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/raid1/www/Hosts/bankrupt/TCR_Public/060918.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, September 18, 2006, Vol. 10, No. 222 Headlines 3DFX INTERACTIVE: Nvidia Doesn't Have to Turnover Privileged Docs ADELPHIA COMMS: Wants to Amend William Schleyer's Employment Pact ADELPHIA COMMS: Wants to Employ Hogan & Hartson as Special Counsel ALIXPARTNERS: Moody's Rates Proposed $435 Mil. Senior Loan at B1 ALTEON INC: Sells $1.4 Million of Common Stocks AMDL INC: Accumulated Deficit Tops $30.2 Million at June 30 AMERICAN FINANCIAL: Moody's Holds (P)Ba1 Subor. Unsecured Rating AQUILA INC: Moody's Lifts Rating on $300 Mil. Senior Debt to Ba2 AZTEC METAL: Taps Cornerstone Consulting as Restructuring Advisors BANNER BUFFETS: Case Summary & 20 Largest Unsecured Creditors BARR PHARMACEUTICALS: Pliva Tender Offer Okayed for Publication BEST MANUFACTURING: Panel Taps Otterbourg as Lead Counsel CARDSYSTEMS SOLUTIONS: Court Extends Bar Date to October 12 CARDSYSTEMS SOLUTIONS: Wants Open-Ended Solicitation Extension CCH II: Fitch Junks Ratings on $396.2 Million Senior Notes CHC HELICOPTER: First Quarter Profit Drops on Increased Expenses CHESAPEAKE CORP: S&P Lifts Senior Unsecured Debt's Rating to B+ COMM 2001-J1: Moody's Lifts Rating on $23.3 Million Class F Notes CSFB HOME: Moody's Assigns Low-B Ratings on Two Class Certificates DELAWARE VALLEY: Moody's Withdraw Ca Rating on $250 Million Bonds DELPHI CORP: Court Defers CBA & GM Contract Hearings to Sept. 28 DISCOVERY ZONE: Oak Point Buys Defaults Judgments for 12% or More DURANGO GEORGIA: Liquidator to Sell Insurance Proceeds Claims EMERALD OUTDOOR: Loses Rights in One of Two Billboard Leases FOAMEX INTERNATIONAL: Wants Until Dec. 13 to File Chapter 11 Plan FORD MOTOR: Eyes $5 Bil. Cost Cuts in Accelerated Turnaround Plan FOSTER WHEELER: Secures New $350 Mil. Domestic Credit Facility FREESCALE SEMICON: Inks $17.6 Bil. Merger Deal with Equity Group FREESCALE SEMICON: Asset Sale Cues Moody's to Review Ratings FTI CONSULTING: Moody's Rates Proposed $215 Mil. Sr. Notes at Ba2 GANNETT PEAK: Moody's Puts (P)Ba2 Rating on Class D Notes GARDEN RIDGE: Judge Baxter Finds Excusable Neglect for Late Claim GMAC COMMERCIAL: Moody's Holds C Rating on $15.2 Mil. Certificates GOLDEN EAGLE: Posts $613,070 Net Loss in Second Quarter GRADUATE HEALTH: Moody's Withdraws Ca Rating on $156 Million Bonds HEALTH CARE: Planned Windrose Buy Cues Fitch's Positive Watch IFSA STRONGMAN: Posts $297,315 Net Loss in Quarter Ended June 30 IMPSAT FIBER: 2006 Second Quarter Net Loss Narrows to $3.5 Million INTRAWEST CORP: Moody's Withdraws B1 Ratings on $397 Million Notes INVICTA GROUP: June 30 Balance Sheet Upside-Down By $2.3 Million ISTAR FINANCIAL: Sells $1.2 Billion Senior Unsecured Notes JORDAN INDUSTRIES: June 30 Balance Sheet Upside-Down by $242.2MM JILLIAN'S ENT: Court OKs $3.5 Million Second Interim Distribution KAISER ALUMINUM: Leblanc & Waddell Wants $300K Admin. Claim Paid KAISER ALUMINUM: Supplements Objection to Agrium's Stay Motion KINETEK INC: June 30 Stockholders' Deficit Narrows to $28.8 Mil. LEGACY ESTATE: John Ryan Wants Case Converted to Chapter 7 MASTR ASSET: Moody's Puts Ba2 Rating on Class M-11 Certificates MILLENIUM BIOLOGIX: Closes $1 Million Debenture Financing MOOSE OIL: Landowner Obtains Judgment for Unpaid Royalties MORGAN STANLEY: Moody's Junks Rating on $2.5 Mil. Class M Certs. NATIONSRENT COS: Ashtead Buy Prompts Moody's to Withdraw Ratings NORTHWEST AIRLINES: District Ct. Okays Prelim. Injunction vs. AFA NORTHWEST TIMBERLINE: Court Finds No Chance of a Reorganization ONEIDA LTD: Completes $170MM Financing & Emerges From Chapter 11 OPEN TEXT: Hummingbird Shareholders Approve Acquisition Bid OPEN TEXT: Moody's Rates $390 Million Senior Secured Loan at Ba3 PEABODY ENERGY: Fitch Rates New $2.75 Billion Sr. Facility at BB+ POPULAR CLUB: Committee Hires Ravin Greenberg as Counsel POWER EFFICIENCY: Has $147,510 Stockholders' Deficit at June 30 PULL'R HOLDINGS: Has Final Access to $300,000 Loan from Merrill