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/raid1/www/Hosts/bankrupt/TCR_Public/060731.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, July 31, 2006, Vol. 10, No. 180 Headlines 94TH AERO: Case Summary & Three Largest Unsecured Creditors 2929 PANTHERSVILLE: Can Use Cash Collateral Until August 30 ADELPHIA COMMS: Asks Court to Okay Post-Closing Incentive Program ADELPHIA COMMS: U.S. Trustee Names Dune Capital to Creditors Panel ADELPHIA COMMS: Wants Resolved Agreements Included in Sale Order AH-DH APARTMENTS: Citigroup Wants to Foreclose on AH-DH Properties AIGAS INCORPORATION: Amends $1.6 Billion Senior Credit Agreement ALLIS-CHALMERS ENERGY: S&P Affirms Planned $80MM Notes' B- Rating ALPHA NATURAL: Good Performance Cues Moody's to Lift Ratings AMAZON.COM: Earns $22 Million in Second Quarter of 2006 AMERIGAS PARTNERS: Posts $14.8MM 2006 3rd Fiscal Quarter Net Loss AMES TRUE: High Leverage Prompts Moody's to Junk Corp. Rating ARVINMERITOR INC: Moody's Cuts 7.125% Unsec. Notes' Rating to Ba3 ATE KAYS: Voluntary Chapter 11 Case Summary ATLANTIC MARINE: S&P Affirms Planned $155MM Facility's B+ Rating B/E AEROSPACE: Earns $18.7 Million in Second Quarter of 2006 B/E AEROSPACE: Acquires Draeger Aerospace from Cobham for $80 Mil. BADAT HOSPITALITY: Voluntary Chapter 11 Case Summary BECKMAN COULTER: Names Carolyn Beaver as Chief Financial Officer BERRY PLASTICS: S&P Revises B+ Corp. Credit Rating's Watch to Neg. BEXAR COUNTY: Debt Level Prompts Moody's to Downgrade Ratings BIDDISCOMBE INT'L: Case Summary & 19 Largest Unsecured Creditors BLUEGRASS CONTAINER: S&P Affirms $985 Mil. Facilities' BB- Rating BOSTON SCIENTIFIC: Posts $4.26 Bil. Net Loss in 2006 2nd Quarter BOYD GAMING: Second Quarter 2006 Net Income Down to $10.2 Million BROOK MAYS: Will Auction Substantially All Assets on August 8 CARMIKE CINEMAS: Inks 5th Amended Senior Secured Credit Facility CHEMED CORP: Mulls $50 Million Stock Repurchase Program CHURCH & DWIGHT: S&P Rates $250 Million Senior Secured Debt at BB COLLINS & AIKMAN: Hires James Wynalek as Head of Plastics Division COLLINS & AIKMAN: Completes Sale of Several De Minimis Assets COMMUNITY HEALTH: 2006 2nd Quarter Net Income Rises to $52.4 Mil. COMPLETE RETREATS: Court Directs Debtors to Segregate Tax Funds CONSUMERS ENERGY: Agrees to Sell MCV Interest to GSO and Rockland CONTINUING CARE: Case Summary & Two Largest Unsecured Creditors CORNELL TRADING: Wants Ch. 11 Case Dismissed & Funds Distributed COUNCIL TRAVEL: Class 3 Unsecured Claimants Receive $374,470 CSK AUTO: Gets Waiver of Default from 4-5/8% Senior Noteholders DANA CORP: Ryder Truck Wants Debtors to Decide on Truck Lease ENTERGY NEW ORLEANS: Gets Court OK to Modify FTI's Retention Order ENTERGY NEW ORLEANS: Releasing 2nd Qtr. Financials on August 8 EXCO RESOURCES: S&P Affirms B- Ratings With Stable Outlook FALCONBRIDGE LTD: Inco Unable to Get Required Shareholder Support FASHION SHOP: Has Until August 8 to File Schedules and Statement FERRO CORP: Fully Pays $55 Mil. Debenture with J.P. Morgan FLEETPRIDE CORP: Moody's Junks Rating on $150 Million Senior Loan FOAMEX INTERNATIONAL: Wants Until Nov. 10 to Remove Civil Actions FORD MOTOR: DBRS Lowers Long-Term Debt Rating to B G+G RETAIL: Court Extends Removal Period to October 23 G+G RETAIL: Walks Away from Unexpired Rave Store Lease GENERAL MOTORS: Unit Gets $6 Million Settlement from ePlus Inc. GREYSTONE LOGISTICS: Unaudited FY 2006 Results Show $2.7MM Loss GTSI CORP: Increases Secured Revolving Credit Pact by $10 Million HONEY CREEK: Says MuniMae's Disclosure Statement Lacks Information HONEY CREEK: Court Issues Stipulated Confidentiality Order HUSKY ENERGY: S&P Raises Preferred Stock Rating to BBB- from BB+ IMC INVESTMENT: Hires Hance Scarborough as Bankruptcy Counsel INCO LTD: Unable to Get Required Falconbridge Shareholder Support INCO LTD: Phelps Dodge Issues Statement on Failed Falconbridge Bid INCO LTD: Consents to OSC's Cease Trade Order on Rights Plan INTEGRATED ELECTRICAL: CNA Companies Withdraw 133 Claims INTEGRATED ELECTRICAL: Watkins Withdraws $26 Million Claim IRIDIUM SATELLITE: S&P Rates $40 Million 2nd-Lien Term Loan at CCC ITC^DELTACOM: Common Stock Delisted From Nasdaq on July 27 J.P. MORGAN: Fitch Assigns Low-B Ratings to Class B-4 & B-5 Certs. LA PETITE: Moody's Rates Proposed Second Lien Term Loan at B3 LIBERTY TAX: Remains Neutral to the Tender Offer of Five Parties LOGAN MEDICAL: Court Denies Move to Dismiss Suit v. Accountants MADE2MANAGE SYSTEMS: Moody's Rates $65 Million Sr. Loan at Caa1 MADE2MANAGE SYSTEMS: S&P Junks Proposed $65 Million Loan's Rating NEXSTAR BROADCASTING: Agrees to Acquire WTAJ-TV Assets for $56MM NORTH AMERICAN ENERGY: IPO Plan Cues S&P to Put Ratings on Watch OCA INC: SEC Has Until Aug. 11 to Contest Debt Dischargeability OWENS CORNING: Buys Modulo/ParMur for $32 Million PERFORMANCE TRANSPORTATION: Drafts Modified Incentive Program PERFORMANCE TRANSPORTATION: Removal Period Extended to November 24 PREMIUM PAPERS: PF Papers' $2.7M Asset Sale to Flambeau River OK'd QUEST MINERALS: Inks LOI to Acquire Parsons Branch Mining Permit RCNR INC: Voluntary Chapter 11 Case Summary RENATA RESORT: Hires Adams & Reese as Special Counsel ROTEC INDUSTRIES: Taps Young Conaway as Bankruptcy Counsel ROTEC INDUSTRIES: U.S. Trustee Picks Five-Member Creditors Panel SAINT VINCENTS: Wants Plan-Filing Period Stretched to Nov. 15 SAINT VINCENTS: Court Approves $2 Million Premium Financing Pact SAINT VINCENTS: Maps Out Tort Claimants Panel's Responsibilities SAKS INC: S&P Affirms B+ Corporate Credit & Sr. Unsecured Ratings SAVERS INC: S&P Junks Proposed $140 Million Sr. Sub. Notes' Rating SCHOLASTIC CORP: S&P Downgrades Corporate Credit Rating to BB SCIENCE DYNAMICS: Inks Pact to Restructure Debt With Laurus Master SERACARE LIFE: Court Sets Aug. 1 as Equity Holders Claim Bar Date SERACARE LIFE: Gets Court Nod to Hire KPMG LLP as Tax Advisors SEW CAL: Incurs $598,699 Net Loss in Quarter Ended May 31, 2006 SIERRA HEALTH: Earns $33.5 Mil. in Second Quarter Ended June 2006 SILICON GRAPHICS: Court Okays Solicitation and Tabulation Protocol SILICON GRAPHICS: Gets Okay to Finance $1.97MM Insurance Payment SKYTERRA COMMS: Approves 2006 New Equity and Incentive Plan STATION CASINOS: June 30 Balance Sheet Upside-Down by $51 Million SYLVEST FARMS: Haskell Slaughter Hired as Panel's Local Counsel TDS INVESTOR: Moody Junks $500 Million Subordinated Notes' Rating TERADYNE INC: Earns $391.6 Million, Launches Stock Repurchase Plan U.S. STEEL: S&P Places BB Corporate Credit Rating on Watch UAL AIR: Moody's Junks Rating on $148 Million Class Certificates VARTEC TELECOM: UMB Bank Wants $1.8M Claim Paid from Sale Proceeds VENETO LLC: Secured Creditor Says Case Was Filed in Bad Faith VJCS ACQUISITIONS: Moody's Junks Rating on $55 Million Sr. Loans WERNER LADDER: Gets Final Court Approval for $99MM DIP Financing WINN-DIXIE: Wants to Enter Into Liberty Surety Bonds Agreement WINN-DIXIE: Court Says Sedgwick Has No Liability to Claimants WOODCREST LLC: Case Summary & 13 Largest Unsecured Creditors * BOND PRICING: For the week of July 24 - July 28, 2006 ********* 94TH AERO: Case Summary & Three Largest Unsecured Creditors ----------------------------------------------------------- Debtor: 94th Aero Squadron of Philadelphia, Inc. 2750 Red Lion Road Philadelphia, PA 19114 Bankruptcy Case No.: 06-13185 Type of Business: The Debtor operates an aviation-themed restaurant. The Debtor filed for chapter 11 protection on August 31, 1993 (Bankr. C.D. Calif. Case No. 93-41032). Chapter 11 Petition Date: July 27, 2006 Court: Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Maureen P. Steady, Esq. Maschmeyer Karalis P.C. 1900 Spruce Street Philadelphia, PA 19103 Tel: (215) 546-4500 Fax: (215) 985-4175 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Specialty Restaurants Corp. Taxes/Debts paid $280,437 8191 East Kaiser Boulevard on behalf of the Anaheim, CA 92808 Debtor City of Philadelphia Land Rent $4,800 Aviation Division c/o Philadelphia Industrial Development Corp. One East Penn Square Building Suite 1800 Philadelphia, PA 19107 Bank of the West Bank Loan Unknown 4400 McArthur Boulevard Suite 150 Newport Beach, CA 92660 2929 PANTHERSVILLE: Can Use Cash Collateral Until August 30 ----------------------------------------------------------- The Hon. Margaret H. Murphy of the U.S. Bankruptcy Court for the Northern District of Georgia gave 2929 Panthersville Associates interim access, until Aug. 30, 2006, to cash collateral securing repayment of its debt to LaSalle Bank National Association. LaSalle Bank is Trustee for the registered holders of Morgan Stanley Capital I, Inc., Commercial Pass-through Certificates, Series 1999-RM1. The Court restricted the use of the cash collateral to pay only those items listed on the budget, incurred utilities, property taxes and insurance as well as fees to the U.S. Trustee. Except for payment of the management fee due to Gateway Management Company, the Debtor is barred from using cash collateral to pay shareholders, partners or members and the Debtor's attorney's fees. A copy of the budget is available for free at http://ResearchArchives.com/t/s?9b8 As adequate protection for its interests, the Debtor grants La Salle Bank replacement liens and security interests to the extent of any diminution in value of its collateral. The Court will consider final approval for the use of cash collateral on Aug. 30, 2006. Headquartered in Atlanta, Georgia, 2929 Panthersville Associates owns a 518-unit apartment known as the Spanish Trace East Apartments in Decatur, Georgia. The company filed for chapter 11 protection on May 1, 2006 (Bankr. N.D. Ga. Case No. 06-64988). John A. Christy, Esq., at Schreeder, Wheeler & Flint, LLP, represents the Debtor. No 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 and $10 million and debts between $10 million and $50 million. ADELPHIA COMMS: Asks Court to Okay Post-Closing Incentive Program ----------------------------------------------------------------- Adelphia Communications Corporation and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to implement a post-closing incentive program to ensure that certain key employees will continue their employment with the Debtors through a transition and wind-down period. Upon consummation of the sale of substantially all of the Debtor's assets to Time Warner NY Cable, LLC, and to Comcast Corporation, the ACOM Debtors' cable operations will largely cease, Shelley C. Chapman, Esq., at Willkie Farr & Gallagher LLP, in New York, tells the Court. Accordingly, on the closing date of the Sale, the ACOM Debtors intend to terminate approximately 98% of their workforce. However, the ACOM Debtors will need to retain key personnel in order to continue administering their estates and preserve value for stakeholders. Out of the ACOM Debtors' 13,500 employees, approximately 275 employees will be asked to remain with ACOM to handle important accounting, tax, administrative, and financial matters, Ms. Chapman discloses. According to Ms. Chapman, most of the Key Transition Employees have irreplaceable institutional knowledge of matters and projects within their particular expertise, including, among other things, oversight and assistance with the audit, the restatement, claims reconciliation, compliance with the post- close requirements under the asset purchase agreements, the government settlement, and the completion of certain tax filings. Ms. Chapman notes that thousands of employees have continued their employment with the ACOM Debtors during the reorganization due, in large part, to their loyalty to senior management. Given that the tasks are critical, time sensitive, and, for the most part, required by applicable law, the ACOM Debtors need to ensure that the Key Transition Employees remain with ACOM until those tasks are complete, or, in some cases, until transition can be made to a new administrative team, Ms. Chapman asserts. Ms. Chapman notes that the Key Transition Employees, who have been so critical to the monumental effort for the ACOM Debtors' Chapter 11 cases, are anxious to move on and are entitled to do so upon the closing of the Sale. "They have been under enormous pressure and strain for extended periods, compounded by the uncertainty inherent in working for years for a company operating in chapter 11 and on the auction block since the spring of 2004." Based on current compensation and benefit entitlements, the Key Transition Employees have little financial incentive to remain in ACOM's employ after the Closing Date. Specifically, the Key Transition Employees will become entitled to receive substantially all of their retention incentives on the Closing Date. Like their colleagues whose employment will terminate upon the close of the Sale, eligible Key Transition Employees will receive their short term and long term incentive bonuses, the first installment of their bonus on the Closing Date and, to the extent they elect to terminate their employment for "good reason," eligible VP Transition Employees -- employees at the Vice President or Senior Vice President level -- may receive severance. If new incentives are not put in place prior to the Closing Date, the ACOM Debtors anticipate that most of the Key Transition Employees will elect to terminate their employment, Ms. Chapman contends. Without the Key Transition Employees in place, the ACOM Debtors stand to lose an enormous resource pool, a loss that imperils the value the ACOM Debtors have worked so hard to preserve, Ms. Chapman says. The ACOM Debtors also seek the Court's authority to: (a) enter into new employment agreements with certain VP Transition Employees to provide for their day-to-day compensation after the Closing Date; and (b) increase the base compensation of EVPs to provide for their day-to-day compensation after the Closing Date pursuant to new letter agreements. According to Ms. Chapman, the ACOM Debtors currently maintain a compensation structure that is fair to employees, reasonably calculated to preserve, rather than squander, estate assets through the retention of qualified personnel, and comparable to the compensation available to employees in the marketplace. Specifically, the Existing Compensation Programs are: Nature of Compensation Rationale ------------ --------- Base Salary Employees' annual base salaries constitute compensation for the performance of day to day tasks. STIP The Short Term Incentive Plan provides employees with the opportunity to earn an annual bonus, which is tied to the satisfaction of certain predetermined targets. Short term incentives are one of the three elements of an employees' core compensation. For 2006's first seven months, most of the ACOM Debtors' STIP targets were based on metrics that were intended to comply with provisions of the Asset Purchase Agreements with the Buyers. PRP The PRP Awards are intended to replace the long-term incentives provided by the ACOM Debtors' competitors and comparable companies not in Chapter 11. Together with base salary and the STIP, the PRP Awards are a core component of an executives basic compensation, which is designed to ensure that the ACOM Debtors' employees are paid at market rates. Severance Severance benefits -- whether afforded under the ACOM Debtors' Severance Plan or under an employment agreement -- are intended to provide compensation in lieu of employment. Severance is not a retention device. Stay Bonus The Stay Bonus and Sale Bonus were designed to Sale Bonus reflect the unique circumstances of these cases, and specifically intended to encourage certain key managers to: (a) work diligently through the Debtors' dual- track emergence; and (b) remain with the Debtors until the closing of the Sale. The occurrence of the Closing in the context of the Joint Venture Plan for the Century-TCI and Parnassos Debtors has created a new and somewhat unique set of circumstances imposing risk and uncertainty on a subset of the ACOM Debtors' key managers. The Parnassos Debtors are comprised of: * Parnassos Communications, L.P., * Parnassos Distribution Company I, LLC, * Parnassos Distribution Company II, LLC, * Parnassos, L.P., * Parnassos Holdings, LLC, and * Western NY Cablevision, L.P. The Debtors now believe that the Existing Compensation Programs are no longer sufficient to retain the Key Transition Employees, Ms. Chapman says. Closing and Post-Closing Compensation On the Closing Date, all eligible Senior Transition Employees will be paid their 2006 STIP, their PRP Award and 50% of their Sale Bonus. Ms. Chapman clarifies that these are not incentives or entitlements that can be altered or utilized as an inducement for the Key Transition Employees to remain with ACOM. Rather, these are entitlements, which have been bargained for, earned, and approved by the ACOM's Board of Directors or the Court, and now must be paid, Ms. Chapman says. The ACOM Debtors anticipate that many, if not all, of the VP Transition Employees will elect to terminate their employment as of the Closing Date for "good reason" and collect their severance and other entitlements. The ACOM Debtors seek the Court's authority to rehire the VP Transition Employees pursuant to the terms of their New VP/SVP Agreements. The New Employment Agreements will provide that all Senior Transition Employees who remain with the Debtors after the Closing Date will be entitled to earn an adjusted base salary calculated by adding that employee's Base Salary, STIP opportunity and PRP Award opportunity at their target levels. The Adjusted Base Salary will be paid pro rata every two weeks during the course of an employee's post-Sale employment with the ACOM Debtors. The ACOM Debtors estimate that the Adjusted Base Salaries for Senior Transition Employees during the Transition will be approximately $4,000,000 in the aggregate, Ms. Chapman discloses. With regards to the Directors, the ACOM Debtors will calculate an Adjusted Base Salary for Directors by adding that employee's Base Salary and annual STIP at target level to ensure that the Directors are compensated at market rates during the Transition. The ACOM Debtors estimate that the Adjusted Base Salaries for Directors will be approximately $1,500,000 in the aggregate. According to Ms. Chapman, while those at the Director level and below will not be entitled to a severance payment on the Closing Date, these employees will be given a date certain on which their employment will conclude. If these employees do not voluntarily terminate their employment before the Guaranteed Severance Date, they will automatically be entitled to receive payment under the Severance Plan on that date. A full-text copy of the Post-Closing Employment Agreements is available for free at http://ResearchArchives.com/t/s?e72 Post-Closing Incentive Program According to Ms. Chapman, virtually all employees who remain with the ACOM Debtors after the Closing Date will be entitled to participate in the Post-Closing Incentive Program. Pursuant to the Post-Closing Incentive Program, the ACOM Debtors will advise each employee of the length of time his or her post- Closing Date assignment is expected to last. Upon the Key Transition Employee's eligible separation from ACOM, the employee will be entitled to receive a payment equal to a percentage of that employee's Base Salary -- prior to any STIP or PRP additions to the employee's Adjusted Base Salary -- pro-rated for the number of days in the Assignment Period. If an eligible employee works until the earlier of the end of the Assignment Period, the employee will receive his or her entire bonus under the Post-Closing Incentive Program. To the extent the ACOM Debtors require that employee to remain longer than the Assignment Period, the Debtors will need to negotiate a compensation package with the employee for the rest of their post-close tenure. The total funding of the Post-Closing Incentive Program is estimated to be approximately $5,000,000 and the average bonus to any one employee will be approximately 50% of base salary. A full-text copy of ACOM's Post Closing Incentive Program is available for free at http://ResearchArchives.com/t/s?e73 About Adelphia Communications Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue No. 142; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADELPHIA COMMS: U.S. Trustee Names Dune Capital to Creditors Panel ------------------------------------------------------------------ Diana G. Adams, the Acting United States Trustee for Region 2, appoints Jon Likomnik, at Dune Capital Management LP, to the Official Committee of Unsecured Creditors in the chapter 11 cases of Adelphia Communications Corporation and its debtor-affiliates. The Creditors Committee is now composed of nine members: 1. Appaloosa Management, LP 26 Main Street Chatham, NJ 07928 Attn: James Bolin Phone: (973) 701-7000 Fax: (973) 701-7309 2. W. R. Huff Asset Management Co., LLC 67 Park Place Morristown, NJ 07960 Attn: Edwin M. Banks, Senior Portfolio Manager Phone: (973) 984-1233 Fax: (973) 984-5818 3. Jon Likomnik Dune Capital Management LP 623 Fifth Avenue, 30th Floor New York, NY 10022 Phone: (646) 734-4012 Fax: (212) 663-5714 4. Law Debenture Trust Company of New York 767 Third Avenue, 31st Floor New York, NY 10017 Attn: Daniel R. Fisher, Senior Vice President Phone: (212) 750-6474 Fax: (212) 750-1361 5. U.S. Bank National Association, as Indenture Trustee 1420 Fifth Avenue, 7th Floor Seattle, WA 98101 Attn: Diana Jacobs, Vice President Phone: (206) 344-4680 Fax: (206) 344-4632 6. Sierra Liquidity Fund, LLC 2699 White Road, Suite 255 Irvine, CA 92614 Attn: Jim Riley, Esq. Phone: (949) 660-1144, ext. 16 Fax: (949) 660-0632 7. Wilmington Trust Company, as Indenture Trustee 1100 North Market Street Wilmington, DE 19890 Attn: Sandra R. Ortiz Phone: (302) 636-6056 Fax: (302) 636-4143 8. Tudor Investment Corporation 15303 Ventura Boulevard, Suite 900 Sherman Oaks, CA 91403 Attn: Darryl A. Schall Phone: (818) 380-3065 9. Highfields Capital Management 200 Clarendon Street, 51st Floor Boston, MA 02116 Attn: Richard Grubman Phone: (617) 850-7510 About Adelphia Communications Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue No. 142; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADELPHIA COMMS: Wants Resolved Agreements Included in Sale Order ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York's order on June 28, 2006, approved the sale of substantially all of the assets of Adelphia Communications Corporation and its debtor- affiliates excluding certain agreements with some non-Debtor parties due to their pending objections to the assignment of those excluded agreements. Steven Wilamowsky, Esq., at Willkie Farr & Gallagher LLP, in New York, notifies the Court that certain of those objections have been resolved. The ACOM Debtors ask the Court to rule that the Sale Order is deemed applicable to the excluded agreements with these contract parties: -- Alabama Power Company, -- Rappahannock Electric Cooperative, -- Thrifty Payless Corporation, -- Paradise Gardens, L.P., -- Georgia Power Company, -- Harborside Commons Apartments, L.L.C., -- City of Lynchburg, Virginia, -- City of Villa Park, California, -- City of Chino, California, -- City of Fullerton, California, -- City of Newport Beach, California, -- City of Twenty-nine Palms, California, -- City of Baldwin Park, California, -- County of San Diego, California, -- City of Diamond Bar, California, -- City of Lynchburg, Virginia, and -- MHC Golden Lakes, LLC, MHC Financing Limited Partnership, and MHC Financing Limited Partnership Two. The ACOM Debtors also ask Judge Gerber to include these contract parties, which previously objected to the amount of proposed monetary cure cost, in the Sale Order's scope: Contract Parties Proposed Reserved Amount ---------------- ------------------------ American Electric Power $3,500,000 Cinergy 7,400,000 Duke Power Company 94,000 FirstEnergy 2,000,000 Niagara Mohawk Power Corporation, Granite State Electric Company, and Massachusetts Electric Company $2,900,000 New York State Electric and Gas Corporation 360,000 Greenwood Village Community Association, Inc. 366,000 Carolina Power and Light 1,300 Fountain View Apartments 25,000 SBC Communications, Inc. 100,000 Southern California Edison 2,000,000 Meredith Enterprises, Inc. 7,500,000 The ACOM Debtors seek the Court's authority to reserve and escrow the proposed reserved amounts. JV Debtors Notify Creditors of Sale Closing On July 25, 2006, the Century-TCI and the Parnassos Debtors notified their creditors that the Sale Transaction will close on July 31, 2006. The JV Debtors set July 25 as the Distribution Record Date. About Adelphia Communications Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue No. 143; Bankruptcy Creditors' Service, Inc., 215/945-7000) AH-DH APARTMENTS: Citigroup Wants to Foreclose on AH-DH Properties ------------------------------------------------------------------ Citigroup Global Market Realty Corporation, fka Salomon Brothers Realty Corporation, asks the U.S. Bankruptcy Court for the Eastern District of Texas to lift the automatic stay to permit foreclosure of its liens and security interests on the properties of AH-DH Apartments, Ltd., and its debtor-affiliates. Five Notes totaling $149,850,000, were executed, from August 2001 to December 2003, by AH-DH and its debtor-affiliates payable to Citigroup and secured by various multifamily real estate complexes located in Houston and Austin, Texas. The maturity dates for each of the Notes was extended and modified to become due on or before March 11, 2006. The Debtors are in default on these notes. Citigroup says the properties securing the Notes were supposed to be sold shortly after the Notes were executed. During the original term of the Notes and the subsequent extensions, the Debtors claimed to be working on a disposition strategy for the properties, however, no sale or refinancing of the properties ever occurred. Prior to the Notes' maturity, the Debtors presented preliminary term sheets to Citigroup proposing, among other things, a refinancing by JP Morgan and the sale of the properties to Laramar Group. Citigroup disputed to the term sheets because they were non-binding. After their bankruptcy filing, the Debtors presented a letter of intent urging Citigroup to waive certain fees and default interest and extend the maturity date of the Notes for one year in exchange for a $20 million paydown of Citigroup's debt by Vintage Capital Group, LLC. The Debtors have incorporated the terms of the LOI into their Plan of Reorganization. Citigroup opposes the terms of the Plan and submits that it is unconfirmable for, among others, these reasons: a) the proposed waiver of Citigroup's unpaid pass-thru interest, default interest and fees in the LOI will result in an $8.5 million reduction in Citigroup's claim; b) the proposed interest rate of 6.8% is below the market rate of interest; c) the proposed $3.1 million for deferred maintenance is inadequate for the properties; d) the Plan fails to address the treatment of Citigroup's equity claim; e) there is no explanation as to how Citigroup will be paid. Citigroup further explains that the Debtors have repeatedly failed to perform at levels promised and their principal, Dale Dodson, has failed to provide equity cash infusions as required by the loan documents to pay operating expenses and maintain the properties. This lack of equity, mismanagement and maintenance resulted in unpaid vendor payables and a steady deterioration and decline in the value of the properties. An engineering firm hired by Citigroup estimated the cost of rehabilitating the properties to as high as $24 million. The most recent appraisal gives the properties a total value of $163 million, however the appraisal does not account for the $24 million deferred maintenance. Citigroup says that that the Debtors no longer have any equity in the properties considering the Debtors almost $160 million debt, plus the $5 million in prepetition unsecured liabilities, administrative claims and rehabilitation costs. Thus, Citigroup says, it should be permitted to control the liquidation of its collateral by having the automatic stay lifted and allowing Citigroup, or a designated third party, to liquidate the properties. Liquidation of the properties will avoid further erosion of the value of its collateral, Citigroup argues. About AH-DH Apartments Headquartered in Plano, Texas, AH-DH Apartments, Ltd., owns 16 apartment complexes. The company and three of its affiliates filed for chapter 11 protection on Mar. 22, 2006 (Bank. E.D. Tex. Case No. 06-40355). J. Mark Chevallier, Esq., at McGuire Craddock & Strother, P.C., represents the Debtors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $50 million and $100 million. DH Holdings Limited Partnership and DH Holdings GP, Inc., filed for chapter 11 protection on Apr. 8, 2006 (Bankr. E.D. Tex. Case Nos. 06-40479 and 06-40480). Another affiliate, DB Holdings, LLC, filed for chapter 11 protection on Apr. 10, 2006 (Bankr. E.D. Tex. Case No. 06-40484). The Debtors' chapter 11 cases are jointly administered under Case No. 06-40355. AIGAS INCORPORATION: Amends $1.6 Billion Senior Credit Agreement ---------------------------------------------------------------- Airgas, Inc., amended and restated its senior credit facility with a syndicate of banks. The five-year $1.6 billion senior unsecured credit facility, consists of a $966 million and CDN$40 million revolving credit line and a $600 million term loan. The drawing on the term loan is contingent on the maturity of $100 million of the 7.75% medium term notes on Sept. 15, 2006, and the closing of certain acquisitions. Airgas is currently contemplating several acquisitions, which, if completed, would be funded with the borrowings that are available under the Credit Agreement. The Credit Agreement supersedes the credit agreement dated Jan. 14, 2005, which would have matured on Jan. 14, 2010, and permitted the company to borrow up to the equivalent of $428 million. The company's initial borrowings under the Credit Agreement total $191 million. The current borrowing rate is LIBOR plus 75 basis points, down from LIBOR plus 95 basis points under the 2005 Agreement. The covenants under the new Credit Agreement are generally similar to those in the 2005 Agreement. The Company expects to file the Credit Agreement as an Exhibit to the Form 10-Q for the period ended Sept. 30, 2006. Airgas also reported its result of the acquisitions under consideration, it suspended the three-year share repurchase plan it initiated in November 2005. The Company will focus on using its cash flow to pay down debt, grow its dividend, and to continue investing in growth opportunities, including future acquisitions. Airgas, Inc. (NYSE:ARG) -- http://www.airgas.com/-- distributes industrial, medical and specialty gases, welding, safety and related products. The Company's integrated network of about 900 locations includes branches, retail stores, gas fill plants, specialty gas labs, production facilities and distribution centers. Airgas also distributes its products and services through eBusiness, catalog and telesales channels. Its national scale and strong local presence offer a competitive edge to its diversified customer base. * * * Airgas, Inc.'s 9-1/8% Senior Subordinated Notes due 2011 carry Moody's Investors Service Ba2 Rating and S&P's BB- Rating. ALLIS-CHALMERS ENERGY: S&P Affirms Planned $80MM Notes' B- Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' rating on oilfield service company Allis-Chalmers Energy Inc.'s proposed $80 million senior notes issuance due 2014. These notes are being offered as additional notes under the indenture pursuant to which the company issued $160 million of notes in January 2006. At the same time, Standard & Poor's affirmed the 'B-' corporate credit rating on the company. The outlook is stable. Pro forma for the proposed notes issuance, Houston-based Allis- Chalmers will have $260 million in debt. "On April 27, 2006, Allis-Chalmers agreed to purchase Drilling Logistics & Services Company for $93.2 million in cash, plus 2.5 million shares of Allis-Chalmers' common stock," said Standard & Poor's credit analyst David Lundberg. "To finance the acquisition, Allis-Chalmers plans to raise $80 million of new senior notes and issue 2.5 million of common stock (equating to roughly $36 million of net cash proceeds, assuming an offering price of $15.24 per share)," he continued. The outlook for the company is stable. Standard & Poor's recognizes that industry trends for oilfield services should remain favorable in the near term, and that Allis- Chalmers' financial performance in the first two quarters of 2006 has exceeded expectations. At the same time, the company faces several challenges, including integrating two large acquisitions (the recent Specialty Rental acquisition and the pending DLS purchase) and operating under a heavy debt burden. Positive rating actions are contingent on the ability to meet financial targets, and integrate acquired properties successfully. Worse than expected financial results or heightened liquidity concerns could result in a negative rating action. ALPHA NATURAL: Good Performance Cues Moody's to Lift Ratings ------------------------------------------------------------ Moody's Investors Service raised Alpha Natural Resources corporate family rating and senior secured ratings to B1 from B2 and its senior unsecured rating to B2 from B3. Moody's also affirmed the SGL-2 speculative grade liquidity rating. The upgrade reflects Alpha's solid earnings performance since its formation in late 2002, its generation of free cash flow, excluding the return of cash to Alpha's founding shareholders following its IPO in February 2005, and its successful integration and operation of the mines acquired in the fall of 2005 from Nicewonder. The B1 corporate family rating reflects Alpha's strong earnings momentum, its favorable leverage and its ability to consistently generate free cash flow. The ratings also consider anticipated stable long-term demand for coal, and Alpha's low level of pension, black lung, and OPEB obligations relative to many of its coal mining peers. However, the rating also considers Alpha's concentration in Central Appalachian coal mining and the geologic and operating difficulties of underground Appalachian mining in particular as well as continuing cost pressures and tight labor markets facing all mining companies. Upgrades: Issuer: Alpha Natural Resources, LLC * Corporate Family Rating, Upgraded to B1 from B2 * Senior Secured Bank Credit Facility, Upgraded to B1 from B2 * Senior Unsecured Regular Debenture, Upgraded to B2 from B3 Moody's most recent rating action on Alpha was in October 2005 when it assigned a B2 Senior Secured rating to its new credit facility and affirmed the B2 Corporate Family rating and B3 Senior Unsecured rating. Alpha Natural Resources, LLC, based in Abingdon, Virginia, is engaged in the mining and marketing of steam and metallurgical coal and had revenues in the fiscal year ended Dec. 31, 2005, of $1.6 billion. AMAZON.COM: Earns $22 Million in Second Quarter of 2006 ------------------------------------------------------- Amazon.com, Inc., disclosed that its net sales increased 22% to $2.14 billion in the second quarter of 2006 from $1.75 billion in second quarter of 2005. The Company's operating income decreased 55% to $47 million in the second quarter from $104 million in second quarter 2005 due to technology and content investments, lower prices including free shipping and Amazon Prime, and $20 million from a contract termination and related fee dispute. Net income was $22 million in the second quarter compared to net income of $52 million in second quarter 2005. The Company also reported a decline in operating cash flow declined of 2% to $610 million for the trailing twelve months, compared to $624 million for the trailing twelve months ended June 30, 2005. The Company's common shares outstanding plus shares underlying stock-based awards outstanding totaled 443 million at June 30, 2006 compared to 438 million a year ago. "We're investing in Amazon Prime and future technology initiatives" Jeff Bezos, founder and chief executive officer of Amazon.com said. "Amazon Prime gets customers their products fast, and our investments in technology position us to innovate in seller platforms, web services, and digital. We're looking forward to the coming decrease in our year-over-year growth rates in technology spending in the second half of 2006." Highlights: -- Sales of the Company's U.S. and Canadian sites, were $1.16 billion, up 21% from second quarter 2005; -- Sales of the Company's U.K., German, Japanese, French and Chinese sites, were $982 million, up 24% from second quarter 2005; -- Worldwide Electronics & Other General Merchandise grew 37% to $624 million in second quarter 2006, and increased to 29% of worldwide net sales compared with 26% in second quarter 2005; -- The Company launched its new Toy and Baby stores on http://www.amazon.com/ -- The Company launched a Grocery store on http://www.amazon.com/with over 14,000 dry goods grocery products across more than 1,200 brands; -- Amazon's German website launched its Sporting Goods store, offering a selection of sporting goods in over 25 categories from top brands like Adidas, Burton, Nike, Puma, Quiksilver and Salomon; -- The Company extended its Enterprise Solutions agreement with Target.com through August 2010 and launched a new Sears Canada branded website; and -- Amazon S3, a storage service for software developers, gained momentum in its first full quarter after launch. At June 30, 2006, the Company's balance sheet showed $3,165,000,000 in total asssets, $2,782,000,000 in total liabilities, and $383,000,000 in total stockholders' equity. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?e8b Based in Seattle, Wash., Amazon.com, Inc. (Nasdaq: AMZN) a Fortune 500 company, opened on the World Wide Web in July 1995 and offers Earth's Biggest Selection. Amazon.com seeks to be Earth's most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as health and personal care, jewelry and watches, gourmet food, sports and outdoors, apparel and accessories, books, music, DVDs, electronics and office, toys and baby, and home and garden. Amazon.com and its affiliates operate retail sites http://www.amazon.com/http://www.amazon.co.uk/ http://www.amazon.de/http://www.amazon.co.jp/ http://www.amazon.fr/http://www.amazon.ca/and http://www.joyo.com/ * * * Standard & Poor's Ratings Services raised its ratings on Amazon.com, including its corporate credit rating to 'BB-' from 'B+' in September 2005 and affirmed its 'B-1' short-term rating on the company. The outlook is stable, S&P said. In December 2004, Moody's upgraded Amazon's senior implied rating to B1, its issuer rating to B2, the rating on Amazon's various convertible subordinated notes issues maturing 2009 thru 2010 to B3, and multiple shelf ratings to (P) B2, (P) B3, and (P) Caa1. At the same time, Moody's affirmed Amazon's SGL-2 speculative grade liquidity rating. AMERIGAS PARTNERS: Posts $14.8MM 2006 3rd Fiscal Quarter Net Loss ----------------------------------------------------------------- AmeriGas Propane, Inc., general partner of AmeriGas Partners, L.P., reported a $14.8 million net loss for the third fiscal quarter ended June 30, 2006, compared with a net loss of $17.7 million in the same period last year. The Company disclosed that including the loss on the early extinguishment of debt of $33.6 million, the prior year third quarter net loss was $51.3 million. The Partnership's earnings before interest expense, income taxes, depreciation and amortization were $20.7 million for the third fiscal quarter of 2006, compared with EBITDA of $19.9 million, excluding the loss on extinguishments of debt of $33.6 million, a year ago. EBITDA in the 2005 fiscal third quarter, including the loss on extinguishment of debt, was a loss of $13.7 million. "Our retail volumes declined 10.8 million gallons to 171.1 million gallons this quarter due to warmer weather and price-induced customer conservation," Eugene V. N. Bissell, chief executive officer of AmeriGas, said. "Weather for the quarter was 21.9% warmer than normal compared with weather that was 4.9% warmer than normal in the prior-year period, according to the National Oceanic and Atmospheric Administration. Despite the lower volumes, we continue to expect to earn adjusted EBITDA in the range of $245 million to $255 million for the fiscal year ending Sept. 30, 2006." The Company reported revenues for the quarter of $379.1 million versus $349.5 million a year ago. Operating and administrative expenses increased $3.8 million during the quarter due to higher vehicle fuel and lease costs, higher employee compensation and benefits expense and increased bad debt expense. AmeriGas Partners, L.P. (NYSE:APU) -- http://www.amerigas.com-- is a retail propane marketer, serving nearly 1.3 million customers from over 650 locations in 46 states. UGI Corporation (NYSE:UGI) through subsidiaries, owns 44% of the Partnership and individual unitholders own the remaining 56%. * * * As reported in the Troubled Company Reporter on Jan. 12, 2006, AmeriGas Partners, L.P.'s $350 million senior notes due 2016, issued jointly and severally with its special purpose financing subsidiary AP Eagle Finance Corp., are rated 'BB+' by Fitch Ratings. Fitch also affirmed APU's existing senior unsecured debt rating of 'BB+' and issuer default rating of 'BB+'. Fitch said the Rating Outlook is Stable. As reported in the Troubled Company Reporter on Jan. 12, 2006, Moody's Investors Service assigned a B1 rating to AmeriGas Partners, L.P.'s $350 million senior unsecured notes due 2016; upgraded its existing $415 million of senior unsecured notes due 2015 to B1 from B2; and affirmed its Ba3 corporate family rating. Moody's said the rating outlook is stable. AMES TRUE: High Leverage Prompts Moody's to Junk Corp. Rating ------------------------------------------------------------- Moody's Investors Service downgraded the debt ratings of Ames True Temper's corporate family rating to Caa1 from B3, concluding the review for possible downgrade initiated in April 2006. The rating outlook is stable. The downgrade reflects Ames' continuing modest operating performance and high leverage following the recent debt financed acquisitions of Union Tools and Hound Dog. The company's operating performance degradation has been caused by continuing high raw material prices, which the company has not been able to fully recapture through price increases and a slowdown in consumer spending, neither of which is expected to materially change in the near term. The company's modest operating performance is also due to less favorable weather conditions The company's modest operating performance and additional borrowings under its revolver have resulted in deteriorating credit metrics. Of particular concern is the company's low adjusted interest coverage, which is just over 1x and the increase in adjusted leverage to over 9x following the acquisitions. While Moody's does not expect either of these metrics to change significantly by the end of fiscal 2006, modest improvement is expected in fiscal 2007 as the company integrates the acquisitions. The company's ratings are supported by its leading brand names and its competitive share position in the lawn & garden industry through its relationships with the "big box" home center retailers. The ratings are further supported by the company's ongoing new product innovations. Moody's believes the company's liquidity is adequate, despite its modest operating cash flow and limited financial flexibility, because of the availability under its $130 million revolver, the lack of any significant financial covenants and no near-term debt maturities. The stable ratings outlook reflects Moody's belief that Ames True Temper's additional EBITDA and cash flow generation from the Union Tools and Hound Dog acquisitions should help buffer against increasing raw material costs and uncertainty in consumer spending. These ratings were downgraded: * Corporate family rating to Caa1 from B3; * $150 million floating rate senior notes to Caa2 from Caa1; * $150 million senior subordinated notes to Caa3 from Caa2; This rating was confirmed: * Liquidity rating of SGL 3 Ames True Tempe is a North American manufacturer and marketer of non-powered lawn and garden tools and accessories. For the LTM ending March 31, 2006, the company had sales of approximately $460 million. ARVINMERITOR INC: Moody's Cuts 7.125% Unsec. Notes' Rating to Ba3 ----------------------------------------------------------------- Moody's Investors Service downgraded approximately $10.9 million of ArvinMeritor, Inc.'s remaining notes that were issued under its 1990 indenture and affirmed ratings on all of the company's other unsecured notes at Ba3. The action follows ArvinMeritor depositing approximately $11.9 million of an investment in a money market fund into an escrow account for the benefit of note holders. While the amounts were sufficient for ArvinMeritor to be relieved of compliance with certain restrictive terms of the indenture, the notes are not legally defeased and will remain on the company's balance sheet. Importantly, no independent legal opinion has been provided which would attest to a perfected interest over the escrowed assets in the event of an unanticipated bankruptcy filing by the issuer. Consequently, Moody's believes that there is insufficient documentation to support a differentiated rating for the affected instruments. All other ArvinMeritor ratings are unaffected by this action and have been affirmed. Ratings downgraded: ArvinMeritor, Inc. * 6.625% notes maturing in 2008 to Ba3 from Ba2 * 7.125% notes maturing in 2009 to Ba3 from Ba2 The notes were placed under review with direction uncertain on June 7, 2006, to assess the impact of the company's plan to pursue an affective defeasance of the notes. Other actions taken on that date included affirming ArvinMeritor's Corporate Family rating of Ba2 and its Speculative Grade Liquidity rating of SGL-2, assigning Ba1 ratings to its secured bank credit facilities, and downgrading the ratings of its other unsecured senior notes to Ba3. The outlook remains negative. In June, ArvinMeritor reset the terms of its bank revolving credit facility and arranged a new $170 million bank term loan, both of which benefit from first priority liens against certain company assets. The extent of the assets pledged was limited by provisions under the company's indentures for its unsecured notes. Language under the company's 1990 indenture contained more protective features. As the company had earlier successfully tendered for a substantial portion of notes issued under the 1990 indenture, only $10.9 million of notes remained. ArvinMeritor has irrevocably placed into escrow an $11.9 million investment in a money market fund which exclusively invests in U.S. treasury obligations. The trustee under the indenture also serves as escrow agent and holds said funds in trust to pay and discharge the remaining indebtedness. In doing so, the company has been relieved of compliance with certain terms of the indenture, but all other terms remain in force. The notes will continue to be included on ArvinMeritor's balance sheet as no assurance can be given that the amount deposited and realized rates of return on the invested funds will be sufficient to fully cover the remaining principal and interest on the notes. The current rate of return on the money market fund is less than the fixed coupons on the notes. Possession and control by the trustee agent and the nature of the trust arrangement might provide some protection in the event of an unanticipated bankruptcy filing by the issuer. However, no definitive independent legal opinion addressing the priority interest over the escrowed assets in the event of bankruptcy is available. Headquartered in Troy, Mich., ArvinMeritor, Inc., is a global supplier of a broad range of integrated systems, modules and components serving light vehicle, commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets. Revenues in fiscal 2005 were approximately $8.9 billion. ATE KAYS: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: Ate Kays Company 370 Lexington Avenue, Suite 1810 New York, NY 10017 Bankruptcy Case No.: 06-11733 Chapter 11 Petition Date: July 28, 2006 Court: Southern District of New York (Manhattan) Judge: Robert E. Gerber Debtor's Counsel: Laurence May, Esq. Cole Schotz Meisel Forman & Leonard, P.A. 460 Park Avenue, 8th Floor New York, NY 10022 Tel: (212) 752-8000 Fax: (212) 752-8393 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million The Debtor did not file a list of its 20 largest unsecured creditors. ATLANTIC MARINE: S&P Affirms Planned $155MM Facility's B+ Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' bank loan rating and '2' recovery rating on Atlantic Marine Holding Co.'s proposed $155 million secured credit facility. The facility consists of a $35 million revolving facility due 2012 and a $120 million term loan due 2013. The affirmation follows a change in the collateral package securing the facility that now excludes land and buildings at the company's Jacksonville, Florida, facility due to an onerous mortgage filing tax in Florida. "Although the secured lenders no longer have a claim to these assets, the recovery prospects have not changed as the lenders are likely to recover the excluded value through an unsecured claim in bankruptcy," said Standard & Poor's credit analyst Christopher DeNicolo. The corporate credit rating on Atlantic Marine is 'B+' and the outlook is stable. The ratings on the company reflect high debt leverage, a modest revenue base (around $175 million), especially compared with some competitors in the government sector, and growth dependent on the more competitive and cyclical nonmilitary and marine fabrication segments. These factors are partly offset by the high barriers to entry in the marine repair industry and the company's fairly good diversity of vessels serviced. Ratings List: Atlantic Marine Holding Co.: * Corporate credit rating: B+/Stable/-- Ratings Affirmed: Atlantic Marine Holding Co.: * $35 million revolving credit facility due 2012: B+ (Recovery rating: 2) * $120 million term loan B due 2013: B+ (Recovery rating: 2) B/E AEROSPACE: Earns $18.7 Million in Second Quarter of 2006 ------------------------------------------------------------ B/E Aerospace, Inc., reported consolidated sales of $271.5 million for the second quarter of 2006, a $63.9 million increase over the second quarter of 2005. Operating earnings for the second quarter of 2006 of $35.3 million increased by $11.2 million or 46.5% as compared to the same period last year, driven by continued revenue and earnings growth as well as margin expansion in each of the Company's Commercial Aircraft, Distribution and Business Jet segments. The retirement in January 2006 of the Company's $250 million senior subordinated notes due 2008 resulted to a $6.3 million decline in interest expense for the second quarter of 2006. The Company's earnings before income taxes of $26.6 million were higher than the prior year's pre-tax earnings of $9.1 million. Net earnings for the second quarter of 2006 were $18.7 million versus $8.4 million in the same period for the prior year. For the six months ended June 30, 2006, the Company reported consolidated sales of $518.7 million, a 28.4% increase over the same period last year. Its operating earnings of $66.4 million for the first six months of 2006 were $22.4 million or 50.9% greater than the same period last year. Interest expense of $18.2 million for the current six-month period decreased by $11.9 million versus the same period in the prior year. Earnings before income taxes for the current six-month period of $46.4 million were higher to the prior year's earnings before income taxes of $13.9 million. Its net earnings for the current six-month period of $32.5 million were 160% higher than the same period last year. Bookings for the current six-month period were nearly $900 million. At June 30, 2006, the Company's total debt stood at approximately $429 million. Capital expenditures for the six months ended June 30, 2006, and 2005 were $10.8 million and $7.1 million, respectively. Backlog at the end of the quarter was $1.45 billion, an increase of approximately $650 million or over 75% as compared to backlog at June 30, 2005. "Our bookings performance this quarter is particularly noteworthy given the absence of any single, major customer award during the quarter," Amin J. Khoury, the Company's chairman and chief executive officer said. "The strong level of bookings reflects the high level of customer activity in the marketplace and continued traction on acceptance of B/E's portfolio of new products. Bookings in the quarter also further strengthened the quality of our record backlog with orders for higher margin products. Our growing and improving backlog further bolsters our confidence in the outlook for the next few years". Based in Wellington, Florida, B/E Aerospace, Inc. (Nasdaq:BEAV) -- http://www.beaerospace.com/-- manufactures aircraft cabin interior products, and is an aftermarket distributor of aerospace fasteners. B/E designs, develops and manufactures a broad range of products for both commercial aircraft and business jets. B/E manufactured products include aircraft cabin seating, lighting, oxygen, and food and beverage preparation and storage equipment. The company also provides cabin interior design, reconfiguration and passenger-to-freighter conversion services. Products for the existing aircraft fleet -- the aftermarket -- generate about 60% of sales. B/E sells and supports its products through its own global direct sales and product support organization. * * * As reported in the Troubled Company Reporter on Jan. 16, 2006, Moody's Investors Service raised B/E Aerospace, Inc.'s Corporate Family Rating to B1 from B3. Moody's said the ratings outlook is stable. B/E AEROSPACE: Acquires Draeger Aerospace from Cobham for $80 Mil. ------------------------------------------------------------------ B/E Aerospace, Inc., acquired Draeger Aerospace GmbH for approximately $80 million from Cobham PLC of Dorset, England. The Company disclosed that the acquisition, which is an all cash purchase, is funded with cash on hand. The integration of Draeger with the Company's existing oxygen business will create substantial operating efficiencies for its original equipment manufacturer partners and will allow it to offer the broadest oxygen system product line in the industry, including passenger and crew oxygen as well as oxygen storage and distribution. About Draeger Aerospace Draeger is a supplier of components and integrated systems to supply oxygen systems for both civil and military aircraft. In the civil market, Draeger has well-established strengths in both chemical and gaseous oxygen systems. Draeger, like B/E, is well positioned on both Airbus and Boeing aircraft. In the military market, Draeger is a contractor for oxygen systems for the Eurofighter Typhoon, as well as providing maintenance and repair services for the German air force's in-service oxygen systems. About B/E Aerospace Based in Wellington, Florida, B/E Aerospace, Inc. (Nasdaq:BEAV) -- http://www.beaerospace.com/-- manufactures aircraft cabin interior products, and is an aftermarket distributor of aerospace fasteners. B/E designs, develops and manufactures a broad range of products for both commercial aircraft and business jets. B/E manufactured products include aircraft cabin seating, lighting, oxygen, and food and beverage preparation and storage equipment. The company also provides cabin interior design, reconfiguration and passenger-to-freighter conversion services. Products for the existing aircraft fleet -- the aftermarket -- generate about 60% of sales. B/E sells and supports its products through its own global direct sales and product support organization. * * * As reported in the Troubled Company Reporter on Jan. 16, 2006, Moody's Investors Service raised B/E Aerospace, Inc.'s Corporate Family Rating to B1 from B3. Moody's said the ratings outlook is stable. BADAT HOSPITALITY: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Badat Hospitality, Inc. dba Days Inn Houston North 915 West Bertrand Road Houston, TX 77088 Tel: (281) 820-1500 Bankruptcy Case No.: 06-33439 Type of Business: The Debtor operates a lodging house. Chapter 11 Petition Date: July 28, 2006 Court: Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: Margaret Maxwell McClure, Esq. 2 Houston Center 909 Fannin, Suite 1580 Houston, TX 77010 Tel: (713) 659-1333 Fax: (713) 658-0334 Estimated Assets: Unknown Estimated Debts: Unknown The Debtor did not file a list of its 20 largest unsecured creditors. BECKMAN COULTER: Names Carolyn Beaver as Chief Financial Officer ---------------------------------------------------------------- Beckman Coulter has appointed Carolyn D. Beaver as its chief financial officer. The Company disclosed that Ms. Beaver will hold the position on an interim basis while the Company completes its search for a replacement for former CFO, James T. Glover, who retired. Ms. Beaver, 47, has held the position of vice president & controller of the Company since August 2005 and was appointed to the position of chief accounting officer in October, 2005. From 1987 through April 2002, she was an audit partner with KPMG, LLP, serving as KPMG's engagement partner for the Beckman Coulter account from 1993 through 1999. She does not have a separate written employment agreement with the Company and is employed on an at-will basis. Headquartered in Fullerton, California, Beckman Coulter, Inc. -- http://www.beckmancoulter.com/-- manufactures biomedical testing instrument systems, tests and supplies that simplify and automate laboratory processes. * * * As reported in the Troubled Company Reporter on Jan. 26, 2006, Moody's Investors Service confirmed its Baa3 rating on Beckman Coulter's $240 Million 7.45% Senior Notes due 2008; $235 Million 6.875% Senior Notes due 2011; and $100 Million 7.05% Senior Debentures due 2026. Moody's also confirmed its (P)Baa3/(P)Ba1 rating on the Company's $500 Million Universal Shelf Registration (senior and subordinate). Moody's said the outlook on Beckman's ratings is stable. BERRY PLASTICS: S&P Revises B+ Corp. Credit Rating's Watch to Neg. ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its CreditWatch implications on the 'B+' corporate credit rating on Berry Plastics Corp. to negative from developing. The ratings were initially placed on CreditWatch with developing implications on April 4, 2006. The CreditWatch revision follows the company's announcement that it has commenced a cash tender offer for all of its outstanding $335 million of 10.75% senior subordinated notes due 2012. a) the tender offer and consent solicitation are subject to the satisfaction of certain conditions, including: b) the receipt of tenders from holders of a majority in principal amount of the outstanding notes; c) the consummation of the previously announced acquisition of the parent company, BPC Holding Corp., by the private equity firms Apollo Management L.P. and Graham Partners and their affiliates; and d) the availability of funds to pay the total consideration with respect to the notes. The funding is to be raised from borrowings under a proposed credit facility and sale of newly issued notes. Berry's announcement removes upside potential for the ratings stemming from the acquisition. "The negative implications reflect the likelihood of a substantial increase in the company's debt levels, given that the proposed transaction will be mostly debt financed," said Standard & Poor's credit analyst Liley Mehta. Ratings could be affirmed or lowered upon resolution of the CreditWatch listing. In assessing the impact on the ratings, Standard & Poor's will examine the implications for the financial profile, as well as review the company's business and financial strategies. In June 2006, private equity firms, Apollo and Graham Partners signed a definitive agreement to acquire BPC Holding Corp. from Goldman Sachs Capital Partners and JPMorgan Partners for an enterprise value of $2.25 billion in aggregate consideration. The transaction is subject to regulatory approval and other customary closing conditions, and is expected to close by the end of the third quarter of 2006. Following the transaction, Apollo will own a majority of Berry's common stock. Evansville, Indiana-based Berry had total debt outstanding of about $1.2 billion at March 31, 2006. The ratings on Berry reflect: * the company's large market shares in its niche segments; * a well-diversified customer base; * strong customer relationships; and * a highly leveraged financial profile. With annual revenues of about $1.3 billion, privately held Berry is a leading manufacturer and supplier of rigid plastic injection- molded and thermoformed open-top containers, aerosol overcaps, drinking cups, housewares, closures for the health care and food and beverage segments, pharmaceutical bottles, and prescription vials. BEXAR COUNTY: Debt Level Prompts Moody's to Downgrade Ratings ------------------------------------------------------------- Moody's Investors Service downgraded two ratings on Bexar County Housing Finance Corporation Multifamily Revenue Refunding Bonds, Series 2002 A to Ba1 from Baa2 and Series 2002B to Ba3 from Ba2. The rating downgrades are reflective of debt service coverage level that are not consistent with Moody's standards for investment grade ratings, subject occupancy that is lower than the submarket and the expectation that supply in the pipeline will erode occupancy further in the near term. The outlook remains negative, reflecting market research, which projects vacancy decreases over the medium term. The 278 unit garden style complex was built in 1974 and is composed of 58, one and two-story buildings located approximately twelve miles northwest of downtown San Antonio. The property is located near major employers such as South Texas Medical Center, University of Texas at San Antonio and USAA World Headquarters. NOI and debt service coverage both decreased in 2003 and part of 2004 due to a softening of the rental market. Legal Security: All bonds are secured by revenues of the project as well as by funds and investments pledged to the trustee as security for the bonds. Strengths -- Revenues continue to generate enough funds for all expenses and debt service payments. -- Property is located in northwest San Antonio near major employment centers. Challenges -- Debt service coverage of senior debt has decreased and is no longer consistent with Moody's benchmark for an investment grade rating. -- Debt service coverage of subordinate debt provides only a relatively thin cushion. -- Occupancy at the subject property is below that of its submarket. -- A substantial number of multi-family units are currently in the pipeline within the northwest San Antonio submarket which will likely reduce occupancies at existing properties. Recent Developments Audited 2005 financials generate senior debt service coverage of 1.28 times, which is below the 1.31x experienced in 2004 and Moody's minimum debt coverage benchmark for an investment grade rating. Subordinate coverage for 2005 is 1.14x, a decrease from 1.17x in 2004. The decrease in coverage is the result of lower net rental revenues. Rolling 12 month interim financial statements indicate coverage will likely be lower for 2006. Occupancy at the subject was 92% in April 2006, lower than the 94.8% average in the northwest San Antonio submarket reported by Torto Wheaton Research. Vacancy in the submarket is forecasted to decrease to 90.6% in 2007 and 90.3% in 2008 by TWR as 1,890 units of new multi-family housing are expected to be completed over the next two years. Cinnamon Creek will likely be negatively impacted as the new product will provide strong competition. What could change the rating -UP A stabilization of occupancy and substantial increase in debt service coverage as substantiated by audited financial statements. What could change the rating -DOWN A decline in occupancy and a decrease in debt service coverage. Outlook The outlook on the bonds remains negative. This reflects Torto Wheaton market research that indicates increases in vacancies in San Antonio over the medium term. BIDDISCOMBE INT'L: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Biddiscombe International, LLC dba Biddiscombe Laboratories dba Stylz Products fka Biddiscombe Holdings, LLC 11961 31st Court North Saint Petersburg, FL 33716 Bankruptcy Case No.: 06-03853 Type of Business: The Debtor is a manufacturer and marketer of skin care and sunless tanning products. See http://biddiscombe.com/ Chapter 11 Petition Date: July 28, 2006 Court: Middle District of Florida (Tampa) Debtor's Counsel: Chad S. Bowen, Esq. Michael P. Brundage, Esq. Jennis Bowen & Brundage, P.L. 400 North Ashley Drive, Suite 2540 Tampa, FL 33602 Tel: (813) 229-1700 Fax: (813) 229-1707 Total Assets: $696,560 Total Debts: $2,616,129 Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Henry J. Barth Personal Loan $690,000 Oedenbergerstrasse 52 D-90491 Nuremberg Germany Stephen Gayheart Purchase Agreement $665,834 3030 Hargett Lane, FL 34965 SunTrust Bank Debtors' Assets $459,263 211 Permieter Center Parkway ($146,024 Suite 100 Secured) Atlanta, GA 30346 Real Estate $583,333 ($550,000 Secured) XO Communications Telephone Services $33,687 8851 Sandy Parkway Sandy, UT 84070 SunTrust BankCard Credit Card $20,970 P.O. Box 791250 Baltimore, MD 21279 Henry Pak, Inc. Trade Debt $17,645 American Flexpack Trade Debt $15,716 Tri-K Industries Trade Debt $15,490 Tubed Products, LLC Trade Debt $15,020 Seppic, Inc. Trade Debt $7,134 Island Sun Times, Inc. Trade Debt $6,684 R&L Carrier Shipping Charges $5,706 Correro, Fishman, Haygood Attorneys' Fees $4,773 Virgo Publishing, LLC Advertising $4,480 Johnson Pope Bokor, et al. Attorneys' Fees $4,131 James C. Christian Web Design Services $3,875 Ashland Chemical Trade Debt $3,826 Aerosol Specialties Trade Debt $3,638 Tanning Trends Advertising $3,200 BLUEGRASS CONTAINER: S&P Affirms $985 Mil. Facilities' BB- Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' senior secured and '1' recovery ratings on the $985 million first-lien senior secured bank facilities of Bluegrass Container Co. LLC (B+/Stable/--). The first-lien debt is rated one notch above the corporate credit rating; the recovery rating of '1' indicates the expectation of full recovery of principal in the event of a payment default. At the same time, Standard & Poor's lowered its recovery rating on the company's $330 million second-lien senior secured bank facility to '5' from '4', indicating the expectation for negligible (0%-25%) recovery of principal in the event of a payment default. The second-lien bank loan rating was affirmed at 'B-', two notches below the corporate credit rating. "The rating actions follow a shift of $75 million from the second- lien term loan to the first-lien bank facilities," said Standard & Poor's credit analyst Pamela Rice. Ratings List: Bluegrass Container Co. LLC: * Corporate credit rating: B+/Stable/-- Rating Affirmed: * $985 mil. sr. sec. first-lien bank loan: BB- (Recovery rating: 1) * $330 mil. sr. sec. 2nd-lien bank loan: B- Rating Lowered: * $330 mil. sr. sec. 2nd-lien bank loan's recovery rating to 5 from 4 BOSTON SCIENTIFIC: Posts $4.26 Bil. Net Loss in 2006 2nd Quarter ---------------------------------------------------------------- Boston Scientific Corporation generated $2.11 billion of net sales for the second quarter of 2006, compared with $1.62 billion for the second quarter of 2005, an increase of 31% on a constant currency basis. The increase was primarily attributable to the inclusion of Guidant Corporation net sales for the period from April 21, 2006, to June 30, 2006, which approximated $474 million. Reported net loss for the second quarter of 2006 was $4.26 billion. Reported results for the second quarter of 2006 included charges (after-tax) of $4.54 billion. These charges (after-tax) included: -- $4.42 billion in purchase accounting adjustments, including a $4.18 billion non-cash charge for purchased in-process research and development costs related to Guidant acquisition; -- $96 million in charges related to the Guidant acquisition; and -- $52 million in charges attributable to investment portfolio activity. Net income for the second quarter of 2005, including net charges, was $205 million. Reported results for the second quarter of 2005 included net charges (after-tax) of $199 million, which consisted primarily of purchased research and development associated with several acquisitions the Company made in 2005. Net income for the second quarter of 2006, excluding net charges and amortization and stock compensation expense, was $412 million. Net income for the second quarter of 2005, excluding net charges and amortization and stock compensation expense, was $434 million. Worldwide sales of TAXUS paclitaxel-eluting coronary stent systems were $647 million for the second quarter of 2006, as compared to $663 million for the second quarter of 2005 and $633 million for the first quarter of 2006. U.S. sales of TAXUS coronary stent systems were $429 million for the second quarter of 2006 as compared to $467 million for the second quarter of 2005 and $419 million for the first quarter of 2006. On a pro-forma basis for the full quarter -- as though the Company had acquired Guidant on April 1st -- worldwide CRM sales were $529 million, which includes $383 million of worldwide implantable cardioverter defibrillator sales and $146 million of worldwide pacemaker sales. ICD sales in the U.S. were approximately $273 million and U.S. pacemaker sales were $81 million. "The second quarter was a transforming one for Boston Scientific," Jim Tobin, president and chief executive officer of Boston Scientific said. "We are reporting revenues of more than $2 billion, and we exited the quarter with an annualized run rate approaching $9 billion in sales, as well as EBITDA before special charges and stock compensation expense, of approximately $2.9 billion. The Guidant acquisition has transformed Boston Scientific into a leading cardiovascular company and has helped to diversify and enhance our growth opportunities. While results are highly impacted by one- time acquisition-related accounting adjustments, our business prospects are clearly promising. In addition, we strengthened our leadership in drug-eluting stents, increasing our U.S. market share to 55 percent, and continuing to grow sales outside the U.S. Our Neuromodulation Group also had an impressive quarter, with a 78 percent increase in sales." Headquartered in Natick, Massachusetts, Boston Scientific Corporation -- http://www.bostonscientific.com/-- develops, manufactures and markets medical devices used in a broad range of interventional medical specialties. * * * As reported in the Troubled Company Reporter on April 25, 2006, Moody's Investor Services lowered the credit ratings of Boston Scientific following the close of the acquisition of Guidant Corporation. Affected ratings include: senior notes to Baa3 from Baa1; short-term rating to Prime-3 from Prime-2; senior shelf to (P)Baa3 from (P)Baa1; subordinated shelf to (P)Ba1 from (P)Baa2; and preferred stock shelf to (P)Ba2 from (P)Baa3. BOYD GAMING: Second Quarter 2006 Net Income Down to $10.2 Million ----------------------------------------------------------------- Boyd Gaming Corporation reported second quarter 2006 net income of $10.2 million, compared with $48.6 million in the same period in 2005. The Company recorded $6.3 million of non-cash compensation expense in the current quarter; there was no such expense recorded for the same period last year. The Company reported adjusted earnings for the second quarter 2006 of $42.5 million compared with $50.3 million for the same quarter in 2005 and during the second quarter 2006, certain pre-tax adjustments to earnings of $50.3 million were: -- $31.2 million charge for write-downs and other charges, related to the retirement of the original gaming vessel at Blue Chip. -- $9.6 million charge for preopening expenses, including the Echelon development and Borgata's public space expansion project and other projects. -- $6.7 million charge for a retroactive Illinois gaming tax assessment at Par-A-Dice. -- $2.7 million charge to accelerate depreciation of Stardust, to retire the property to develop Echelon Place. Net revenues increased 10.2% to $610.9 million for the second quarter 2006, due to the addition of South Coast and Blue Chip expansion. Total Adjusted EBITDA was $167.3 million in the second quarter 2006 and included a $6.7 million charge for a retroactive gaming tax assessment at its Par-A-Dice property in Illinois. Total Adjusted EBITDA for the same period last year was $159.2 million. "After eight consecutive quarter-over-quarter increases in Adjusted EPS dating back to the second quarter 2004, this quarter turned out to be a transition period, as we continued to ramp-up at Blue Chip, re-introducing our new facility within that market, and to adjust operationally for a capacity increase of approximately 14% in gaming positions in the Las Vegas Locals market," Bill Boyd, chairman and chief executive officer of Boyd Gaming, commented. "We also completed our public space expansion at Borgata and added to our development plans with a near-term opportunity in Florida, further strengthening our growth pipeline. Blue Chip's new expansion demonstrated significant potential for the future, as we move past our launch phase and begin focusing on margin improvement. "Additionally, Borgata's expansion, which opened on the last day of the quarter, was extremely well-received by guests, and with renowned chefs Wolfgang Puck, Bobby Flay and Michael Mina, we reinforced Borgata's leading position in the Atlantic City market." Year-To-Date Results The Company reported net income for the six months ended June 30, 2006 was $73.4 million compared to $88.7 million for the six months ended June 30, 2005, which included a $16.4 million net of tax charge. It also recorded a $12.1 million share-based compensation expense in the 2006 year-to-date period; there was no such expense recorded for the same period last year. Its adjusted earnings for the six months ended June 30, 2006, were $113.5 million compared to $107.8 million for the six months ended June 30, 2005. The Company also reported net revenues of $1.3 billion and $1.1 billion for the six months ended June 30, 2006, and 2005, respectively. Total Adjusted EBITDA was $382.2 million for the six months ended June 30, 2006, and included a $6.7 million charge for a retroactive gaming tax assessment for its Par-A-Dice property in Illinois. Total Adjusted EBITDA for the 2005 period was $329.6 million. Quarterly Dividend The Company's board of directors declared a quarterly dividend of $0.135 per share, payable on Sept. 1, 2006, to shareholders of record on Aug. 11, 2006. About Boyd Gaming Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) -- http://www.boydgaming.com/-- is a diversified owner and operator of 19 gaming entertainment properties located in Nevada, New Jersey, Mississippi, Illinois, Indiana and Louisiana. The Company is also developing Echelon Place, a world-class destination on the Las Vegas Strip, expected to open in early 2010. * * * As reported in the Troubled Company Reporter on Jan. 30, 2006, Standard & Poor's Ratings Services placed a 'B+' rating to Boyd Gaming Corp.'s $250 million senior subordinated notes due 2016 and affirmed its existing ratings on the Company, including its 'BB' issuer credit rating. S&P said the outlook is stable. As reported in the Troubled Company Reporter on Jan. 27, 2006, Moody's Investors Service assigned a B1 to Boyd Gaming Corporation's new $250 million senior subordinated notes due 2016. Fitch Ratings assigned a 'B+' rating to Boyd Gaming Corporation's $250 million senior subordinated notes. BROOK MAYS: Will Auction Substantially All Assets on August 8 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas approved the Aug. 8, 2006, proposed schedule for the auction of substantially all of Brook Mays Music Company's assets. The sale is intended to close in time for the purchaser to capture the "back-to-school" rental business. There is no stalking horse bidder. In Feb. 2006, the Debtor hired Houlihan Lokey & Zukin Capital to assist in the exploration of strategic alternatives, including, without limitation, the infusion of new equity, a restructuring of its capital structure, or the sale of some or all of its assets. Houlihan sought all qualified purchasers who satisfied the size criteria and risk profile to consummate the purchase of a distressed company similar to the Debtor, however: (a) the Debtor received no viable offers for a refinancing of its obligations owed to a group of lenders with J.P. Morgan Chase Banks, N.A., as administrative agent. (b) the Debtor received indications of interest from financial buyers to purchase the obligations owed to the Bank Group at a discount to par. After further due diligence by these prospective buyers, those indications of interests never resulted in a transaction. This purchase would have been followed by a restructuring of Brook Mays through a chapter 11 case with the ultimate goal of the buyer taking control of the Debtor; and (c) the Debtor received no viable efforts to purchase certain or all of its assets. However, certain potential buyers may still be interested. Those interested to make a bid must submit by Aug. 4, 2006, at 12:00 p.m. (CDT) a proposed asset purchase agreement to: (a) the Debtor Brook Mays Music Group 3940 Pipestone Group Dallas, TX 75212 Fax: 214-631-7241 (b) the Debtor's financial advisor Adam Dunayer Houlihan Lokey Howard & Zukin 200 Crescent Court, Suite 1900 Dallas, TX 75201 Tel: 214-220-8470 Fax: 214-220-3808 (c) the Debtor's counsel Stephen McCartin Gardere Wynne Sewell LLP 3000 Thanksgiving Tower 1601 Elm Street Dallas, TX 75201 Tel: 214-999-4945 (d) JPMorgan Chase's counsel William L. Wallander Vinson & Elkins LLP Trammel Crow Center 2001 Ross Avenue, Suite 3700 Dallas, TX 75201-2975 Tel: 214-220-7905 Fax: 