/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060630.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 30, 2006, Vol. 10, No. 154 Headlines AFFINITY GROUP: Buys Back $24.8 Mil. of 9% Sr. Subordinated Notes ALBUQUERQUE EXCAVATORS: Case Summary & 16 Largest Unsec. Creditors ALLIED HOLDINGS: Retirees Oppose Borrowings Under Insurance Plans ALLIED HOLDINGS: Bostic Estate Wants to Pursue Injury Lawsuit ALLIED HOLDINGS: Cushman Gets More Time to Sell Windsor Property AMERICAN MEDIA: Hires Saul Kredi as Chief Accounting Officer BANC OF AMERICA: Fitch Places Low-B Ratings on Watch Evolving BLAST ENERGY: March 31 Balance Sheet Upside-Down by $113,067 CAL-BAY INT'L: Posts $1.6 Mil. Net Loss in Quarter Ended March 31 CALPINE CORP: Panel Taps Fasken Martineau as Canadian Counsel CALPINE CORP: Wants Deloitte to Provide Tax Compliance Services CALPINE CORP: Committee Hires Garden City as Communications Agent CAMPBELL RESOURCES: Creditors & Court OK Plans of Arrangement CELL THERAPEUTICS: Bank to Buy up to $55 Million of Common Shares CHESAPEAKE ENERGY: S&P Rates Proposed $500 Million Sr. Notes at BB CMS ENERGY: Moody's Reviews Low-B Debt Ratings & May Upgrade COLETO CREEK: S&P Rates $735 Million Sr. Secured Term Loan at B+ COLLEEN INC: Case Summary & Three Largest Unsecured Creditors COMDIAL CORP: Wants Until September 19 to File Chapter 11 Plan CUMULUS MEDIA: Can Loan from BofA After Complying with Conditions DANA CORP: U.S. Trustee Appoints Three-Member Equity Committee DANA CORP: Court Okays London Underwriters Settlement Agreement DANA CORP: Plans to Pay $8.363 Million to Employees' Pension Plans DEDICATED MEDICAL: Case Summary & Largest Unsecured Creditor DELPHI CORP: Wilmington Trust Objects to Brunswick Plant Transfer DELPHI CORP: Can Conduct Rule 2004 Examination on Barclays Bank DIPLOMATIC LANGUAGE: Case Summary & 20 Largest Unsecured Creditors DONOBI INC: April 30 Balance Sheet Upside-Down by $413,292 ELEC COMMS: Raises $1.7 Million for Liberty Bell Acquisition EXTENSITY SARL: S&P Holds Negative Watch on B Corp. Credit Rating FISCHER IMAGING: Incurs $2.7 Million Net Loss in First Quarter FLEETPRIDE CORP: S&P Junks Rating on $150 Million Bridge Facility FOSS MFG: Sells Substantially All Assets to Foss LLC for $39 Mil. GENERAL MOTORS: S&P Holds Negative Watch on B Corp. Credit Rating GE-RAY FABRICS: Gets Court Nod to Hire Davis Graber as Accountants HARTVILLE GROUP: Posts $2 Mil. Net Loss in Quarter Ended March 31 HEALTH NET: Moody's Lifts Rating on Senior Unsecured Notes HEATING OIL: CCAA Court Confirms Joint Plan of Reorganization HEMOSOL CORP: Plan Sponsorship Agreement Amendment Clarified HERCULES OFFSHORE: S&P Upgrades Corporate Credit Rating to B HERTZ CORP: Debt Financing Plans Prompt Moody's to Hold Ratings HMEZZ LLC: Case Summary & 20 Largest Unsecured Creditors IMPART MEDIA: Posts $2.8 Million Net Loss in 2006 First Quarter IMPERIAL PETROLEUM: Files Amended Financial Statements INFORMATION ARCHITECTS: Expand Credit Services with CDE Purchase INTEGRATED ELECTRICAL: Michael Caliel Succeeds C. Snyder as CEO INTELSAT LTD: Chairman Conny Kullman to Leave Post on August 31 INTERPOOL INC: Debt Reduction Prompts S&P to Affirms Ratings ISLE OF CAPRI: Earns $15.1 Mil. in Fourth Quarter Ended April 30 JAMES DIGIANDOMENICO: Case Summary & 15 Largest Unsec. Creditors JERNBERG INDUSTRIES: Horwich Coleman OK'd as Trustee's Accountant LEVITZ HOME: Has Until July 31 to Decide on Woodbury Lease LSP BATESVILLE: S&P Affirms B+ Rating on $326 Million Sr. Bonds MARSH SUPERMARKETS: Posts $27.9M Net Loss in 4th Qtr. Ended Apr. 1 MEDICAL CONNECTIONS: March 31 Balance Sheet Upside-Down by $1.1MM MEDICALCV INC: Eapen Chacko Replaces Jack Jungbauer as CFO MERIDIAN AUTOMOTIVE: Has Until July 31 to File Chapter 11 Plan MERIDIAN AUTOMOTIVE: Has Until Nov. 1 to Remove Civil Actions NATURADE INC: Symco Agrees to Decrease Note to $1 Million NCP MARKETING: Court Okays Spangenberg Shibley as Special Counsel NEPTUNE INDUSTRIES: March 31 Balance Sheet Upside-Down by $147K NHON TAI VO: Case Summary & 13 Largest Unsecured Creditors NORTEL NETWORKS: Outlines Biz Plan to Improve Operating Margins NORTHWEST AIRLINES: Employees Need Not File Proofs of Wage Claim NORTHWEST AIRLINES: Can Assume Worldspan Carrier Agreement NORTHWEST AIRLINES: Can Reject Flight Attendants' Labor Contracts ON SEMICONDUCTOR: Major Shareholder Adopts 10b5-1 Trading Plan ORCAL GEOTHERMAL: Inadequate Info Cues Moody's to Withdraw Ratings OVERSEAS SHIPHOLDING: Hires J.H. Cohn as Savings Plan Accountant PARKER DRILLING: Debt Reduction Prompts S&P's Positive Outlook PERFORMANCE HOME: March 31 Balance Sheet Upside-Down by $9.4 Mil. PHOTOWORKS INC: Set to Make First Interest Payment on $2.5MM Loan PORTOLA PACKAGING: Settles Blackhawk's Patent Infringement Suit POSITRON CORP: Ham Langston Resigns as Independent Auditor PREFERRED HEALTH: Moody's Rates Proposed $185 Million Loan at B1 PROGRESS RAIL: Caterpillar Merger Cues Moody's to Hold Ratings SAGE RANCH: Steve Cote Wants Debtor's Chapter 11 Case Dismissed SATELITES MEXICANOS: Financial Restructuring Accord Approved SECURECARE TECHNOLOGIES: Robert Woodrow Resigns as CEO SILICON GRAPHICS: Can Use Secured Noteholders' Cash Collateral SILICON GRAPHICS: Committee Taps Winston & Strawn as Counsel SILICON GRAPHICS: KPMG Replaces Ernst & Young as Auditor SILK SCREEN: Case Summary & 16 Largest Unsecured Creditors STRATUS SERVICES: Insurance Fund Demands $2.3 Million Payment SUNCOM WIRELESS: Eric Haskell Continues Stint as CFO SYNOVICS PHARMA: Posts $2.2 Mil. Net Loss in Quarter Ended Apr. 30 TELOS CORP: March 31 Balance Sheet Upside-Down by $105.2 Million THERMADYNE HOLDINGS: May Release Restated Financials on July 14 TOYS 'R' US: Moody's Rates $1 Billion Senior Secured Loan at B1 TRANSMONTAIGNE INC: Inks Merger Agreement With Morgan Stanley TRC HOLDINGS: Gets Final Court Order on Cash Collateral Use TRIPLE A POULTRY: Has Access to the Mendenhalls' Cash Collateral TRIPLE A POULTRY: Section 341(a) Meeting Moved to July 18 UNIVISION COMMS: Fitch Lowers Senior Unsecured Debt Ratings to BB USEC INC: S&P Junks Rating on 6.75 Senior Notes VENTAS INC: New York Supreme Court Defers Ruling on Kindred Suit VISIPHOR CORP: Gets $253,000 Contribution from NRC-IRAP VITAL LIVING: March 31 Balance Sheet Upside-Down by $676,000 WACO VOLUNTEER: Voluntary Chapter 11 Case Summary WINN-DIXIE STORES: Files Chapter 11 Reorganization Plan WINN-DIXIE: Sells Louisville Facility to Seay for $3.75 Million WINN-DIXIE: Sells Stockbridge Property to BH Properties for $2.1MM WI-TRON INC: Names Joe Nordgaard as Chief Executive Officer WORLDWIDE ENTERPRISES: Case Summary & Two Largest Unsec. Creditors WYNN RESORTS: S&P Maintains Watch on B+ Corporate Credit Rating XYBERNAUT CORP: John Moynahan Resigns as Chief Financial Officer * BOOK REVIEW: ITT: The Management of Opportunity ********* AFFINITY GROUP: Buys Back $24.8 Mil. of 9% Sr. Subordinated Notes ----------------------------------------------------------------- Affinity Group, Inc., repurchased $24,841,000 of its 9% senior subordinated notes due 2012 on June 20, 2006. The Company had previously bought back $4,841,000 of its senior subordinated notes on June 14, 2006. The Senior Subordinated Note purchases were made with available cash and the Company intends to have them promptly retired. As reported in the Troubled Company Reporter on June 19, 2006, Affinity Group modified its Amended and Restated Credit Agreement dated as of June 24, 2003 to permit the Company to repurchase up to $30 million of the Company's $200 million 9% senior subordinated notes due 2012 from time to time as and when the Company determines. The Senior Subordinated Notes bear interest at 9% per annum payable semi-annually, mature on February 15, 2012, and may be called at a price of 104.5% beginning February 15, 2008 and declining to par at February 15, 2010. A full-text copy of the Seventh Amendment to the Credit Agreement dated June 8, 2006, is available for free at: http://researcharchives.com/t/s?b8c Headquartered in Ventura, California, Affinity Group, Inc. -- http://www.affinitygroup.com/-- and its affiliated companies serve the safety, security, comfort, and convenience needs of the North American recreational vehicle market. * * * As reported in the Troubled Company Reporter on May 5, 2006, Standard & Poor's Ratings Services lowered its ratings on Affinity Group Holding Inc. and its operating subsidiary, Affinity Group Inc., including lowering the corporate credit ratings to 'B' from 'B+'. The outlook is stable. Total debt outstanding was $412.7 million as of Dec. 31, 2005. ALBUQUERQUE EXCAVATORS: Case Summary & 16 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Albuquerque Excavators, Inc. 5500 Cleo Southwest Albuquerque, New Mexico 87105 Bankruptcy Case No.: 06-11095 Type of Business: The Debtor is an underground utilities contractor. Chapter 11 Petition Date: June 28, 2006 Court: District of New Mexico (Albuquerque) Judge: James Starzynski Debtor's Counsel: William F. Davis, Esq. William F. Davis & Associates, P.C. P.O. Box 6 Albuquerque, New Mexico 87103-0006 Tel: (505) 243-6129 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hanover Insurance Company Litigation $261,790 c/o Butt Thorton & Baehr, P.C. P.O. Box 3170 Albuquerque, NM 87190-3170 Clearbrook Investments, Inc. Specific Performance $175,000 c/o Dixon, Scholl & Bailey P.A. On Contract P.O. Box 26746 Albuquerque, NM 87125-6746 Twin Mountain Litigation $138,410 Construction II Co. 7926 South Platte Canyon Road Littleton, CO 80123 Western Pacific $38,854 Insurance Network City of Albuquerque Utilities $8,138 Water Utility Department Kardas, Abeyta, Weiner, P.C. Accounting Services $8,102 First Insurance Funding Corp. Insurance $7,109 West American Insurance Company Insurance $7,000 Big Bear Vendor $5,633 Scott & Kienzle, P.A. Legal Services $5,408 Noeding & Jarrett, P.C. Legal Services $4,902 Western Technologies, Inc. Vendor $4,426 Keleher & McLeod, P.A. Legal Services $4,073 Bluesky Construction Litigation on $4,000 Services, Inc. Survey Services Paradigm Engineering EPA Reports $2,664 PNM-Remittance Utilities $1,758 ALLIED HOLDINGS: Retirees Oppose Borrowings Under Insurance Plans ----------------------------------------------------------------- Charles Vining, Verno Grimes and Alfred Carl Hart ask the United States Bankruptcy Court for the Northern District of Georgia to deny Allied Holdings, Inc., and its debtor-affiliates' request to obtain loans against or surrender their interest in certain insurance policies. The retirees say that the move: -- is premature until a Retiree Committee is appointed; -- is a sub rosa effort to circumvent the requirements of Section 1114 of the Bankruptcy Code; -- lacks any reasonable business basis; and -- is unnecessary. The Retirees are beneficiaries of the Death Benefit Plan of Allied Systems, Ltd. John A. Christy, Esq., at Schreeder, Wheeler & Flint, LLP, contends that until the Debtors comply with their obligations under Section 1114, they are not entitled to modify, terminate or borrow against the insurance policies, which fund the death benefits. The borrowing would reduce or eliminate the benefits if the Debtors don't pay back the loans, Mr. Christy explains. Mr. Christy notes that the Debtors' request fails to provide adequate disclosure and presents discrepancies, which renders the request inadequate on its face. "The fact that the Debtors are so profoundly illiquid that they have to borrow against insurance policies and cannot represent that even with this borrowing they can stave off a default leads to the obvious conclusion that borrowings against these policies is akin to burning the furniture to stay warm," Mr. Christy says. With the entry of the Yucaipa Companies, Mr. Christy relates that the proposed borrowings are no longer necessary as the Debtors have other alternative available financing. About Allied Holdings Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLIED HOLDINGS: Bostic Estate Wants to Pursue Injury Lawsuit ------------------------------------------------------------- The Bostic Estate asks the U.S. Bankruptcy Court for the Northern District of Georgia to modify the automatic stay to allow it to pursue a wrongful death claim and personal injury claim against Allied Holdings, Inc., its debtor-affiliates and their insurer, Ace American. In April 2005, Howard Bostic was involved in a car accident in Versailles, Kentucky, when his automobile was rear-ended by a tractor-trailer truck owned by the Debtors. On May 25, 2005, Tammy Goodlett was appointed Executrix of the Estate of Howard Bostic. The Bostic Estate filed a claim for $1,500,000. About Allied Holdings Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLIED HOLDINGS: Cushman Gets More Time to Sell Windsor Property ---------------------------------------------------------------- Allied Holdings, Inc., and its debtor-affiliates inform the United States Bankruptcy Court for the Northern District of Georgia that Allied Systems (Canada) Company and Cushman & Wakefield LePage, Inc., extended the term of the agreement for the firm's exclusive authority to market the Debtors' property for sale through December 31, 2006. As reported in the Troubled Company Reporter on Feb. 14, 2006, Cushman will have exclusive authority to market and solicit bids for the Debtors' property in Windsor, Ontario, Canada, pursuant to a brokerage agreement. Cushman will have a 5% commission upon the successful completion of a property sale. About Allied Holdings Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMERICAN MEDIA: Hires Saul Kredi as Chief Accounting Officer ----------------------------------------------------------- Saul M. Kredi will serve as American Media Operations Inc.'s Chief Accounting Officer effective June 26, 2006. Mr. Kredi will have an annual base salary of $185,000 and will also be eligible for an annual bonus of up to 20% of his base salary based on AMOI achieving its EBITDA target. Prior to joining AMOI, Mr. Kredi was Senior Director of Finance and Corporate Controller for Answerthink, Inc., from December 1999 to the present. Answerthink is a publicly traded information technology consulting services company. From January 1993 to December 1999, Mr. Kredi served as Manager of Assurance and Advisory Services for Deloitte & Touche. Mr. Kredi holds Bachelor's and Master's degrees in accounting, and is a CPA. Headquartered in Boca Raton, Florida, American Media Operations Inc. is the United States' largest publisher of celebrity, health and fitness, and Spanish language magazines. * * * As reported in the Troubled Company Reporter on Jan. 20, 2006, Moody's Investors Service assigned a B1 rating to American Media Operations, Inc.'s $510 million senior secured credit facilities and affirmed other low-B and junk ratings. As reported in the Troubled Company Reporter on Jan. 19, 2006, Standard & Poor's Ratings Services lowered the corporate credit rating on American Media Operations Inc. to 'B-' from 'B', and the subordinated debt rating to 'CCC' from 'CCC+'. S&P affirmed the 'B' rating on the company's senior secured bank loan at that time. BANC OF AMERICA: Fitch Places Low-B Ratings on Watch Evolving ------------------------------------------------------------- Fitch upgraded this class of Banc of America Large Loan, Inc. Series 2002-FLT1: -- $8.8 million class G to 'AAA' from 'AA' In addition, Fitch placed these classes on Rating Watch Evolving: -- $50.1 million class H at 'BB-' -- $11.1 million class J at 'B' Fitch affirmed this class: -- Interest only X-1B at 'AAA' Classes A-1, A-2, B, C, D, E, F, and interest only classes X-1A and X-2 have been paid in full. The upgrade is due to increased credit enhancement due to loan payoffs. As of the June 2006 remittance report, the transaction has paid down 87.9% to $70 million from $826.2 million at issuance. Of the original seven loans in the deal, one remains. Classes H and J are placed on Rating Watch Evolving due to the loan's approaching August 2006 maturity date coupled with a decline in performance since issuance. The ratings of classes H and J will depend on the ability of the borrower to refinance the loan. The Central Research Park loan is collateralized by four single- story and four two-story office and research and development buildings in Sunnyvale, California, 35 miles south of San Francisco. The property is currently 92.9% occupied, up from 91.2% at issuance. Blue Coat Systems, occupying 45,823 square feet (9.78%), will be vacating upon expiration of its lease on June 30, 2006, bringing total occupancy to 80%. The Sunnyvale submarket has experienced an increase in vacancy since the loan was originated. The loan is scheduled to mature in August 2006 and has no extension options remaining. Fitch will continue to monitor performance of the loan. BLAST ENERGY: March 31 Balance Sheet Upside-Down by $113,067 ------------------------------------------------------------ Blast Energy Services, Inc., filed its financial statements for the quarter ended March 31, 2006, with the Securities and Exchange Commission. The Company reported a $968,346 net loss on $291,961 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $2,809,581 in total assets and $2,922,648 in total liabilities resulting in a stockholders' deficit of $113,067. Full-text copies of the Company's financial statements for the quarter ended March 31, 2006 are available for free at: http://ResearchArchives.com/t/s?c78 Going Concern Doubt Malone & Bailey, P.C., in Houston, Texas, raised substantial doubt about Blast Energy'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, a working capital deficiency of $0.6 million, a net loss of $2.9 million, and an accumulated deficit of $29.9 million for the year ended Dec. 31, 2005. The Company is trying to raise additional capital in response to its financial difficulty. About Blast Energy Headquartered in Houston, Texas, Blast Energy Services, Inc. -- http://www.blastenergyservices.com/-- has developed a commercially viable lateral drilling technology with the potential to penetrate through well casing and into reservoir formations to stimulate oil and gas production. The Company also has a secondary business segment providing satellite communication services to energy companies. This service allows these energy companies to remotely monitor and control wellhead, pipeline, drilling, and other operations through low cost broadband data and voice services. CAL-BAY INT'L: Posts $1.6 Mil. Net Loss in Quarter Ended March 31 ----------------------------------------------------------------- Cal-Bay International, Inc., filed its financial statements for the quarter ended March 31, 2006, with the Securities and Exchange Commission. The Company reported a $1,647,354 net loss on $5,172 of revenues for the three months ended March 31, 2006, versus a $347,963 net loss on zero revenues for the three months ended March 31, 2005. At March 31, 2006, the Company's balance sheet showed $11,975,743 in total assets and $2,472,991 in total liabilities resulting in a stockholders' equity of $9,502,752. A full-text copy of the Company's financial statements for the quarter ended March 31, 2006, is available for free at: http://ResearchArchives.com/t/s?c7a Going Concern Doubt Cal-Bay's management expressed substantial doubt about the Company's ability to continue as a going concern because of its losses and its net deficit as of Sept 30, 2005. The Company's continued existence is dependent upon its ability to generate more profitable business activities from its customers. About Cal-Bay Cal-Bay International, Inc., originally incorporated in the State of Nevada on December 9, 1998, under the name Var-Jazz Entertainment, Inc. Var-Jazz was organized to engage in the business of music production and sales. Var-Jazz did not succeed in the music business and the board of directors determined it was in the best interest of the Company to seek additional business opportunities. On March 8, 2001, Var-Jazz entered into an Agreement and Plan of Reorganization with Cal-Bay Controls, Inc., whereby Var-Jazz changed its name to Cal-Bay International, Inc., and acquired Cal-Bay Controls, Inc., as a wholly owned subsidiary in exchange for 17,112,000 shares of common stock. CALPINE CORP: Panel Taps Fasken Martineau as Canadian Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Calpine Corp. and its debtor-affiliates bankruptcy cases asks permission from the U.S. Bankruptcy Court for the Southern District of New York to retain Fasken Martineau DuMoulin as its Canadian bankruptcy counsel. At the direction of the Committee's lead counsel, Akin Gump Strauss Hauer & Feld LLP, Fasken Martineau will: (a) advise the Committee with respect to its rights, duties and powers in the Debtors' Chapter 11 cases as they relate to the Canadian Proceedings; (b) assist and advise the Committee in its consultations with the Canadian Debtors relative to the administration of their Chapter 11 cases; (c) assist the Committee in analyzing the claims of the US Debtors' Canadian creditors and the Canadian Debtors' capital structure and in negotiating with holders of claims and equity interests; (d) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial conditions of the Canadian Debtors and the operation of the Canadian Debtors' businesses; (e) assist the Committee in its analysis of, and negotiations with, the Canadian Debtors or any third party concerning matters related to, among other things, the assumption or rejection of certain non-residential real property leases and executory contracts, asset dispositions, financing of other transactions and the terms of one or more plans of reorganization for the Canadian Debtors and accompanying disclosure statements and related plan documents; (f) assist and advise the Committee as to its communications to the general creditor body regarding significant matters in the Debtors' Chapter 11 cases as they relate to the Canadian proceedings; (g) represent the Committee at all hearings and other proceedings related to the Canadian Proceedings; (h) review and analyze applications, orders, statements of operations and schedules filed with the Canadian Court and advise the Committee as to their propriety, and to the extent deemed appropriately by the Committee, support, join or object to it; (i) advise and assist the Committee with respect to any Canadian legislative, regulatory or government activities; (j) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of its interests and objectives insofar as they relate to the Canadian proceedings; (k) assist the Committee in its review and analysis of the Canadian Debtors' various power agreements; (l) prepare any pleadings, including motions, memoranda, complaints, adversary complaints, objections or comments in connection with any of the Canadian Proceedings or Canadian claims against the US Debtors; (m) investigate and analyze any Canadian claims against the US Debtors' non-debtor affiliates; and (n) perform other legal services as may be required or are otherwise deemed to be in the interests of the Committee in accordance with the Committee's powers and duties. Jonathan A. Levin, Esq., a partner at Fasken Martineau Dumoulin LLP, discloses that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $360 - $775 Counsel $300 - $775 Associates $235 - $500 Students at Law $100 - $150 Mr. Levin further discloses that the Firm's professionals primarily expected to provide services to the Committee bill: Professional Designation Hourly Rate ------------ ----------- ----------- Jonathan A. Levin Partner $775 David E. Baird Counsel $775 Edmond F.B. Lamek Partner $650 Alex Kotkas Partner $370 The Debtors will also reimburse Fasken's necessary out-of-pocket expenses. Mr. Levin assures the Court that his Firm does not hold any interest adverse to the US Debtors' estates or their creditors, and is "disinterested " as defined in Section 101(14) of the Bankruptcy Code. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Wants Deloitte to Provide Tax Compliance Services --------------------------------------------------------------- Calpine Corp. and its debtor-affiliates ask permission from the U.S. Bankruptcy Court for the Southern District of New York to expand Deloitte Tax LLP's responsibilities to include Tax Compliance Services. As reported in the Troubled Company Reporter on April 12, 2006, the Debtors obtained permission from the Court to employ Deloitte Tax as their tax service providers. Deloitte Tax is expected to: (a) consult with the Debtors regarding federal and state income tax matters; (b) advise and assist the Debtors regarding U.S. and foreign tax matters on Calpine's International Operations; (c) assist the Debtors related to sales and use tax matters; (d) assist the Debtors relating to the ongoing audit by the Internal Revenue Service of the Debtors' tax returns for the periods ending Dec, 31, 2000 to 2004 and with certain other Federal and State audit, assessment, or tax examination matters; (e) assist the Debtors with property tax matters; (f) assist the Debtors with various international assignment services; and (g) advise and assist the Debtors with the entity rationalization and simplification project. Tax Compliance Services Deloitte Tax will assist the Debtors in the preparation of state and federal income tax returns for the years ending Dec. 31, 2005, and Dec. 31, 2006, for more than 400 Debtors and non-Debtor affiliates. Matthew A. Cantor, Esq., at Kirkland & Ellis LLP, in New York, informs the Court that a portion of the Tax Compliance Services will be performed by Deloitte's indirect wholly owned subsidiary, Deloitte Tax Services India Private Limited. Deloitte Tax India will assist Deloitte Tax in preparing the tax returns. Mr. Cantor discloses that the Firm's professionals bill: Professionals Hourly Rate ------------- ----------- Partner, Principal or Director $325 - $375 Senior Manager $265 - $325 Manager $230 - $290 Tax Senior $160 - $225 Tax Staff $115 - $173 Paraprofessionals $100 - $113 The Debtors will also reimbursement Deloitte Tax for reasonable out-of-pocket expenses it incurs in relation to the Tax Compliance Services. Mr. Cantor assures the Court that the Tax Compliance services rendered by Deloitte Tax to the Debtors will not duplicate or overlap with the work of any of the Debtors' other professionals. Guy S. Johnson, a partner at Deloitte Tax, assures the Court that his firm holds no interest adverse to the Debtors and their estates, and is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Committee Hires Garden City as Communications Agent ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York granted the Official Committee of Unsecured Creditors appointed in the Calpine Corp. and debtor-affiliates bankruptcy cases authority to retain The Garden City Group, Inc., as its official communications agent. The Garden City Group is expected to: (a) establish and maintain an internet-accessed Web site that provides: -- general information concerning the Debtors and other significant parties, including dockets and access to docket filings; -- monthly Committee written reports summarizing recent proceedings, events and public financial information; -- highlights of significant events in the cases; -- a calendar with upcoming significant events in the cases; -- access to the claims docket; -- press releases issued by the Committee and the Debtors; -- a non-public registration form for creditors' to request "real-time" case via electronic mail; -- a non-public form to submit creditor questions, comments and requests for access to information; -- responses to creditors' questions, comments and requests for access to information; provided that the Committee may privately provide those responses in the exercise of its reasonable discretion; -- answers to frequently asked questions; and -- links to other relevant Web sites. (b) distribute case updates via e-mail for creditors that have registered on the Committee Web site; (c) establish and maintain a telephone number and e-mail address for creditors to submit questions and comments; and (d) print and serve documents as directed by the Committee and its counsel. The Debtors will pay for The Garden City Group' services in its customary hourly rates: Professional Hourly Rate ------------ ----------- Supervisor $79 - $95 Project Manager $125 Senior Project Manager $150 Director/Assistant Vice-President $175 Vice President $225 Quality Assurance Staff $75 - $125 Senior VP Systems & Managing Director $275 The Debtors will also reimburse The Garden City Group's reasonable and necessary out-of-pocket expenses. Michael J. Sherin, chairman of The Garden City Group, assures the Court that his firm does not represent any interest adverse to the Debtors' estates, and is "disinterested" as the term is defined in Section 101(14) of the Bankruptcy Code. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) CAMPBELL RESOURCES: Creditors & Court OK Plans of Arrangement ------------------------------------------------------------- The plans of arrangement presented earlier this month to the creditors of Campbell Resources Inc., Meston Resources Inc. and MSV Resources Inc., under the Companies' Creditors Arrangement Act, received the required approvals at a meeting of creditors held on June 27, 2006, in Chibougamau. The Superior Court sanctioned the plans and granted the Company an extension to Oct. 31, 2006, of the stay provided in the initial order granted in June 2005. The Company will now carry-out plans of arrangement and produce a prospectus which will allow it to proceed, among other things, with a rights offering to its shareholders for gross proceeds of up to $5 million. About Campbell Resources Headquartered in Montreal, Quebec, Campbell Resources Inc. -- http://www.ressourcescampbell.com/-- is a mining company focusing mainly in the Chibougamau region of Quebec, holding interests in gold and gold-copper exploration and mining properties. The Superior Court of Quebec (Commercial District) granted the Company protection under the CCAA on June 30, 2005. CELL THERAPEUTICS: Bank to Buy up to $55 Million of Common Shares ----------------------------------------------------------------- Cell Therapeutics, Inc., entered into a Step-up Equity Financing Agreement with Societe Generale. The bank has agreed to purchase, over a period of 24 months commencing upon meeting certain conditions, up to $55 million of CTI new common shares based on a pre-determined formula with a right to increase the amount of the issuance to up to $72 million. Any shares issued, which are covered under an existing shelf registration, will be purchased by Societe Generale, which will sell the shares on the Italian market. Societe Generale's obligation to purchase shares upon request by CTI is subject to the conditions indicated in the agreement with the bank. Subject to certain conditions, the Step-up Equity Financing Agreement will allow CTI to raise equity finance in one or more tranches. All issuances are at CTI's election, and CTI is not required to undertake any issuances under the agreement. The total amount of any capital raised will depend on the actual financing needs over the lifetime of the agreement and other considerations and will reflect the market performance and trading volume of CTI shares. About Cell Therapeutics Based in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTAX: CTIC) -- http://www.cticseattle.com/-- engages in the development, acquisition, and commercialization of treatments for cancer. The company was co-founded by James A. Bianco, Louis A. Bianco, and Jack W. Singer in 1991. At Mar. 31, 2006, the Company's balance sheet showed a $98,941,000 shareholders' deficit, as compared to a $107,097,000 shareholders' deficit at Dec. 31, 2005. CHESAPEAKE ENERGY: S&P Rates Proposed $500 Million Sr. Notes at BB ------------------------------------------------------------------ Standard & Poor's Rating Services assigned its 'BB' rating to oil and gas company Chesapeake Energy Corp.'s proposed $500 million senior unsecured notes due 2013. Chesapeake's corporate credit rating is 'BB'. The outlook is stable. On June 26, 2006, the company announced plans to publicly sell: * 20 million common shares ($580 million in gross proceeds using the June 23 stock price), * $500 million in senior notes due 2013, and * $500 million in mandatory convertible preferred stock. The common and preferred stock issuances are subject to a 15% over-allotment option. Estimated net proceeds of $1.5 billion (before consideration of the overallotment options) will be used to finance the company's recently announced Barnett Shale acquisitions for $932 million and to repay debt under its revolving credit facility. Chesapeake had previously stated that it would likely fund the recent acquisitions with senior notes and preferred equity. "We view the higher equity component of the announced capital raises as positively affecting the company's financial risk profile relative to our previous expectations, although not to such an extent to warrant a positive ratings action," said Standard & Poor's credit analyst David Lundberg. The ratings on Chesapeake reflect: * a highly leveraged financial profile; * risks associated with a very aggressive growth by acquisition strategy; and * participation in the highly cyclical and capital-intensive oil and gas exploration and production sector. These concerns are partially offset by: * a large and attractive reserve base with favorable growth prospects; * good production visibility; * a competitive cost structure; and * a relatively favorable commodity price environment. CMS ENERGY: Moody's Reviews Low-B Debt Ratings & May Upgrade ------------------------------------------------------------ Moody's Investors Service placed the debt ratings of CMS Energy Corporation under review for possible upgrade. The ratings placed under review include CMS Energy's Ba3 Corporate Family Rating and B1 senior unsecured debt. Moody's also affirmed CMS Energy's SGL-2 rating and revised the rating outlook for Consumers Energy Company to stable from negative. The review for upgrade of CMS Energy's ratings reflects: 1. expectations for higher net income and funds from operations in 2006 and 2007. This would continue an underlying improving trend. Certain key financial metrics were stronger in 2005, including the ratio of funds from operations to debt, which was improved to about 10% and the ratio of FFO to interest, which approved to about 2.5 times, in accordance with Moody's standard global adjustments. These credit metrics would be consistent with a low Ba level senior unsecured rating for a utility parent holding company with an overall business risk category in the medium range as defined in Moody's rating methodology for global regulated electric utility companies. 