, LLC, ask the U.S. Bankruptcy Court for the Western District of Kentucky to extend the period within which they can assume, assume and assign or reject the Debtor's leases to Sept. 7, 2006. The Debtors' operations are located at two facilities: 1) a 184-acre leased sand and gravel reserve and processing plant in Bethlehem, Indiana where Debtor Brooks employed around 15 individuals; and 2) a 226-acre rock quarry owned by Debtor Smith Mining and Materials LLC employed around 25 individuals. Brooks Sand's Leases Debtor Brooks conducts its sand extraction business pursuant to mineral leases with Paul and Sandy Hutsell and Albert and Geraldine Miles. Sand extracted by Debtor Brooks is transported to a facility in Louisville, Kentucky which is leased by Debtor Brooks from River Road Terminals, Inc. Smith Mining's Leases The majority of Debtor Smith's mining activities are conducted under a Limestone Mineral Lease between G.W. Chandler and Kathy Chandler as lessor and Debtor Smith as lessee. Debtor Smith also has leased mining rights under a sublease agreement between G.W. Chandler and Kathy Chandler as sublessor and Debtor Smith as sublessee involving mineral leases between Dorothy C. Waters and the Chandlers and between Beverly Duff and the Chandlers. Debtor Smith also has the right to purchase the mineral rights currently leased from G.W. Chandler pursuant to the terms of an Asset Purchase Agreement dated January 18, 2005. On March 16, 2006 G.W. Chandler and Kathy Chandler filed an adversary proceeding seeking a declaration that the Chandler Lease was forfeited by Debtor Smith prepetition, due to the alleged transfer of a "controlling interest" in Debtor Smith. The adversary action remains pending at this time, and as a practical matter, Debtor Smith will not be able to decide whether to assume or reject this lease until a resolution of the adversary action occurs. Dean A. Langdon, Esq., at Wise Delcotto PLLC, in Lexington, Kentucky, special counsel of the trustees, told the Court that since their appointment as chapter 11 trustees in late April, they moved expeditiously to evaluate the Debtors' assets, including their leases. However, the Trustees have not had sufficient time to review and fully analyze the Debtors unexpired, nonresidential leases of real property in order to make a determination as to which leases should be assumed or rejected. The Trustees wants to maintain his ability to assume all unexpired, nonresidential real property leases. One of the options available to the Trustee under the Bankruptcy Code is to seek to sell the businesses as going concerns. To preserve this option, the Trustees need additional time to assume or reject their unexpired, non-residential leases of real property, as those decisions may be influenced by a potential purchaser of the Debtors' assets, Mr. Langdon points out. Headquartered in Louisville, Kentucky, Brooks Sand and Gravel LLC leases an 184-acre sand reserve and processing plant in Bethlehem, Indiana, in Clark County and employs about 15 people. Smith Mining and Materials LLC owns a 226-acre limestone quarry in Brooks, Kentucky, in Bullitt County and employs about 25 people. Brooks Sand and Smith Mining filed for chapter 11 protection on Feb. 9, 2006 (Bankr. W.D. Ky. Case No. 06-30259). Dean A. Langdon, Esq., and Laura Day DelCotto, Esq., at Wise DelCotto PLLC represented the Debtors. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. Judge Cooper approved the appointment of Kenneth C. Henry as chapter 11 trustee. J. Bruce Miller, Esq., and his firm, J. Bruce Miller Law Group represent the chapter 11 trustee. CATHOLIC CHURCH: Court Approves Portland's Disclosure Statement --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon approved the Disclosure Statement accompanying the Third Amended Plan of Reorganization of the Archdiocese of Portland in Oregon, subject to a possible objection by the Tort Claimants Committee. On the other hand, the Court denies approval of the Disclosure Statement explaining the First Amended Plan of Reorganization filed by the Tort Committee. Judge Perris directs Portland to further revise the Disclosure Statement after the Archdiocese's sex abuse-related liabilities have been estimated. Judge Perris adds that voting on the Plan will not occur before estimation is completed. The Court directs the Tort Committee to file a second amended disclosure statement after Portland's tort claims have been estimated. Under the Archdiocese's Plan, either prior to or as part of the confirmation hearings, the Bankruptcy Court or the U.S. District Court for the District of Oregon will estimate, for all purposes necessary for confirmation of the Plan and the funding of the Claims Resolution Facility, the aggregate allowed amount of all Unresolved Tort Claims, including Present Tort Claims, Future Claims, and Supplemental Tort Claims, including the punitive damages portion of those Claims. 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. 62; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Dist. Ct. Remands Property Dispute to Bankr. Ct. ----------------------------------------------------------------- Judge Justin L. Quackenbush of the U.S. District Court for the Eastern District of Washington overturns Judge Williams' August 2005 decision regarding the ownership of parish property. Judge Quackenbush rules that the Bankruptcy Court erred in holding that parish properties belong to the Diocese of Spokane. The District Court remands the Property of the Estate Dispute to the Bankruptcy Court. Spokane Says Bankruptcy Court Ignored Evidence The Spokane Diocese and the Association of Parishes in Spokane, Washington, filed a joint brief with the District Court. They argued that Judge Williams did not apply appropriate standards in granting the Tort Litigants Committee's request for partial summary judgment. The Diocese's counsel, Shaun M. Cross, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, in Spokane, Washington, explained that the Diocese submitted evidence to establish that parish property was acquired, improved and is maintained exclusively with parish funds, and that each parish is administered and conducts its own business affairs separate and apart from the Diocese of Spokane. However, Mr. Cross said, the Bankruptcy Court considered only "a fraction" of the evidence under the guise of "judicial economy. Moreover, Mr. Cross asserted that the Bankruptcy Court did not consider the entirety of the circumstances and context surrounding the acquisition and administration of parish property, including the: -- provisions of the corporation sole statute; -- terms of the Diocese's Articles of Incorporation; -- the requirements of internal church law, including the Code of Canon Law, governing the ownership of ecclesiastical property within the Catholic Church, and the stated intentions of the donors. Furthermore, the Bankruptcy Court recognized -- but did not consider -- the fact that the parishioners, when donating to their parish, intended to benefit their specific parish. Donations given for a specific purpose, like for a capital building campaign, were intended only for that purpose, Mr. Cross said. Mr. Cross argued that the Court should consider Canon Law in making a decision because: * it defines the nature and extent of the ownership rights pertaining to ecclesiastical property as between the parishes and the Diocese; and * Washington's corporation sole statute makes it relevant. Mr. Cross also pointed out that the First Amendment's religion clauses either limit or structurally restrain government from burdening the free exercise of religion, from interfering with the institutional autonomy of churches, and from creating a religious establishment. Mr. Cross told Judge Quackenbush that the Bankruptcy Court incorrectly stated that the "Church Autonomy Doctrine" and the "compulsory deference rule" in Watson v. Jones, 80 U.S. (13 Wall.) 679 (1871) are limited to "intra-church disputes." Intra- church disputes are disputes that: -- relate to ownership of property between different factions of a religious organization;" and -- the constitution's structural limitations on government power do not apply when tort claims are brought by "unrelated third parties" or "creditors." According to Mr. Cross, the Bankruptcy Court constricted the interpretation of "intra-church dispute," which could lead to the inevitable conclusion that courts could rearrange the internal polity of the Catholic Church if advocated by "unrelated third parties," but not if the issue were raised by one of the church entities in a dispute against another. The First Amendment Church Autonomy principles, Mr. Cross explained, apply to the dispute whether or not the tort claimants are characterized as "third parties," or whether the adversary proceeding is labeled an "intra-church" dispute. Mr. Cross further asserted that the Religious Freedom Restoration Act applies to and "amends" the Bankruptcy Code to preclude the Bankruptcy Court from applying provisions of the Code, which substantially burden a debtor's exercise of religion unless it is the least restrictive means to satisfy a compelling governmental interest. Tort Panel Insists Bankruptcy Court Ruling Correct The Tort Litigants Committee and Michael Shea, a victim of clergy sexual abuse, filed responsive briefs. James I. Stang, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, in Los Angeles, California, the Tort Panel's counsel, told Judge Quackenbush that the Diocese submitted a lot of information and argument, but little admissible evidence or sound legal reasoning. Mr. Stang argued that Judge Williams correctly ruled that: (1) no admissible evidence contradicted the plain language of the deeds; (2) the law of Washington does not incorporate the Canon Law to create trusts that exist only among members of the faithful; (3) the parishioners' gifts were not declarations of trust; (4) no circumstances justified the imposition of remedies imposing trusts; and (5) nothing about the First Amendment prevented the Diocese from being held to the same legal standards as other owners of real property. Among other things, Mr. Stang contended that: * parishes are not independent entities and trust beneficiaries; * Canon Law has no place in determining property of the estate; * real property title disputes do not implicate the First Amendment; and * the Religious Freedom Restoration Act is not applicable in the case. Mr. Stang also pointed out that the U.S. Supreme Court has never identified or embraced the doctrine on Church autonomy. Mr. Stang said the First Amendment is no impediment to a civil court's jurisdiction when it can resolve a church's conflict by "neutral principles of law" without examining its religious doctrine. In Employment Div., Ore. Department of Human Resources v. Smith, 494 U.S. 872 (1990), the Supreme Court set out a test for free exercise challenges that do not combine First Amendment religion claims with other constitutional claims, Mr. Stang explained. In the Smith case, the Supreme Court stated, "the right of free exercise does not relieve an individual of the obligation to comply with a valid and neutral law of general applicability on the ground that the law proscribes (or prescribes) conduct that his religion prescribes (or proscribes)." Moreover, Mr. Stang argued that the District Court may not constitutionally apply RFRA because it contradicts vital principles necessary to maintain separation of powers and the federal balance. Among other things, the Diocese cannot prove that the Bankruptcy Code is imposing a "substantial burden," because the burden being imposed comes from state law. In its ruling, the Bankruptcy Court considered all materials submitted, "separated the wheat from the chaff," and relied on Washington law to guide the identification of material facts, Mr. Stang maintained. Spokane Says Tort Panel Confusing the Issue In response, Spokane argued that the Tort Litigants Committee is attempting to confuse the issue. Mr. Cross explained that parishioners gave a "gift" to each parish as an entity distinct from the Diocese under both Washington law and the Canon Law. He pointed out that the Diocese's evidence regarding the donors' intent, and the Diocese's and the parishes' mutual acknowledgment that the legal title is held in trust for the benefit of the Parishes is relevant to determine the intentions of the parties with respect to the deeds. The imposition of a constructive trust is necessary to prevent the unjust enrichment of the Diocese and to prevent constructive fraud on the parishes, Mr. Cross added. By refusing to consider evidence about how the actual administrative operations of the Diocese and the Parishes worked, Mr. Cross said the Bankruptcy Court drew an inaccurate picture of the Spokane Diocese and its relationship to other church entities and its trust obligations to the Parishes. The Tort Litigants Committee's argument, citing the Smith case, that the government can burden free exercise of religion by "generally applicable natural laws" is flawed and misleading, Mr. Cross argued. Mr. Cross pointed out that the Smith case expressly recognized the vitality of the Church autonomy law by reaffirming certain seminal cases on Church autonomy. Every Circuit Court of Appeals, which has considered whether the Smith case diminished Church autonomy law, has determined that it has not. Mr. Cross said the Tort Litigants Committee confuses and conflates Smith case's approach for applying "Free Exercise" law to "neutral and generally applicable" laws in individual rights cases with the "neutral principles" methodology for applying Church Autonomy theory in church property disputes in Jones v. Wolf, 443 U.S. 595 (1979). In mixing Smith's and Jones' tests, the Tort Litigants Committee never explains that Smith involved a generally applicable law, which burdened an individual's free exercise and not a church's autonomy. Moreover, Mr. Cross noted that if the Tort Litigants Committee is proceeding in the Diocese's shoes, then it is arguing for derivative standing. Under the Ninth Circuit case of Estate of Spirtos v. Estate of Spirtos, 2006 WL 933405, "only the bankruptcy trustee has standing to sue on behalf of the estate." If the Tort Litigants Committee is not asserting the derivative rights of the Diocese, but is instead asserting direct "third- party" tort claims, then the Committee has yet to articulate an interest in the real property under a direct cause of action, Mr. Cross said. The Tort Committee's adversary proceeding should be dismissed for lack of subject matter jurisdiction under the Spirtos case, Mr. Cross argued. District Court Urges Parties to Talk The District Court has not issued a memorandum opinion in support of its oral ruling as of press time. At the hearing on June 15, 2006, Judge Quackenbush encouraged the tort claimants and the Diocese to negotiate and resolve the matter. The Diocese and the tort claimants have previously scheduled a settlement conference before Bankruptcy Judge Gregg W. Zive, to be held on July 7, 2006, in Reno, Nevada. Catholic News Service reports that the District Court's ruling implies that a claimant could sue individually the parish where the accused priest is working or previously worked. Mr. Stang, the tort claimants' attorney, declined to comment whether they would appeal the District Court ruling to the U.S. Ninth Circuit Court of Appeals, The SpokesmanReview says. Ford Elsaesser, the attorney for the Association of Parishes, told The SpokesmanReview that the ruling leaves the parishes a high degree of optimism. "[The Diocese] didn't have the right to deal with other people's money. It's that simple." Bishop Skylstad Lauds Ruling I am grateful for Judge Quackenbush's decision to reverse Judge Patricia Williams' decision last August regarding the ownership of parish property, and to remand the Property of the Estate question to Judge Williams. Judge Quackenbush ruled that Judge Williams erred in holding that parish properties belong to the Bishop of Spokane. Our consistent position has been that the bishop holds the parish properties in trust. By his comments and ruling from the bench, Judge Quackenbush confirmed our position. I know that many people have been severely damaged by individuals representing the Catholic Church. I again offer my profound apologies to all victims of abuse. I again offer my promise of prayers and support to all victims. Today's decision by Judge Quackenbush helps foster an atmosphere in which healing and reconciliation can continue to take place. All of us welcome this opportunity. Both judges have now strongly recommended mediation. We look forward to the mediation scheduled for this summer, as the parties come together in a spirit of cooperation, working toward a speedy resolution of the Diocese of Spokane's Chapter 11 Reorganization. We look forward to achieving a just and fair settlement for victims, as we continue the ministry of the Catholic Church in Eastern Washington. The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. (Catholic Church Bankruptcy News, Issue No. 62; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Spokane Amends Tort Claim Sharing Protocol ----------------------------------------------------------- Judge Patricia C. Williams of the U.S. Bankruptcy Court for the Eastern District of Washington allowed the Diocese of Spokane to amend the Proof of Claim Sharing Protocol. The Bankruptcy Court rules that the amendments to the Proof of Claim Sharing Protocol will not be interpreted as restricting the ability of any insurance company, which is currently a party to the declaratory judgment action pending in the U.S. District Court for the Eastern District of Washington, Case No.05-CV-0075- JLQ, to obtain access to all proofs of claim, which it is entitled to receive under the Protocol. The Bankruptcy Court's Order and the amendments to the Protocol do not in any way: * restrict, modify or supersede any discovery orders or protocols that have been entered or may be entered in the Coverage Case; and * prejudice the rights, if any, of Cowles Publishing Company to challenge the enforceability of the Protocol or any of its part as asserted in its objection. The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. (Catholic Church Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000) CEDAR FAIR: Moody's Puts Ba3 Rating on Sr. Sec. Credit Facility --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 corporate family rating to Cedar Fair, L.P. and a Ba3 rating to its senior secured credit facility. Proceeds from the facility, which consists of a $1.74 billion term loan and a $350 million revolver, will fund the $1.24 billion acquisition of Paramount Parks, Inc. from CBS Corporation and refinance existing Cedar Fair debt of approximately $500 million. Moody's analysis focuses on the combined company. Cedar Fair's ratings reflect its high financial risk and inherently shareholder oriented bias as a Master Limited Partnership. Furthermore, Cedar Fair operates in a mature, seasonal, weather sensitive business; competes for consumer leisure time from increasing entertainment options; and faces some integration risk given the size of the Paramount acquisition. Cedar Fair's strong track record for generation of positive free cash flow before dividends, high asset value, greater diversification and scale pro forma for the Paramount acquisition, and high barriers to entry support the ratings. This is the first time Moody's rated Cedar Fair. Cedar Fair, L.P. * Corporate Family Rating, Assigned Ba3 * Senior Secured Bank Credit Facility, Assigned Ba3 * Stable Outlook The stable outlook incorporates Moody's expectations that Cedar Fair will issue $250 million of equity within six months of the transaction's close and apply proceeds to debt reduction. The absence of an equity issuance alone would not necessarily result in a downgrade, but the combination of no additional equity and weaker performance could pressure the ratings down. If Cedar Fair does not issue new equity, the resulting reduction in distribution payments offsets much of the higher debt service on a greater amount of debt, leading to very modest differences in free cash flow under an all debt scenario. Cedar Fair, L.P. is a publicly traded Delaware limited partnership formed in 1987 and managed by Cedar Fair Management, Inc., an Ohio corporation whose shares are held by an Ohio trust. Cedar Fair owns and operates seven amusement parks with over 12 million in annual attendance. Cedar Fair is acquiring Paramount Parks, Inc., which owns and operates five amusement parks in North America with over 12 million in annual attendance. Combined revenue of the two entities will be approximately $1 billion. CITRUS VALLEY: Good Performance Prompts S&P to Lift Rating to BB+ ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating to 'BB+' from 'BB' on California Statewide Communities Development Authority's $61.9 million certificates of participation, issued for Citrus Valley Health Partners. The raised rating reflects CVHP's second consecutive year of profitable and improving operating performance experienced in fiscal 2005. The outlook is stable. "CVHP has improved its operating profitability with an operating margin of 3.6% in 2005, which boosted maximum annual debt service coverage to a solid 4.1x," Standard & Poor's credit analyst James Cortez said. "CVHP also has a leading 36% market position, and has a strengthening balance sheet that experienced improvement over the past two years despite heightened capital spending compared to historical levels." Mitigating factors includes CVHP's backlog of capital expenditures, which is evidenced by a high average plant age, as well as seismic construction needs at its largest campus. Seismic costs and funding sources are currently being refined from a previous estimate of $35 million in 2000, but should be available in 2007 with construction expected to begin in the next two to three years. "In addition to continuing to address a high average age of plant, CVHP will begin to deal with seismic retrofitting costs at its Queen of the Valley campus over the next two to three years, which could be funded in part with additional debt proceeds," he added. CVHP's primary service area is in the East San Gabriel Valley. COFFEE PACIFICA: Williams & Webster Expresses Going Concern Doubt ----------------------------------------------------------------- Williams & Webster, P.S., in Spokane, Washington, raised substantial doubt about Coffee Pacifica, Inc.'s ability to continue as a going concern after auditing the Company's consolidated amended financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's significant operating losses. The Company reported a $3,748,480 net loss on $749,660 of total revenues for the year ended Dec. 31, 2005. At December 31, 2005, the Company's balance sheet showed $1,288,377 in total assets and $112,071 in total liabilities, and a $1,176,306 stockholders' equity. The Company says that its continuation as a going concern is dependent upon its ability to obtain additional financing and to generate revenue and cash flow to meet its obligations on a timely basis. The Company plans to raise equity financing as required. A full-text copy of the Company's 2005 Annual Report is available for free at http://researcharchives.com/t/s?bc0 About Coffee Pacifica Based in Vancouver, Canada, Coffee Pacifica, Inc. -- http://www.coffeepacifica.com/-- is a distributor and marketer of green bean coffee produced in Papua New Guinea. Coffee Pacifica generates revenue from the sale of green bean organic and non- organic premium grade Papua New Guinea grown coffee. The Company sells grown green coffee beans directly to coffee roaster retailers, commercial roasters, coffee brokers and gourmet roasters and retailers. Following the acquisition of Uncommon Grounds, Inc., the Company now sells the "Uncommon Grounds" brand of roasted coffee, tea, cafe supplies and equipment in North America and Europe. COLLINS & AIKMAN: Selling Sundry Assets for $908,500 ---------------------------------------------------- Pursuant to an expedited procedures for the sale and abandonment of de minimis assets, Collins & Aikman Corporation and its debtor- affiliates inform the U.S. Bankruptcy Court for the Eastern District of Michigan that they will sell these assets for $908,500: 1. Asset: 10 Van de Wiele MPS-22 Looms Purchaser: BSS, Inc. Purchase Price: $180,000 2. Asset: one Measuregraph Sample Table Purchaser: Elgort Textile Associates. Inc. Purchase Price: $1,000 3. Asset: one Atlas Weatherometer C1-65 Purchaser: Tri-Tex Company, Inc. Purchase Price: $5,000 4. Asset: one Dornier Jacquard Flat Loom and three Dornier Dobby Flat Looms Purchaser: David Rothschild Company Purchase Price: $200,000 5. Asset: 11 Van de Wiele VMM-22 Looms Purchaser: United Textile Machinery Corporation Purchase Price: $522,500 Furthermore, the Debtors inform the Court that they will abandon these assets in their facility at 8121 East Mid America Boulevard, in Oklahoma City, Oklahoma: -- design, software, engineering and programming specific to vehicle dashboard assembly; -- pallet load/unload system; -- facility modifications, air conditioning ductwork, storage and office space construction; and -- all other property in the premises. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000) CONGOLEUM CORP: March 31 Balance Sheet Upside-Down by $44.6 Mil. ---------------------------------------------------------------- Congoleum Corporation reported $211,000 of net income on $57.2 million of revenues for the three months ended March 31, 2006, compared to a $352,000 net loss on $57.6 million of revenues for the same period in 2005. At March 31, 2006, the Company's balance sheet showed $207.7 million in total assets and $252.5 million in total liabilities, resulting in a $44.6 million stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $127.3 million in total current assets available to pay $97.3 million in total current liabilities coming due within the next 12 months. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?bce About Congoleum Corporation Headquartered in Mercerville, New Jersey, Congoleum Corporation (AMEX:CGM) -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The Company filed for chapter 11 protection on Dec. 31, 2003 (Bankr. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennanat, Esq., at Pillsbury Winthrop Shaw Pittman LLP represent the Debtors. Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP represents the Official Committee of Unsecured Bondholders. R. Scott Williams serves as the Futures Representative, and is represented by lawyers at Orrick, Herrington & Sutcliffe LLP. Aaron Van Nostrand, Esq., at Coughlin Duffy, LLP, represents Continental Casualty Company and Continental Insurance Company. When Congoleum filed for protection from its creditors, it listed $187,126,000 in total assets and $205,940,000 in total debts. Congoleum is a 55% owned subsidiary of American Biltrite Inc. (AMEX:ABL). CONSECO FINANCE: Moody's Reviews Rating on Cert. & May Downgrade ---------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade one certificate from one transaction, issued by Conseco Finance Home Equity Loan Trust in 2001. The certificate is secured by fixed-rate home equity loans. The subordinate fixed-rate certificate from the 2001-D transaction is placed on review for possible downgrade because existing credit enhancement levels may be low given the current projected losses on the underlying pool. One of the main factors causing high cumulative losses is the existence of second liens in this transaction which generally experience high loss severities. Moody's complete rating action: Review for Possible Downgrade: Issuer: Conseco Finance Home Equity Loan Trust * Series 2001-D; Class B-2, current rating B2, under review for possible downgrade. CRYSTAL RIVER: Fitch Holds BB+ Rating on $10.75 Million Notes ------------------------------------------------------------- Fitch Ratings affirms all classes of notes issued by Crystal River CDO 2005-1, Ltd. and Crystal River CDO 2005-1 LLC. These affirmations are the result of Fitch's review process and are effective immediately: -- $109,750,000 class A floating-rate notes at 'AAA'; -- $44,750,000 class B floating-rate notes at 'AAA'; -- $20,500,000 class C floating-rate notes at 'AA'; -- $42,500,000 class D-1 floating-rate notes at 'AA'; -- $10,000,000 class D-2 fixed-rate notes at 'AA'; -- $23,250,000 class E deferrable floating-rate notes at 'A'; -- $29,000,000 class F deferrable floating-rate notes at 'BBB'; -- $10,750,000 class G deferrable fixed-rate notes at 'BB+'; -- $4,750,000 class H deferrable fixed-rate notes at 'BB'. Crystal River is an arbitrage cash flow collateralized debt obligation managed by Hyperion Crystal River Capital Advisors, LLC. Crystal River is a CDO composed of commercial mortgage- backed securities, residential mortgage-backed securities, B-Notes, mezzanine loans, and whole loans. Since the deal closed in November 2005, the underlying portfolio has continued to perform. According to the March 31, 2006 trustee report, the Fitch weighted average rating factor is 19.1 ('BB- /B+'), meeting its maximum covenant of 21.72 ('BB-/B+'). Further, all of the structure's overcollateralization and interest coverage ratios are in compliance with their respective covenants. The ratings of the classes A, B, C, D-1, and D-2 notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the classes E, F, G, and H notes address the likelihood that investors will receive ultimate interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. DELPHI CORP: Outlines Lift-Stay Request Procedures -------------------------------------------------- Delphi Corporation and its debtor-affiliates ask the Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York to approve certain procedures to settle requests to lift the automatic stay under Section 362(a) of the Bankruptcy Code. The Lift Stay Procedures are intended to promote cost-effective and timely liquidation and settlement of certain prepetition litigation claims, John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, relates. Prior to the Petition Date, the Debtors maintained an insurance program for general liability, product, liability, and automobile liability claims with ACE American Insurance Company and its affiliates. As of the Petition Date, 101 claimants in 76 open files had asserted liability claims against the Debtors that fall within the scope of the Insurance Program. The Claims can be broken into four general categories: * automobile liability (25%) * general liability (28%) * product liability (39%) * emissions (8%) The Debtors anticipate that the aggregate amount of the Claims could exceed $6,300,000. There are four claims for which the Debtors have reserved $1,000,000 or more. Prior to filing for bankruptcy, 52 Claimants had already commenced litigation against the Debtors. However, all lawsuits were stayed when the Debtors filed for bankruptcy. Thus, dozens of asserted Claims remain contingent, disputed, or unliquidated. In many cases, the Debtors believe that they have no liability or dispute the asserted amounts. The Debtors expect to file objections to a majority of the Claims. The Debtors also note that most of the Claimants seek relatively small amounts with about 91% of all Claims to be allowed in less than $100,000. Mr. Butler relates that one of the agreements in the Insurance Program is a Multi-Line Deductible Program Agreement, which requires the Debtors to pay the Insurers "all amounts the Insured is or may be obligated to pay to other parties but which are paid by the [Insurers]." Furthermore, under the Insurance Program, the Debtors have deductible limits depending on the date and nature of the claim, ranging from $1,000,000 to $5,000,000. The Debtors are obligated to pay any portion of a claim that falls within the applicable deductible limit. Thus, if the Debtors' Insurers make any payments directly to the Claimants, the Debtors' Insurers would have administrative expense priority claims for any payments that are within the applicable deductible amount. Despite the existence of insurance coverage, the Claimants' prosecution of the Claims could directly and significantly affect the Debtors' estate. The Debtors do not believe that the Lift Stay Procedures violate the Insurance Program. The Debtors have notified the Insurers and gave them an opportunity to comment or object to the procedures requested. Lift Stay Procedures Mr. Butler explains that the underlying rationale for the Lift Stay Procedures is that most Claims are settled prior to trial but only after each side has had an opportunity to analyze the merits of its and its opponent's case. Each Claimant that chooses to participate in the Lift Stay Procedures will be permitted to analyze, present, and document the alleged Claim in an informal, inexpensive way that could result in a large percentage of the Claims being resolved without the need of further litigation. For those Claimants who still want to present their claims before a jury, Mr. Butler assures the Court that the procedure would not infringe on any right to a trial by jury. Terms of the Lift Stay Procedures include: (a) Only Claimants who file timely proofs of claim by 5 p.m. Eastern Time on July 31, 2006, and in accordance with the order establishing bar dates for filing proofs of claim would be eligible to participate in the Lift Stay Procedures. Nothing in the Lift Stay Procedures is intended to obviate the need for any Claimant to file a proof of claim prior to the Bar Date. (b) Following the Bar Date, the Debtors would begin to contact certain Claimants by telephone in an effort to settle the Claims informally, in each case after appropriate consultation and consent by the Third Party Indemnitor, if applicable. (c) If a settlement were not reached through informal negotiations, the parties could seek to mediate the Claims. (d) The Debtors require that the Claimant release the Debtors' Insurers from all amounts they are or might be obligated to pay to other parties under a Multi-Line Deductible Program Agreement. (e) Nothing in the Lift Stay Procedures would be construed to alter the rights or obligations or any Insurer of the Debtors, except to the extent that a Claimant releases the Insurer from certain liability. At any time during the administration of the Lift Stay Procedures, even during litigation, the Debtors would have the authority to agree to a settlement with an eligible claimant. Court approval would not be required for the allowance of any claim as a prepetition general unsecured non-priority claim in an amount equal to or less than $500,000, and the Debtors could settle and allow the claim without notice or hearing. The goal of the Lift Stay Procedures is to provide Claimants with a cost-effective mechanism for liquidating their Claims, Mr. Butler says. The Debtors are hopeful that many Claimants will seek to engage in these procedures. About Delphi Corporation 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. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) DI GIORGIO: Adequate Notes Funding Cues S&P to Withdraw Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B-' corporate credit and 'CCC+' senior unsecured debt ratings on Di Giorgio Corp. "This action follows the company's placement of adequate funds in an account to cover all principal and interest on its 10% senior notes due 2007," said Standard & Poor's credit analyst Stella Kapur. The placement completes the satisfaction and discharge of the indenture on these notes. The redemption date for the 10% senior notes has been set for July 14, 2006. On this day, senior noteholders will receive $1,008.55 in cash per $1,000 principal amount of senior notes, which includes accrued and unpaid interest to the redemption date. DIALOG GROUP: March 31 Balance Sheet Upside-Down by $4.1 Million ---------------------------------------------------------------- Dialog Group Inc. filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on June 2, 2006. The Company reported a $46,597 net loss on $963,246 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $1,114,754 in total assets, $5,229,572 in total liabilities, resulting in a $4,114,818 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $602,249 in total current assets available to pay $4,609,405 in total current liabilities coming due within the next 12 months. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?bbc Going Concern Doubt Berenfeld, Spritzer, Shechter and Sheer in Coral Gables, Florida, raised substantial doubt about Dialog Group's ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses from operations and significant accumulated deficiency. About Dialog Group Headquartered in New York, N.Y., Dialog Group, Inc., provides a combination of traditional advertising (print, broadcast) and marketing services (broadcast, new media, and internet-based promotional venues), as well as a broad spectrum of proprietary and exclusive databases for healthcare, pharmaceutical, consumer and business-to-business market clients. The Company and its wholly owned subsidiary, imx-eti LifePartners, Inc., filed for chapter 11 protection on Nov. 20, 2000 (Bankr. S.D. Fla. Case No. 00-35217). The Bankruptcy Court confirmed the Company's Third Amended Plan of Reorganization on Oct. 11, 2001, and that Plan took effect on Dec. 11, 2001. The Bankruptcy Court finally closed the Company's cases on Oct. 24, 2002. E*TRADE ABS: Fitch Affirms BB+ Rating on $5 Million Class D Notes ----------------------------------------------------------------- Fitch affirms these classes of notes issued by E*TRADE ABS CDO IV, Ltd. and E*TRADE ABS CDO IV, LLC. These affirmations are the result of Fitch's review process and are effective immediately: -- $7,000,000 class A-1A first priority senior secured floating-rate notes affirmed at 'AAA'; -- $152,800,000 class A-1B-1 first priority senior secured floating-rate delayed draw notes affirmed at 'AAA'; -- $38,200,000 class A-1B-2 first priority senior secured floating-rate notes affirmed at 'AAA'; -- $21,000,000 class A-2 second priority senior secured floating-rate notes affirmed at 'AAA'; -- $52,000,000 class B third priority senior secured floating- rate notes affirmed at 'AA'; -- $17,000,000 class C fourth priority mezzanine deferrable secured floating-rate notes affirmed at 'BBB'; -- $5,000,000 class D fifth priority mezzanine deferrable secured floating-rate notes affirmed at 'BB+'. E*TRADE IV is a collateralized debt obligation which closed December 1, 2005 and is managed by E*TRADE Global Asset Management, Inc. E*TRADE Global Asset Management, Inc. is currently rated 'CAM2' by Fitch Ratings in Structured Finance CDO management. E*TRADE IV is backed by a managed pool of residential mortgage-backed securities, commercial mortgage-backed securities, consumer and commercial asset-backed securities, and collateralized debt obligations. The deal is currently in the substitution period. Discretionary trading is limited to a maximum 15% of the total collateral balance each year during the two-year substitution period, as well as for any defaulted and credit-impaired securities at any time. These affirmations are the result of stable collateral performance. According to the May 30, 2006 trustee report, the Fitch weighted average rating factor is 4.16 ('BBB/BBB-'), below its allowed maximum. Further, the structure is meeting all of its overcollateralization and interest coverage test covenants. There are no defaulted or distressed assets in the portfolio. The ratings of the class A-1A, class A-1B-2, class A-1B-2, class A-2, and class B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class C and class D notes address the likelihood that investors will receive ultimate interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. E*TRADE ABS: S&P Puts Junk Ratings on Negative Watch ---------------------------------------------------- Standard & Poor's Ratings Services placed its 'CCC+' ratings on the class C-1 and C-2 notes issued by E*Trade ABS CDO I Ltd., a CDO of structured finance transaction, on CreditWatch with negative implications. Concurrently, the ratings on the class A-1, A-2, and B notes are affirmed based on the level of credit enhancement available. The CreditWatch placements reflect factors that have negatively affected the credit enhancement available to support the class C notes since the last rating action in December 2005, primarily the continued decline of the overcollateralization ratio. In addition, Standard & Poor's downgraded a manufactured housing security in the portfolio (with a $6 million par value as of the May 31, 2006, trustee report) to 'CC' from 'CCC-' on June 7, 2006. Standard & Poor's will review the results of the current cash flow runs generated for E*Trade ABS CDO I Ltd. to determine the level of future defaults the rated classes can withstand under various stressed default timing and interest rate scenarios while still paying all of the interest and principal due on the notes. The results of these cash flow runs will be compared with the projected default performance of the performing assets in the collateral pool to determine whether the ratings currently assigned to the notes remain consistent with the credit enhancement available. Ratings Placed on Creditwatch Negative E*Trade ABS CDO I Ltd. Rating Balance ------ ------- Class To From Current Original ----- -- ---- ------- -------- C-1 CCC+/Watch Neg CCC+ $9,322,000 $9,500,000 C-2 CCC+/Watch Neg CCC+ $3,384,000 $3,400,000 Ratings Affirmed E*Trade ABS CDO I Ltd. Balance ------- Class Rating Current Original ----- ------ ------- ------- Class A-1 AAA $2,059,000 $151,250,000 Class A-2 AAA $50,000,000 $50,000,000 Class B A+ $25,000,000 $25,000,000 Other Outstanding Ratings Rating ------ Composite securities CC Preference shares CC Transaction Information Issuer: E*Trade ABS CDO I Ltd. Co-issuer: E*Trade ABS CDO I LLC Current manager: E*Trade Global Asset Management Underwriter: Credit Suisse Trustee: Wells Fargo Bank N.A. Transaction type: CDO of structured finance EAGLEPICHER HOLDINGS: Has Until Sept. 3 to Decided on Leases ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Ohio extended the period within which EaglePicher Holdings, Inc., and its debtor-affiliates can assume, assume and assign or reject all of their unexpired leases of nonresidential real property until Sept. 3, 2006. On March 2, 2006, the Debtors filed their First Amended Joint Plan of Reorganization. Under the Plan, on March 28, 2006, the Debtors filed notices of intent to assume and reject all executory contracts and unexpired leases. The Debtors have also filed, and will continue to file, supplements to those notices to modify the intended treatment of certain agreements, as provided for by the Plan. Thus, the Debtors submit that they have already determined which of the leases they will be assuming and which they will be rejecting. However, the intended assumption or rejection of the leases will not become effective until the Court confirms the Plan. The Court has not yet handed down an order on the confirmation. Headquartered in Phoenix, Arizona, EaglePicher Incorporated -- http://www.eaglepicher.com/-- is a diversified manufacturer and marketer of innovative advanced technology and industrial products for space, defense, automotive, filtration, pharmaceutical, environmental and commercial applications worldwide. The company along with its affiliates and parent company, EaglePicher Holdings, Inc., filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Ohio Case No. 05-12601). Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P, represents the Debtors in their restructuring efforts. Houlihan Lokey Howard & Zukin is the Debtors financial advisor. When the Debtors filed for protection from their creditors, they listed $535 million in consolidated assets and $730 in consolidated debts. EAST CAMERON: S&P Junks Rating on $165.67 Mil. Trust Certificates ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'CCC+' rating to East Cameron Gas Co.'s (as trustee for East Cameron Gas Co. Sukuk Trust) $165.67 million investment trust certificates. The investment trust certificates represent the first future flow securitization backed by overriding royalty interests in the form of Sukuk. It is also the first U.S. Islamic finance securitization to be rated by Standard & Poor's. The transaction is the first rated U.S. Sukuk that is a true securitization in that it is not originator guaranteed and it is rated higher than the originator's credit quality. The preliminary rating reflects the credit enhancement available in the form of overcollateralization through production coverage, price hedge and off-take agreements, and reserve accounts. The preliminary rating reflects these characteristics of the transaction's structure: -- The credit enhancement available in the form of overcollateralization of production coverage; -- A reserve account to be opened by the purchaser special- purpose vehicle and held by Deutsche Bank AG ('AA-'), of which an amount equal to $9.5 million (six months' return and expenses) will be credited from the proceeds on the closing date; -- An earnout account, to be held as an escrow account at Deutsche Bank, into which the purchaser SPV will deposit $38.28 million on the closing date. The originator will be entitled to have amounts in the earnout account disbursed to it from time to time as it performs its obligations under the development plan; -- The ECP Opex Account, an escrow account to be held at Deutsche Bank, into which $5 million of the proceeds will be deposited by the originator (East Cameron Partners L.P.; ECP) on the closing date; -- The royalty subordination account, an escrow account to be held at Deutsche Bank, into which 50% of the ORRI allocated to two additional parties will be pledged to fund this account until it reaches $3 million. Both Opex accounts will be used by ECP to support ongoing operating expenses associated with the property; -- The engagement of Production Management Industries LLC as back-up operator if the originator fails to operate the properties adequately; -- The hedge agreement to be entered into by Merrill Lynch Commodities Inc., supported by Merrill Lynch & Co. Inc. ('A+') and ECP, and subsequently novated to the purchaser SPV at closing. The hedge mitigates price risk for a set volume of gas production from 2007-2010. Any payments owed by the purchaser SPV to the hedge counterparty are covered by a guarantee from Merrill Lynch Credit Products LLC up to $12 million; and -- The gas production off-taker is Cedar Gas Co., which has the benefit of a back-up off-take agreement from Merrill Lynch Commodities Inc., guaranteed by Merrill Lynch & Co. Inc. ('A+'). Gas production accounts for approximately 93% of total hydrocarbons produced by the field. The oil condensate off-taker is Shell Trading (U.S.) Co. The sale proceeds from the gas and oil condensate after appropriate allocations constitute the ORRI. Standard & Poor's preliminary rating on the certificates solely addresses the likelihood of scheduled payments of Sukuk return and redemption. The rating does not address the ability of certificateholders to receive the residual return. The certificates will have a fixed quarterly return of 11.25%, and the redemption, including payment of residual return, will be by July 2019. Standard & Poor's bases its credit rating opinion on Sukuk transactions' compliance with applicable commercial law, and the rating, therefore, does not reflect the compliance of the transaction with Shari'a law. Standard & Poor's will review a true-sale opinion, a nonconsolidation opinion addressing the risk of substantive consolidation of the assets and liabilities of the seller and the trust, and other applicable opinions, addressing the sale of the ORRI from ECP (the originator) to the purchaser SPV. East Cameron Gas Co., a SPV, will take the certificate proceeds and advance them to Louisiana Offshore Holdings LLC (purchaser SPV) to purchase the ORRI over the properties from ECP. ECP, the originator, is an independent oil and gas exploration and production company with leasehold interests in a natural gas and condensate field in U.S. federal waters. The field is located 20 miles off the shores of Louisiana. Merrill Lynch International is sole bookrunner, and Merrill Lynch International and BSEC-Bemo Securitisation SAL are co-arrangers of the transaction. EASY GARDENER: Completes $58.7 Million Assets Sale to Green Thumb ----------------------------------------------------------------- Easy Gardener Products, Ltd. (PINKSHEETS: EZGRP) completes the sale of all of its assets pursuant to an order of the United States Bankruptcy Court for the District of Delaware. The buyer was Green Thumb Acquisition Corporation, an affiliate of Bayside Capital, at a purchase price of $58,797,023. The purchase price consists of $23.5 million, plus the principal and interest owed to the Company's senior secured revolving and term lenders and minus certain fees to be paid. Bayside Capital is an affiliate of H.I.G. Capital, an investment firm that manages more than $2.5 billion in invested capital and has invested in over 40 portfolio companies. Terms of the Sale Agreement Under the sale agreement, the Company sold to the GTAC substantially all of the assets of the Company and its wholly- owned subsidiaries Weatherly Consumer Products Group, Inc. and Weatherly Consumer Products, Inc. in a transaction subject to Section 363 of the Federal Bankruptcy Code. The Company used the proceeds of the sale to repay 100% of the outstanding principal and unpaid interest due to the Company's senior secured revolving and term lenders at the closing of the sale, upon which the Company terminated its agreements with its senior secured revolving and term lenders. The Company expects the $23.5 million balance of the purchase price to be used to pay amounts owed to holders of two subordinated promissory notes issued by the Company in the aggregate principal amount of $4.275 million, plus accrued interest of $1 million. After paying transaction and other fees estimated to be between $3.1 million and $4.3 million, there will be between $15.1 million and $13.9 million remaining for distribution to holders of the Company's 9.40% Cumulative Preferred Trust Securities due April 15, 2028 (estimated to be between approximately $6.25 and $5.75 per Trust Preferred Share). The amount ultimately paid to the holders of the Trust Preferred Shares will depend upon several contingencies, including the amount of transaction and other fees actually incurred in connection with the sale and the Chapter 11 process. No funds will be available for payment to the Company's common equity securities. Effective June 16, 2006, the Company has changed its name to EGI Liquidating Company, Ltd. The Company is a Texas limited partnership with principal executive offices located at 3022 Franklin Avenue, Waco, Texas 76710. About Easy Gardener Products Headquartered in Waco, Texas, Easy Gardener Products, Ltd. -- http://www.easygardener.com/-- manufactures and markets a broad range of consumer lawn and garden products, including weed preventative landscape fabrics, fertilizer spikes, decorative landscape edging, shade cloth and root feeders, which are sold under various recognized brand names including Easy Gardener, Weedblock, Jobe's, Emerald Edge, and Ross. The Company and four of its affiliates filed for bankruptcy on April 19, 2006 (Bankr. D. Del. Case Nos. 06-10393 to 06-10397). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP represent the Debtors in their restructuring efforts. Young Conaway Stargatt & Taylor, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for bankruptcy, they reported assets amounting to $103,454,000 and debts totaling $107,516,000. GARY RICHARDS: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Gary Richards, Sr. Muriel Pauline Richards 21581 East Portland Place Aurora, Colorado 80016-2343 Bankruptcy Case No.: 06-13737 Chapter 11 Petition Date: June 20, 2006 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtors' Counsel: Robert Padjen, Esq. Laufer and Padjen LLC 5290 DTC Parkway, Suite 150 Englewood, Colorado 80111 Tel: (303) 830-3173 Fax: (303) 830-3135 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtors' 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Washington Mutual Loan/Home $630,000 CIT Small Business Lending Loan $606,457 P.O. Box 277280 Atlanta, GA 30384 Trade Debt $28,870 Internal Revenue Service Taxes $90,565 P.O. Box 145566 Stop 5012DEN Cincinnati, OH 45250-5566 Graybar Electric Co., Inc. Trade Debt $20,411 File #57072 Los Angeles, CA 90074 State of Colorado Tax Taxes $18,948 Data Connection, Inc. Trade Debt $14,741 Alternative Communication Trade Debt $11,548 Services Corp. Medline Communications, Inc. Trade Debt $9,164 Telecom Networking Trade Debt $8,948 Systems, Inc. Aschinger Elect Trade Debt $8,900 Parallel Technologies, Inc. Trade Debt $8,105 Chrysler Financial Loan $7,000 Wire-Rite Data Cabling Trade Debt $6,692 National Telephone & Equipment Trade Debt $6,166 Hardy Communications & Cabling Trade Debt $6,154 Infrastructure Solutions, Inc. Trade Debt $5,900 Kari-Lane LLC Trade Debt $5,220 John List Trade Debt $5,160 GENERAL MOTORS: Fitch Rates New $4.48 Billion Facility at BB ------------------------------------------------------------ Fitch has assigned a rating of 'BB' and a Recovery Rating (RR) of 'RR1' to General Motor's (GM) new $4.48 billion senior secured bank facility. The 'RR1' (recovery of 90%-100%) is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. Although the offering of security to bank lenders moderately impairs the position of GM's unsecured debtholders, the recovery rating for unsecured holders still falls within the 30%-50% range represented by the 'RR4' designation. The Issuer Default Rating (IDR) is affirmed at 'B', and remains on Rating Watch Negative. Fitch's ratings for GMAC remain at 'BB', Rating Watch Positive, and are not affected by the new bank financing. The bank agreement is secured by certain North American receivables and inventory, a stock pledge of a Mexican subsidiary, and certain PP&E in Canada. These assets also act as collateral for $1.5 billion in non-loan facilities, bringing the total amount of facilities secured by these assets to approximately $6 billion. The assets pledged provide sufficient over-collateralization to support the 'RR1' rating, and borrowing base restrictions provide further protection to secured lenders. GM's ratings remain on Rating Watch Negative, based on short-term concerns with the unresolved Delphi situation. In addition to the long-term liabilities that GM will absorb under its guarantee of pension and OPEB obligations to Delphi workers, GM is expected to provide other forms of near-term financial assistance in order to prevent any significant work stoppage. Financial assistance is expected to come in a variety of forms, including the financing of buyout packages. High acceptance rates of buyout packages being offered to GM and Delphi hourly workforces could facilitate the resolution of the Delphi situation. However, wage and benefit programs for the remaining hourly workforce have yet to be resolved, and Delphi has also not resolved its large underfunded pension position and faces a pending $1.1 billion required contribution. Fitch anticipates that the Rating Watch Negative status will remain in place until a new labor agreement is reached, and ratified by Delphi's unions. A Delphi work stoppage that results in a material shutdown of GM's North American production would likely result in a downgrade of the IDR and unsecured ratings to the 'CCC' category. A review of the rating could also take place in the event that GM's agreement to sell a 51% interest in GMAC to a group of investors does not proceed as planned, or in the event of a further deterioration in operating results. Recent product introductions have supported revenues to date in 2006, providing time for GM to address its fixed cost structure, although the duration of recent sales performance remains uncertain given the continuing decline of industry sales in the large SUV segment. In addition, stresses in the supply base and high commodity costs will continue to hinder the company's cost reduction efforts. GIBRALTAR LTD: S&P Holds Rating on Class C Notes & Removes Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its rating on the class C notes issued by Gibraltar Ltd., a high-yield arbitrage CBO transaction managed by Seneca Investment Management, and removed it from CreditWatch negative. At the same time, the ratings on the class A and B notes are affirmed. The affirmed rating on the class C notes reflects factors that have positively affected the available credit enhancement since the rating was placed on CreditWatch negative in November 2005. Since the class C notes were last downgraded in November 2003, Gibraltar Ltd. has experienced $40.445 million in defaults. However, $94.75 million has been paid down to the class A notes since the November 2003 rating action. Currently, the class A balance is $164.125 million, down from $272 million at issuance. Additionally, the credit quality of the collateral pool has improved since the November 2005 CreditWatch placement. As of the March 31, 2006, monthly report, the transaction was carrying $30.459 million in defaulted assets. As of the May 31, 2006 report, all defaulted assets had been sold. These sales have significantly increased the quality of the collateral and have increased the transaction's available cash. Standard & Poor's has reviewed current cash flow runs generated for Gibraltar Ltd. to determine the level of future defaults the rated notes can withstand under various stressed default timing and interest rate scenarios while still paying all of the interest and principal due on the notes. After comparing the results of these cash flow runs with the projected default performance of the performing assets in the collateral pool, Standard & Poor's determined that the rating assigned to the class C notes was consistent with the credit enhancement available. Standard & Poor's will continue to monitor the future performance of the transaction to ensure that the ratings assigned to all of the notes remain consistent with the credit enhancement available. Rating Affirmed and Removed from Creditwatch Negative Gibraltar Ltd. Rating ------ Class To From ----- -- ---- C BB+ BB+/Watch Neg Ratings Affirmed Gibraltar Ltd. Class Rating ----- ------ A AAA B-fixed A- B-floating A- Transaction Information Issuer: Gibraltar Ltd. Co-issuer: Gibraltar Corp. Current Manager: Seneca Investment Management Underwriter: Goldman Sachs & Co. Inc. Trustee: J.P. Morgan Chase Bank N.A. Transaction type: High-yield arbitrage CBO Tranche Prior Watchneg Current Information Downgrade Placement Action Date (MM/YYYY) 11/2003 11/2005 06/2006 Class A note rtg. AAA AAA AAA Class A note balance (mil.$) 258.0 218.61 164.13 Class A OC ratio(%) 137.9 143.4 159.9 Class A OC ratio minimum(%) 119.0 119.0 119.0 Class B-fixed nt rating A- A- A- Class B-fixed nt bal (mil.$) 22.50 22.50 22.50 Class B-float note rtg. A- A- A- Class B-float nt bal (mil.$) 17.50 17.50 17.50 Class B OC ratio(%) 119.5 121.2 128.6 Class B OC ratio minimum(%) 110.0 110.0 110.0 Class C note rtg. BB+ BB+ BB+ Class C note balance (mil.$) 24.00 24.00 24.00 Class C OC ratio(%) 110.6 110.9 115.0 Class C OC ratio minimum(%) 107.0 107.0 107.0 Portfolio Benchmarks Current S&P Wtd. Avg. Rtg. (excl. defaulted) B+ S&P Default Measure (excl. defaulted) (%) 4.37 S&P Variability Measure (excl. defaulted) (%) 3.04 S&P Correlation Measure (excl. defaulted) 1.09 Wtd. Avg. Coupon (excl. defaulted) (%) 8.06 Wtd. Avg. Spread (excl. defaulted) (%) 3.86 Oblig. Rtd. 'BBB-' and above (%) 13.60 Oblig. Rtd. 'BB-' and above (%) 32.44 Oblig. Rtd. 'B-' and above (%) 88.18 Oblig. Rtd. in 'CCC' range (%) 11.28 Oblig. Rtd. 'CC', 'SD' or 'D' (%) 0.00 Obligors on Watch Neg (excl. defaulted) (%) 3.17 S&P Rated OC (ROC) Prior To Action Current Class A nts (%) 124.12 (AAA) 124.12 (AAA) Class B-fixed nts (%) 108.45 (A-) 108.45 (A-) Class B-float nts (%) 108.45 (A-) 108.45 (A-) Class C nts (%) 103.60 (BB+/Watch Neg) 103.60 (BB+) GROUP 1 AUTOMOTIVE: Prices $250 Million of 2.25% Convertible Notes ------------------------------------------------------------------ Group 1 Automotive, Inc. (NYSE:GPI) disclosed the pricing of $250 million aggregate principal amount of 2.25% convertible senior notes due 2036 in a private offering to qualified institutional buyers under Rule 144A under the Securities Act of 1933. The Convertible Notes will be convertible into cash and, if applicable, shares of Group 1 common stock, based on an initial conversion price of approximately $59.43 per share. Group 1 has granted to the initial purchasers a 13-day over-allotment option to purchase an additional $37.5 million aggregate principal amount of Convertible Notes. Interest on the Convertible Notes will be paid semi-annually at a rate of 2.25% per year until June 15, 2016, and at a rate of 2.00% per year thereafter. The Convertible Notes will be redeemable by the Company for cash at 100% of the principal amount of the notes to be redeemed plus accrued and unpaid interest on or after June 20, 2011, but prior to June 15, 2016, in the event that the price of Company's common stock is at least 130% of the conversion price then in effect over a specified measurement period. In addition, the Convertible Notes will be redeemable by the Company at any time on or after June 15, 2016. Holders of the Convertible Notes will be able to require Group 1 to repurchase their Convertible Notes on June 15, 2016, for cash at 100% of the principal amount to be repurchased plus accrued and unpaid interest, or on each subsequent ten year anniversary until maturity, or upon the occurrence of certain types of fundamental changes. The Convertible Notes offering is expected to close on Monday, June 26, 2006. The Company intends to use the net proceeds from the issuance of the Convertible Notes to: * repay a portion of its existing floor plan borrowings under its Credit Facility, which may be re-borrowed; * repurchase up to $50 million of shares of its common stock simultaneously with the offering; and * pay the approximately $31.0 million net cost of the convertible hedge and warrant transactions. This stock repurchase replaces the previously announced stock repurchase authorization of $42 million. In connection with the offering, the Company has entered into convertible note hedge and warrant transactions in respect of its common stock with affiliates of certain of the initial purchasers of the Convertible Notes to increase the effective conversion premium on the Convertible Notes to 50%. These transactions will reduce the potential dilution upon future conversion of the Convertible Notes by providing the Company with the option, subject to certain exceptions, to acquire shares that offset the delivery of newly issued shares upon settlement of conversion of the Convertible Notes. The counterparties to such transactions have advised the Company that they or their affiliates have entered into simultaneously with the pricing of the Convertible Notes, and may enter into shortly after pricing, various derivative transactions with respect to the Company's common stock. In addition, following pricing of the Convertible Notes, the counterparties or their affiliates may purchase or sell shares of the Company's common stock in secondary market transactions, or enter into or unwind various derivative transactions relating to the Company's common stock (including, without limitation, during any observation period relating to any conversion of the Convertible Notes). The Convertible Notes and the common stock issuable upon conversion of the Convertible Notes have not been registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. About Group 1 Automotive Group 1 Automotive, Inc. (NYSE:GPI) owns 95 automotive dealerships comprised of 136 franchises, 33 brands and 30 collision service centers in California, Colorado, Florida, Georgia, Louisiana, Massachusetts, New Hampshire, New Jersey, New Mexico, New York, Oklahoma and Texas. Through its dealerships, the company sells new and used cars and light trucks; arranges related financing, vehicle service and insurance contracts; provides maintenance and repair services; and sells replacement parts. GROUP 1 AUTOMOTIVE: Higher Debt Levels Cue S&P's Negative Outlook ----------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook of automotive retailer Group 1 Automotive Inc. to negative from stable because of increased debt levels that will result from the company's new $250 million convertible notes. The 'BB' corporate credit rating on the company was affirmed. Houston, Texas-based Group 1 will have pro forma debt of about $750 million, including the present value of operating leases and excluding floor plan liabilities. Proceeds from the debt will be used to repurchase shares and to reduce floor plan liabilities. Standard & Poor's considers the company's floor plan liabilities to be more akin to trade payables than debt because of their indefinite maturity, high loan-to-value ratios, and because manufacturer subsidies largely offset borrowing costs. Group 1's credit protection measures will deteriorate. The ratings reflect a weak financial profile resulting from an aggressive acquisition strategy, combined with the competitive and cyclical challenges of the automotive retail industry. HEADWATERS INC: Offering $150MM of Sr. Notes in Private Placement ----------------------------------------------------------------- Headwaters Incorporated (NYSE: HW) disclosed on June 20, 2006, that it intends to offer, subject to market and other conditions, $150 million of senior subordinated notes in a private placement to qualified institutional buyers pursuant to exemptions from the registration requirements of the Securities Act of 1933. The notes will mature in 2016 and will bear interest at a rate to be determined. Headwaters intends to use all of the net proceeds from the offering to repay a portion of its senior secured credit facility. Headquartered in South Jordan, Utah, Headwaters Incorporated -- http://www.hdwtrs.com/-- is a world leader in creating value through innovative advancements in the utilization of natural resources. Headwaters Inc. is a diversified growth company providing products, technologies and services to the energy, construction and home improvement industries. Through its alternative energy, coal combustion products, and building materials businesses, the company earns a growing revenue stream that provides the capital needed to expand and acquire synergistic new business opportunities. HEADWATERS INC: Moody's Rates Proposed $150 Million Notes at B3 --------------------------------------------------------------- Moody's Investors Service affirmed the B1 corporate family rating for Headwaters Incorporated and assigned a B3 rating to the company's proposed $150 million of senior subordinated notes due 2016. The company will use a small amount of cash and the net proceeds from the note offering to retire bank term debt and notes payable, so its leverage will not change materially as a result of the proposed financing. In a related action, Moody's raised the rating on the company's senior secured credit agreements to Ba3 from B1, reflecting the improved ranking of the secured debt in the company's capital structure. Headwaters' rating outlook remains stable. Headwaters' ratings reflect the company's high leverage, the higher risks associated with some of its growth initiatives as it seeks to replace the synfuel business with other alternative energy technologies, and the possibility of further acquisitions. In fiscal year 2005, Headwaters' synfuel business accounted for close to two-thirds of its consolidated cash flow. Moody's ratings have always given little long-term weight to the synfuel operations due to the uncertainty associated with Section 45K tax credits and their scheduled expiry after 2007, but high oil prices may cause the phase-out of Section 45K tax credits in 2006. Headwaters' ratings also consider a high degree of customer concentration at Tapco and exposure to cyclical and seasonal construction markets. However, the B1 corporate family rating is supported by the good operating margins, organic growth potential and strong market positions held by CCP, Tapco, and Eldorado Stone, and Headwaters' success in integrating these diverse businesses and reducing leverage. Earnings stability is enhanced by long-term CCP management contracts and by Tapco's low-cost manufacturing capabilities, leading market share for vinyl shutters, and the breadth of its offerings of exterior residential building products. Moody's took these rating actions: * Assigned a B3 rating to its proposed $150 million of senior subordinated notes due 2016 * Upgraded, to Ba3 from B1, the guaranteed senior secured credit facilities, which consist of a $60 million five-year revolving credit facility maturing September 8, 2009 and a term loan B facility maturing April 30, 2011 Affirmed these ratings: * B1 corporate family rating, * SGL-1 speculative grade liquidity rating. Moody's previous rating action on Headwaters was in September 2004, when it assigned the previous ratings. Headwaters Incorporated, headquartered in South Jordan, Utah, is a diversified company providing products, technologies and services to the energy and construction materials industries. For the fiscal year ended September 30, 2005, Headwaters had sales of $1.06 billion. HEADWATERS INC: S&P Rates Proposed $150 Million Subor. Notes at B ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' subordinated debt rating to Headwaters Inc.'s proposed $150 million subordinated notes offering due 2016, based on preliminary terms and conditions. At the same time, S&P placed its 'BB-' senior secured bank loan and '2' recovery ratings on Headwaters' $475 million credit facilities on CreditWatch with positive implications, based on expectations that the note offering proceeds will be used to reduce the company's term loan. S&P affirmed all other ratings, including the 'BB-' corporate credit rating. The outlook is stable. "If the transaction is completed as expected, we will raise the bank loan rating to 'BB', one notch above the corporate credit rating, and the recovery rating to '1', indicating expectations of full recovery of principal in the event of a payment default," said Standard & Poor's credit analyst Pamela Rice. Headwaters, based in South Jordan, Utah, has the leading U.S. market share in post-combustion services to coal-fired electric power plants. With the possible termination of its synthetic fuels business looming, Headwaters should be able to generate substantial positive free cash flow for further debt reduction because of good growth prospects for building products and fly ash, favorable end- market conditions, and moderate capital spending needs. In addition, efficiency initiatives and operating synergies will gradually strengthen profitability from already-strong levels. "We could revise the outlook to negative if conditions in any of Headwaters' markets worsen or if it pursues meaningful debt- financed acquisitions while the continued viability of the alternative energy business remains uncertain," Ms. Rice said. "It is unlikely we would change the outlook to positive over the intermediate term unless one or more of the company's budding technologies, such as coal cleaning or heavy oil upgrading, becomes highly successful and the alternative fuels tax credit is extended for several years." HEATING OIL: Units Want CCAA Court to Implement Confirmation Order ------------------------------------------------------------------ Heating Oil Partners Income Fund (TSX: HIF.UN) reported that its subsidiaries, Heating Oil Partners, L.P., Heating Oil Partners G.P., Inc. and HOP Holdings, Inc. filed motion materials with the Ontario Superior Court of Justice Commercial List in conjunction with the proceedings under the Companies' Creditors Arrangement Act for those companies. On June 15, 2006, the U.S. Bankruptcy Court for the District of Connecticut, Bridgeport Division issued an order confirming the First Amended Joint Plan of Reorganization, as amended, of the Company and Partners pursuant to Chapter 11 of the U.S. Bankruptcy Code. Further to the Confirmation Order, the Company and Partners will be seeking an order pursuant to the CCAA recognizing and implementing the Confirmation Order in Canada on Monday, June 26, 2006. The Plan Applicants and Holdings will also be seeking an order from the CCAA court authorizing Holdings to file an assignment in bankruptcy pursuant to the Bankruptcy and Insolvency Act. Terms of the Plan Under the terms of the reorganization plan, 100% of the equity of the Company will be distributed to the Company's pre-petition secured lenders in complete satisfaction of their secured claims against the Company (approximately $118 million), which will result in the Company being a private company. This group of new equity holders will also provide an $8 million equity infusion following the Company's emergence from Chapter 11. Holders of unsecured claims will be entitled to receive their pro rata share of a cash distribution from a $525,000 settlement pool. Current equity investors in the Company, and holders of the Fund's units, will receive no distribution. It is anticipated that the Fund will be dissolved and all existing units will be cancelled. About Heating Oil Partners Headquartered in Darien, Connecticut, Heating Oil Partners, L.P. -- http://www.hopheat.com/-- is one of the largest residential heating oil distributors in the United States, serving approximately 150,000 customers in the Northeastern United States. The Company's primary business is the distribution of heating oil and other refined liquid petroleum products to residential and commercial customers. The Company and its subsidiaries filed for chapter 11 protection on Sept. 26, 2005 (Bankr. D. Conn. Case No. 05-51271) and filed for recognition of the chapter 11 proceedings under the Companies' Creditors Arrangement Act (Canada). Craig I. Lifland, Esq., and James Berman, Esq., at Zeisler and Zeisler, represent the Debtors in their restructuring efforts. Jeffrey D. Prol, Esq., at Lowenstein Sandler PC, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $127,278,000 in total assets and $155,033,000 in total debts. IRIDIUM SATELLITE: Moody's Junks Rating on Senior Sec. Facility --------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and SGL-2 speculative grade liquidity to Iridium Satellite LLC. As well, Moody's assigned a B3 first priority senior secured and a Caa1 second priority senior secured rating to the company's prospective bank facility, subject to review of final documentation. This is the first time ratings have been assigned to Iridium. The outlook is stable. The B3 Corporate Family Rating reflects considerable uncertainty surrounding the company's long term future given its existing satellite constellation has a finite life and there are no firm plans to launch a replacement constellation. In Moody's opinion, however, Iridium's near-term outlook is reasonably strong based on the likely continuance of its existing U.S. Department of Defense anchor contract and Moody's expectations that market conditions for mobile satellite service providers will remain favorable. As a result, Moody's believes Iridium is likely to reduce its EBITDA-based leverage to roughly 3 timnes by 2007, which will provide the company with some flexibility to determine its future direction well before its operations are impacted by the significant longer term challenges it faces. The SGL-2 speculative grade liquidity rating reflects Moody's expectations that, pro-forma the proposed financing, Iridium will have approximately $20 million of combined cash balances and unused revolver availability, no restrictive financial covenants, and that free cash flow over the next year is expected to total roughly $25 million compared to mandatory debt maturities of less than $10 million. Assignments: Issuer: Iridium Satellite LLC * Corporate Family Rating, Assigned B3 * Speculative Grade Liquidity Rating, Assigned SGL-2 * Senior Secured Bank Credit Facility, Assigned B3 * Senior Secured Bank Credit Facility, Assigned Caa1 Iridium Satellite LLC is a mobile satellite services company that provides global telecommunication services to government and commercial customers. The company is headquartered in Bethesda, Maryland. ISORAY INC: Posts $1.6 Mil. Net Loss for 3rd Qtr. Ended March 31 ---------------------------------------------------------------- IsoRay, Inc., reported a $1.6 million net loss on $479,225 of revenues for the third quarter ended March 31, 2006, compared to a $724,314 net loss on $50,565 of revenues for the same period in 2005. At March 31, 2006, the Company's balance sheet showed $6 million in total assets and $1.8 million in total liabilities. As of March 31, 2006, the company's accumulated deficit widened to $10.9 million from an accumulated deficit of $5.3 million at June 30, 2005. On Jan. 30, 2006, IsoRay closed a round of private financing under its Oct. 17, 2005 private placement memorandum, as amended, which was fully sold at $6 million. In February, IsoRay commenced a new round of private financing under its Feb. 1, 2006 private placement memorandum, and had raised approximately $1.2 million under that offering as of March 31, 2006. The Company had approximately $1.2 million cash on hand as of May 17, 2006. As of that date, the Company's monthly required cash operating expenditures were approximately $630,000, and capital expenditures were approximately $50,000. The management believes that assuming expenditures continue at approximately the same monthly rate that the Company's cash on hand would fund operating expenditures through the end of the fiscal year, June 30, 2006. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?bd1 IsoRay, Inc., formerly known as Century Park Pictures Corporation has no operations, assets or liabilities since its fiscal year ended September 30, 1999 through June 30, 2005. The company merged with IsoRay Medical, Inc., on May 27, 2005, and the merger closed on July 28, 2005. As a result of the merger, the company changed its name to IsoRay, Inc. IsoRay Medical sells IsoRay 131Cs brachytherapy seed for the treatment of prostate cancer. Going Concern Doubt As reported in the Troubled Company Reporter on Feb. 28, 2006, IsoRay's management indicated there's doubt about the company's ability to continue as a going concern. Management pointed to the company's heavy cash expenditures and lack of additional financing. S. W. Hatfield, CPA, in Dallas, Texas, expressed substantial doubt about IsoRay, Inc.'s ability to continue as a going concern after auditing the financial statements for the years ended June 30, 2005, Sept. 30, 2004, and 2003. Hatfield pointed to IsoRay's lack of operations and lack of additional financing. IVI COMMUNICATIONS: Bagel Josephs Expresses Going Concern Doubt --------------------------------------------------------------- Bagel, Josephs, Levine & Company, LLC, in Gibbsboro, New Jersey, raised substantial doubt about IVI Communications Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended March 31, 2006. The auditor pointed to the Company's operating losses and capital deficits. Additionally, the Company sold off its operations in Colorado, Oregon and California, and was operating essentially as a shell company up until January 2005, when it acquired Internet Business Consulting/AppState.net, LLC. The Company is in the process of restructuring and is continuing to search for more profitable Internet and communications related service companies to acquire. The Company reported a $4,158,104 net loss on $2,681,373 of total revenues for the year ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $4,930,683 in total assets and $6,005,076 in total liabilities, resulting in a $1,074,393 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $720,369 in total current assets available to pay $5,552,944 in total current liabilities coming due within the next 12 months. A full-text copy of the Company's 2006 Annual Report is available for free at http://researcharchives.com/t/s?bbb About IVI Comm IVI Communications, Inc. -- http://www.ivn.net/-- acquires, consolidates and profitably operates locally branded ISPs to offer state of the art dialup and fixed wireless (WIMAX) broadband Internet access and other services such as VoIP Internet Telephony to residential and business customers. IVI has three wholly owned subsidiaries, Internet Business Consulting, Inc., Futura, Inc., and AppState.Net. IBC is a VoIP services provider and a source of turnkey wireless networks that has the expertise required to engineer, install, and support wireless applications and solutions. Futura, founded in September 1995, is a regional Internet Service Provider serving dialup, DSL and VoIP in communities surrounding Little Rock, Arkansas. AppState.net is an Internet Service Provider founded in July 1999 providing wireless and dialup Internet access to the Appalachian State University town of Boone, NC. J.L. FRENCH: Delaware Court Confirms Plan of Reorganization ----------------------------------------------------------- After only 18 weeks under Chapter 11 protection, J.L. French Automotive Castings, Inc. reported that the U.S. Bankruptcy Court for the District of Delaware has confirmed the company's Plan of Reorganization that details how the company will satisfy creditor claims. J.L. French anticipates that the company will emerge from Chapter 11 protection at the end of June. "I am pleased to communicate that we have successfully completed our restructuring," stated Jack F. Falcon, chairman, CEO and president. "I want to acknowledge the tremendous support of our major customers, employees, vendors, and creditors as well as the professionals we engaged to help us reach our goals. "When we emerge on June 30, J.L. French will have shed $465 million in first and second lien senior secured debt and $28.9 million in 11.5% senior subordinated unsecured notes. We will have acquired $130 million in new equity investment and $255 million in new financing. In recent months, our major customers have made new business commitments to us, and we expect to grow solidly into the future. Our work in Europe and China is progressing to plan, and the opportunities in these markets are encouraging. With a strong balance sheet and capable production centers, we foresee controlled, steady growth." Upon emergence, the participants in the $130 million rights offering will hold 92% of the common stock in the newly reorganized company. The holders of second lien debt will receive the remaining 8% of new common stock in satisfaction of approximately $170 million of claims. The approved Plan of Reorganization also calls for three tranches of warrants to be made available to certain creditor classes with an exercise period five years from the Plan's effective date. The $130 million of new money investment, along with a new $205 million term loan that is part of the exit facility, will pay off first lien debt of approximately $295 million, as well as fund certain costs associated with exiting bankruptcy. The newly reorganized company will then have $231 million in long-term debt comprised of the term loan and some $26 million in other secured debt. The company's debt leverage will be approximately 3.5x projected 2006 earnings before certain deductions, as compared to a pre-reorganization leverage of approximately 8.5x earnings. The new $205 million term facility is structured as $140 million and $65 million in first and second lien term loans, respectively. The $255 million exit facility also contains a $50 million revolver available to fund working capital needs. Exit financing is being provided by Goldman Sachs Credit Partners L.P. and Morgan Stanley Senior Funding, Inc. About J.L. French 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 $100 million. KAMP RE: S&P Retains Negative Watch on CC-Rated $190 Million Note ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'CC' senior secured debt rating on KAMP RE 2005 Ltd.'s $190 million floating- rate principal-at-risk note, which is due Dec. 14, 2007, remains on CreditWatch with negative implications, where it was placed on Oct. 13, 2005. Although the paid losses and loss reserve related to Hurricane Katrina are in excess of the trigger amount and outstanding principal balance, the notes are not in default, as the paid losses have not reached the point of attachment. The notes are highly vulnerable to nonpayment. "The rating will remain on CreditWatch as long as the loss- estimating process is more reliant on actuarial modeling that actual loss appraisals," said Standard & Poor's credit analyst Gary Martucci. "We will continue to monitor loss estimates." MEDIQUIP HOLDINGS: Malone & Bailey Expresses Going Concern Doubt ---------------------------------------------------------------- Malone & Bailey, P.C., in Houston, Texas, raised substantial doubt about MediQuip Holdings, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Jan. 31, 2006. The auditor pointed to the Company's recurring losses from operations and working capital deficiency. The Company reported a $3,304,789 net loss on $2,286,355 of total revenues for the year ended Jan. 31, 2006. At Jan. 31, 2006, the Company's balance sheet showed $903,655 in total assets and $1,118,672 in total liabilities, resulting in a $215,017 stockholders' deficit. The Company's January 31 balance sheet also showed strained liquidity with $719,040 in total current assets available to pay $1,072,671 in total current liabilities coming due within the next 12 months. A full-text copy of the Company's 2006 Annual Report is available for free at http://researcharchives.com/t/s?bba About MediQuip Holdings Based in Kent, United Kingdom, MediQuip Holdings Inc. fka True Health, Inc. -- http://www.mediquip.co.uk/shop/-- delivers healthcare products and services to its private and public healthcare customers. The Company is a provider of total procurement solutions that creates savings for its customers. Through its wholly-owned subsidiary in the United Kingdom, Westmeria Health Care Ltd., it specializes in providing medical equipment and professionals in the medical and social care sectors to some of the largest healthcare customers in the United Kingdom. MERRILL LYNCH: Fitch Lifts Ratings on Class B-2 & B-5 Certificates ------------------------------------------------------------------ Fitch has taken rating actions on these Merrill Lynch Mortgage Investors mortgage pass-through certificates: Series 2003-A3 -- Class A affirmed at 'AAA'; -- Class M-1 upgraded to 'AAA' from 'AA+'; -- Class M-2 upgraded to 'AA+' from 'A+'; -- Class M-3 upgraded to 'AA' from 'A'; -- Class B-1 upgraded to 'A' from 'BBB'; -- Class B-2 upgraded to 'BBB-' from 'BB'. Series 2003-B -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 upgraded to 'AA+' from 'AA'; -- Class B-3 upgraded to 'AA' from 'A+' ; -- Class B-4 upgraded to 'AA-' from 'BBB+'; -- Class B-5 upgraded to 'BBB' from 'BB'. The collateral consists of 15- to 30-year adjustable-rate mortgages extended to prime borrowers primarily secured by first liens on one- to four-family residential properties. As of the May 2005 distribution date, the transactions are seasoned from a range of 36 to 38 months and the pool factors (current principal balance as a percentage of the original) range from approximately 36% to 38%. The servicer for series 2003-A3 is Wells Fargo Home Mortgage, Inc (rated 'RPS1' by Fitch), and for series 2003-B is Capstead Mortgage Corporation (not rated by Fitch). Since the last review of these transactions in November 2005, when all classes excluding the 'AAA' were upgraded, credit enhancement has increased and no losses were realized. The levels of CE for all certificates have at least doubled since issuance, and there is no collateral in the Foreclosure and Real Estate Owned delinquency buckets. The amount of collateral in the delinquency pipeline for both transactions ranges from only 81 to 87 basis points, with the majority concentrated in the 30+ bucket. For series 2003-A3, the balance of the non-rated tranche is $697,416, or 0.51% of the current collateral balance. For series 2003-B, the balance of the non-rated tranche is $3,062,982, or 0.79% of the current collateral balance. MICROFIELD GROUP: Posts $5.2 Mil. Net Loss in 2006 1st Fiscal Qtr. ------------------------------------------------------------------ Microfield Group Inc., fka Microfield Graphics Inc., filed with the Securities and Exchange Commission its first quarter financial statements for the three months ended April 1, 2006. The Company reported a $5,221,407 net loss on $15,833,167 of revenues for the three months ended April 1, 2006. At April 1, 2006, the Company's balance sheet showed $53,296,695 in total assets, $30,102,531 in total liabilities, and $23,194,164 in positive stockholders' equity. The Company's April 1 balance sheet showed strained liquidity with $10,793,483 in total current assets available to pay $17,496,922 in total current liabilities coming due within the next 12 months. A full-text copy of the Company's financial statements for the three months ended April 1, 2006, is available for free at http://researcharchives.com/t/s?bc2 Going Concern Doubt Russell Bedford Stefanou Mirchandani LLP in McLean, Virginia, raised substantial doubt about the ability of Microfield Group to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's recurring losses and difficulty in generating sufficient cash flow to meet its obligations and sustain its operations. About Microfield Group Headquartered in Portland, Oregon, Microfield Group, Inc. -- http://www.microfield.com/-- is engaged in the arena of energy related technology products and services. Through its subsidiaries, Microfield offers an array of new technologies for energy production, distribution, and management. Microfield also offers services within other segments including data, telephony and fire/life/security systems. The company's strategic objective is to grow its customer base and brand value to capitalize on acquisition opportunities and strategic partnerships that broaden its product and service offerings in the energy field. MIRANT CORP: Creditors Committee Objects to Professional Fees ------------------------------------------------------------- The Official Committee of Unsecured Creditors of Mirant Corporation, et al., objects to the requests for payment of fees and reimbursement of expenses of these professionals and the parties they represent: Professional Party Represented ------------ ----------------- Brown Rudnick Berlack Israels LLP and Equity Committee Hohmann, Taube & Summers, L.L.P. Cadwalder, Wickersham & Taft LLP, and MAGi Committee Cox Smith Matthews Incorporated Peter J. Solomon Company Equity Committee Houlihan Lokey Howard & Zukin MAGi Committee Blackstone Group L.P. Debtors The Wilson Law Firm, P.C. Frank Smith, Kent Koerper, Peter Depavloff, Bart Engram, Mary Leight and L. Matt Wilson Fredric Sosnick, Esq., at Shearman & Sterling LLP, in New York, asserts that Brown and Hohmann have been paid more than $6,200,000, which adequately compensates them for their efforts. In addition, Brown and Hohmann are unable to demonstrate that they did anything more than "what any competent counsel would have done under similar circumstances." Cadwalader and Cox Smith fail to establish exceptional circumstances to justify a fee enhancement, Mr. Sosnick says. Even if the Court were to conclude that exceptional circumstances exist, Cadwalader and Cox Smith fail to demonstrate that the quality of representation they provided was "superior to that which one would reasonably expect." The Mirant Committee disputes the calculation of the proper transaction fee that should be awarded for Peter J. Solomon. Instead of $3,400,000, Mr. Sosnick contends that Peter J. Solomon is entitled to $2,120,000 in transaction fees pursuant to the terms of its engagement letter. Mr. Sosnick argues that Houlihan Lokey's $9,800,000 transaction fee is "unreasonably high," and far in excess of transaction or success fees paid to comparable firms under similar circumstances. The Mirant Committee asks the Court to deny Houlihan's Fee Application and reduce Houlihan's transaction fee to a reasonable amount. The Mirant Committee believes that Blackstone's $7,000,000 transaction fee and $7,200,000 in other fees is sufficient compensation for the firm's work in the Debtors' cases. No additional compensation should be awarded, Mr. Sosnick says. The Mirant Committee asks the Court to deny the Wilson Shareholders' fee application in its entirety. Mr. Sosnick argues that: (i) the fees underlying the application were never "incurred" by the Wilson Shareholders; and (ii) the Wilson Shareholders are unable to establish that they made a "substantial contribution" to the Debtors' cases. "[The Wilson Shareholders'] activities were duplicative of the efforts of the Equity Committee, wasted countless hours of court time and thus added no value," Mr. Sosnick points out. For these reasons, the Mirant Committee asks the Court to deny the fee applications. 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. MIRANT CORP: Court Denies Shareholders' Move for Protective Order ----------------------------------------------------------------- Certain shareholders represented by the Wilson Law Firm, P.C., filed separate fee applications seeking payment for monthly fees totaling $712,518 and $6,450,000 as contingency success fee. Because of those fee applications, Reorganized Mirant Corporation and its debtor-affiliates propounded discovery requests from the Wilson Shareholders -- Frank Smith, Kent Koerper, Peter Depavloff, Bart Engram, Mary Leight and L. Matt Wilson. The Shareholders ask the Court for a protective order and to quash New Mirant's discovery requests. L. Matt Wilson, Esq., at The Wilson Law Firm, P.C., in Atlanta, Georgia, asserts that the discovery requests, among other things, broadly seek attorney-client privileged information and attorney work product privileged information. New Mirant Objects Jason D. Schauer, Esq., at White & Case LLP, in Miami, Florida, explains that the purpose of New Mirant's discovery request is to narrow issues so a hearing on the Shareholders' Fee Application may proceed efficiently and without surprise. New Mirant asks the Court to compel the Shareholders to submit to discovery. New Mirant also asks the Court deny the Shareholders' requests for a protective order and to quash discovery. Wilson Shareholders' Reply Mr. Wilson contends that New Mirant failed to: * obtain leave from the Court to conduct the discovery; * articulate the relevance of the discovery to the fee requests; and * limit the scope of their discovery, resulting to "excessive, burdensome or oppressive" requests. Thus, the Shareholders ask the Court for a protective order and to deny New Mirant's request to compel responses to discovery. * * * Judge Lynn denies, in all respects, the Shareholders' requests for a protective order and to quash New Mirant's discovery. The Court grants New Mirant's request to compel the Shareholders' responses to the discovery requests subject to any attorney- client privilege claims. With respect to any documents withheld on the basis of attorney- client privilege, Judge Lynn directs the Shareholders to provide a privilege log to Mirant's counsel. The log must be prepared by category rather than by individual document. 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. NATIONAL ENERGY: USGen Files Post-Confirmation Reports ------------------------------------------------------ Pursuant to its Second Amended Plan of Liquidation, USGen New England, Inc., delivered to the U.S. Bankruptcy Court for the Middle District of Maryland post-confirmation Chapter 11 reports for the period from May 12, 2005, through November 30, 2005, and from December 1, 2005, through May 31, 2006. USGen's Second Amended Plan became effective on June 1, 2005. Distributions under the Plan 5/12/05 12/01/05 to 11/30/05 to 5/31/06 ----------- ---------- Priority Payment of Admin. Expenses: Trustee's commission (if any) N/A N/A Accountants' fees and expenses N/A N/A Auctioneers' and appraisers' fees and expenses N/A N/A USGen attorneys' fees & expenses $2,772,578 3,920,133 Creditors Committee attorneys' fees and expenses 345,639 3,201,255 Trustee's counsel fees & expenses N/A N/A Other professional fees 11,429,193 114,837 U.S. Trustee fees 20,000 20,000 Taxes, fines, penalties, etc. N/A N/A Other administration expenses N/A N/A -------------- ----------- $14,567,410 $7,256,225 Payments to Creditors: prepetition claims, Section 507(a)(2) N/A N/A Wages, etc., Section 507(a)(3) N/A N/A Contributions, employee benefit plans, Sect. 507(a)(4) N/A N/A Deposits for undelivered services or property, Sect. 507(a)(6) N/A N/A Taxes, Section 507(a)(7) N/A N/A Secured payments N/A N/A Unsecured payments $1,186,233,669 $15,078,984 Others N/A 402,000 -------------- ----------- $1,186,233,669 $15,480,984 Other Payments: Amounts paid to equity holders $108,056,588 $15,500,000 Surplus returned to USGen N/A N/A -------------- ----------- $108,056,588 $15,500,000 Operating Expenses: Actual business operations $15,961,869 $252,417 -------------- ----------- TOTAL DISBURSEMENTS $1,324,819,535 $38,489,627 ============== =========== According to Emmett Bergman, agent of the Plan Administrator, USGen, as of June 2, 2006, has made cumulative distributions of $1,201,312,653 to Class 3 claim holders. The majority of the first and final Class 3 creditor distributions, totaling $1,186,233,669, occurred between June 6 and July 29, 2005. The remaining distributions were made December 1, 2005 through May 31, 2006. The Plan Administrator is holding approximately $113,300,000 in reserve pending the resolution of three disputed unsecured claims: Claimant Claim No. Amount -------- --------- ------ Tennessee Gas Pipeline Company 410 $41,000,000 TransCanada Pipelines, Ltd. 73 C$71,133,276 Brascan Energy Marketing, Inc.'s - $24,934,700 About National Energy Headquartered in Bethesda, Maryland, PG&E National Energy Group, Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas Transmission, Inc.) develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. The Company filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr & Gallagher represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT received bankruptcy court approval of its reorganization plan in May 2004, and emerged from bankruptcy on Oct. 29, 2004. (PG&E National Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONAL ENERGY: Posts $857,058 Net Sales in Qtr. Ended April 30 ---------------------------------------------------------------- National Energy Services Company, Inc., filed its second quarter financial statements for the three months ended April 30, 2006, with the Securities and Exchange Commission on June 14, 2006. The Company reported a $20,660 net loss on $857,058 of revenues for the three months ended April 30, 2006. At April 30, 2006, the Company's balance sheet showed $1,286,436 in total assets and $2,268,092 in total liabilities resulting in a $981,656 stockholders' deficit. The Company's April 30 balance sheet also showed strained liquidity with $856,767 in total current assets available to pay $1,408,145 in total current liabilities coming due within the next 12 months. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?bd0 Going Concern Doubt As reported in the Troubled Company Reporter on March 22, 2006, Bagell Josephs & Company, LLC, expressed substantial doubt about National Energy Services Company, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended October 31, 2005 and 2004. The auditing firm pointed to the Company's substantial net losses for the years ended October 31, 2005 and 2004 that has resulted in substantial accumulated deficits. About National Energy Headquartered in Egg Harbor Township, New Jersey, National Energy Services Company, Inc. -- http://www.nescorporation.com/-- The Company is engaged in the business of marketing a comprehensive energy management program for long- term care and hospitality facilities. The program features an upgrade to lighting fixtures, improved heating, venting and air conditioning (HVAC) equipment, ozone laundry support systems (OLSS). The facilities generally recover the cost of these renovations through the monthly energy savings, resulting in no out-of-pocket costs to the facility. As of Oct. 31, 2005, National Energy's stockholders' equity deficit widened to $1,002,314 from a deficit of $295,208 at Oct. 31, 2004. NVE INC: Gets Court Nod to Enter Insurance Accord with A.I.Credit ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey gave NVE Inc., dba NVE Pharmaceuticals, Inc., permission to enter into Insurance Premium Finance Agreement with A.I.Credit Corp., or its subsidiary AICCO, Inc. The Debtor wants to product liability and general liability insurance policies with certain companies and of financing the premiums for same through A.I.Credit Corp., or its subsidiary AICCO, Inc. Leonard C. Walczyk, Esq., at Wasserman, Jurista & Stolz, P.C., told the Court that to finance these insurance premiums, AICCO requires that the Debtor executes an Insurance Premium Finance Agreement, which agreement sets forth the rights of AICCO to cancel the policies, and to collect unearned premiums. The Financing Arrangement provides for an initial cash down payment of $231,636 which the Debtor already paid. The total premiums are $661,817, and the amount to be financed is $430,181. When adding a finance charge of $11,586, the total payments required to be paid by the Debtor for the balance of the Insurance Financing Agreement is $441,767. The payments will be made in seven consecutive monthly payments of $63,109. According to Mr. Walczyk, the Debtor has been unable to obtain this Insurance Premium Financing from any other source under similar or better terms. 