214-999-7905 -- and -- (e) counsel to the Unofficial Committee of Unsecured Trade Creditors Scott Blakeley Blakeley & Blakeley LLP 2030 Main Street, Suite 210 Irvine, CA 92614 Tel: 949-260-0611 Fax: 949-260-0613 The Court will consider approval of the sale on Aug. 9, 2006, at 1:30 p.m. (CDT). Headquartered in Dallas, Texas, Brook Mays Music Company -- http://www.brookmays.com/-- is a full-line musical instrument retailer in the U.S. It offers a broad range of educational services, complete instrument repair and overhaul facilities and operates a rental program for musical instruments. The Company filed for chapter 11 protection on July 11, 2006 (Bankr. N.D. Tex. Case No. 06-32816). Marcus Alan Helt, Esq., and Michael S. Haynes, Esq., at Gardere Wynne Sewell LLP, represent the Debtor. The Recovery Group, Inc., serves as the Debtor's financial advisor while Houlihan Lokey Howard and Zukin Capital, Inc., acts as restructuring advisor. The Debtor has selected Kurtzman Carson Consultants LLC as its Notice, Claims and Balloting Agent. When it filed for bankruptcy, the Debtor estimated its assets at $10 million to $50 million and its debts at $50 million to $100 million. CARMIKE CINEMAS: Inks 5th Amended Senior Secured Credit Facility ---------------------------------------------------------------- Carmike Cinemas, Inc., entered into a fifth amendment, effective as of July 27, 2006, to its existing senior secured credit facility which extends the date by which Carmike must submit to the lenders audited financial statements for the year ended Dec. 31, 2005, and unaudited financial statements for the quarters ended March 31, 2006, June 30, 2006, and Sept. 30, 2006. The fifth amendment: -- extends the date by which Carmike must submit to the lenders audited financial statements for the year ended Dec. 31, 2005, to Sept. 30, 2006; -- extends the date by which Carmike must submit to the lenders unaudited financial statements for the quarter ended March 31, 2006 to Sept. 30, 2006; -- extends the date by which Carmike must submit to the lenders unaudited financial statements for the quarters ended June 30, 2006 and Sept. 30, 2006 to Dec. 31, 2006; and -- increases the effective interest rate on Carmike's outstanding borrowings under the senior secured credit facility by 0.50% per annum until such time as Carmike's audited financial statements for the year ended Dec. 31, 2005 and its unaudited financial statements for the quarter ended March 31, 2006, are delivered to the lenders. In addition, this 0.50% per annum increase will be in effect if Carmike is unable to deliver its unaudited financial statements for the quarter ended June 30, 2006, by Aug. 14, 2006 or if Carmike is unable to deliver its unaudited financial statements for the quarter ended Sept. 30, 2006 by Nov. 14, 2006, until such time as these unaudited financial statements are delivered. The fifth amendment provides that until Carmike has delivered to the lenders the audited financial statements for the year ended Dec. 31, 2005, and the unaudited financial statements for the quarter ended March 31, 2006, the maximum principal amount of indebtedness that Carmike may incur under the $50 million revolving credit facility comprising part of the senior secured credit agreement is $10 million. In addition, the maximum principal amount of indebtedness that Carmike may incur under the revolving credit facility will continue to be limited to $10 million if Carmike is unable to deliver its unaudited financial statements for the quarter ended June 30, 2006, by Aug. 14, 2006, or if Carmike is unable to deliver its unaudited financial statements for the quarter ended Sept. 30, 2006, by Nov. 14, 2006, until such time as these unaudited financial statements are delivered. No borrowings are currently outstanding under the revolving credit facility. Carmike will pay amendment fees to those lenders approving the fifth amendment in the aggregate amount of approximately $650,000. Request for Nasdaq Filing Extension As reported in the Troubled Company Reporter on July 25, 2006, Carmike also requested an extension from the Nasdaq Listing Qualifications Panel to file its 2005 Form 10-K, all required restatements, and its 2006 first quarter Form 10-Q on or before Aug. 22, 2006. There can be no assurance that the Nasdaq panel will grant Carmike's request for an extension to Aug. 22, 2006. About Carmike Cinemas Headquartered in Columbus, Georgia, Carmike Cinemas, Inc. (NASDAQ: CKEC) -- http://www.carmike.com/-- is a motion picture exhibitor in the United States with 301 theatres and 2,475 screens in 37 states, as of Dec. 31, 2005. Carmike's focus for its theatre locations is small to mid-sized communities with populations of fewer than 100,000. * * * As reported in the Troubled Company Reporter on June 2, 2006, Moody's Investors Service placed Carmike Cinemas, Inc.'s ratings on review for possible downgrade include B2 corporate family rating; B1 senior secured bank credit facility; and Caa1 senior subordinated bonds rating. The Company's outlook was changed to rating under review from negative. CHEMED CORP: Mulls $50 Million Stock Repurchase Program ------------------------------------------------------- Chemed Corporation is in the process of establishing a $50 million ongoing share repurchase program. In addition, the Company announced it intends to fully utilize the remaining $8 million from its February 2000 share repurchase program. These share repurchases will be funded through a combination of cash generated from operations as well as utilization of its revolving credit facility. The timing and the amount of any repurchase of shares will be determined by Company management based on its evaluation of market conditions and other factors. Headquartered in Cincinnati, Ohio, Chemed Corporation (NYSE:CHE) -- http://www.chemed.com/-- operates VITAS Healthcare Corporation, the nation's largest provider of end-of-life care, and Roto-Rooter, the nation's largest commercial and residential plumbing and drain cleaning services provider. * * * As reported in the Troubled Company Reporter on June 27, 2006, Moody's Investors Service affirmed ratings of Chemed Corp.'s $175 million senior secured revolving credit facility due 2010 at Ba2; $150 million 8.75% guaranteed senior notes due 2011 at Ba3; Corporate family rating at Ba2; and Speculative grade liquidity rating at SGL-1. Moody's said the outlook is stable. CHURCH & DWIGHT: S&P Rates $250 Million Senior Secured Debt at BB ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its loan and recovery ratings to Church & Dwight Co. Inc.'s $250 million senior secured debt due 2012. The loan was rated 'BB' (at the same level as the corporate credit rating on Church & Dwight) with a recovery rating of '2', indicating the expectation for substantial (80%-100%) recovery of principal in the event of a payment default. At the same time, Standard & Poor's lowered its ratings on the company's existing senior secured bank debt and removed them from CreditWatch. The loan rating was lowered to 'BB' from 'BB+', and the recovery rating was revised to '2' from '1'. In addition, these ratings were removed from CreditWatch, where they were placed with negative implications July 18, 2006, following the company's announcement that it would utilize its $250 million accordion feature on its existing bank facility to help fund the acquisition of Orange Glo International for $325 million. The corporate credit rating on Church & Dwight is 'BB' and the rating outlook is stable. "The rating reflects the company's participation in the highly competitive personal care segment of the consumer products industry, its lack of geographic diversity, and its moderately leveraged balance sheet," said Standard & Poor's credit analyst Patrick Jeffrey. While Church & Dwight maintains leading brands including Arm & Hammer and Trojan, it competes against much larger companies, such as Procter & Gamble Co. and Colgate-Palmolive Co., with much greater resources to promote and market products. The company's operations also are less geographically diverse than those of many of its competitors, as about 78% of its sales are in the U.S. Ratings List: Church & Dwight Co. Inc.: * Corporate credit rating: BB/Stable/-- Ratings Assigned: * $250M senior secured debt: BB (Recovery rtg: 2) Ratings Revised: To From -- ---- Existing first-lien secured debt: BB BB+/Watch Neg. Recovery rating: 2 1/Watch Neg. COLLINS & AIKMAN: Hires James Wynalek as Head of Plastics Division ------------------------------------------------------------------ Frank Macher, president and chief executive officer of Collins & Aikman Corporation disclosed the appointment of James W. Wynalek as president of Plastics Operations, effective immediately. Mr. Wynalek had been serving as executive vice president and chief technology officer for the North American automotive supplier. In his new position, Mr. Wynalek will oversee all manufacturing, purchasing, process engineering and quality issues for the Company's Plastics Operations. Mr. Wynalek replaces Dennis Profitt, who has left the Company to pursue other interests. Mary Ann Wright, executive vice president for commercial and program management will now oversee the Company's product engineering, design and development functions in addition to her previous responsibilities of marketing, sales, business development and program management. Mr. Wynalek joined Collins & Aikman in early 2006 from Dell Computers, most recently serving as Vice President Engineering and Quality for Dell Americas Operations. In this position he was responsible for new product introduction, process engineering, and test and quality operations across all North and South American manufacturing facilities. Mr. Wynalek brings more than 28 years of manufacturing, production design, and business development experience to the Company. "Jim's ability to understand the multifaceted pieces of the manufacturing and engineering sides of our business will provide C&A invaluable direction as we look to expedite the turnaround of our Plastics group," Mr. Macher said. "We thank Dennis for the contributions he made in laying the foundation for the Plastics group turnaround and wish him well in his future endeavors." Prior to his experience at Dell, Mr. Wynalek held senior positions at Visteon Corporation and Ford Motor Company. Highlights of Wynalek's extensive career in the auto sector include roles as the VP/GM of two Visteon business units as well as executive positions at Ford Motor Company in product design, manufacturing and European operations. Mr. Wynalek holds a Master of Business Administration from Eastern Michigan University and a Bachelor of Science degree in Mechanical Engineering from the University of Detroit. Under the terms of Mr. Wynalek's employment agreement, he is entitled to receive a $475,000 annual base salary and an annual bonus equal to 50% of his annual base salary, Collins & Aikman disclosed in a regulatory filing with the Securities and Exchange Commission. In addition, upon the Court's confirmation of a plan of reorganization or sale of substantially all of Collins & Aikman's assets -- assuming the valuation of the company meets or exceeds the thresholds established in the success sharing plan -- Mr. Wynalek is entitled to receive a portion of the incentive compensation pool that is set aside for senior executives of the company. Stacy Fox, Collins & Aikman executive vice president, chief administrative officer and general counsel, relates that Mr. Wynalek is also entitled to receive his salary and other benefits for a period of one year in the event the Company terminates him without cause or he resigns as the result of a constructive termination. Mr. Profitt, who resigned from his position on July 21, 2006, will receive a lump sum severance payment equal to five months of his annual base salary. Mr. Profitt is also eligible to continue to participate in the company's health plans for five months. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Completes Sale of Several De Minimis Assets -------------------------------------------------------------- Collins & Aikman Corporation and its debtor-affiliates inform the U.S. Bankruptcy Court for the Eastern District of Michigan that between March 31, 2006, and June 30, 2006, they have consummated the sales of these assets: Asset Purchaser Sale Proceeds ----- --------- ------------- Air jet texturing Schneider Mills $400,000 equipment and compressors 300 stackable racks Elgort Textile 7,500 Associates Inc. 18 Van de Wiele looms Petit Textile 954,000 and 18 Staubli heads Machinery Corp. 22 van de Wiele looms Petit Textile 690,000 Machinery Inc. 250 stakable racks Elgort Textile 6,250 Associates Inc. Measuregraph Sample Elgort Textile 1,000 Table Associates Inc. 10 Van de Wiele looms BSS, Inc. 180,000 Atlas Weatherometer Tri-Tex Company Inc. 5,000 C1-65 1 Dornier Jacquard David Rothschild Co. 200,000 flat loom and three Dornier Dobby flat looms 11 Van de Wiele looms United Textile 522,500 Machinery Corp. Cafeteria equipment; Faurecia Automotive 225,000 Reception Desk and Seating display system; Systemax Cat5 horizontal cabling; Technician's workbench; Audio/video system; United power pulse 24 Dornier rapier American Dornier 2,200,000 Jacquard machines; Machinery Corp. 12 Dornier rapier dobby type machines; 14 Dornier airject dobby type machines Various information U.S. Computer Exchange 2,200 Technology related equipment Furthermore, the Debtors notify the Court and parties-in-interest that they plan to sell more de minimis assets: Asset Purchaser Purchase Price ----- --------- -------------- MAAC Rotary Vacuum KD Capital $50,000 Forming Machine Equipment, LLC Toyota Tugger material Fisher Textile Inc. 750 Wet brush unit KM Fabrics Inc. 5,000 The purchase price for the assets is the highest offer that the Debtors received. The assets are being sold "as-is" and "where- is." The Purchasers will incur substantially all costs associated with dismantling and moving the Assets. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000) COMMUNITY HEALTH: 2006 2nd Quarter Net Income Rises to $52.4 Mil. ----------------------------------------------------------------- Community Health Systems, Inc., generated $1.061 billion of net operating revenues for the quarter ended June 30, 2006, a 15.5% increase from $918.7 million generated during the same period last year. Income from continuing operations increased 13.5% to $52.4 million for the quarter ended June 30, 2006, compared with $46.2 million for the same period last year and net income increased to $52.4 million for the quarter ended June 30, 2006 compared with $40.5 million for the same period last year. The Company's second quarter 2006 results include additional compensation expense of $3.8 million resulting from stock-based compensation. Adjusted EBITDA for the second quarter of 2006, the Company disclosed, increased 11.8% to $156.7 million compared with $140.2 million for the same period last year. Its net cash from operating activities for the second quarter of 2006 was $116.2 million compared with $127.7 million for the same period last year. The Company's consolidated financial results for the six-months ended June 30, 2006, reflect net operating revenues totaled $2.088 billion, a 14.3% increase compared with $1.827 billion for the same period last year. Income from continuing operations increased 15.1% to $109.6 million compared with $95.2 million, for the same period last year. Net income increased to $106.4 million compared with $76.5 million for the same period last year. Loss on discontinued operations for the six months ended June 30, 2006, consists of an after-tax loss of approximately $3.2 million related to the sale of one hospital in March of 2006. The results for the six months ended June 30, 2006, include additional compensation expense of $6.9 million, resulting from stock-based compensation. Adjusted EBITDA for the six months ended June 30, 2006, was $315.2 million, compared with $283.9 million for the same period last year, representing an 11.0% increase. Net cash provided by operating activities for the six months ended June 30, 2006, was $207.0 million, compared with $276.4 million for the same period last year. At June 30, 2006, the Company's balance sheet showed $4,178,660,000 in total assets, $2,480,361,000 in total liabilities, and $1,698,299,000 in total stockholders' equity. "Community Health Systems delivered another very strong financial and operating performance for the second quarter of 2006," Wayne T. Smith, the Company's chairman, president and chief executive officer, said. "These results reflect consistent execution of our centralized and standardized operating strategy, the successful integration of recently acquired hospitals and our continued focus on quality care." Healthcare Assets Acquisitions The Company completed on April 1, 2006, the acquisition of Baptist Medical Center DeKalb located in Fort Payne, Alabama, and Baptist Medical Center Cherokee located in Centre, Alabama. The Company acquired on May 1, 2006, Via Christi Oklahoma Regional Medical Center located in Ponca City, Oklahoma. The Company also acquired on June 1, 2006, Mineral Area Regional Medical Center located in Farmington, Missouri. The Company completed on July 1, 2006, the acquisition of the healthcare assets of Vista Health, which included Victory Memorial Hospital and St. Therese Medical Center, both located in Waukegan, Illinois. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?e8c Located in the Nashville, Tennessee, Community Health Systems, Inc. (NSE:CYH) -- http://www.chs.net/-- operates general acute care hospitals in non-urban communities throughout the U.S. Through its subsidiaries, the company currently owns, leases or operates 76 hospitals in 22 states. Its hospitals offer a broad range of inpatient medical and surgical services, outpatient treatment and skilled nursing care. * * * Standard & Poor's Ratings Services revised its outlook on Brentwood, Tennessee-based hospital operator Community Health Systems Inc. to positive from stable in September 2005. Ratings on the company, including the 'BB-' corporate credit rating, were affirmed. COMPLETE RETREATS: Court Directs Debtors to Segregate Tax Funds --------------------------------------------------------------- The Honorable Alan H.W. Shiff of the U.S. Bankruptcy Court for the District of Connecticut directed Complete Retreats LLC and its debtor-affiliates, including their agents and officers, to segregate from all other funds all amounts deducted and withheld from employees or collected from others for taxes under any law of the United States during the pendency of their cases and deposit the amounts collected for the payment of Federal Tax liabilities. The Debtors are also required to segregate amounts collected from others for taxes under Chapters 214, 219, 221 and 225 of the Connecticut General Statutes and all contributions payable to the Unemployment Compensation Fund under Chapter 567 of the Connecticut General Statutes during the pendency of their cases and deposit the amounts in a separate tax account. A full-text copy of the Court order for payment of federal taxes is available at no charge at http://researcharchives.com/t/s?e7b A full-text copy of the Court order for payment of state taxes is available at no charge at http://researcharchives.com/t/s?e7c Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor- affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq., and Jeffrey K. Daman, Esq., at Dechert LLP represent the Debtors in their restructuring efforts. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed $308,000,000 in total debts. (Complete Retreats Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., 215/945-7000). CONSUMERS ENERGY: Agrees to Sell MCV Interest to GSO and Rockland ---------------------------------------------------------------- Consumers Energy reached an agreement to sell its interests in the 1,500-megawatt Midland Cogeneration Venture to GSO Capital Partners and Rockland Capital Energy Investments for $60.5 million. The Company owns 49% of the MCV Partnership, which leases and operates the facility near Midland, Michigan. It also indirectly owns 35% of the facility and along with the other owners leases the facility to the MCV Partnership. The sales agreement calls for GSO and Rockland to purchase all of the Michigan utility's interests and provide Consumers Energy a financial guarantee to back certain contingent obligations. The Company is the main customer for the MCV's electricity output. The utility's contract to purchase power from the plant, and the associated customer rates, are not affected by the sale. The proceeds from the sale will be used to reduce debt at the utility. "This sale will reduce our exposure to sustained high natural gas prices and allow us to pay down debt at the utility at a time when interest rates are rising," David Joos, the president and chief executive officer of CMS Energy, said. J.P. Morgan Securities Inc. served as financial advisor for Consumers Energy and managed the competitive sale process. About GSO Capital GSO Capital Partners LP is an investment advisor specializing in the leveraged finance marketplace. Funds managed by GSO invest in a broad array of assets including private equity securities, mezzanine securities and leveraged loans. The firm has approximately $5 billion in assets under management and has over 90 professionals in New York, London and Houston. About Rockland Capital Rockland Capital Energy Investments is a private energy investment company founded in 2003 to focus on the acquisition, development and optimization of companies and projects in the North America and European energy sectors. About Consumers Energy Company Headquartered in Jackson, Michigan, Consumers Energy Company -- http://www.consumersenergy.com/-- a wholly owned subsidiary of CMS Energy Corporation, is a combination of electric and natural gas utility that serves more than 3.3 million customers in Michigan's Lower Peninsula. * * * As reported in the Troubled Company Reporter on April 4, 2006, Fitch assigned a rating of 'BB+' to Consumers Energy Company's $300 million 364-day revolving credit facility. Fitch said the rating outlook is stable. CONTINUING CARE: Case Summary & Two Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Continuing Care, Inc. aka Natura aka Florida Naturist Park aka Naturist-Christians.org aka Venice Friends' Fellowship 1662 Quail Lake Drive Venice, FL 34293 Bankruptcy Case No.: 06-03838 Type of Business: The Debtor is a non-profit organization made up of a society of Christian nudists. The organization was first incorporated in London, England, to handle all incoming donations from supporters and donors. See http://naturist-christians.org/ Chapter 11 Petition Date: July 28, 2006 Court: Middle District of Florida (Tampa) Debtor's Counsel: Chad S. Bowen, Esq. David S. Jennis, Esq. Jennis Bowen & Brundage, P.L. 400 North Ashley Drive, Suite 2540 Tampa, FL 33602 Tel: (813) 229-1700 Fax: (813) 229-1707 Total Assets: $6,041,575 Total Debts: $2,287,417 Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Forizs & Dogali, P.L. Attorney Fees - $95,000 4301 Anchor Plaza Parkway prepetition Suite 300 litigation Tampa, FL 33634-7521 Dan C. Rasmussen Mediation Services $220 P.O. Box 1822 New Port Richey, FL 34656 CORNELL TRADING: Wants Ch. 11 Case Dismissed & Funds Distributed ---------------------------------------------------------------- Cornell Trading, Inc., and its Official Committee of Unsecured Creditors ask the U.S. Bankruptcy Court for the District of Massachusetts to dismiss the Debtors chapter 11 case pursuant to Sections 105(a) and 1112(b) of the Bankruptcy Code. The Debtor and the Committee also ask the Court to permit the Committee's counsel to distribute funds "carved out" from proceeds otherwise payable to the Debtor's senior secured creditor and held in trust for the benefit of general unsecured creditors. The Debtor sold its entire inventory and certain designated furniture, fixtures and equipment through store closing sales. Pursuant to separate Court orders, the Debtor assumed and assigned eleven of its leases of nonresidential real property. With the sole exception of the Debtor's lease of its headquarters in Williston, Vermont, all of its leases of non-residential real estate, not otherwise assumed and assigned, have been rejected. As a result, the Debtor ceased its retail operations, is no longer conducting its ordinary business and is in the process of winding up its affairs by, among other things, processing and filing state sales tax returns and terminating employee benefit plans. The Committee conducted a review of payments made to creditors prior to the its bankruptcy petition and concluded that there would be no substantial net benefit to unsecured creditors to pursue preference claims or other avoidance actions. Consequently, the Committee has determined that, other than funds in the GUC Trust, there are no material unencumbered assets to be administered in the Debtor's case. Under the Court's final cash collateral order, carve out funds were deliverable in trust to counsel to the Committee for the benefit of general unsecured creditors. The Carveout Funds total $493,633. Based upon the Debtor's Schedule F filed with the Bankruptcy Court on Feb. 3, 2006, and the proofs of claim filed with the Bankruptcy Court as of July 15, 2006, the Debtor estimates that the general unsecured claims against it at $8.8 million. Based on an estimate of general unsecured claims of $8.8 million, the Carveout Funds will provide around a 5.3% distribution to general unsecured creditors, exclusive of a $10,000 carveout for the Committee's counsel and $17,500 in estimated other administrative expenses, including the expenses of distributing the Carveout Funds to general unsecured creditors. Headquartered in Williston, Vermont, Cornell Trading, Inc. -- http://www.aprilcornell.com/-- sells women's and children's apparel including dresses, skirts, blouses, and sleepwear. Cornell also offers books and housewares like table linens, placemats and napkins, bedding, and dolls and stuffed animals. The Company filed for chapter 11 protection on January 4, 2006 (Bankr. D. Mass. Case No. 06-10017). Christopher J. Panos, Esq., at Craig & Macauley, P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated debts and assets between $10 million to $50 million. COUNCIL TRAVEL: Class 3 Unsecured Claimants Receive $374,470 ------------------------------------------------------------ Travel Services Creditor Trust has made further distributions of $374,470.02 to Class 3 Unsecured Claims. The Trust was created under Council Travel Services, Inc., and its debtor-affiliates' Second Amended Joint Plan of Liquidation, which was confirmed on Aug. 12, 2004. The Trust paid 10% to allowed Class 3 Unsecured Claims from distributions made from Feb. 21, 2006, to March 28, 2006, except for claim 694, which waived the first 5% by stipulation. To date, Class 3 Unsecured Claims have received 24% of their allowed claims. These allowed claims were fully paid from distributions made from Feb. 21, 2006, to March 28, 2006: -- Administrative Claims, -- Class 1 Priority Claims and Priority Tax Claims, and -- Class 2 Miscellaneous Secured Claims. Allowed Class 4 Convenience Claims received 40% from distributions made from Feb. 21, 2006, to March 28, 2006. Headquartered in Manhattan, New York, Council Travel Services, Inc., provides student and budget travel packages. The Company and its debtor-affiliates filed for chapter 11 protection on February 5, 2002 (Bankr. S.D.N.Y. Case No. 02-10509). Schuyler Glenn Carroll, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP, represents the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed an estimated $10 million in assets and $21 million in debts. Judge Gerber confirmed the Debtors' Second Amended Joint Plan of Liquidation. Brown Raysman Millstein Felder & Steiner represents the Travel Services Creditor Trustee. CSK AUTO: Gets Waiver of Default from 4-5/8% Senior Noteholders --------------------------------------------------------------- CSK Auto, Inc., a wholly owned subsidiary of CSK Auto Corporation, reached an agreement with a majority in aggregate principal amount of its 4-5/8% Senior Exchangeable Notes due 2025 to: (i) provide for the waiver of any default or event of default resulting from the Company's failure to file certain financial information with the Trustee for the Notes, including the default that was the subject of the notice of default delivered to the Company and (ii) amend the Indenture governing the Notes to exempt Auto from compliance with the Filing Covenant until June 30, 2007. In consideration for the Waiver and the Extension, the Indenture and the Notes will be further amended to increase the interest rate of the Notes to 6-3/4% per year and to increase the exchange rate of the Notes from 49.8473 shares of the Company's common stock per $1,000 principal amount of Notes to 60.6061 shares of the Company's common stock per $1,000 principal amount of Notes. The Waiver, Extension and Amendments will be applicable to all outstanding Notes. The Letter Agreement will expire on Aug. 4, 2006, if a Supplemental Indenture that will give effect to the Extension and the Amendments is not executed and delivered by the Company and the Trustee for the Notes by 5:00, Eastern Daylight Time, on Aug. 4, 2006. The Company expects that the Supplemental Indenture will be executed on or before July 28, 2006. Based in Phoenix, Arizona, CSK Auto Corporation (NYSE: CAO) -- http://www.cskauto.com/-- is the parent company of CSK Auto, Inc., a specialty retailer in the automotive aftermarket. As of Jan. 29, 2006, the Company operated 1,273 stores in 22 states under the brand names Checker Auto Parts, Schuck's Auto Supply, Kragen Auto Parts and Murray's Discount Auto Parts. * * * As reported in the Troubled Company Reporter on July 27, 2006, Standard & Poor's Ratings Services assigned loan and recovery 'B+' ratings to CSK Auto Inc.'s $450 million term facility. These ratings were placed on CreditWatch with negative implications in conjunction with the other existing ratings on the company. Standard & Poor's also lowered its rating on the company's $100 million 4.625% senior exchangeable notes due 2025 to 'B-' from 'B+'. The 'B-' rating remains on CreditWatch with negative implications. DANA CORP: Ryder Truck Wants Debtors to Decide on Truck Lease ------------------------------------------------------------- Ryder Truck Rental Inc. asks the U.S. Bankruptcy Court for the Southern District of New York to compel Dana Corp. and its debtor- affiliates to assume or reject their Truck Lease and Service Agreement with Ryder Truck. The Debtors and Ryder Truck are parties to a TLSA, pursuant to which Ryder Truck provides about 554 vehicles for the Debtors' exclusive use. Before their bankruptcy filing, the Debtors incurred at least $363,302 in unpaid lease charges pursuant to the TLSA, Ken Coleman, Esq., at Allen & Overy LLP, in New York, tells the Court. The Debtors continue to use the Vehicles in the operation of their businesses, Mr. Coleman adds. As of July 5, 2006, the Debtors owe Ryder Truck approximately $374,133 for outstanding postpetition TLSA payments, Mr. Coleman says. The Debtors have asked the Court's permission to partially reject the TLSA. Mr. Coleman asserts that the TLSA is a unitary contact that may not be rejected piecemeal. "It must be either assumed or rejected in its entirety." Moreover, under the TLSA lease terms, the TLSA is effective until validly terminated. The termination of the TLSA requires written notice 60 days prior to any anniversary of the TLSA, Mr. Coleman notes. Mr. Coleman contends that if the Debtors reject the TLSA in toto, Ryder Truck will be damaged by the breach of the TLSA: -- Ryder Truck will suffer at least $363,302 in damages for non-payment of prepetition charges under the TLSA; and -- Ryder Truck will suffer lease termination damages. Ryder Truck specifically asks the Court to: (a) compel the Debtors to file a Notice of Rejection of the entire TLSA; (2) order the immediate release of the Vehicles; or (3) in the alternative, grant it adequate protection for the Debtors' performance under the TLSA until the Debtors assume or reject it, in the form of a $300,000 cash bond for $300,000, to be furnished to Ryder Truck on or before Aug. 23, 2006. Toledo, Ohio-based Dana Corp. -- 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. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000). The Debtors' consolidated balance sheet at March 31, 2006, showed a $456,000,000 total shareholder' equity resulting from total assets of $7,788,000,000 and total liabilities of $7,332,000,000. ENTERGY NEW ORLEANS: Gets Court OK to Modify FTI's Retention Order ------------------------------------------------------------------ Judge Jerry A. Brown of the U.S. Bankruptcy Court for the Eastern District of Louisiana approves the request of the Official Committee of Unsecured Creditors appointed in Entergy New Orleans Inc.'s chapter 11 case, to modify the Court's prior order authorizing the retention of FTI Consulting, Inc., as the Committee's financial advisor. FTI's compensation will be capped at the cumulative amount of $550,000, plus reimbursement of actual and necessary expenses it incurred, for January through July 2006. For August 2006 and all subsequent months, FTI's compensation will be capped at $75,000 per month, plus reimbursement of actual and necessary expenses, subject to further order of the Court. As reported in the Troubled Company Reporter on June 21, 2006, the Committee sought the U.S. Bankruptcy Court for the Eastern District of Louisiana to modify the firm's compensation to allow the fee caps from January 2006 through July 2006 to be cumulative. The Court's order approving the Committee's continued retention of FTI provides that the firm's compensation is capped at $100,000 for the month of January 2006 and at $75,000 for all subsequent months, plus reimbursement of actual and necessary expenses. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENTERGY NEW ORLEANS: Releasing 2nd Qtr. Financials on August 8 -------------------------------------------------------------- Entergy New Orleans, Inc., along with parent Entergy Corp. and affiliates, will release its second quarter financial results before the market opens on Aug. 8, 2006. Entergy Corp. said in a press release that it expects second quarter as-reported earnings of approximately $1.31 per share and operational earnings of approximately $1.20 per share. The as-reported earnings, Entergy Corp. said, will include special items to reflect the quarterly results of ENOI and the quarterly results of Entergy's competitive retail business including the gain recorded on the sale of this business during the quarter. ENOI's results are being reported as a special item given the uncertainty that remains for the business as it works toward emerging from bankruptcy. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000) EXCO RESOURCES: S&P Affirms B- Ratings With Stable Outlook ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' ratings on independent exploration and production company EXCO Resources Inc. The affirmation follows the company's announcement that it will be acquiring 400 billion cubic feet equivalent of proved oil and gas reserves and certain pipeline assets from Progress Energy Inc. (BBB/Positive/A-2) for $1.2 billion. The all-cash transaction will be initially funded through debt issued at a newly created, wholly owned unrestricted subsidiary. Standard & Poor's notes that this financing structure shares similar characteristics to EXCO's 2005 acquisition of properties from ONEOK Inc. (BBB/Stable/A-2). The ratings affirmation incorporates Standard & Poor's expectation that rising near-term cash flows, an extensive hedging program, and liquidity are mitigants to a significantly weakened consolidated financial profile post-funding the acquisition. The outlook is stable. Pro forma for the announced transaction, Dallas, Texas-based EXCO will have close to $2 billion in consolidated debt. The ratings on EXCO reflect: * a highly leveraged financial profile; * a highly acquisitive growth strategy; and * aggressive financial policies. Credit weaknesses are only somewhat mitigated by: * a robust hedging program (at prices largely above midcycle); * a low-risk, largely development-focused drilling strategy; * a growing domestic asset base; and * an experienced management team. "Aggressive financial policies, an increased debt burden (on a consolidated basis), and execution risk with regard to integrating recent acquisitions (as well as the eventual outcome concerning execution of the proposed MLP strategy) remain concerns that could pressure ratings," said Standard & Poor's credit analyst Jeffrey B. Morrison. "A positive rating action or outlook revision is unlikely for the foreseeable future," he continued. FALCONBRIDGE LTD: Inco Unable to Get Required Shareholder Support ----------------------------------------------------------------- Inco Limited reported that its tender offer to acquire all of the outstanding common shares of Falconbridge Limited expired at midnight (Vancouver time) on July 27, 2006. At the time of expiration, the minimum tender condition of 50.01% of the Falconbridge common shares had not been satisfied, and the company has therefore elected to terminate its offer. Inco has instructed CIBC Mellon Trust Company, the depositary for the offer, to promptly return all shares tendered. "Though a large number of Falconbridge shareholders supported our offer, unfortunately it wasn't enough," said Scott Hand, Chairman and Chief Executive Officer of Inco. "This is disappointing news for the many people at Inco and Falconbridge who have worked very hard to realize this transaction and create what we believe would have been a truly great mining company. I thank everyone for the many long hours and effort they have contributed. But the Falconbridge shareholders have spoken, and we're moving on. I wish Derek Pannell and his team all the best going forward." "While we may not have achieved the transaction that we originally hoped for, our shareholders have benefited since we began this process, as our share price has increased by 73% from when we originally announced our transaction on October 11, 2005," Mr. Hand said. "Inco's attention now turns to completing our two-way transaction with Phelps Dodge to create a global powerhouse in nickel and copper," he said. "Based on the combined company's premier asset base, the outlook for sustained long-term high metals prices and strong cash flows, the two-way combination is a winning option for the shareholders of both companies. We also believe that it is clearly superior to the competing bid for Inco put forward by Teck Cominco." Under the terms of the Phelps Dodge transaction, Inco shareholders will receive 0.672 shares of Phelps Dodge stock, plus CDN$20.25 per share in cash for each share of Inco stock. The implied value of the Phelps Dodge offer currently stands at CDN$79.81, based on the closing price of the Phelps Dodge common stock on the New York Stock Exchange and the U.S./Canadian dollar exchange rate on July 27, 2006. Phelps Dodge Inco will be the world's second largest nickel producer, one of the world's largest copper producers, and a leading producer of molybdenum and cobalt, with a world-class portfolio of growth projects in nickel and copper. "Nickel and copper are both trading at or near record price levels," said Mr. Hand. "They are the two metals with the best supply-demand fundamentals going forward, and are the two metals that China needs but does not produce in any significant quantities," he said. "Phelps Dodge Inco will be ideally positioned to make the most of the strong markets we foresee for both metals over the near and long term." As previously disclosed, the corporate office and the new company's copper division will be headquartered in Phoenix. Inco Nickel, the new company's nickel division, will be headquartered in Toronto. Under the terms of Inco's agreement with Falconbridge, an enhanced expense payment of $150 million is payable by Falconbridge to Inco as a result of the failure to meet the minimum tender condition of the Inco offer. A further break-up fee of $300 million will be payable by Falconbridge to Inco in the event that Xstrata completes its proposed acquisition of Falconbridge. Inco had also entered into a definitive agreement with Falconbridge and LionOre Mining International Ltd. covering the sale of the Nikkelverk refinery and related assets to LionOre, which was conditional on Inco taking up and paying for the Falconbridge common shares pursuant to its offer. Under the agreement with LionOre, a break-up fee of $32.5 million is payable by Inco to LionOre as a result of the Falconbridge transaction not having been completed. About Phelps Dodge Headquartered in Phoenix, Arizona, Phelps Dodge Corp. (NYSE: PD) - - http://www.phelpsdodge.com/-- produces copper and molybdenum and is the largest producer of molybdenum-based chemicals and continuous-cast copper rod. The company and its two divisions, Phelps Dodge Mining Co. and Phelps Dodge Industries, employ approximately 13,500 people worldwide. About Inco Ltd. Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N) -- http://www.inco.com/-- produces nickel, which is used primarily for manufacturing stainless steel and batteries. Inco also mines and processes copper, gold, cobalt, and platinum group metals. It makes nickel battery materials and nickel foams, flakes, and powders for use in catalysts, electronics, and paints. Sulphuric acid and liquid sulphur dioxide are produced as byproducts. The company's primary mining and processing operations are in Canada, Indonesia, and the U.K. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Limited (TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/-- is a leading copper and nickel company with investments in fully integrated zinc and aluminum assets. Its primary focus is the identification and development of world-class copper and nickel orebodies. It employs 14,500 people at its operations and offices in 18 countries. The Company owns nickel mines in Canada and the Dominican Republic and operates a refinery and sulfuric acid plant in Norway. It is also a major producer of copper (38% of sales) through its Kidd mine in Canada and its stake in Chile's Collahuasi mine and Lomas Bayas mine. Its other products include cobalt, platinum group metals, and zinc. * * * As reported in the Troubled Company Reporter on July 24, 2006, Standard & Poor's Ratings Services revised the CreditWatch implications on Inco Ltd. and Falconbridge Ltd. to developing from positive after Phelps Dodge Corp. (BBB/Watch Neg/A-2) announced an increase in the debt-financed cash consideration for the two companies. CreditWatch with developing implications means the ratings may be raised, lowered, or affirmed. Falconbridge's CDN$119.7 Million Cumulative Preferred Shares Series 2 carries S&P's BB rating. That rating was assigned on Nov. 21, 2001. Falconbridge's CDN$150 Million Preferred Shares Series H also carries S&P's BB rating. That rating was assigned on Mar. 5, 2003. FASHION SHOP: Has Until August 8 to File Schedules and Statement ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Kentucky gave Fashion Shop of Kentucky, Inc., until Aug. 8, 2006, to file its Schedules of Assets and Liabilities and Statement of Financial Affairs. The Debtor had asked for the extension citing that it needs additional time to gather all the pertinent information. Headquartered in Louisville, Kentucky, Fashio Shop of Kentucky Inc. retails fashion accessories and women's apparel. The Company filed for chapter 11 protection on July 10, 2006 (Bankr. W.D. Ky. Case No. 06-31697). David M. Cantor, Esq., at Seiller Waterman LLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and debts between $1 million and $10 million. FERRO CORP: Fully Pays $55 Mil. Debenture with J.P. Morgan ---------------------------------------------------------- Ferro Corporation repaid in full its 7.125% debenture at a cost of $56,251,822.92, principal plus all accrued and unpaid interest. The Company reported that by a letter dated July 21, 2006, J.P. Morgan Trust Company accelerated the payment of its 7.125% debentures due April 1, 2028, with a principal amount of $55 million. The event of default that triggered the acceleration was the delayed filing of financial statements and an Officer's Certificate relating to the Company's compliance with the terms of the indenture, in its Form 10-K filed on March 31, 2006, and its Form 8-K filed April 10, 2006. The Company has drawn on the term loans in its credit facility to make the accelerated payment and expects the accelerated repayment to result to its taking a pre-tax charge in the period ended June 30, 2006, of approximately $2.5 million. Headquartered in Cleveland, Ohio, Ferro Corporation (NYSE:FOE) -- http://www.ferro.com/-- produces performance materials for manufacturers, including coatings and performance chemicals. The Company has operations in 20 countries and has approximately 6,800 employees globally. * * * As reported in the Troubled Company Reporter on April 3, 2006, Standard & Poor's Ratings Services lowered its ratings on Ferro Corp., including its corporate credit rating to 'B+' from 'BB'. All ratings remain on CreditWatch with negative implications, where they were placed Nov. 18, 2005. FLEETPRIDE CORP: Moody's Junks Rating on $150 Million Senior Loan ----------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to FleetPride Corporation's senior unsecured bridge loan and has affirmed FleetPride's Corporate Family rating of B3 and senior secured first lien ratings of B2. The ratings outlook is stable. Rating assigned: * $150 million senior unsecured term loan, Caa1 Moody's assigned initial ratings on June 15, 2006, and withdrew a prospective rating on a planned unsecured note offering on June 29, 2006. The bridge loan continues as the junior piece of FleetPride's capital structure arranged to finance Investcorp S.A.'s acquisition of the company in early June 2006. Initially, a $150 million senior unsecured note offering was proposed to refinance the bridge loan, but plans to proceed with that offering were cancelled in late June, leaving the bridge loan in place. Terms of the bridge loan, other than applicable interest, are substantially identical to those contemplated for the unsecured note offering. The bridge loan, provided by Bank of America Securities and Deutsche Bank Securities, has an initial maturity date in June 2007. But, FleetPride has an option to extend the final maturity under certain conditions to June 2014, the same tenor as the envisioned note offering. Interest under the bridge loan is currently fixed, and, over time, will step up once and be capped thereafter. As its interest is comparatively greater than that assumed under the unsecured note offering, higher carrying costs will adversely affect certain coverage ratios compared to earlier assumptions. Similarly, final pricing on the first lien term loan was slightly higher than original assumptions. However, the impact of higher interest expense on after-tax free cash flow will be marginal, and FleetPride's credit profile will remain consistent with the B3 Corporate Family rating. The bridge loan benefits from up-streamed guarantees from material domestic subsidiaries of FleetPride. In addition to these up- streamed guarantees, the senior secured facilities have a down- streamed guarantee from FleetPride's holding company parent, FPC Holdings, Inc. The Caa1 rating, one notch below Corporate Family Rating, recognizes lower recovery expectations from its effective subordination to the senior secured credit facilities. FleetPride Corporation, based in The Woodlands, Texas, operates 156 branch locations in 36 states. The company distributes brand name heavy-duty vehicle parts as well as select private label brands. In addition the company provides a limited range of re-manufactured products as well as truck and trailer repair services. Revenues in 2005 were $582 million. FOAMEX INTERNATIONAL: Wants Until Nov. 10 to Remove Civil Actions ----------------------------------------------------------------- Pursuant to Rules 9006(b) and 9027 of the Federal Rules of Bankruptcy Procedure, Foamex International Inc. and its debtor- affiliates further ask the U.S. Bankruptcy Court for the District of Delaware to extend until Nov. 10, 2006, the period within which they must remove civil actions pending as of the Debtor's chapter 11 filing. The Debtors have not had adequate time to fully investigate and evaluate all of the Civil Actions to determine whether removal is appropriate, Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, says. An extension will give the Debtors more time to make fully informed decisions concerning removal of each action and will assure that the Debtors do not forfeit valuable rights, Ms. Morgan asserts. Ms. Morgan assures the Court that the rights of the Debtors' adversaries will not be prejudiced by an extension because they may seek to have the actions remanded to state court. The Debtors reserve the right to seek further extensions of the removal period. The Court will convene a hearing on August 8, 2006, to consider the Debtors' request. Objections to the relief sought must be filed by August 1, 2006. By application of Del. Bankr. LR 9006-2, the Debtors' removal period is automatically extended until the conclusion of that hearing. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) FORD MOTOR: DBRS Lowers Long-Term Debt Rating to B -------------------------------------------------- Dominion Bond Rating Service lowered on July 21, 2006, Ford Motor Company's long-term debt rating to B from BB, and lowered its short-term debt rating to R-3 middle from R-3 high. DBRS also lowered Ford Motor Credit Company's long-term debt rating to BB(low) from BB, and confirmed Ford Credit's short-term debt rating at R-3(high). DBRS maintained a negative outlook for Ford Motor Company and Ford Credit. Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With about 300,000 employees and more than 100 plants worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company. G+G RETAIL: Court Extends Removal Period to October 23 ------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York extended until Oct. 23, 2006, the period within which G+G Retail Inc. can remove state court actions to the U.S. District Court for the Southern District of New York. Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young Jones & Wientraub LLP, in Manhattan, informed the Court that since the Debtor filed for bankruptcy, it focused its efforts on obtaining Court approval for the sale of substantially all of its assets, addressing issues attendant to the sale, and working with key constituencies on issues relating to the case. Early this year, Max Rave and Guggenheim Corporate Funding LLC won the auction of substantially all of the Debtor's assets for $35 million. Ms. Selzer contended that the extension will afford the Debtor the opportunity necessary to make fully informed decisions concerning removal of each prepetition action and will assure that the Debtor does not forfeit valuable rights under Section 1452 of the Bankruptcy Code. Headquartered in New York, New York, G+G Retail Inc. retails ladies wear and operates 566 stores in the United States and Puerto Rico under the names Rave, Rave Girl and G+G. The Debtor filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., Laura Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A. Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C. represent the Debtor in its restructuring efforts. Scott L. Hazan, Esq.. at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets of more than $100 million and debts between $10 million to $50 million. G+G RETAIL: Walks Away from Unexpired Rave Store Lease ------------------------------------------------------ Pursuant to the Rejection Procedures approved by the U.S. Bankruptcy Court for the Southern District of New York, G+G Retail Inc. gave notice to the Court to reject an unexpired non- residential real property lease located at 2540 Central Avenue, in Central Plaza, Yonkers, New York. The 2,224-square feet Rave Store #508 was leased on Jan. 27, 2001, by and between Central Plaza Associates and the Debtor with a minimum rent of $77,840 per year from May 17, 2002 to May 16, 2007, and $85,624 per year from May 17, 2007 to Jan. 31, 2010. The Debtor determined that the store is unnecessary and burdensome to its estate. Headquartered in New York, G+G Retail Inc. retails ladies wear and operates 566 stores in the United States and Puerto Rico under the names Rave, Rave Girl and G+G. The Debtor filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., Laura Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A. Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C. represent the Debtor in its restructuring efforts. Scott L. Hazan, Esq.. at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets of more than $100 million and debts between $10 million to $50 million. GENERAL MOTORS: Unit Gets $6 Million Settlement from ePlus Inc. --------------------------------------------------------------- ePlus Inc. settled a lawsuit with GMAC Commercial Finance, LLC. The financial terms of the settlement includes a cash payment of $6 million from ePlus to GMAC, which ePlus has paid. GMAC filed a suit against ePlus Group, Inc., on Jan. 4, 2005, seeking repayment of three underlying non-recourse promissory notes totaling approximately $10,646,000. Including interest and legal fees, the total claim sought by GMAC was approximately $13.4 million. The trial was to begin on July 24, 2006. The suit was in connection with an alleged breach of warranties regarding an assignment of debt on a non-recourse basis from ePlus Group, Inc., as lessor, for leases with lessee Cyberco Holdings, Inc. In June 2006, one of the principals of Cyberco pled guilty to fraud, money laundering, and conspiracy. Cyberco, related affiliates, and at least one principal are in Chapter 7 bankruptcy, and no future payments are expected from Cyberco. The U.S. Attorney asserted that Cyberco defrauded 40 financial institutions of $90 million. The Company stated that although it believed it had a strong case on the law and facts, the pre-trial process created an unusual amount of uncertainty because there were no pre-trial rulings on motions regarding issues of law, fact or contract interpretations. Therefore, on advice of counsel, the Company decided a settlement was in its best interest. The Company believes the after-tax net cash outflow resulting from the settlement will be approximately $3.6 million. The settlement, which was unanticipated, has been recorded in the year ended March 31, 2006. About ePlus Headquartered in Herndon, Virginia, ePlus, Inc. (Nasdaq NM: PLUS) -- http://www.eplus.com/-- provides Enterprise Cost Management solutions to information technology, finance, procurement, operations, and supply chain professionals who want to reduce the costs of finding, purchasing, managing, and financing information technology goods and services. About General Motors Corp. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. * * * As reported in the Troubled Company Reporter on April 7, 2006 Moody's Investors Service reviews for possible downgrade General Motors Acceptance Corporation's Ba1 long-term rating and Residential Capital Corporation's Baa3 long-term and Prime-3 short-term ratings will continue. As reported in the Troubled Company Reporter on April 5, 2006, Standard & Poor's Ratings Services held its ratings on General Motors Acceptance Corp. ('BB/B-1') and on GMAC's subsidiary, Residential Capital Corp. ('BBB-/A-3'), on CreditWatch with developing implications. GREYSTONE LOGISTICS: Unaudited FY 2006 Results Show $2.7MM Loss --------------------------------------------------------------- Warren F. Kruger, Vice Chairman of Greystone Logistics, Inc., disclosed unaudited results for fiscal year ending May 31, 2006. Sales increased to $15,949,400 for the fiscal year ending May 31, 2006, compared to $9,305,500 for fiscal year 2005 for an increase of $6,643,900, or 71%. The increase is primarily attributable to sales from the addition of one production line in fiscal year 2006. Greystone also announced a $2,758,500 net loss to common shareholders for the year ended May 31, 2006. Greystone's EBITDA (earnings (loss) before interest (including preferred dividends), taxes, depreciation (including impairments and amortization)) for the year ended May 31, 2006, is $429,600 versus $2,713,200 for the same period last year. The fourth quarter resulted in a positive EBITDA of $218,500. "We have established our physical capacities in production and in our plastic grinding operation to meet expected demand and have continued to bring operating costs inline with company established goals," Warren Kruger, Vice Chairman of Greystone said. "We expect the recent delivery of our Grocery Manufacturer's Association standard size 48 inch x 40 inch rackable pallet mold to contribute substantially to sales volume in the next year. The addition expands the Company's product line to meet new inquiries for our unique line of recycled plastic pallets, including significant requests for pallets by cost conscious and environmentally sensitive corporations," Mr. Kruger continued. Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 16, 2006, Murrell, Hall, Mcintosh & Co., PLLP, expressed substantial doubt about Greystone's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended May 31, 2005, and 2004. The auditing firm pointed to the Company's significant losses from operations, lack of adequate funding to maintain working capital and stockholders' deficits at May 31, 2005. Headquartered in Tulsa, Oklahoma, Greystone Logistics, Inc. (OTCBB: GLGI) through its wholly owned subsidiaries Greystone Manufacturing, LLC, and Plastic Pallet Production, Inc. -- http://www.palweb-plwb.com/-- manufactures and markets plastic pallets. GTSI CORP: Increases Secured Revolving Credit Pact by $10 Million ----------------------------------------------------------------- GTSI(R) Corp. increased its four-year senior secured revolving credit agreement by $10 million to $135 million. The Company entered into the lending agreement on June 2 with SunTrust Bank and Bank of America, N.A. LaSalle Business Credit, The CIT Group, PNC Bank, and Textron Financial Corporation have joined the lending facility through syndication. "The confidence our lenders have shown in GTSI is a powerful endorsement of our strategy and recognition of the robust market opportunities before us," Jim Leto, GTSI's president and chief executive officer, said. "We are happy to be associated with these quality financial institutions. With this expanded facility, we have the financial capacity to execute our strategy and continue to meet the needs of our government customers." Headquartered in Northern Virginia, GTSI Corp. (NASDAQ:GTSI) -- http://www.GTSI.com/-- is an information technology product and solutions provider, combining products and services to produce solutions that meet government's evolving needs. For more than two decades, GTSI has focused exclusively on Federal, State, and Local government customers worldwide, offering a broad range of products and services, an extensive contract portfolio, flexible financing options, global integration and worldwide distribution. GTSI's Lines of Business incorporate certified experts and deliver exceptional solutions to support government's critical transformation efforts. Additionally, GTSI focuses on systems integrators on behalf of government programs. Going Concern Doubt Ernst & Young LLP expressed substantial doubt about GTSI Corp.'s ability to continue as a going concern after auditing the company's 2004 and 2005 financials. The auditors pointed to the company's net losses and covenant defaults as of Jan. 31, 2006. HONEY CREEK: Says MuniMae's Disclosure Statement Lacks Information ------------------------------------------------------------------ Honey Creek Kiwi, LLC, filed an objection to the Disclosure Statement explaining the Plan of Reorganization of MuniMae Portfolio Services, LLC, with the U.S. Bankruptcy Court for the Northern District of Texas in Dallas. Disclosure Statement Objections The Debtor objects to MuniMae's Disclosure Statement on the ground that it fails to contain adequate information, as defined in Section 1125(a). The Debtor says MuniMae's Disclosure Statement: (a) fails to correctly state the Debtor's position as to the impetus of filing its bankruptcy petition; (b) fails to state the source of information relating to MuniMae's valuation of the property securing its claim generally and in the context of the liquidation analysis; (c) fails to state: (1) the fact that the Debtor asserts that it had never had complete control of the management of the business before filing for bankruptcy; (2) on a postpetition basis, the profitability of the Debtor has improved; (d) fails to discuss: (1) the anticipated future of the Debtor; (2) whether MuniMae has or will obtain consent from required third parties including, without limitation, the Texas Department of Housing and Community Affairs, the Internal Revenue Service and Vinson & Elkins as to approval of the transfers contemplated by the Plan; (3) who will manage the Debtor after the Effective Date; (4) whether and how the Plan is feasible if the debt service required by the Plan is satisfied without a tax abatement; (e) fails to discuss the value of the tax abatement currently utilized by the Debtor, its value and the impact of its loss on the ability of the reorganized debtor to make the debt service payments contemplated by the Plan; (f) fails to discuss the current status of the claims asserted by Alternative Building Concepts Group against the estate; (g) fails to adequately inform creditors as to liquidation value. Without limitation, the Disclosure Statement fails to state MuniMae's valuation of the collateral securing their claims and the value of the tax abatement being sacrificed by the Plan; (h) fails to adequately discuss how MuniMae reached its valuation of the collateral securing its claim; (i) fails to provide sufficient information. Without limitation, the Disclosure Statement fails to discuss the identities of and compensation being paid to MuniMae, the New Equity Interest, the proposed management company, their respective insiders, officers, and directors; (j) discusses, in a summary of the plan of reorganization, the restructuring of debt under the Plan, but not of the contemplated business reorganization: -- how will the business operations be modified to make the debt service payments required by the Plan feasible; -- what is the plan for the sale or refinancing of the apartments, if any; -- how is this plan not merely calling for a second reorganization immediately after transfer of control of the Debtor from Alternative Building to the New Equity Interest; (k) fails to state whether the reorganized debtor will be paying the postpetition attorneys fees and other administrative expenses incurred by MuniMae and how those payments will affect the cash flow of the reorganized debtor. (l) fails to adequately describe the nature and value of any claims MuniMae asserts the bankruptcy estate has against non-debtor parties; (m) fails to include proforma projections relating to the debt structure of the reorganized debtor and its ability to service payments contemplated by the Plan; (n) fails to adequately discuss: (1) the risk of the reorganized debtor's ability to make the payments contemplated in the Plan; (2) the risks associated with inability to obtain third party approval of the transfers and transactions contemplated by the Plan; (o) fails to adequately address: (1) the exemption of the Debtor from paying corporate income taxes; (2) the exemption of the Debtor from paying ad Valorem taxes; (3) the tax attributes of the bonds as restructured and the risks inherent with bondholder control of the New Equity Interest. The Disclosure Statement fails to adequately address the impact of confirmation of the Plan on these tax attributes; (p) fails to adequately address the relationship of MuniMae, the New Equity Interest and their affiliates and the effect of that relationship on the tax attributes of the bonds as restructured; (q) fails to provide adequate information for the Internal Revenue Service to make an informed decision pursuant to Section 1129(d) of the Bankruptcy Code; (r) fails to provide adequate information for creditors to make an informed decision under Section 1129(a)(5) of the Bankruptcy Code. Without limitation, the Disclosure Statement fails to identify how allowing a for-profit entity such as MuniMae to control the actions of the not-for-profit 501(c)(3) New Equity Interest is consistent with public policy and the interests of creditors of the estate. The Disclosure Statement does not identify the successor of the Debtor under the Plan and its relationship to MuniMae including without limitation, the direct and indirect relationships and control of MuniMae over the new not-for-profit entity; and (s) fails to adequately address the motivations and intentions of MuniMae in: (1) opposing the Debtor's Plan; (2) purchasing claims against the estate with the intent of opposing the Debtor's plan and confirming the proposed MuniMae Plan; (3) adopting a course of action which results in lesser payments to MuniMae over that proposed by the Debtor's Plan; (4) making an election under Section 1111(b) of the Bankruptcy Code (by not making the election) thereby electing a lesser treatment for the sole purpose of blocking confirmation of the Plan. The Debtor says, contrary to the express requirement of Section 1129(a)(5)(A) of the Bankruptcy Code, the Disclosure Statement does not disclose "the identity and affiliations of any individual proposed to serve, after confirmation of the plan, as a director, officer, or voting trustee of the debtor, an affiliate of the debtor, or a successor to the debtor under the plan." The Debtor also says, contrary to the express requirement of Section 1129(a)(5)(B) of the Bankruptcy Code, the Disclosure Statement does not disclose "the identity of any insider that will be employed or retained by the reorganized debtor, and the nature of any compensation for such insider." The Debtor says the Disclosure Statement: (a) should contain these information: (1) the name of New Equity Interest; (2) its State of Organization; (3) its Registered Agent name and address; (4) the names of its officers, directors, managers and partners of the New Equity Interest; (5) an identification and telephone number of agent of New Equity Interest with authority to enter into the transaction contemplated by the Plan; (6) a statement regarding the existence and good standing of the New Equity Interest in the State of Texas; (7) a statement as to whether the New Equity Interest has the corporate power to enter into and perform the obligations of the managing member of the Reorganized Debtor under the Plan and applicable law; (8) a statement as to whether the New Equity Interest is an organization exempt from federal income taxation pursuant to section 401(a) of the Internal Revenue Code of 1986, as amended, by virtue of being an organization described in Section 501(c)(3) of the IR Code and that; (9) a statement of the market value of the project and the outstanding secured claims against the project, as reorganized; (10) a statement as to whether the New Equity Interest is not treated as an entity apart from the Reorganized Debtor for federal income tax purposes; (b) should contain a statement regarding the current 501(c)(3) status of the New Equity Interest including, without limitation, a statement regarding whether the New Equity Interest has a current 501(c)(3) final determination letter from the Internal Revenue Service or a conditional letter that has not yet expired and is not scheduled to expire prior to the end of 2006; (c) should contain a statement regarding whether the New Equity Interest has satisfied or can (on or prior to the Effective Date) satisfy the requirements necessary for the Debtor to have a 100% tax abatement from Texas Ad Valorem real and personal property taxes; (d) should contain a statement regarding whether the New Equity Interest is organized as a community housing development organization within the meaning of Section 11.182 of the Texas Property Tax Code (TPTC) and Section 12704 of The Public Health and Welfare Code; (e) should contain a statement regarding whether the New Equity Interest meets the requirements of a charitable organization provided by Section 11.18(e) and (f) of the Property Tax Code; (f) should contain a statement regarding whether the New Equity Interest seeks to acquire the Reorganized Debtor for the purpose of building or repairing house on the property to sell without profit to a low-income or moderate income individual or family satisfying the New Equity Interest's eligibility requirements or to rent without profit to such an individual or family; (g) should contain a statement regarding whether the New Equity Interest engages exclusively in the building, repair, and sale or rental of housing; (h) should contain a statement regarding whether the New Equity Interest will continue to rent the property without profit to a low income or moderate-income individual or family satisfying the organization's eligibility requirements; (i) should contain a statement regarding whether the New Equity Interest has complied with the requirements of Sections 11.43(a) and (b) of the Texas Property Tax Code. Confirmation Objections The Debtor says the Plan, as written, is not feasible because of the proposed loss of the Debtor's ad Valorem tax abatement. On the Effective Date of the Plan, the Debtor would immediately be in default of a number of provisions of the Bond Documents. The Debtor says the Plan cannot be confirmed until the Plan is modified so that the Reorganized Debtor would not be in immediate default. The Debtor also says the Plan does not satisfy Section 1129(a)(5)(A)(ii) of the Bankruptcy Code and cannot be confirmed, even with modification because the appointment of the successor to the debtor under the Plan is not consistent with public policy -- control of a not-for-profit entity by a for-profit company. The Debtor says the Plan has not been proposed in good faith and cannot be confirmed under Section 1129(a)(3) of the Bankruptcy Code because the structure of the Plan in having a for-profit entity select a not-for-profit 501(c)(3) violates the U.S. Tax Code and is a "means forbidden by law," unless the holders of bonds are willing to waive the tax-exempt status of the bonds. Headquartered in Mesquite, Texas, Honey Creek Kiwi LLC owns a 656-unit apartment complex known as the Honey Creek Apartments. The company filed for chapter 11 protection on August 24, 2005 (Bankr. N.D. Tex. Case No. 05-39524). Richard G. Grant, Esq., at Roberts & Grant, P.C., represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. HONEY CREEK: Court Issues Stipulated Confidentiality Order ---------------------------------------------------------- The Honorable Harlin DeWayne Hale of the U.S. Bankruptcy Court for the Northern District of Texas in Dallas approved a stipulation between Honey Creek Kiwi, LLC, MuniMae Portfolio Services, LLC, and Alternative Building Concepts Group governing the protection of discovery of documents and information. The Debtor wanted to be protected from the actions of MuniMae. MuniMae wanted to take: -- deposition of Mark A. Solheim, Esq., at Larson King, LLP; -- deposition duces tecum of the custodian of records of Larson King, LLP; -- deposition Skip Durocher, Esq., at Dorsey & Whitney, LLP; and -- deposition duces tecum of the custodian of records of Dorsey & Whitney, LLP. Mr. Solheim, Mr. Durocher, Larson King and Dorsey & Whitney represented the Debtor in the case styled Community Housing Corporation of America, Inc. v. Alternative Building Concepts Group, Inc. and Honey Creek Kiwi, LLC, et al, Case No. 01-18658, in the District Court, Fourth Judicial District, County of Hennepin, Minnesota. MuniMae sought documents and information from the law firms and the lawyers that is subject to the attorney and client privilege and the attorney work product privilege. The Debtor has not waived these privileges. The Debtor specifically requested the Court to issue a protective order providing that the law firms and the lawyers are not required to produce any document that is not: (a) a pleading filed of public record; (b) the product of discovery to or from the Plaintiffs in the State Court action; (c) correspondence to third parties or opposing counsel; and (d) invoices from the law firms redacted of privileged materials. The Debtor also requested the Court to issue a protective order limiting any deposition testimony of the lawyers or the law firms to nonprivileged matters and restricting the use of any discovered materials to litigation of the claims of Alternative Building against the Debtor and to otherwise hold that information in confidence. Alternative Building concurred with the Debtor's position. Thus, the parties reached a settlement. Judge Hale issued the Stipulated Confidentiality and Protective Order to facilitate discovery of documents, information, and other materials and at the same time protect the proprietary interests of the parties. The order says information may be designated "Confidential" if it contains: (A) (1) personal information of an employee of a party; (2) non-public and proprietary information involving planning, research, financial, or marketing data; (3) proprietary and confidential know-how and trade secrets; (4) any marketing, financial, strategic or pricing information; or (5) the identity of customers and clients of the parties and its affiliates; and (B) with respect to designations by MuniMae: (1) the identity of customers and potential customers other than the Debtor and Alternative Building; (2) the terms of deals with other customers other than the Debtor and Alternative Building; (3) the facts and documents related to setting the financial terms of deals; and (4) proposed terms of deals other than with the Debtor and Alternative Building. Information designated as "Confidential" may be reviewed and copied by the receiving party, but will not be disclosed by the receiving party to any other person. "Confidential" information may be disclosed to: (a) outside counsel for the receiving party and all their partners and associates, together with clerical personnel, law clerks, paralegals and legal assistants employed by outside counsel, who are performing legal services in connection with this action, provided all those persons have read this Order and agree to be bound by this Order; (b) the Court and Court personnel; (c) stenographic reporters retained to record and transcribe testimony in this action provided those reporters agree in writing or on the record of a deposition or other proceeding to be bound by this Order; (d) employees of the receiving party provided: (1) the receiving party believes that disclosure to an employee, who is to be designated for disclosure, may be needed to assist in the prosecution or defense of this action; (2) prior to any disclosure, that employee agrees to be bound by this Order; and (3) information is maintained in separate and identifiable files, access to which is restricted to these employees; (e) experts and consultants who: (1) have been retained by a party or its attorneys of record in this action for the purpose of the preparation of this action for trial or assisting at trial (such as technical experts, expert consultants, expert witnesses or prospective expert witnesses), (2) prior to disclosure, have agreed to be bound by the terms of this Order, and (3) agree to maintain the information in separate and identifiable files, access to which is restricted to persons and their assistants, stenographic, and clerical personnel; or (f) any federal, state, or local governmental or municipal entity or duly authorized representatives, including, but not limited to, representatives from the Office of the U.S. Trustee. All documents and discovery materials designated as "Confidential" that are filed with the Court, and any pleading, motion, or other paper filed with the Court containing or disclosing classified information, will be identified as confidential and filed and kept under seal until further order of the Court. Headquartered in Mesquite, Texas, Honey Creek Kiwi LLC owns a 656-unit apartment complex known as the Honey Creek Apartments. The company filed for chapter 11 protection on August 24, 2005 (Bankr. N.D. Tex. Case No. 05-39524). Richard G. Grant, Esq., at Roberts & Grant, P.C., represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. HUSKY ENERGY: S&P Raises Preferred Stock Rating to BBB- from BB+ ---------------------------------------------------------------- Standard & Poor's Rating Services raised its long-term corporate credit and senior unsecured debt ratings on Calgary, Alta.