2. a reduced overall business risk profile with the divestiture of a number of its non-regulated assets and a more focused business strategy that is centered around Consumers Energy, its regulated utility business. Over the last two years, the management's strategy has been to shift focus back to the regulated utility business in the US and to decrease the reliance on assets in more volatile markets. 3. significant improvements in corporate governance practices, risk management procedures, and liquidity management. Moody's review of CMS Energy's ratings will consider the company's ability to further improve its financial metrics following the implementation of its electric rate case and a potential constructive outcome of its gas rate case, balanced by the need to fund substantial capital improvements required for Consumers' power generation facilities. The review will also consider the company's strategy to further reduce its consolidated business risk profile and to address challenges arising from the vulnerability of the Midland Cogeneration Venture facility to high natural gas prices. The stable outlook for Consumers Energy considers the favorable impact of the company's recent electric rate order, which included a meaningful increase in base rates, the recovery of environmental costs incurred during the rate freeze that ended in 2005 and the inclusion of a pension cost tracking mechanism. The stable outlook also considers the improvement in near term financial flexibility following the implementation of a $300 million 2nd lien revolving credit facility at Consumers Energy. This credit facility provides an additional source of liquidity for the company. Consumers Energy's potential financial flexibility has been reduced by a limitation on its issuance of first mortgage bond indebtedness. The rating outlook had been revised to negative when the financing limitation was triggered by a 2005 impairment charge in connection with the company's Midland Cogeneration Venture investment. The new credit facility will supplement Consumer's $500 million multi-year revolving credit facility and the approximately $325 million accounts receivable securitization program, which collectively are expected to provide the utility with over $1 billion of external liquidity to support needs that could arise in the event of a substantial spike in natural gas prices. Based in Jackson, Michigan, CMS Energy Corporation is a diversified energy holding company. Through its regulated utility subsidiary, Consumers Energy, the company provides natural gas and electricity to almost 60% of nearly 10 million customers in Michigan's lower peninsula counties. CMS Enterprises is engaged in energy businesses in the United States and in select international markets through various subsidiaries. On Review for Possible Upgrade: Issuer: CMS Energy Corporation * Corporate Family Rating, Placed on Review for Possible Upgrade, currently Ba3 * Preferred Stock, Placed on Review for Possible Upgrade, currently Caa1 * Preferred Stock Shelf, Placed on Review for Possible Upgrade, currently (P)Caa1 * Senior Secured Bank Credit Facility, Placed on Review for Possible Upgrade, currently Ba3 * Senior Unsecured Conv./Exch. Bond/Debenture, Placed on Review for Possible Upgrade, currently B1 * Senior Unsecured Medium-Term Note Program, Placed on Review for Possible Upgrade, currently B1 * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently B1 * Senior Unsecured Shelf, Placed on Review for Possible Upgrade, currently (P)B1 * Subordinated Conv./Exch. Bond/Debenture, Placed on Review for Possible Upgrade, currently B3 * Subordinated Shelf, Placed on Review for Possible Upgrade, currently (P)B3 Issuer: CMS Energy Trust I * Preferred Stock, Placed on Review for Possible Upgrade, currently B3 * Preferred Stock Shelf, Placed on Review for Possible Upgrade, currently (P)B3 Issuer: CMS Energy Trust II * Preferred Stock Shelf, Placed on Review for Possible Upgrade, currently (P)B3 Issuer: CMS Energy Trust III * Preferred Stock Shelf, Placed on Review for Possible Upgrade, currently (P)B3 Issuer: CMS Energy Trust IV * Preferred Stock Shelf, Placed on Review for Possible Upgrade, currently (P)B3 Issuer: CMS Energy Trust V * Preferred Stock Shelf, Placed on Review for Possible Upgrade, currently (P)B3 Outlook Actions: Issuer: CMS Energy Corporation * Outlook, Changed To Rating Under Review From Stable Issuer: CMS Energy Trust I * Outlook, Changed To Rating Under Review From Stable Issuer: CMS Energy Trust II * Outlook, Changed To Rating Under Review From Stable Issuer: CMS Energy Trust III * Outlook, Changed To Rating Under Review From Stable Issuer: CMS Energy Trust IV * Outlook, Changed To Rating Under Review From Stable Issuer: CMS Energy Trust V * Outlook, Changed To Rating Under Review From Stable Issuer: Consumers Energy Company * Outlook, Changed To Stable From Negative Issuer: Consumers Energy Company Financing IV * Outlook, Changed To Stable From Negative Issuer: Consumers Energy Company Financing V * Outlook, Changed To Stable From Negative Issuer: Consumers Energy Company Financing VI * Outlook, Changed To Stable From Negative COLETO CREEK: S&P Rates $735 Million Sr. Secured Term Loan at B+ ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating to Coleto Creek Power L.P.'s $735 million senior secured first-lien term loan due 2013 and affirmed the 'B+' rating on Coleto's $170 million synthetic LOC facility maturing 2013, and $60 million working capital revolver maturing 2011. The outlook is stable. Standard & Poor's also assigned its '1' recovery rating to the $735 million senior secured first-lien term loan and raised its recovery rating on the other two facilities to '1' from '2'. The score of '1' indicates high expectation of full recovery of principal (100% recovery) in the event of a payment default. Coleto Creek is also issuing a $200 million senior secured second-lien term loan due 2013 that is not rated. These ratings are subject to the receipt of final project documentation under substantially identical terms. "The 'B+' rating reflects a high debt burden and substantial refinancing risk when the term loans mature in June 2013, which are tempered by the plant's favorable market position and the plant's contracted output of 90% through June 2009," said Standard & Poor's credit analyst Swami Venkataraman. "The plant's economics benefit substantially from being an efficient, coal- fired base load generating station in a market in which gas-fired generation dominates." Coleto Creek will use the loans' proceeds to purchase: * the 632 MW coal-fired Coleto Creek plant located in the Electric Reliability Council of Texas region from Coleto Creek WLE L.P.; * a 50/50 partnership of Sempra Energy (BBB+/Stable/A-2); and * The Carlyle Riverstone Group for a total of $1.14 billion. The plant will be Coleto Creek's sole asset and cash from the plant will support debt service on all borrowings. Sempra and Riverstone will use the proceeds to repay existing loans at Coleto Creek WLE L.P., following which Standard & Poor's will withdraw its 'BB' rating on the $228.1 million first-lien term B1 bank loan due 2011 and its 'BB-' rating on the $150 million second-lien term C1 bank loan due 2012. COLLEEN INC: Case Summary & Three Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Colleen, Inc. aka A & B Check Cashing 2135 West Patapsco Avenue Baltimore, Maryland 21230 Bankruptcy Case No.: 06-13748 Type of Business: The Debtor specializes in cashing in all types of checks, and provides other financial services. See http://www.abcheckcashing.com/ Chapter 11 Petition Date: June 28, 2006 Court: District of Maryland (Baltimore) Judge: Nancy V. Alquist Debtor's Counsel: Marc Robert Kivitz, Esq. 201 North Charles Street, Suite 1330 Baltimore, Maryland 21201 Tel: (410) 625-2300 Fax: (410) 576-0140 Total Assets: $467,000 Total Debts: $11,800,000 Debtor's Three Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Carrollton Bank $5,000,000 1589 Sulphur Spring Road, Suite 102 Baltimore, MD 21227 Baltimore County Savings Bank $5,000,000 4111 East Joppa Road Baltimore, MD 21236 Global Express Money Orders, Inc. $1,800,000 8819 Monard Drive Silver Spring, MD 20910 COMDIAL CORP: Wants Until September 19 to File Chapter 11 Plan -------------------------------------------------------------- Comdial Corporation and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to extend until Sept. 19, 2006, the period within which they can file a chapter 11 plan. The Debtors also want their time to solicit acceptances of that plan extended until Nov. 20, 2006. The Debtors tell the Court that they have been devoted to negotiating and completing the sale of substantially all of their assets to Vertical Communications Acquisitions Corp., which recently closed on Sept. 28, 2005, and finalizing matters related to the sale, preparing for the termination of the benefit pension plan, and filing motions to establish claim bar dates. In addition, the Debtors have drafted a proposed liquidation plan and related disclosure statement that the Committee is in the process of reviewing. The extension, the Debtors say, will provide them more time to continue to negotiate a confirmable plan. Headquartered in Sarasota, Florida, Comdial Corporation, nka CMDL Corporation -- http://www.comdial.com/-- and its affiliates develop and market sophisticated communications products and advanced phone systems for small and medium-sized enterprises. The Company and its debtor-affiliates filed for chapter 11 protection on May 26, 2005 (Bankr. D. Del. Case No. 05-11492). Jason M. Madron, Esq., and John Henry Knight, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $30,379,000 and total debts of $35,420,000. CUMULUS MEDIA: Can Loan from BofA After Complying with Conditions ----------------------------------------------------------------- Cumulus Media Inc. has complied with all conditions to funding under a Credit Agreement with a group of lenders represented by Bank of America, N.A., as administrative agent. Funding under the Credit Agreement was subject to conditions customary for financing transactions, and also was subject to the additional condition that shares of Class A Common Stock were accepted for payment in the Company's previously announced tender offer. On June 23, 2006, Cumulus reported that it had accepted for purchase 11,500,000 shares of its Class A Common Stock pursuant to the tender offer at a purchase price of $11.50 per share. The Company had made initial borrowings of approximately $722.3 million, which it used to repay all amounts owed under its existing credit facilities and to pay for the shares being purchased in the tender offer. The Company expects to borrow an additional $57.5 million to purchase 5,000,000 shares of its Class B Common Stock, pursuant to a stock purchase agreement, dated May 9, 2006, between the Company, BA Capital Company, L.P. and Banc of America Capital Investors SBIC, L.P.. About Cumulus Media Headquartered in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ:CMLS) -- http://www.cumulus.com/-- is the second-largest radio company in the United States based on station count. Giving effect to the completion of all pending acquisitions and divestitures, Cumulus Media Inc., directly and through its investment in Cumulus Media Partners, will own and operate 343 radio stations in 67 U.S. media markets. * * * As reported in the Troubled Company Reporter on May 26, 2006, Standard & Poor's Ratings Services lowered its ratings on Cumulus Media Inc., including lowering the corporate credit rating to 'B' from 'B+'. The ratings were removed from CreditWatch, where they were placed with negative implications on May 11, 2006. The outlook is stable. As reported in the Troubled Company Reporter on May 24, 2006, Moody's Investors Service downgraded Cumulus Media, Inc.'s corporate family rating to a Ba3 from a Ba2. Additionally, Moody's assigned Ba3 ratings to the company's $850 million in amended senior secured credit facilities. DANA CORP: U.S. Trustee Appoints Three-Member Equity Committee -------------------------------------------------------------- Diana G. Adams, Acting United States Trustee for Region 2, appoints three parties, being the largest equity security holders, to the official equity committee in Dana Corporation and its debtor-affiliates' Chapter 11 cases. The Committee of Equity Security Holders consists of: (1) Harbinger Capital Master Fund I, Ltd. Attention: Lawrence M. Clark, Jr. 555 Madison Avenue, 16th Floor New York, New York 10027 Tel No. (212) 521-6995 (2) Appaloosa Management L.P. Attention: Ronald Goldstein 26 Main Street Chatham, New Jersey 07928 Tel No. (973) 701-7000 (3) Brandes Investment Partners, L.P. Attention: Brent Woods 11988 El Camino Real, Suite 500 San Diego, California 92130 Tel No. (858) 523-6464 Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORP: Court Okays London Underwriters Settlement Agreement --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the settlement agreement between Dana Corporation and its debtor-affiliates and certain underwriters at Lloyds' London. In February 2001, the Underwriters commenced an action in the Court of Common Pleas of Lucas County, Ohio, against Allstate Insurance Company, as successor-in-interest to Northbrook Excess and Surplus Insurance Company, among others. The Underwriters seek contribution and interest, and declaratory judgment, arising from their payment of indemnity and defense expenses to the Debtors, relating to asbestos-related bodily injury claims made against the Debtors. The Debtors were not a party to the Ohio Contribution Action. The London Underwriters are certain underwriters and companies that subscribe portions of excess comprehensive general liability insurance policies placed by the Debtors in the London insurance market. Allstate also provided comprehensive general liability insurance to the Debtors. In the Ohio Contribution Action, the Underwriters asserted that they have paid asbestos bodily injury claims on the Debtors' behalf for many years. The Underwriters sought to recover from Allstate their contribution payments. Subsequently, the Debtors were joined as a party to the Ohio Contribution Action. As against Allstate, the Ohio Contribution Action was stayed pending the completion of an arbitration between the Debtors and the Underwriters over the Underwriters' right to pursue the relief sought against Allstate in the Ohio Contribution Action. The Underwriters and the Debtors resolved the arbitration through confidential settlements, pursuant to which: (a) the Debtors agreed that the Underwriters were entitled to pursue the Ohio Contribution Action against Allstate; (b) the Debtors agreed that it would take no steps to stay or prevent the Underwriters' pursuit of the Ohio Contribution Action against Allstate; and (c) the Underwriters agreed to limit the amount they may obtain from Allstate solely to interest on amounts they paid to the Debtors as indemnity or defense expenses for asbestos bodily injury claims. The Underwriters have not brought any claim or action against the Debtors in the Ohio Contribution Action. After the Debtors' bankruptcy filing, Allstate sent a letter to the Ohio Court, suggesting the automatic stay may affect the Underwriters' pursuit of their claims in the Ohio Contribution Action. Accordingly, the Debtors and the Underwriters stipulate that the automatic stay: (1) is modified solely to permit the Underwriters to pursue the Ohio Contribution Action against Allstate; (2) is modified to permit the Underwriters to collect from Allstate the interest portion of any judgment or settlement entered in the Ohio Contribution Action, so long as the collection will not reduce the available limits of the Allstate Policies; and (3) precludes the Underwriters from collecting from, or enforcing against, Allstate the contribution portion of any judgment entered in the Ohio Contribution Action. About Dana Corporation Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORP: Plans to Pay $8.363 Million to Employees' Pension Plans ------------------------------------------------------------------ In connection with their collective bargaining agreements and as part of their benefit programs for certain non-union employees, Dana Corporation and its debtor-affiliates maintain defined benefit pension plans and periodically make contributions to those Pension Plans. The next contribution required by the Internal Revenue Code and the Employee Retirement Income Security Act to certain of the Pension Plans, amounting to $8,363,000, is on July 15, 2006. Accordingly, the Debtors, with the consent of the Official Committee of Unsecured Creditors, will make the July 15 Contribution. The Debtors and the Creditors Committee agree that neither the making of the July 15 Contribution, nor any party's consent, is intended nor will it be deemed or construed as a waiver of the right of any party to challenge, or otherwise contest the ability, or alleged obligation, of the Debtors to make any future Pension Contributions. The parties reserve all of their rights, remedies, claims, causes of action and defenses with respect to all aspects of the Pension Funding Dispute. Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000). DEDICATED MEDICAL: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------ Debtor: Dedicated Medical Imaging Center, Inc. 1125 East 17th Street West, Suite 125 Santa Ana, California 92701 Tel: (714) 547-3200 Bankruptcy Case No.: 06-11010 Type of Business: The Debtor offers medical imaging services. The Debtor's president, Marshall Martinez, filed for chapter 11 protection on June 26, 2006 (Bankr. C.D. Calif. Case No. 06-10990). Chapter 11 Petition Date: June 28, 2006 Court: Central District Of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: Todd B. Becker, Esq. 3750 East Anaheim Street, Suite 100 Long Beach, California 90804 Tel: (562) 495-1500 Fax: (562) 494-8904 Total Assets: $1,300,500 Total Debts: $2,026,987 Debtor's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Siemens Financial Services, Inc. $726,987 c/o Danning, Gill, Diamond & Kollitz 2029 Century Park East, Third Floor Secured Value: Los Angeles, CA 90067 $1,300,000 DELPHI CORP: Wilmington Trust Objects to Brunswick Plant Transfer ----------------------------------------------------------------- Wilmington Trust Company and the U.S Environmental Protection Agency raised certain objections to the transfer agreement inked between Delphi Corporation and its debtor-affiliates and Johnson Controls, Inc. As reported in the Troubled Company Reporter on June 15, 2006, the Debtors sold their lead acid battery business to Johnson Controls, $202,500,000, with post-closing adjustments of at least $12,500,000, as part of its efforts to dispose of non-core assets. Delphi was not able to transfer a battery manufacturing facility in New Brunswick, New Jersey, because of certain provisions in their agreements with the International Union, IUE-CWA and IUE-CWA Local 416. To achieve a consensual transfer of the New Brunswick Facility to Johnson Controls, the Debtors and Johnson Control entered into the Transfer Agreement to effectuate the sale of the New Brunswick Facility in exchange for Johnson Control's payment of $1 plus the value of certain inventory estimated at $1,700,000. Wilmington Trust Opposes Attrition Program Funding Wilmington Trust Company, as indenture trustee for $2 billion in senior notes issued by Delphi Corporation, opposes the Debtors' proposal to fund an attrition program for the benefit of Delphi Automotive Systems, LLC, and its employees. The attrition program will cost Delphi up to $22,800,000. Edward M. Fox, Esq., at Kirkpatrick & Lockhart Nicholson Graham LLP, in New York, points out that while Johnson Controls Inc. has agreed to contribute up to $12,500,000 to offset the cost of the attrition program, that payment will be made to DAS rather that Delphi, which is actually funding the cost of the program. "The Motion appears to be the latest example of the Debtors' willingness to treat Delphi Corporation as a communal piggybank to be tapped for the benefit of its operating subsidiaries rather than a separate and distinct legal entity, with interests and obligations distinct from those of its subsidiaries, and a fiduciary duty to advance the interests of its own creditors and equity holders," Mr. Fox asserts. Environmental Protection Agency Insist on Liability The United States, on behalf of the Environmental Protection Agency, opposes the Debtors' request to the extent that it purports to seek approval of a sale that would extinguish potential environmental liabilities. The EPA is charged with the police and regulatory responsibility to protect public health and the environment under several environmental statutes. David J. Kennedy, Esq., assistant United States Attorney, in New York, asserts that the Debtors cannot extinguish the environmental obligations of future purchasers through a sale under Section 363 of the Bankruptcy Code. Mr. Kennedy points out that Section 107(a)(1) of the Comprehensive Environmental Response, Compensation, and Liability Act makes the current owner or operator of a facility liable for releases of hazardous substances from their facility, without regard to whether the current owner or operator had anything to do with bringing the hazardous substances to the facility or causing the release. Thus, if there is contamination at the facility, liability for contamination runs with the property. The U.S. Government asserts that the Sale Order must clarify that nothing in the U.S Bankruptcy Court for the Southern District of New York's order approving the Transfer Agreement: (1) releases or nullifies any liability to a government entity under environmental statutes or regulations that any entity would be subject to as owner or operator of that property; and (2) precludes or prevents a governmental entity from exercising any powers under police and regulatory statutes, or regulations, that would be applicable to any entity as an owner or operator of property. About Delphi Corp 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. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Can Conduct Rule 2004 Examination on Barclays Bank --------------------------------------------------------------- The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York compels Barclays Bank PLC to turn over all requested documents to Delphi Corp, pursuant to Rule 2004(a) of the Federal Rules of Bankruptcy Procedure. Judge Drain directs Barclays to appear for oral examination under oath at the offices of Togut, Segal & Segal LLP, One Penn Plaza, in New York, on a date and time as may be designated by Delphi. As reported in the Troubled Company Reporter on June 5, 2006, the Debtors asked the Court to: (a) authorize examination of Barclays Bank PLC pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, pertaining to its assertion of a right of set-off regarding its payment obligations to Delphi pursuant to a Master Agreement; and (b) direct Barclays to produce all documents in its possession or control pertaining to the assertion. Delphi Corporation and Delphi Automotive Systems Risk Management Corporation had entered into separate master swap agreements with Barclays -- one agreement dated Nov. 23, 2001, and one dated Dec. 6, 2001. On Oct. 10, 2005, Barclays sent a notice of early termination to Delphi Risk Management to terminate the December Agreement. Barclays paid the Debtor $1,999,658 on account of that termination. Barclays also sent Delphi a notice of termination of the Master Agreement on Oct. 10, 2005, but has yet to tender a termination payment as required under the Master Agreement. Barclays agreed in writing that it owes a matured and liquidated debt of at least $9,049,399 to Delphi on account of the swap Master Agreement but it has refused to pay that amount, Neil Berger, Esq., at Togut, Segal & Segal LLP, in New York, told the Court. Barclays had elected to withhold payment of the Termination Payment to protect its set-off rights against any indemnification payments owed by Delphi. According to Barclays, its indemnification rights arise from potential liability in connection with the involvement of Barclays Capital, Inc., in the prepetition issuance of certain Delphi bonds. Mr. Berger noted that Barclays Capital has been named as a defendant in a class action filed in the U.S. District Court for the Southern District of New York, styled In re Delphi Corp. Securities Litigation, 1:05-cv-2637. However, Mr. Berger related that Delphi is not aware of any claims having been asserted in the Litigation against Barclays Bank PLC -- the counterparty to the Master Agreement. Mr. Berger contended that Barclays failed to articulate any justifiable basis or authority for the alleged set-off right. Mr. Berger explained that the examination is intended to assist Delphi in its efforts to recover its liquidated and matured claim against Barclays. "The Documents, including those related to Barclays' corporate structure and potential liability in the Litigation, will enable Delphi to assess the validity of any set-off claim that is being asserted by Barclays," Mr. Berger said. About Delphi Corp 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. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000) DIPLOMATIC LANGUAGE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Diplomatic Language Services, LLC 1901 North Fort Myer Drive, Suite 600 Arlington, Virginia 22209 Bankruptcy Case No.: 06-10699 Type of Business: The Debtor provides language training, proficiency testing, and linguist service to federal and state government, commercial and academic clients, in both traditional and remote-access settings. See http://www.dls-llc.com/ Chapter 11 Petition Date: June 28, 2006 Court: Eastern District of Virginia (Alexandria) Debtor's Counsel: Donald F. King, Esq. Odin, Feldman & Pittleman 9302 Lee Highway, Suite 1100 Fairfax, Virginia 22031 Tel: (703) 218-2100 Fax: (703) 218-2160 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ JBG/Rosslyn $856,646 Gateway South 1911 North Fort Myer Drive, Suite 112 Arlington, VA 22209 ALSI, LLC $131,000 1801 Rockville Pike, Suite 410 Rockville, MD 20852 Pepper Hamilton $130,993 600 14th Street Northwest Washington, D.C. 20005 Wei Yeh $125,000 Noreast Capital Corporation $40,688 CareFirst BlueCross $36,000 Eurocentres $30,000 Seestrasse 247 Zurich, Switzerland CH-8038 Verizon $27,785 MBNA America $24,000 Virtual Foreign Language $22,787 Mouna Carpenter Rothwell Figg Ernst $19,955 De Lage Landen $15,000 G.E. Capital $12,365 Bean Kinney & Korman $9,700 Gross & Romanick $8,245 Barry Lerner $7,020 Grafik Industries, Ltd. $6,500 Credential Leasing $6,298 Powell Goldstein LLP $5,000 Schreiber Translations $4,500 DONOBI INC: April 30 Balance Sheet Upside-Down by $413,292 ---------------------------------------------------------- Donobi, Inc., filed its financial results for the three months ended April 30, 2006, with the Securities and Exchange Commission on June 12, 2006. For the first quarter ended April 30, 2006, the company incurred a $255,066 net loss on $345,354 of net revenues compared to a $119,105 net loss on $319,783 of net revenues for the same period in 2005. At April 30, 2006, the company's balance sheet showed total assets of $1.6 million and total debts of $2 million, resulting in a $413,292 stockholders' deficit. A full-text copy of the Company's Quarterly Report is available for free at http://ResearchArchives.com/t/s?c93 Donobi, Inc. -- http://www.donobi.com/-- is an Internet Service Provider with operations in Washington, Oregon, and Hawaii. The Company offers Internet connectivity and digital video to individuals, multi-family housing, businesses, organizations, educational institutions and government agencies. The Company provides high quality, reliable and scalable Internet access, web hosting and development, equipment co-location, and networking services to underserved rural markets. Going Concern Doubt Bongiovanni & Associates, P.A., in Charlotte, North Carolina, expressed substantial doubt about Urban Television Network Corporation's ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Jan. 31, 2006. The auditing firm pointed to the Company's recurring losses and has yet to generate an internal cash flow. ELEC COMMS: Raises $1.7 Million for Liberty Bell Acquisition ------------------------------------------------------------ eLEC Communications Corp. has raised $1.7 million from the sale of a three-year secured term note to Laurus Master Fund, Ltd. The proceeds of the sale will be used primarily to fund the proposed purchase of Liberty Bell Telecom and for working capital needs. Under the terms of the Laurus Funds financing, the note is payable over a three year period, with principal payment deferred for the first year. A portion of the proceeds has been deposited in a restricted cash account and will not to be released until the pending acquisition of Liberty Bell is completed. The note bears an interest rate equal to the Wall Street Journal Prime Rate plus 2%. eLEC and Laurus also amended and restated existing secured term notes, making notes that were formerly convertible into common stock, non-convertible. Paul Riss, eLEC's CEO, commented, "This financing is positive for us in two ways. First, the financing provides us with the capital to consummate the proposed acquisition of Liberty that will add considerable scale, cash flow and marketing capabilities for our emerging VoIP business. Second, we completed an important capital restructuring by eliminating the conversion feature on the convertible debt, thereby providing us with a greatly simplified and strengthened capital structure with which to build our business going forward." In February, eLEC signed a letter of intent to acquire Liberty Bell Telecom, LLC, a privately held telecommunications company that provides local and long distance telephone service in the State of Colorado. Liberty Bell generated approximately $5 million of revenue in 2005 and produced over $150,000 in net profits in the fourth quarter of 2005. Tom Martino, its founder, will become a stockholder in eLEC and will remain with Liberty Bell to help roll out its new VoIP service offerings, which meet his vision of excellent telephone service at affordable prices nationwide. About eLEC Comms eLEC Communications Corp. (OTCBB:ELEC) -- http://www.elec.net/-- is a Competitive Local Exchange Carrier that offers local and long distance calling plans to small business and residential customers. The Company sells under the names of New Rochelle Telephone and eLEC Communications, and the Company delivers telephone services. Going Concern Doubt As reported in the Troubled Company Reporter on Mar. 7, 2006, Nussbaum Yates & Wolpow, PC, expressed substantial doubt about eLEC Communications Corp.