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. OCA INC: Court Dismisses Motions Enforcing Automatic Stay --------------------------------------------------------- The Honorable Jerry A. Brown of the U.S. Bankruptcy Court for the Eastern District of Louisiana dismissed as moot on June 2, 2006: -- a motion filed by OCA Outsource, Inc., an affiliate of OCA Inc., to enforce automatic stay, and to cite for contempt and give sanctions for violations of second order against George Marse, D.D.S, and George Marse, D.D.S., P.C.; and -- a motion for relief from automatic stay filed by George Marse, a creditor. OCA Outsource made this motion because of Dr. Marse's willful violation of the automatic stay, and contumacious and willful violation of the Bankruptcy Court's Second Order [P-46], Warren Horn, Esq., at Heller Draper Hayden Patrick & Horn, LLC, told the Court. The Second Order, dated March 15, 2006, ordered that all Affiliated Practices (defined in the motion and order) from whom the Debtors have not received written notice of termination or default prior to their bankruptcy filing will continue to comply with the Business Service Agreements. The Second Order also: -- authorized the Debtor to continue to operate under and provide services pursuant to BSAs; -- authorized the Debtors to pay certain prepetition obligations in connection with BSAs; and -- directed Affiliated Practices to continue to operate under the BSAs, including, without limitation, making timely deposits and payments to the Debtors. Dr. Marse filed a motion for relief from the automatic stay and objected to the Second Order directing Affiliated Practices to continue to operate under the BSAs. The Bankruptcy Court overruled Dr. Marse's objection at a hearing on April 5, 2006, and denied Dr. Marse's motion for relief from automatic stay on April 11, 2006. Dr. Marse entered into an Outsource Agreement with OCA Outsource in Jan. 2005. The agreement is an executory contract and a BSA. At the April 5 hearing, Dr. Marse argued that the agreement is not a BSA and is not governed by the Second Order. Also at that hearing, Dr. Marse's counsel was admonished by the Court that if Dr. Marse refused to comply with the Second Order, he did so "at his own peril." Notwithstanding the clear language of the Second Order, Dr. Marse willfully refused and failed to pay the required payments due to OCA Outsource under the Outsource Agreement, Mr. Horn added. Dr. Marse filed another motion to lift automatic stay relating to the Outsource Agreement. The order overruling Dr. Marse objections entered on April 11, 2006, clearly states that the Second Order remains in full force and effect until further order from this Bankruptcy Court. Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/ -- provides a full range of operational, purchasing, financial, marketing, administrative and other business services, as well as capital and proprietary information systems to approximately 200 orthodontic and dental practices representing approximately almost 400 offices. The Debtor's client practices provide treatment to patients throughout the United States and in Japan, Mexico, Spain, Brazil and Puerto Rico. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 14, 2006 (Bankr. E.D. La. Case No. 06-10179). Three Debtors also filed for bankruptcy protection on June 1, 2006 (Bankr. E.D. La. Case No. 06-10503). William H. Patrick, III, Esq., at Heller Draper Hayden Patrick & Horn, LLC, represents the Debtors. Patrick S. Garrity, Esq., and William E. Steffes, Esq., at Steffes Vingiello & McKenzie LLC represent the Official Committee of Unsecured Creditors. Carmen H. Lonstein, Esq., at Bell Boyd & Lloyd LLC and Robin B. Cheatham, Esq., at Adams and Reese LLP represent the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed US$545,220,000 in total assets and US$196,337,000 in total debts. OPTICAL DATACOMM: Court Converts Ch. 11 Case to Ch. 7 Liquidation ----------------------------------------------------------------- The Honorable Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware converted Optical Datacomm, LLC's chapter 11 case to a chapter 7 liquidation proceeding. Frederick B. Rosner, Esq., the Chapter 11 Trustee for the Debtor's bankruptcy estate, sought the conversion saying the chapter 11 estate is administratively insolvent and he can't propose a feasible plan. Mr. Rosner added that the estate's principal remaining asset can be more effectively prosecuted in the context of a chapter 7 liquidation proceeding. Since his appointment, the Chapter 11 Trustee prosecuted numerous avoidance actions and has collected proceeds. In addition, the Chapter 11 Trustee resolved litigation against the Debtor's bank lenders. Under the settlement, the bank lenders now hold an allowed general unsecured claim of $35.5 million less the aggregate amount of all payments, if any, they may receive from the liquidation of any remaining collateral. The Ch. 11 Trustee also filed a lawsuit against Larry Large, et al. The Large Litigation seeks recovery of the $70 million on a fraudulent transfer theory and its effective prosecution presents the only hope for any recovery to the estate's general unsecured creditors. The Court named Jeoffrey L. Burtch as the interim chapter 7 trustee. Optical Datacomm, LLC, now known as OODC LLC, supplies network integration services solutions and design and manufactures custom connectionized fiber optic, copper and coaxial cable assemblies to telecommunication companies worldwide. The Company filed for chapter 11 protection on November 17, 2001. H. Jeffrey Schwartz, Esq. at Benesch, Friedlander, Coplan & Aronoff, LLP and Joel A. Waite, Esq. at Young Conaway Stargatt & Taylor represent the Debtor in its restructuring efforts. Anthony M. Saccullo, Esq., and Neil B. Glassman, Esq, at The Bayard Firm represent the Debtor's Official Committee of Unsecured Creditors. In its petition, the Company listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. OXFORD MEDIA: March 31 Working Capital Deficit Tops $4.4 Million ---------------------------------------------------------------- Oxford Media, Inc., incurred a $6,380,641 net loss on $1,049,985 of revenues for the three months ended March 31, 2006, compared to a $249,545 net loss on $1,032,827 of revenues for the same period in 2005. At March 31, 2006, the Company's balance sheet showed $4.2 million in total assets and $7.4 million in total liabilities, resulting in a $3.2 million stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $1.5 million in total current assets available to pay $5.9 million in total current liabilities coming due within the next 12 months. During the quarter ended March 31, 2006, the Company obtained new short-term debt financing in the amount of $1,966,666. To obtain profitable operations, the Company's management plans to increase revenues by including the rollout of its VOD systems in the hospitality industry, along with increasing revenues from network consulting and telecommunications. In addition, management plans to finance future operations through private or public issuances of the Company's common stock; however, the successfulness of these efforts cannot be assured and may not be available on terms acceptable to the Company at the time the financing is needed. The Company has engaged an investment banking firm to raise a maximum of $15 million to allow the Company to fund its ongoing operations as well as allowing for its future growth in the VOD business and further expansion into a wireless private broadband network using WiMAX technology. The Company expects to receive the funding in the second quarter of 2006. Going Concern Doubt McKennon Wilson & Morgan LLP expressed substantial doubt about Oxford Media's ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Dec. 31, 2005. The auditing firm pointed to the Company's losses from operations and working capital deficiency. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?bc8 About Oxford Media Headquartered in Irvine, California, Oxford Media, Inc. -- http://www.oxfordmediainc.com/-- develops private broadband networks and proprietary software and hardware. Through private broadband networks, it provides broadband Internet access, and video and audio content on demand via a pay-per-view basis primarily to small and mid-sized hotels and motels in the United States. The company's products include VOD movie server, a digital computer operated system that provides a 'menu' of available movies to the hotel guests; STB Controller; and Management Server, a control and billing system that controls the movie server and the hotel VOD movie billing operations. PARMALAT USA: Grand Cayman Court Appoints Kroll as Liquidator ------------------------------------------------------------- In a judgment dated May 12, 2006, the Grand Court of Cayman Islands appointed Gordon I. MacRae and James Cleaver at Kroll (Cayman) Limited as Joint Official Liquidators of Parmalat Capital Finance Limited, Dairy Holdings Limited, and Food Holdings Limited. The Cayman Court has yet to enter an order regarding the judgment. The Official Liquidators expect Parmalat Finanziaria SpA and its affiliates and subsidiaries to file a notice of appeal from the Grand Court Order. Messrs. Cleaver and MacRae are former partners of Ernst & Young Restructuring Ltd., before the Cayman Islands insolvency and advisory arm of Ernst & Young was acquired by Kroll Cayman, an affiliate of Kroll, Inc., in 2005. About Parmalat 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. 73; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT USA: Creditors Approve Parmalat Brasil Sale to LatAm ------------------------------------------------------------- Creditors of Parmalat Brasil Industria de Alimentos SA on May 26, 2006, agreed to sell Parmalat Finanziaria SpA's Brazilian unit to Latin American Equity Partners, Reuters reports. The transaction will allow the unit to emerge from bankruptcy protection. As part of the agreement, 51% of Parmalat Brasil's Batavia unit will be sold Perdigao SA. LatAm is a Brazilian investment fund. Perdigao is a producer and distributor of meat and poultry products. The creditors agree to give LatAm control of Parmalat Brasil in exchange for its BRL20,000,000 -- $8,850,000 -- investment. Perdigao paid BRL101,000,000 for the Batavia stake. According to Reuters, the creditors agreed to write off 85% of Parmalat Brasil's liabilities estimated at BRL970,000,000. The new owners will pay the remaining debt at closing. LatAm Managing Partner Marcus Elias told Reuters in an interview that the investment fund plans to license the Parmalat brand name from Parmalat Brasil's parent, which will no longer have a stake in the unit after the sale. Perdigao's Statement Pursuant to CVM Instruction 358 of January 3, 2002, Perdigao S.A. (NYSE: PDA) announced that PDA Distribuidora de Alimentos Ltda., a corporation indirectly controlled by Perdigao S.A., has acquired 51% of the capital stock of Batavia S/A Industria de Alimentos, subject to the effective transfer of shares. PDA, Batavia, Cooperativa Central de Laticinios do Parana Ltda., Cooperativa Central Agromilk ("CCA" and, jointly with CCLPL, the "Cooperatives") and Parmalat Brasil S.A. Industria de Alimentos have concluded a series of transactions under which: 1. PDA has acquired from Parmalat at a price of BRL101,000,000, 73,542,000 common shares issued by Batavia and held by Parmalat and the totality of the equipment that up to the present time has been leased free of charge by Parmalat to Batavia; 2. PDA has acquired from the Cooperatives at a total price of BRL8,700,000, 5,000,000 common nominative shares issued by Batavia and held by said Cooperatives; and 3. The implementation and conclusion of the operations are subject to compliance with the suspensive conditions in the documents relative to the transactions. About Parmalat 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. PENN NATIONAL: Ernst & Young Replaces BDO Seidman as Auditor ------------------------------------------------------------ The Audit Committee of the Board of Directors of Penn National Gaming, Inc., dismissed BDO Seidman, LLP, as the Company's independent registered public accounting firm on June 12, 2006. The Committee engaged Ernst & Young, LLP, as the Company's new auditor, in light of the relative strength of E&Y's experience with gaming companies. BDO's report on the Company's consolidated financial statements for the fiscal years ended Dec. 31, 2005, and 2004 did not contain an adverse opinion or a disclaimer of opinion, nor was that report qualified or modified as to uncertainty, audit scope or accounting principles. BDO's report, dated March 7, 2006, on the consolidated financial statements of the Company expressed an unqualified opinion. BDO's report on management's assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting for the Company as of Dec. 31, 2005, contained no adverse opinion or disclaimer of opinion. During the Company's fiscal years ended Dec. 31, 2005, and 2004, and through June 12, 2006, the Company did not have any disagreements with BDO on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of BDO, would have caused it to make reference to the subject matter of the disagreements in connection with its report. Penn National Gaming, Inc. -- http://www.pngaming.com/-- owns and operates casino and horse racing facilities with a focus on slot machine entertainment. The Company presently operates fifteen facilities in thirteen jurisdictions including Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, Ohio, Pennsylvania, West Virginia, and Ontario. In aggregate, Penn National's facilities feature over 17,500 slot machines, over 400 table games, over 2,000 hotel rooms and approximately 575,000 square feet of gaming floor space. The property statistics in this paragraph exclude two Argosy properties which the company anticipates divesting, but are inclusive of the Company's Casino Magic - Bay St. Louis, in Bay St. Louis, Mississippi and the Boomtown Biloxi casino in Biloxi, Mississippi, which remain closed following extensive damage incurred as a result of Hurricane Katrina. * * * As reported in the Troubled Company Reporter on Feb. 2, 2006, Moody's Investors Service raised the ratings of Penn National Gaming, Inc., and assigned a stable ratings outlook, including its Corporate family rating, to Ba2 from Ba3; $750 million revolver due 2010, to Ba2 from Ba3; $325 million term loan due 2011, to Ba2 from Ba3; $1,650 million term loan B due 2012, to Ba2 from Ba3; $175 million 8.875% guaranteed senior subordinated notes due 2010, to Ba3 from B2; $200 million 6.875% guaranteed senior subordinated notes due 2011, to Ba3 from B2; and $250 million 6.750% not guaranteed senior subordinated notes due 2015, to B1 from B3. As reported in the Troubled Company Reporter on Jan. 16, 2006, Standard & Poor's Ratings Services raised its ratings on casino owner and operator Penn National Gaming Inc., including its issuer credit rating to 'BB' from 'BB-'. PLATFORM LEARNING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Platform Learning Inc. 55 Broad Street, 25th Floor New York, New York 10004 Tel: (646) 442-2500 Fax: (646) 442-2501 Bankruptcy Case No.: 06-11391 Type of Business: The Debtor provides comprehensive supplemental educational services through their Learn-to- Succeed tutoring program to public school students that are in need of improvement. See http://www.platformlearning.com/ Chapter 11 Petition Date: June 21, 2006 Court: Southern District of New York (Manhattan) Debtor's Counsel: David M. Bass, Esq. Herrick, Feinstein LLP 2 Park Avenue New York, New York 10016 Tel: (212) 592-1400 Fax: (212) 592-1500 Total Assets: $21,026,148 Total Debts: $36,933,490 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Scholastic Inc. Trade Vendor $2,896,336 Beth Polcari 557 Broadway New York, NY 10012 Tel: (212) 965-7404 Adecco USA, Inc. Trade Vendor $2,476,648 Richard Colefield Attn: General Counsel 175 Broad Hollow Road Melville, NY 11747 Tel: (212) 509-3300 Philosophy IB Trade Vendor $818,269 Christine Lohtz 25 A Vreeland Road Suite 100 Florham Park, NJ 07932 Cambium Learning Trade Vendor $722,207 David Caron, CFO 313 Speen Street Natick, MA 01760 Tel: (508) 647-1340 Suttle Straus Trade Vendor $463,170 John Fox P.O. Box 370 Waunakee, WI 53597 Tel: (608) 849-7000 x222 Ace Printing Company Inc. Trade Vendor $289,940 Mike Marantz 54 Fadem Road Springfield, NJ 07081 Tel: (973) 467-4422 Korn Ferry International Trade Vendor $273,811 1900 Avenue of the Stars 26th Floor Los Angeles, CA 90067 Christine Donovan, Esq. The Donovan Group 2920 Newport Boulevard, Suite B Newport Beach, CA 92663 Tel: (949) 673-8674 Ultimus Trade Vendor $248,501 15200 Weston Parkway Suite 106 Cary, NC 27513 Print Media Trade Vendor $246,749 350 7th Avenue, 12th Floor New York, NY 10001 Prudential Financial Trade Vendor $241,595 P.O. Box 841337 Dallas, TX 75284 KB Toys Wholesale, Inc. Trade Vendor $240,872 100 West Street Pittsfield, MA 01201 Recruitmax Software, Inc. Trade Vendor $231,114 c/o Mark Silverman Vurv Technology 7600 Centurian Parkway Suite 100 Jacksonville, FL 32256 Harcourt Assessment, Inc. Trade Vendor $228,775 Customer Service P.O. Box 708912 San Antonio, TX 78270-8912 Managerial Design Corp. Trade Vendor $225,774 1033 Solutions Center Chicago, IL 60677-1000 VirtualEdge Corp. Trade Vendor $207,778 1010 Stony Hill Road Yardley, PA 19067 AXA Corp. Solutions Leasehold $202,374 Reinsurance Co. 17 State Street, 38th Floor New York, NY 10004 EPredix Trade Vendor $193,872 MI 06, P.O. Box 1150 Minneapolis, MN 55480-1150 Russell Reynolds Assoc. Trade Vendor $185,953 200 Park Avenue New York, NY 10166-7018 Nixon Peabody LLP Legal Services $180,000 437 Madison Avenue New York, NY 10022 Hudson Bay Environments Trade Vendor $175,571 One Fordham Plaza Bronx, NY 10458-5871 PLIANT CORP: Files Third Amended Plan of Reorganization in Del. --------------------------------------------------------------- Pliant Corporation delivered to the U.S. Bankruptcy Court for the District of Delaware its Third Amended Plan of Reorganization on June 5, 2006. Pliant Vice President and General Counsel Stephen T. Auburn discloses that the Third Amended Plan includes a new class -- Class 11A, which consists of the Durham Subordinated Claims. The Claims are impaired. The Durham Subordinated Claims are the claims of the Durham Parties related to the Durham Put Shares to the extent subordinated by the Bankruptcy Court pursuant to Section 510(b) of the Bankruptcy Code. The Durham Parties refers to Richard P. Durham and Durham Capital, L.L.C. The Durham Put Shares refers to the capital stock and warrants of the Debtors that are subject to the alleged "put" right of the Durham Parties. As of the Petition Date, the Durham Put Shares consisted of 18,200 shares of outstanding common stock, 1,232 shares of Series A Preferred Stock and 1,250 Warrants. The Plan provides if and to the extent the Court determines that Holders of Allowed Durham Subordinated Claims are entitled to receive: (a) a portion of the New Equity Common Stock that is otherwise distributable to Holders of Outstanding Common Stock Interests; or (b) a portion of the Series A Common Stock and the Series A or Series AA Preferred Stock that is otherwise distributable to Holders of Series A Preferred Stock Interests; then the Holders of Allowed Durham Subordinated Claims will receive a payment in Cash equal to the value as of the Effective Date, as agreed with the Debtors or determined by the Court, of that Subordinated Claim Common Stock Allocation and that Subordinated Claim Preferred Allocation; provided, however, that the amount of the distribution will be reduced by the value, as agreed with the Debtors or determined by the Court, of the New Equity Common Stock, the Series A Common Stock and the Series A or Series AA Preferred Stock that is distributed to Holders of Allowed Durham Subordinated Claims on account of Durham Put Shares. For the avoidance of doubt, Class 11 includes the Durham Put Shares that are Outstanding Common Stock Interests but does not include Durham Subordinated Claims. Mr. Auburn clarifies that Class 9 includes the Durham Put Shares that are Series A Preferred Stock Interests but does not include Durham Subordinated Claims. A full-text copy of Pliant's Third Amended Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?bda 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. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) POPE & TALBOT: Debt Refinancing Prompts Moody's to Junk Rating -------------------------------------------------------------- Moody's Investors Service downgraded Pope & Talbot Inc.'s senior unsecured debt rating to Caa2 from Caa1. The rating action was prompted by news that the company plans to refinance certain indebtedness. Details of Pope & Talbot's plans are outlined in a June 2nd 8-K filing. The refinance contemplates the company's two existing revolving bank credit facilities, its accounts receivable securitization facility and its Halsey lease facility being consolidated into one omnibus arrangement. Related obligations will be secured by all of Pope & Talbot's assets and undertakings, eliminating the existing pool of unencumbered assets. This pool is currently quite limited, however, since it is likely that any realization activity will be in the context of distressed asset values that will cause coverage of the senior credit facilities to be quite thin, elimination of the unencumbered asset pool disadvantages unsecured creditors sufficiently to warrant a downgrade to Caa2 from Caa1. The outlook is stable. However, the potential of moderating general economic activity creates caution, as does the fact the new credit facility is being arranged with lenders that characterize themselves as being opportunistic. This increases the potential of event risk should pre-maturity negotiations be necessary. For example, the facility features a minimum EBITDA covenant, and many commentators are concerned about inflation and Federal Reserve Board interest rate actions potentially causing an economic slow-down. Judging by recent equity market performance, investors appear to share these concerns. In addition, lumber pricing has fallen dramatically over the past several weeks as housing start activity slows after a prolonged three year run. Aside from reducing cash flow from lumber operations, in the event this circumstance is indicative of more broad based economic weakness, there is the potential of results from Pope & Talbot's pulp business also being affected. Should demand and pricing for pulp moderate along with economic activity, it would be unlikely that the current rating could be maintained. It is also possible that the safety margin relative to the proposed financial covenant could prove to be inadequate, and that any resulting negotiations could be more difficult than was the case historically with relationship lenders. In the interim, it is not certain that the economy will slow significantly from current levels, nor that any negotiations with lenders will be required. In that context and given improving pulp pricing, the outlook remains stable. Ratings downgraded: Issuer: Pope & Talbot, Inc. * Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2 from Caa1 Pope & Talbot, Inc. is headquartered in Portland, Oregon, and produces pulp and wood based building products from manufacturing facilities located primarily in British Columbia, Canada. The company also has operations in the north western United States. PREMIUM PAPERS: Sells SMART Papers to Unidentified Company ---------------------------------------------------------- SMART Papers LLC will soon be sold to an unnamed Ohio-based equity firm after nearly three months into bankruptcy proceedings, Chris Dumond, writing for JournalNews reports. The company has signed a letter of intent to sell its Hamilton operation with the firm, according to SMART President Tim Needham. SMART Papers didn't disclose the company's name pursuant to the terms of the agreement. Under the terms of dip financing agreement with Wachovia Bank, the company must close the sale of its Hamilton operation by Aug. 15, 2006. Headquartered in Hamilton, Ohio, Premium Papers Holdco, LLC, -- http://www.smartpapers.com/-- is an independent manufacturer and marketer of a wide variety of premium coated and uncoated printing papers, such as Kromekote, Knightkote, and Carnival. The Company and its debtor-affiliates, SMART Papers LLC and PF Papers LLC, filed for chapter 11 protection on March 21, 2006 (Bankr. D.Del.Case No. 06-10269). Ian S. Fredericks, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors. When the Debtors filed for protection from their creditors, they listed unknown estimated assets and $10 million to $50 million estimated debts. PRICE OIL: Court Extends Lease Decision Period to July 20 --------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Alabama gave Price Oil, Inc., and its debtor-affiliates until July 20, 2006, to decide whether to assume, assume and assign, or reject their unexpired non-residential property leases. As part of the Court-approved sale of the their fuel distribution assets, the Debtors agreed to sublet property subject to a nonresidential real property lease for real estate located at 700 Oliver Road in Montgomery, Alabama. To properly transition the distribution business to the buyer of the fuel distribution assets, the Debtors told the Court that they need the additional time to determine whether to assume or reject the Lease. Headquartered in Niceville, Florida, Price Oil, Inc., supplies gasoline fuel to convenience store owners and operators throughout Alabama and Florida panhandle. The Debtor also owns, operates and lease multiple convenience stores. The Debtor and five of its affiliates filed for chapter 11 protection on Dec. 22, 2005 (Bankr. M.D. Ala. Case No. 05-34286). M. Leesa Booth, Esq., at Bradley, Arant, Rose & White represents the Debtors in their restructuring efforts. Marc A. Beilinson, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., serves as counsel to the Official Committee of Unsecured Creditors. The Debtors tapped Cahaba Capital Advisors, L.L.C. and AEA Group, L.L.C., for financial and restructuring advice. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. PRIDE BUSINESS: Malone & Bailey Expresses Going Concern Doubt ------------------------------------------------------------- Malone & Bailey, P.C., in Houston, Texas, raised substantial doubt about Pride Business Development Holdings, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring net losses from operations and working capital deficit. The Company reported a $3,694,021 net loss on $282,241 of total revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the Company's balance sheet showed $782,529 in total assets and $2,744,166 in total liabilities, resulting in a $1,961,637 stockholders' deficit. The Company's December 31 balance sheet also showed strained liquidity with $437,644 in total current assets available to pay $2,189,761 in total current liabilities coming due within the next 12 months. In response to their continuation as a going concern, the Company says it plans to obtain additional capital through debt or equity financing. A full-text copy of the Company's 2005 Annual Report is available for free at http://researcharchives.com/t/s?bbf About Pride Business Based in Camarillo, California, Pride Business Development Holdings, Inc. (OTC:PDVG.PK) -- http://www.pridegroup.org/-- is a specialty and protective clothing and materials manufacturer for the domestic and international law enforcement, military and dangerous materials handling markets with its brand of Bodyguard(R) products. The Company's current focus is the manufacture and sale of personal soft body armor (bullet-resistant vests) and ballistic and projectile fragment covers such as ballistic blankets and bomb blast blankets. The Company, through our wholly-owned subsidiary Bodyguard, Inc., is the holder of the worldwide exclusive license to utilize the Smith & Wesson trademarks on personal body armor (and related apparel) and ballistic blankets. PRIMUS TELECOMMS: Receives Nasdaq Delisting Notice on Common Stock ------------------------------------------------------------------ PRIMUS Telecommunications Group, Incorporated, received on June 13, 2006, a letter from the Nasdaq Stock Market stating that its common stock is subject to delisting from the Nasdaq Capital Market because the closing bid price of the Primus' common stock is not in compliance with the $1.00 minimum closing bid requirement as set forth in Marketplace Rule 4450(a)(5) and 4450(i). PRIMUS intends to request a hearing before a Nasdaq Listing Qualifications Panel to review the Staff Determination. The hearing request will automatically stay the delisting of PRIMUS's common stock pending the decision of the Panel. There can be no assurance that the Panel will grant PRIMUS's request for continued listing on the Nasdaq Capital Market. Based in McLean, Virginia, PRIMUS Telecommunications Group, Incorporated (NASDAQ: PRTL) -- http://www.primustel.com/-- is an integrated communications services provider offering international and domestic voice, voice-over-Internet protocol, Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 350 points-of-presence throughout the world, ownership interests in undersea fiber optic cable systems, 16 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Going Concern Doubt As reported in the Troubled Company Reporter on June 19, 2006, Deloitte & Touche LLP expressed substantial doubt about PRIMUS Telecommunications Group, Incorporated's ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended Dec. 31, 2005. The auditing firm pointed to the Company's recurring losses from operations, the maturity of $23.6 million of the 5-3/4% convertible subordinated debentures due February 2007, negative working capital, and stockholders' deficit. * * * As reported in the Troubled Company Reporter on April 7, 2006, Standard & Poor's Ratings Services lowered its ratings on McLean, Virginia-based international telecommunications carrier PRIMUS Telecommunications Group Inc., including the corporate credit rating, which was downgraded to 'CCC' from 'CCC+'. The outlook is negative. PROCARE AUTOMOTIVE: Wants to Use Cash Collateral to Wind Down ------------------------------------------------------------- ProCare Automotive Service Solutions, LLC, asks the United States Bankruptcy Court for the Northern District of Ohio wants to use cash collateral securing repayment of its prepetition debt to J.P. Morgan Chase Bank, N.A., Key Mezzanine Capital Fund I, L.P., Regis Capital Partners, L.P., PASS Holdings LLC and Sullivan Partners LLC. The Debtor wants to use the cash collateral to pay for expenses as it winds down its estate. When it filed for bankruptcy, the Debtor owed: -- $200,000 to JPMorgan Chase; -- $6.4 million to Key Mezzanine; -- $1.6 million to Regis Capital; -- $236,000 to PASS Holdings; and -- $$96,000 to Sullivan Partners LLC. Alan R. Lepene, Esq., at Thompson Hine LLP, in Cleveland, Ohio, recalls that the Debtor sold substantially all of its assets to Monro Muffler Brake, Inc., on April 29, 2006 for $14.65 million. After taking into account certain purchase price adjustments specified in the Asset Purchase Agreement, the net amount payable to the Debtor was $12,843,785 of which $1,098,750 is being held in escrow at Chicago Title as a holdback. The Debtor expects to file a plan of liquidation soon. As part of this process, the Debtor expects to spend $2,347,000 for pre-closing administrative expenses until August 25, 2006, which is the targeted date for confirmation of a plan of liquidation to be filed by the Debtor. Based in Independence, Ohio, ProCare Automotive Service Solutions, LLC -- http://www.procareauto.com/-- offers maintenance and repair services to all makes and models of foreign, domestic, light truck, and commercial-fleet vehicles. ProCare operates 82 retail locations in eight metropolitan areas throughout three states. The Debtor filed for chapter 11 protection on March 5, 2006 (Bankr. N.D. Ohio Case No. 06-10605). Alan R. Lepene, Esq., Jeremy M. Campana, Esq., and Sean A. Gordon, Esq., at Thompson Hine LLP, represent the Debtor. Scott N. Opincar, Esq., at McDonald Hopkins Co., LPA, represents the Official Committee of Unsecured Creditors. Joseph M. Geraghty at Conway MacKenzie & Dunleavy gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. PROCARE AUTOMOTIVE: Wants Court to Set July 17 as Claims Bar Date ----------------------------------------------------------------- ProCare Automotive Service Solutions, LLC, asks the United States Bankruptcy Court for the Northern District of Ohio to set July 17, 2006, as deadline for all holders of prepetition claims, other than governmental units to file a proof of claim. The Debtor also propose to set July 17 as the deadline for all parties asserting administrative expense claims that were incurred or that accrued prior to May 25, 2006, to file a request for payment and all parties asserting any claims involving actions taken by the Debtor's officers or directors prior to May 25, 2006, to assert those claims. The Debtor wants the Court to establish Sept. 12, 2006, as the last date for governmental units, which hold claims against the Debtor to file proofs of claim. Alan R. Lepene, Esq., at Thompson Hine LLP, in Cleveland, Ohio, recalls that the Debtor sold substantially all of its assets to Monro Muffler Brake, Inc., on April 29, 2006. Since substantially all of the Debtor's assets have been sold, the Debtor is now in the process of winding down its estate and expects to file a plan of liquidation in the coming months. To facilitate the plan confirmation process, the Debtor must understand the amount of claims that may be asserted against its estate, Mr. Lepene explains. Mr. Lepene contends that reasonable bar dates are required for the Debtor to evaluate the full range of asserted claims against its estate and its directors and officers, as well as for the Debtor to identify potential disputes as to claims, and to move the Chapter 11 case toward complete resolution and closure. Without knowledge of the claims pending against its estate, including the indemnification obligation of the Debtor owed to its directors and officers in the event of a D&O Claim, the Debtor cannot properly develop its liquidating plan. Based in Independence, Ohio, ProCare Automotive Service Solutions, LLC -- http://www.procareauto.com/-- offers maintenance and repair services to all makes and models of foreign, domestic, light truck, and commercial-fleet vehicles. ProCare operates 82 retail locations in eight metropolitan areas throughout three states. The Debtor filed for chapter 11 protection on March 5, 2006 (Bankr. N.D. Ohio Case No. 06-10605). Alan R. Lepene, Esq., Jeremy M. Campana, Esq., and Sean A. Gordon, Esq., at Thompson Hine LLP, represent the Debtor. Scott N. Opincar, Esq., at McDonald Hopkins Co., LPA, represents the Official Committee of Unsecured Creditors. Joseph M. Geraghty at Conway MacKenzie & Dunleavy gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. PRUDENTIAL COMMERCIAL: Fitch Ups Ratings on $36 Mil. Class Certs. ----------------------------------------------------------------- Fitch upgrades these Prudential Commercial Mortgage Trust commercial mortgage pass-through certificates, series 2003-PWR1: -- $32.4 million class B to 'AAA' from 'AA'; -- $36 million class C to 'AA-' from 'A'; -- $14.4 million class D to 'A+' from 'A-'; -- $9.6 million class E to 'A' from 'BBB+'; -- $10.8 million class F to 'A-' from 'BBB'; -- $12 million class G to 'BBB+' from 'BBB-'; -- $16.8 million class H to 'BBB-' from 'BB+'; -- $7.2 million class J to 'BB+' from 'BB'; -- $4.8 million class K to 'BB+' from 'BB-'; and -- $7.2 million class L to 'BB-' from 'B+'. In addition, Fitch affirms the following classes: -- $223.4 million class A-1 at 'AAA'; -- $518.2 million class A-2 at 'AAA'; -- Interest only class X-1 at 'AAA'; -- Interest only class X-2 at 'AAA'; -- $3.6 million class M at 'B'; and -- $3.6 million class N at 'B-'. Fitch does not rate the $14.4 million class P certificates. The upgrades reflect stable collateral performance, as well as bringing subordination levels in line with the levels of deals issued today with similar characteristics. As of the May 2006 distribution date, the pool's aggregate certificate balance has decreased 4.7% to $914.5 million from $960 million at issuance. One loan (0.5%) has defeased. Currently, there is one specially serviced loan (0.2%). The loan is secured by an anchored retail center in Newark, New Jersey and is current. The loan transferred to special servicing in November 2005 due to 60+ days delinquency. The borrower has since become current on debt service payments and upon the receipt of three timely, consecutive payments, the loan will be returned to the master servicer. Fitch continues to monitor the performance of the eighth largest loan (2.6%) in the pool, which is a full-service hotel located in the French Quarter area of New Orleans, Louisiana. The hotel suffered extensive damage due to Hurricane Katrina. However, the hotel is operating, with all outstanding repairs scheduled to be completed by 2006. Fitch does not currently anticipate a loss on this loan. Fitch reviewed the three credit assessed loans in the pool, 1290 Avenue of the Americas (8.8%), The Furniture Plaza and Plaza Suites (4.6%), and the Inland Portfolio (4.5%). Each loan maintains an investment-grade credit assessment. 1290 Avenue of the Americas is secured by a 2 million square feet (sf) office building, located in the Midtown area of New York, NY. As of year-end (YE) 2005, the Fitch stressed debt service coverage ratio (DSCR) increased to 1.66 times (x) from 1.47x at issuance. Occupancy for YE 2005 remained stable, decreasing slightly to 98% versus 99% at issuance. The Furniture Plaza and Plaza Suites is secured by a wholesale furniture showroom in High Point, NC. As of YE 2005, the Fitch stressed DSCR increased to 2.16x from 1.50x at issuance. Occupancy for YE 2005 increased to 100% compared with 98% at issuance. The Inland Portfolio is comprised by six anchored community shopping centers located in Florida, South Carolina, Virginia, and Georgia. As of YE 2005, the Fitch stressed DSCR has increased to 1.58x from 1.46x at issuance. Consolidated occupancy for YE 2005 is 91%, versus 96% at issuance. REDMAN LLC: Case Summary & 12 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Redman LLC aka Redman Investment Partnership 1719 South Main Street Salt Lake City, Utah 84115 Bankruptcy Case No.: 06-22177 Type of Business: The Debtor offers financial services. Chapter 11 Petition Date: June 20, 2006 Court: District of Utah (Salt Lake City) Debtor's Counsel: Stanley S. Adams, Esq. 680 East 600 South Salt Lake City, Utah 84102 Tel: (801) 363-0177 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of the West Bank Loan $2,980,000 142 East 200 South Salt Lake City, UT 84111 Redevelopment Agency RDA Loan $780,000 451 South State Street Room 418 Salt Lake City, UT 84111 Sahara Inc. Construction Company $431,277 801 North 500 West, Suite 300 West Bountiful, UT 84087 First Western Capital Promissory Note $275,000 P.O. Box 548 Park City, UT 84060 McIntyre Building Partnership Bank Payment $200,000 Ayers Capital Corporation Finders Fee $60,000 Consulting Beecher Walker & Associates Garages/Condo Work $21,346 VanCott Bagley Cornwall Legal $20,637 McCarthy Gilger Homes Management Agreement $7,000 Dunn Associates Structural $4,087 Engineering Lloyd Architects Condo Finishes $1,566 CBIZ Accounting of Utah LLC Accounting $1,061 REDPRAIRIE CORP: Moody's Junks Rating on $45 Million Senior Loan ---------------------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating, a B2 rating to RedPrairie Corporation's proposed $20 million five- year first lien senior secured revolver and $150 million six year first lien term loan and a Caa1 rating to the proposed $45 million six and one half year second lien term loan. Proceeds from the credit facility will be used to finance RedPrairie's acquisition of BlueCube Software, Inc. The outlook is stable. These ratings were assigned: * Corporate family rating -- B2 * $20 million first lien senior secured revolving credit facility -- B2 * $150 million first lien senior secured term loan -- B2 * $45 million second lien senior secured term loan -- Caa1 * Outlook is stable The B2 corporate family ratings are constrained: i) the moderately high leverage of the company pro forma for the acquisition; ii) product revenue concentration in the warehouse software industry; iii) somewhat uneven organic growth; and iv) the ongoing threat from large well capitalized competitors. The ratings also acknowledge the well regarded products, long track record and strong market position of RedPrairie in the warehouse management industry and the good prospects for BlueCube's business. The combination of RedPrairie and BlueCube represents 6% market share of the fragmented supply chain software solution market. However it is estimated that RedPrairie has a much greater market share of the high end warehouse management market. The addition of BlueCube will help to diversify RedPrairie's revenue base by providing a platform for addressing the retail end of the supply chain. The acquisition will also contribute to the company's long term strategy of being an end-to-end provider of supply chain solutions. Moody's notes that achieving this longer term vision will require either substantial product development or further acquisitions. However, Moody's does not expect near term integration issues as management plans to operate the two businesses effectively separately. Post closing, RedPrairie's leverage, as measured by debt-to-EBITDA will be high but in line with its B2 corporate family rating. Debt to EBITDA will be 5.19 times based on pro forma last twelve month EBITDA of $37.4 million and total debt of $195 million. Moody's expects that RedPrairie should be able to reduce financial leverage by executing its business plan over the near term. RedPrairie, headquartered in Waukesha, Wisconsin, is a provider of warehouse management, labor management and transportation management software solutions. BlueCube provides store operations technology solutions. REPUBLIC STORAGE: Wants Court OK to Terminate Retiree Benefits -------------------------------------------------------------- Republic Storage Systems Company, Inc., asks the U.S. Bankruptcy Court for the Northern District of Ohio for permission to terminate medical and life insurance benefits provided to its retirees. As reported in the Troubled Company Reporter on May 15, 2006, the Debtor sold substantially all of its assets to an affiliate of Chrysalis Capital Partners, LP, a private equity investment firm, for $20 million. Nathan A. Wheatley, Esq., at Calfee, Halter & Griswold LLP, in Cleveland, Ohio, said that the Debtor will no longer maintain an ongoing business, and the Debtor's estate will consist mainly of liquidated assets. Thereafter, the Debtor will be in a liquidation mode. But, to discontinue the Debtor's business, it will be necessary to terminate the employment of both its union and non-union employees (most of whom will be employed by the asset purchaser). About Republic Storage Systems Headquartered in Canton, Ohio, Republic Storage Systems Company, Inc. -- http://www.republicstorage.com/-- an employee-owned firm, manufactures industrial and commercial shelving, storage rack, mezzanine systems and shop equipment. The Company filed for Chapter 11 protection on March 14, 2006, (Bankr. N.D. Ohio Case No. 06-60316). James Michael Lawniczak, Esq., at Calfee, Halter & Griswold, LLP, represents the Debtor in its restructuring efforts. Dov Frankel, Esq., at Buckley King, LPA, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. RESI FINANCE: Fitch Upgrades Ratings on 17 Class Certificates ------------------------------------------------------------- Fitch has taken rating actions on the following RESI Finance Limited Partnership mortgage pass-through certificates: Series 2002-A -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 affirmed at 'AAA'; -- Class B-4 affirmed at 'AAA'; -- Class B-5 affirmed at 'AAA'; -- Class B-6 affirmed at 'AAA'; -- Class B-7 affirmed at 'AAA'; -- Class B-8 affirmed at 'AAA'; -- Class B-9 upgraded to 'AAA' from 'AA+'; -- Class B-10 upgraded to 'AA+' from 'AA-'; -- Class B-11 upgraded to 'AA' from 'A-'. Series 2003-A -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 affirmed at 'AAA'; -- Class B-4 affirmed at 'AAA'; -- Class B-5 upgraded to 'AAA' from 'AA'; -- Class B-6 upgraded to 'AA+' from 'AA-'; -- Class B-7 upgraded to 'AA' from 'A'; -- Class B-8 upgraded to 'AA-' from 'A-'; -- Class B-9 upgraded to 'A' from 'BBB+'; -- Class B-10 upgraded to 'BBB+' from 'BBB'; -- Class B-11 upgraded to 'BB+' from 'BB'. Series 2003-B -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 upgraded to 'AAA' from 'AA'; -- Class B-4 upgraded to 'AA+' from 'AA-'; -- Class B-5 upgraded to 'AA' from 'A'; -- Class B-6 upgraded to 'AA-' from 'A-'; -- Class B-7 upgraded to 'A' from 'BBB'; -- Class B-8 upgraded to 'A-' from 'BBB-'; -- Class B-9 upgraded to 'BBB' from 'BB+'; -- Class B-10 upgraded to 'BB+' from 'B+'; -- Class B-11 upgraded to 'BB' from 'B'. Series 2003-C -- Class A affirmed at 'AAA'; -- Class B-1 upgraded to 'AAA' from 'AA'; -- Class B-2 upgraded to 'AA+' from 'AA-'; -- Class B-3 upgraded to 'AA' from 'A'; -- Class B-4 upgraded to 'AA-' from 'A-'; -- Class B-5 upgraded to 'A' from 'BBB'; -- Class B-6 upgraded to 'BBB+' from 'BBB-'; -- Class B-7 upgraded to 'BBB-' from 'BB'; -- Class B-8 upgraded to 'BBB-' from 'BB-'; -- Class B-9 upgraded to 'BB' from 'B+'; -- Class B-10 upgraded to 'BB-' from 'B'; -- Class B-11 upgraded to 'B' from 'B-'. Series 2003-CB1 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 affirmed at 'AAA'; -- Class B-4 affirmed at 'AA'; -- Class B-5 affirmed at 'AA-'; -- Class B-6 upgraded to 'A+' from 'A'; -- Class B-7 upgraded to 'A' from 'BBB'; -- Class B-8 upgraded to 'A-' from 'BBB-'; -- Class B-9 upgraded to 'BBB' from 'BB'; -- Class B-10 upgraded to 'BB' from 'B+'; -- Class B-11 upgraded to 'BB-' from 'B'. Series 2003-D -- Class A affirmed at 'AAA'; -- Class B-1 upgraded to 'AAA' from 'AA'; -- Class B-2 upgraded to 'AA+' from 'AA-'; -- Class B-3 upgraded to 'AA' from 'A'; -- Class B-4 upgraded to 'A+' from 'A-'; -- Class B-5 upgraded to 'A-' from 'BBB'; -- Class B-6 upgraded to 'BBB+' from 'BBB-'; -- Class B-7 upgraded to 'BBB-' from 'BB'; -- Class B-8 upgraded to 'BB+' from 'BB-'; -- Class B-9 upgraded to 'BB' from 'B+'; -- Class B-10 upgraded to 'BB-' from 'B'; -- Class B-11 upgraded to 'B' from 'B-'. The RESI (Real Estate Synthetic Investments) transactions are synthetic balance sheet credit-linked securitizations that reference diversified portfolios of primarily jumbo, A-quality, fixed-rate, first lien residential mortgage loans. The ratings are based on the credit quality of the respective referenced portfolio, credit enhancement provided by subordination for each tranche, the financial strength of Bank of America, N.A., as the swap counterparty, and the legal structure of the transaction. As of the May 2005 distribution date, the seasoning of the transactions ranges from 29 to 40 months, and the pool factors (current collateral balance as a percentage of original collateral balance) range from 3% to 63%. At origination, the majority of the collateral in the reference portfolios was concentrated in the State of California, and the weighted average FICO score was approximately 735. The primary servicer for all transactions is Wells Fargo Home Mortgage, Inc., which has a servicer rating of 'RPS1' by Fitch. The upgrades reflect an improved relationship between credit enhancement and future expected losses and affect approximately $1.27 billion in outstanding certificates. The affirmations reflect adequate levels of CE to future expected losses and affect approximately $34.64 million in outstanding certificates. The last review for all aforementioned transactions was in December 2005. Since then, the amount of CE available has increased, and realized losses have remained very low. Typically for prime transactions, principal can be distributed to the non- rated classes through a pro rata waterfall structure. For RESI transactions, the non-rated class does not receive principal. The main utility of this piece is to absorb all loan losses and to solely protect the rated certificates from suffering a write-down. The balances of these certificates remain nearly intact for all series' leaving ample protection for the more senior certificates. RESMED INC: Notes Conversion Prompts S&P to Withdraw BB- Rating --------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB-' corporate credit rating on ResMed Inc., which was the only outstanding rating on the company at that time. The corporate credit rating withdrawal follows the conversion of ResMed's 4% convertible subordinated notes. The notes were the company's only previously rated debt. Standard & Poor's withdrew its rating on the notes earlier in the year. Ratings List To From ResMed Inc. Corporate credit rating NR BB-/Positive/-- SAGAMORE HOLDINGS: April 2 Balance Sheet Upside-Down by $3.8 Mil. ----------------------------------------------------------------- Sagamore Holdings, Inc., incurred a $2.8 million net loss on $12.2 million of revenues for the third quarter ended April 2, 2006, compared to a $3.1 million net loss on $11.7 million of revenues from Sept. 15, 2004 through April 3, 2005. At April 2, 2006, the Company's balance sheet showed $7.6 million in total assets and $11.5 million in total liabilities, resulting in a $3.8 million stockholders' deficit. The Company's April 2 balance sheet also showed strained liquidity with $4.4 million in total current assets available to pay $11 million in total current liabilities coming due within the next 12 months. Going Concern Doubt J.H. Cohn LLP, in Roseland, New Jersey, raised substantial doubt about Sagamore Holdings' ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended June 30, 2005. The auditor pointed to the Company's recurring net loss in the period from Sept. 15, 2004 (date of capitalization) through June 30, 2005, and had a working capital deficiency. The company also did not meet certain covenants under its credit facility and its promissory note agreement with the former owner of its business and the related outstanding balances were in default. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?bcd Headquartered in Iselin, New Jersey, Sagamore Holdings, Inc., was formed and incorporated in the State of Florida on Aug. 30, 2004, to acquire substantially all of the net assets and the business of Nexus Custom Electronics, Inc., a wholly owned subsidiary of Jaco Electronics, Inc., which provides contract-manufacturing services to industrial original equipment manufacturers customers. SCHOLASTIC CORP: Low Revenues Prompt Moody's to Downgrade Rating ---------------------------------------------------------------- Moody's Investors Service downgraded the Scholastic Corporation's senior unsecured rating to Ba1 from Baa3 and assigned the company a Ba1 Corporate Family Rating, concluding the review for downgrade initiated on March 24, 2006. The rating downgrade reflects the continued deterioration in Scholastic's already low operating margins due largely to lower than expected revenue growth and a high fixed cost structure. The specific ratings affected: Downgrades: Issuer: Scholastic Corporation * Senior Unsecured Regular Bond/Debenture, Downgraded to Ba1 from Baa3 Assignments: Issuer: Scholastic Corporation * Corporate Family Rating, Assigned Ba1 Outlook Actions: Issuer: Scholastic Corporation * Outlook, Changed To Stable From Rating Under Review Moody's believes that moderate growth in the mature children's book publishing market, the absence of a visible replacement for the successful Harry Potter book franchise once the final installment in the series is published, and the execution risks associated with the company's plans to rationalize costs and working capital without impairing the breadth of the product line or service quality, will sustain margins and cash flow from earnings at levels more consistent with the speculative-grade rating. The stable rating outlook reflects Moody's expectation that the company will maintain a conservative financial policy and utilize a portion of its existing cash balance to reduce debt such that debt-to-EBITDA is maintained at 3 times or lower in fiscal years 2007 and 2008. Moody's also believes that the company has the flexibility to satisfy the $294 million January 2007 bond maturity from a combination of existing cash, committed bank facilities and new external financing. Scholastic Corporation, with its headquarters located in New York, New York, operates as a publisher and distributor of children's books, classroom and professional magazines, educational technology, and instructional materials, with long-established operations in the United States, Canada, the United Kingdom, Australia, New Zealand and Southeast Asia. SEARS HOLDINGS: Fitch Affirms BB Rating on Senior Notes ------------------------------------------------------- Fitch affirms its ratings of Sears Holdings Corporation: Sears Holdings Corporation -- Issuer Default Rating (IDR) 'BB'; -- Senior notes 'BB'; -- Secured bank facility 'BBB-'. Sears, Roebuck and Co. (Sears) -- IDR 'BB'; -- Senior notes 'BB'. Sears Roebuck Acceptance Corp. (SRAC) -- IDR 'BB'; -- Senior notes 'BB'; -- Commercial Paper 'B'. Sears DC Corp. -- IDR 'BB'; -- Senior notes 'BB'. The Rating Outlook has been revised to Stable from Negative. Fitch has also assigned an IDR of 'BB' to Kmart Holding Corp., with a Stable Outlook. Approximately $3.9 billion of debt is affected by these actions. The affirmations reflect Holdings' broad market presence in the moderate department store and discounter segments and solid balance sheet balanced against soft operating results and significant long-term competitive challenges. The revision in the Rating Outlook to Stable from Negative reflects the completion of the bulk of the integration of Sears and Kmart, with margins and cash flow showing improvement despite weak comparable store sales. Sears' comparable store sales declined 8.4% in the first quarter of 2006 following an 8.4% decline in 2005, reflecting a less promotional posture and poor reception to its apparel offerings. Kmart's comp sales declined 0.2% in the first quarter and 1.2% in 2005 following 3 years of sharp declines. Operating earnings have nonetheless improved due to aggressive cost cutting and reduced promotional activity, though overall profitability remains weak, with operating margins of 2.6% and 3.4% at Sears' domestic business and Kmart, respectively, in the first quarter. Holdings' challenge will be to generate longer-term sales and earnings growth at both Sears and Kmart in the face of growing competition from the discounters and big box specialty retailers. The company is attempting to create a customer-oriented culture and is gradually remodeling its Kmart stores while adding Sears' well-known brands into those stores. This should support the turnaround effort, though the pace of remodeling remains cautious. Holdings has relatively low leverage and solid liquidity. Adjusted debt/EBITDAR and EBITDAR/interest plus rents were 2.7 times and 3.3 times, respectively, in the twelve months ended April 29, 2006. Liquidity is supported by a sizable cash balance of $3.2 billion and a $4 billion revolver, on which $3.5 billion was unused as of April 29, 2006. This is more than adequate for seasonal working capital needs that peak at around $1.5 billion. Cash flow is projected to be sufficient to cover capital expenditures and domestic debt maturities for the foreseeable future. Leverage should continue to drift lower over the next few years as domestic debt maturities are expected to be repaid with cash flow. This may be offset in part by additional borrowing at Sears' Orchard Supply Hardware subsidiary, which is expected to refinance a $230 million inter-company note to Sears at some point. Ongoing share repurchases are expected to be financed with cash and free cash flow. The 'BBB-' rating of Holdings' $4 billion secured revolver, under which SRAC and Kmart are the borrowers, reflects a downstream guarantee from Holdings to both SRAC and Kmart and cross- guarantees between SRAC and Kmart. The facility is secured primarily by inventories, which range from $9-11 billion. The collateral can be released in the event the company achieves certain performance targets or ratings levels. If the collateral is released, leverage and asset coverage tests would become effective. The ratings of SRAC's senior notes and commercial paper reflect a guarantee provided by Sears. In addition, Sears DC Corp. benefits from an agreement by Sears to maintain a minimum fixed charge coverage at SDC of 1.005 times. Sears also agrees to maintain ownership of and a positive net worth at SDC. SILICON GRAPHICS: Gets Okay to Hire Ordinary Course Professionals ----------------------------------------------------------------- Silicon Graphics, Inc., and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Southern District of New York for authority to continue employing and paying ordinary course professionals, without having to file separate employment applications and affidavits. As reported in the Troubled Company Reporter on March 31, 2006, the Debtors retained the services of various attorneys, accountants, and other professionals in the ordinary course of their business operations, unrelated to their Chapter 11 cases, including general corporate, accounting, auditing, tax, and litigation matters. A list of the Debtors' ordinary course professionals is available for free at http://researcharchives.com/t/s?a0a According to Gary Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, the Debtors will continue to require the services of the OCPs to enable them to continue normal business activities that are essential to their stabilization and reorganization efforts. The Debtors' request will save the estates the substantial expenses associated with applying separately for the employment of each OCP. Furthermore, it will avoid the incurrence of additional fees relating to the preparation and prosecution of interim fee applications. The Debtors proposed to pay each OCP 100% of the fees and disbursements incurred, on their approval of an appropriate invoice. The payment is capped at the lesser of $35,000 per month per OCP or $350,000 per month for all OCPs. 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. 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: Court Gives Nod on AlixPartners as Advisors ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave Graphics, Inc., and its debtor-affiliates permission to employ AlixPartners, LLC, as their restructuring advisors, nunc pro tunc to May 8, 2006. AlixPartners, LLC, waives the right of indemnification during their retention as of the Petition Date. The U.S. Trustee retains all rights to object to AlixPartners' interim and final fee applications on all grounds including the reasonableness standard provided in Section 330 of the Bankruptcy Code. As reported in the Troubled Company Reporter on May 18, 2006, AlixPartners has provided and will continue to: (a) analyze cash sources and identify potential additional sources of cash; (b) assist the Debtors in securing postpetition DIP and exit financing; (c) assess the Debtors' relationship with their key vendors; (d) assist in the preparation of reviewing the Debtors' restructuring plan and provide the Debtors an assessment of that plan; (e) review the Debtors' borrowing base and collateral reporting; (f) assist the Debtors in supporting the due diligence and other activities of their current and prospective lenders in evaluating the Debtors and their request for financing; (g) assist management to improve the Debtors' net cash position; (h) assist the Debtors in reviewing and updating existing alternative strategy plans; (i) develop contingency plans and financial alternatives in the event an out-of-court restructuring cannot be achieved; (j) assist in the preparation of documents and the implementation of procedures related to the filing and subsequent administration of a bankruptcy petition; and (k) assist the Debtors in the negotiation and preparation of a plan of reorganization. The Debtors will pay AlixPartners a fixed monthly fee of $260,000, based on the full-time services of James A. Mesterharm and one full-time equivalent staff person. Additional personnel will be billed based on these hourly rates: Position Rates -------- ----- Managing Directors $590 - 750 Directors $440 - 550 Vice Presidents $330 - 430 Associates $260 - 300 Analysts $190 - 220 Paraprofessionals $160 The Debtors assured the Court that the firm has no connection with, and holds no interest adverse to, the Debtors, their creditors, or any other party-in-interest. AlixPartners is a "disinterested person," as defined in Section 101(14) of the Bankruptcy Code. 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. 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) SIVAULT SYSTEMS: March 31 Working Capital Deficit Tops $4.8 Mil. ---------------------------------------------------------------- SiVault Systems, Inc., filed its third fiscal quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on June 15, 2006. The Company reported a $1,561,891 net loss with no revenues for the three months ended March 31, 2006, compared to a $3,880,263 net loss on $295,778 of revenues for the third quarter last year. At March 31, 2006, the Company's balance sheet showed $7,716,681 in total assets, $5,205,500 in total liabilities, and $2,511,181 in stockholders' equity. The Company's March 31 balance sheet also showed strained liquidity with $390,956 in total current assets available to pay $5,205,500 in total current liabilities coming due within the next 12 months. Restructuring of Longview Funds Loan For the past nine months, the Company has been engaged in an intense effort at settling and refinancing debts. Approximately $6,700,000 in debts have been settled or restructured, including the $2.5 million owed to Longview Funds as of June 30, 2005. The loan was restructured by: -- the February 2006 payment of $400,000; -- an additional payment of $400,000 due June 15, 2006; and -- the issuance of convertible notes of $410,000 at a fixed conversion rate of $0.20 per share (subject to repurchase rights). The Company intends to continue to settle payables on favorable terms until such time as it is able to generate funds from operations. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?bcb Going Concern Doubt As reported in the Troubled Company Reporter on May 1, 2006, Miller, Ellin & Company, LLP, in New York, raised substantial doubt about SiVault Systems, Inc., fka Security Biometrics, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended June 30, 2004, and 2005. The auditor pointed to the company's significant operating losses since inception and working capital deficiency. About SiVault Systems SiVault Systems, Inc., fka Security Biometrics, Inc. -- http://www.sivault.com/-- provides products and services for the secure authentication, processing, storage and retrieval of signature-based medical, financial and retail electronic transactions and documents. SMARTIRE SYSTEMS: Posts $4.2 Mil. Net Loss in Third Fiscal Quarter ------------------------------------------------------------------ SmarTire Systems Inc. filed its third fiscal quarter financial statements for the three months ended April 30, 2006, with the Securities and Exchange Commission on June 15, 2006. The Company reported a $4,260,212 net loss on $1,195,136 of revenues for the three months ended April 30, 2006, compared to a $7,135,091 net loss on $330,406 of revenues for the third quarter in 2005. At April 30, 2006, the Company's balance sheet showed $9,711,976 in total assets and $30,576,613 in total liabilities, resulting in a $20,864,637 stockholders' deficit. Cornell Capital Loan The Company issued $1.5 million 5% convertible debentures to Cornell Capital Partners. The principal was due on May 20, 2006. Cornell Capital granted the Company an extension until Aug. 1, 2006, to start making the principal and interest payments. Full-text copies of SmarTire Systems' third fiscal quarter financial statements for the three months ended April 30, 2006, are available for free at http://ResearchArchives.com/t/s?bc6 Headquartered in Richmond, British Columbia, Canada, SmarTire Systems Inc. develops and markets technically advanced tire pressure monitoring systems for the transportation and automotive industries that monitor tire pressure and tire temperature. Its TPMSs are designed for improved vehicle safety, performance, reliability and fuel efficiency. The Company has three wholly owned subsidiaries: SmarTire Technologies Inc., SmarTire USA Inc. and SmarTire Europe Limited. Going Concern As reported in the Troubled Company Reporter on March 24, 2006, KPMG LLP expressed substantial doubt about SmarTire Systems Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended July 31, 2005 and 2004. In an addendum to its audit report, KPMG pointed to the Company's uncertainty in meeting its current operating and capital expense requirements. STATER BROS: Credit Metrics Decline Cues S&P to Cut Ratings to B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Colton, California-based Stater Bros Holdings Inc. to 'B+' from 'BB-'. The outlook is stable. "The downgrade reflects a steady decline in credit metrics following the peak levels experienced during the 2003/2004 labor strike and our belief that these measures are not likely to materially improve from current levels," said Standard & Poor's credit analyst Stella Kapur. While Stater Bros. materially benefited from the grocery workers' strike at other supermarkets in California in late 2003 through early 2004, the company was not able to hold on to as much market share as originally anticipated after the strike ended. Hence, credit metrics reverted to weak levels experienced prior to the strike. Furthermore, given the continued highly competitive supermarket environment, we believe significant credit metric improvement from current levels is unlikely. The ratings on Stater Bros. reflect the risks inherent in the competitive supermarket industry, the impact that an aggressive "everyday low pricing" strategy has had on operating margins, and the company's historically leveraged capital structure. For the year to date, second-quarter same-store sales were essentially flat and profitability levels improved marginally due to lower shrink and holiday promotional pricing. First-half EBITDA increased 8% to $68 million from a year earlier. Despite this, credit metrics only marginally improved from year-end levels. Lease-adjusted debt to EBITDA was 5.4x at March 26, 2006, and 12- month EBITDA coverage of interest was around 2.3x. Funds from operations to total debt was around 12%. While unrestricted cash balances remain substantial following the company's debt refinancing activity, with $207 million at March 26, 2006, a majority of this will be used to build the company's distribution center and headquarters. Stater Bros. has a leading market position in the Inland Empire region of southern California, which comprises Riverside and San Bernardino counties. STEVEN SHELTON: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Steven J. Shelton dba Southeast Technical Group 1508 Bohannon Drive Huntsville, Alabama 35802 Bankruptcy Case No.: 06-81118 Chapter 11 Petition Date: June 20, 2006 Court: Northern District of Alabama (Decatur) Debtor's Counsel: Kevin D. Heard, Esq. Heard & Associates, LLC 307 Clinton Avenue West, Suite 200 Huntsville, Alabama 35801 Tel: (256) 535-0817 Fax: (256) 535-0818 Total Assets: $1,257,174 Total Debts: $1,792,600 The Debtor did not file a list of its 20 largest unsecured creditors. STEWART & STEVENSON: S&P Rates $150 Million Senior Notes at B- -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to capital equipment provider Stewart & Stevenson LLC, and its 'B-' rating to the company's $150 million senior unsecured notes. Stewart & Stevenson LLC will be using proceeds from the notes to refinance existing indebtedness. The outlook is stable. Pro forma for the notes issuance, Houston, Texas-based Stewart & Stevenson will have about $194 million in debt. The one notch differential between the corporate credit rating and the notes reflects the company's ability to incur senior debt in excess of 15% of assets. "The ratings on Stewart & Stevenson reflect the reliance on cyclical end markets for a meaningful percentage of revenues and cash flow, a short track record as an operating company in its current configuration, and a highly leveraged financial profile," said Standard & Poor's credit analyst Jeffrey Morrison. "Concerns are somewhat offset by the more stable cash flow and margin characteristics of the company's aftermarket business, low annual maintenance capital spending requirements, and long standing relationships with OEM suppliers," said Mr. Morrison. The stable outlook on Stewart & Stevenson is predicated on the expectation that strong backlog and improved margins should be favorable for cash flow and credit measures in the near to intermediate term. STRIKEFORCE TECH: Incurs $1.3 Million Net Loss in First Quarter --------------------------------------------------------------- StrikeForce Technologies, Inc., incurred a $1.3 million net loss on $14,589 of revenues for the three months ended March 31, 2006, compared to a $932,366 net loss on $8,029 of revenues for the same period in 2005. At March 31, 2006, the Company's balance sheet showed $2.3 million in total assets and $3.6 million in total liabilities, resulting in a $1.2 million stockholders' equity deficit. The Company's March 31 balance sheet also showed strained liquidity with $378,612 in total current assets available to pay $1.8 million in total current liabilities coming due within the next 12 months. At March 31, 2006, the Company's accumulated deficit was $9,656,548, its working capital deficiency was $1,472,281 and approximately 95% of its assets consist of deferred royalties. For the three months ended March 31, 2006, the company had negative cash flows from operating activities of approximately $625,140. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?bca Headquartered in Edison, New Jersey, StrikeForce Technologies, Inc. -- http://www.sftnj.com/-- provides total identity assurance solutions to both industry and government. Its main product is ProtectID(TM) -- a "hack proof" authentication solution that guards both businesses and consumers from phishing, keylogging, malware, spyware and other identity attacks and scams. Going Concern Doubt As reported in the Troubled Company Reporter on June 15, 2006, Massella & Associates, CPA, PLLC, in Syosset, New York, raised substantial doubt about Strikeforce Technologies' ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses from operations, di minimis revenues and working capital deficiency. SUNSTATE EQUIPMENT: Good Performance Cues S&P's Positive Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on equipment rental company Sunstate Equipment Co. LLC to positive from stable. "The revision reflects the improved operating performance and continued favorable industry conditions," said Standard & Poor's credit analyst John R. Sico. All ratings were affirmed including the 'B' corporate credit rating. At the same time, Standard & Poor's assigned a recovery rating of '4' to the existing $150 million senior secured notes, which reflects marginal recovery of principal (25%-50%) in the event of a bankruptcy. Phoenix, Arizona-based Sunstate, a privately owned company, had about $200 million in sales in 2005 and had about $275 million in debt outstanding. From 2001 to 2003, the construction equipment rental industry revenues in the U.S. suffered because of the more than 20% decline in nonresidential construction spending. Conditions have improved because of the rising demand and the diminishing equipment oversupply in the market. This has resulted in increases in rental rates and prices for new and used equipment. Recovery in nonresidential construction is expected to continue in 2006. Sunstate's revenues are modest at about $210 million in 2005. This is up 37% from 2004 from a small base; the industry end markets were up about 4%. EBITDA margins are 45% or above average industry margins. More than 90% of sales are for rental, and there are minimal new- and used-equipment sales. SUPERCLICK INC: April 30 Balance Sheet Upside-Down by $1.5 Million ------------------------------------------------------------------ Superclick, Inc., filed its second fiscal quarter financial statements for the three months ended April 30, 2006, with the Securities and Exchange Commission on June 15, 2006. The Company reported a $309,477 net loss on $907,809 of net revenues for the three months ended April 30, 2006, compared to a $498,188 net loss on $735,933 of net revenues for second quarter last year. At April 30, 2006, the Company's balance sheet showed $1,726,258 in total assets and $3,320,909 in total liabilities, resulting in a $1,594,651 stockholders' deficit. The Company's April 30 balance sheet also showed strained liquidity with $1,406,178 in total current assets available to pay $3,286,097 in total current liabilities coming due within the next 12 months. Full-text copies of Superclick's second fiscal quarter financial statements for the three months ended April 30, 2006, are available for free at http://ResearchArchives.com/t/s?bcc Superclick, Inc. -- http://www.superclick.com/-- and its wholly owned Montreal-based subsidiary, Superclick Networks, Inc., develops, manufactures, markets and supports the Superclick Internet Management System in worldwide hospitality, multi-tenant unit and hospital markets. Superclick provides hotels, MTU residences and hospital patients and visitors with cost-effective Internet access and IP-based services utilizing high-speed DSL, CAT5 wiring, wireless and dial-up modem technologies. Over 100 InterContinental Hotels Group properties have Superclick systems including Candlewood Suites, Crowne Plaza, Holiday Inn, Holiday Inn Express, Holiday Inn SunSpree, InterContinental and Staybridge Suites in Canada and the United States. Going Concern Doubt As reported in the Troubled Company Reporter on Feb. 20, 2006, Bedinger & Company expressed substantial doubt about Superclick, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the fiscal year ended Oct. 31, 2005. The auditing firm points to the company's recurring losses from operations. THREE-FIVE SYSTEMS: Settles Claims Litigation with TFS Electronic ----------------------------------------------------------------- Three-Five Systems, Inc. (OTC: TFSIQ) reached a settlement agreement with TFS Electronic Manufacturing Systems, Inc., and the Official Committee of Unsecured Creditors in the bankruptcy case of TFS EMS and CGNSW-Willows, Inc. The Settlement Agreement awaits approval by the U.S. Bankruptcy Court for the District of Arizona. The settlement with the Committee resolves a lawsuit filed by the Committee in the EMS Chapter 11. Under the settlement, the first $3,125,000 will go to creditors other than TFSIQ, and $2,150,000 from EMS will go to TFSIQ as well as the net recovery of proceeds from the pending lawsuit against Topsearch Printed Circuits Ltd. and Avocent Corporation. The exact amount payable to TFSIQ will be determined through the EMS bankruptcy proceeding. The settlement with Willows resolves outstanding issues relating to the amount of Willow's claim against TFSIQ. Willows' request that the Court dismiss TFSIQ's Chapter 11 proceeding has been eliminated. On June 13, 2006, TFSIQ presented the Settlement Agreement to the Court and the Court began the confirmation hearing on TFSIQ's bankruptcy plan. The Plan had drawn objections from Willows, the UCC, the