-based Husky Energy Inc. to 'BBB+' from 'BBB', and its preferred stock rating on the company to 'BBB-' from 'BB+' following a review of the company's current and prospective business and financial risk profiles. The ratings were also removed from CreditWatch with positive implications, where they were placed April 13, 2006, following an initial review of the company's year-end 2005 results. The outlook is stable. "Our decision to raise the corporate credit rating is based on Husky's recent start of production at White Rose and Standard & Poor's assessment of the company's very good internal growth prospects, competitive full-cycle cost profile and its consistently moderate financial risk profile," said Standard & Poor's credit analyst Michelle Dathorne. "Although Husky's capital spending will accelerate between 2007 and 2009, we expect operating cash flows will outpace the company's spending requirements, even in a more moderate price environment. As a result, there is expected to be cushion at the 'BBB+' rating level to absorb some level of capital cost increases over this three-year period," Ms. Dathorne added. The stable outlook reflects Standard & Poor's expectation that Husky will maintain its strong liquidity and moderate debt levels as it proceeds with its Canadian and international development projects. Given Husky's strong cash flow generating capability at cyclical peaks and troughs of the hydrocarbon price cycle, there is little risk that the company's financial profile will materially deteriorate between 2007 and 2008. Nevertheless, if material capital cost overruns occur as the company proceeds with its various oil sands development projects, a negative rating action could occur. As the benefits of the near to medium term growth initiatives are currently factored into the 'BBB+' rating, further positive rating actions during this time period are unlikely. IMC INVESTMENT: Hires Hance Scarborough as Bankruptcy Counsel ------------------------------------------------------------- IMC Investment Properties, Inc., obtained authority from the U.S. Bankruptcy Court for the Northern District of Texas to employ Hance Scarborough Wright Ginsberg & Brusilow, LLP, as its bankruptcy counsel. As reported in the Troubled Company Reporter on July 19, 2006, Hance Scarborough will: (a) take all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on its behalf, the defense of any actions commenced against it, negotiations concerning all litigation in which it is involved, and objecting to claims; (b) prepare on behalf of the Debtor all necessary motions, applications, answers, orders, reports, and papers in connection with the administration of the Debtor's estate; (c) formulate, negotiate, and propose a plan of reorganization; and (d) perform all other necessary legal services in connection with these proceedings. The Debtor told the Court that the firm's professionals and paraprofessionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Frank Wright, Esq. Member $500 E. P. Keiffer, Esq. Member $400 Keith Miles Aurzada, Esq. Member $350 Ashley Ellis, Esq. Member $350 Shawn Brown, Esq. Member $325 William Burke, Esq. Of Counsel $350 Paraprofessionals Hourly Rate ----------------- ----------- John Lajoie $110 Betty Wallace $85 Guadalupe M. Rojas $85 Deborah Andreacchi $85 Medrith Rhotenberry $50 Keith Miles Aurzada, Esq., at Hace Scarborough, assured the Court that his firm does not hold or represent any interest adverse to the Debtor or its estate. Headquartered Dallas, Texas, IMC Investment Properties, Inc., filed for chapter 11 protection on July 3, 2006 (Bankr. N.D. Tex. Case No. 06-32754). Edwin Paul Keiffer, Esq., and Keith Miles Aurzada, Esq., at Hance Scarborough Wright Ginsberg and Brusilow, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. INCO LTD: Unable to Get Required Falconbridge Shareholder Support ----------------------------------------------------------------- Inco Limited reported that its tender offer to acquire all of the outstanding common shares of Falconbridge Limited expired at midnight (Vancouver time) on July 27, 2006. At the time of expiration, the minimum tender condition of 50.01% of the Falconbridge common shares had not been satisfied, and the company has therefore elected to terminate its offer. Inco has instructed CIBC Mellon Trust Company, the depositary for the offer, to promptly return all shares tendered. "Though a large number of Falconbridge shareholders supported our offer, unfortunately it wasn't enough," said Scott Hand, Chairman and Chief Executive Officer of Inco. "This is disappointing news for the many people at Inco and Falconbridge who have worked very hard to realize this transaction and create what we believe would have been a truly great mining company. I thank everyone for the many long hours and effort they have contributed. But the Falconbridge shareholders have spoken, and we're moving on. I wish Derek Pannell and his team all the best going forward." "While we may not have achieved the transaction that we originally hoped for, our shareholders have benefited since we began this process, as our share price has increased by 73% from when we originally announced our transaction on October 11, 2005," Mr. Hand said. "Inco's attention now turns to completing our two-way transaction with Phelps Dodge to create a global powerhouse in nickel and copper," he said. "Based on the combined company's premier asset base, the outlook for sustained long-term high metals prices and strong cash flows, the two-way combination is a winning option for the shareholders of both companies. We also believe that it is clearly superior to the competing bid for Inco put forward by Teck Cominco." Under the terms of the Phelps Dodge transaction, Inco shareholders will receive 0.672 shares of Phelps Dodge stock, plus CDN$20.25 per share in cash for each share of Inco stock. The implied value of the Phelps Dodge offer currently stands at CDN$79.81, based on the closing price of the Phelps Dodge common stock on the New York Stock Exchange and the U.S./Canadian dollar exchange rate on July 27, 2006. Phelps Dodge Inco will be the world's second largest nickel producer, one of the world's largest copper producers, and a leading producer of molybdenum and cobalt, with a world-class portfolio of growth projects in nickel and copper. "Nickel and copper are both trading at or near record price levels," said Mr. Hand. "They are the two metals with the best supply-demand fundamentals going forward, and are the two metals that China needs but does not produce in any significant quantities," he said. "Phelps Dodge Inco will be ideally positioned to make the most of the strong markets we foresee for both metals over the near and long term." As previously disclosed, the corporate office and the new company's copper division will be headquartered in Phoenix. Inco Nickel, the new company's nickel division, will be headquartered in Toronto. Under the terms of Inco's agreement with Falconbridge, an enhanced expense payment of $150 million is payable by Falconbridge to Inco as a result of the failure to meet the minimum tender condition of the Inco offer. A further break-up fee of $300 million will be payable by Falconbridge to Inco in the event that Xstrata completes its proposed acquisition of Falconbridge. Inco had also entered into a definitive agreement with Falconbridge and LionOre Mining International Ltd. covering the sale of the Nikkelverk refinery and related assets to LionOre, which was conditional on Inco taking up and paying for the Falconbridge common shares pursuant to its offer. Under the agreement with LionOre, a break-up fee of $32.5 million is payable by Inco to LionOre as a result of the Falconbridge transaction not having been completed. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Limited (TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/-- is a leading copper and nickel company with investments in fully integrated zinc and aluminum assets. Its primary focus is the identification and development of world-class copper and nickel orebodies. It employs 14,500 people at its operations and offices in 18 countries. The Company owns nickel mines in Canada and the Dominican Republic and operates a refinery and sulfuric acid plant in Norway. It is also a major producer of copper (38% of sales) through its Kidd mine in Canada and its stake in Chile's Collahuasi mine and Lomas Bayas mine. Its other products include cobalt, platinum group metals, and zinc. About Phelps Dodge Headquartered in Phoenix, Arizona, Phelps Dodge Corp. (NYSE: PD) - - http://www.phelpsdodge.com/-- produces copper and molybdenum and is the largest producer of molybdenum-based chemicals and continuous-cast copper rod. The company and its two divisions, Phelps Dodge Mining Co. and Phelps Dodge Industries, employ approximately 13,500 people worldwide. About Inco Ltd. Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N) -- http://www.inco.com/-- produces nickel, which is used primarily for manufacturing stainless steel and batteries. Inco also mines and processes copper, gold, cobalt, and platinum group metals. It makes nickel battery materials and nickel foams, flakes, and powders for use in catalysts, electronics, and paints. Sulphuric acid and liquid sulphur dioxide are produced as byproducts. The company's primary mining and processing operations are in Canada, Indonesia, and the U.K. * * * Inco Limited's 3-1/2% Subordinated Convertible Debentures due 2052 carry Moody's Investors Service's Ba1 rating. INCO LTD: Phelps Dodge Issues Statement on Failed Falconbridge Bid ------------------------------------------------------------------ Phelps Dodge Corp. (NYSE: PD) issued a statement on regarding the results of the tender offer by Inco Ltd. (TSX, NYSE: N) to Falconbridge Ltd. (TSX, NYSE: FAL) shareholders to purchase all outstanding common shares of Falconbridge. The deadline for Falconbridge shareholders to tender their shares was 3 a.m. eastern time, July 28. J. Steven Whisler, chairman and chief executive officer of Phelps Dodge, said: "We are disappointed that less than 50.01% of Falconbridge shareholders chose to tender their shares in support of Inco's offer and participate in the new Phelps Dodge Inco. However, we are excited about our agreed combination with Inco, which will create both the world's leading base metals company and a must-own stock for investors who want exposure to our leading positions in copper and nickel. With an excellent outlook for sustained high copper and nickel prices, Phelps Dodge Inco will have tremendous earnings and cash flow potential. Our combination with Inco will be immediately and meaningfully accretive to cash flow and accretive to earnings in 2008, using our base case commodity price assumptions." Phelps Dodge's agreed offer for Inco consists of CDN$20.25 plus 0.672 Phelps Dodge shares for each Inco share. As of the close of business on Thursday, July 27, the implied value of Phelps Dodge's offer for Inco is CDN$79.83 per share. About Phelps Dodge Headquartered in Phoenix, Arizona, Phelps Dodge Corp. (NYSE: PD) - - http://www.phelpsdodge.com/-- produces copper and molybdenum and is the largest producer of molybdenum-based chemicals and continuous-cast copper rod. The company and its two divisions, Phelps Dodge Mining Co. and Phelps Dodge Industries, employ approximately 13,500 people worldwide. About Inco Ltd. Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N) -- http://www.inco.com/-- produces nickel, which is used primarily for manufacturing stainless steel and batteries. Inco also mines and processes copper, gold, cobalt, and platinum group metals. It makes nickel battery materials and nickel foams, flakes, and powders for use in catalysts, electronics, and paints. Sulphuric acid and liquid sulphur dioxide are produced as byproducts. The company's primary mining and processing operations are in Canada, Indonesia, and the U.K. * * * Inco Limited's 3-1/2% Subordinated Convertible Debentures due 2052 carry Moody's Investors Service's Ba1 rating. Owens Corning to Acquire Modulo/ParMur Group, a Leading European Manufactured Stone Operation INCO LTD: Consents to OSC's Cease Trade Order on Rights Plan ------------------------------------------------------------ Inco Limited and Teck Cominco Limited consented to a cease trade order, made on July 20, 2006, by the Ontario Securities Commission, whereby the Company's Rights Plan will cease to apply as of Aug. 16, 2006. The Company has a shareholder rights plan administered under the Shareholder Rights Plan Agreement with CIBC Mellon Trust Company, as rights agent. The rights issued under the rights plan are attached to and trade with its common shares. The rights plan was to remain in effect until October 2008. About Teck Cominco Based in Vancouver, British Columbia, Teck Cominco Limited (TSX:TCK.A; TCK.B; NYSE:TCK) mines, produces and refines gold, copper, zinc, lead, molybdenum, niobium, silver and metallurgical coal. The Company operates in Canada, the United States and Peru. About Inco Ltd. Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N) -- http://www.inco.com/-- produces nickel, which is used primarily for manufacturing stainless steel and batteries. Inco also mines and processes copper, gold, cobalt, and platinum group metals. It makes nickel battery materials and nickel foams, flakes, and powders for use in catalysts, electronics, and paints. Sulphuric acid and liquid sulphur dioxide are produced as byproducts. The company's primary mining and processing operations are in Canada, Indonesia, and the U.K. * * * Inco Limited's 3-1/2% Subordinated Convertible Debentures due 2052 carry Moody's Investors Service's Ba1 rating. INTEGRATED ELECTRICAL: CNA Companies Withdraw 133 Claims -------------------------------------------------------- On March 20, 2006, Continental Casualty Company, Transportation Insurance Company, American Casualty Company of Reading, Pennsylvania, CNA ClaimPlus, Inc., and their American insurance affiliates filed 133 unliquidated proofs of claim in the Debtors' bankruptcy proceedings. Under Integrated Electrical Services, Inc., and its debtor- affiliates' Second Amended Joint Plan of Reorganization, the CNA Companies' Claims are unimpaired within the meaning of Section 1124 of the Bankruptcy Code, Joseph J. Wielebinski, Esq., at Munsch, Hardt, Kopf & Harr, P.C., in Dallas, Texas, points out. Moreover, nothing contained in the Debtors' Second Amended Plan of Reorganization will enlarge, reduce, modify, impair or affect in any way the parties' rights, defenses and exclusions under the CNA Insurance Agreements. In particular, Mr. Wielebinski notes that: -- the corporate restructuring proposed in the Plan will have no effect on the scope of coverage and related duties under the CNA Insurance Agreements; -- the CNA Companies will retain all of their set-off or recoupment rights under the CNA Insurance Agreements and applicable law; -- the CNA Companies will not be deemed to have released any of the non-debtor parties released pursuant to Article 13.06 of the Plan from any direct or independent contractual obligations that those parties may have to the CNA Companies, or from any claims that the CNA Companies may hold against the insurance brokers or agents of the Debtors. The CNA Companies will be entitled to retain and hold CNA Collateral and will be entitled to draw on the CNA Collateral as permitted by the CNA Insurance Agreements, Mr. Wielebinski relates. Accordingly, the CNA Companies withdraw their Claims, without prejudice. A 10-page list of the 133 CNA Companies' Claims is available for free at http://ResearchArchives.com/t/s?e5d Headquartered in Houston, Texas, Integrated Electrical Services, Inc. -- http://www.ielectric.com/and http://www.ies-co.com/-- is an electrical and communications service provider with national roll-out capabilities across the U.S. Integrated Electrical Services offers seamless solutions and project delivery of electrical and low-voltage services, including communications, network, and security solutions. The Company provides system design, installation, and testing to long-term service and maintenance on a wide array of projects. 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. (Integrated Electrical Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc. 215/945-7000) INTEGRATED ELECTRICAL: Watkins Withdraws $26 Million Claim ---------------------------------------------------------- Scott Watkins and his estate withdrew its Claim No. 76 for $26 million pursuant to a stipulation entered into with Integrated Electrical Services, Inc., and its debtor-affiliates. The stipulation provides, among others, that the Watkins Estate will withdraw its claim after the Effective Date of the Debtors' Plan of Reorganization. The Debtors' Chapter 11 Plan became effective on May 12, 2006. Headquartered in Houston, Texas, Integrated Electrical Services, Inc. -- http://www.ielectric.com/and http://www.ies-co.com/-- is an electrical and communications service provider with national roll-out capabilities across the U.S. Integrated Electrical Services offers seamless solutions and project delivery of electrical and low-voltage services, including communications, network, and security solutions. The Company provides system design, installation, and testing to long-term service and maintenance on a wide array of projects. 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. (Integrated Electrical Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc. 215/945-7000) IRIDIUM SATELLITE: S&P Rates $40 Million 2nd-Lien Term Loan at CCC ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its bank loan and recovery ratings to the $210 million secured bank financing of mobile satellite services provider Iridium Satellite LLC (B-/Negative/--). The $170 million first-lien loan, which consists of: * a $98 million first-lien senior secured term loan A, * a $62 million first-lien senior secured term loan B, and * a $10 million first-lien revolving credit facility, is rated 'B-', the same as the corporate credit rating on Iridium, with a recovery rating of '3', indicating an expectation for meaningful (50%-80%) recovery of principal following a payment default. The $40 million second-lien term loan is rated 'CCC' (two notches below the corporate credit rating), with a recovery rating of '5', indicating the expectation for negligible (0%-25%) recovery of principal following a payment default. "The ratings on Iridium reflect a vulnerable business risk profile from participation in a niche market with uncertain long-term customer demand, a small revenue base, substantial long-term satellite replacement capital expenditures requirements to continue current operations beyond 2014, and competition from other MSS providers and terrestrial wireless carriers," said Standard & Poor's credit analyst Susan Madison. Minimally tempering these risks are: * the attractiveness of Iridium's services to a narrow customer base requiring communications in remote locations and in emergencies; * a base of steady U.S. Department of Defense business representing about one-third of revenue; * ubiquitous global coverage; and * low customer churn. Ratings List: Iridium Satellite LLC: * Corporate credit rating affirmed at B-/Negative/-- Ratings Assigned: * $98 mil 1st-lien sr secd term loan A: B- (Recovery rtg: 3) * $62 mil 1st-lien sr secd term loan: B- (Recovery rtg: 3) * $10 mil 1st-lien revolving loan: B- (Recovery rtg: 3) * $40 mil 2nd-lien term loan: CCC (Recovery rtg: 5) ITC^DELTACOM: Common Stock Delisted From Nasdaq on July 27 ---------------------------------------------------------- Nasdaq Stock Market delisted on July 27, 2006, ITC^DeltaCom, Inc.'s common stock from the Nasdaq Global Market. The common stock was delisted because the Company did not maintain a minimum market value of publicly held shares of $15 million as required by Nasdaq Marketplace Rule 4450(b)(3). NASDAQ's requirement for the minimum market value of publicly held shares excludes the market value of outstanding shares of common stock held by officers, directors and 10% stockholders, who collectively own a majority of ITC^DeltaCom's total outstanding common stock. ITC^DeltaCom will continue to file all required reports with the Securities and Exchange Commission and expects to be eligible for quotation in the OTC Bulletin Board through one or more market makers. Headquartered in Huntsville, Alabama, ITC^DeltaCom, Inc. -- http://www.deltacom.com/-- provides, through its operating subsidiaries, integrated telecommunications and technology services to businesses and consumers in the southeastern United States. ITC^DeltaCom has a fiber optic network spanning approximately 14,500 route miles, including more than 11,000 route miles of owned fiber, and offers a comprehensive suite of voice and data communications services, including local, long distance, broadband data communications, Internet connectivity, and customer premise equipment to end-user customers. ITC^DeltaCom is one of the largest competitive telecommunications providers in its primary eight-state region. ITC^DeltaCom has interconnection agreements with BellSouth, Verizon, SBC, CenturyTel and Sprint for resale and access to unbundled network elements and is a certified competitive local exchange carrier in Arkansas, Texas, Virginia and all nine BellSouth states. At March 31, 2006, the Company's balance sheet showed a stockholders' deficit of $47,956,000, compared to a $31,654,000 deficit at Dec. 31, 2005. J.P. MORGAN: Fitch Assigns Low-B Ratings to Class B-4 & B-5 Certs. ------------------------------------------------------------------ J.P. Morgan Mortgage Trust mortgage pass-through certificates, series 2006-A5, are rated by Fitch: -- $1.313 billion class 1-A-1, 2-A-1 through 2-A-5, 3-A-1 through 3-A-7, 4-A-1, 4-A-2, 5-A-1, 5-A-2, 6-A-1, 6-A-2, A-R and P 'AAA'; -- $25.27 million class B-1 'AA'; -- $8.87 million class B-2 'A'; -- $6.83 million class B-3 'BBB'; -- $4.09 million class B-4 'BB'; and -- $3.42 million class B-5 'B'. The 'AAA' rating on the senior classes reflects the 3.8% credit enhancement provided by the: * 1.85% class B-1; * 0.65% class B-2; * 0.5% class B-3; * 0.3% non-offered class B-4; * 0.25% non-offered class B-5; and * 0.25% non-offered and non-rated class B-6 certificates. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral and the strength of the legal and financial structures. HSBC Bank USA, N.A. will serve as trustee. J.P. Morgan Acceptance Corporation I, a special purpose corporation, deposited the loans in the trust, which issued the certificates. For federal income tax purposes, the trustee will elect to treat all or portion of the assets of the trust funds as comprising multiple real estate mortgage investment conduits. LA PETITE: Moody's Rates Proposed Second Lien Term Loan at B3 ------------------------------------------------------------- Moody's Investors Service assigned B1 ratings to the proposed first lien credit facilities of La Petite Academy, Inc., and a B3 rating to the company's proposed second lien term loan. Concurrently, Moody's upgraded La Petite's Corporate Family Rating to B2 from Caa2. The outlook for the ratings is stable. Proceeds from the proposed $110 million first lien term loan due 2012 and the $85 million second lien term loan due 2013 will be used to refinance $145 million of 10% senior notes due 2008, about $40 million of existing bank debt and pay expenses associated with the transaction. The upgrade to a Corporate Family Rating of B2 acknowledges significant and continuing financial performance improvement over the last two years, the benefits of the proposed refinancing in terms of extending the maturity of the company's debt structure, La Petite's prominent market position in the for-profit childhood education space and generally favorable fundamentals for the industry in terms of expected growth in enrollment over the medium term as well as trends with respect to tuition increases. Profitability improvements that bring EBIT to interest coverage closer to two times on a sustainable basis and reduction in leverage to adjusted debt to EBITDA ratios closer to four times could lead to a positive ratings outlook. Weaker than expected growth in enrollments, material increases in leverage from acquisitions or margin deterioration that weakens interest coverage would put negative pressure on the company's ratings. In addition, if free cash flow to debt is anticipated to turn negative for any period of time, the ratings could be downgraded. Moody's took these rating actions: * Assigned a B1 rating to the proposed $20 million first lien revolving credit facility due 2011; * Assigned a B1 rating to the proposed $110 million first lien term loan due 2012; * Assigned a B3 rating to the proposed $85 million second lien term loan due 2013; * Affirmed the Ca rating on the existing $145 million senior notes due 2008, subject to withdrawal upon completion of the tender; * Upgraded to B2 from Caa2 the Corporate Family Rating. The ratings outlook is stable. The ratings are contingent upon the receipt of executed documentation in form and substance acceptable to Moody's. For further detail, refer to Moody's Credit Opinion for La Petite Academy, Inc. La Petite Academy, Inc., based in Chicago, Illinois, is the second largest for-profit preschool provider in the United States. La Petite offers educational, developmental and child care programs that are available on a full-time or part-time basis, for children between six weeks and twelve years old. The company's schools are located in 36 states and the District of Columbia, primarily in the southern, Atlantic coastal, mid-western and western regions of the United States. As of April 8, 2006, the company operated 652 schools, including 593 residential academies, 30 employer-based schools and 29 Montessori schools. La Petite had revenue of approximately $417 million for the twelve months ending April 8, 2006. LIBERTY TAX: Remains Neutral to the Tender Offer of Five Parties ---------------------------------------------------------------- Liberty Tax Credit Plus L.P., responded to an unsolicited tender offer made by: -- SCM Special Fund, LLC, -- MPFNY 2006, LLC, -- MPF Senior Note Program I, LP, -- MPF Flagship Fund 11, LLC, and -- MPF DeWaay Premier Fund 3, LLC, to purchase up to 3,197.50 Beneficial Assignment Certificates representing assignments of limited partnership interests in Liberty at a price of $125 per Unit, less the amount of any distributions declared or made with respect to the Units between July 7, 2006, and Aug. 8, 2006, or such other date to which the Offer may be extended. The Offerors are not affiliated with Liberty or its general partners. The Offerors filed a Tender Offer Statement on Schedule TO with the Securities and Exchange Commission on July 7, 2006. Following receipt of the terms of the Offer, Liberty and its General Partners reviewed and considered the Offer. On July 20, 2006, the Partnership and the General Partners filed a Solicitation Statement on Schedule 14D-9 with the SEC as required under Section 14(d)(4) of the Securities Exchange Act of 1934. As disclosed in the Schedule 14D-9, the Partnership and the General Partners are expressing no opinion and are remaining neutral with respect to the Offer. Although the General Partners are not making a recommendation with respect to the Offer, as set forth in the Schedule 14D-9, the General Partners believe that Unit holders should carefully consider the following information in making their own decisions of whether to accept or reject the Offer: -- Liberty is in the process of liquidating its portfolio of investments in its local partnerships. It is uncertain at this time how much money, if any, will be realized by Liberty and its Unit holders from the liquidation of its investments. Liberty has not prepared for itself or received from any third party any valuations of its investments. Accordingly, it takes no position on whether or not the Offer and its purchase price are attractive or unattractive to Unit holders from an economic point of view. -- The Offer raises certain questions about its potential impact on the Liberty's tax status for federal income tax purposes. Liberty is currently treated, and has since its inception been treated, as a partnership and a pass-through entity for federal income tax purposes -- a tax status that is desirable and beneficial to Liberty and its investors. That beneficial tax status might be lost, and Liberty might be taxed as a corporation, if it were deemed to be a "publicly traded partnership" within the meaning of the Internal Revenue Code and certain regulations promulgated by the Internal Revenue Service. It is uncertain whether or not the Offer, if consummated, might cause Liberty to be deemed a "publicly traded partnership." Accordingly, Liberty will not permit any Units to be transferred pursuant to the Offer unless and until the Offerors provide it with: (i) an opinion of counsel that the Offer will not result in Liberty being deemed to be a "publicly traded partnership" for federal income tax purposes and (ii) an agreement to indemnify Liberty, its General Partners and its Unit holders for any loss or liability relating to any adverse tax consequences arising from the Offer. This legal opinion and indemnity must be in a form and content satisfactory to Liberty and its counsel. Certain of the Offerors and their affiliates have previously provided to Liberty such a legal opinion and indemnity in connection with a prior tender offer seeking less than 5% of Liberty's Units. Counsel for the Offerors has orally stated to Liberty's counsel that the Offerors will provide the required legal opinion and indemnity with respect to transfers made pursuant to the Offer. Each Unit holder should consult with his, her or its own investment, tax and legal advisors in deciding whether or not to tender units in response to the Offer. About Liberty Tax Credit Liberty Tax Credit Plus II L.P. is a limited partnership that invests in 18 limited partnerships, each of which owns one or more leveraged low-income multifamily residential complexes that are eligible for the low-income housing tax credit enacted in the Tax Reform Act of 1986, and to a lesser extent, in Local Partnerships owning properties that are eligible for the historic rehabilitation tax credit. Going Concern Doubt As reported in the Troubled Company Reporter on July 3, 2006, Trien Rosenberg Rosenberg Weinberg Ciullo & Fazzari LLP in New York, raised substantial doubt about Liberty Tax Credit Plus II L.P.'s ability to continue as a going concern after auditing the Partnership's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the losses, contingencies and uncertainties of the Partnership's three subsidiary partnerships. At March 31, 2006, the Partnership's balance sheet showed $84,456,842 in total assets, $93,899,077 in total liabilities, and $2,573,125 in negative minority interest, resulting in a $6,869,110 partners' deficit. LOGAN MEDICAL: Court Denies Move to Dismiss Suit v. Accountants --------------------------------------------------------------- The Honorable Patrick M. Flatley of the U.S. States Bankruptcy Court for the Southern District of West Virginia denied Hayflich & Steinberg and Robert E. DeLawder's request to dismiss the breach of contract lawsuit brought by Logan Medical Foundation, Inc., against them. Before Logan Medical's bankruptcy filing, it employed Hayflich & Steinberg to perform various accounting services. Mr. DeLawder handled the Debtor's account at the firm. On. Jan. 21, 1999, three months after the Debtor filed for bankruptcy, the firm filed a proof of claim for unpaid accounting services totaling $39,278. On Sept. 22, 2003, the Debtor objected to the claim alleging that the firm breached its contractual duties to the Debtor, which, the Debtor continued, was a significant factor in precipitating its bankruptcy filing. The Debtor filed an adversary proceeding (Bankr. S.D. W. Va. Adv. Pro. No. 05-02026) on Feb. 22, 2005, to pursue its counter-claim against the firm. The accountants moved to dismiss the suit for lack of subject matter jurisdiction and on judicial estoppel grounds. Bankr. Court Has Jurisdiction Judge Flatley ruled that the Debtor's lawsuit is a core proceeding and the bankruptcy court has jurisdiction to hear the matter. Judge Flatley explained that when a creditor files proof of claim, it subjects itself to the bankruptcy court's jurisdiction to hear all matters related to allowance of that claim. The Bankruptcy Court's jurisdiction to consider allowance of a proof of claim includes jurisdiction to determine all defenses and affirmative counterclaims. Debtor Not Estopped Judge Flatley further determined that any delay by the Debtor in scheduling breach of contract claims that it initially raised as a counterclaim to its accountants' proof of claim did not judicially estop it from pursuing those claims. According to Judge Flatley, judicial estoppel is an equitable doctrine applied by the court when a litigant attempts to play fast and loose by taking inconsistent positions or denying previously made sworn statements in an effort to prevail twice on opposite theories. Three requirements must be satisfied before a court can apply doctrine of judicial estoppel: (1) a party must adopt a present position that is inconsistent with a stance taken in previous litigation; (2) a court must have accepted the previous inconsistent position; and (3) the party to be estopped must have intentionally misled the court to gain an unfair advantage. The accountants reminded the Court that the Debtor did not include its litigation claims against them in Schedule B to its Schedules of Assets and Liabilities. The Debtor's first disclosure of its litigation claims occurred as part of its Third Amended Disclosure statement -- about four years after it filed bankruptcy. Judge Flatley pointed out that the Debtor did disclose its litigation claims against the accountant before creditors had the opportunity to vote on the Debtor's plan of reorganization. Furthermore, no evidence was presented either of any intent or effort by the Debtor to mislead the Court or to gain unfair advantage by failing to make timely disclosure of its claims against the accountants. The accountants also argued that the Debtor's claims were barred by the statute of limitations, but they abandoned that argument at the hearing on the motion to dismiss. Judge Flatley noted they reserved the right to raise the argument later, in the context of a motion for summary judgment. The Court's Opinion identifies these lawyers and law firms as counsel to the Debtor: Robert J. Hickey, Esq. 1050 17th St., N.W., Suite 700 Washington, DC 20036-5535 - and - Kennedy Covington Lobdell & Hickman, L.L.P. Atlanta, GA [sic] - and - Ronald B. Roteman, Esq. Campbell & Levine, LLC Grant Building 310 Grant Street, Suite 1700 Pittsburgh, PA 15219 - and - W.B. Sorrells, Esq. The Segal Law Firm 810 Kanawha Boulevard, East Charleston, WV 25301 - and - Bynum E. Tudor, III, Esq. Tudor Law Firm P.O. Box 198258 Nashville, TN 37219-8258 - and - W. Greer, Esq. McCreedy, Kellam, Pickrell, Cox & Tayloe Bank of the Commonwealth Building 403 Boush Street, Suite 300 Norfolk, VA 23510 Hayflich & Steinberg and Mr. DeLawder are represented by: John F. McCuskey, Esq. Shuman, McCuskey & Slicer, PLLC 1411 Virginia Street, East, Suite 200 P.O. Box 3953 Charleston, WV 25339 Logan Medical Foundation, Inc., is a community non-profit organization, which used to manage the Logan General Hospital nka Logan Regional Medical Center. Logan Medical filed for chapter 11 bankruptcy protection on Oct. 22, 1998 (Bankr. S.D. W. Va. Case No. 98-21721). LifePoint Hospitals, Inc., purchased the hospital in Dec. 2002. MADE2MANAGE SYSTEMS: Moody's Rates $65 Million Sr. Loan at Caa1 --------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and B2 ratings to Made2Manage Systems, Inc.'s proposed $15 million senior secured Revolving Credit Facility and $100 million senior secured Term Loan and a Caa1 to their $65 million Second Lien Term Loan. Proceeds of the loans will be used to purchase Onyx Software Corporation, to refinance existing debt and for general corporate purposes. The outlook is stable. * Corporate family rating -- B3 * $15 million first lien senior secured revolving credit facility -- B2 * $100 million first lien senior secured term loan -- B2 * $65 million second lien senior secured term loan -- Caa1 The outlook is stable The B3 corporate family rating reflects the Company's high degree of leverage as well as the significant integration and restructuring risks associated with the Onyx acquisition. In addition, the Company has recently closed four other acquisitions within the last eight months which combined with Onyx effectively doubles the size of the Company. Management has completed significant cost reductions in each of these acquisitions, however it is unclear at this time whether there will be any negative long term impact from these reductions. The ratings also reflect the relatively small size of the combined companies. The corporate family rating is supported by the strength of the Company's market positions within particular enterprise software niches. While the niches represent small segments within the manufacturing industry, the Company appears to have considerable market shares within those niches. The corporate family rating also takes into account management's successful track record of completing and restructuring acquisitions, including their original purchase of M2M. The first lien debt is notched up from the corporate family rating reflecting priority secured status within the capital structure. The Caa1 rating on the second lien debt reflects the subordination to the first lien debt and its diminished recovery prospects in a default scenario. The stable outlook reflects the expectation that the company will be able to achieve the cost cuts outlined for the Onyx and other recent acquisitions over the near term. The outlook also takes into account some near term modest reduction in revenues levels at Onyx from 2005 levels. The ratings could face upward pressure should the integrations go as planned and the company is able to reduce its debt leverage. Conversely the ratings could face downward pressure if the declines in Onyx revenues continue for an extended period or are greater than the modest declines anticipated. The ratings could also face downward pressure if the company were to make additional debt financed acquisitions. M2M is a provider of enterprise software systems designed for small to medium sized manufacturing businesses. The Company is headquartered in Indianapolis, Indiana. MADE2MANAGE SYSTEMS: S&P Junks Proposed $65 Million Loan's Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Indianapolis, Indiana-based Made2Manage Systems Inc. The outlook is stable. At the same time, Standard & Poor's assigned its 'B-' bank loan rating and '2' recovery rating to the company's proposed $15 million first-lien secured revolving credit facility (due 2011) and $100 million first-lien Term Loan B (due 2011), reflecting its expectation of substantial (80%-100%) recovery of principal by lenders in the event of a payment default or bankruptcy. The first-lien senior secured bank loans are rated the same as the corporate credit rating. The rating agency also assigned its 'CCC' bank loan rating (two notches below the corporate credit rating) and '5' recovery rating to the proposed $65 million second-lien secured term loan C (due 2012), indicating expectation for negligible (0-25%) recovery of principal in the event of a payment default. These ratings are based on preliminary offering statements and are subject to review upon final documentation. Proceeds from the proposed credit facilities will be used to finance the acquisition of Onyx Software Inc. for approximately $92.6 million, to refinance existing debt and to pay related fees and expenses. "Made2Manage's lack of a track record of managing at anticipated revenue levels and the company's modest EBITDA levels currently limit ratings upside," said Standard & Poor's credit analyst Martha Toll-Reed. "However, we could raise ratings over the intermediate term if the company successfully integrates recent acquisitions and achieves material EBITDA growth. On the other hand, integration problems and/or additional leverage following completion of the Onyx acquisition could lead to lower ratings." Made2Manage is a second-tier player in the Enterprise Resource Planning market. Enterprise software applications are designed to help customers increase operating efficiency by automating key business processes. NEXSTAR BROADCASTING: Agrees to Acquire WTAJ-TV Assets for $56MM ---------------------------------------------------------------- Nexstar Broadcasting Group, Inc., entered into a definitive agreement to acquire the assets of WTAJ-TV for $56 million in cash from Television Station Group Holdings, LLC. The Company disclosed that WTAJ-TV is a CBS affiliate serving the Johnstown/Altoona, Pennsylvania market. The acquisition complements the Company's current Pennsylvania television station operations in Wilkes Barre/Scranton and Erie. As part of the purchase consideration, the Company will also acquire the license and certain assets and contracts of WLYH-TV, in Lancaster PA which is operated by a third party under a 'grandfathered' Time Brokerage Agreement that extends until 2015. WLYH-TV is the UPN affiliate serving the Harrisburg/Lancaster/ Lebanon/York, Pennsylvania market. "The acquisition of WTAJ-TV reflects our focus on expanding Nexstar's portfolio with stations that have leading audience and revenue shares and quality, highly rated local news programming," Nexstar Broadcasting Group President and chief executive officer, Perry A. Sook said. "The acquisition is also consistent with our clustering strategy whereby we seek to operate multiple stations in concentrated geographic regions." "Under Nexstar's stewardship WTAJ-TV will realize additional retransmission revenues as well as synergistic operating improvements, and on a pro-forma basis the acquisition is immediately accretive to the company," Mr. Sook added. The Company intends to finance the acquisition through borrowings under its senior credit facility. Nexstar Broadcasting Group (NASDAQ: NXST) including pending acquisitions, owns, operates, programs or provides sales and other services to 49 television stations in 29 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama, and New York. The Company's television station group includes affiliates of NBC, CBS, ABC, Fox, and UPN, and reaches approximately 8% of all U.S. television households. * * * As reported in the Troubled Company Reporter on Mar 31, 2006 Standard & Poor's Ratings Services revised its outlook on Nexstar Broadcasting Group Inc. to negative from stable. The Company's long-term ratings, including the 'B' corporate credit rating, were affirmed. NORTH AMERICAN ENERGY: IPO Plan Cues S&P to Put Ratings on Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B-' long-term corporate credit, its 'B' senior secured debt, and its 'CCC' senior unsecured debt ratings on Edmonton, Alta.