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Nov. 30, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations. EXTENSITY SARL: S&P Holds Negative Watch on B Corp. Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services held its ratings on Atlanta, Geogia-based Extensity S.a.r.l. (B/Watch Neg/--) on CreditWatch, where they were placed with negative implications on April 28, 2006, following the announcement of a combined $3.825 billion financing with Infor Global Solutions Holdings Ltd. to finance the combination of Infor and Extensity, including the previously announced acquisitions of Systems Union Group PLC and SSA Global Technologies Inc. A portion of the proceeds from the proposed financing is expected to be used to refinance Extensity's existing debt. Ratings on Extensity would be withdrawn upon the closing of the proposed transaction. FISCHER IMAGING: Incurs $2.7 Million Net Loss in First Quarter -------------------------------------------------------------- Fischer Imaging Corporation incurred a $2.7 million net loss on $6.9 million of revenues for the three months ended March 31, 2006, compared to a $6.5 million net loss on $14.4 million of revenues for the same period in 2005. As of March 31, 2006, the Company's accumulated deficit widened to $46.9 million from $44.2 million at Dec. 31, 2005. A full-text copy of the Company's quarterly report is available for free at http://ResearchArchives.com/t/s?c6f Going Concern Doubt Ehrhardt Keefe Steiner & Hottman PC in Denver, Colorado, raised substantial doubt about Fischer Imaging'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 sold substantially all of its assets in September 2005. Headquartered in Denver, Colorado, Fischer Imaging Corporation -- http://www.fischerimaging.com-- engages in the design, manufacture, and sale of mammography and digital imaging products used to diagnose breast cancer and other diseases. It offers digital imaging systems and other medical devices that help radiologists, surgeons, and other healthcare professionals in screening, diagnostic, and interventional procedures. FLEETPRIDE CORP: S&P Junks Rating on $150 Million Bridge Facility ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on truck parts distributor FleetPride Corp. to negative from stable. At the same time, Standard & Poor's assigned its 'CCC+' rating to FleetPride's $150 million unsecured senior bridge loan facility and withdrew its preliminary rating of 'CCC+' rating on the company's proposed $150 million senior unsecured notes. In addition, Standard & Poor's affirmed its 'B' corporate credit and its 'B+' senior secured ratings on the company. FleetPride's pro forma debt totaled $341 million at March 31, 2006, including $25 million of discount notes issued by FPC Holdings Inc., parent of FleetPride Corp. The rating actions reflect the withdrawal of the company's proposed $150 million senior unsecured notes issuance, proceeds from which were to be used to repay a $150 million bank bridge loan. Instead, the bridge loan will now remain outstanding. The bank loan borrowings were used by Investcorp International Inc., a global investment group, to finance FleetPride's acquisition on June 6, 2006. The bridge loan facility, which matures June 6, 2007, will remain in FleetPride's capital structure until it either matures or can be refinanced with a bond placement. The outlook revision reflects FleetPride's reduced liquidity situation and weaker credit measures resulting from higher-than- expected cash interest expense. Interest expense for the bridge loan exceeds that expected for the notes, and the term loan was sold with a higher-than-planned rate. Recovery expectations for holders of the senior secured credit facilities are not impaired by the presence of the bridge loan because the loan is unsecured and, thus, effectively subordinated to the senior credit facility to the extent of the assets. FOSS MFG: Sells Substantially All Assets to Foss LLC for $39 Mil. ----------------------------------------------------------------- The Honorable J. Michael Deasy of the U.S. Bankruptcy Court for the District of New Hampshire in Manchester authorized Patrick J. O'Malley, the Chapter 11 Trustee of Foss Manufacturing Company, Inc., to sell substantially all of the Debtor's assets free and clear of all liens, claims, encumbrances, and interests, to Foss Manufacturing Company LLC, for $39,061,000. Judge Deasy also authorized the Chapter 11 Trustee to pay on the closing date the sale proceeds of the assets to CapitalSource Finance, LLC, as prepetition lender and T.I.P. Lender: (a) the cash portions of the deposit amount and the payment amount, and (b) the remittance by or on behalf of Foss LLC of any additional sums necessary to satisfy the CapitalSource indebtedness. The payment will be deemed to fully satisfy the CapitalSource Indebtedness, which is secured by a first-priority lien on the assets. Despite full satisfaction, CapitalSource will still receive 506(c) surcharge under the Court's financing order. On the Closing Date, Foss LLC will become liable to honor CapitalSource's obligations to fund post-termination date expenses to the extent set forth in the Financing Order, including items presented in accordance with a wind-down budget. Also, on the Closing Date, these three items will be paid in cash: (a) fees and expenses due and owing to Gordian Group, LLC, which will be paid immediately upon closing; (b) the amounts due and owing under the approved Key Employee Retention Plan; (c) budgeted and unpaid professional fees. The Trustee will establish segregated accounts to hold the funds for the KERP and professional fees, which will only be used to satisfy the respective obligations for which those funds were established. Headquartered in Hampton, New Hampshire, Foss Manufacturing Company, Inc. -- http://www.fossmfg.com/-- is a producer of engineered, non-woven fabrics and specialty synthetic fibers, for a variety of applications and markets. The Company filed for chapter 11 protection on Sept. 16, 2005 (Bankr. D. N.H. Case No. 05-13724). Andrew Z. Schwartz, Esq., at Foley Hoag LLP represented the Debtor. Beth E. Levine, Esq., at Pachlski, Stang, Zieh, Young, Jones & Weintraub represents the Official Committee of Unsecured Creditors. The Court appointed Patrick J. O'Malley as the Debtor's Chapter 11 Trustee and lawyers from Hanify & King, Perkins, Smith & Cohen, LLP, and Mintz, Levin, Cohn, Ferris represent the Chapter 11 Trustee. When the Debtor filed for protection from its creditors, it listed $49,846,456 in assets and $53,419,673 in debts. GENERAL MOTORS: S&P Holds Negative Watch on B Corp. Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services held all its ratings on General Motors Corp. -- including the 'B' corporate credit rating and the 'B+' bank loan rating, but excluding the '1' recovery rating -- on CreditWatch with negative implications, where they were placed March 29, 2006. The CreditWatch update follows GM's announcement that approximately 35,000 hourly employees have agreed to participate in GM's accelerated attrition program. Although up to 5,000 Delphi Corp. employees can return to GM, GM seems poised to reach its 2008 goal of reducing 30,000 manufacturing jobs about two years early. The program will reduce greatly the number of idled employees currently in the long-term layoff pool known as the "JOBS Bank." GM expects to take a net after-tax charge in the second quarter of about $3.8 billion, most of which is not expected to be cash. The attrition program announcement bolsters GM's progress in reducing labor costs as part of turning around its troubled North American operations. "Still, market share losses, and the need to execute on the other cost-based aspects of the plan such as plant closings, remain concerns," said Standard & Poor's credit analyst Robert Schulz. The most pressing near-term issue is resolving several issues concerning GM's exposure to Delphi, its former unit and an important supplier. "We expect GM's ratings to remain on CreditWatch for several more months," Mr. Schulz continued, "because court hearings on Delphi's motion to reject its labor contracts were adjourned until Aug. 11, and hearings on Delphi's request to reject unprofitable supply contracts with GM have also been postponed until the same date. But, we expect negotiations between Delphi, the United Auto Workers, and GM to continue." Delphi has offered its employees an attrition program similar to GM's, and preliminary acceptance rates seem strong. A lower Delphi headcount is likely to be an important factor toward resolving GM's exposure to Delphi. GM's pending secured bank deal is considered an incremental positive for GM's liquidity, even prior to establishment of the new bank facility. Standard & Poor's believes GM's liquidity is adequate to meet near-term funding requirements, including payments to participants in the accelerated attrition program. GE-RAY FABRICS: Gets Court Nod to Hire Davis Graber as Accountants ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York approved the request of Ge-Ray Fabrics, Inc., and its debtor- affiliate Lustar Dyeing & Finishing, Inc., to employ Davis, Graber, Plotzker & Ward, LLP, as their accountants Davis Graber is expected to: a) prepare monthly operating statements; and b) provide ordinary course tax compliance and planning services in connection with annual or other periodic federal and state tax matters. If requested by the Debtors, Davis Graber's services may include: a) assisting the Debtors in the analysis of whatever financial or other information may be required by the Court, the Debtor, the U.S. Trustee, or any other entity requiring that information; and b) conferring with the Debtors and their retained professionals, and providing other and further professional accounting services as may be required with respect to any aspect of this Chapter 11 case. Andew W. Plotzker, a Davis Graber member, discloses that the firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $325 - $395 Senior Managers & Managers $225 - $305 Staff $135 - $205 Para Professionals $95 - $125 Mr. Plotzker assures the Court that his firm does not represent any interest adverse to the Debtors. Headquartered in Manhattan, Ge-Ray Fabrics, Inc. -- http://www.geray.com/-- supplies circular knitted fabrics to the apparel industry. The fabrics include cottons and synthetics, with and without spandex, and range from basic jersey to high fashion knits. Lustar Dyeing & Finishing, Inc., its subsidiary, is a dyeing & finishing processing plant for textile fabrics. The Debtors filed for chapter 11 on April 4, 2005, (Bankr. S.D.N.Y. Case Nos. 05-12201 & 05-12207). Avrom R. Vann, Esq., at Avrom R. Vann, P.C., represents the Debtors in their restructuring efforts. David A. Matthews, Esq., and David M. Groganm, Esq., at Shumaker, Loop & Kendrick, LLP, represent the Official Committee of Unsecured Creditors. When they filed for bankruptcy, the Debtors reported assets and debts totaling between $10 million to $50 million. HARTVILLE GROUP: Posts $2 Mil. Net Loss in Quarter Ended March 31 ----------------------------------------------------------------- Hartville Group, Inc., filed its financial statements for the quarter ended March 31, 2006, with the Securities and Exchange Commission. The Company reported a $2,479,978 net loss on $1,336,632 of gross revenues for the three months ended March 31, 2006, versus a $2,093,903 net loss on $1,090,796 of gross revenues for the three months ended March 31, 2005. At March 31, 2006, the Company's balance sheet showed $7,191,820 in total assets and $3,821,686 in total liabilities resulting in a stockholders' equity of $3,370,134. A full-text copy of the Company's financial statements for the quarter ended March 31, 2006, is available for free at: http://ResearchArchives.com/t/s?c73 Going Concern Doubt As reported in the Troubled Company Reporter on May 4, 2006, BDO Seidman, LLP, raised substantial doubt about the ability of Hartville Group, Inc., to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2004, and 2005. The auditing firm pointed to the company's recurring losses from operations, substantial accumulated deficit, and impending due dates of some material financial obligations. About Hartville Corporation Hartville Group, Inc. -- http://www.hartvillegroup.com/-- is a holding company whose wholly owned subsidiaries include Hartville Re Ltd. and Petsmarketing Insurance.com Agency, Inc. Hartville is a reinsurance company that is registered in the Cayman Islands, British West Indies. Hartville was formed to reinsure pet health insurance that is being marketed by the Agency. The Agency is primarily a marketing/administration company concentrating on the sale of its proprietary health insurance plans for domestic pets. Its business plan calls for introducing its product effectively and efficiently through a variety of distribution systems. The Company accepts applications, underwrites and issues policies. HEALTH NET: Moody's Lifts Rating on Senior Unsecured Notes ---------------------------------------------------------- Moody's Investors Service upgraded the rating on Health Net, Inc.'s (NYSE:HNT) senior unsecured notes to Baa1 from Ba2 following an in-substance defeasance of the $400 million 8.375% notes due in April 2011. To effectuate the defeasance, Health Net has purchased U.S. Treasury securities that will generate cash flows sufficient to cover all remaining scheduled interest and principal payments due under these obligations. The Treasury securities have been deposited into an account with U.S. Bank National Association for the benefit of the registered holders of the notes. Moody's treats in-substance defeased bonds as secured obligations whereby the bonds are eligible for a higher rating than the company's theoretical long-term senior, unsecured rating. However, the rating is not based solely on the quality of the assets securing the notes since the treatment of the assets in the event of a bankruptcy is not entirely certain. In upgrading the bonds to the Baa1 rating, Moody's considers both Health Net's debt rating and the security provided by the assets securing the notes. In a separate action, unrelated to the defeasance, Moody's changed the outlook on Health Net's ratings to stable from negative and assigned a Baa2 insurance financial strength rating to Health Net of California, Inc., Health Net's largest operating subsidiary. According to the rating agency, the change in outlook reflects the improvement in Health Net's NAIC risk-based capital level, its improved net margins during 2005 and into 2006, and, over the last few months, some stability exhibited in its commercial membership. Moody's noted that Health Net's consolidated RBC at company action level has improved to 200% as of December 31, 2005 from 110% CAL as of December 31, 2004. As part of the company's action plan to increase its RBC level, Health Net did not take dividends from its regulated health subsidiaries during 2005. A significant positive factor that results from the improved capital level is Health Net's plan to resume the up-streaming of dividends to the parent during 2006. Offsetting these positive developments is Moody's concern with commercial membership growth going forward. Moody's stated that the company has expressed an interest in growing Medicare membership, with significant expansion in the program planned for 2006. With the decline in commercial membership over the last two years and the increased competitive environment in California, Moody's has concerns with the Medicare/Medicaid segment becoming a significant portion of Health Net's membership base, as there is greater earnings volatility and uncertainty associated with the government segments. The Baa2 IFSR at HNCA reflects the company's size as the fifth largest HMO in California with over $6 billion in annual premiums and over 2 million members. The company's RBC is considered strong at 186% CAL as of December 31, 2005. In addition, its net margins have returned to its historic level of 2.5% to 3.5% after resolving hospital contract issues that reduced earnings during 2004. Offsetting these positives is HNCA's high percentage of business in the Medicaid segment and the potential for increased competitiveness in the California market. Moody's stated that if annual net margins are consistently above 2.5%, commercial membership grows organically at an annual rate of at least 2%, RBC is maintained at 175% or above, adjusted debt to capital is reduced to 30%., and EBIT interest coverage increases to at least 10 times, Health Net's ratings may be upgraded. However, should annual net margins fall below 2%, net commercial membership begins to decline again, RBC fall below 150% CAL, increased debt levels raise the company's financial leverage to the 35% level, or if Medicare/Medicaid membership exceeds 25% of total membership, the ratings may be downgraded. The last rating action for Health Net occurred on May 16, 2005 when Moody's downgraded the rating and changed the outlook to negative. This rating was assigned with a stable outlook: Health Net of California, Inc. * insurance financial strength rating at Baa2. This rating was upgraded and the outlook changed to stable: Health Net, Inc. * senior unsecured debt rating to Baa1 from Ba2. Health Net, based in Woodland Hills, California, reported total revenues of $3.2 billion for the first three months of 2006. As of March 31, 2006, the company had total membership of approximately 6.3 million and reported shareholder's equity of $1.7 billion. Moody's health insurance financial strength ratings are opinions about the ability of life and health insurance companies to punctually repay senior policyholder claims and obligations. Because the IFSR is applied to operating life and health insurance companies whose cash flows are regulated by the applicable state insurance department, the IFSR is typically the highest rating within a corporate group. HEATING OIL: CCAA Court Confirms Joint Plan of Reorganization ------------------------------------------------------------- Heating Oil Partners Income Fund (TSX: HIF.UN) reported that the Ontario Superior Court of Justice Commercial List issued an order on June 26, 2006, recognizing and implementing the order of the U.S. Bankruptcy Court for the District of Connecticut, Bridgeport Division, confirming the First Amended Joint Plan of Reorganization, as amended, of Heating Oil Partners, L.P. and Heating Oil Partners G.P., Inc. pursuant to Chapter 11 of the U.S. Bankruptcy Code. The CCAA Court also issued an order authorizing HOP Holdings, Inc. 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. The Company is expected to emerge from Chapter 11 in the next several weeks. 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. HEMOSOL CORP: Plan Sponsorship Agreement Amendment Clarified ------------------------------------------------------------ The removal of the condition precedent in the Sponsorship Agreement that a new license agreement be entered into with ProMetic Life Sciences Inc. prior to concluding a successful restructuring of Hemosol Corp. (TSX: HML) under the Companies' Creditors Arrangement Act and Business Corporations Act (Ontario) as reported on June 26, 2006, relates only to the refund of certain deposits paid by the purchaser under the Sponsorship Agreement. Hemosol confirmed that the restructuring remains conditional upon, among other things, new arrangements being entered into with ProMetic. About Hemosol Hemosol Corp. (NASDAQ: HMSLQ, TSX: HML) -- http://www.hemosol.com/ -- is an integrated biopharmaceutical developer and manufacturer of biologics, particularly blood-related protein based therapeutics. Information on Hemosol's restructuring is available at http://www.pwc.com/ca/eng/about/svcs/brs/hemosol.html Hemosol Corp and Hemosol LP filed a Notice of Intention to Make a Proposal Pursuant to section 50.4 (1) of the Bankruptcy and Insolvency Act on Nov. 24, 2005. The Company had defaulted in the payment of interest under its $20 million credit facility. Hemosol said that it would require additional capital to continue as a going concern and is in discussions with its secured creditors with respect to its current financial position. On Dec. 5, 2005, PricewaterhouseCoopers Inc. was appointed interim receiver of the Companies. HERCULES OFFSHORE: S&P Upgrades Corporate Credit Rating to B ------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating and senior secured rating on drilling and liftboat service provider Hercules Offshore Inc. to 'B' from 'B-'. The outlook is stable. Houston, Texas-based Hercules, a niche provider of shallow-water drilling and liftboat services for the oil and natural gas exploration and production industry in the U.S. Gulf of Mexico, had about $95 million of debt outstanding as of March 31, 2006. "The rating action incorporates the company's significantly improved financial risk profile resulting from the use of its equity offerings to reduce its debt levels and to prudently finance recent liftboat acquisitions, combined with continued favorable market fundamentals resulting in improved cash flow generation during 2006," said Standard & Poor's credit analyst Brian Janiak. "Furthermore, the rating action incorporates the company's improved liquidity position with full availability under its recently upsized $75 million revolving credit facility due 2010 and with about $79 million of cash on hand as of March 31, 2006," said Mr. Janiak. Nevertheless, the ratings on Hercules, which operates in the highly competitive, cyclical, and volatile oil and gas contract drilling industry, reflect its vulnerable business risk profile, which stems from its small, lower-specification jack-ups (nine, excluding the Jupiter rig) and liftboats (51) as well as its geographic concentration in the shallow waters of the Gulf of Mexico. Slightly mitigating these weaknesses is the company's adequate near-term liquidity to meet capital spending and debt service in the current favorable market utilization and day-rate environment. The stable outlook on Hercules reflects Standard & Poor's expectation that the company will continue to benefit from near- term market conditions, adhere to its conservative financial policies, and maintain its adequate liquidity. HERTZ CORP: Debt Financing Plans Prompt Moody's to Hold Ratings --------------------------------------------------------------- Moody's Investors Service affirmed the debt ratings of The Hertz Corporation, Corporate Family Rating at Ba3, and changed the rating outlook to negative from stable. The rating action follows the 8K disclosure that Hertz's indirect parent company, Hertz Global Holdings, Inc. received a commitment from a group of financial institutions to provide or arrange debt financing for up to $1 billion for the purpose of paying a dividend to Hertz Holdings' stockholders -- primarily a private equity group consisting of Clayton, Dubilier & Rice, Inc, The Carlyle Group, and Merrill Lynch Global Private Equity. Hertz's ratings include corporate family -- Ba3, secured ABL and term loan -- Ba2; senior unsecured -- B1; and subordinate -- B3. The negative outlook recognizes a potentially more aggressive financial strategy that is reflected in the willingness of Hertz's owners to seek up to a $1 billion distribution only six months after completing the buyout of Hertz. The debt issued by Hertz Holdings to fund any dividend would have to be serviced by the receipt of dividends from Hertz and could be a source of pressure on the operating subsidiary's financial position. Notwithstanding the negative outlook, Moody's noted several factors that remain supportive of Hertz's current rating level despite the possibility that Hertz Holdings might pay a large dividend. The company continues to maintain a leading competitive position in the daily car rental business and with favorable trends in earnings and cash flow since the buyout. Importantly, the debt supporting the contemplated dividend would be at the holding company level and would consequently be structurally subordinated to the rated debt at Hertz. In addition, the initially disclosed terms of the holding company debt incorporate an important degree of flexibility with respect to interest payments, and could thereby moderate any negative impact on the credit quality and financial metrics of Hertz. These terms afford Hertz Holdings various options to pay interest in kind and to defer interest payments. Moreover, requirements by Hertz Holdings to pay cash interest would be limited by the degree to which upstream dividends are available from Hertz. The terms of Hertz's credit facilities and bonds limit its dividend paying ability. Moody's also noted that the near-term outlook for the travel, car rental and equipment rental sectors remain strong, and that this could support operating performance and cash generation at Hertz which is more robust than had been anticipated. "The proposal to take a $1 billion distribution so soon after the buyout is aggressive and warrants a negative outlook. However, Hertz is performing well and the structuring of the transaction could moderate the negative impact on the company" said Bruce Clark, a senior vice president with Moody's. "If the ultimate dividend is sized to keep pace with any operating improvement at Hertz, and if the ongoing financial strategy underlying the payment of the dividend is managed to preserve the company's credit profile near current levels, then any potential pressure on the rating could be muted" said Clark. The Hertz Corporation, headquartered in Park Ridge, New Jersey, operates the largest general use car rental business in the world, and one of the largest industrial, construction and material handling rental businesses in North America. HMEZZ LLC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: HMezz, LLC fka Prime Care Six, LLC c/o CT Corporation System 251 East Ohio Street, Suite 1100 Indianapolis, Indiana 46204 Bankruptcy Case No.: 06-03526 Type of Business: The Debtor previously filed for chapter 11 protection on March 20, 2006 (Bankr. M.D. N.C. Case No. 06-10285). Chapter 11 Petition Date: June 29, 2006 Court: Southern District of Indiana (Indianapolis) Debtor's Counsel: Jeffrey M. Hester, Esq. William J. Tucker & Associates, LLC 429 North Pennsylvania Street, Suite 400 Indianapolis, Indiana 46204-1816 Tel: (317) 833-3030 Fax: (317) 833-3031 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Genesis Rehabilitation Trade Debt $383,509 P.O. Box 7777 Philadelphia, PA 19175 Interlock Pharmacy Trade Debt $307,474 S. Ruscher 1600 River Center 2 100 East River Center Boulevard Covington, KY 41011 Homeward Rehabilitation Trade Debt $222,250 P.O. Box 7777 Philadelphia, PA 19175 Communicare Health Services Trade Debt $135,838 Allen Foods, Inc. Trade Debt $108,558 McKesson Medical Trade Debt $55,751 Bradley & Associates Accounting Services $42,612 Collector of Revenue Real Property Tax $35,740 Division of Medical Services Trade Debt $34,528 Rubin Bond Dubin Frankel Trade Debt $33,012 Davis Lynn & Moots Accounting Services $21,000 Wachovia Bank, N.A. Trade Debt $17,916 Direct Supply Trade Debt $14,189 Laclede Gas Utility Services $8,460 HP Products Trade Debt $8,008 Biotech Laboratory, Inc. Trade Debt $5,903 Tech Electronics, Inc. Trade Debt $5,428 Gateway Services, Inc. Trade Debt $4,625 Husch & Eppenberger, LLC Trade Debt $4,028 Hard Warehouse Technologies Trade Debt $3,803 IMPART MEDIA: Posts $2.8 Million Net Loss in 2006 First Quarter --------------------------------------------------------------- Impart Media Group, Inc. (OTCBB: IMMGe) filed its financial statements for the first quarter ended, March 31, 2006, with the Securities and Exchange Commission on June 22, 2006. Revenues were $1,222,744 compared to $1,030,282 for the first three months of 2005, an increase of 18.7% year over year. Historically, revenues have primarily been derived from the sale of hardware components and software products used in the Company's proprietary digital signage networks and the fees received from consulting, maintenance and other digital signage services. However, the overall increase in revenues for the quarter ended March 31, 2006, were primarily due to increased media services revenues from the Company's acquisition of E&M Advertising nka Impart Media Advertising in February 2006, and increased subscription revenues from the June 2005 acquisition of Media SideStreet Corporation. This coincides with a shift in the Company's long-term business strategy to a full-service digital media offering with an advertising-based revenue model designed to take advantage of the evolving out-of-home media sector. The net loss for the quarter ended March 31, 2006 was $2,844,173 compared to a net loss of $182,402 in the same quarter of 2005. The net losses were primarily attributable to an increase in general expenses made in infrastructure investment and administrative expenses related to the addition of personnel needed to ramp up to support the growing demand for the Company's services resulting from acquisitions of E&M Advertising, iPoint Technologies, Inc., and Media SideStreet Corporation. Legal and accounting costs were also significantly higher due to the fees incurred in completing the public filings required in connection with these acquisitions and additional financing transactions. The majority of these expenses were one-time and non-cash charges for the period ended March 31, 2006. "Our first quarter result have begun to reflect the new direction that Impart is moving in and the efforts to revamp our operations", Impart Chairman and CEO Joseph F. Martinez stated. "Our goal is to position Impart as the undisputed leader in the out-of-home digital advertising market and this required that we develop the infrastructure and systems necessary to manage and grow a publicly traded company," Martinez continued. "We plan to hire an experienced chief financial officer who will provide guidance and help us build a team that will enable our company to establish procedures to ensure timely financial reporting in the future. Before we could bring on such an individual we had significant work to get the company in the proper reporting position. "We expect the release of our second quarter results to be completed in a timely manner, and look forward to releasing the first full quarter of Impart Media Advertising DBA E&M Advertising revenue and results from the introduction of our scalable and unique IQ Box(TM) to the digital media network industry, which is a key to our organic growth initiative for the Company," Martinez stated. Highlights * signing a contract with Dole Foods for Impart's new, patent-pending, iPoint(TM) interactive kiosks; * signing of a major airport contract with the Detroit Metropolitan Wayne County Airport for a deployment of an airport-wide series of iPoint(TM) kiosks; * purchasing the assets of Marlin Capital Partners II, LLC, dba InTransit Media, a privately-held advertising and marketing services company. The asset purchase included the exclusive rights to provide digital signage and out-of-home digital advertising services for the PATHVision digital network. The PATHVision system includes more than 277 displays throughout 13 transit stations in New York City and New Jersey that provide advertisements and informational spots for travelers; * signing a marketing agreement with TransCore Media Group, the media sales organization of TransCore, a transportation services company with 1,800 employees and 80 locations. TransCore is now representing the full complement of services offered by the Impart Mobile Media division, which offers media solutions for fleet and truck side advertising; * acquiring the assets of New York City-based E&M Advertising, a branded direct response media agency. E&M, now Impart Media Advertising, is fully integrated as an Impart subsidiary