RELIANCE GROUP: Durango Liquidator to Sell Insurance Claims RIO VISTA: Posts $434,000 Net Loss in 2006 Quarter Ended RIVERSTONE NETWORKS: Derivative Action Settlement Pact Approved ROYAL GROUP: Gets Required Consents from 7.1% Senior Noteholders RURALMETRO CORP: Equity Deficit Narrows to $91 Million at June 30 SATELITES MEXICANOS: Court Gives Final Nod on Milbank as Counsel SATELITES MEXICANOS: Court Rules on First 90-Day Fee Application SECURITIZED ASSET: Moody's Rates Class B-5 Certificates at Ba2 SILICON GRAPHICS: Court Approves Revised KPMG Hourly Rates SILICON GRAPHICS: Wants to Enter Into Christensen Lease SOLO CUP: Moody's Junks Rating on $80 Million Senior Secured Loan SOLOMON TECH: June 30 Balance Sheet Upside-Down by $2 Million SONIC CORP: Inks $775 Million Credit Agreement SOS REALTY: Court Extends Exclusive Plan-Filing Period to Dec. 7 SOS REALTY: General Claims Bar Date Set on October 20 STEEL PARTS: Case Summary & 25 Largest Unsecured Creditors STRUCTURED ASSET: Moody's Rates Class B2 Certificates at Ba2 TARGUS GROUP: Moody's Junks Rating on $85 Million Second-Lien Loan TELCORDIA TECH: Moody's Reviews Low-B Ratings and May Downgrade TRIMARAN CLO: Moody's Rates $12 Million Class B-2L Notes at Ba2 TRANS ENERGY: Terminates HJ & Associates as Principal Auditors UNITED INVESTORS: Equity Deficit Widens to $4.3 Mil. at June 30 VISIPHOR CORP: Inks Software OEM Agreement with Civica WELD WHEEL: Hires Silverman Consulting as Turnaround Consultants WELD WHEEL: White Oak to Assist in Asset Sale as Investment Banker WESCO AIRCRAFT: S&P Rates Proposed $165 Million Senior Loan at B- WEST HILLS: Files Schedules of Assets and Liabilities ZOOMERS HOLDING: Hires Trenam Kemker as Bankruptcy Counsel * Bankruptcy Attorneys at Traub Bonacquist Join Dreier LLP * BOND PRICING: For the week of September 11 -- September 15, 2006 ********* 3DFX INTERACTIVE: Nvidia Doesn't Have to Turnover Privileged Docs ----------------------------------------------------------------- The Honorable James R. Grube of the U.S. Bankruptcy Court for the Northern District of California denied the motion of William A. Brandt, Jr., the trustee overseeing the chapter 11 liquidation of 3DFX Interactive Inc., to compel Nvidia Corp. to produce documents relating to Nvidia's purchase of the Debtor's graphics chip business in 2000 for $70,000,000 plus 1,000,000 shares of Nvidia stock. The Trustee wanted Nvidia to produce documents Nvidia withheld based on attorney-client privilege, contending that Nvidia waived the privilege by (1) asserting that it paid reasonably equivalent value for the assets it purchased, (2) witnesses have testified about the documents, and (3) Nvidia has already produced a significant number of privileged documents. Nvidia disputed the Trustee's allegations, arguing that any privileged communication is not at the heart of determining the asset value issue, and that if any privilege were waived as to the testimonies, the waiver would be limited to the communication disclosed and only with respect to that communication. Judge Grube, in a decision published at 2006 WL 242369, says the Trustee has not shown that Nvidia put the privileged communication directly at issue and there is no showing that disclosure is essential for a fair adjudication of the matter. Citing Mitchell v. Superior Court, 37 Cal.3d 591 at 599-600, 208 Cal. Rptr. 886, 691 P.2d 642, Judge Grube emphasizes that permitting the exercise of the attorney-client privilege may result in the suppression of relevant evidence, however, those concerns are outweighed by the importance of preserving confidentiality in the attorney-client relationship. Nvidia Corp. is represented by Robert P. Varian, Esq., at Orrick, Herrington and Sutcliffe in this matter. Headquartered in Palo Alto, California, 3DFX Interactive Inc. developed graphics chips, graphics boards, software and related technology. On March 27, 2001, 3dfx's shareholders approved proposals to liquidate, wind up and dissolve the Company pursuant to a plan of dissolution and to sell certain of its assets