-based North American Energy Partners Inc. on CreditWatch with positive implications. The CreditWatch placement follows NAEP's filing of a preliminary offering document with the Securities and Exchange Commission, in which it states its plan to sell up to $250 million in common stock through an initial public offering. Net proceeds will be used to fund the purchase of equipment currently under operating leases, tender the company's 9% senior notes, and for general corporate purposes. "The CreditWatch placement reflects the potential for an upgrade if the IPO is successfully completed and if NAEP's aggressive debt leverage is reduced," said Standard & Poor's credit analyst Jamie Koutsoukis. "The funds from the offering should provide the company with much- needed liquidity as well the added flexibility from its access to the equity market. Furthermore, the equity offering provides NAEP with an ability to expand and improve its equipment fleet at the present time without any incremental negative effects on its financial profile," Ms. Koutsoukis added. The extent of any positive rating action will depend on an analysis of NAEP's planned uses of the proceeds and the amount of debt reduction the company will achieve as a result of the offering. Standard & Poor's will resolve the CreditWatch action after further consultation with NAEP's management and the successful completion of the IPO. OCA INC: SEC Has Until Aug. 11 to Contest Debt Dischargeability --------------------------------------------------------------- The Securities and Exchange Commission has until Aug. 11, 2006, to file a complaint or take whatever action against OCA, Inc., and its debtor-affiliates to determine the dischargeability of a debt, if any, owing to the Commission pursuant to Section 1141(d)(6) of the Bankruptcy Code. The U.S. Bankruptcy Court for the Eastern District of Louisiana may extend the deadline if stipulated between the Debtors and the Commission. Section 1141(d)(6) of the Bankruptcy Code was recently amended to provide that "the confirmation of a plan does not discharge a debtor that is a corporation from any debt . . . (A) of a kind specified in paragraph (2)(A) or (2)(B) of Section 523(a) that is owed to a domestic governmental unit" William H. Patrick III, Esq., at Heller, Draper, Hayden, Patrick & Horn, LLC, told the Court that Section 1141(d)(6) contains no provision requiring a governmental unit to seek Court determination that the kind of debt specified is exempt from discharge. No known published decision has been issued and the parties are not aware of any action in which a court has determined whether affirmative action, such as required by Section 523(c) of the Code, is applicable to a corporation pursuant to Section 1141(d)(6) of the Code. The staff of the Securities and Exchange Commission does not concede to the applicability of Section 523(c) to Section 1141(d)(6). They are currently investigating potential claims, if any, that the Commission may assert against the Debtors, including whether the Commission has claims that fall within Section 523(a)(2)(A) of the Code. The Commission staff has not filed a proof of claim and is not required to do so until the governmental unit bar date, Sept. 13, 2006. The Commission staff needs the additional time to complete its ongoing investigation to avoid being forced to make a premature determination of whether a non-dischargeable claim lies against the Debtor, Mr. Patrick asserted. About OCA Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/ -- provides a full range of operational, purchasing, financial, marketing, administrative and other business services, as well as capital and proprietary information systems to approximately 200 orthodontic and dental practices representing approximately almost 400 offices. The Debtor's client practices provide treatment to patients throughout the United States and in Japan, Mexico, Spain, Brazil and Puerto Rico. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 14, 2006 (Bankr. E.D. La. Case No. 06-10179). Three debtor-affiliates also filed for bankruptcy protection on June 1, 2006 (Bankr. E.D. La. Case No. 06-10503). William H. Patrick, III, Esq., at Heller Draper Hayden Patrick & Horn, LLC, represents the Debtors. Patrick S. Garrity, Esq., and William E. Steffes, Esq., at Steffes Vingiello & McKenzie LLC represent the Official Committee of Unsecured Creditors. Carmen H. Lonstein, Esq., at Bell Boyd & Lloyd LLC and Robin B. Cheatham, Esq., at Adams and Reese LLP represent the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed $545,220,000 in total assets and $196,337,000 in total debts. OWENS CORNING: Buys Modulo/ParMur for $32 Million ------------------------------------------------- Owens Corning has signed a purchase agreement to acquire The Modulo(TM)/ParMur Group, a market-leading producer and distributor of manufactured stone veneer in Europe. The acquisition will further the global expansion of the Owens Corning Cultured Stone(R) business in the European building products market. The transaction, valued at approximately $32 million (EUR25.5 million), is expected to close in September. "We are excited about combining the strength of the Modulo/ParMur brands, reputation for service, distribution and manufacturing network together with Owens Corning's Cultured Stone(R) business to better meet the needs of our customers worldwide," said Chuck Stein, president, Owens Corning Cultured Stone(R). "This acquisition, combined with the recent launch of our new manufactured stone facility in Asia, will serve the continued global growth in the demand for these products, which add warmth, curb appeal and value to the world's homes and businesses." "As an industry leader in Europe, it is an incredible opportunity for Modulo/ParMur and its employees to join forces with Owens Corning's market- leading brand of stone in North America," said Christian Roggeman, general manager, The Modulo/ParMur Group. "This will result in product and technology synergies that will add value to our customers around the world." Mr. Roggeman was appointed general manager, Owens Corning Cultured Stone(R) Europe. The transaction is subject to the approval of applicable regulatory and judicial authorities. About Modulo/ParMur The Modulo/ParMur Group, based in Bray-sur-Seine, France, designs, manufactures and markets manufactured stone veneer wall and floor products under the Modulo and ParMur brands. Modulo and ParMur are plaster-based interior wall and cement-based exterior wall- cladding products, which are distributed primarily through the Do- It-Yourself market in Europe. In addition to Bray-sur-Seine, the company operates two additional manufacturing sites in Forbach, France, and Turda, Romania. Modulo/ParMur has nearly 150 employees. About Owens Corning Cultured Stone Owens Corning Cultured Stone(R) -- http://www.culturedstone.com/- - manufactures stone veneer products. The business began making replicas of natural stone in 1962 and today offers more than 20 textures, 80 colors and countless blended texture and color options for interior and exterior applications. About Owens Corning Owens Corning (OTC: OWENQ.OB) (BULLETIN BOARD: OWENQ) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. PERFORMANCE TRANSPORTATION: Drafts Modified Incentive Program ------------------------------------------------------------- Performance Transportation Services, Inc., and its debtor- affiliates ask the U.S. Bankruptcy Court for the Western District of New York for authority to implement a modified performance incentive program. The Debtors sought permission to implement a performance-based bonus program for three management personnel. The International Brotherhood of Teamsters objected to the Original Program Motion. Additionally, the Official Committee of Unsecured Creditors informally raised some concerns with the Debtors. In March 2006, the Debtors' Chief Financial Officer, one of the beneficiaries under the Original Program, resigned to pursue other employment opportunities. In light of the necessity to modify the Original Program to account for the resignation as well as to address the objections, the Debtors determined that it was appropriate to re-examine the Original Program to ensure that the program's terms are fair and reasonable under the circumstances of their Chapter 11 cases. With the help of their compensation experts, Watson Wyatt & Company, the Debtors modified the Original Program. Modified Performance-Based Incentive Program The Debtors came up with a modified performance-based program consisting of two components: 1. the EBITDAR Realization Bonus; and 2. the Value Added Bonus. The board of directors of Performance Logistics Group, Inc., the ultimate parent Debtor, in consultation with Watson Wyatt and the Debtors' financial advisors, FTI Consulting, Inc., approved the Modified Program. Under the terms of the Modified Program, the Debtors increased the number of their management personnel eligible to achieve a bonus payment, to include all 54 participants that were eligible for a bonus payment under the Debtors' prepetition bonus plan. The Modified Program does not include any type of severance payments. The Debtors, Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York, asserts, have satisfied the requirements of Sections 363 and 105 of the Bankruptcy Code in that: * there is a "sound business purpose" that justifies the implementation of the Modified Program; * proper business judgment was exercised by the PLG Board in formulating and approving the Modified Program; and * the terms of the Modified Program are fair and reasonable. EBITDAR Realization Bonus The Realization Bonus is a pool of money that will be generated for the benefit of eligible management personnel of the Debtors, Mr. Graber relates. The Debtors believe that the eligible participants have a substantial impact on the success of the their businesses and, as a result, the overall restructuring efforts. In particular, Mr. Graber says, the eligible participants coordinate the delivery of the vehicles that the Debtors transport, monitor the Debtors' vehicle damage and workers' compensation claims and maintain the Debtors' tractor-trailer units. The Debtors contend that these services are vital to the their vehicle-hauling operations. The Debtors believe that the Realization Bonus will provide the eligible participants with the incentive to more efficiently and cost-effectively conduct the Debtors' operations. The size of the Realization Bonus pool will depend on the Debtors' ability to achieve an Earnings Before Interest, Taxes, Depreciation, Amortization and Restructuring costs in excess of that set forth in the 2006 financial forecast. To the extent the Debtors achieve an annual EBITDAR greater than their 2006 projection of $13,373,000, a certain portion of earnings achieved over the Threshold will fund the Realization Bonus pool. In particular, with respect to EBITDAR generated that is above the Threshold and is less than or equal to $17,700,000 -- the Target -- 16% of EBITDAR above the Threshold will be allocated to the bonus pool while 84% will remain for the benefit of the Debtors' estates. If the Debtors generate EBITDAR that is greater than the Target and is less than or equal to $20,102,000 -- the Maximum -- 29% of EBITDAR above the Target will be allocated to the bonus pool while 71% will remain for the benefit of the Debtors' estates. Any additional EBITDAR the Debtors achieve above the Maximum will not be allocated to the bonus pool. To the extent any of the Debtors' earnings are allocated to the Realization Bonus pool, each of the eligible participants may earn a bonus, the amount of which is dependent on the eligible participant's position with the Debtors. Consistent with the terms of the Debtors' prepetition bonus plan, the eligible participants are divided into five tiers and the participants within each tier may earn a bonus in the amount of a certain percentage of their annual base salaries: Target Bonus Tier Eligible Participants (% of Base Salary) ---- --------------------- ---------------- 1 Chief Executive Officer (1) 65% 2 Chief Operating Officer (1) 40% 3 Vice Presidents (11) 16% 4 Directors (16) 6% 5 Terminal Managers (25) 5% The bonuses that the eligible participants may receive will depend on the percentage of the Target that the Debtors achieve. For example, if the Debtors achieve a 2006 annual EBITDAR of $14,000,000, which is 14% of the Target, a Vice President would be eligible to receive a bonus that is 14% of 16% of his base salary. If the Debtors achieve a $17,000,000 2006 annual EBITDAR, which is 84% of the Target, a Vice President would be eligible to receive a bonus that is 84% of 16% of his salary. Payment of any of the Realization Bonuses will be made on the internal closure of the Debtors' annual financial statements. Additionally, if the Debtors' emerge from bankruptcy or a majority of the Debtors' assets are sold before the end of 2006 -- a Restructuring Event -- the Realization Bonuses will be determined proportionately relative to the Debtors' actual performance through the Restructuring Event. Thus, if the Debtors were to emerge from bankruptcy on September 30, 2006, and the actual year to date EBITDAR through September was 120% of the Target, a Director would be eligible to earn 120% of 6% of his base salary, adjusted for the fact that the Director operated under the Modified Program for only 75% of the year. Accordingly, if a Restructuring Event occurs on September 30, 2006, and based on an average annual salary of $86,900, the Director would be eligible for a Realization Bonus of $4,693 ($86,900 x 120% x 6% x 75%). If a Restructuring Event occurs before the end of 2006, the Debtors will not conduct an audit of the 2006 period prior to the Restructuring Event. Therefore, 100% of any Realization Bonuses awarded by the PLG Board will be paid when the Debtors close the books for the pre-Restructuring Event period. Additionally, if an eligible participant is terminated without cause before the end of 2006, or the occurrence of a Restructuring Event, that participant will still be eligible to receive a pro rated portion of the Realization Bonus that he would have been entitled to receive if the participant had not been terminated. All payments under the Realization Bonus are subject to the PLG Board's discretion. The Board will also provide the necessary oversight to ensure that each eligible participant only receives a bonus payment that is commensurate with the participant's efforts towards the Debtors' reorganization. Value Added Bonus The PLG Board determined that the efforts of the Debtors' Senior Executives -- Chief Executive Officer and Chief Operating Officer -- will have the greatest ability to demonstrably influence the Debtors' ability to create maximum value for the Debtors' estates. The Senior Executives have engaged in negotiations with the Debtors' customers and labor unions as to how these parties can contribute to the Debtors' turnaround, Mr. Graber points out. Furthermore, the Senior Executives' ability to renegotiate the necessary contracts will greatly enhance the Debtors' annual earnings. To provide the Senior Executives with an incentive to put forth the extraordinary efforts required to consummate a successful restructuring as expeditiously as possible, the Debtors developed the Value Added Bonus. The success-based bonus is based on the total value realized by the Debtors' stakeholders through a Restructuring Event combined with whatever additional sources of recovery contribute to the overall stakeholder recoveries. The Value Added Bonus will be based on both the amount realized by the Debtors' stakeholders and on the timeframe in which that realization occurs. The Debtors have prepared a grid reflecting the Value Added Bonus Payment structure. A full-text copy of the Value Added Bonus Grid is available for free at http://researcharchives.com/t/s?e7f In the instance where total recovery is $130,000,000, at which point the Debtors' creditors could be paid in full resulting in the Debtors' equity-holders potentially realizing a recovery, and this amount of recovery is achieved by September 30, 2006, a pool of approximately $2,740,000 would be available for distribution as bonuses to the Senior Executives. Furthermore, to the extent value realized drops below $130,000,000, or the timeframe for the realization extends past September 30, 2006, the Value Added Bonus pool decreases. The actual Value Added Bonus paid is only the $2,740,000 pool if the Debtors' stakeholders realize $130,000,000 in value on or before September 30, 2006. After that date, holding value realized constant, the total available Value Added Bonus is reduced by 7.5% monthly through the maturity date of the Debtors' postpetition financing agreement -- the Program End Date. After that date, the Value Added Bonus will be zero provided that, in the case of a VAB triggered by a sale of a majority of the Debtors' assets, a 70% Value Added Bonus will still be available to the Senior Executives if both: -- an agreement for the sale is executed and a deposit related to that agreement has been collected by the Program End Date; and -- the sale is completed within three months after the Program End Date. Additionally, if the total recovery realized falls within, but does not reach the maximum amount of, a particular range of creditor recovery set forth in the VAB Grid, the Senior Executives are entitled to a proportionate amount of the maximum bonus available in the range. Therefore, if the total recovery realized is $81,500,000, which is 50% of the range of $80,000,000 to $83,000,000, the Senior Executives may receive 50% of the maximum bonus available in this range. The PLG Board determines how the Value Added Bonus will be distributed among the Senior Executives. The Board may also determine that a particular Senior Executive may receive a portion of the Value Added Bonus if the Senior Executive is terminated without cause or has resigned prior to the Program End Date, provided that, in the Board's discretion, the Senior Executive has made a substantial and determinable contribution to the Debtors' reorganization efforts. In connection with negotiating the terms of their postpetition financing, the Debtors engaged in extensive discussions with the postpetition lenders concerning the parameters of a postpetition bonus structure for the Senior Executives, Mr. Graber tells Judge Kaplan. As a result, the Debtors' postpetition lenders agreed to subject their liens to a $1,000,000 carve-out basket for compensation to be awarded under the Modified Program, as part of the postpetition financing that the Court approved on a final basis in February 2006. Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) PERFORMANCE TRANSPORTATION: Removal Period Extended to November 24 ------------------------------------------------------------------ Performance Transportation Services, Inc., and its debtor- affiliates, with the help of their professionals, have been evaluating their current operations to develop and confirm a viable plan or reorganization, Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York, relates. Currently, Mr. Graber says, the Debtors are engaged in negotiations with their customers and labor unions concerning concessions that are necessary to increase the Debtors' overall earnings and maximize value of their estates. With their hands full, the Debtors have not completed a thorough analysis of legal actions that they are parties to, which are pending in various tribunals. In addition, the Debtors have not developed a strategy with respect to the pending actions, or additional actions that could be filed against them, because the strategy is largely dependent on the negotiations and the resulting business plan, Mr. Graber tells the U.S. Bankruptcy Court for the Western District of New York. At the Debtors' request, the Court extends the time within which they may file notices of removal with respect to the Actions, to and including the later to occur of: -- Nov. 24, 2006; or -- the day that is 30 days after entry of an order terminating the automatic stay with respect to the particular Action sought to be removed. "Th[e] extension will allow the Debtors to concentrate on their negotiations with their customers and labor unions, the outcome of which is crucial to the Debtors' profitability and the ultimate success of these Chapter 11 cases," Mr. Graber maintains. Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000) PREMIUM PAPERS: PF Papers' $2.7M Asset Sale to Flambeau River OK'd ------------------------------------------------------------------ The Honorable Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware approved the sale of substantially all of PF Papers, LLC's assets to Flambeau River Papers, LLC, for $2.7 million. PF Papers, a Premium Papers Holdco, LLC, debtor-affiliate, conducts paper machine operations, de-inking operations, and pulping operations at facilities located in Park Falls, Wisconsin, and certain non-contiguous real estate. The Debtors are also in the process of selling substantially all of Smart Paper, LLC's assets. Headquartered in Hamilton, Ohio, Premium Papers Holdco, LLC, -- http://www.smartpapers.com/-- is an independent manufacturer and marketer of a wide variety of premium coated and uncoated printing papers, such as Kromekote, Knightkote, and Carnival. The Company and its debtor-affiliates, SMART Papers LLC and PF Papers LLC, filed for chapter 11 protection on March 21, 2006 (Bankr. D.Del.Case No. 06-10269). Ian S. Fredericks, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors. Traxi LLC serves as the Debtors' financial advisor. When the Debtors filed for protection from their creditors, they listed unknown estimated assets and $10 million to $50 million estimated debts. QUEST MINERALS: Inks LOI to Acquire Parsons Branch Mining Permit ---------------------------------------------------------------- Quest Minerals & Mining Corp. signed a non-binding letter of intent with Parsons Branch Development to acquire a permit to mine the Elkhorn #2 seam on Parsons Branch located in Mud Creek, Kentucky. Parsons Branch Development has approximately 450,000 tons of clean coal under lease at this location. Upon completion of the transfer of the permit to Quest, Quest will retain all revenues from coal sales after payment of a royalty to Parsons Branch of $1.50 per clean ton mined and expenses of mine operations, which are expected to be carried out by a contract miner. "With approximately 450,000 tons of clean coal, we believe that this project has tremendous potential," Eugene Chiaramonte, Jr., President of Quest, said. "We have been seeking new energy opportunities to enhance stockholder value, and we believe that the Big Mud Creek region holds great opportunity. We are excited about working with Parson Branch Development and the local community to create real value with this prospect. This acquisition is not only good for our company and our shareholders, but it will also have a positive impact on the local community by creating more jobs." The transaction is subject to due diligence, negotiation of definitive agreements, regulatory approval of the transaction, and satisfaction of other customary conditions to closing. About Quest Minerals & Mining Based in Paterson, New Jersey, Quest Minerals & Mining Corp. (OTC BB:QMMG.OB) -- http://www.questminerals.com/-- acquires and operates energy and mineral related properties in the southeastern part of the United States. Quest focuses its efforts on properties that produce quality compliance blend coal. At March 31, 2006, the Company's balance sheet showed total assets of $6,776,800 and total liabilities of $7,368,152, resulting in a stockholders' deficit of $591,352. RCNR INC: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: RCNR, Inc. 128 Lubrano Drive, Suite L 102 Annapolis, MD 21401 Bankruptcy Case No.: 06-14444 Chapter 11 Petition Date: July 27, 2006 Court: District of Maryland (Baltimore) Judge: Robert A. Gordon Debtor's Counsel: John Douglas Burns, Esq. The Burns Law Firm, LLC 6303 Ivy Lane, Suite 102 Greenbelt, MD 20770 Tel: (301) 441-8780 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. RENATA RESORT: Hires Adams & Reese as Special Counsel ----------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Florida in Panama City gave Renata Resort LLC authority to employ Adams and Reese, LLP, as its special counsel. As reported in the Troubled Company Reporter on July 3, 2006, Adams and Reese will: (a) assist with plan negotiations and plan structure; (b) assist with claim estimation proceedings; (c) evaluate potential claims the Estate may have against third parties, including but not limited to Earl Durden, Sylvia Harrison and Vanguard Bank; (d) negotiate and obtain financing; and (e) assist with litigation in adversary proceedings or contested matters, to the extent necessary. The Debtor told the Court that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- John M. Duck, Esq. $330 Charles Cook, Esq. $295 Stacey L. Greaud, Esq. $240 Lisa M. Hedrick, Esq. $220 Jason M. Cerise, Esq. $190 Paralegals and Law Clerks $120 John M. Duck, Esq., a partner at Adams and Reese, assured the Court that his firm does not represent any interest adverse to the Debtor, its estates or other parties-in-interest. Headquartered in Panama City, Florida, Renata Resort, LLC, fdba Sunset Pier Resort, LLC, operates a hotel and resort. The company filed for chapter 11 protection on May 31, 2006 (Bankr. N.D. Fla. Case No. 06-50114). John E. Venn, Jr., Esq., at John E. Venn, Jr., P.A., represents the Debtor in its restrucutring 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 listed total assets of $19,947,271 and total debts of $8,524,196. ROTEC INDUSTRIES: Taps Young Conaway as Bankruptcy Counsel ---------------------------------------------------------- Rotec Industries, Inc., asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain Young, Conaway, Stargatt & Taylor, LLP, as its bankruptcy counsel. Young Conaway will: a) provide legal advice with respect to the Debtor's powers and duties as debtor-in-possession in the continued operation of its business and management of its properties; b) prepare on behalf of the Debtor necessary applications, motions, answers, orders, reports and other legal papers; c) appear in Court and protect the interest of the Debtor before the Court; d) assist in the preparation and pursuit of confirmation of a plan and approval of a disclosure statement; and e) perform all other legal services for the Debtor which may be necessary and proper in this proceeding. Michael R. Nestor, Esq., a member at Young Conaway, will charge the Debtor $445 per hour for his services. Mr. Nestor discloses the firm's principal counsel and paralegal that will represent the Debtor and their current hourly rates: Professional Hourly Rate ------------ ----------- Edward J. Kosmowski, Esq. $365 Kara Hammond Coyle, Esq. $255 Gregory J. Babcock, ESq. $215 Melissa Bertsch $115 Mr. Nestor assures the Court that his firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Elmhurst, Illinois, Rotec Industries, Inc. -- http://www.rotec-usa.com/-- is an industry leader in concrete products and concrete placing technology & solutions. The company filed for chapter 11 protection on May 31, 2006 (Bankr. D. Del. Case No. 06-10542). Edward J. Kosmowski, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. ROTEC INDUSTRIES: U.S. Trustee Picks Five-Member Creditors Panel ---------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, appointed five creditors to serve on an Official Committee of Unsecured Creditors in Rotec Industries, Inc.'s chapter 11 case: 1. China Three Gorges Project Corporation No. 1 Jiansha Road, Yichang, Hubei, P.R. China 443002 Tel: (0086) 7176767258 Fax: (0086) 717620248 2. R-M Industries, Inc. Attn: Richard Trepanier 38 Interstate Road, Addison, IL 60101 Tel: (630) 543-3071 Fax: (630) 543-7318 3. Stewart-Skeehan, Inc. dba Gray's Travel Attn: Glen P. Stewart 60 Revere Drive, Ste. 900 Northbrook, IL 60602 Tel: (847) 498-9750 Fax: (847) 498-5543 4. D.C. Transport Attn: John Edward Coccieniglio 1300 E. Devon Avenue Elk Grove Village, IL 60007 Tel: (847) 593-4200 Fax: (847) 593-4243 5. Apache Hose & Belting Company, Inc. Attn: John Pientok 4805 Bowling Street, S.W. Cedar Rapids, IA 52406 Tel: 319-366-0471 ext. 226 Fax: 319-366-4210 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Headquartered in Elmhurst, Illinois, Rotec Industries, Inc. -- http://www.rotec-usa.com/-- is an industry leader in concrete products and concrete placing technology & solutions. The company filed for chapter 11 protection on May 31, 2006 (Bankr. D. Del. Case No. 06-10542). Edward J. Kosmowski, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. SAINT VINCENTS: Wants Plan-Filing Period Stretched to Nov. 15 ------------------------------------------------------------- Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to further extend the period within which they have the exclusive right to: (a) file a plan of reorganization to Nov. 15, 2006; and (b) solicit acceptances of that plan to Feb. 1, 2007. Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that the Debtors, with the assistance of their professionals, have made substantial progress essential to the stabilization of their operations and successful reorganization. Mr. Troop relates that due to the complex regulatory and licensing issues involved in selling a hospital in New York, the negotiations for the sales of the Queens and Staten Island hospitals took longer than anticipated and were unusually complicated. The Debtors, with the respective buyers for the hospitals, must now seek the necessary regulatory approvals to consummate the sales, which approvals are not expected to be complete until the fourth quarter of 2006. To date, Mr. Troop says, approximately 125 individual claimants have filed motions for relief from the automatic stay effectively to continue their prepetition district or state court actions against the Debtors. The Debtors have filed nine omnibus objections and several other individual objections in response to the lift-stay motions. The Debtors' proposed methodology to address the medical malpractice claims is being reviewed by the Tort Claimants' Committee and the Debtors have continued to refine the Methodology through discussions with various constituents. The Debtors continue to solicit offers for various parcels of real property that they own and that are not central to their operations and expected future operations. Mr. Troop informs the Court that the Debtors are working diligently with the Creditors' Committee, the Tort Claimants' Committee, and other major interest-holders on the aspects of the bankruptcy cases that are the necessary prerequisites to being able to formulate a plan of reorganization. The Debtors, Mr. Troop asserts, need more time to develop and implement a viable long-term business plan and allow the Creditors' Committee and other parties-in-interest to evaluate that plan. The Court will convene a hearing on August 29, 2006, to consider the Debtors' request. Since their current Exclusive Filing Period will expire on August 15, the Debtors seek a temporary extension of the deadline. The Creditors' Committee and the Tort Claimants' Committee have agreed to the requested temporary extension, Mr. Troop says. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 29 Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT VINCENTS: Court Approves $2 Million Premium Financing Pact ---------------------------------------------------------------- The Honorable Adlai S. Hardin Jr. of the U.S. Bankruptcy Court for the Southern District of New York grants Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates' request for authority to finance, on a secured basis, approximately $2,200,000 in premium payment for certain primary and excess casualty -- not medical malpractice -- insurance covering the Debtors' hospitals. Judge Hardin authorizes the Debtors to: * enter into and perform the Premium Finance Agreement, Disclosure Statement and Security Agreement; and * grant to AICCO a security interest in and a lien on all unearned or returned Insurance Premiums and other amounts which may become due to the Debtors in connection with the Umbrella Policy and the New/Renewed Excess Policies. The Debtors have historically maintained commercial general liability insurance, automobile liability insurance, and workers' compensation programs in Staten Island, Brooklyn and Queens, Manhattan, and Westchester. Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New York, related that the Debtors have financed the insurance premiums through parties other than their primary or revolving credit lender. According to Mr. Troop, the insurance generally is obtained on an annual basis, and premiums are likewise due on an annual basis. To continue the benefits of commercial insurance coverage, the Debtors must now renew those commercial insurance policies and obtain financing to cover their premiums. A.I. Credit Corporation financed the Debtors' casualty insurance for the policy year covering July 1, 2005, through June 30, 2006. The Previous Casualty Insurance Policies expired at 12:01 a.m., on June 30, 2006. Mr. Troop related that insurance coverage has been "bound" from July 1, 2006, through June 30, 2007, through a renewed Umbrella Policy and a series of new or renewed excess casualty insurance policies, subject to combined, required premium payments of $2,952,816. In summary, the renewed Umbrella Policy provides for: * $750,000 of primary general liability coverage in excess of the $250,000 provided by Queensbrook Insurance Company, Ltd., totaling $1,000,000 on a per occurrence basis and up to $7,000,000 on an aggregate basis for Brooklyn and Queens; and * $750,000 of primary workers' compensation and automobile liability coverage to SVCMC on a system-wide, consolidated basis in excess of the $250,000 provided by QIL, totaling $1,000,000 on a per occurrence basis and up to $7,000,000 on an aggregate basis. Once the primary per occurrence or aggregate limit is exhausted, the New and Renewed Excess Policies provide for: * a first layer of $25,000,000 in per occurrence and aggregate excess coverage underwritten by AIG; * a second layer of $25,000,000 in per occurrence and aggregate excess coverage underwritten by XL Insurance Company; and * a third layer of $50,000,000 in per occurrence and aggregate excess coverage underwritten by Starr Excess Liability Ltd. Overall, the Umbrella Policy and the New and Renewed Excess Policies are designed to cover up to: (i) $101,000,000 in claims on a per occurrence basis and $106,000,000 in claims in the aggregate for the Staten Island general liability program; (ii) $101,000,000 on a per occurrence basis and $107,000,000 in the aggregate for the Brooklyn and Queens general liability program; and (iii) $101,000,000 on a per occurrence basis and $107,000,000 in the aggregate for automobile liability and workers compensation coverage system-wide. The need to ensure a seamless transition to the new Umbrella Policy and the New/Renewed Excess Policies and the benefits of doing so for these estates are beyond question, Mr. Troop told the Court. According to Mr. Troop, the Debtors have engaged in arm's-length, good faith negotiations with AICCO regarding the terms and conditions of financing the payment of the Insurance Premiums. These terms and conditions are embodied in a "Premium Finance Agreement, Disclosure Statement and Security Agreement." A full- text-copy of this agreement is available for free at: http://ResearchArchives.com/t/s?e8f Pursuant to the Agreement, the Debtors will repay the $2,952,816 in Insurance Premiums by: (a) making an initial cash payment of $711,000 to AICCO; (b) paying interest on the balance of $2,241,816 at an annual percentage rate of 5.99%; (c) paying the $2,241,816 in 10 equal monthly installments of $230,420 and making the monthly payments starting August 1, 2006; and (d) paying AICCO a $62,392 finance charge. The Debtors will also grant AICCO a security interest in all unearned or returned Insurance Premiums and other amounts, which may become due to the Debtors in connection with the Umbrella Policy and New Excess Policies. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 30 Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT VINCENTS: Maps Out Tort Claimants Panel's Responsibilities ---------------------------------------------------------------- At the request of the U.S. Bankruptcy Court for the Southern District of New York, Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates, the Official Committee of Unsecured Creditors, the Official Committee of Tort Claimants, Kronish Lieb Weiner & Hellman LLP, and the United States Trustee conferred and defined the duties of the Tort Claimants' Committee. The parties agreed that the Tort Claimants' Committee will: 1. investigate, monitor, negotiate and assist: * in the global resolution of Medical Malpractice Claims, including, the Debtors' proposed compulsory mediation process or any subsequently proposed alternatives; * in the resolution of any requests by holders of Medical Malpractice Claims for relief from the automatic stay to pursue Claims including, the Debtors' proposed three- category approach to stay relief motions filed by holders of Medical Malpractice Claims or any subsequently proposed alternative; * the holders of Medical Malpractice Claims with respect to the Debtors' complex set of insurance policies, including, different tiers of insurance, different pools of insurance proceeds and different rights afforded to various holders of Medical Malpractice Claims; and * the holders of Medical Malpractice Claims with respect to any and all proposed procedures with respect to (i) pooling of insurance proceeds and (ii) the treatment of the Debtors' current or former employees in the context of the commencement or continuation of a proceeding with respect to a Medical Malpractice Claim; 2. monitor the disposition of otherwise unencumbered assets of the Debtors' estates, which may be available for distribution to holders of Medical Malpractice Claims, including, participating in the Debtors' search for a real estate advisor and all activities concerning the development/disposition of the Debtors' Manhattan real estate; 3. communicate with holders of Medical Malpractice Claims regarding (a) the progress of the Debtors' Chapter 11 cases generally and (b) any specific issues or motions affecting the treatment of Medical Malpractice Claims, as distinct from prepetition general unsecured claims; and 4. participate in the formulation of any plan of liquidation or reorganization for any of the Debtors solely to the extent of: (a) reviewing and negotiating the classification of Medical Malpractice Claims in the p1an; and (b) reviewing whether a plan which separately classifies Medical Malpractice Claims or any portion discriminates unfairly or is fair and equitable with respect to that class; and (c) advising holders of Medical Malpractice Claims of the Tort Claimants' Committee's determination as to the plan. The Court approves the Tort Claimants' Committee's limited scope of duties and responsibilities. Furthermore, the Court rules that if the Tort Claimants' Committee seeks to engage in any activity beyond the approved scope, it will be required to obtain approval from the Court. The Court also rules that the Tort Claimants' Committee will: -- not retain any professionals other than Kronish Lieb and Gilbert Heintz; -- be subject to a professional fee budget for its legal and insurance advisors: * for the compensation period starting on May 17, 2006, through and including June 30, 2006, Kronish Lieb's fees will not be subject to a cap, and for the compensation period starting July 1, 2006, its fees will be subject to a monthly cap of $100,000; and * Gilbert Heintz will be limited to $175,000 for the entire scope of its engagement. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 30 Bankruptcy Creditors' Service, Inc., 215/945-7000) SAKS INC: S&P Affirms B+ Corporate Credit & Sr. Unsecured Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit and senior unsecured ratings on Birmingham, Alabama-based department store company Saks Inc. The ratings were removed from CreditWatch, where they had been placed with developing implications in April 2005. The outlook is positive. Total debt was $694 million at April 29, 2006. "The affirmation is a reflection of Saks' relatively weak business profile, as its luxury Saks Fifth Avenue department stores have underperformed important competitors such as Neiman Marcus, Nordstrom, and Bloomingdale's," said Standard & Poor's credit analyst Gerald A. Hirschberg. "Moreover, the company's financial profile is expected to be remain highly leveraged." The positive outlook recognizes that a refocused business has the potential for improving the company's market share. With better sales and margins, EBITDA could recover, but this would need to be accompanied by a less aggressive financial policy, such that debt reduction has a higher priority. SAVERS INC: S&P Junks Proposed $140 Million Sr. Sub. Notes' Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' rating to Bellevue, Washington-based thrift store operator Savers, Inc.'s proposed $212 million credit facility that matures in 2012. At the same time, Standard & Poor's assigned its recovery rating of '2' to the credit facility, indicating a high expectation of substantial recovery (80%-100%). In addition, a 'CCC+' was assigned to the proposed $140 million senior subordinated notes that mature in 2014. The notes will be issued under rule 144a without registration rights. Concurrently, Standard & Poor's assigned its 'B' corporate credit rating to Savers. The outlook is negative. "The ratings are based on preliminary terms and are subject to change after review of final documents," said Standard & Poor's credit analyst Diane Shand. Proceeds from the bank facility and subordinated notes will be used to finance the acquisition of Savers Inc. by Freeman Spogli & Co. and management, and for general corporate purposes. The ratings on Savers reflect the company's: * participation in the intensely competitive retail industry; * relatively small size; * high leverage; and * vulnerability to fluctuations in the value of the Canadian dollar. These factors are somewhat offset by Savers established market position in the fragmented for-profit thrift industry. Standard & Poor's expects the investor group to fund $327 million of their $555 million acquisition of Savers with debt. The rating agency estimates that after the transaction the company's leverage will be very high, at more than 6.5x, and cash flow protection measures will be thin with EBITDA coverage of interest less than 2.0x. SCHOLASTIC CORP: S&P Downgrades Corporate Credit Rating to BB ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Scholastic Corp. The corporate credit rating was lowered to 'BB' from 'BB+'. The rating outlook is negative. New York, N.Y.-based Scholastic is a leading publisher and distributor of children's books. Total debt as of May 31, 2006, was $571 million. The downgrade reflects weak operating performance in the fiscal fourth quarter ended May 31, 2006, resulting in a lower-than- anticipated increase in full-year earnings. Moreover, Standard & Poor's has concerns regarding the company's increasing business risk and uncertain long-term growth prospects. "The 'BB' rating reflects the company's somewhat weakening business profile and volatile operating performance, partially offset by its niche position as a children's book publisher and seller, as well as its moderate capital structure," said Standard & Poor's credit analyst Hal F. Diamond. Scholastic has a well-entrenched market position in the distribution of children's books in elementary schools through book clubs and fairs. Operating income declined 10% in the three months ended May 31, 2006, reflecting lower profitability in some of its core businesses and higher operating costs and expenses. Revenues from book clubs, the company's largest operation, are likely to decline in fiscal 2007 due to the discontinuation of the company's Troll and Trumpet clubs. The continuity segment, formerly a significant profit contributor, is now minimally profitable because of the implementation of alternative marketing strategies as a result of federal telemarketing regulations. The negative outlook reflects Standard & Poor's concern that management may face challenges in restoring consistent revenue growth and margin stability in its core operations over the near- to-intermediate term. In order for Standard & Poor's to revise the outlook to stable, the rating agency needs confidence that the company will be able to improve operating performance of its core businesses as well as to maintain satisfactory discretionary cash flow and its ample margin of compliance with covenants. SCIENCE DYNAMICS: Inks Pact to Restructure Debt With Laurus Master ------------------------------------------------------------------ Science Dynamics Corporation entered into an agreement to restructure its debenture with Laurus Master Fund. "This restructuring represents a critical achievement for Science Dynamics" Paul Burgess, the Company's chief executive officer, said. "We have agreed to pay off the entire $2 million debenture with Laurus in exchange for a waiver of previous defaults and removal of all related liens and indebtedness. In addition to saving Science Dynamics significant fees and penalties, this agreement strengthens our balance sheet and enables us to seek additional financing more favorable to shareholder growth." "Science Dynamics is in a dramatically different financial position as a result of this agreement," Burgess said. "Laurus played an important role in the progress we have made over the past several years, enabling us to finance the acquisition of SMEI and providing us with working capital as we transformed our business. Since placing the convertible with Laurus in February of last year, we completed a transformative acquisition, grew sales to $4.7 million on a trailing 12-month basis and became EBITDA positive as we grew the value of our service contracts with clients to more than $16 million. We appreciate Laurus' assistance and their continuing confidence in us. Laurus will continue to be an important shareholder." Science Dynamics will pay off the existing Laurus $2 million debenture by Aug. 31, 2006. The company will pay Laurus $500,000 in cash and issue 1 million restricted common shares immediately and will pay another $250,000 in cash to Laurus on Aug. 1, 2006. By Aug. 31, 2006, Science Dynamics will issue an additional 8,333,333 restricted common shares and pay $750,000 in cash to Laurus. In exchange, Laurus will consider the existing convertible debenture repaid in full and will waive all previous defaults and liens on the company. Upon fulfilling the terms of this agreement, Science Dynamics will have no outstanding indebtedness to Laurus. About Science Dynamics Headquartered in Pennsauken, New Jersey, Science Dynamics Corp. (OTCBB: SIDY) -- http://www.scidyn.com/-- develops geospatial systems in the United States. It operates in two divisions, Technology Services and Technology Products. Also, the company offers architecture software to provide users to manage applications in a secure environment. Going Concern Doubt Peter C. Cosmas Co., CPA, in New York, raised substantial doubt about Science Dynamics' ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's losses from operations and working capital deficit. At March 31, 2006, the Company's balance sheet showed $4,483,845 in total assets, $85,758 minority interest and $5,725,426 in total liabilities, resulting in a $1,327,339 stockholders' deficit. SERACARE LIFE: Court Sets Aug. 1 as Equity Holders Claim Bar Date ----------------------------------------------------------------- Equity security holders owed money by SeraCare Life Sciences, Inc., have until tomorrow, Aug. 1, 2006, to file their proofs of claim, excluding proofs of interest. Proofs of claim must be filed with the Clerk of the Bankruptcy Court for the U.S. Bankruptcy Court for the Southern District of California at this address: Clerk of Court U.S. Bankruptcy Court Southern District of California 325 West F St. San Diego, CA 92101 Based in Oceanside, California, SeraCare Life Sciences, Inc. -- http://www.seracare.com/-- develops and manufactures biological based materials and services for diagnostic tests, commercial bioproduction of therapeutic drugs, and medical research. The Company filed for chapter 11 protection on March 22, 2006 (Bankr. S.D. Calif. Case No. 06-00510). The Official Committee of Unsecured Creditors selected Henry C. Kevane, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, as its counsel. When the Debtor filed for protection from its creditors, it listed $119.2 million in assets and $33.5 million in debts. SERACARE LIFE: Gets Court Nod to Hire KPMG LLP as Tax Advisors -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California authorized SeraCare Life Sciences, Inc., to employ KPMG LLP as its tax advisors. KPMG LLP will: a) review and assist in the preparation and filing of any tax returns including amended tax returns; b) advise and assist the Debtor regarding tax planning issues, including, but not limited to, assistance in estimating net operating loss carryforwards, net operating loss carrybacks, international taxes, and state and local taxes; c) assist the Debtor regarding any existing or future IRS, state or local tax examinations; d) advise and assist on the tax consequences of proposed plans of reorganization, including, but not limited to, assistance in the preparation of Internal Revenue Service ruling requests regarding the future tax consequences of alternative reorganization structures; and e) take other action and perform other services that require tax expertise that the Debtor may require in connection with its chapter 11 case. Ron Busick, a partner at KPMG, discloses that the firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $625 Directors/Senior Managers/Managers $500 - $575 Senior/Staff Accountants $259 - $305 KPMG has agreed to apply a 20% discount to its fees. In addition, the firm will also apply a 30% discount on its professional's fees with respect to the preparation of amended tax returns for the three years, starting August 2002. Mr. Busick assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Based in Oceanside, California, SeraCare Life Sciences, Inc. -- http://www.seracare.com/-- develops and manufactures biological based materials and services for diagnostic tests, commercial bioproduction of therapeutic drugs, and medical research. The Company filed for chapter 11 protection on March 22, 2006 (Bankr. S.D. Calif. Case No. 06-00510). The Official Committee of Unsecured Creditors selected Henry C. Kevane, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, as its counsel. When the Debtor filed for protection from its creditors, it listed $119.2 million in assets and $33.5 million in debts. SEW CAL: Incurs $598,699 Net Loss in Quarter Ended May 31, 2006 --------------------------------------------------------------- Sew Cal Logo Inc. filed its third quarter financial statements for the three months ended May 31, 2006, with the Securities and Exchange Commission on July 25, 2006. The Company reported a $598,699 net loss on $516,648 of total revenues for the third quarter ended May 31, 2006, compared with a $59,153 net loss on $613,522 of total revenues for the same period in 2005. At May 31, 2006, the Company's balance sheet showed $1,494,602 in total assets and $2,520,881 in total liabilities, resulting in a $1,026,279 stockholders' deficit. Going Concern Doubt Moore & Associates, Chartered, in Las Vegas, Nevada, raised substantial doubt about Sew Cal Logo Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the third quarter ended May 31, 2006. The auditor pointed to the Company's losses since inception. Subsequent Events Since May 31, 2006, the Company has received $2,000,000 in new financing. The Company has expended approximately $1,000,000 on a branded line of surf and sportswear under an acquired logo. The Company has signed several famous surfing athletes who are and will continue to endorse and use the Company's clothing and accessories. Trademark applications have been processed and are awaiting final registration. Management confidently forecasts a profit in the next fiscal year. Full-text copies of the Company's third quarter financials are available for free at http://ResearchArchives.com/t/s?e7a Based in Los Angeles, Calif., Sew Cal Logo Inc. produces and manufactures custom embroidered caps, sportswear and related corporate identification apparel. The Company provides an in-house, full-service custom design center where original artwork and logo reproduction for embroidery are available. The Company also offers contract embroidery and silk-screening to the manufacturing and promotional industry. The Company's products are sold, primarily in the United States, to Fortune 500 companies, major motion picture and television studios, retailers, and local schools and small businesses. SIERRA HEALTH: Earns $33.5 Mil. in Second Quarter Ended June 2006 ----------------------------------------------------------------- Sierra Health Services, Inc., earned $33.5 million of net income for the second quarter ended June 30, 2006, compared with $33.8 million earned for the same period in 2005. The Company reported pre-tax income from its core managed care and corporate operations segment of $51.5 million, compared with $40.7 million for the second quarter of 2005. Its total revenues for the quarter were $424.4 million, compared with $348 million for the same period in 2005 and medical premium revenues were $400.7 million, compared with $320.4 million for the same period in 2005. At June 30, 2006, the Company's balance sheet showed $754,105,000 in total assets, $509,032,000 in total liabilities, and $245,073,000 in total stockholders' equity. The Company's medical claims payable balance decreased to $148 million at June 30, 2006, compared with $162.3 million at March 31, 2006. The Company also reported cash flow from operations for the six months ended June 30, 2006, of $140.1 million including seven months of payments from the Centers for Medicare and Medicaid Services. Its cash flow from operations decreased to $10.5 million for the quarter from $16.0 million for the same period in 2005. During the quarter, the Company purchased 923,000 shares of its common stock in the open market for $36.6 million, at an average price of $39.72. Since January 2006, it has repurchased 3.1 million shares for $127.8 million. Its current available and authorized balance for future share repurchases is $64.4 million. "The continued growth dynamics of the commercial market in Nevada, combined with our recent re-selection as one of the state's Medicaid managed care plans, bode well for another successful year," Anthony M. Marlon, M.D., chairman, president and chief executive officer of the Company said. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?e91 Headquartered in Las Vegas, Nevada, Sierra Health Services Inc. (NYSE: SIE) -- http://www.sierrahealth.com/-- is a diversified health care services company that operates health maintenance organizations, indemnity insurers, military health programs, preferred provider organizations and multispecialty medical groups. Sierra's subsidiaries serve more than 1.2 million people through health benefit plans for employers, government programs and individuals. * * * As reported in the Troubled Company Reporter on May 4, 2006, Standard & Poor's Ratings Services raised its counterparty credit rating on Sierra Health Services Inc. to 'BB+' from 'BB' and removed it from CreditWatch with positive implications, where it was placed on Feb. 7, 2006. Standard & Poor's also said that the outlook on Sierra is positive. SILICON GRAPHICS: Court Okays Solicitation and Tabulation Protocol ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York approved Silicon Graphics, Inc., and its debtor-affiliates' proposed solicitation and tabulation procedures, and established: * Aug. 3, 2006, as the Solicitation Date and the Subscription Commencement Date; * Aug. 31, 2006, as the Confirmation Objections Deadline; * Sept. 6, 2006, as the Voting Deadline; and * Sept. 19, 2006, as the Confirmation Hearing Date. The Official Committee of Unsecured Creditors and the Ad Hoc Committee had written letters supporting the approval of the Disclosure Statement. The Support Letters will be included as part of the Solicitation Packages distributed to the holders of claims in classes entitled to vote to accept or reject the Plan. The Debtors will publish the Confirmation Hearing Notice, on one occasion, on or before August 6, 2006, in the national edition of The New York Times. 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. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) SILICON GRAPHICS: Gets Okay to Finance $1.97MM Insurance Payment ---------------------------------------------------------------- The Hon. Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York authorizes Silicon Graphics, Inc., and its debtor-affiliates, on an interim basis, to: (i) enter into, and pay all sums due under, the Premium Finance Agreement; and (ii) grant AFCO a security interest in all unearned Insurance Premiums. Objections must be filed and actually received by 4:00 p.m., on Aug. 14, 2006. The Court will convene a final hearing on Aug. 17, 2006, at 10:00 a.m. Before the Court's approval, the Debtors sought the Court's authority to incur secured debt from AFCO Premium Acceptance, Inc., to finance certain insurance premiums for the policy year July 1, 2006, to July 1, 2007, pursuant to Section 364(c)(2) of the Bankruptcy Code. AFCO is a wholly owned subsidiary of AFCO Premium Credit, LLC, and a joint venture of AFCO Credit Corporation and Marsh USA, Inc. Prior to their bankruptcy filing, the Debtors purchased liability, product, and property-related insurance policies from numerous insurance companies. The Court authorized the Debtors to maintain and continue their insurance coverage in the ordinary course of business. Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, in New York, informs the Court that several insurance policies expired on July 1, 2006. The Debtors have made arrangements to renew the insurance policies or to purchase replacement policies for an additional one-year period through and including July 1, 2007, from 11 insurers: * Federal Insurance Company, * Great Northern Insurance Company, * St. Paul Surplus Lines Insurance Company, * St. Paul Fire & Marine Insurance Company, * American Guarantee and Liability Insurance Company, * North River Insurance Company, * Global Aerospace, Inc., * Factory Mutual Insurance Company, * Lloyds of London, * Zurich American Insurance Company, and * National Union Fire Insurance. The total amount of premiums due under the Insurance Policies for the 2006 - 2007 policy year is $1,979,456, inclusive of estimated taxes and policy fees. Mr. Waisman notes that it is not possible to obtain premium financing by incurring unsecured debt. AFCO agreed to provide premium financing on a secured basis. The parties entered into a Premium Finance Agreement, which contemplates that the Debtors will pay $712,672 before Aug. 1, 2006. The remaining $1,266,784 will be repaid in eight monthly installments of $158,348. In addition, the Premium Finance Agreement provides that the Debtors will grant AFCO a security interest in the Insurance Policies. The Security Interest extends to all unearned Insurance Premiums, which may become payable under the Insurance Policies, and loss payments that reduce the unearned Insurance Premiums subject to any mortgagee or loss payee interests. Mr. Waisman asserts that the continuation of the Insurance Policies is necessary, among others, to protect the Debtors from a variety of product and property-related, and general liabilities. A full-text copy of the Premium Finance Agreement is available for free at http://researcharchives.com/t/s?e8a 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. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) SKYTERRA COMMS: Approves 2006 New Equity and Incentive Plan ----------------------------------------------------------- At the annual meeting of SkyTerra Communications, Inc., the Company's stockholders approved: -- a new 2006 Equity and Incentive Plan, -- re-elected all of the members of the Board of Directors, and -- ratified the appointment of Ernst & Young as the Company's independent registered public accounting firm for the year ending Dec. 31, 2006. In addition, the Company completed the redemption of all of the Company's outstanding Series A Preferred Stock for aggregate cash and common stock consideration equal to the $120 million liquidation preference of the preferred stock. A total of approximately $18 million in cash was paid to redeem the preferred stock along with the issuance of approximately 5.7 million shares of voting and non-voting common stock of the Company. The Redemption is a condition to closing of the pending transactions to consolidate majority ownership and control of Mobile Satellite Ventures LP and its corporate general partner under the Company. Closing of those transactions is currently expected to occur during the current fiscal quarter, pending regulatory approvals. The approximately $18 million in cash paid in connection with the Redemption was generated from the completion of the rights offering that the Company launched on June 22, 2006, which resulted in the sale of approximately 1 million shares of the Company's common stock at $18 per share through exercised basic and oversubscription rights. The remaining outstanding shares of the Company's Series A Preferred Stock were redeemed through the issuance of 2.4 million shares of the Company's voting and 3.2 million shares of its non- voting common stock to the preferred stockholders, in accordance with the Company's May 2006 agreement with the preferred stockholders, reflecting nearly the entire balance of the Rights Offering, in which 6.67 million shares were sold. In accordance with pre-existing agreements, the Company issued voting common stock to Apollo Investment Fund IV, L.P. and certain affiliated funds so that their voting power did not exceed a previously agreed to 29.9% threshold, and issued the remainder in the form of non-voting common stock. Immediately following the completion of the Rights Offering and the Redemption, the Company will have 24.6 million shares of common stock outstanding and no shares of Series A Preferred Stock outstanding. Headquartered in New York, SkyTerra Communications, Inc. (OTCBB: SKYT) -- http://www.skyterracom.com/-- through its subsidiary, MSV Investors, LLC, provides and sells mobile digital voice and data communications services via satellite in the United States and Canada. The Company's services include data communication and satellite communication services. At March 31, 2006, SkyTerra's balance sheet showed a stockholder's deficit of $51,457,000 compared to a $15,000,000 stockholder's equity at March 31, 2005. STATION CASINOS: June 30 Balance Sheet Upside-Down by $51 Million ----------------------------------------------------------------- Station Casinos, Inc., reported net revenues for the second quarter ended June 30,2006, of approximately $341.8 million, an increase of 25% compared to prior year's second quarter. The Company reported EBITDA for the quarter of $134.0 million, an increase of 13% compared to the prior year's second quarter. During the second quarter, the Company reported net income of $26.8 million including pre-opening costs related to projects under development of $13.6 million, a $100,000 loss on the disposition of certain assets and $2.5 million in costs to develop new gaming opportunities, primarily related to Native American gaming. The Company reported a $51 million stockholders' deficit for the second quarter ended June 30, 2006, versus a stockholders' equity of $630 million for the year ended Dec. 31, 2005. The Company's earnings from its Green Valley Ranch joint venture for the second quarter were $11.5 million. For the quarter, Green Valley Ranch generated EBITDA before management fees of $26.4 million, an 8% increase compared to the prior year's second quarter. "Green Valley Ranch has continued its strong performance this year despite the significant construction disruption related to the Phase III expansion of that property, as well as new supply in the market," Lorenzo J. Fertitta, the Company's vice chairman and president said. The Company further reported that long-term debt was at $3.04 billion as of June 30, 2006, and total capital expenditures were $215.3 million for the second quarter. The Company also disclosed the commencement of the Phase III master-planned expansion of Red Rock, which will include a 72-lane bowling center and expansions of both parking garages. The estimated cost of this expansion is approximately $60 million to $65 million. Cash Dividend The Company's Board of Directors has also declared a quarterly cash dividend of $0.2875 per share, which represents a 15% increase over the prior quarterly cash dividend and is payable on Sept. 1, 2006, to shareholders of record on Aug, 11, 2006. Stock Repurchases During the second quarter, the Company also purchased approximately 6.3 million shares of its common stock for approximately $472.7 million and since the beginning of the year, has repurchased 10.1 million shares of its common stock through a combination of open market purchases and an accelerated stock buyback program. The total cost of the share repurchases completed in 2006 to date is approximately $737 million. In addition, on July 24, 2006, the Company's Board of Directors authorized the repurchase of up to an additional 10 million shares of the Company's common stock. Station Casinos, Inc. (NYSE:STN) -- http://www.stationcasinos.com/ -- is a provider of gaming and entertainment to the residents of Las Vegas, Nevada. Station owns and operates Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Casino and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel & Casino, Fiesta Henderson Casino Hotel, Magic Star Casino and Gold Rush Casino in Henderson, Nevada. Station also owns a 50% interest in Green Valley Ranch Station Casino, Barley's Casino & Brewing Company and The Greens in Henderson, Nevada and a 6.7% interest in the Palms Casino Resort in Las Vegas, Nevada. In addition, Station manages Thunder Valley Casino near Sacramento, California on behalf of the United Auburn Indian Community. * * * As reported in Troubled Company Reporter on Feb. 27, 2006, Standard & Poor's Ratings Services revised its outlook on Station Casinos Inc. to stable from positive. At the same time, Standard & Poor's placed a 'B+' rating on the Company's $300 million senior subordinated notes due 2018 and affirmed its ratings, including the 'BB' corporate credit rating. SYLVEST FARMS: Haskell Slaughter Hired as Panel's Local Counsel --------------------------------------------------------------- The Hon. Thomas B. Bennett of the U.S. Bankruptcy Court for the Northern District of Alabama authorized the Official Committee of Unsecured Creditors appointed in Sylvest Farms, Inc., and its debtor-affiliates' chapter 11 cases to retain Haskell Slaughter Young & Rediker, LLC, as its local counsel. Haskell Slaughter is expected to: a) advise the Committee with respect to their powers and duties; b) attend meetings and negotiate with the Debtor's representatives of the Debtor and other parties-in-interest concerning matters that might impact the interest of creditors; c) prepare for the Committee all necessary motions, applications, answers, reports, and other pleadings necessary in connection with the administration of the Debtors' chapter 11 cases; d) negotiate and where appropriate prepare a chapter 11 plan of reorganization or liquidation, disclosure statement and related documents and prosecute, defend or otherwise participate in the confirmation process on behalf of the Committee; e) advise the Committee concerning any sales of assets proposed and attend all hearings held in connection with any sales from the Debtors' cases; f) appear before the Court and other courts or in other hearings or meetings to protect the interest of the Committee and the creditors; and g) perform other legal services required by the Committee. The firm's professionals bill: Professional Hourly Rate ------------ ----------- Thomas E. Reynolds, Esq. $275 R. Scott Williams, Esq. $275 Meredith Jowers Lees, Esq. $185 Latanishia D. Watters, Esq. $185 Paralegal Services $95 Mr. Williams assures the Court that his firm does not hold or represent any interest adverse to the Debtor or their estate. Headquartered in Montgomery, Alabama, Sylvest Farms, Inc. -- http://sylvestcompanies.com/-- produces, processes and markets poultry products. The Debtors employ approximately 1,500 workers. The Company and two debtor-affiliates filed for chapter 11 protection on April 18, 2006 (Bankr. N.D. Ala. Case No. 06-40525). Richard A. Robinson, Esq., and Eric S. Golden, Esq., at Baker & Hostetler LLP represent the Debtors. When the Debtors filed for protection from their creditors, they estimated their total assets and debts at $50 million to $100 million. TDS INVESTOR: Moody Junks $500 Million Subordinated Notes' Rating ----------------------------------------------------------------- Moody's Investors Service assigned a first-time corporate family rating of B2 to TDS Investor Corporation as part of its buyout from Cendant Corporation. At the same time, Moody's assigned B1 ratings to secured facilities comprised of a $275 million revolving credit facility, a $125 million synthetic letter of credit facility, and a $2,200 million term loan facility; Moody's also assigned a B3 rating to Travelport's $900 million senior notes and a Caa1 rating to its $500 million subordinated notes. At the time of the closing of the transaction, $3.6 billion of debt will be drawn and along with $900 million of sponsor equity will finance the proposed $4.3 billion buyout of Travelport from Cendant and related fees and expenses. These ratings were assigned: * Corporate family rating -- B2 * $275 million revolving credit facility due 2012 -- B1 * $125 million synthetic letter of credit facility due 2013 -- B1 * $2,200 million term loan facility due 2013 -- B1 * $900 million senior unsecured notes due 2014 -- B3 * $500 million subordinated notes due 2016 -- Caa1 * Speculative Grade Liquidity rating -- SGL-2 The rating outlook is stable. The B2 corporate family rating reflects: (1) the significant leverage Travelport will be taking on as a result of the current buyout; (2) the potential secular decline of global distribution system as travel bookings continue to shift away from travel agencies to supplier direct distribution; (3) the on-going challenges facing Travelport's international B2C business as the company integrates its various acquisitions, and (4) the limited asset protections afforded by Travelport's balance sheet, which is heavily comprised of intangibles. The rating also reflects: (1) the franchise value of Travelport's business portfolio including that of GDS which should remain an important channel for travel distribution in the medium term; (2) the diversity of Travelport's business portfolio, both in terms of geography and distribution channels - GDS business outside the U.S., which is solid, represents over 70% of its total GDS business, and profitable online businesses which should provide opportunities as online traffic grows; and (3) the reasonable certainty of its U.S. GDS business provided by the recently negotiated 5 - 7 year contracts with all 6 major U.S. airlines, despite significant pricing declines. Developments that could cause downward rating pressure include: 1) a significant acceleration of a shift in booking channels towards direct supplier distribution and Travelport's B2C business unable to capture growth opportunities to offset losses; and 2) free cash flow growth going forward unable to match expectations either because of an inability to extract cost savings currently envisioned and underperforming the operational forecast. Conversely, upward rating pressure if there Travelport could: 1) significantly de-lever, 2) increase FCF as a result of solid performance in non-U.S. GDS markets, and 3) improve its international B2C business performance. Headquartered in Parsippany, New Jersey, Travelport is one of the world's largest and most geographically diverse travel companies, operating 20 leading brands, including Orbitz, an online travel agency; Galileo, a global distribution system; and GTA, a wholesaler of global travel content. For the fiscal year 2005, it had revenues of $2.4 billion. TERADYNE INC: Earns $391.6 Million, Launches Stock Repurchase Plan ------------------------------------------------------------------ Teradyne, Inc., earned $82.4 million of net income on $391.6 million of net sales for the second quarter ended July 2, 2006, compared with a $45.4 million net loss on $266.1 million of net sales for the period ended July 3, 2005. "We had an exceptional quarter, seeing very strong demand for our Semiconductor Test products with short lead times, and steady growth in our system level test businesses," Mike Bradley, Teradyne president and chief executive officer, said. "Once again, our FLEX System-On-Chip tester led the way with record orders. We also had our highest Semiconductor Test bookings in Japan and Korea, combined with much stronger subcontract test ordering." Sales in the third quarter of 2006 are expected to be between $340 million and $370 million. In addition, Teradyne disclosed that its Board of Directors authorized a Stock Repurchase Program. Under the Program, the company is permitted to spend an aggregate of $400 million to repurchase shares of its common stock in open market purchases, in privately negotiated transactions or through other appropriate means, over the next two years. Shares are to be repurchased at the company's discretion, subject to market conditions and other factors. Teradyne Inc. (NYSE:TER) -- http://www.teradyne.com/-- is a supplier of Automatic Test Equipment used to test complex electronics used in the consumer electronics, automotive, computing, telecommunications, and aerospace and defense industries. In 2005, Teradyne had sales of $1.08 billion, and currently employs about 4,000 people worldwide. Teradyne (R) is a registered trademark of Teradyne, Inc. in the U.S. and other countries. All product names are trademarks of Teradyne, Inc., including its subsidiaries or their respective owners. * * * Teradyne's 3.75% Convertible Senior