and in 2005 had revenues of approximately $5 million, which were derived from media placements of $39 million. As measurability and accountability increasingly drive advertisers' media decisions and advertising campaigns increasingly include the use of digital media, the acquisition of E&M is a key strategy to position Impart Media Group as a leader in the rapidly growing out-of-home market sector with a major focus on the interactive portion of Impart's core business and its corollary to the direct response core business of E&M; * receiving gross proceeds of $4.5 million from the sale of its Series A Convertible Preferred Stock and related warrants to institutional investors. Impart also announced a three-year non convertible revolving line of credit for up to $6 million from Laurus Master Fund, Ltd., and received an initial draw of $2 million less certain closing fees which is being used for ongoing working capital and expansion plans; and * announcing the Impart IQ Box(TM), an evolutionary new approach to deploying, managing, and delivering content to digital signage networks. The fully integrated solution dramatically simplifies the deployment of digital signage networks and empowers users with the ability to manage a digital network from anywhere in the world. In May the Company announced that New Jersey-based Vira Manufacturing, Inc., signed a contract to incorporate the IQ Box(TM) into their digital signage and interactive product offerings. The Company believes that enabling this type of control of over media environments will deliver significant recurring revenue streams. Full-text copies of the Company's financial statements for the first quarter ended, March 31, 2006, are available for free at http://ResearchArchives.com/t/s?c80 Going Concern Doubt As reported in the Troubled Company Reporter on May 17, 2006, Peterson Sullivan PLLC in Seattle, Washington, raised substantial doubt about Impart Media Group, Inc., fka Limelight Media Group, 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 losses from operations and substantial accumulated deficit. Based in Seattle, Wash., Impart Media Group, Inc., fka Limelight Media Group, Inc. (OTCBB: IMMG) -- http://www.Impartmedia.com/-- designs, integrates, sells, and installs interactive digital signage and media solutions to a variety of out-of-home advertising and information venues. The Company also sells time slots on networks for the display of advertising and other media content for delivery to the networked digital elements that the Company manages and to non-networked, stand-alone displays, cell phones and personal digital assistant. IMPERIAL PETROLEUM: Files Amended Financial Statements ------------------------------------------------------ Imperial Petroleum, Inc., filed with the Securities and Exchange Commission on June 26, 2006, its amended financial statements for: -- the year ended July 31, 2005; -- first quarter ended Oct. 31, 2005; and -- second quarter ended Jan. 31, 2006. The Company's Statement of Operations showed: For the period ended Year Quarter Quarter 07/31/05 10/31/05 01/31/06 ----------- ----------- ----------- Revenue $2,963,651 $1,045,188 $979,980 Net Income (Loss) ($2,695,812) ($287,987) ($1,035,526) The Company's Balance Sheet showed: For the period ended Year Quarter Quarter 07/31/05 10/31/05 01/31/06 ----------- ----------- ----------- Current Assets $814,274 $1,053,450 $575,686 Total Assets $17,082,279 $17,242,181 $17,174,261 Current Liabilities $2,952,064 $2,599,192 $20,286,838 Total Liabilities $19,281,041 $19,521,233 $20,526,847 Total Stockholders' Equity (Deficit) ($2,198,762) ($2,279,052) ($3,352,586) Full-text copies of the Company's financial statements are available for free at: Year ended July 31, 2005 http://ResearchArchives.com/t/s?c87 First quarter ended Oct. 31, 2005 http://ResearchArchives.com/t/s?c88 Second quarter ended Jan. 31, 2006 http://ResearchArchives.com/t/s?c89 Based in Evansville, Indiana, Imperial Petroleum, Inc., is a diversified energy, and mineral mining company. The Company wants to sell its mining assets. At Jan. 31, 2006, the Company operated 134 oil and gas wells in Texas, New Mexico, Louisiana and Mississippi and owned an interest in an additional approximately 280 wells operated by others. Net daily production from the Company's oil and gas properties averaged approximately 87 Bopd and 711 Mcfpd during the quarter ended January 31, 2006. The Company acquired an additional 24 wells in Kentucky and will become operators of each of these wells when its leasing and bonding process is complete. The Company's estimated net proven oil and gas reserves as of July 31, 2005 were 799.1 MBO and 15,162 MMCFG. No proved reserves are included for the Kentucky properties. The Company is the operator of the Duke Gold Mine in Utah, although no significant operations occurred during the current quarter. INFORMATION ARCHITECTS: Expand Credit Services with CDE Purchase ---------------------------------------------------------------- Information Architects has acquired the Council of Debt Education. Through the acquisition of CDE, Information Architects solidifies their commitment to enhancing the quality of life for consumers. IA intends to utilize resources within CDE to expand their credit processing services in order to offer new and existing customers easier access to products and solutions. The Council of Debt Education provides debt education and debt settlement services that typically reduce credit card balances by fifty percent or more. CDE mediates the relationship between creditors and debtors through negotiations that reduce credit card balances as well as interests, late fees, and penalties. With a strong and successful track record the growth of CDE has been steady at an average of 30% annually. "With our Credit Card Processing Company, CDE provides a strategic fit that allows Information Architects to further develop our pre- paid debit card programs. CDE will provide an immediate infusion of Card Programs based on its strong client base. The ability to obtain a company that is cash flow positive as well as being a strategic fit is a great opportunity for Information Architects," states Todd K. Morgan, CEO of Information Architects. CDE's average client carries approximately 27,000 dollars of debt; CDE fills a vital role in lifting the burden of debt placed on the average American family. Information Architects realize that without the worry of debt, the availability of quality television, entertainment and recreational venues, families will be able to afford and create memories that will last a lifetime. "This is great progress for Information Architects; CDE is an acquisition that fits perfectly into our operational business plan while strengthening our mission and commitment to the consumer. We will be able to provide solutions in every area that is important and necessary to consumers. CDE will quickly provide a strong revenue steam for Information Architects," added Jon Grinter, President of Information Architects. Additional information on The Council of Debt Education is available at http://www.dumpdebt.com About Information Architects Headquartered in Ft. Lauderdale, Florida, Information Architects Corporation (OTCBB: IACH) -- http://www.ia.com/-- provides employment screening and background investigations software application. At March 31, 2006, the Company's balance sheet showed $1,767,509 in total assets and $5,454,923 in total liabilities, resulting in a $3,687,414 stockholders' deficit. * * * Gong Concern Doubt As reported in the Troubled Company Reporter on May 12, 2006, Jaspers + Hall, PC, in Denver, Colorado, raised substantial doubt about Information Architects Corporation's ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the Company's recurring losses from operations and stockholders' deficiencies. INTEGRATED ELECTRICAL: Michael Caliel Succeeds C. Snyder as CEO --------------------------------------------------------------- Michael J. Caliel will be the new president and chief executive officer of Integrated Electrical Services, Inc. He comes to Integrated after a stint as president of Invensys Process Systems unit. Caliel will succeed C. Byron Snyder, who has served in that position on an interim basis since agreeing to resign at the time of the company's Chapter 11 filing in February. Headquartered in Houston, Texas, Integrated Electrical Services, Inc. (NASDAQ: IESC) -- http://www.ielectric.com/and http://www.ies-co.com/-- is an electrical and communications service provider with national roll-out capabilities across the U.S. Integrated Electrical Services offers seamless solutions and project delivery of electrical and low-voltage services, including communications, network, and security solutions. The Company provides everything from system design, installation, and testing to long-term service and maintenance on a wide array of projects. With approximately 140 locations nationwide, the Company is prepared to seamlessly manage and deliver all your electrical, security, and communication requirements. The Debtor and 132 of its affiliates filed for chapter 11 protection on Feb. 14, 2006 (Bankr. N.D. Tex. Lead Case No. 06-30602). Daniel C. Stewart, Esq., and Michaela C. Crocker, Esq., at Vinson & Elkins, L.L.P., represent the Debtors in their restructuring efforts. Marcia L. Goldstein, Esq., and Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, represent the Official Committee of Unsecured Creditors. As of Dec. 31, 2005, Integrated Electrical reported assets totaling $400,827,000 and debts totaling $385,540,000. The Court confirmed the Debtors' Modified Second Amended Joint Plan of Reorganization on Apr. 26, 2006. That plan became effective on May 12, 2006. INTELSAT LTD: Chairman Conny Kullman to Leave Post on August 31 --------------------------------------------------------------- Intelsat, Ltd.'s Chairman, Conny Kullman, will resign from his position as of the earlier of August 31, 2006, or the date that each company elects a new Chairman of the Board, and from all employment with Intelsat Holdings, Ltd., and Intelsat (Bermuda), Ltd., as of August 31, 2006. The restricted shares of Intelsat Holdings, Ltd. common stock granted to Mr. Kullman that have not vested in accordance with their terms on or prior to August 31, 2006, will be forfeited. Mr. Kullman will continue to receive his base salary and certain employee benefits through August 31, 2006, but will not be eligible for an annual bonus during this period. Mr. Kullman has also agreed to waive his right to severance payments under the Employment Agreement. Instead, he will be entitled upon his resignation to the payments and benefits. On August 31, 2006, Intelsat will purchase the shares of Intelsat Holdings, Ltd. common stock and the vested restricted shares of Intelsat Holdings, Ltd. common stock held by Mr. Kullman (a total of 60,343 shares) for the fair market value of the shares as of the date of the completion of the merger contemplated by the Merger Agreement among Intelsat (Bermuda), Ltd., Proton Acquisition Corporation and PanAmSat Holding Corporation. The purchase price will be paid to Mr. Kullman in six equal installments on August 31, 2006, 2007, 2008, 2009, 2010 and 2011, and such payments will be made pursuant to an unsecured promissory note executed in favor of Mr. Kullman. If private equity investors cease to hold at least 40% of the equity interests of Intelsat Holdings, Ltd., the purchase described above will be made in full on the later of the first anniversary of the event and January 28, 2008. About Intelsat Intelsat, Ltd. - http://www.intelsat.com/-- offers telephony, corporate network, video and Internet solutions around the globe via capacity on 25 geosynchronous satellites in prime orbital locations. Customers in approximately 200 countries rely on Intelsat's global satellite, teleport and fiber network for high- quality connections, global reach and reliability. * * * As reported in the Troubled Company Reporter on June 19, 2006, Fitch upgraded the Issuer Default Rating for Intelsat to 'B' from 'B-' pro forma for its pending acquisition of PanAmSat. The ratings were also removed from Rating Watch Negative, where they had originally been placed on Aug. 30, 2005. Fitch said the Rating Outlook is Stable. As reported in the Troubled Company Reporter on June 13, 2006, Moody's Investors Service affirmed the B2 corporate family rating of Intelsat, Ltd., and downgraded the corporate family rating of PanAmSat Corporation to B2, given the greater clarity regarding the final capital structure and the near-term completion of the PanAmSat acquisition by Intelsat. INTERPOOL INC: Debt Reduction Prompts S&P to Affirms Ratings ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on Interpool Inc., including its 'BB' corporate credit rating, and removed the ratings from CreditWatch. The ratings were initially placed on CreditWatch with developing implications on March 15, 2006; the CreditWatch status was revised to positive on May 10, 2006. The outlook is now positive. "The rating affirmation is based on uncertainty regarding sustainability of Interpool's recently improved balance sheet after proceeds from the sale of assets were used to reduce debt," said Standard & Poor's credit analyst Betsy Snyder. "While the debt reduction is a positive credit development, the company may face pressure as a publicly held equipment leasing company to adopt a less conservative balance sheet." The revised CreditWatch listing on May 10 reflected Interpool's improved balance sheet after the March 29, 2006, sale of approximately 74% of its dry marine cargo container fleet, with proceeds used to repay $434 million of related debt. Interpool recorded a gain of approximately $61 million in connection with the sale. As a result, the company's debt to capital declined to around 71% at March 31, 2006, (a lower-than-average level for a transportation equipment lessor) from 81% at Dec. 31, 2005. Interpool will continue to manage the fleet for the new buyers, generating fee income for this service. Interpool is the largest lessor of chassis in North America, with a fleet of 227,000 chassis. Chassis are wheeled frames attached to cargo containers that, when combined, are equivalent to a trailer that can be trucked to its destination. Interpool's only major competitor in this business is privately held Flexi-Van Leasing Inc. The chassis leasing business has tended to generate strong and stable cash flow, even in periods of economic weakness. If Interpool continues to maintain its strong financial profile over the intermediate term, ratings could be raised. If the company were to adopt a less conservative balance sheet, resulting in a weaker financial profile, the outlook could be revised to stable. ISLE OF CAPRI: Earns $15.1 Mil. in Fourth Quarter Ended April 30 ---------------------------------------------------------------- Isle of Capri Casinos, Inc. (Nasdaq: ISLE), reported its financial results for the fourth quarter and fiscal year ended April 30, 2006. For the fourth quarter, the Company reported a 19.3% increase in net revenues to $306.5 million compared to net revenues of $257.0 million for the same quarter in fiscal 2005. Net income for the fourth quarter of fiscal 2006 increased 338% to $15.1 million compared to $3.5 million for the fourth quarter of fiscal 2005. Included in net income for the quarter ended April 30, 2006, are pre-tax valuation charges of $13.3 million related to the Company's international operations. For the fiscal year 2006, the Company reported a 4.3% increase in net revenues to $988.0 million compared to net revenues of $947.6 million in fiscal 2005. For the fiscal year 2006, the Company reported a 5.5% increase in net income to $19.0 million compared to $18.0 million for the fiscal year 2005. The Company entered into an agreement to sell the assets of Isle-Bossier City and Isle-Vicksburg and these are reflected as discontinued operations fiscal 2006 and fiscal 2005. For the fourth quarter of fiscal 2006, Isle-Bossier City and Isle-Vicksburg had combined net revenues of $48.6 million compared to combined net revenues of $42.7 million for the same quarter in fiscal 2005. For the fiscal year 2006 Isle-Bossier City and Isle-Vicksburg had combined net revenues of $166.4 million compared to $164.0 million in fiscal year 2005. The Company expects this sale to close in the second quarter of fiscal 2007, subject to regulatory and other customary closing conditions. Assuming this transaction closes, the Company expects to record a pre-tax gain on the sale of between $14 million and $18 million. Colorado Grande-Cripple Creek assets are also reflected as discontinued operations and sold effective April 24, 2005. In April 2006, the Company's Board of Directors approved a plan to exit its Our Lucaya operations. Effective June 1, 2006, the Company notified its landlord of the Company's decision to terminate its lease and intent to cease operations by June 1, 2007. Isle-Our Lucaya had net revenues of $7.4 million and $9.4 million for the fourth fiscal quarters ended April 30, 2006, and April 24, 2005, respectively, and had net revenues of $25.3 million and $23.3 million for the fiscal years ended April 30, 2006, and April 24, 2005, respectively. The Company will continue to report the results of its Our Lucaya property as continuing operations until a probable sale of this facility is reached or operations are ceased, at which time these results will be reported as discontinued operations. "I am pleased that our performance produced comparative quarter- to-quarter growth. This accomplishment, at the end of one of the most challenging years in our Company's history, shows that our business model continues to perform at a high level. We believe our portfolio diversity and our pipeline of development opportunities puts Isle of Capri in an excellent position for continued growth," Bernard Goldstein, chairman and chief executive officer, said. Highlights and Updates * The Company is proceeding with construction of a $140 million development project at Pompano Park in Florida. The project includes 1,500 slot machines, 30 poker tables and four restaurants, as well as new horse racing amenities including a sports bar and wagering area overlooking the track. The Company expects to open the racino early in calendar year 2007. * In late May 2006, Isle-Biloxi completed the renovation of its existing atrium adding additional gaming space, bringing the casino resort to approximately 1,600 gaming positions, opening a new multi-story entry feature and bar, and connecting the parking garage with the atrium by a covered walkway. The remaining 100 damaged hotel rooms became fully operational, bringing the hotel back to full capacity with 728 rooms including 200 whirlpool suites. * On June 15, 2006, the Company announced that it received site and development approval from the Mississippi Gaming Commission in connection with its previously announced casino resort in west Harrison County, Mississippi, which is approximately 20 miles from the Mississippi/Louisiana state border along Interstate 10. Preliminary plans call for the estimated $250 million to 300 million project to include a single level gaming facility with over 2,000 gaming positions, a 500-room hotel, five restaurants and a complement of additional resort amenities. The project remains in the preliminary planning stages, and is subject to certain significant conditions, including but not limited to the receipt of all necessary licenses, approvals and permits. * In early June 2006, the Company opened its new 140-room hotel, including 20 suites, and an 800-seat entertainment venue at Isle-Boonville in Missouri. * The Company continues to deploy the IGT Advantage(TM) Casino System to replace the existing slot management systems at its properties in Missouri and Iowa. After implementation, these properties will feature the NexGen(TM) Interactive Display, supporting loyalty-building Bonusing(TM) tools, which will allow the Company to enhance its uniquely branded marketing programs. * Construction is underway at the Isle-Waterloo in Iowa with completion expected in the late spring of 2007. The Company plans to spend approximately $134 million constructing a single-level casino with approximately 1,300 gaming positions, three of its signature restaurants, a 200-room hotel and 1,000 parking spaces. * The Company continues to construct a new 250-room hotel at the Isle-Bettendorf. Included in the project are additional parking, a signature restaurant, and expansion of the existing buffet. The cost of the project is expected to be approximately $45 million, with the new hotel scheduled to open in the summer of 2007. * The Company is moving forward with the relocation of its corporate headquarters to the St. Louis County municipality of Creve Coeur and expects to complete the transition by mid-summer 2006. The Company will maintain a regional office in Biloxi, Mississippi. The anticipated cost of this move is approximately $10 million, most of which will be recorded in fiscal 2007. * At Isle-Our Lucaya, in conjunction with the termination of its lease, the Company paid a $2.2 million fee to its landlord, which will be expensed in the first quarter of fiscal 2007. Based on projected cash flows and government regulations, the Company had recorded an impairment charge of approximately $2.4 million and have accrued $1.2 million for severance payments in the fourth quarter of fiscal 2006. "We have and will continue to refine our product mix and invigorate the Isle brand, providing our customers the amenities and experiences that they prefer. Our focus on developing our core properties, implementing technological advances, and improved service initiatives continues to produce improved financial results," Tim Hinkley, president and chief operating officer, said. Based in Biloxi, Miss., Isle of Capri Casinos, Inc. (Nasdaq: ISLE) -- http://www.islecorp.com/-- a developer and owner of gaming and entertainment facilities, operates 16 casinos in 14 locations. The Company owns and operates riverboat and dockside casinos in Biloxi, Vicksburg, Lula and Natchez, Miss.; Bossier City and Lake Charles (two riverboats), La.; Bettendorf, Davenport and Marquette, Iowa; and Kansas City and Boonville, Mo. The Company also owns a 57% interest in and operates land-based casinos in Black Hawk (two casinos) and Cripple Creek, Colorado. Isle of Capri's international gaming interests include a casino that it operates in Freeport, Grand Bahama, and a 2/3 ownership interest in casinos in Dudley, Walsal and Wolverhampton, England. The company also owns and operates Pompano Park Harness Racing Track in Pompano Beach, Fla. * * * As reported in the Troubled Company Reporter on Feb. 16, 2006, Moody's Investors Service confirmed Isle of Capri, Inc.'s Corporate family rating at Ba3; $400 million senior secured revolver due 2010 at Ba2; $300 million senior secured term loan due 2011 at Ba2; $500 million 7% senior subordinated debt due 2014 at B2; and $200 million 9% senior subordinated debt due 2012 at B2. Moody's assigned a negative ratings outlook. As reported in the Troubled Company Reporter on Dec. 26, 2005, Standard & Poor's Ratings Services affirmed its ratings on Isle of Capri Casinos Inc., including its 'BB-' corporate credit rating. At the same time, all ratings were removed from CreditWatch with negative implications where they were placed on Sept. 1, 2005. S&P said the outlook is negative. JAMES DIGIANDOMENICO: Case Summary & 15 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: James S. DiGiandomenico 130 South Street Northborough, Massachusetts 01532 Bankruptcy Case No.: 06-20257 Type of Business: The Debtor is the sole shareholder of Atlantic Park, LLC. Atlantic Park filed for chapter 11 protection on May 22, 2006 (Bankr. D. Maine Case No. 06-20198). Chapter 11 Petition Date: June 28, 2006 Court: District of Maine (Portland) Debtor's Counsel: Randy J. Creswell, Esq. Perkins Thompson Hinckley & Keddy, P.A. One Canal Plaza, P.O. Box 426 Portland, Maine 04112-0426 Tel: (207) 774-2635 Fax: (207) 871-8026 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ LBM Financial, LLC $1,677,321 171 Lock Drive Marlborough, MA 01752 Jay & Kay Hachigan $564,174 c/o David J. Schlansky, Esq. 1762 Massachusetts Avenue Boston, MA 02420 Wachusett Lumber & Building Supply $156,779 87 Main Street Rutland, MA 01543-1327 Andre and Laura Mossiat $100,000 A.I.M. Mutual Insurance Companies $31,465 Royal Barry Wills Associates $14,672 GMAC Bank Loan $10,000 Highland Hardwoods $6,893 Brookline Bank Bank Loan $5,960 HFC $4,286 Bengal Construction, Inc. $3,773 Town of Northborough $696 Northborough Oil Company, Inc. $446 National Grid $382 Charter Communications $115 JERNBERG INDUSTRIES: Horwich Coleman OK'd as Trustee's Accountant ----------------------------------------------------------------- The Honorable John H. Squires of the U.S. Bankruptcy Court for the Northern District of Illinois in Chicago approved the retention of Horwich Coleman Levin, LLC, as tax accountant for Richard J. Mason, the Chapter 7 Trustee of JII Liquidating, Inc., fka Jernberg Industries, Inc., JSI Liquidating, Inc., fka Jernberg Sales, Inc., and IM Liquidating, LLC, fka Iron Mountain Industries, LLC. Horwich Coleman will: (a) prepare all necessary and appropriate forms to extend the time for filing the Debtors' tax returns (HCL has already completed this service and obtained all needed extensions); (b) prepare all of the Debtors' 2005 tax returns, including any related documents; and (c) prepare all K-1 or similar forms for the Debtors' equity holders. Eugene B. Levin, a partner at Horwich Coleman Levin, LLC, disclosed that the Firm has agreed to provide its services for a $60,000 fixed fee, payable in three equal payments: (a) $20,000 -- upon the entry of the Bankruptcy Court's order authorizing the Firm's retention; (b) $20,000 -- 30 days after the initial payment; and (c) $20,000 -- upon the completion and delivery of all relevant documents to the Chapter 7 Trustee. In the event that the Firm will provide any additional services to the Chapter 7 Trustee, Horwich Coleman's professionals will bill: Designation Hourly Rate ----------- ----------- Partners $250 - $280 Managers $200 Staff $90 - $150 Mr. Levin assures the Court that Horwich Coleman Levin, LLC, is disinterested as that term is defined in Sections 101(14), 327(a) and 327(c) of the Bankruptcy Code. Headquartered in Chicago, Illinois, Jernberg Industries, Inc., -- http://www.jernberg.com/-- is a press forging company that manufactures formed and machined products. The Company and its debtor-affiliates filed for chapter 11 protection on June 29, 2005 (Bankr. N.D. Ill. Case No. 05-25909). Jerry L. Switzer, Jr., Esq., at Jenner & Block LLP, represented the Debtors. When the Debtors filed for chapter 11 protection, they estimated assets and debts of $50 million to $100 million. CM&D Management Services, LLC's A. Jeffery Zappone served as the Debtors' Chief Restructuring Officer. The Bankruptcy Court converted the Debtors' chapter 11 case to a chapter 7 liquidation proceeding on Sept. 26, 2005. Richard J. Mason is the Debtors' Chapter 7 Trustee. Michael M. Schmahl, Esq., and Patricia K. Smoots, Esq., at McGuireWoods LLP represent the Chapter 7 Trustee. LEVITZ HOME: Has Until July 31 to Decide on Woodbury Lease ---------------------------------------------------------- Levitz Home Furnishings, Inc., and its debtor-affiliates and PLVTZ, LLC; and Lake Park 300 Crossways Park Drive, LLC, and CLK- HP 300 Crossways Park Drive, LLC, agree to resolve the dispute with respect the Debtors' Lease Decision Period for the lease of the nonresidential property located in Woodbury, New York, that serves as the Debtors' corporate headquarters. As reported in the Troubled Company Reporter on June 12, 2006, Lake Park 300 Crossways Park Drive LLC, and CLK-HP 300 Crossways Park Drive LLC, lease to Levitz Furniture, LLC, approximately 45,000 square feet of a 100,000-square foot nonresidential property located in Woodbury, New York. Crossways had asserted that there was no compelling explanation why an additional 120 days is needed to decide for the Woodbury Lease while the requested extension for the other leases is between 60 and 90 days. Crossways asked the U.S. Bankruptcy Court for the Southern District of New York to deny a 120-day extension and suggested a shorter extension period. Pursuant to a stipulation, the parties agree that: (a) The Lease Decision Deadline for the Woodbury Lease is extended through, and including, July 31, 2006, which time may not be further extended without Crossways' consent, and which consent Crossways may withhold for any reason; (b) If any written notice of PLVTZ's intent to designate the Woodbury Lease as a Purchased or Designated Lease, as defined in the Asset Purchase Agreement, is not provided to Crossways and its counsel by 6:00 p.m. on July 31, 2006, the Woodbury Lease will be automatically deemed rejected; (c) If the Woodbury Lease is rejected, the Debtors and PLVTZ will, under any circumstances, be entitled to occupy the premises through and including, December 31, 2006, provided that the Debtors or PLVTZ will provide Crossways with 60 days' notice of intent to actually vacate the Premises; (d) Notwithstanding any rejection of the Woodbury Lease, the Debtors and PLVTZ will remain liable for all rent and other charges due through and including, December 31, 2006, and all the rent and other charges will be allowed and paid as an administrative claim; and (e) Upon notice from the Debtors or PLVTZ of intent to reject the Woodbury Lease, Crossways may immediately commence effort to procure a new tenant for the Premises. About Levitz Home Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- is a leading specialty retailer of furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. The Company and its 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq., at Jones Day, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman LLP represents the Official Committee of Unsecured Creditors. Levitz sold substantially all of its assets to Prentice Capital on Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) LSP BATESVILLE: S&P Affirms B+ Rating on $326 Million Sr. Bonds --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' rating on LSP Batesville Funding Corp.'s $150 million senior secured bonds due 2014 and $176 million senior secured bonds due 2025 after a review. The project, a special-purpose entity, is an indirect, wholly owned subsidiary of LSP Energy L.P., which was formed to develop, design, build, finance, own, operate, and maintain an 837 MW, natural-gas-fired, combined-cycle plant in Batesville, Mississippi. LSP Batesville Funding was established to co-issue the bonds with LSP Energy. "The rating reflects the project's credit risk, given the purchased-power agreement with South Mississippi Electric Power Association (SMEPA; not rated) and J. Aron & Co., a unit of The Goldman Sachs Group Inc.," said Standard & Poor's credit analyst Elif Acar. "We've evaluated SMEPA's credit risk and concluded that it is higher than the speculative-grade category," said Ms. Acar. "However, the project's merchant exposure over the long term and low debt-service coverage ratios in the short term limit the project rating." [SMEPA is the offtaker of the project's capacity and electricity from the plant's Unit 3 for one-third (279 MW nominally) of its total output pursuant to the PPA until 2016.] The J. Aron PPA is for the remaining two-thirds (570 MW) of its capacity and energy until June 2013. Goldman Sachs provides a guarantee of all obligations and liabilities of J. Aron under the PPA. The project relies on revenues from both PPAs to fully cover debt service. The 'B+' rating further reflects these risks: * If the tolling agreements are not extended, in the last 12 years of the bonds' term the project will be exposed to price and volume risk in a fully competitive market for power. * The capacity overbuild in the U.S. Southeast, leading to low electricity market prices, is causing reduced dispatch and weak prospects for merchant revenues. * Lower energy revenues due to lower dispatch and higher operating and maintenance costs than originally expected cause lower-than-originally-projected debt-service coverage ratios. * Losses on the project's heat-rate tracking account have negatively affected cash flow. * The debt-service coverage ratio is projected to be around 1.2x to 1.3x for the next