SEC, the US Trustee, and the Official Committee of Equity Holders. Shareholders of TFSIQ, who sent ballots, voted over 99.9% of voted shares to accept the Bankruptcy Plan for TFSIQ, prior to the Settlement Agreement. As a result of the Settlement Agreement and modifications to the Plan, the objections of all parties except the Committee of Equity Holders have been fully resolved. The Court has set a June 30, 2006 deadline for objections to the Settlement Agreement and a July 7, 2006 hearing date to approve the Settlement Agreement. If the Settlement Agreement is approved, TFSIQ anticipates that the Court will enter an order confirming the Plan no later than July 12, 2006, with an expected effective date of July 24, 2006. A full-text copy of the Debtors' Amended Disclosure Statement and Amended Joint Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=060329032855 Headquartered in Tempe, Arizona, Three-Five Systems, Inc. -- http://tfsc.com/-- provides specialized electronics manufacturing services to original equipment manufacturers. TFS offers a broad range of engineering and manufacturing capabilities. The Company filed for chapter 11 protection on Sept. 8, 2005 (Bankr. D. Ariz. Case No. 05-17104). Thomas J. Salerno, Esq., at Squire, Sander & Dempsey, LLP, represents the Debtor in its restructuring efforts. Brian N. Spector, Esq., at Jennings Strouss & Slamon, PLC, represents the Official Committee of Unsecured Creditors. The Official Equityholders Committee is represented by Craig J. Bolotn, Esq., at Jennings Haug & Cunningham. When the Debtor filed for protection from its creditors, it listed $11,694,467 in total assets and $2,880,377 in total debts. TRANSDIGM INC: Prices $275 Million of 7-3/4% Senior Subor. Notes ---------------------------------------------------------------- TransDigm Inc., a wholly-owned subsidiary of TransDigm Group Incorporated (NYSE: TDG), priced a private offering of $275 million of 7-3/4% Senior Subordinated Notes due 2014. The sale of the Notes is expected to close tomorrow, June 23, 2006. The Notes will mature on July 15, 2014 and will be senior unsecured subordinated obligations of TransDigm Inc. The Notes will be fully and unconditionally guaranteed, jointly and severally, on a senior unsecured subordinated basis by TransDigm Group Incorporated, the parent company of TransDigm Inc., and all of TransDigm Inc.'s existing and future domestic subsidiaries (other than certain immaterial domestic subsidiaries). Interest on the Notes will be payable semi-annually on July 15 and January 15 of each year, commencing on January 15, 2007. TransDigm intends to use the proceeds from the offering of the Notes, together with the initial borrowings under a new senior secured credit facility that it intends to enter into in connection with the completion of the offering and a portion of its existing cash balances, to repay all of TransDigm Inc.'s outstanding borrowings under its existing senior secured credit facility, to repay all of the outstanding borrowings under a term loan facility under which TransDigm Group Incorporated is the borrower, to purchase all of the $400 million in aggregate principal amount of 8-3/8% Senior Subordinated Notes due 2011 of TransDigm Inc. that are tendered and to pay the related consent payment, in each case in connection with TransDigm Inc.'s previously announced tender offer for such notes, to pay all accrued and unpaid interest on all such indebtedness and to pay all premiums and transaction expenses associated therewith. The Notes have not been and will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. TransDigm Group Incorporated, through its wholly-owned subsidiaries, including TransDigm Inc., designs, manufactures and supplies highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include ignition systems and components, gear pumps, mechanical/electro- mechanical actuators and controls, NiCad batteries/chargers, power conditioning devices, hold-open rods and locking devices, engineered connectors, engineered latches and cockpit security devices, lavatory hardware and components, specialized AC/DC electric motors and specialized valving. TRANSDIGM INC: Moody's Puts B3 Rating on Senior Subordinated Bond ----------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to TransDigm, Inc.'s proposed senior subordinated notes due 2014. Proceeds from the new notes offering, along with proceeds from an amended and expanded term loan facility as well as company's cash, will be used to repay all of TransDigm's existing debt, including the existing $400 million subordinated notes due 2011 and to repay a $200 million private loan issued by TransDigm's parent company, TransDigm Group Inc. The Corporate Family Rating has been affirmed at B1. The ratings outlook remains negative. The ratings continue to reflect the company's substantial debt levels, high leverage and the potential use of additional leverage for equity distributions, and uncertainty about the size and funding of potential future acquisitions. The ratings also consider TransDigm's history of stable profit margins and revenue growth in an improving commercial aerospace environment, as well as the company's strong and stable free cash flow. Good margins and free cash flow generation are expected to continue. These high margins and strong free cash flow are expected to support the company's ability to either repay debt or to fund modestly-sized acquisitions in the future without further reliance on debt. The negative rating outlook, which was changed from stable upon the December 2005 issuance of $200 million in TDG debt to fund a sizeable distribution to shareholders, continues to reflect Moody's concerns about the increased degree of financial risk associated current debt levels, possibly affecting TransDigm's ability to withstand any potential downturn in demand in the aerospace sector that the company serves. A rating downgrade could occur if leverage remains in excess of 5 times for more than 12 months, particularly if the company were to pay additional distributions to shareholders without first reducing debt. Ratings could also face negative pressure if free cash flow were to fall below 5% of total debt over this period, or if the company's operating margins were to fall below 30%. The outlook could return to stable if the company was to repay debt or otherwise reduce leverage to below 5 times, with free cash flow in excess of 10% of debt and EBIT coverage of interest of greater than 2 times for a sustained period. This proposed notes offering completes TransDigm's refinancing of all of the company's debt, including TDG debt. Moody's affirmed TransDigm's Corporate Family Rating when this re-financing was announced and ratings were assigned to the new bank credit facilities, leaving the outlook at negative. Please refer to Moody's press release dated 7 June, 2006 for a more detailed explanation of ratings drivers. The B3 rating on the proposed senior subordinated notes, two notches below the Corporate Family Rating, reflects the notes' junior status in claim behind all current senior commitments, as well as potential additional senior debt, secured and unsecured. These notes will be guaranteed by parent TransDigm Group Inc. and each of the company's current and future domestic subsidiaries. The B3 rating on the current subordinated notes due 2011, to the extent than any amount remains outstanding an un-tendered, has been affirmed at B3, and will be withdrawn when all such notes are redeemed. Assignments: Issuer: TransDigm Inc. * Senior Subordinated Regular Bond/Debenture, Assigned B3 Headquartered in Cleveland, Ohio, TransDigm Inc. is a leading manufacturer of highly engineered aerospace components to commercial airlines, aircraft maintenance facilities, original equipment manufacturers and various agencies of the U.S. Government. The company had LTM April 2006 revenues of $411 million. TRANSDIGM INC: S&P Rates Proposed $275 Million Subor. Notes at B- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' rating to TransDigm Inc.'s proposed $275 million subordinated notes due 2014. The notes will be issued under SEC rule 144A with registration rights. The proceeds from notes, in combination with a new $800 million credit facility, will be used to refinance all outstanding debt, including the $200 million unsecured loan at TransDigm Group Inc. (not rated), the company's ultimate parent. The corporate credit rating on TransDigm Inc. is 'B+' and the outlook is stable. "The ratings for TransDigm reflect a highly leveraged balance sheet, cyclical and competitive pressures in the commercial aerospace industry, and a relatively modest scale of operations (around $400 million revenues), but incorporate the firm's leading positions in niche markets and very strong profit margins," said Standard & Poor's credit analyst Christopher DeNicolo. The company's high profitability, with operating margins over 40% before depreciation, and a recovery in the commercial aerospace aftermarket are expected to support good free cash flow generation in the intermediate term. Ratings List TransDigm Inc. Corporate credit rating B+/Stable/-- Senior secured debt B+ Subordinated debt B- Ratings Assigned TransDigm Inc. $275 mil. subordinated notes due 2014 (prop.) B- TRUST ADVISORS: Can Hire Heller Ehrman to Litigate v. Grafton ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Connecticut gave Trust Advisors Stable Value Plus Fund permission to hire Heller Ehrman LLP as its special counsel. The Debtor selected Heller Ehrman to assist it in connection with some matters in Grafton Partners, L.P., and its affiliates' bankruptcy case, including: a) an appeal of a memorandum decision granting summary judgment in favor of the Debtor in an adversary proceeding brought against the Debtor pursuant to Sections 547(b) and 550 of the Bankruptcy Code to recover alleged preferential transfers and Section 502 objecting to the Debtor's proof of claim; b) defense of a supplemental objection to the Debtor's proof of claim; and c) defense of a second adversary proceeding brought against the Debtor, alleging that certain payments made to the Debtor were fraudulent conveyances. As of the chapter 11 filing, Heller Ehrman holds a claim against the Debtor's estate for accrued fees and expenses for legal services in connection with the Grafton Partner's bankruptcy case totaling $467,933. The Debtor acknowledges the claim's existence but is still in the process of reviewing the amount of the fees and costs. Headquartered in Darien, Connecticut, Trust Advisors Stable Value Plus Fund is a collective trust for employee benefit plan investors and was created to serve as an investment vehicle for various types of pension plans qualified under Section 401(a) of the Internal Revenue Code, which plans are also governed by the Employee Retirement Income Security Act of 1974. The Company filed for chapter 11 protection on Sept. 30, 2005, (Bankr. D. Conn. Case No. 05-51353). Scott D. Rosen, Esq., at Cohn Birnbaum & Shea P.C. represents the Debtor in its restructuring efforts. Robert A. White, Esq., Robert E. Kaelin, Esq., and Lissa J. Paris, Esq., at Murtha Cullina LLP, represent the Official Committee of Unsecured Investor Creditors. When the Debtor filed for protection from its creditors, it estimated assets and debts of more than $100 million. USA COMMERCIAL: Section 341(a) Meeting Will Continue on July 12 --------------------------------------------------------------- The Section 341(a) meeting of creditors of USA Commercial Mortgage Company and its debtor-affiliates started on May 17, 2006, will continue on July 12, 2006, 9:30 a.m. at 300 Las Vegas Boulevard South, Room 1500, Las Vegas, Nevada 89101. 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. 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: Sets June 30 Record Date for Rights Offering ------------------------------------------------------ USG Corporation (NYSE:USG) has set Friday, June 30, 2006, as the record date for its previously announced rights offering. USG intends to distribute at no charge to stockholders on the record date one transferable right for each share of common stock held on the record date. Each right will entitle a stockholder to purchase one share of USG common stock for $40.00. The rights will be exercisable until Thursday, July 27, 2006 (unless extended), after which they will expire. It is expected that certificates evidencing the rights, together with a prospectus and other information regarding the rights, will be mailed to stockholders of record promptly following the record date. Stockholders who hold their USG shares through a bank or broker will receive the rights materials from their bank or broker. USG common stock is listed on the New York Stock Exchange and the Chicago Stock Exchange under the symbol "USG." The rights are expected to trade on the New York Stock Exchange under the symbol "USG RT." Current trading prices for both USG common stock and the rights can be obtained from a broker or through normal sources of financial information on the internet. A copy of the preliminary prospectus relating to the rights offering is available from Georgeson Shareholder Communications, Inc. at (888) 206-5896, 17 State Street, 10th floor, New York, NY, 10004 and is also available at the SEC web site, http://www.sec.gov/ A copy of the final prospectus relating to the rights offering will be available after the rights offering commences. 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. VIPER NETWORKS: Armando Ibarra Raises Going Concern Doubt --------------------------------------------------------- Armando C. Ibarra, CPA, in Chula Vista, California, raised substantial doubt about Viper Networks, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's losses from operations since its inception. The Company reported a $1,929,685 net loss on $3,482,549 of total revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the Company's balance sheet showed $755,482 in total assets and $1,471,943 in total liabilities, resulting in a $716,461 stockholders' deficit. The Company will seek additional financing through new stock issuances and lines of credit. It will continue to develop its voice and data services to Web-based customers and expand its Voice-over-Internet Protocol networks for businesses, institutions, and Internet Service Providers. A full-text copy of the Company's 2005 Annual Report is available for free at http://researcharchives.com/t/s?bbe About Viper Networks, Inc. Viper Networks, Inc. -- http://www.vipernetworks.com/-- provides Voice-over-Internet VoIP products and services through distributors and resellers around the world. Its network of VoIP gateways serves more than 350 countries and regions, and it is unique in offering both network services and equipment to its customers. Unlike most competing VoIP providers, Viper Networks offers its service on a pre-pay basis. It charges only for minutes used and does not requiring any monthly fees. Its Internet-based users can get dial-up or broadband service with equal quality. Viper has been pioneering VoIP service and technology for more than five years. WCA WASTE: Moody's Rates Proposed $150 Million Senior Notes at B2 ----------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to the proposed $150 million senior unsecured notes due 2014 of WCA Waste Corporation and upgraded the Corporate Family Rating to B1 from B2. The outlook for the ratings is stable. Concurrently, Moody's affirmed the company's liquidity rating of SGL-2. The upgrade acknowledges WCA Waste's continued strong relative performance in terms of organic volume and price increases in excess of industry trends and a favorable pricing environment across the industry. The upgrade also reflects the deleveraging impact of the recently announced proposed $75 million preferred equity injection by Ares Capital Management and continued progress by the company in implementing its acquisition-based strategy. The proposed $150 million of senior notes is intended to refinance about $99 million of outstanding first lien debt and $25 million of outstanding second lien debt as well as a portion of revolver advances. The existing $100 million revolver due 2010 is also being refinanced. WCA Waste also recently signed an agreement for a $75 million convertible preferred equity investment with Ares Corporate Opportunities Fund II. The proposed new revolver and preferred equity are not rated by Moody's. Attaining the next higher Corporate Family Rating would be contingent on achieving considerably larger scale of operations, maintaining adjusted free cash flow to debt ratios of around 10% and progress toward improved leverage metrics with adjusted debt to EBITDA falling well below four times. Declining or negative free cash flow generation, reduced interest coverage with EBIT to interest ratios falling below 1.5 times, debt-financed acquisitions at high valuation multiples or additional indebtedness could lead to downward pressure on the ratings. Moody's took these rating actions: WCA Waste Corporation: * Assigned B2 to $150 million senior unsecured notes due 2014; * Upgraded the Corporate Family Rating to B1 from B2; * Affirmed the SGL-2 liquidity rating. WCA Waste Systems, Inc.: * Withdrew the B2 rating on the existing $100 million guaranteed first lien revolving credit facility due April 2010; * Withdrew the B2 rating on the existing $99 million guaranteed first lien term loan due April 2011; * Withdrew the Caa1 rating on $25 million guaranteed second lien term loan due October 2011. * The outlook for the ratings is stable. The ratings assume completion of all aspects of the financing including the $75 million preferred equity injection. For further detail, refer to Moody's Speculative Grade Liquidity Assessment and Credit Opinion for WCA Waste Corporation. WCA Waste Corporation is based in Houston, Texas, and is an integrated company engaged in the transportation, processing, and disposal of non-hazardous solid waste. The company's operations consist of twenty landfills, twenty-one transfer material recovery facilities and twenty-four collection operations located throughout Alabama, Arkansas, Colorado, Florida, Kansas, Missouri, New Mexico, North Carolina, South Carolina, Tennessee and Texas. The company provides services for approximately 203,000 commercial, industrial, and residential customers. Revenues for the twelve months ended March 31, 2006 were about $126 million and were derived from collection, disposal and transfer operations. WCA WASTE: S&P Rates Proposed $150 Million Senior Notes at B- ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on WCA Waste Systems Inc. to positive from stable and affirmed the existing 'B' corporate credit rating. "The outlook revision reflects the expected strengthening of WCA's financial profile because of a proposed $75 million convertible preferred equity investment by Ares Management. If management remains committed to maintaining a stronger financial profile while pursuing its acquisition growth strategy, we could raise the ratings within the next two years," said Standard & Poor's credit analyst Robyn Shapiro. S&P also assigned a 'B' corporate credit rating and positive outlook to WCA Waste Corp., an indirect parent of WCA Waste Systems. At the same time, based on preliminary terms and conditions, Standard & Poor's assigned its 'B-' rating to WCA Waste Corp.'s proposed $150 million of senior unsecured notes due 2014. This rating reflects the disadvantaged position of the senior unsecured notes in the debt structure relative to a new $100 million revolving credit facility, which S&P expects will be utilized in the near term to finance acquisitions. Proceeds from the senior unsecured notes will be used to refinance remaining balances outstanding under the company's existing senior secured credit facilities. Upon completion of the proposed notes offering, S&P will withdraw all of the ratings on the existing senior secured credit facilities. The ratings on Houston, Texas-based WCA reflect its very modest size and narrow scope of activities, meaningful exposure to construction and demolition cycles, the risks associated with an active growth strategy that includes additional debt-financed acquisitions, and its highly leveraged balance sheet. These factors are only partially offset by favorable overall industry characteristics and an experienced senior management team with a proven acquisition and integration track record. With revenues of about $125 million, WCA is a publicly owned solid waste management company, which provides collection (about 60% of sales), transfer (about 15%), and disposal services (about 25%). The company's integrated operations include 24 collection operations, 21 transfer stations, and 20 landfills (eight for municipal solid waste and 12 for construction and demolition or industrial waste). WCA benefits from an above-average internalization of waste rate of about 78%. With operations located exclusively in the South and Southeast, the company serves over 200,000 residential, commercial, and industrial customers. WINN-DIXIE: Allows Sylvania Lighting's $1.4 Million Claims ---------------------------------------------------------- Sylvania Lighting Services Corp. and Winn-Dixie Stores, Inc., and its debtor-affiliates are parties to an Energy Services Contract, dated Jan. 3, 2000, which was extended until Dec. 31, 2005, via a letter agreement. On July 19, 2005, Sylvania filed three unsecured non-priority claims: (1) Claim No. 6862 for $435,450 against Winn-Dixie Montgomery, Inc.; (2) Claim No. 6863 for $796,885 against Winn-Dixie Stores, Inc.; and (3) Claim No. 6864 for $234,654 against Winn-Dixie Raleigh, Inc. Pursuant to Rule 3003(c)(4) of the Federal Rules of Bankruptcy Procedure, Claim Nos. 6862, 6863, and 6864 superseded Sylvania Lighting's three scheduled claims, which totaled $1,147,583. The Debtors investigated and verified that the Claims contain the correct amount. After the Debtors filed for bankruptcy, Sylvania made a reclamation demand for $105,000. Sylvania Lighting investigated the Reclamation Claim and has determined that there was a mistake and that it should be disallowed. Accordingly, the parties stipulate that: (a) Claim Nos. 6862, 6863, and 6864 will be allowed as filed; and (b) the Reclamation Claim will be disallowed in its entirety. 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) * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent chapter 11 cases filed with assets and liabilities below $1,000,000: In re Central Valley Resources Bankr. E.D. Calif. Case No. 06-10819 Chapter 11 Petition filed June 13, 2006 See http://bankrupt.com/misc/caeb06-10819.pdf In re Air Joy Heating & Cooling, Inc. Bankr. D. N.J. Case No. 06-15360 Chapter 11 Petition filed June 14, 2006 See http://bankrupt.com/misc/njb06-15360.pdf In re Centro Alarmas De Puerto Rico Inc. Bankr. D. P.R. Case No. 06-01888 Chapter 11 Petition filed June 14, 2006 See http://bankrupt.com/misc/prb06-01888.pdf In re Deborah Lynne Hoffman Bankr. C.D. Calif. Case No. 06-10896 Chapter 11 Petition filed June 14, 2006 See http://bankrupt.com/misc/cacb06-10896.pdf In re PCI Commercial Roofing, Inc. Bankr. N.D. Tex. Case No. 06-41778 Chapter 11 Petition filed June 14, 2006 See http://bankrupt.com/misc/txnb06-41778.pdf In re Ralph A. Gutierrez Bankr. W.D. Tex. Case No. 06-51074 Chapter 11 Petition filed June 14, 2006 See http://bankrupt.com/misc/txwb06-51074.pdf In re Trident Software Corporation Bankr. N.D. Ill. Case No. 06-06891 Chapter 11 Petition filed June 14, 2006 See http://bankrupt.com/misc/ilnb06-06891.pdf In re Visions-Painting, Drywall & Services, Inc. Bankr. W.D. Pa. Case No. 06-10667 Chapter 11 Petition filed June 14, 2006 See http://bankrupt.com/misc/pawb06-10667.pdf In re Millmatics, Inc. Bankr. N.D. Ala. Case No. 06-81078 Chapter 11 Petition filed June 15, 2006 See http://bankrupt.com/misc/alnb06-81078.pdf In re Zsa Zsa Couch Bankr. M.D. Ala. Case No. 06-30710 Chapter 11 Petition filed June 15, 2006 See http://bankrupt.com/misc/almb06-30710.pdf In re Benjamin Frank Camp Bankr. N.D. Ala. Case No. 06-40822 Chapter 11 Petition filed June 16, 2006 See http://bankrupt.com/misc/alnb06-40822.pdf In re Richard J. Morrell Bankr. N.D. Ga. Case No. 06-66983 Chapter 11 Petition filed June 16, 2006 See http://bankrupt.com/misc/ganb06-66983.pdf In re Sofio's Flower Mound, Inc. Bankr. N.D. Tex. Case No. 06-41815 Chapter 11 Petition filed June 16, 2006 See http://bankrupt.com/misc/txnb06-41815.pdf In re Stella Luisa, Inc. Bankr. D. N.J. Case No. 06-15483 Chapter 11 Petition filed June 16, 2006 See http://bankrupt.com/misc/njb06-15483.pdf In re PJA Holding Corp. Bankr. S.D.N.Y. Case No. 06-35616 Chapter 11 Petition filed June 19, 2006 See http://bankrupt.com/misc/nysb06-35616.pdf In re Plaza International Bankr. W.D. Mich. Case No. 06-02792 Chapter 11 Petition filed June 19, 2006 See http://bankrupt.com/misc/miwb06-02792.pdf In re Gregory Stuart Peck Bankr. W.D. Wash. Case No. 06-41314 Chapter 11 Petition filed June 20, 2006 See http://bankrupt.com/misc/wawb06-41314.pdf In re Rose Controls, Inc. Bankr. E.D. Pa. Case No. 06-20886 Chapter 11 Petition filed June 20, 2006 See http://bankrupt.com/misc/paeb06-20886.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. 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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, Robert Max Quiblat, 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. 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