Notes due Oct. 15, 2006, carry Standard & Poor's B+ rating. U.S. STEEL: S&P Places BB Corporate Credit Rating on Watch ---------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'BB' corporate credit rating, on Pittsburgh, Pennsylvania- based United States Steel Corp. on CreditWatch with positive implications. "The action reflects U.S. Steel's improved business and financial profile and healthy industry conditions," said Standard & Poor's credit analyst Marie Shmaruk. "Through healthy steel prices, U.S. Steel has been able to improve its capital structure, resulting in improved credit metrics, while concurrently diversifying its operations and mix. The listing also reflects our expectations for reasonable pricing to continue for the near-to- medium term." Although the steel industry is cyclical, volatile and subject to the constant threat of imports, the ongoing consolidation should result in more price stability. "Over the long run, we remain concerned about the continued growth of global steel capacity and its ability to find its way to domestic markets," Ms. Shmaruk said. "However, U.S. Steel's improved profile should enable it to better manage future downturns." Standard & Poor's plans to meet with management to discuss its growth plans, what it will do with its meaningful cash balances, and its financial policy. UAL AIR: Moody's Junks Rating on $148 Million Class Certificates ---------------------------------------------------------------- Moody's Investors Service assigned ratings to United Air Lines, Inc.'s Pass Through Trust Certificates, Series 2000-1, 2000-2 and 2001-1: Series 2000-1 * $233,244,336 Class A-1 Certificates: Ba3 * $324,913,300 Class A-2 Certificates: Ba3 * $186,368,450 Class B Certificates: B3 Series 2000-2 * $260,322,870 Class A-1 Certificates: Ba2 * $684,117,291 Class A-2 Certificates: Ba2 * $266,663,000 Class B Certificates: B1 * $148,577,000 Class C Certificates: Caa2 Series 2001-1 * $204,981,915 Class A-1 Certificates: Ba2 * $207,139,050 Class A-2 Certificates: Ba2 * $295,462,107 Class A-3 Certificates: Ba2 * $150,168,000 Class B Certificates: Ba3 * $251,885,000 Class C Certificates: B2 * $137,268,000 Class D Certificates: B3 The rating assignments represent a reestablishment of rating coverage of these instruments following United's emergence from bankruptcy and restructuring of the certificates. The previous ratings on these certificates were withdrawn in February, 2004 due to a lack of sufficient information to maintain the ratings during the bankruptcy process. During the bankruptcy process United negotiated with certificate holders and amended the structure, terms and conditions of the equipment notes supporting certain enhanced equipment trust certificates. The modifications made to the equipment notes included the abandonment of certain aircraft collateralizing the notes along with changes made to payment obligations and maturity dates. Additionally, under the restructured EETC's the liquidity facilities were terminated, which, in Moody's view makes the new structures similar to traditional equipment trust certificates and limits the magnitude of rating enhancement. Other enhancements were added which the ratings also reflect, including the cross-collateralization and cross-default terms associated with United's obligations, as well as terms which require that United perform certain maintenance obligations in a timely manner for its aircraft collateralizing the Certificates. The equipment notes continue to benefit from a security interest in the aircraft and it is the opinion of counsel to United that, with respect to the aircraft owned by United, the indenture trustee, as the secured party under each aircraft indenture, continues to be entitled to the benefits under section 1110 of the U.S. Bankruptcy Code. With this restructuring, all three transactions experienced a post-triggering event waterfall, resulting in a sequential pay structure under which the senior tranches are to be paid in full before the junior tranches receive any funds. Accordingly, the assigned ratings reflect that the junior certificate holders may not receive ultimate payment of principal and interest in the event of default. The aircraft portfolio in Series 2000-1 transaction, with a weighted average age of approximately 8.4 years, is comprised of 20 aircraft including 6 A320s, 7 B757-200s, 2 B767-200ER, 4 B777- 200, and 1 747-400. During United's bankruptcy, 2 of the 777s were returned by United in August 2003 to the trustee. As of December 2004, these two aircraft were leased to Varig Brasil, a Brazilian airline, which itself has been operating in bankruptcy. As a result of Varig's bankruptcy, these two planes are to be returned to the trustee by the Brazilian bankruptcy court; however, there is currently no specified time frame in which these two planes are to be returned. The uncertainties of the outcome regarding these two aircraft create more volatility in the future cash flows for this transaction. The full repayment of Class B Certificates depends on the future recovery amount from these two leased planes which is reflected in the ratings assigned. As a result of the restructuring of the equipment notes underlying the Certificates, the expected maturities of the Certificates has changed. For the Class A-1 Certificates, the expected maturity date was changed to 2010 from 2014, reflecting the accelerated amortization under the sequential pay waterfall. The Class B Certificates expected maturities were extended to 2012 from 2011. The aircraft portfolio collateralizing the Series 2000-2 transaction has a similar weighted average as that of the 2000-1 transaction, and consists of 35 aircraft, including 12 A319-100s, 5 A320-200s, 6 B757-200s, 3 B747-400s and 9 B777-200ERs. 2 B777 aircraft, after being returned by United, were leased to Air India in May 2005. The difference in the senior ratings of this transaction versus the 2000-1 transaction is attributable to lower LTV ratios. In addition, the retirement of the Class B Certificates at full amount does not rely on the cash flow of the leased aircraft to Air India in this transaction and positions the Class B Certificates at a relatively faster and more certain amortization schedule. The full repayment of Class C Certificates is highly dependent on the future sale value or the releasing amount of the two Air India planes upon either lease expiration or default. Expected maturity dates were also changed for this transaction in the restructuring process. For the Class A-2 Certificates, the expected maturity date was changed to 2010 from 2011, and the Class B Certificate expected maturities were extended to 2011 from 2009. For the Series 2001-1 transaction, there are 29 aircraft that currently collateralize these certificates comprised of 10 A319, 6 A320, 5 B747, 5 B767 and 3 B777 aircraft. Moody's notes that during the bankruptcy process one B777 aircraft was sold, but that all remaining aircraft remain in operation as part of United's fleet. Additionally, the expected maturity dates were changed in the restructuring process. For the Class A Certificates, the expected maturity dates were changed to 2009 from 2013 and from 2008. The Class B, C and D Certificates expected maturities were modified to 2010, 2011 and 2012, respectively, from the original maturities of 2011, 2008 and 2006, respectively. For all transactions, it is the view of counsel to United that the new maturity dates for the restructured United equipment notes supporting the Certificates are now effectively the legal final distribution dates for the Certificates. Moody's ratings consider the value of the collateral as compared to the outstanding loan amounts. Any decline in aircraft values occurring faster than the amortization of related debt could put downward pressure on the ratings. Additionally, the ratings assigned to the Certificates considers the ability of United to make timely payment of interest and the ultimate payment of principal, under the restructured terms, at a date no later than the legal final distribution date. The ratings are also based upon the credit quality of United, as obligor, the expected future cash flow from the leased aircraft and the value of the aircraft collateralizing the Certificates. Any future changes in the underlying credit quality or ratings of United and material changes in the value of the underlying collateral could cause a change in the ratings assigned to the Certificates. United Air Lines, Inc., and its parent company, UAL Corporation, are headquartered in Elk Grove Township, Illinois. VARTEC TELECOM: UMB Bank Wants $1.8M Claim Paid from Sale Proceeds ------------------------------------------------------------------ UMB Bank, N.A., is seeking to obtain a portion of the proceeds of the $82.1-million sale of Vartec Telecom, Inc., and its debtor- affiliates' assets to privately owned ComTel Investment, LLC. The assets sold include four DMS 500 Voice and Data Communications equipment, called Switches. The Debtors' secured lender, Rural Telephone Finance Cooperative, is holding the proceeds of the asset sale, including the portion paid for the Switches. Under a July 23,2001, Intercreditor Agreement, RFTC conceded that UMB has a first-priority security interest in the Switches. As of June 16, 2006, the Debtors owed UMB these amounts: * $1,336,092 principal amount; * 10,113 interest; and * $40,000 attorneys' fees. Lisa A. Epps, Esq., at Spencer Fane Britt & Browne LLP, in Kansas City, Missouri, tells the U.S. Bankruptcy Court for the Northern District of Texas that the value of the Switches is over and above that of UMB's claim. UMB now wants their claim paid from the proceeds of the sale of the Switches and wants the Court to authorize the payment. Headquartered in Dallas, Texas, Vartec Telecom Inc. -- http://www.vartec.com/-- provides local and long distance service and is considered a pioneer in promoting 10-10 calling plans. The Company and its affiliates filed for chapter 11 protection on November 1, 2004 (Bankr. N.D. Tex. Case No. 04- 81694. Daniel C. Stewart, Esq., William L. Wallander, Esq., and Richard H. London, Esq., at Vinson & Elkins, represent the Debtors in their restructuring efforts. J. Michael Sutherland, Esq., and Stephen A. Goodwin, Esq., at Carrington Coleman Sloman & Blumenthal, represent the Official Committee of Unsecured Creditors. When the Company filed for protection from its creditors, it listed more than $100 million in assets and debts. VENETO LLC: Secured Creditor Says Case Was Filed in Bad Faith ------------------------------------------------------------- Richard Scotti, a secured creditor and holder of a fourth deed trust, asks the U.S. Bankruptcy Court for the Central District of California to dismiss the chapter 11 case of Veneto, LLC. Mr. Scotti tells the Court that the Debtor was in default on the loan and he was set to foreclose on his deed of trust. The Debtor sought to obtain an injunction in the case styled "Veneto, LLC, et al. v. Richard J. Scotti, et al (Case No. INC 059031). Mr. Scotti says that his lien was determined valid and the Debtor's injunction motion was denied. Mr. Scotti contends that the case was filed in bad faith because the bankruptcy filing was done on the eve of a foreclosure sale on the Debtor's property at 70600 Country Club Drive in Rancho Mirage, California. Mr. Scotti relates that the Debtor had previously tried to enjoin the sale in state court but failed. Mr. Scotti discloses that the Debtor's petition was signed by James R. Snedaker, claiming to be the Debtor's manager. Mr. Scotti however reveals that he was informed by Kevin Smith, president of Canyon Capital Marketing, Inc., and Mr. Smith's counsel, Thomas Nelson, Esq., that Mr. Snedaker had previously sold his 100% interest in the Debtor to Canyon Capital. Thus, Mr. Snedaker has no interest in the property or the Debtor. Mr. Scotti concludes that the case should be dismissed as it was filed in bad faith and Mr. Snedaker lacked authority to file the chapter 11 petition. Mr. Smith is represented by Robert P. Goe, Esq., at Goe & Forsythe, LLP. Rancho Mirage, California-based real estate company Veneto LLC, fka L'Veneto LLC, filed for a chapter 11 petition on July 12, 2006 (U.S. Bankr. C.D. Cal. Case No. 06-11744). Jack F. Fitzmaurice, Esq., at Fitzmaurice, Demergian & Palaganas serves as the Debtor's counsel. When the Debtor sought protection from its creditors, it listed total assets of $23,499,000 and total debts of $11,443,889. VJCS ACQUISITIONS: Moody's Junks Rating on $55 Million Sr. Loans ---------------------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating to VJCS Acquisition, Inc., a B2 rating to the company's $190 million senior secured bank credit facilities, and a Caa1 rating to its $55 million senior subordinated loans. Proceeds from the transactions were used to effect the recently completed acquisition of Vi-Jon Laboratories and Cumberland Swan Holdings, two leading private label manufacturers of personal care products by a group of investors including management, John G. Brunner and Berkshire Partners. VJCS is a direct subsidiary of VJCS Holdings, Inc. The ratings reflect VJCS' participation in highly competitive product categories with a limited brand portfolio, which results in relatively low profit margins and significant exposure of sales and earnings to the actions of its large branded competitors, smaller private label companies, and its concentrated retail customers. Further, the ratings recognize the relatively modest free cash flow expectations for the initial years after the transaction, given heightened spending to effect the integration of the two businesses. Although the integration plan and related cost savings are reasonable, Moody's notes with caution that cost savings may be needed to offset competitive or cost pressures, and that VJCS may incur greater-than-expected integration spending levels or adverse customer reactions to its larger market positions. However, the ratings and stable outlook are supported by the sensible rationale of the proposed business combination, which brings together two companies with leading private label market positions, diverse product portfolios, long-term relationships with growing retailers, strong operational and systems capabilities, and a highly experienced management team. As such, VJCS is well-positioned to capitalize on long-term trends for above-average growth of private label personal care products, especially given the attractive economics for retailers, the improving quality of products, and strengthening consumer acceptance. Notwithstanding the above-mentioned challenges, Moody's expects VJCS to maintain positive free cash flow, adequate liquidity, and appropriate credit metrics for its rating category over the near-to-medium term. These ratings were assigned: * Corporate family rating, B2; * $30 million senior secured revolving credit facility due 2012, B2; * $160 million senior secured term loan B due 2013, B2; * $55 million senior subordinated loans due 2013, Caa1. Although Moody's ratings incorporate the potential for sales, earnings, and cash flow challenges during FY06, given potential market and integration-related pressures, the failure to maintain leverage below 6 times, positive free cash flow, and access to borrowing lines would likely prompt negative rating actions. Similarly, Moody's would consider positive rating actions with the successful integration of the two companies and maintenance of strong sales and market share trends, such that leverage trends towards 4 times and free cash flow approaches the high single digits as a percentage of debt. The B2 rating on VJCS' senior secured credit facilities reflects their priority position in the capital structure, as supported by parent and domestic subsidiary guarantees, and by an all assets and capital stock pledge from the company and its guarantors. Notching above the corporate family rating is restrained by the significant size of the facilities in the capital structure, and by the limited values offered by tangible asset and brands to cover debt in a distressed scenario. The credit agreement requires quarterly term loan amortization at a rate of 1% per annum, and an annual excess cash flow sweep of 50%. The Caa1 rating of the senior subordinated loans reflects the large amount of higher priority debt in the pro forma capital structure and the uncertainity of a full recovery for these securities in a distressed scenario. VJCS, with headquarters in St. Louis, Missouri, is a leading manufacturer of store brand personal care products in the United States. WERNER LADDER: Gets Final Court Approval for $99MM DIP Financing ---------------------------------------------------------------- The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware granted final approval for the $99 million debtor-in-possession financing for Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor-affiliates provided by Black Diamond Commercial Finance. This financing provides Werner with additional liquidity and is now available to help satisfy obligations associated with conducting the Company's business, including payments to suppliers under normal terms for goods and services provided after the Chapter 11 filing. "Judge Carey's approval of our DIP financing is another important milestone in our reorganization process," Steven P. Richman, Werner's President and Chief Executive Officer, said. "This financing will help ensure that we have sufficient financial resources and flexibility to complete the operational restructuring already underway. We continue to make progress in implementing our long-term strategy to become the low-cost producer of ladders and other climbing products and leverage the Werner brand to drive future growth." On June 12, 2006, Werner and several of its affiliated companies filed to reorganize under Chapter 11 of the United States Bankruptcy Code. Since then, the Company has continued to operate in the normal course of business, including payment of wages and benefits to employees and independent sales representatives without interruption, timely fulfillment of customer orders and efficient customer service, and payment to suppliers for goods and services provided after the filing. Headquartered in Greenville, Pennsylvania, Werner Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). Kara Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S. Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, serves as the Debtors' counsel. The firm of Willkie Farr & Gallagher LLP represents the Debtors as its co-counsel. The Debtors have retained Rothschild Inc. as their financial advisor and investment banker. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. WINN-DIXIE: Wants to Enter Into Liberty Surety Bonds Agreement -------------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida to allow them to enter into a surety credit facility with Liberty Mutual Insurance Company pursuant to Sections 105(a) and 363 of the Bankruptcy Code. D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that the Debtors must have a surety post, bonds or other forms of security to comply with workers' compensation insurance, governmental licensing, tax and other regulations and to maintain or establish water, waste, telephone and electric utility accounts. Before the Debtors filed for bankruptcy, Liberty provided them with a surety facility. Under a General Agreement of Indemnity dated Jan. 23, 2003, Liberty posted numerous bonds under which the Debtors agreed to reimburse Liberty for any loss, damage or expense incurred by reason of any bonds issued on the Debtors' behalf. As of Feb. 21, 2005, bonds aggregating $41,000,000 remained outstanding. Through Court-approved transactions and settlements, the aggregate amount of the bonds has been reduced to around $35,000,000, Mr. Baker relates. The Debtors' reimbursement obligation to Liberty is backed by a letter of credit for $19,999,793 issued by Wachovia Bank, N.A. Liberty filed proofs of claim against the Debtors, alleging contingent fees of up to $41,000,000, plus attorneys' fees and expenses. Earlier in the Chapter 11 cases, the Debtors were unable to reach an agreement with Liberty on the posting of new surety bonds on terms favorable to the Debtors. The Debtors therefore sought and obtained the Court's consent to enter into a general surety indemnity agreement with RLI Insurance Company, following the unsuccessful negotiations with Liberty. However, Liberty resumed negotiations with the Debtors and the parties have reached an agreement that justifies the Debtors' entry into the Surety Credit Facility with Liberty despite the previous agreement with RLI, Mr. Baker says. The principal terms of the Surety Credit Facility are: (1) Liberty will provide the Debtors with up to $50,000,000 in surety credit for 18 months from the date of the closing of the Facility; (2) All outstanding surety bonds as of July 21, 2006, that were issued by Liberty will remain in full force and effect for the duration of the Facility; (3) Premium will be charged on all bonds at the net rate of $15.30 per $1,000 of bond penal sum, with a minimum premium of $100 for issuance of any single bond; (4) Upon closing of the Facility, the Debtors will pay Liberty a $630,000 facility fee in exchange for Liberty's waiver of any claims for reimbursement of professional fees and expenses through June 30, 2006, and withdrawal of all proofs of claim previously filed with the Court; (5) The Debtors will reimburse Liberty for attorneys' fees and expenses incurred after June 30, 2006, in connection with their Chapter 11 proceeding, the bonds and the Facility; (6) All bonds issued by Liberty after closing will be consistent with the type of the outstanding surety bonds; (7) Liberty will consider applications of bond issuance on a case-to-case basis, requiring special terms and conditions for certain types of bonds; (8) Liberty will continue to hold the Letter of Credit as collateral for all bonded and indemnity obligations owed by the Debtors; and (9) The Debtors will assume the liabilities and obligations under the Liberty General Agreement of Indemnity, which bulk of liabilities are associated with nearly $27,000,000 of bonds backing the Debtors' workers' compensation obligations. Liberty and the Debtors continue to negotiate the definitive documentation that will govern the Surety Credit Facility. They agree that the documentation will contain indemnity provisions in favor of Liberty. As of July 21, 2006, 64 bonds of various types aggregating $33,871,688 remain outstanding. The Debtors have applied for six miscellaneous bonds, aggregating $6,320,000, which Liberty has agreed to issue immediately after the closing of the transaction. The aggregate amount of surety credit available under the Facility is reduced by the existing bonds and the miscellaneous bonds, with the difference between the total amount of the existing bonds and miscellaneous bonds and the $50,000,000 maximum amount remaining available for the issuance of new bonds or increases in the penal sums of the existing bonds. Mr. Baker relates that the Surety Credit Facility is superior to RLI's facility because: -- it has a significantly higher credit limit; -- Liberty has committed to issue the bonds on the Debtors' behalf immediately after the closing of the transaction, while RLI is under no obligation to issue any bonds; and -- Liberty's collateral requirements and premium rates are lower and provide the Debtors increased operational flexibility. 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. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Court Says Sedgwick Has No Liability to Claimants ------------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates obtained a default judgment against Carol Schweitzer, Rita Ferguson, and Elizabeth Whitbeck and her attorneys, Dell & Schaefer P.A., for filing to timely file responses to the adversary proceedings commenced by the Debtors. Judge Funk of the U.S. Bankruptcy Court for the Middle District of Florida holds that Sedgwick Claims Management Services, Inc., the Debtors' claims agent, has no liability to the Claimants as to the actions they commenced against Sedgwick. As reported in the Troubled Company Reporter on April 27, 2006, in its capacity as the Debtors' claims agent, Sedgwick negotiated prepetition settlements of claim against the Debtors asserted by: -- Rita Ferguson, -- Elizabeth Whitbeck, -- Ann Wiggins and Ralph Wiggins, and -- Carol Schweitzer. In connection with the settlement, Sedgwick issued prepetition checks from the Settlement Account. Sedgwick's representative capacity on behalf of the Debtors was stated on the Check. As a result of the Debtors' bankruptcy, the checks issued in settlement of prepetition claims were dishonored, including checks issued to the four claimants. Thus, the claimants filed actions against Sedgwick and the Debtors defended the claims agent in the lawsuits. The Claimants, by reasons of the prepetition settlements with the Debtors, will have allowed claims in the Debtors' cases: Claimant Claim No. Amount -------- --------- ------ Carol Schweitzer 243 $85,000 Rita Ferguson 5158 35,000 Elizabeth Whitbeck 2012 100,000 The Debtors agree to dismiss Adversary Proceeding No. 06-00126 against Ann Wiggins, Ralph Wiggins, Blake R. Maislin, and Sedgwick. Ferguson Settlement Reached According to George C. Douglas, Jr., counsel for Ms. Ferguson, the summons served to his client was not mailed until March 27, 2006, which was the date inadvertently calendared as the due date for responses. Ms. Ferguson and the Debtors are actively litigating a duplicate adversary proceeding the Debtors filed before the Northern District of Alabama on March 16, 2006 -- a day before the Debtors filed their complaint in the Middle District of Florida, Mr. Douglas notes. Ms. Ferguson's participation in the other adversary case shows that she has not defaulted in responding to the issues, and her default should be set aside as excusable mistake especially since the Debtors did not apprise the Court that there was another proceeding in another court, Mr. Douglas asserts. Mr. Douglas adds that the doctrine of collateral estoppel and the "first filed" rule prohibit the Debtors from maintaining a duplicative proceeding in the Middle District of Florida. After settlement negotiations, the Debtors agree to ask the Court to vacate the default judgment against Ms. Ferguson. The parties agree to seek the dismissal of the Adversary Proceeding with prejudice. Schweitzer Wants Order Vacated Joseph M. Lyon, Lopez, Hodes, Restaino, Milman & Skikos, in Cincinnati, Ohio, informs the Court that Ms. Schweitzer did not timely receive notice of the summons or the adversary proceeding. Ms. Schweitzer says she was first notified of the adversary proceeding and default judgment on May 26, 2006, when Sedgwick served her with a supplemental memorandum related to the pending motions for summary judgment in a separate proceeding before the United States District Court for the Southern District of Ohio, Western Division. The Debtors have no evidence to confirm that Ms. Schweitzer received proper notice and her own testimony has rebutted the presumption of service, Mr. Lyon contends. The Debtors' unreliable method of service and choice not to issue service upon her counsel resulted in Ms. Schweitzer not answering the adversary complaint, Mr. Lyon adds. Mr. Lyon further asserts that Ms. Schweitzer has meritorious defenses to the issues raised in the adversary proceeding: (i) Ms. Schweitzer's lawsuit against Sedgwick before the Ohio Court will not affect the Debtors' estates, therefore, the Bankruptcy Court does not have subject matter jurisdiction; and (ii) The Bankruptcy Court may permissively abstain from accepting jurisdiction because the case in the Ohio Court is far advanced and the case is centered on state law issues. Accordingly, Ms. Schweitzer asked Judge Funk to vacate the default judgment due to improper notice and service of process, and abstain from accepting jurisdiction of the Adversary Complaint. A status conference will be held on Aug. 8, 2006, to allow the parties to discuss the possibilities for a prompt settlement of the case. Whitbeck Seeks Dismissal of Complaint Rehan N. Khawaja, Esq., in Jacksonville, Florida, contends that the Court should dismiss the complaint due to the Debtors' failure to state a claim. He notes that Ms. Whitbeck and Dell have sued Sedgwick on a matter totally unrelated to the Debtors' bankruptcy case. The "bad check" claim, which is the substance of the lawsuit, is only between the plaintiffs and Sedgwick, which is a separate entity from Winn Dixie Stores, Inc. Accordingly, Ms. Whitbeck and Dell ask Judge Funk to dismiss the Debtors' complaint. Representing the Debtors, Leanne McKnight Prendergast, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida, asserts that the Motion to Dismiss should be denied as moot since the Bankruptcy Court has already entered a final judgment in the proceeding. Ms. Whitbeck and Dell's request to vacate the default judgment should also be denied since they cannot use excusable neglect to justify their failure to timely file a response to the adversary proceeding, Ms. Prendergast contends. A status conference will be held on Aug. 8, 2006, to allow the parties to settle the case. 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. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000). WOODCREST LLC: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Woodcrest LLC 953 East Monroe Road St. Louis, MI 48880 Bankruptcy Case No.: 06-21217 Chapter 11 Petition Date: July 28, 2006 Court: Eastern District of Michigan (Bay City) Judge: Daniel S. Opperman Debtor's Counsel: Donald C. Darnell, Esq. Darnell & Lulgjuraj, P.C. 311 Weiser Way Chelsea Clocktower Courtyard Chelsea, MI 48118 Tel: (734) 433-0816 Fax: (734) 433-0817 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ms. Ann L. Andrews, Esq. Legal Services $166,390 Honigman Miller Schwartz and Cohn LLP 222 North Washington Square Suite 400 Lansing, MI 48933-1800 Lee Wilson dba Real Property $150,000 D&G Underground Construction 3825 Wellman Line Yale, MI 48907 Michigan Pipe and Real Property $120,817 Valve-Flint, Inc. 5701 Weservelt Saginaw, MI 48604 Northern Concrete Pipe Real Property $88,278 401 Kelton Street Bay City, MI 48706 Kohn Financial Expert Witness in $11,112 2939 South Rochester Road Litigation Suite 239 Rochester, MI 48307 Wonsey Tree Service Tree Services $7,454 Mr. Marc A. Goldman, Esq. Legal Services $7,125 Powell's Plumbing and Supply Plumbing Services $5,619 Capital Consultants Expert Witness in $4,264 Litigation Home Depot Revolving Credit $400 Wells Fargo Revolving Credit $150 Franklin Bank Revolving Credit $150 Dell Computer Leased Computers $38 * BOND PRICING: For the week of July 24 - July 28, 2006 ------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- Adelphia Comm. 3.250% 05/01/21 1 Adelphia Comm. 6.000% 02/15/06 0 Adelphia Comm. 7.500% 01/15/04 58 Adelphia Comm. 7.750% 01/15/09 60 Adelphia Comm. 7.875% 05/01/09 58 Adelphia Comm. 8.125% 07/15/03 44 Adelphia Comm. 8.375% 02/01/08 58 Adelphia Comm. 9.250% 10/01/02 58 Adelphia Comm. 9.375% 11/15/09 59 Adelphia Comm. 9.500% 02/15/04 54 Adelphia Comm. 9.875% 03/01/05 58 Adelphia Comm. 9.875% 03/01/07 58 Adelphia Comm. 10.250% 06/15/11 60 Adelphia Comm. 10.250% 11/01/06 57 Adelphia Comm. 10.500% 07/15/04 58 Adelphia Comm. 10.875% 10/01/10 57 AHI-DFLT07/05 8.625% 10/01/07 73 Allegiance Tel. 11.750% 02/15/08 47 Allegiance Tel. 12.875% 05/15/08 45 Amer & Forgn Pwr 5.000% 03/01/30 67 Amer Plumbing 11.625% 10/15/08 18 Ames Dept. Stores 10.000% 04/15/06 0 Antigenics 5.250% 02/01/25 60 Anvil Knitwear 10.875% 03/15/07 57 Armstrong World 6.350% 08/15/03 69 Armstrong World 6.500% 08/15/05 70 Armstrong World 7.450% 05/15/29 71 Armstrong World 9.000% 06/15/04 70 At Home Corp. 0.525% 12/28/18 2 At Home Corp. 4.750% 12/15/06 0 ATA Holdings 12.125% 06/15/10 2 Autocam Corp. 10.875% 06/15/14 59 Banctec Inc 7.500% 06/01/08 74 Bank New England 8.750% 04/01/99 6 Bank New England 9.500% 02/15/96 10 Big V Supermarkets 11.000% 02/15/04 0 Budget Group Inc 9.125% 04/01/06 0 Burlington North 3.200% 01/01/45 54 Cell Therapeutic 5.750% 06/15/08 58 Charter Comm Hld 10.000% 05/15/11 68 Charter Comm Hld 11.125% 01/15/11 72 CIH 9.920% 04/01/14 63 CIH 10.000% 05/15/14 64 CIH 11.125% 01/15/14 65 Collins & Aikman 10.750% 12/31/11 23 Color Tile Inc 10.750% 12/15/01 0 Columbia/HCA 7.050% 12/01/27 73 Columbia/HCA 7.500% 11/15/95 72 Comcast Corp 2.000% 10/15/29 38 CPNL-Dflt12/05 4.000% 12/26/06 25 CPNL-Dflt12/05 4.750% 11/15/23 48 CPNL-Dflt12/05 4.750% 11/15/23 49 CPNL-Dflt12/05 6.000% 09/30/14 38 CPNL-Dflt12/05 7.625% 04/15/06 71 CPNL-Dflt12/05 7.750% 04/15/09 74 CPNL-Dflt12/05 7.750% 06/01/15 38 CPNL-Dflt12/05 7.875% 04/01/08 73 CPNL-Dflt12/05 8.500% 02/15/11 50 CPNL-Dflt12/05 8.625% 08/15/10 50 CPNL-Dflt12/05 8.750% 07/15/07 73 CPNL-Dflt12/05 10.500% 05/15/06 71 Cray Research 6.125% 02/01/11 11 Curagen Corp 4.000% 02/15/11 74 Dal-Dflt09/05 9.000% 05/15/16 24 Decode Genetics 3.500% 04/15/11 72 Delco Remy Intl 9.375% 04/15/12 56 Delco Remy Intl 11.000% 05/01/09 62 Delphi Trust II 6.197% 11/15/33 64 Delta Air Lines 2.875% 02/18/24 26 Delta Air Lines 7.541% 10/11/11 38 Delta Air Lines 7.700% 12/15/05 26 Delta Air Lines 7.900% 12/15/09 26 Delta Air Lines 8.000% 06/03/23 26 Delta Air Lines 8.270% 09/23/07 75 Delta Air Lines 8.300% 12/15/29 27 Delta Air Lines 8.540% 01/02/07 73 Delta Air Lines 8.950% 01/12/12 66 Delta Air Lines 9.200% 09/23/14 73 Delta Air Lines 9.250% 03/15/22 26 Delta Air Lines 9.375% 09/11/07 63 Delta Air Lines 9.750% 05/15/21 26 Delta Air Lines 9.875% 04/30/08 68 Delta Air Lines 10.000% 06/01/11 58 Delta Air Lines 10.000% 08/15/08 26 Delta Air Lines 10.060% 01/02/16 70 Delta Air Lines 10.125% 05/15/10 26 Delta Air Lines 10.375% 02/01/11 27 Delta Air Lines 10.375% 12/15/22 27 Delta Air Lines 10.500% 04/30/16 69 Deutsche Bank NY 8.500% 11/15/16 65 Dov Pharmaceutic 2.500% 01/15/25 52 Dura Operating 9.000% 05/01/09 50 Dura Operating 9.000% 05/01/09 51 Eagle-Picher Inc 9.750% 09/01/13 72 Encysive Pharmac 2.500% 03/15/12 72 Epix Medical Inc. 3.000% 06/15/24 68 Federal-Mogul Co. 7.375% 01/15/06 59 Federal-Mogul Co. 7.500% 01/15/09 59 Federal-Mogul Co. 8.160% 03/06/03 54 Federal-Mogul Co. 8.370% 11/15/01 53 Federal-Mogul Co. 8.370% 11/15/01 58 Federal-Mogul Co. 8.800% 04/15/07 56 Finova Group 7.500% 11/15/09 30 Ford Motor Co 6.500% 08/01/18 72 Ford Motor Co 6.625% 02/15/28 71 Ford Motor Co 7.125% 11/15/25 71 Ford Motor Co 7.400% 11/01/46 70 Ford Motor Co 7.500% 08/01/26 72 Ford Motor Co 7.700% 05/15/97 69 Ford Motor Co 7.750% 06/15/43 71 Ford Motor Cred 5.750% 02/20/14 73 Ford Motor Cred 5.750% 02/20/14 74 Ford Motor Cred 6.000% 11/20/14 75 Ford Motor Cred 6.050% 02/20/15 72 Ford Motor Cred 6.050% 12/22/14 75 Ford Motor Cred 6.050% 12/22/14 75 Ford Motor Cred 6.100% 02/20/15 75 Ford Motor Cred 6.150% 01/20/15 75 Ford Motor Cred 6.150% 12/22/14 72 Ford Motor Cred 6.250% 03/20/15 74 Ford Motor Cred 6.300% 05/20/14 75 Ford Motor Cred 7.500% 08/20/32 72 Gateway Inc. 2.000% 12/31/11 71 GB Property Fndg 11.000% 09/29/05 62 GMAC 6.150% 10/15/19 74 Graftech Intl 1.625% 01/15/24 72 Gulf Mobile Ohio 5.000% 12/01/56 73 HNG Internorth 9.625% 03/15/06 33 Home Prod Intl 9.625% 05/15/08 64 Imperial Credit 9.875% 01/15/07 0 Inland Fiber 9.625% 11/15/07 60 Insight Health 9.875% 11/01/11 48 Iridium LLC/CAP 10.875% 07/15/05 29 Iridium LLC/CAP 11.250% 07/15/05 28 Iridium LLC/CAP 13.000% 07/15/05 28 Iridium LLC/CAP 14.000% 07/15/05 28 Isolagen Inc. 3.500% 11/01/24 75 Kaiser Aluminum 9.875% 02/15/02 49 Kaiser Aluminum 10.875% 10/15/06 58 Kaiser Aluminum 12.750% 02/01/03 14 Kellstrom Inds 5.500% 06/15/03 0 Kitty Hawk Inc 9.950% 11/15/04 2 Liberty Media 3.250% 03/15/31 74 Liberty Media 3.750% 02/15/30 58 Liberty Media 4.000% 11/15/29 64 Lifecare Holding 9.250% 08/15/13 74 Macsaver Financl 7.600% 08/01/07 1 Merisant Co 9.500% 07/15/13 65 Merrill Lynch 10.000% 08/15/12 72 Missouri Pac RR 5.000% 01/01/45 73 MSX Int'l Inc. 11.375% 01/15/08 67 Muzak LLC 9.875% 03/15/09 54 New Orl Grt N RR 5.000% 07/01/32 66 Northern Pacific RY 3.000% 01/01/47 54 Northern Pacific RY 3.000% 01/01/47 54 Northwest Airlines 6.625% 05/15/23 47 Northwest Airlines 7.248% 01/02/12 14 Northwest Airlines 7.625% 11/15/23 48 Northwest Airlines 7.875% 03/15/08 50 Northwest Airlines 8.700% 03/15/07 50 Northwest Airlines 8.875% 06/01/06 50 Northwest Airlines 9.875% 03/15/07 52 Northwest Airlines 10.000% 02/01/09 50 Northwest Stl&Wir 9.500% 06/15/01 0 NTK Holdings Inc 10.750% 03/01/14 70 Nutritional Src 10.125% 08/01/09 60 Oscient Pharm 3.500% 04/15/11 65 Osu-Dflt10/05 13.375% 10/15/09 0 Outboard Marine 7.000% 07/01/02 0 Outboard Marine 10.750% 06/01/08 9 Overstock.com 3.750% 12/01/11 73 Owens-Corning 7.000% 03/15/09 71 Owens-Corning 7.500% 05/01/05 73 Owens-Corning 7.500% 08/01/18 69 Owens-Corning 7.700% 05/01/08 73 Owens-Corning Fiber 9.375% 06/01/12 75 PCA LLC/PCA Fin 11.875% 08/01/09 21 Pegasus Satellite 9.625% 10/15/49 11 Pegasus Satellite 12.375% 08/01/06 9 Pegasus Satellite 12.500% 08/01/07 12 Pixelworks Inc. 1.750% 05/15/24 71 Pliant Corp 13.000% 06/01/10 43 Pliant Corp 13.000% 06/01/10 45 Polaroid Corp. 6.750% 01/15/02 0 Polaroid Corp. 7.250% 01/15/07 0 Polaroid Corp. 11.500% 02/15/06 0 Primus Telecom 3.750% 09/15/10 48 Primus Telecom 8.000% 01/15/14 65 PSINET Inc 10.500% 12/01/06 0 Radnor Holdings 11.000% 03/15/10 36 Railworks Corp 11.500% 04/15/09 1 Read-Rite Corp. 6.500% 09/01/04 18 Refco Finance 9.000% 08/01/12 73 RJ Tower Corp. 12.000% 06/01/13 58 Salton Inc 12.250% 04/15/08 73 Startec Global 12.000% 05/15/08 0 Tekni-Plex Inc. 12.750% 06/15/10 70 Tenet Healthcare 6.875% 11/15/31 74 Tom's Foods Inc 10.500% 11/01/04 9 Toys R Us 7.375% 10/15/18 71 Tribune Co 2.000% 05/15/29 66 Triton Pcs Inc. 8.750% 11/15/11 73 Triton Pcs Inc. 9.375% 02/01/11 73 Twin Labs Inc. 10.250% 05/15/06 2 United Air Lines 7.270% 01/30/13 53 United Air Lines 7.870% 01/30/19 57 United Air Lines 9.020% 04/19/12 58 United Air Lines 9.350% 04/07/16 30 United Air Lines 9.560% 10/19/18 58 United Air Lines 10.020% 03/22/14 45 United Air Lines 10.125% 03/22/15 50 United Homes Inc 11.000% 03/15/05 0 US Air Inc. 10.250% 01/15/49 5 US Air Inc. 10.250% 01/15/49 11 US Air Inc. 10.300% 07/15/49 6 US Air Inc. 10.550% 01/15/49 45 US Air Inc. 10.680% 06/27/08 2 US Air Inc. 10.700% 01/15/49 44 US Air Inc. 10.700% 01/15/49 45 US Air Inc. 10.700% 01/15/49 45 US Air Inc. 10.700% 01/15/49 45 US Air Inc. 11.200% 03/19/05 0 US Leasing Intl 6.000% 09/06/11 75 Venture Holdings 9.500% 07/01/05 1 Vesta Insurance Group 8.750% 07/15/25 34 Werner Holdings 10.000% 11/15/07 28 Westpoint Steven 7.875% 06/15/05 0 Westpoint Steven 7.875% 06/15/08 0 Wheeling-Pitt St 6.000% 08/01/10 69 Winsloew Furniture 12.750% 08/15/07 26 World Access Inc. 13.250% 01/15/08 4 Xerox Corp. 0.570% 04/21/18 34 Ziff Davis Media 12.000% 07/15/10 40 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Robert Max Victor M. Quiblat II, Shimero R. Jainga, Joel Anthony G. Lopez, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q. Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***