four to five years. These strengths somewhat mitigate these risks: * PPAs until June 2013 with J. Aron and until January 2016 with SMEPA provide cash flow that reduces the amount of debt at the end of the initial term of the PPAs to less than $180 per kilowatt. * Good location with direct transmission links to the systems of Entergy Corp. (BBB/Stable/--) and the Tennessee Valley Authority (TVA; AAA/Stable/--). * The Into Entergy and Into TVA market hubs are established indexes on the New York Mercantile Exchange and the Chicago Board of Trade, which are liquid electricity trading/exchange hubs in the U.S. for the wholesale market. * Direct access to three natural gas pipelines, ANR Pipeline Co. (B+/Stable/--), Tennessee Gas Pipeline Co. (B+/Stable/--), and Trunkline Gas Co. (not rated), and indirect access to one other pipeline system, Texas Gas Transmission LLC (BBB+/Negative/--), which should result in a diverse supply and competitive cost for fuel. The stable outlook reflects the predictability of contracted revenues over the next eight years. MARSH SUPERMARKETS: Posts $27.9M Net Loss in 4th Qtr. Ended Apr. 1 ------------------------------------------------------------------ Marsh Supermarkets, Inc. (Nasdaq: MARSA & MARSB), reports results of operations for the 12 and 52 weeks ended April 1, 2006. Fourth Quarter Performance For the 12-week fourth quarter of fiscal 2006, which ended April 1, 2006, total revenues were $377.5 million as compared to $419.1 million for the 13-week fourth quarter of fiscal 2005. Retail sales in comparable supermarkets and convenience stores for the 2006-quarter were 3.8% below sales for the 2005 quarter. Comparable store merchandise sales, which exclude gasoline sales, decreased 5.6% from sales for the 2005 quarter. The Company excludes gasoline sales from its analysis of comparable store merchandise sales because retail gasoline prices fluctuate widely and frequently, making analytical comparisons difficult. Continued high levels of competitive promotional activity and competitors' new store openings continue to adversely affect comparable store sales. Net loss for the 2006 quarter was $27.9 million as compared to a net loss of $1.4 million for the 2005 quarter. Loss before income taxes for the 2006-quarter was $40.2 million as compared to a loss before income taxes of $2.3 million for the 2005 quarter. The loss before income taxes for the 2006-quarter is primarily attributable to charges recorded in the quarter for long-lived asset impairment, restructuring, and goodwill impairment totaling $30.7 million. "These financial results reflect continuing competitive pressure, as well as some difficult decisions that significantly impacted the bottom line, but which also should enhance our ability to improve future earnings," Don E. Marsh, Chairman and CEO said. "Throughout the strategic alternatives review process, the Company has gained significant insights into its business. Although this has been a challenging year, we are proud of what we've accomplished in our 75 years. Despite the realities of working in an industry with low margins and high competition, we've grown our business while focusing on bringing the best in service and products to our customers." At the quarter end, April 1, 2006, the Company had unused borrowing capacity under its revolving credit facility of $49.3 million, net of $11.2 million of outstanding letters of credit. Unused borrowing capacity increased to $59.6 million as of June 23, 2006. Long-lived Asset Impairment & Restructuring During the fourth quarter of fiscal 2006, the Company recorded impairment charges totaling $2.2 million -- primarily related to abandoned construction in progress assets and to write down real estate held for sale to fair market value based on recent appraisals. These charges were in addition to the $12.8 million impairment charge previously announced and recorded during the third quarter of fiscal 2006 to reduce the carrying costs of buildings and building improvements, and fixtures and equipment for nine supermarkets and ten convenience stores. Total long-lived asset impairment charges for fiscal 2006 were $15.0 million. During the fourth quarter of fiscal 2006, the Company closed two supermarkets, six convenience stores and a restaurant; abandoned its plans to further develop a new prototype restaurant; and recorded other charges related to the abandonment of certain other leased equipment. Total charges related to these actions were $8.4 million and included $5.3 million related to future lease payments on real estate, net of expected future sublease payments; $2.6 million related to future rentals of equipment; and $500,000 related to contract termination and other costs. During the fourth quarter of fiscal 2006, the Company announced a reduction in force of approximately 25 employees at its headquarters, including four officers, and incurred severance and other personnel related costs related to terminating employees at the closed store locations discussed above. The Company recorded a charge for the personnel related costs of $7.0 million related to these reductions in force. 2006 Fiscal Year Performance Total revenues were $1,744.4 million for the 52-week 2006 fiscal year compared to $1,747.4 million for the 53-week 2005 fiscal year. Retail sales in comparable supermarkets and convenience stores in fiscal 2006 were 0.8% above last year. Comparable store merchandise sales in fiscal 2006, which exclude gasoline, declined 1.7% from last year. Continued high levels of competitive promotional activity and competitors' new store openings continue to adversely affect comparable store sales. Net loss for fiscal 2006 was $40.2 million as compared to net income of $4.2 million last year. Loss before income taxes in fiscal 2006 was $57.9 million, as compared to income before income taxes of $6.5 million last year. The loss before income taxes for the 2006 fiscal year was primarily attributable to charges recorded for long-lived asset impairment, restructuring, and goodwill impairment totaling $43.5 million. MSH Supermarkets Merger On May 2, 2006, the Company signed a definitive merger agreement to be acquired by MSH Supermarkets Holding Corp., an affiliate of Sun Capital Partners Group IV, Inc., pursuant to which all of the shares of common stock of the Company would be converted to cash at $11.125 per share, or approximately $88.7 million in total. This event established a fair market price for the Company for accounting purposes and resulted in the impairment of $13.1 million of goodwill in the supermarket and McNamara reporting units in the fourth quarter of fiscal 2006. The Company has filed with the Securities and Exchange Commission a preliminary proxy statement and will file with the SEC and mail to its shareholders a definitive proxy statement in connection with the proposed merger with MSH Supermarkets. Investors are urged to carefully read the preliminary proxy statement, the definitive proxy statement, and any other relevant documents filed with the SEC when they become available, because they will contain important information about the Company and the proposed merger. The definitive proxy statement may be obtained, without charge, by directing a request to: Secretary Marsh Supermarkets, Inc. 9800 Crosspoint Boulevard Indianapolis, IN 46256 Tel: (317) 594-2100 About Marsh Supermarkets, Inc. Marsh Supermarkets, Inc. (Nasdaq: MARSA & MARSB) -- http://www.marsh.net/-- is a regional supermarket chain with stores primarily in Indiana and western Ohio, operating 69 Marsh(R) supermarkets, 38 LoBill(R) Food stores, eight O'Malias(R) Food Markets, 154 Village Pantry(R) convenience stores, and two Arthur's Fresh Market(R) stores. The Company also operates Crystal Food Services(SM) which provides upscale catering, cafeteria management, office coffee, coffee roasting, vending and concessions, and Primo Banquet Catering and Conference Centers; Floral Fashions(R), McNamara(R) Florist and Enflora(R) -- Flowers for Business. * * * As reported in the Troubled Company Reporter on May 8, 2006, Moody's Investors Service placed the ratings of Marsh Supermarkets, Inc., including the B3 Corporate Family Rating and Caa2 rating of 8.875% Senior Subordinated Notes due 2007 on review-direction uncertain. As reported in the Troubled Company Reporter on April 25, 2006, Standard & Poor's Ratings Services held its 'B-' corporate credit and 'CCC' subordinated debt ratings on Marsh Supermarkets Inc. on CreditWatch with developing implications. MEDICAL CONNECTIONS: March 31 Balance Sheet Upside-Down by $1.1MM ----------------------------------------------------------------- Medical Connections Holdings, Inc., filed its financial statements for the quarter ended March 31, 2006, with the Securities and Exchange Commission. The Company reported a $810,324 net loss on $243,739 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $1,085,501 in total assets and $2,193,088 in total liabilities resulting in a stockholders' deficit of $1,107,587. Full-text copies of the Company's financial statements for the quarter ended March 31, 2006, are available for free at: http://ResearchArchives.com/t/s?c77 Going Concern Doubt Bagell, Josephs, Levine & Company LLC expressed substantial doubt about Medical Connections's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's operating losses and little recurring operating revenue. About Medical Connections Headquartered in Boca Raton, Florida, Medical Connections, Inc. -- http://www.medicalconnections.com/--is a pioneering medical recruitment and staffing company, created in 2002 to satisfy the increasing demands for qualified personnel in the healthcare industry. The company identifies, trains, and places medical professionals from allied health, nurses and physicians to pharmacists and medical scientists. Medical Connections applies established and innovative methods to meet the needs of its clientele, capitalizing on the more than 20 years experience of its key personnel. MEDICALCV INC: Eapen Chacko Replaces Jack Jungbauer as CFO ---------------------------------------------------------- Eapen Chacko has agreed to join MedicalCV, Inc., effective June 21, 2006, as Vice President, Finance and Chief Financial Officer. Mr. Chacko replaces John H. Jungbauer. From September 2000 to May 2005, Mr. Chacko was Chief Financial Officer of Possis Medical, Inc., a developer, marketer and manufacturer of medical devices for the endovascular treatment market. Mr. Chacko was Vice President for Investor and Public Relations, Corporate Communication at Possis from September 1999 to August 2000. From 1995 to 1999, he was Director of Investor Relations at Fingerhut Companies, a direct marketer and financial services company. Mr. Chacko is a director of Hawkins, Inc., a company that formulates, blends and distributes bulk and specialty chemicals. Under his employment agreement with MedicalCV, Mr. Chacko will receive an annual base salary of $200,000 and is eligible to receive performance-based cash bonuses. Headquartered in Inver Grove Heights, Minnesota, MedicalCV, Inc. -- http://www.medicalcvinc.com/-- is a cardiothoracic surgery device manufacturer. Previously, its primary focus was on heart valve disease. It developed and marketed mechanical heart valves known as the Omnicarbon 3000 and 4000. In November 2004, after an exhaustive evaluation of the business, MedicalCV decided to explore options for exiting the mechanical valve business. The Company intends to direct its resources to the development and introduction of products targeting treatment of atrial fibrillation. Going Concern Doubt PricewaterhouseCoopers LLP expressed substantial doubt about MedicalCV Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended April 30, 2005 and 2004. The auditing firm pointed to MedicalCV's losses, negative cash flows from operations and difficulty in obtaining additional funds to finance its working capital and capital expenditure needs. MERIDIAN AUTOMOTIVE: Has Until July 31 to File Chapter 11 Plan -------------------------------------------------------------- Meridian Automotive Systems, Inc., and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the District of Delaware to further extend their exclusive periods to: (a) file a plan of reorganization through and including July 31, 2006; and (b) obtain acceptances of that plan through and including Sept. 30, 2006. The Debtors delivered their Second Amended Joint Plan of Reorganization and Disclosure Statement to the Bankruptcy Court on June 23, 2006. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERIDIAN AUTOMOTIVE: Has Until Nov. 1 to Remove Civil Actions ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware further extended the period within which Meridian Automotive Systems, Inc., and its debtor-affiliates may file notices of removal of prepetition civil actions to Nov. 1, 2006. As reported in the Troubled Company Reporter on June 12, 2006, according to Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, an extension will give the Debtors more time to make fully informed decisions concerning removal of each pending prepetition civil action and will assure that the Debtors do not forfeit their rights under Section 1452 of the Judiciary and Judicial Procedures Code. Mr. Brady told the Court that the rights of the Debtors' adversaries will not be prejudiced by an extension because any party to a prepetition action that is removed may seek to have it remanded to the state court pursuant to Section 1452(b). The Court also approved the Debtors' request without prejudice to: (a) any position the Debtors may take regarding whether Section 362 of the Bankruptcy Code applies to stay any civil action pending against them; and (b) the Debtors' right to seek further extensions. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000). NATURADE INC: Symco Agrees to Decrease Note to $1 Million --------------------------------------------------------- Naturade, Inc., Quincy Investments Corp., and Symbiotics, Inc. and Symco Incorporated have entered into an Agreement amending the terms of a Promissory Note dated July 22, 2005. The amendment: -- decreased the principal amount of the Note from $1,492,360 to $1,000,000; -- modified the payments on the Note from $20,000 per month in May 2006 with a balloon payment of $518,500 on June 1, 2006, $10,000 per month from July 2006 to May 2007 with a balloon payment of $450,000 on June 1, 2007 and $5,000 per month from July 2007 to May 2008 with a balloon payment of $476,305 on June 1, 2008, to $33,000 per month in cash beginning June 15, 2006 for 30 consecutive months ending November 15, 2008;and -- Included an interest charge of 7% per annum on the unpaid principal balance beginning June 1, 2006 payable monthly in arrears. In consideration for the amendment, the Company agreed to issue Symco 500,000 shares of the Company's Common Stock and agreed to authorize Series D Convertible Preferred Stock and issue Symco 6,000 shares of Series D by August 31, 2006. The Series D will be convertible into 200 shares of Common Stock for each share of Series D, at the discretion of the holder. A full text copy of the Amended and Restated Promissory Note is available for free at http://researcharchives.com/t/s?c74 About Naturade Inc. Naturade Inc. is a branded natural products marketing company focused on growth through innovative, scientifically supported products designed to nourish the health and well being of consumers. The Company primarily competes in the overall market for natural, nutritional supplements. Nutrition Business Journal, a San Diego-based research publication that specializes in this industry, reports that sales for the overall $58 billion "Nutrition" industry were up 7% in 2004 versus 2003. Naturade primarily competes in the $19 billion segment defined by NBJ as Supplements, which grew 3.8% in 2004. In addition, the report points out that sales of supplements were growing at similar rates in both the mass market channel and health food and natural product stores at approximately 3.5%. At March 31, 2006, Naturade Inc.'s balance sheet showed total assets of $11,839,862 and total liabilities of $14,106,365, resulting in a $5,786,503 stockholders' deficit. NCP MARKETING: Court Okays Spangenberg Shibley as Special Counsel ----------------------------------------------------------------- N.C.P. Marketing Group, Inc., and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the District of Nevada to employ Spangenberg, Shibley & Liber, LLP, as their special litigation counsel. The Blanks Litigation Since 1997, the Debtor has operated as a seller of Tae Bo brand exercise tapes and DVDs after it formed a relationship with Billy Blanks, creator of the Tae Bo brand of exercise. Pursuant to a letter agreement dated August 31, 1999, the Debtor purchased certain Tae Bo trademark rights from Mr. Blanks. In early 2002, the Debtor, Mr. Blanks, Gayle Blanks, and BG Star Productions Inc. entered into settlement and license agreements, assigning the Debtors' interest in the Tae Bo trademarks back to the Blanks parties. Pursuant to the agreements, the Debtor has the: -- exclusive right to produce and sell the tapes; -- exclusive right to use the trademarks to market the tapes; and -- ability to assign its rights in the trademarks uder the license agreement to a third party. After the Debtors filed for chapter 11 protection on April 13, 2004, they decided to auction its trademark rights. The Blanks parties objected to the Debtors' motion to sell the rights since under the license agreement, the Blanks parties did not grant the Debtor the right to freely assign its trademark license to a third party. The Court subsequently order the Debtors not to sell the rights. The Debtors argue that the trademark transfer constitutes a fraudulent transfer of the Debtors' interest in the Tae Bo trademarks, because the Debtors failed to receive a reasonably equivalent value for transferring its interest in the trademarks back to the Blanks parties. Spangenberg Shibley Retention The Debtors tell the Court that Spangenberg Shibley is expected to prosecute their claims in the Blanks Litigation, in any court or venue, and to interact and coordinate with the Debtors' bankruptcy counsel concerning the Blanks Litigation and any related actions. The Debtors say that the Blanks Litigation is a very valuable asset of its estates. Essentially, unless the Debtors recover either its rights in the Tae Bo trademarks or their equivalent value, the Debtors will be unable to reorganize. Therefore, retaining the services of the Firm is essential to preserving the value of the Blanks Litigation to the estates. Peter H. Weinberger, Esq., a partner at Spangenberg Shibley, tells the Court that the Firm's fees are contingent on the outcome of the Blanks litigation, and will receive: a) one-third or 33% of the amount collected on any of the claims for which it has been retained, if the said claim is settled prior to the scheduled trial date; and b) two-fifths or 40% of the amount collected on any of the claims for which it has been retained, if the said claim is settled on or after the scheduled trial date or if the matter proceeds to trial. Mr. Weinberger assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Weinberger can be reached at: Peter H. Weinberger, Esq. Spangenberg, Shibley & Liber LLP 2400 National City Center 1900 East Ninth Street Cleveland, Ohio 44114 Tel: (216) 696-3232 Fax: (216) 696-3924 http://www.spanglaw.com/ About N.C.P. Marketing Headquartered in North West Canton, Ohio, N.C.P. Marketing Group, Inc. is an infomercial producer and global marketer of the platinum award-winning original Billy Blanks' Tae-Bo Video Library. The Debtor filed for chapter 11 protection on April 13, 2004 (Bankr. Nev. Case No. 04-51071). Jeffrey Baddeley, Esq., at Spangenberg Shibley & Liber LLP and Jennifer A. Smith, Esq., at Lionel Sawyer & Collins represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. NEPTUNE INDUSTRIES: March 31 Balance Sheet Upside-Down by $147K --------------------------------------------------------------- Neptune Industries, Inc., filed its financial statements for the quarter ended March 31, 2006, with the Securities and Exchange Commission. The Company reported a $338,831 net loss on $124,918 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $978,397 in total assets and $1,126,105 in total liabilities resulting in a stockholders' deficit of $147,708. A full-text copy of the Company's financial statements for the quarter ended March 31, 2006, is available for free at: http://ResearchArchives.com/t/s?c76 Going Concern Doubt Dohan and Company CPAs, PA, expressed substantial doubt about Neptune Industries' ability to continue as a going concern after it audited the Company's financial statements for the year ended June 30, 2005. The auditing firm pointed to the Company's recurring losses from operations and recurring deficiencies in working capital. About Neptune Industries Neptune Industries Inc. -- http://www.neptuneindustries.net/-- is a public Florida corporation that engages in commercial fish farming and related production and distribution activities in the seafood and aquaculture industries. NHON TAI VO: Case Summary & 13 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Nhon Tai Vo 502 Glade Boulevard Lafayette, Louisiana 70506 Bankruptcy Case No.: 06-50485 Chapter 11 Petition Date: June 28, 2006 Court: Western District of Louisiana (Lafayette/Opelousas) Judge: Gerald H. Schiff Debtor's Counsel: William C. Vidrine, Esq. Vidrine & Vidrine, PLLC 711 West Pinhook Road Lafayette, Louisiana 70503 Tel: (337) 233-5195 Total Assets: $558,600 Total Debts: $1,454,333 Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Business Loan Center Bank Loan $451,863 1633 Broadway, 39th Floor New York, NY 10019 Zionn Bank Bank Loan $413,000 P.O. Box 25822 Salt Lake City, UT 84125-0822 HSBC NV $12,951 16430 North Scottsdale Road Scottsdale, AZ 85254 Citi $12,130 CBUSASEARS $7,969 Bank of America $6,624 Monogram Bank North America $4,960 Chase $3,674 Bank of America $1,264 Valentine & Kebartas, Inc. $1,113 Amex $421 Providian $403 Wash Mutual/Providian $402 NORTEL NETWORKS: Outlines Biz Plan to Improve Operating Margins --------------------------------------------------------------- In connection with its business transformation plan to increase competitiveness by improving operating margins and overall business performance, Nortel Networks Corp. reported: * significant changes to its North American pension programs; * a net reduction of approximately 1,100 positions globally; and * a series of new initiatives to create a world-class Operations organization. The report is the latest in a series of actions Nortel is taking to achieve a targeted operating-margin expansion in excess of $1.5 billion in 2008. "I am confident in the progress we are making in turning around Nortel and recreating a great company," Mike Zafirovski, Nortel president and CEO, said. "In the past few months we've taken important steps, some with near-term impact, and others with longer-term benefits, toward transforming our operations to be more efficient and customer-focused." Key Company actions include: * Pension Plan: changes to control costs and align with industry-benchmarked companies. These changes are expected to result in an estimated annual reduction of $100 million in pension expense starting in 2008 and savings of more than $400 million in cash by the year 2012. This will reduce the Company's unfunded pension liability deficit by $400 million. * Global Operations: initiatives designed to create a world- class Operations organization to speed customer responsiveness and to instill process excellence while reducing costs. * Organizational Simplification: flatten the organization and shift to a culture marked by agility and accountability. The latter two actions result in a reduction of 1,900 positions globally and the creation of approximately 800 new positions in Operations Centers of Excellence. Total cost, both the charge to the income statement and cash, for the Global Operations restructuring and the organizational simplification, is estimated to be $100 million over the next two years, of which $35 million of the charge to the income statement is expected to be taken in the second quarter of 2006. The cash cost is expected to be incurred equally over a two-year period. Annual savings from these actions is targeted to be $100 million in 2007 and $175 million by 2008. Pension Plan Changes Beginning Jan. 1, 2008, Nortel will introduce key changes to the current Nortel Capital Accumulation and Retirement Program in the United States and Canada. Employees currently in defined benefit pension plans will be moved to defined contribution retirement programs. Employees already in defined contribution programs will stay in defined contribution programs. The defined contribution programs will have a new formula, which is comprised of an automatic employer contribution equal to two percent of employees' eligible earnings. In addition, Nortel will provide a 50% match on employee contributions of up to 6% of eligible earnings, for a total maximum five percent employer contribution. Current post-retirement healthcare benefits will be eliminated for employees who are not age 50 with five years of service on July 1, 2006. All future retirees who do not meet this age and service criteria will continue to have access to healthcare coverage at their own cost through Nortel's preferred provider, given they meet eligibility requirements when they retire. These changes will not go into effect for 18 months. Between now and then employees will continue to earn benefits under the current plans. Also, employees will keep their rights to all benefits already earned in their current plans. Those benefits will be available when they retire or leave Nortel. The Company will provide financial education and modeling assistance to help employees through the transition. Current retirees in both the U.S. and Canada will not see any change to their pension income benefit. Some retirees in the U.S. will see a change in the cost-sharing formula for medical benefits. Creating a World-Class Operations Organization To realize the vision of a world-class Operations organization that delivers high quality service at low cost to customers, Nortel reports a number of actions designed to increase customer responsiveness, as well as product and service reliability. The action plan to deliver these savings and transform Nortel's Global Operations includes: * Operations Centers of Excellence: The creation of two new world-class Nortel Operations Centers of Excellence in Mexico and Turkey powered by state-of-the-art tools, Six Sigma processes and Nortel's own technology. These locations were selected for a number of reasons including Nortel's established operations in these countries, a strong labor pool, cost competitiveness, and proximity to major customers based in these regions. The long-term plan is to consolidate more than 100 sites globally into fewer operations centers of excellence focused on delivering engineering, product and technical support, order management, purchasing and data analysis, among other functions. As Nortel consolidates these sites, the company will eliminate 1,200 Operations positions globally, in part through attrition. Nortel expects to create 800 new Operations positions for these and other centers of excellence by 2008. * High-Touch Customer Centers: An increased focus on high-customer-interaction processes delivering strategic capabilities such as network design, project engineering, consulting and advisory work to support Nortel's new Services strategy. These activities will be led out of major Nortel locations including Ottawa, Ontario; Richardson, Texas; and Research Triangle Park, North Carolina, as well as locations supporting Europe, the Middle East and Africa, Caribbean and Latin America and Asia Pacific. * Procurement Effectiveness: Driving process excellence through the implementation of three major initiatives: a) supplier life cycle management, which maps supplier capabilities including agility, volume and capacity to the different stages in a product's life cycle; b) smart, simple design or parts standardization; and c) Clean Sheet Analysis, a data-intensive best practice that enables Nortel to identify what a product, or component "should" cost and then use that data in supplier negotiations. Organizational Simplification In addition to the actions taken to create a world-class Operations organization, Nortel will eliminate 350 middle management positions throughout the company and through business unit efficiencies 350 additional positions globally. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. * * * As reported in the Troubled Company Reporter on June 20, 2006, Moody's Investors Service affirmed the B3 corporate family rating of Nortel; assigned a B3 rating to the proposed $2 billion senior note issue; downgraded the $200 million 6.875% Senior Notes due 2023 and revised the outlook to stable from negative. Standard & Poor's Ratings Services removed its ratings on Brampton, Ontario-based Nortel Networks Limited from CreditWatch with negative implications, where they were placed March 10, 2006, following a ratings review. At the same time, Standard & Poor's affirmed its 'B-' long-term and 'B-2' short-term corporate credit ratings on the company, and assigned its 'B-' senior unsecured debt rating to the company's proposed $2 billion notes. The outlook is stable. NORTHWEST AIRLINES: Employees Need Not File Proofs of Wage Claim ---------------------------------------------------------------- Northwest Airlines Corp. and its debtor-affiliates obtained from the U.S. Bankruptcy Court for the Southern District of New York a supplemental order clarifying that their present or former salaried employees will not be required to file proofs of claim for wages, salaries and benefits authorized to be paid under the First Day Wage Order, unless the Debtors have provided written notice to the subject employee that they do not intend to pay that claim. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, says an identical provision with respect to the Debtors' unionized employees was included in the Bar Date Order. The Debtors sought to extend the provision to cover the Debtors' salaried personnel as well. In the event the Debtors provide written notice to the employee stating that they do not intend to pay its claim, it should file a proof of claim until the later of: -- the August 16, 2006 Bar Date; or -- 30 days from the written notice's date. Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000). NORTHWEST AIRLINES: Can Assume Worldspan Carrier Agreement ---------------------------------------------------------- Northwest Airlines Corp. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to assume a participating carrier agreement, as supplemented by the content agreement. The Debtors also obtained the Court's permission to file the Agreements under seal as a necessary measure to protect the parties from disclosing confidential commercial information. Worldspan PCA As reported in the Troubled Company Reporter on June 9, 2006, in February 1991, Northwest Airlines and Worldspan, L.P., entered into a Participating Carrier Agreement, pursuant to which Worldspan, through its global distribution system, distributed Northwest's products. Northwest Airlines and Worldspan have negotiated a Content Agreement to supplement the PCA beginning August 1, 2006, for a five-year term. Northwest Airlines and Worldspan agree that in connection with the assumption, Worldspan will have an allowed $15,635,000 general unsecured claim for the prepetition amounts due under the PCA. The parties agree that the allowance of Worldspan's prepetition claim, together with the accommodations and financial arrangements encompassed by the terms of the Content Agreement, satisfy any "cure" obligations Northwest Airlines has to Worldspan under Section 365. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, tells the Court that the PCA allows Northwest Airlines to continue to have access to an important component of Northwest Airlines' distribution process. The Content Agreement provides for immediate savings in reduced distribution costs, and further augments the benefits under the PCA by providing for additional and enhanced Northwest Airlines content to be made available to users of the Worldspan GDS. About Northwest Airlines Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000). NORTHWEST AIRLINES: Can Reject Flight Attendants' Labor Contracts ----------------------------------------------------------------- The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York granted, on June 29, 2006, Northwest Airlines' motion to reject its contract with flight attendants, represented by the Professional Flight Attendants Association. The court stayed implementation of the order for 14 days so that additional negotiations may take place. If no agreement is reached during that 14-day period, the company is authorized to implement the terms of the tentative agreement that it reached with the PFAA on March 1, which the flight attendants failed to ratify. "Northwest bargained in good faith with representatives of PFAA. In March, we reached a consensual agreement with the union's negotiating committee whom the flight attendants chose to represent them," Mike Becker, senior vice president of human resources and labor relations, said. "The tentative agreement was the result of extensive negotiations involving substantial compromise on the part of Northwest Airlines and PFAA's own negotiating committee." Northwest reached agreements on permanent wage and benefit reduction agreements with the Air Line Pilots Association, the International Association of Machinists and Aerospace Workers, Aircraft Technical Support Association, the Transport Workers Union of America, and the Northwest Airlines Meteorologists Association. Two rounds of salaried and management employee pay and benefit cuts have also been instituted and the needed aircraft maintenance employee labor cost savings have been achieved. About Northwest Airlines Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. ON SEMICONDUCTOR: Major Shareholder Adopts 10b5-1 Trading Plan -------------------------------------------------------------- ON Semiconductor Corporation's largest shareholder, TPG Advisors II Inc., has entered into a Rule 10b5-1 trading plan as part of TPG's long-term strategy of reducing its holdings of ON Semiconductor common stock in an orderly manner. The plan has been adopted in accordance with ON Semiconductor's trading policies and the guidelines specified under Rule 10b5-1 under the Securities Exchange Act of 1934. Under the plan, TPG contemplates selling up to a total of 30 million shares of ON Semiconductor common stock during a six-month period that begins July 31, 2006. Up to 10 million shares could be sold at prices of $6.00 or higher, up to 10 million additional shares at prices of $6.25 or higher and up to 10 million additional shares at prices of $6.50 or higher. The shares covered by the 10b5-1 plan represent approximately 18% of TPG's total holdings of ON Semiconductor common stock and approximately 9% of the total stock outstanding. Rule 10b5-1 allows corporate executives, directors and other insiders to establish pre-arranged plans to sell a specified number of shares of a company's stock at prices and in accordance with a schedule established at the time the plan is adopted. Sales made under TPG's Rule 10b5-1 plan will be disclosed publicly through Form 4 filings with the Securities and Exchange Commission and will be effected in accordance with Rule 144 under the Securities Act of 1933, including the volume limitations of Rule 144(e). ON Semiconductor Corp. (Nasdaq: ONNN) -- http://www.onsemi.com/-- supplies power solutions to engineers, purchasing professionals, distributors and contract manufacturers in the computer, cell phone, portable devices, automotive and industrial markets. At March. 31, 2006, the Company's equity deficit narrowed to $249.7 million from $300.3 million at Dec. 31, 2005. ORCAL GEOTHERMAL: Inadequate Info Cues Moody's to Withdraw Ratings ------------------------------------------------------------------ Moody's Investors Service has withdrawn the Ba1 rating for the senior secured notes of OrCal Geothermal Inc. The rating has been withdrawn because Moody's believes that it lacks adequate information to maintain a rating. Outlook Actions: Issuer: OrCal Geothermal, Inc. * Outlook, Changed To Rating Withdrawn From Stable Withdrawals: Issuer: OrCal Geothermal, Inc. * Senior Secured Regular Bond/Debenture, Withdrawn, previously rated Ba1 OrCal's operating subsidiaries produce electricity from geothermal resources in California having a generating capacity of approximately 76 megawatts. OrCal is wholly-owned by Ormat Nevada, a holding company and the operator of OrCal's geothermal power projects. Ormat Nevada is a wholly-owned subsidiary of Ormat Technologies, Inc. OVERSEAS SHIPHOLDING: Hires J.H. Cohn as Savings Plan Accountant ---------------------------------------------------------------- J.H. Cohn LLP has been appointed as the independent registered public accounting firm for the OSG Ship Management, Inc., Savings Plan for the year ended December 31, 2005. J.H. Cohn replaces Margolin, Winer & Evens LLP as the independent registered public accounting firm for the Plan. The decision to change independent registered public accounting firms was approved by the Savings Plan Committee that administers the Plan. About OSG Overseas Shipholding Group, Inc. (NYSE: OSG) -- http://www.osg.com/-- is a publicly traded tanker company with an owned, operated and newbuild fleet of 113 vessels, aggregating 12.7 million dwt and 865,000 cbm. The Company provides energy transportation services for crude oil and petroleum products in the U.S. and International Flag markets. OSG has offices in New York, Athens, London, Newcastle and Singapore. * * * As reported in the Troubled Company Reporter on Feb. 15, 2005, Standard & Poor's Ratings Services affirmed its ratings, including the 'BB+' corporate credit rating, on Overseas Shipholding and removed all ratings from CreditWatch, where they were placed on Dec. 14, 2004. S&P's CreditWatch placement followed the Company's announcement that it would acquire Stelmar Shipping Ltd. Overseas Shipholding completed its $1.3 billion acquisition of Stelmar on Jan. 20, 2005. S&P said the outlook is stable. As reported in the Troubled Company Reporter on Feb. 10, 2005, Moody's Investors Service confirmed Overseas Shipholding's senior unsecured and senior implied ratings at Ba1. Moody's also changed the rating outlook to negative from stable. This completed Moody's ratings review opened on Dec. 13, 2004, following the announcement by the company of its acquisition of Stelmar Shipping (not rated) for $1.36 billion. PARKER DRILLING: Debt Reduction Prompts S&P's Positive Outlook -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on oil and gas contract driller Parker Drilling Co., and revised its outlook on the company to positive from stable. Houston, Texas-based Parker had total debt of about $390 million as of March 31, 2006. "The outlook revision incorporates the company's successful completion of its $200 million debt reduction plans and continued favorable market fundamentals resulting in a significantly improved financial risk profile," said Standard & Poor's credit analyst Brian Janiak. The ratings on Parker reflect the company's high debt leverage and participation in the highly competitive, cyclical, and volatile oil and gas contract drilling industry in areas of high political risk. These weaknesses are slightly mitigated by a diversified rig fleet and adequate near-term liquidity for capital spending and debt service. "The positive outlook on Parker incorporates the expectation that current favorable market conditions will lead to continued improving operating results and allow the company to meet its more aggressive capital expenditure plans while improving its financial risk profile," said Mr. Janiak. PERFORMANCE HOME: March 31 Balance Sheet Upside-Down by $9.4 Mil. ----------------------------------------------------------------- Performance Home Buyers, LLC, filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on June 26, 2006. The Company reported a net loss of $777,039 on $1,025,758 of total revenues for the three months ended March 31, 2006, compared to $541,409 net loss on $1,385,406 of total revenues for the same quarter last year. At March 31, 2006, the Company's balance sheet showed $17,686,596 in total assets and $27,160,213 in total liabilities, resulting in a $9,473,617 stockholders' deficit. Full-text copies of the Company's first quarter financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?c8a Performance Home Buyers, LLC, acquires, renovates and markets existing residential properties for resale or lease in the Greater Miami Valley Ohio region. PHOTOWORKS INC: Set to Make First Interest Payment on $2.5MM Loan ----------------------------------------------------------------- PhotoWorks, Inc., will commence payment, on June 30, 2006, of quarterly interest due on its recently secured $2.5 million bridge financing. The company closed the financing on May 26, 2006, with the issuance of convertible notes in the principal amount of $2,500,000 as well as warrants to purchase 1,250,000 shares of Common Stock. The notes bear interest at 10% per annum. The principal and accrued interest is due and payable on March 29, 2011. The warrants are exercisable immediately and expire on March 29, 2011. The warrants have an exercise price of $.40 per share. If PhotoWorks completes an equity financing of at least $2 million on or prior to September 30, 2007, the notes will automatically convert into shares of the class of equity issued in the financing at the same price. In the event such an equity financing is not completed by September 30, 2007, or in the event of a sale or merger of Registrant to or into another company prior to September 30, 2007, the notes will be convertible into common stock at $0.54 per share. A full-text copy of the Convertible Note and Warrant Purchase Agreement dated as of May 26, 2006, is available for free at http://ResearchArchives.com/t/s?c79 PhotoWorks(R), Inc. (OTCBB:FOTO) -- http://www.photoworks.com/-- is an online photography services company. Every day, photographers send film, memory cards and CDs, or go to the Company's website to upload, organize and email their pictures, order prints, and create Signature Photo Cards and Custom Photo Going Concern Doubt Williams & Webster, PS, expressed substantial doubt about the Company's ability to continue as a going concern after it audited the financial statements for the year ending Sept. 30, 2005. The auditing firm pointed to the Company's net losses and cash flow shortages. PORTOLA PACKAGING: Settles Blackhawk's Patent Infringement Suit --------------------------------------------------------------- Portola Packaging Inc. has signed an agreement with Blackhawk Molding Co., Inc., to settle a patent infringement suit filed by Blackhawk with the U.S. District Court for the Northern District of Illinois, Eastern Division. Blackhawk had alleged that a "single stick" label attached to the Company's five-gallon caps causes the Company's caps to infringe a patent held by it and is seeking damages. The Company answered the complaint denying all allegations and asserting that its product does not infringe the Blackhawk patent and that the patent was invalid. The settlement agreement provides that the Company will pay Blackhawk $4 million by June 30, 2006, and $500,000 per quarter for four quarters thereafter and $250,000 per quarter for an additional four quarters. Portola says it has sufficient cash flow from operations and ample lines of credit to make the payments. The Company has already switched to an alternative label for its customers, which is not covered by the Blackhawk patent. Portola Packaging Inc. -- http://www.portpack.com/-- is a leading designer, manufacturer and marketer of tamper evident plastic closures used in dairy, fruit juice, bottled water, sports drinks, institutional food products and other non-carbonated beverage products. The Company also produces a wide variety of plastic bottles for use in the dairy, water and juice industries, including various high density bottles, as well as five-gallon polycarbonate water bottles. In addition, the Company designs, manufactures and markets capping equipment for use in high speed bottling, filling and packaging production lines. The Company is also engaged in the manufacture and sale of tooling and molds used in the blow molding industry. As of Feb. 28, 2006, Portola's balance sheet showed total assets of $171,621,000 and total liabilities of $234,818,000, resulting in a shareholders' deficit of $63,197,000. POSITRON CORP: Ham Langston Resigns as Independent Auditor ---------------------------------------------------------- Ham, Langston & Brezina, LLP, has resigned as Positron Corporation's certifying independent accountant. The Company's management says that during the two most recent fiscal years and any subsequent interim period preceding the resignation of the Ham Langston, there were no disagreements with the firm on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. As reported in the Troubled Company Reporter on May 16, 2006, Ham, Langston & Brezina, L.L.P. expressed substantial doubt about Positron Corporation's ability to continue as a going concern after auditing the Company's financial statements for the year ended Dec. 31. 2005. The auditing firm pointed to the Company's recurring losses from operations and low inventory turnover. Headquartered in Houston, Texas, Positron Corporation -- http://www.positron.com-- designs, manufactures, markets and supports advanced medical imaging devices utilizing positron emission tomography technology under the trade name POSICAM(TM) systems. POSICAM(TM) systems incorporate patented and proprietary software and technology for the diagnosis and treatment of patients in the areas of cardiology, oncology and neurology. POSICAM(TM) systems are in use at leading medical facilities, including the University of Texas -- Houston Health Science Center; The Heart Center of Niagara in Niagara Falls, New York; Emory Crawford Long Hospital Carlyle Fraser Heart Center in Atlanta; and Nishidai Clinic (Diagnostic Imaging Center) in Tokyo. PREFERRED HEALTH: Moody's Rates Proposed $185 Million Loan at B1 ---------------------------------------------------------------- Moody's Investors Service assigned a B1 senior debt rating to the proposed $185 million term loan of Preferred Health Management Corporation. The term loan is being issued under an amendment to the existing credit facility of Aveta Inc. The ratings of the co- borrowers under the existing facility, MMM Holdings, Inc. and NAMM Holdings, Inc. were both affirmed at B1. The outlook on all the ratings is stable. According to Moody's, the proceeds of the bank loan will be used by Aveta to fund the purchase of Preferred Medicare Choice, Inc., a licensed HMO operating in Puerto Rico and PHMC, an administrative services company. The new facility will be guaranteed by Aveta on the same basis as the existing facility and is considered to be pari passu with the existing term loans. The existing facility is secured with the pledge of the stock and assets of Aveta, as well as the pledge of the stock of each of the borrowers and their regulated subsidiaries and all assets of the non-regulated entities. The new loan, which matures on the same date as the existing term loans, will have the same pledge. According to Moody's, PHMC and PMC will become subsidiaries of MMM, alongside MMM Healthcare which also operates in Puerto Rico. MMM Healthcare and PMC are the two largest providers of Medicare Advantage products in Puerto Rico, with 118,000 members and 61,000 members, respectively. PMC offers its products in all 78 municipalities, with a stronger concentration in the western portion of the island, compared to MMM Healthcare which is more concentrated in the south and east. Combined, they will service approximately 75% of the Medicare Advantage enrolled population in Puerto Rico. Moody's B1 senior secured bank credit facility rating is based on the consolidated results of MMM and NAMM and reflects the companies' highly leveraged capital structure, including the large amount of goodwill, the companies' short operating history, dependence on the Medicare Advantage product and geographic concentration in Puerto Rico, as well as the uncertainty which surrounds the future financial prospects of the Medicare program. Although the companies comply with the regulatory capital requirements of each jurisdiction in which they operate, Moody's believes that the targeted consolidated capital adequacy on an NAIC risk-based capital basis is relatively weak at approximately 50% of company action level. However, the rating agency noted that the results for 2005 were solid with combined Medicare membership growth in Puerto Rico exceeding 30% and operating margins of approximately 10%. The rating agency added that given the current Medicare reimbursement rates for Puerto Rico and the combined marketing potential of MMM Healthcare and PMC, similar results are expected during 2006. Moody's ratings are based on the expectation that there are no changes in the methodology used by the Centers for Medicare and Medicaid Services in determining the Medicare Advantage reimbursement rates, that 100% of excess unregulated cash is used for debt repayment, and the companies maintain a consolidated RBC of at least 50% of company action level. Moody's also expects that there are no significant changes to the financial covenants contained in the secured bank credit facility and all covenants will be met or exceeded. Moody's stated that the ratings could move up if NAIC RBC grows to 100% of company action level, debt to EBIT falls below 2 times, EBIT interest coverage is at least 5 times, there is additional product and geographic diversification, and there is successful integration with PMC measured by net margins of at least 4% and organic membership growth in Puerto Rico of at least 10%. However, if there is a significant adverse change in Medicare reimbursement levels, if NAIC RBC falls below 50% of company action level, if debt to EBIT exceeds 5 times, if EBIT to interest expense falls below 3.5 times, or if a significant portion of debt is not retired each year, then Moody's said, the ratings could be moved down. MMM Healthcare offers Medicare Advantage products exclusively to eligible participants in Puerto Rico. Moody's notes that the company currently enjoys being the market leader in providing Medicare Advantage products in Puerto Rico and being reimbursed at a very favorable rate from CMS, which determines the rates that health benefit companies are paid to provide a Medicare Advantage product. As a result of these circumstances, Moody's stated, the company has been able to record impressive growth and earnings margins since it was established in 2001. However, while CMS reimbursement rates are in place for 2006, and rates for 2007 have been announced, rates for subsequent years are susceptible to unpredictable shifts in Medicare policy emanating from Washington. NAMM is a medical management company that operates in California and Illinois. Its regulated operating subsidiary, PrimeCare Medical Network, Inc., consists of 10 owned IPAs in Southern California that contract with major health care benefit companies on a capitated basis to provide medical care to commercial and Medicare members. This rating was assigned with a stable outlook: * Preferred Health Management Corporation -- senior secured debt rating at B1 These ratings were affirmed with a stable outlook: * MMM Holdings, Inc. -- senior secured debt rating at B1; corporate family rating at B1; * NAMM Holdings, Inc. -- senior secured debt rating at B1, * MMM Healthcare, Inc. -- insurance financial strength rating at Ba2; * PrimeCare Medical Network, Inc. -- insurance financial strength rating at Ba2. Aveta, Inc. is headquartered in Fort Lee, NJ. As of December 31, 2005, Aveta reported stockholders' equity of $38 million and approximately 130,500 Medicare members. For full year 2005, pro-forma total revenues were $938 million. Moody's health insurance financial strength ratings are opinions about the ability of life and health insurance companies to punctually repay senior policyholder claims and obligations. Because IFSRs are applied to operating life and health insurance companies, the cash flows of which are regulated by the applicable state insurance department, the IFSR is typically the highest rating within a corporate group. Moody's corporate family rating is an opinion of a corporate family's ability to honor all of its financial obligations and is assigned to a corporate family as if it had a single class of debt and a single consolidated legal entity structure. PROGRESS RAIL: Caterpillar Merger Cues Moody's to Hold Ratings -------------------------------------------------------------- Moody's Investors Service confirmed the ratings of Progress Rail Services Holdings Corporation and its subsidiary PRSC Acqusition Corp.; Corporate Family at B1. The outlook is stable. This action concludes the review for upgrade initiated on May 17, 2006 and follows the completion of the acquisition of Progress Rail by Caterpillar, Inc. As part of the acquisition, Progress Rail has provided notices of redemption to holders of the $200 million 7.75% senior unsecured notes due 2012 issued by Progress Rail's subsidiary, PRSC Acquisition Corp. Accordingly, no rated debt of Progress Rail will be outstanding upon completion of the redemptions. Moody's will withdraw all ratings of Progress Rail and PRSC Acquisition Corp. upon the completion of the redemption of the Notes by the end of July 2006. Ratings confirmed and to be withdrawn: Issuer: Progress Rail Services Holdings Corporation: * Corporate Family Rating: B1 * Speculative Grade Liquidity Rating SGL-2 Issuer: PRSC Acquisition Corp. * Senior Unsecured: B2 Outlook Actions: Issuer: Progress Rail Services Holdings Corporation: * Outlook changed to Stable from Rating Under Review Issuer: PRSC Acquisition Corp. * Outlook changed to Stable from Rating Under Review Progress Rail Services Holdings, headquartered in Albertville, Alabama, provides outsourced maintenance and repair services and products to the railroad industry in North America. Caterpillar Inc., headquartered in Peoria, Illinois, is the world's largest manufacturer of construction equipment. SAGE RANCH: Steve Cote Wants Debtor's Chapter 11 Case Dismissed --------------------------------------------------------------- Steven Cote, an equity interest holder of Sage Ranch Estates, LLC, asks the U.S. Bankruptcy Court for the District of Nevada in Reno to dismiss Sage Ranch Estates' chapter 11 case on the grounds that the petition was filed in bad faith. Mr. Cote argues that the bankruptcy case will impede and slow down the Debtor's liquidation and add a layer of administrative expense that is unnecessary and unjustified. A hearing to consider Mr. Cote's request is scheduled on July 19, 2006, at 2:00 p.m. Sage Ranch Estates, Inc. and six of its affiliates filed for chapter 11 protection on March 9, 2006 (Bankr. D. Nev. Case Nos. 06-50104 through 06-50112). Based in Fernley, Nevada, the Company is an affiliate of Sage View Estates, L.L.C., which owns and develops Sage Valley Estates. Sage Valley is a residential community that encompasses 50 one-acre lots and 87 one-half acre lots. Sallie B. Armstrong, Esq. in Reno, Nevada represents the Debtor. John F.Murtha, Esq., serves as the Debtor's chapter 11 trustee. Michael W. Keane, Esq., and John F. Keuscher, Esq., at Woodburn & Wedge serve as attorneys to the Trustee. Muckel Anderson provides the Trustee with accounting services. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. SATELITES MEXICANOS: Financial Restructuring Accord Approved ------------------------------------------------------------ Secretaria de Comunicaciones y Transporte, the Mexican transport and communications ministry, said in a statement that the financial restructuring agreement reached by Satelites Mexicanos S.A. de C.V. aka Satmex, the creditors and the shareholders in March has received its approval. Business News Americas reports that the restructuring proposal now requires authorization from the local civil courts. Satmex expects the courts' decision in the next few days. The presentation of the plan to a US bankruptcy court will then follow, BNamericas relates. The restructuring agreement, says BNamericas, would allow Satmex to cut its $800 million debt by US$300 million, of which $100 million is interest. The company defaulted on $523 million of its total debt. BNamericas states that creditors of Satmex will acquire 80% of the company while the Mexican government will hold 20%. Much of the foreign ownership, however, will be identified as "neutral investment" and the government will have 55% of the voting rights. According to BNamericas, the Mexican government negotiated with the US creditors of Satmex to make sure that bankruptcy proceedings would be held locally. BNamericas says that Servicios Corporativos, a shareholder of Satmex, owes the government at least US$188 million, and the government doubted that this would be seen as a priority in US courts. Creditors, however, demanded that the US courts have the final say, according to BNamericas. Headquartered in Mexico, Satelites Mexicanos, S.A. de C.V. -- http://www.satmex.com/-- is the leading provider of fixed satellite services in Mexico and is expanding its services to become a leading provider of fixed satellite services throughout Latin America. Satmex provides transponder capacity to customers for distribution of network and cable television programming and on-site transmission of live news reports, sporting events and other video feeds. Satmex also provides satellite transmission capacity to telecommunications service providers for public telephone networks in Mexico and elsewhere and to corporate customers for their private business networks with data, voice and video applications, as well as satellite internet services. The Debtor is an affiliate of Loral Space & Communications Ltd., which filed for chapter 11 protection on July 15, 2003 (Bankr. S.D.N.Y. Case No. 03-41710). Some holders of prepetition debt securities filed an involuntary chapter 11 petition against the Debtor on May 25, 2005 (Bankr. S.D.N.Y. Case No. 05-13862). The Debtor, through Sergio Autrey Maza, the Foreign Representative, Chief Executive Officer and Chairman of the Board of Directors of Satmex filed an ancillary proceeding on Aug. 4, 2005 (S.D.N.Y. Case No. 05-16103). Matthew Scott Barr, Esq., Luc A. Despins, Esq., Paul D. Malek, Esq., and Jeffrey K. Milton, Esq., at Milbank, Tweed, Hadley & McCloy LLP represent the Debtor. When the Debtor filed an ancillary proceeding, it listed $900,000,000 in assets and $688,000,000 in debts. SECURECARE TECHNOLOGIES: Robert Woodrow Resigns as CEO ------------------------------------------------------ Robert Woodrow resigned as SecureCARE Technologies, Inc.'s President, Chief Executive Officer, and member of the Board of Directors due to personal reasons. The Board accepted M r. Woodrow's resignation on June 16, 2006. The Company says there were no disagreements with Mr. Woodrow which led to his resignation. Neil Burley, SecureCARE's Chief Financial Officer, was appointed interim President and Chief Executive Officer. Based in Austin, Texas, SecureCARE Technologies, Inc., fka eClickMD, Inc., provides Internet-based document exchange and e-signature solutions for the healthcare industry. The Company's SecureCARE.net application is a secure, HIPAA-ready (Health Insurance Portability and Accountability Act) tracking and reporting tool that streamlines operations. The Company's software is tailored to the needs of physicians, clinics, home healthcare, hospice and durable medical equipment providers. Going Concern Doubt As reported in the Troubled Company Reporter on June 1, 2006, KBA Group LLP in Dallas, Texas, raised substantial doubt about SecureCARE Technologies, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the Company's recurring losses and negative cash flows from operations. SILICON GRAPHICS: Can Use Secured Noteholders' Cash Collateral -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the request of Silicon Graphics, Inc., and its debtor- affiliates to continue using of Cash Collateral of the holders of the Senior Secured Notes. The Debtors' right to use the Secured Noteholders' Cash Collateral under commenced on June 26, 2006, and will expire on "the occurrence of a Termination Event," Judge Lifland says. In no event will the Debtors be authorized to use the Secured Noteholders' Cash Collateral for any purposes or under any terms other than those set forth in the Final DIP Order, the Budget, the DIP Loans and DIP Loan Documents, or as may otherwise be approved by the Court following notice and hearing as may be required, Judge Lifland adds. A full-text copy of Court-Approved Budget is available for free at http://ResearchArchives.com/t/s?c6a 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. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) SILICON GRAPHICS: Committee Taps Winston & Strawn as Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors in Silicon Graphics, Inc., and its debtor-affiliates' chapter 11 cases, asks the United States Bankruptcy Court for the Southern District of New York's authority to retain Winston & Strawn LLP as its counsel, nunc pro tunc to May 18, 2006. According to Jaspaul Singh, co-chairperson of the Committee, Winston & Strawn is well qualified to represent the Committee in the Debtors' bankruptcy cases. Winston & Strawn LLP has an extensive restructuring and insolvency practice, and represents debtors, creditors, committees and other parties-in-interest in cases under the Bankruptcy Code and in out- of-court debt restructuring and workouts, Mr. Singh relates. The firm's restructuring and insolvency group currently has over 35 full or part-time members. As Counsel to the Committee, Winston & Strawn will: a. provide legal advice to the Committee with respect to its duties and powers in the Chapter 11 cases; b. consult with the Committee and the Debtors concerning the administration of the bankruptcy proceedings; c. assist the Committee in: -- in its investigation of the acts, conduct, assets, liabilities, postpetition financing, and financial condition of the Debtors, operation of the Debtors' businesses, and the desirability of continuing or selling businesses and assets, and other matters related to the bankruptcy case or to the formulation of a plan; -- in the evaluation of claims against the estates, including analysis of and possible objections to the validity, priority, amount, subordination, or avoidance of claims and transfers of property on account of the claims; -- in participating in the formulation of a plan, including the Committee's communications with unsecured creditors concerning the plan and collecting of, and filing with the Court, acceptances or rejections of the plan; and -- with any effort to request the appointment of a trustee or examiner; d. advise and represent the Committee in connection with administrative and substantive matters arising in the Chapter 11 cases, including the obtaining of credit, the sale of assets, and the rejection or assumption of executory contracts and unexpired leases; e. appear before the Court, any other federal court, state court or appellate courts; and f. perform other legal services as may be required and which are in the interest of the unsecured creditors. Winston & Strawn will be paid on its current hourly rates and will be reimbursed for necessary expenses. The firm's customary hourly rates, subject to periodic adjustment, are: Partners $360 to $765 Associates $225 to $470 Legal Assistants $105 to $230 David Neier, a partner at Winston & Strawn, assures the Court that his firm has no connection with, and holds no interest adverse to, the Debtors, their creditors, or any other party-in-interest. Winston & Strawn 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. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) SILICON GRAPHICS: KPMG Replaces Ernst & Young as Auditor -------------------------------------------------------- Silicon Graphics, Inc., dismissed Ernst & Young as its independent registered public accounting firm on June 19, 2006. The Company's Audit Committee made the decision to change independent accountants and that decision was approved, ratified and adopted by the Company's Board of Directors. The Company says the change in independent registered public accounting firms is not the result of any disagreement with Ernst & Young. Silicon Graphics subsequently engaged KPMG LLP as its new independent registered public accounting firm. About Silicon Graphics Headquartered in Mountain View, California, Silicon Graphics, Inc. (OTC: SGID) -- http://www.sgi.com/-- offers high-performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. The Debtor and 13 of its affiliates filed for chapter 11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $369,416,815 and total debts of $664,268,602. SILK SCREEN: Case Summary & 16 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Silk Screen Depot Inc. dba Two Thumbs Screen Print 1766 East 46th Street Los Angeles, California 90058 Bankruptcy Case No.: 06-12825 Chapter 11 Petition Date: June 28, 2006 Court: Central District Of California (Los Angeles) Judge: Richard M. Neiter Debtor's Counsel: Steven R. Fox, Esq. 17835 Ventura Boulevard, Suite 306 Encino, California 91316 Tel: (818) 774-3545 Fax: (818) 774-3707 Total Assets: $390,151 Total Debts: $1,350,273 Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ California Bank & Trust Loan $106,210 2399 Gateway Oaks Drive Suite 110 Sacramento, CA 95833 Bank of America Loan $100,841 P.O. Box 60060 City of Industry, CA 91716-0069 Joseph Tartakovsky Loans $100,000 10205 Louise Avenue Northridge, CA 91325 AIG Workers' $40,000 Compensation Wells Fargo Business Card $37,117 Nazdar Vendor $24,186 Cisco, Inc. Collector for AIG $21,312 Best Vendor $11,631 Rheetech Sales & Services Vendor $9,995 Fashion Syndicate Vendor $5,887 TM Takata & Marzalek, Inc. Vendor $5,540 Zimmerman, Walker and Landlord's Attorney $949 Monitz LLP Shell Credit Card Processing Gas Card $903 Texaco Gas Card $204 U.S. Bank For Listing Purposes Unknown Wells Fargo Financial Leasing Schenk Typ-VC4 Unknown Printing Machine STRATUS SERVICES: Insurance Fund Demands $2.3 Million Payment ------------------------------------------------------------- Stratus Services Group, Inc., disclosed that it continues to receive increasing pressure from creditors on old debt. In June 2006, the California State Compensation Insurance Fund instituted an action to collect $2.3 million of payments allegedly owed by the Company with respect to workers' compensation insurance, and Liberty Mutual Insurance Company filed suit seeking $250,000 allegedly owed for workers' compensation insurance. The Company's resources are limited to work out satisfactory settlements with all of its creditors. Stratus has negotiated or is in the process of re-negotiating a certain portion of its debt to remain solvent. Joseph J. Raymond, CEO commented, "at this point, we continue to battle past creditor and debt issues, which ultimately could eventually force us into a strategic bankruptcy filing down the road. However, if our creditors can realistically assess our current assets, they will realize that staying the course with the Company makes most sense for all parties involved. As previously disclosed, the Company has had a working capital deficiency for quite some time, and most of our current issues relate to our old business model. Creditors need to allow the Company a chance to flourish again, which will in turn strengthen their assets." Stratus also reports that some of its negotiations with other creditor parties have been positive in nature, although no other restructuring of magnitude can be reported at this time. Pinnacle Investment Partners, Inc., a private equity hedge fund is one such party with whom Stratus is currently in default. Fund Manager, Christopher Janish commented, "we remain extremely concerned with the debt levels of Stratus at this point, however, we are equally pleased with the commitment that management has made in order to right the ship for both Stratus' creditors and equity investors. The current business model eliminates major risk of operations losses, which should lead to sustained operational profitability within its continued operations. Additionally, we believe the IT market is a high growth area, and Stratus is well positioned for a rebound via that space, provided that the Company's creditors stay the course. We remain committed to working hand and hand with Stratus in order to bring value to Stratus' shareholders." Headquartered in Manalapan, New Jersey, Stratus Services Group Inc. (OTCBB: SSVG.OB) -- http://www.stratusservices.com/-- provides a wide range of staffing and productivity consulting services nationally through a network of offices located throughout the United States. Going Concern Doubt E. Randall Gruber, CPA, PC, expressed substantial doubt about Stratus Services' ability to continue as a going concern after it audited the Company's financial statements for the year ended Sept. 30, 2005. The auditing firm pointed to the Company's recurring losses from operations, and has working capital deficit of $12.0 million at Sept. 30, 2005. SUNCOM WIRELESS: Eric Haskell Continues Stint as CFO ---------------------------------------------------- Eric Haskell has agreed to serve as the Executive Vice President and Chief Financial Officer of SunCom Wireless Holdings Inc. and its subsidiaries until February 3, 2007. Prior to his permanent appointment, Mr. Haskell had served as SunCom's interim Executive Vice President and Chief Financial Officer since December 20, 2005. Mr. Haskell currently also serves as a director of SunCom and as its interim Chief Executive Officer while SunCom's Chief Executive Officer and Chairman, Michael E. Kalogris, recovers from injuries sustained in an automobile accident. If Mr. Haskell's employment agreement is not terminated on or before February 3, 2007, the employment agreement will be automatically extended for successive 60 day periods unless either party elects to terminate the agreement by giving 60 days' prior notice. Under his employment agreement, Mr. Haskell will receive an annual base salary of $285,000 and is eligible to receive an annual performance-based bonus equal to his base salary multiplied by the percentage of the goals associated with that year's bonus achieved during that year. The bonus amount will be prorated based upon the portion of the calendar year Mr. Haskell is employed. Based in Berwyn, Pennsylvania, SunCom Wireless Holdings Inc. -- http://www.suncom.com/-- fka Triton PCS, Inc., is licensed to provide digital wireless communications services in the southeastern United States, Puerto Rico and the U.S. Virgin Islands. As of Dec. 31, 2005, the network covers approximately 14.8 million potential customers in North Carolina, South Carolina, Tennessee and Georgia and 4.1 million potential customers in Puerto Rico and the U.S. Virgin Islands. At March 31, 2006, the company's stockholders' deficit widened to $228,312,000 from an $83,266,000 deficit at Dec. 31, 2005. * * * As reported in the Troubled Company Reporter on March 22, 2006, Standard & Poor's Ratings Services held its ratings on Berwyn, Pennsylvania-based SunCom Wireless Holdings Inc. and its operating subsidiaries, including the 'CCC+' corporate credit rating, on CreditWatch, where they were placed with negative implications on Jan. 23, 2006. The 'B-' bank loan rating for Suncom Wireless Inc. remained on CreditWatch with negative implications, but the bank loan recovery rating of '1' is not on CreditWatch, indicating high expectations for full (100%) recovery of principal in the event of bankruptcy or payment default. SYNOVICS PHARMA: Posts $2.2 Mil. Net Loss in Quarter Ended Apr. 30 ------------------------------------------------------------------ Synovics Pharmaceuticals, Inc., fka Bionutrics, Inc., filed its second fiscal quarter financial statements for the three months ended April 30, 2006, with the Securities and Exchange Commission on June 21, 2006. The Company reported $2,252,624 net loss on $475 of revenues for the three months ended April 30, 2006, compared to $263,792 net loss on $2,107 of revenues for the same period last year. At April 30, 2006, the Company's balance sheet showed $18,593,503 in total assets, $8,170,113 in total liabilities, and $10,423,390 in total stockholders' equity. The Company's April 30 balance sheet also showed strained liquidity with $1,270,151 in total current assets available to pay $6,003,639 in total current liabilities coming due within the next 12 months. Metformin Licensing Agreement On May 17, 2006, the Company had obtained ownership of an Abbreviated New Drug Application filed with the United States Food and Drug Administration for an Extended Release 500mg dosage of Metformin as part of an ANDA transfer and licensing agreement with Nostrum Pharmaceuticals, Inc. Nostrum will cooperate with the Company in all phases of the work to be performed under the licensing agreement, including, necessary studies, validations, and tests related to Metformin. Until the Company has received ANDA approval for the product, Nostrum is to make the Nostrum personnel directly involved with Metformin available to advise and consult about its development and manufacture. Nostrum also agrees that its President will be personally available to consult and advise during all aspects of the development of the ANDA for Metformin. The Company is to reimburse Nostrum for its reasonable out-of-pocket expenses incurred in performance of the obligations set forth in Section 3.1(c) Metformin Licensing Agreement. In May 2006, in partial consideration for granting the license, the Company paid $150,000 to Nostrum. The Company has agreed to make milestone payments in further consideration for the license granted, and these payments will be made within 30 days of achieving each milestone: (i) $150,000 upon the receipt of approval for ANDA 76-756; and (ii) royalty payments of 20% of net sales up to a maximum of $1,500,000 Kirk Pharmaceuticals Acquisition In May 2006, the Company consummated its acquisition of Kirk Pharmaceuticals, LLC, and its subsidiary for $12,000,000. The Company paid $9,000,000 in cash on the closing date and a $3,000,000 promissory note. The Kirk Acquisition Note constitutes a general unsecured obligation of the Company. Immediately prior to the closing of the acquisition of Kirk, the Company consummated two financings to satisfy the Cash Purchase Price and its working capital requirements: (i) a credit facility with Bank of India, New York Branch; and (ii) the sale of the Company's 1,500,000 shares of common stock, par value $0.001 per share, to Maneesh, an India-based accredited investor. The Bank of India Financing is a senior secured loan for $10,500,000. Of the loan, $5,250,000 will be used for working capital purposes. In the Working Capital Loan, the Company is entitled to borrow an amount equal to 70% of the value of fully paid inventory, accounts receivable, and cash maintained at the Bank of India, or $5,250,000, which ever is less. The Bank of India Loan accrues interest at the prime rate of interest as determined by the bank plus 1.0%. In the event of any default, the interest rate will increase to the prime rate of interest as determined by bank plus 3.0%. Interest is payable monthly. The Principal will be paid with increasing payments over time through Dec. 31, 2010. Payments will be subject to a fee equal to 1.0% of the amount paid for each year or a portion of the remaining balance between the date of payment and Dec. 31, 2010. The obligations of the Company to the Bank of India Financing have been guaranteed jointly and severally by its subsidiaries. The Bank of India has a first priority security interest in the subsidiaries' assets. An officer of the Company has also guaranteed the obligations to the Bank of India. Maneesh Investment The Company also consummated the sale of 1,500,000 shares of its common stock to Maneesh for $4.00 per share, for a total of $6,000,000. The Company agreed to pay $525,000 broker fees for services provided in the Bank of India financing, and $180,000 in cash for the Maneesh Investment. In addition, the Company has agreed to issue 300,000 warrants with an exercise price of $6.00 and term of three years for Introduction Services relative to the Maneesh Investment, as well as $180,000 in cash plus 45,000 warrants as a finder's fee for the Maneesh Investment. Full-text copies of the Company's second fiscal quarter financial statements for the three months ended April 30, 2006, are available for free at http://ResearchArchives.com/t/s?c7e Going Concern Doubt Miller Ellin & Company, LLP, in New York, raised substantial doubt about Bionutrics, Inc., nka Synovics Pharmaceuticals, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Oct. 31, 2005, and 2004. The auditor pointed to the Company's significant losses and negative cash flows. Based in Phoenix, Ariz., Synovics Pharmaceuticals, Inc., fka Bionutrics, Inc., develops, makes and sells oral controlled- release drug formulations using proprietary drug formulation and delivery technologies. TELOS CORP: March 31 Balance Sheet Upside-Down by $105.2 Million ---------------------------------------------------------------- Telos Corporation filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on June 22, 2006. The Company reported $8,119,000 net loss on $25,174,000 of total revenues for the three months ended March 31, 2006, compared to $629,000 net loss on $35,012,000 of total revenues for the same period last year. At March 31, 2006, the Company's balance sheet showed $35,555,000 in total assets and $140,775,000 in total liabilities, resulting in a $105,220,000 stockholders' deficit. The Company's Dec. 31 balance sheet also showed strained liquidity with $24,937,000 in total current assets available to pay $38,042,000 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's first quarter financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?c82 Telos Corporation is a systems integration and services company addressing the information technology needs of U.S. Government customers worldwide. The Company also owns all of the issued and outstanding share capital of Xacta Corporation, a subsidiary that develops, markets and sells U.S. Government-validated secure enterprise solutions to federal, state and local government agencies and to financial institutions. THERMADYNE HOLDINGS: May Release Restated Financials on July 14 --------------------------------------------------------------- Thermadyne Holdings Corporation (Pink Sheets: THMD) will restate its previously issued financial statements for the year ended Dec. 31, 2004, and the first three quarters of 2005. The Company will also delay filing its annual report on Form 10-K for the 12 months ended Dec. 31, 2005 and quarterly report on Form 10-Q for the three months ended March 31, 2006. The Company was required to reclassify certain non-core businesses that had been sold as discontinued operations in prior year consolidated financial results. The Company further reported that it was analyzing whether certain of its subsidiaries have been accurately applying U.S. GAAP to the accounting for foreign currency translations and in its financial statement consolidation process in conjunction with adjustments related to fresh-start accounting. The Company was also reassessing its accounting for deferred income taxes related to the fresh-start accounting adjustments and state income tax liabilities. The Company has substantially completed its review of these matters and has determined that certain adjustments related to deferred income taxes associated with fresh-start accounting, state income tax liabilities, foreign currency translation and miscellaneous other matters are necessary in its financial statements for the year ended Dec. 31, 2004, and for the first three quarters of 2005. The Company will release the audited 2005 and first quarter 2006 results together with the restated 2004 financial statements and the restated 2005 quarterly financial statements. The Company anticipates this information will be available on or before July 14, 2006. In the event the Company is unable to complete its filing by this date, the Company intends to provide preliminary financial information, hold a conference call with investors and may begin to solicit consents from its bondholders and senior lenders if additional time is needed to complete those filings. Based in St. Louis, Missouri, Thermadyne Holdings Corporation (Pink Sheets: THMD) -- http://www.Thermadyne.com/-- is a global marketer of cutting and welding products and accessories under a variety of brand names including Victor(R), Tweco(R), Arcair(R), Thermal Dynamics(R), Thermal Arc(R), Stoody(R), and Cigweld(R). * * * As reported in the Troubled Company Reporter on March 21, 2006, Moody's Investors Service placed Thermadyne Holdings Corporation's Caa1 rating on $175 million 9.25% senior subordinated notes, due 2014, rated; and B2 Corporate Family Rating on review for possible downgrade. As reported in the Troubled Company Reporter on April 27, 2005, Standard & Poor's Ratings Services lowered its corporate credit rating on Thermadyne Holdings Corp. to 'B-' from 'B+', and subordinated debt rating to 'CCC' from 'B-'. S&P assigned a negative outlook at that time. TOYS 'R' US: Moody's Rates $1 Billion Senior Secured Loan at B1 --------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the new senior secured term loans of Toys "R" Us Delaware, Inc., and affirmed all other ratings. The outlook remains negative. Ratings assigned: Toys "R" Us Delaware. Inc. * $200 million Senior Secured Term Loan maturing 2008 at B1, * $800 million Senior Secured Term Loan maturing 2012 at B1. Ratings affirmed: Toys "R" Us Delaware. Inc. * 8.75% debentures due 2012 at B2. Toys "R" Us, Inc. * Corporate family rating at B2; * Senior unsecured debt rating at Caa2, and * Speculative grade liquidity rating of SGL-3. TRU 2005 RE Holding Co. I, LLC * Senior unsecured credit facility at B2. The B1 ratings on the new term loans, or one notch above the B2 corporate family rating, reflects their preferential position in the capital structure, with the unrated $2 billion secured asset- based revolving credit facility the only debt in a superior position. The B2 corporate family rating balances TRU's solid franchise, particularly Babies "R" Us, with credit metrics that are weak given the increased debt resulting from 2005's leveraged acquisition, with debt/EBITDA assuming Moody's standard analytic adjustments of more than 8 times. The 8.75% unsecured debentures due 2012 are rated at the corporate family level as they are joint obligations of Toys "R" Us, Inc. and Toys "R" Us-Delaware, the principal operating subsidiary. The senior unsecured notes of TRU 2005 RE Holding Co. I, LLC are rated at the B2 corporate family level, reflecting the lack of mortgage collateral. The initial pool has a loan to value of approximately 68%. Moody's notes that the loan is guaranteed by the four subsidiaries with ownership of the pool properties and that there is a solid master lease with Toys "R" Us Delaware, the sole tenant, with an original fifteen year term and rent coverage of roughly 1.9 times. However, the 1.25 times fixed charge coverage ratio covenant is on the low side. The Caa2 rating of the legacy senior unsecured notes of Toys "R" Us, Inc. reflects their weak position in the capital structure given their lack of both security and gurantees, and the fact that further deterioration is possible as the indentures offer little protection. The negative outlook reflects the ongoing challenges in the U.S. Toy division, as well as the necessity of remediating the material weakness in accounting controls. As a result of the high leverage, short-term upward rating momentum is unlikely; however, the outlook will stabilize if 2006 operating performance demonstrates that the U.S. turnaround is gaining momentum, which would be evidenced by improved operating margins and reasonable comparable store sales performance, and if the material weakness issues are satisfied. Quantitatively, improved performance would be evidenced by the achievement off gross margin of 35% and EBIT margin of 5%. Downward rating pressure would build if the gross margin decline to below 34% or the EBIT margin falls below 4.5%, or if the material weakness issues are not satisfactorily resolved by FYE 2006. The affirmation of the SGL-3 speculative grade liquidity rating reflects : (1) the reduced financial flexibility as a result of the impact on free cash flow of the high leverage, (2) the covenants in the bank facilities, and (3) the very limited alternative sources of liquidity available given that all operating assets have been pledged, the real estate that has been mortgaged or encumbered by negative pledges under various credit facilities. Toys "R" Us, headquartered in Wayne, New Jersey, is the largest specialty retailer of toys, with FYE January 2006 revenues of $11.3 billion. It operates stores both in the U.S. and internationally, as well as the Babies "R" Us format. Toys was taken private in July 2005 by Kohlberg, Kravis, Roberts, Vornado Realty Trust, and Bain Capital, each of which now owns one-third of the company. TRANSMONTAIGNE INC: Inks Merger Agreement With Morgan Stanley ------------------------------------------------------------- TransMontaigne Inc. has entered into a definitive merger agreement with Morgan Stanley Capital Group Inc., pursuant to which all the issued and outstanding shares of common stock of TransMontaigne, including TransMontaigne's outstanding Series B Convertible Preferred Stock, on an as-converted basis, will be exchanged for $11.35 per share in cash. The merger has been approved by TransMontaigne's Board of Directors. Upon completion of the merger, TransMontaigne's common stock will no longer be traded on the New York Stock Exchange. Prior to entering into the definitive agreement with Morgan Staley, TransMontaigne terminated the merger agreement it previously entered into with SemGroup, L.P. and its affiliates, in accordance with its terms. Closing of the merger is subject to: a) the approval of a majority of the outstanding shares of common stock and Series B Convertible Preferred Stock of TransMontaigne, on an as-converted basis, voting as a single class at a special meeting of TransMontaigne's stockholders; and b) the receipt of customary regulatory approvals, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. TransMontaigne will solicit stockholder approval by means of a proxy statement, which will be mailed to all TransMontaigne stockholders upon completion of the required Securities and Exchange Commission filing and review process. TransMontaigne currently expects the merger to close between mid-August and mid- September 2006. Prior to closing of the merger, TransMontaigne will make provision to (i) either redeem or defease TransMontaigne's 91/8% Series B Senior Subordinated Notes pursuant to the terms and conditions thereof, or (ii) amend the terms and conditions of the Notes to permit them to remain outstanding following the closing of the merger. TransMontaigne Partners L.P. will remain a public company, subject to the periodic filing requirements with the Securities and Exchange Commission, and its common units will continue to be listed and traded on the New York Stock Exchange. UBS Investment Bank acted as financial advisor and provided a fairness opinion to TransMontaigne. Morrison & Foerster LLP served as legal counsel to TransMontaigne, and Wachtell, Lipton, Rosen & Katz served as legal counsel to Morgan Stanley. About TransMontaigne TransMontaigne Inc. (NYSE:TMG) -- http://www.transmontaigne.com/ -- is a refined petroleum products marketing and distribution company based in Denver, Colorado with operations in the United States, primarily in the Gulf Coast, Florida, East Coast and Midwest regions. The Company's principal activities consist of (i) terminal, pipeline, tug and barge operations, (ii) marketing and distribution, (iii) supply chain management services and (iv) managing the activities of TransMontaigne Partners L.P. The Company's customers include refiners, wholesalers, distributors, marketers, and industrial and commercial end-users of refined petroleum products. * * * As reported in the Troubled Company Reporter on May 1, 2006, Standard & Poor's Ratings Services held its 'B+' corporate credit rating on petroleum storage and distribution company TransMontaigne Inc. on CreditWatch with developing implications, following the announcement that Morgan Stanley Capital Group Inc. has made a competing offer to acquire TransMontaigne for $10.50 per share. As reported in the Troubled Company Reporter on March 30, 2006, Standard & Poor's Ratings Services revised the CreditWatch implications for its 'B+' corporate credit rating on petroleum storage and distribution company TransMontaigne Inc. to developing from positive. TRC HOLDINGS: Gets Final Court Order on Cash Collateral Use ----------------------------------------------------------- The Honorable James E. Shapiro of the U.S. Bankruptcy Court for the Eastern District of Wisconsin entered a final order allowing TRC Holdings, Inc., to use cash collateral securing repayment of its debts to Jackson Street Funding LLC and H/E Financial LLC. Judge Shapiro directs the Debtor to use its lenders' cash collateral in accordance with a budget. A copy of that budget is available for free at http://ResearchArchives.com/t/s?c7d The Debtor owes a total of $2.6 million to Jackson Street, as its first position lender and H/E Financial, as its second position lender. Jackson Street and H/E Financial holds liens and security interests in all assets acquired by the Debtor before it filed for bankruptcy. As adequate protection for any decrease in the aggregate value of the prepetition collateral, the lenders are granted security interests and liens in all property acquired by the Debtor after April 18, 2006. The Debtor is also required to place all cash, checks, notes, drafts and other instruments it receives in an account at Johnson Bank. DIP Loan Judge Shapiro further authorized the Debtor to obtain up to $850,000 from Jackson Street and H/E Financial. All advances and other extensions of credit under the Debtor-in-Possession loan are payable in full on Aug. 31, 2006. To secure repayment of the DIP loan, the lenders are granted first priority security interests and super-priority liens on all of the Debtor's property. About TRC Holdings TRC Holdings, Inc., is a staffing agency that provides skilled and semi-skilled temporary staff to small and mid-market employees primarily in the areas of industrial, administrative, technical, construction, light industrial and health care. The Debtor currently employs approximately 930 temporary and 50 full-time workers. The Debtor filed for chapter 11 protection on April 18, 2006 (Bankr. E.D. Wis. Case No. 06-21855). Daryl L. Diesing, Esq., Patrick B. Howell, Esq., and Daniel J. McGarry, Esq., at Whyte Hirschboeck Dudek S.C. represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtor filed for protection from its creditors, it estimated assets between $1 million to $10 million and debts between $10 million to $50 million. TRIPLE A POULTRY: Has Access to the Mendenhalls' Cash Collateral ---------------------------------------------------------------- The Hon. Karen K. Brown of the U.S. Bankruptcy Court for the Southern District of Texas in Houston authorized Triple A Poultry, Inc., to use cash collateral securing repayment of approximately $4,141,510 of its debts to Mark O. Mendenhall and Oniel C. Mendenhall. The Debtor sought to continue using the lenders' cash collateral in order to continue the operation of its business. The Debtor had inked a Revolving Demand Note in the principal amount of $9 million with Mark Mendenhall and a Revolving Demand Note in the principal amount of $3 million with Oniel Mendenhall in September 2005. The Debtor used proceeds from the Mendenhalls' credit line to pay delinquent taxes due to the Internal Revenue Service. The Mendenhalls hold a first lien and security interest in all of the Debtor's accounts, inventory, products and proceeds on account of the notes. To secure the aggregate amount of all cash collateral used by the Debtor and to secure any diminution in the value of their interest in the prepetition collateral, the Mendenhalls are granted replacement liens and security interests junior only to their existing liens and security interests, on all of the prepetition collateral and all accounts, inventory, products and proceeds. The Debtors will also provide adequate protection to the Lenders, by segregating and accounting for all cash collateral. The Mendenhalls' liens and security interests is subject to a $50,000 carve out for statutory fees payable to the U.S. Trustee and fees payable to the Clerk of Court. The Debtor is authorized to use cash collateral in accordance with a court-approved budget. A copy of this budget is available for free at http://researcharchives.com/t/s?c7c Headquartered in Houston, Texas, Triple A Poultry, Inc., sells meat and poultry products. The company filed for chapter 11 protection on May 19, 2006 (Bankr. S.D. Tex. Case No. 06-32119). John Matthew Vaughn, Esq., at Porter & Hedges, LLP, represents the Debtor in its restructuring efforts. 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. TRIPLE A POULTRY: Section 341(a) Meeting Moved to July 18 --------------------------------------------------------- The U.S. Trustee for Region 7 reset the meeting of Triple A Poultry Inc.'s creditors at 3:00 p.m. on July 18, 2006, at Suite 3401, 515 Rusk Avenue in Houston, Texas. The meeting was originally scheduled on June 20, 2006. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. 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 officer of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Houston, Texas, Triple A Poultry, Inc., sells meat and poultry products. The company filed for chapter 11 protection on May 19, 2006 (Bankr. S.D. Tex. Case No. 06-32119). John Matthew Vaughn, Esq., at Porter & Hedges, LLP, represents the Debtor in its restructuring efforts. 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. UNIVISION COMMS: Fitch Lowers Senior Unsecured Debt Ratings to BB ----------------------------------------------------------------- Fitch downgraded Univision Communications Inc.'s IDR and senior unsecured debt ratings to 'BB' from 'BBB-', and the ratings remain on Rating Watch Negative. The company, along with a group that includes: * Madison Dearborn Partners, * Providence Equity Partners, * Texas Pacific Group, * Thomas H. Lee Partners, and * Saban Capital Group, announced they have signed a definitive agreement under which the group will acquire Univision for $36.25 per share in cash. The transaction is valued at approximately $13.7 billion, including the assumption of $1.4 billion in debt. The downgrade reflects Fitch's belief that debt levels will materially increase as a result of this transaction negatively impacting the credit profile of the company with significant potential that ratings could be downgraded further. The resolution of Fitch's Rating Watch will be determined by an evaluation of the ultimate financing of the purchase price, overall capital structure, and free cash flow generating ability of the post-acquired entity. As part of its rating evaluation, Fitch anticipates reviewing the company's strategy with Univision's management. Existing indenture language does not protect bondholders from a change of control event and does not limit the company's ability to incur additional indebtedness. Fitch believes the company's bank facility will likely be paid-down as it contains a restriction on fundamental changes that includes the disposition of material assets. USEC INC: S&P Junks Rating on 6.75 Senior Notes ----------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Bethesda, Maryland-based USEC Inc. to 'B-' from 'B+'. At the same time, Standard & Poor's lowered its senior unsecured rating on USEC's 6.75% senior notes due 2009 to 'CCC' from 'B-'. The outlook is negative. This rating action follows the issuance of a license by the United States Nuclear Regulatory Commission to Louisiana Energy Services authorizing the construction and operation of a uranium-enrichment facility in the U.S., clearing the last major regulatory hurdle for LES. Construction of LES' proposed enrichment facility is likely to take a few years with initial production not expected until 2009. "Even so, completion of the new facility poses a significant threat to USEC's already-weak competitive position and would most likely lead to a loss of market share, because LES plans to use a lower-cost enrichment technology than currently used at USEC's existing plant," said Standard & Poor's credit analyst Dominick D'Ascoli. While USEC also has plans to build a new enrichment facility using lower-cost technology, that technology has not been proven commercially viable. Testing is under way, and the announcement of results is not expected for another three to four months. Moreover, USEC has not yet received a license from the NRC authorizing construction and operations of the proposed enrichment facility. "We are also concerned about the ability of USEC to receive financing for a new enrichment facility," Mr. D'Ascoli said, "given the approval for LES to build an enrichment facility as well." Mr. D'Ascoli said, "We could lower the ratings if USEC's new technology proves commercially unviable, liquidity declines substantially, or for other reasons. We are unlikely to raise the ratings before there is substantial certainty about the timing, funding, and commercial viability of the new enrichment facility." VENTAS INC: New York Supreme Court Defers Ruling on Kindred Suit ---------------------------------------------------------------- The Supreme Court of the State of New York, County of New York, did not rule on the request by Kindred Healthcare, Inc., to prevent Ventas from exercising its remedies under the four Master Leases between the companies. The Court asked Ventas and Kindred to re-appear to present their respective positions on Thursday, July 6, 2006. Until then, the existing stipulation agreement between the parties, entered into on June 19, 2006, by Ventas, will remain in place. As required under the Master Leases, Ventas demanded that Kindred provide to Ventas all appraisal reports in Kindred's possession relating to Ventas facilities. Kindred refused to provide such reports to Ventas. Kindred sought the injunction against Ventas on June 19, to prevent Ventas from exercising its remedies under the Master Leases that cover the 225 healthcare facilities leased by Ventas to Kindred. Ventas said that Kindred's failure to provide these reports entitles Ventas to exercise all its remedies under the Master Leases, including termination of Kindred's rights thereunder as to one or more than one healthcare facility. "We remain confident in our positions in the litigation, and we look forward to a ruling by the Court," Ventas Chairman, President and CEO Debra A. Cafaro said. "However the Court rules on Kindred's injunction request, we are confident that we are entitled to the appraisal reports regarding our facilities and are eager to obtain a hearing on that issue. In the meantime, we will honor our previous agreement with Kindred not to pursue remedies for its failure to deliver all the appraisal reports to us under Section 26.1(i)(v) of the Master Leases at this time." Each Master Lease states that Kindred is required to deliver to Ventas all "copies of any Facility-specific . . . reports or studies that are in Tenant's possession or control." On numerous prior occasions, Kindred publicly stated that it has received various appraisal reports relating to Ventas's facilities. Despite the litigation initiated by Kindred, Ventas expects the process outlined in the Master Leases whereby Ventas has the right to increase base rental rates under the Master Leases to a "Fair Market Rental" amount to continue in accordance with the terms of the Master Leases. On May 9, Ventas initiated the Reset Right process under the Master Leases by delivering notices to Kindred with its proposal that aggregate base rents under the Master Leases increase by $111 million to $317 million per year. "As we move forward in this process, we remain committed to seeking a positive outcome of the Reset Right for Ventas shareholders," Ms. Cafaro said. "The increasingly robust market for healthcare real estate assets and the terms of our Master Leases strongly support our views that the Reset Right will have significant value for Ventas shareholders. We are very focused on realizing that value and obtaining the fair market rental for our assets that Kindred agreed to pay when we provided over $600 million in concessions to allow Kindred to emerge from bankruptcy in 2001." The determination of the Fair Market Rental under the Reset Right is dependent on and may be influenced by a variety of factors, including market conditions, reimbursement rates, and cash flow to rent coverages applicable to healthcare facilities. It is highly speculative, and there can be no assurances (and Ventas is expressing no views) regarding the final determination of the Fair Market Rental. If Fair Market Rental is determined by the appraisal process in the Master Leases, it is subject to the inherent risks, uncertainties, subjectivity and judgment contained in any appraisal process. A Third Appraiser's determination regarding Fair Market Rental amounts or escalations for Ventas's 225 healthcare facilities that are covered by the Master Leases could materially differ from Ventas's estimates, analyses or proposals. About Ventas Louisville, Ky.-based, Ventas, Inc. -- http://www.ventasreit.com/ -- is a leading healthcare real estate investment trust that is the nation's largest owner of seniors housing and long-term care assets. Its diverse portfolio of properties located in 42 states includes independent and assisted living facilities, skilled nursing facilities, hospitals and medical office buildings. * * * As reported in the Troubled Company Reporter on June 5, 2006, Moody's Investors Service changed the rating outlook for Ventas, Inc. to positive. This rating action results from Ventas' recent refinancing of its bank facility from a secured facility to an unsecured facility, once again demonstrating the REIT's commitment to balance sheet enhancement. Ventas' ratings were affirmed with a positive outlook including (P)Ba3 senior debt shelf rating; (P)B1 rating subordinated debt shelf rating; and (P)B1 preferred stock shelf. In its previous rating actionwith respect to Ventas, Moody's upgraded the senior debt rating to Ba2 with a stable outlook. VISIPHOR CORP: Gets $253,000 Contribution from NRC-IRAP ------------------------------------------------------- Visiphor Corporation received a contribution from the National Research Council Canada Industrial Research Assistance Program. "The NRC-IRAP involvement is an important and welcome addition to the Visiphor endeavour," says Roy Trivett, President and CEO, Visiphor Corporation. "NRC-IRAP is contributing up to $253,000 of the projected project technical costs of $506,000." The monies will be used to further the Company's innovative research and development of "Software Factories" to deliver highly automated integration solutions. Software Factories represent a way to create new and horizontal business applications without the use of software code. Instead, proven and reusable modular components such as existing applications, services and systems are "assembled" together using a set of productivity tools. This work is being carried out in concert with a major release of platform technologies surrounding the Microsoft .NET 2.0 Framework. As part of Visiphor's commitment to optimize the research and development efforts associated with the Software Factories project the Company has decided to consolidate all its development activities in its Burnaby head office. T he Company is closing its Victoria development office and, due to personal reasons not allowing his move to Burnaby at this time; Mr. James Smith is resigning his position as the Company's Vice-President of Engineering. Mr. Smith will continue to work with the Company in a consulting role and the Company will continue to have access to his extensive knowledge and leadership. Based in Vancouver, British Columbia, Visiphor Corporation (OTCBB: VISRF; TSX-V: VIS; DE: IGYA) -- http://www.imagistechnologies.com/ -- fka Imagis Technologies Inc, specializes in developing and marketing software products that enable integrated access to applications and databases. The company also develops solutions that automate law enforcement procedures and evidence handling. These solutions often incorporate Visiphor's proprietary facial recognition algorithms and tools. Using industry standard "Web Services", Visiphor delivers a secure and economical approach to true, real-time application interoperability. The corresponding product suite is referred to as the Briyante Integration Environment. Going Concern Doubt As reported in the Troubled Company Reporter on Nov. 24, 2005, KPMG LLP expressed substantial doubt about Visiphor's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2004 and 2003. The auditing firm pointed to the Company's recurring losses from operations, deficiency in operating cash flow and deficiency in working capital. VITAL LIVING: March 31 Balance Sheet Upside-Down by $676,000 ------------------------------------------------------------ Vital Living, Inc., filed its financial statements for the quarter ended March 31, 2006, with the Securities and Exchange Commission. The Company reported a $187,000 net loss on $1,333,000 of revenues for the three months ended March 31, 2006, versus a $722,000 net loss on $1,262,000 of net sales for the three months ended March 31, 2005. At March 31, 2006, the Company's balance sheet showed $4,872,000 in total assets and $5,548,000 in total liabilities resulting in a stockholders' deficit of $676,000. Full-text copies of the Company's financial statements for the quarter ended March 31, 2006, are available for free at: http://ResearchArchives.com/t/s?c7b Going Concern Doubt As reported in the Troubled Company Reporter on May 12, 2006, Epstein Weber & Conover, PLC, expressed substantial doubt about Vital Living, Inc.'s financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations, working capital deficit and dependence on funding sources other than operations. About Vital Living Headquartered in Phoenix, Arizona, Vital Living - http://www.vitalliving.com/-- develops nutritional and nutraceutical products which are marketed for distribution through physicians and licensed or certified health care professionals. WACO VOLUNTEER: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Waco Volunteer Fire Department, Inc. P.O. Box 190 Waco, Kentucky 40385 Tel: (859) 369-7301 Bankruptcy Case No.: 06-50724 Chapter 11 Petition Date: June 28, 2006 Court: Eastern District of Kentucky (Lexington) Debtor's Counsel: Ellen Arvin Kennedy, Esq. Fowler, Measle & Bell, LLP 300 West Vine Street, Suite 600 Lexington, Kentucky 40507 Tel: (859) 252-6700 Fax: (859) 255-3735 Estimated Assets: Unknown Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. WINN-DIXIE STORES: Files Chapter 11 Reorganization Plan ------------------------------------------------------- Winn-Dixie Stores, Inc. filed its proposed Plan of Reorganization and related Disclosure Statement with the U.S. Bankruptcy Court for the Middle District of Florida on June 29, 2006. With this filing, Winn-Dixie is positioned to emerge from Chapter 11 protection as soon as late October. Winn-Dixie expects to emerge from its reorganization with sufficient financing and liquidity to make significant investments in its current store base, to selectively open new stores, and to take other actions to position the business to compete effectively in its markets over the next several years. The company also expects to emerge with only a minimal amount of long- term debt on its balance sheet. The proposed Plan of Reorganization represents the culmination of extensive negotiations with various creditors and creditor groups in Winn- Dixie's Chapter 11 cases. Creditors have been divided over whether these cases should be substantively consolidated or not. Litigation of that issue would have been complex and expensive, delaying Winn-Dixie's emergence from Chapter 11 for a substantial period of time. Accordingly, the Official Committee of Unsecured Creditors, with Winn-Dixie's support, successfully negotiated a settlement of the substantive consolidation issue. The Creditors Committee and the company have garnered the support of ad hoc committees representing the interests of trade vendors and retirees. Winn- Dixie's Plan of Reorganization incorporates the substantive consolidation settlement. $725 Million Exit Financing Winn-Dixie received a commitment for up to $725 million in exit financing from Wachovia Bank. The exit financing, which will replace the company's current debtor-in-possession credit facility on the effective date of a Plan of Reorganization, will increase Winn-Dixie's cash availability substantially. The financing is subject to the satisfaction of customary conditions. "The filing of the Plan of Reorganization and Disclosure Statement represents an important milestone in our Chapter 11 cases," Winn- Dixie President and Chief Executive Officer Peter Lynch said. "We are hopeful that all parties involved in our Chapter 11 cases will agree that this plan represents an appropriate resolution of a variety of complex issues, including potential disputes regarding substantive consolidation." "Winn-Dixie now is positioned to emerge from bankruptcy as soon as late October," Mr. Lynch continued. "Upon emergence, Winn-Dixie will be in a stronger and more financially stable position. We will have only a minimal amount of long- term debt on our balance sheet and, between our projected cash flow and new exit financing, we will be able to make significant investments in our stores and our business to ensure that we can continue to provide outstanding service and products to our customers and compete effectively in our markets. "I want to thank our Associates for their unwavering support during this process. Their perseverance and commitment to help Winn-Dixie get better all the time played a significant role in positioning us to emerge in such a positive way. We are also extremely appreciative of our customers and our partners in the vendor and real estate communities for their continued loyalty to Winn-Dixie." Business Plan The Disclosure Statement filed includes a discussion of Winn- Dixie's five-year business plan, which is designed to position the company to compete successfully by delivering high-quality products and customer service with competitive pricing. The business plan highlights the many actions the company has already taken to enhance its operational and financial performance. These include numerous merchandising and marketing initiatives, such as a focus on improving the perishables offering to reinforce the stores' image of freshness and quality and communicating the branding message of "Getting better all the time" to reflect the improvements that are being made in the stores and throughout the company. Other major completed actions include a reduction of the store footprint to focus on regions where Winn-Dixie's market share and profitability provide the best foundation for growth, a major redesign of the field and corporate overhead structure, and an annual cost reduction of approximately $100 million. As a result of these initiatives, Winn-Dixie has reported improved financial results and sales growth in recent periods. For the quarters ended Jan. 11, 2006 and April 15, 2006, the company reported year-over-year increases in identical store sales of 7.3% and 6.7%, respectively. In its business plan, Winn-Dixie projects additional growth in revenue (fueled by continued increases in identical store sales and, beginning in 2008, new store openings), gross margin and EBIDTA (earnings before interest, taxes, depreciation and amortization) during the five-year period. The Disclosure Statement also includes information about the proposed Plan of Reorganization, financial estimates regarding the company's reorganized business enterprise value, and events leading up to and during the company's Chapter 11 cases. Approval of the Disclosure Statement and related voting solicitation procedures, which Winn-Dixie will seek at a Bankruptcy Court hearing scheduled for Aug. 4, 2006, will permit the company to solicit acceptances for the proposed Plan of Reorganization and seek confirmation of the proposed Plan of Reorganization by the Bankruptcy Court. Assuming these milestones are achieved, Winn-Dixie expects to emerge from Chapter 11 reorganization as soon as late October 2006. The company's Chapter 11 cases are being presided over by the Honorable Jerry A. Funk, U.S. Bankruptcy Judge for the Middle District of Florida. "In the 16 months since Winn-Dixie filed for Chapter 11 protection, the company has made tremendous progress in addressing its operational and financial challenges," Mr. Lynch said. "In particular, there has been a tangible improvement in customer service, Associate morale, and the quality of the product offering -- particularly in perishables. All of this has led to significant increases in identical store sales in recent months and improving gross margin. I look forward to seeing what our talented and dedicated Associates can accomplish once they are no longer held back by the constraints of Chapter 11." Details of Proposed Plan of Reorganization The Plan of Reorganization and Disclosure Statement may be modified prior to the approval of the Disclosure Statement and as a result of the confirmation process. Key elements of the Plan of Reorganization, as currently proposed and subject to approval by the Bankruptcy Court, include: * The company and its subsidiaries will be deemed substantively consolidated for purposes of the Plan of Reorganization and distribution under the Plan of Reorganization in accordance with the settlement negotiated by the Creditors Committee, which include different levels of recovery for different categories of unsecured creditors, based on their relative rights and the strengths of their positions on the substantive consolidation issue and other matters. * Substantially all of the unsecured liabilities of the company will be discharged in exchange for distribution of common equity of the reorganized company, allocated to the unsecured creditors in accordance with the substantive consolidation compromise. * A portion of the common equity of the reorganized company will be set aside for use in a long-term incentive plan to be provided to certain key Winn-Dixie Associates. That plan may consist of a combination of stock grants and options. The participants in that plan and the awards for each participant will generally be determined by a newly constituted Board of Directors. * On the effective date of the Plan of Reorganization, a new Board of Directors will be appointed. The initial New Board will be comprised of nine directors. * Administrative claims and priority claims will be paid in full as required by the Bankruptcy Code, unless otherwise agreed by the holders of such claims. Secured claims may be reinstated on original terms, satisfied on deferred payment terms, or paid in full at the election of the company. * Certain creditors with claims under $3,000, including creditors who elect to reduce their claims to $3,000, will receive cash payments equal to 67% of the amount of their claims. Creditors with claims under $100 will be paid in cash, in full. * Current holders of Winn-Dixie's equity will not receive any distributions following emergence and their equity interests will be cancelled once the Plan of Reorganization becomes effective. Similarly, subordinated claims, including stock- related claims, will not receive any distributions and will be discharged. CEO Retention The Winn-Dixie Board believes it is in the best interest of the reorganized company to enter into a new employment agreement with Mr. Lynch, pursuant to which he will continue to serve as the President and Chief Executive Officer of Winn-Dixie after the Effective Date of the Plan of Reorganization. Mr. Lynch has expressed a strong desire to continue serving in these roles after the company emerges from Chapter 11. To this end, the Winn-Dixie Board, Creditors Committee and Mr. Lynch are negotiating the terms of a new employment agreement for Mr. Lynch. His current retention agreement expires on Aug. 31, 2006. About Winn-Dixie 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: Sells Louisville Facility to Seay for $3.75 Million --------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida grants Winn-Dixie Stores, Inc., and its debtor-affiliates' request to sell the Louisville warehouse and other related assets to Seay Properties, LLC, for $3,750,000. The Commonwealth of Kentucky withdraws its objection to the sale. The Court clarifies that the Debtors' transfer of the Assets will not result in Seay Properties having any liability: (a) for any claim or interest against the Debtors or against an insider of the Debtors; or (b) to the Debtors, except as expressly stated in the Agreement and the Court order. 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. 41; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Sells Stockbridge Property to BH Properties for $2.1MM ------------------------------------------------------------------ Winn-Dixie Stores, Inc., and its debtor-affiliates obtained authority from the U.S. Court Bankruptcy Court for the Middle District of Florida to sell Winn-Dixie Raleigh, Inc.'s fee simple title interest in the Stockbridge Property and all related appurtenances, rights, easements, rights-of-way, tenements and hereditaments, free and clear of liens, claims and interests, to BH Properties, LLC, for $2,100,000. As reported in the Troubled Company Reporter on June 12, 2006, before filing for bankruptcy, the Debtors developed Store No. 2701 on owned property located in Stockbridge, Georgia. The Debtors closed the Store on Aug. 28, 2005, and have exited this market area. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, asserts that the sale of the Stockbridge Property will save the estates at least $56,435 per year in administrative expenses. With the exception of the Permitted Encumbrances, there are no interests in or claims against the Assets other than the interest of Wachovia Bank, National Association, as Administrative Agent and Collateral Agent, Mr. Baker tells the Court. According to Mr. Baker, the interest of the DIP Lender will be satisfied because the Debtors will pay the sale proceeds, to the extent required, in accordance with the terms of the Final DIP Order. Real Estate Purchase Agreement On April 18, 2006, WD Raleigh and BH Properties entered into a Real Estate Purchase Agreement. BH Properties has deposited an initial earnest money deposit of $50,000 and a second deposit of $160,000 with the escrow agent. At Closing, the combined deposits will be credited against the Purchase Price and the unpaid balance of the Purchase Price will be due and payable in cash. 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. 41; Bankruptcy Creditors' Service, Inc., 215/945-7000). WI-TRON INC: Names Joe Nordgaard as Chief Executive Officer ----------------------------------------------------------- Wi-Tron, Inc., disclosed the appointment of Joe Nordgaard as Chief Executive Officer, effective June 1, 2006. Mr. Nordgaard comes to Wi-Tron with an extensive background in telecom and wireless industries, with more than 20 years of leadership experience that began at AT&T Bell Laboratories. As the former lead strategist for Lucent Technologies' Wireless Network Systems division, he created and drove Lucent's global business development leadership in the cdma450 industry. He also worked diligently with many foreign governments, operators and vendors to drive this vision; and as a direct result cdma450 is now used in over 30 countries and is scheduled for use in many more. Wi-Tron, Inc. (OTCBB: WTRO -- http://www.amplidyneinc.com/-- designs, manufactures and sells ultra linear single and multi- channel power amplifiers and broadband high-speed wireless products to the worldwide wireless telecommunications market. The single and multi-carrier linear power amplifiers, which are a key component in cellular base stations, increase the power of radio frequency and microwave signals with low distortion. The Company's products are marketed to the cellular, PCS, X-band, wireless local loop segments of the wireless telecommunications industry. * * * As reported in the Troubled Company Reporter on May 3, 2006, KBL, LLP, raised substantial doubt about Wi-Tron, Inc., fka Amplidyne, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended Dec. 31, 2004, and 2005. The auditor pointed to the company's losses from operations and limited financial resources. WORLDWIDE ENTERPRISES: Case Summary & Two Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Worldwide Enterprises at Milton Avenue, LLC 75 Lake Road, Suite 140 Congers, New York 10920 Bankruptcy Case No.: 06-22392 Chapter 11 Petition Date: June 28, 2006 Court: Southern District of New York (White Plains) Debtor's Counsel: Anne J. Penachio, Esq. 575 White Plains Road Eastchester, New York 10709 Tel: (914) 961-6003 Fax: (914) 961-5658 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Elizabethtown Gas $13,003 P.O. Box 1208 Newark, NJ 07101-1208 State of New Jersey Apartment Building Unknown Hughes Justice Complex Rooming House Trenton, NJ 08628 WYNN RESORTS: S&P Maintains Watch on B+ Corporate Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services held its ratings on Wynn Resorts Ltd. and its wholly owned subsidiary Wynn Las Vegas LLC, including their 'B+' corporate credit ratings, on CreditWatch with positive implications. The ratings were initially placed on CreditWatch on March 6, 2006, following the company's announcement that it had entered into an agreement to sell a subconcession in the Macau Special Administrative Region of the People's Republic of China for $900 million to Publishing and Broadcasting Ltd. (PBL; A-/Stable/A-2). While a definitive time frame as to the closing of the sale remains uncertain, Standard & Poor's has determined that if the sale is completed as outlined, the ratings on Wynn Resorts and Wynn Las Vegas would be raised one notch to 'BB-'. It is expected that the outlook would be stable. The upgrade would primarily reflect the favorable impact the cash proceeds from the sale would have on the company's consolidated financial profile and liquidity situation at a time when it is pursuing multiple capital spending initiatives, specifically its development of Wynn Macau and Encore at Wynn Las Vegas. In addition, the initial opening of Wynn Macau in early September 2006 will likely provide a significant cash flow stream to the company and decrease its dependence on its Wynn Las Vegas asset. The continued ramping-up of the Wynn Las Vegas asset, initial operating results in Macau, and any unexpected announcements concerning additional growth opportunities would also be factors in the planned upgrade. The CreditWatch listing will be resolved once the pending sub-concession sale is completed. XYBERNAUT CORP: John Moynahan Resigns as Chief Financial Officer ---------------------------------------------------------------- John F. Moynahan's employment agreement, dated November 14, 2005, with Xybernaut Corporation has been terminated following Mr. Moynahan's termination as the Company's Executive Vice President and Chief Financial Officer in connection with a reduction in force. Headquartered in Fairfax, Virginia, Xybernaut Corporation, develops and markets small, wearable, mobile computing and communications devices and a variety of other innovative products and services all over the world. The corporation never turned a profit in its 15-year history. The Company and its affiliate, Xybernaut Solutions, Inc., filed for chapter 11 protection on July 25, 2005 (Bankr. E.D. Va. Case Nos. 05-12801 and 05-12802). John H. Maddock III, Esq., at McGuireWoods LLP, represents the Debtors in their chapter 11 proceedings. Paul M. Sweeney, Esq., at Linowes & Blocher LLP, represents the Official Committee of Unsecured Creditors. Craig Benson Young, Esq., at Connolly Bove Lodge & Hutz, represents the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed $40 million in total assets and $3.2 million in total debts. * BOOK REVIEW: ITT: The Management of Opportunity ------------------------------------------------- Author: Robert Sobel Publisher: Beard Books Paperback: 421 pages List Price: $34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/1893122441/internetbankrupt We all know how it ends, but whew, what a ride! An enterprising man envisions a world-wide telecommunications company and guides it vigilantly through hard times; his successor radically changes course, buying up hundreds of unrelated companies; economic conditions and the national mood change; the conglomerate sags under its own weight; the next chief executive officer retrenches and then wards off hostile takeovers; the company is sold. This account of the ITT story was published in 1982, 15 years before the end. The author was given complete access to records and files, and employees were instructed to be candid and forthcoming. The result is evenhanded, thorough, and well written, and provides solid historical background for, and thoughtful analysis of, the various events. ITT founder Sosthenes Behn was born in the Caribbean and educated in Europe. He and his brother began their hoped-for "International System" of worldwide-interconnected telephone lines in 1920 by acquiring two small telephone companies in Puerto Rico and Cuba. Sobel recounts ITT's forays into Spain, Mexico, and South America; attempts to purchase RCA Communications in the late 1920s; acquisitions in France and Germany; near insolvency during the Depression; Behn's partisanship in the Spanish Civil War; and Behn's relationship with Germany before World War II and with Argentina under Peron. After the War, with his International System in shambles, Behn turned to the U.S. market, but feeling inadequate to the task, stepped down. Eventually, his successor was found in Harold Geneen, an outsider from Raytheon. Under Geneen, ITT quickly became one of the fastest growing corporations in the U.S. ITT once acquired some 20 unrelated companies in one month. Sales grew from $930 million in 1961 to $8 billion in 1970. Geneen's acquisitions sometimes complemented one another, like Sheraton, Continental Baking, and Avis, but were often random, like The Hartford (insurance), Rayonier (forest products), and O.M. Scott (lawn care). ITT's descent began in 1966, when it tried to acquire ABC. National sentiment against conglomerates had become vitriolic and this merger became its target. As Sobel put it, "Perhaps not since the end of the war had so many large groups arrayed themselves against a single corporation involved in a merger." In the end, despite The Federal Communications Commission's approval of the merger in two separate rulings, ITT and ABC yielded to the Department of Justice, media censure, and public opinion, and abandoned merger plans. Next came a variety of allegations against ITT, some well substantiated and all well publicized: funding Salvador Allende's opponents in Chile's 1970 presidential elections; peddling of influence in the Nixon White House to rid the Department of Justice of trustbusters; and exchange of campaign donations for use of a Sheraton hotel as the 1972 Republican National Convention headquarters in San Diego. All the while, ITT's poor handling of several antitrust cases were also making headlines. And then came recession in 1973. Geneen had difficulty adjusting to ITT's new business climate. His theory that growth could serve as business strategy had been disproved. ITT's stock fell from 60 in early 1973 to 12 in late 1974. Under pressure from ITT's board, Geneen stepped down in 1977, but masterminded the dismissal of his successor, Lyman Hamilton, and the installation of Rand Araskog in 1978. When the book ends in 1982, Araskog had begun a plan of coherent divesting and reorganizing the company into more manageable segments, prelude to the dismantling that was to take place in the hostile- takeover wars. Robert Sobel, who died in 1999, was a highly regarded academic and business historian with a tremendous array of books and news articles to his credit. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Rizande B. Delos Santos, Shimero Jainga, Joel Anthony G. Lopez, Tara Marie A. Martin, Jason A. Nieva, Emi Rose S.R. Parcon, Lucilo M. Pinili, Jr., Marie Therese V. Profetana, Robert Max Quiblat, Christian Q. Salta, Cherry A. Soriano-Baaclo, and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***