to Nvidia US Investment Company, a wholly owned subsidiary of Nvidia Corporation. The Company filed for chapter 11 protection on Oct. 15, 2002 (Bankr. N.D. Calif. Case No. 02-55795). William A. Brandt, Jr. serves as trustee and is represented by Aron M. Oliner, Esq., at the Law Offices of Duane Morris and Craig C. Chiang, Esq, at Buchalter, Nemer, Fields and Younger. Robert S. Gebhard, Esq., at Sedgwick, Detert, Moran and Arnold represents the Official Committee of Unsecured Creditors. At July 31, 2002, the Company had $35,236,000 net liabilities in liquidation from total assets of $106,000 and total liabilities of $35,342,000. ADELPHIA COMMS: Wants to Amend William Schleyer's Employment Pact ----------------------------------------------------------------- Adelphia Communications Corporation and the Official Committee of Unsecured Creditors seek authority from the U.S. Bankruptcy Court for the Southern District of New York to: (a) amend the existing employment and compensation agreement with William Schleyer, ACOM's chief executive officer and chairman of the board of directors, (b) implement an extended post-closing incentive program for the Debtors' two Executive Vice Presidents, and (c) implement an extended post-closing incentive program for certain key employees at the level of Senior Vice President and below. Shelley C. Chapman, Esq., at Willkie Farr & Gallagher LLP, in New York, reminds the Court that the ACOM Debtors have closed the sale of substantially all of their assets to Time Warner NY Cable LLC and Comcast Corporation. The Debtors' Third Modified Fourth Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code for Century-TCI Debtors and Parnassos Debtors became effective on July 31, 2006. Since then, distributions in excess of $1.2 billion have been made to creditors under the JV Plan. Notwithstanding the closing of the Sale and the consummation of the JV Plan, Ms. Chapman says, ultimate recoveries for the remaining creditors will be determined in large part by work that remains to be completed. According to Ms. Chapman, the ACOM Debtors have a number of ongoing responsibilities, including: -- oversight and assistance with the audit; -- calculation of purchase price adjustments in connection with the Sale; -- continuing work on the restatement; -- the claims reconciliation process; -- compliance with the post-close requirements under the asset purchase agreements executed in connection with the Sale; -- compliance with the government settlement; and -- the completion of certain tax filings. The Debtors' Court-approved Post-Closing Incentive Program did not provide for retention of Mr. Schleyer and Ronald Cooper, its resident and chief operating officer. Each had the right under his employment agreement to terminate his employment for Good Reason upon the consummation of the Sale. Mr. Cooper exercised this right and resigned last month. The Board of Directors and the Official Committee of Unsecured Creditors want to provide additional incentives to ensure that Mr. Schleyer remained in the ACOM Debtors' employ beyond the Sale, and that Brad Sonnenberg, the Debtors' General Counsel, and Vanessa Wittman, the Debtors' Chief Financial Officer, and approximately 45 other senior managers, who were covered by the Post-Closing Incentive Program remained in the Debtors' employ for a longer period than that contemplated by the Post-Closing Incentive Program. Ms. Chapman relates that the chief executive officer, executive vice presidents, and Key Managers lead teams that have irreplaceable institutional knowledge of matters and projects that must be addressed and completed prior to the Debtors' successful emergence from chapter 11. "Their intimate familiarity with the complicated issues that remain in [the Debtors'] cases renders this group uniquely qualified to guard against the potential value degradation that threatens the estates if the post-closing tasks . . . are not completed timely and properly." While each of the approximately 275 employees who, pursuant to the Post-Closing Incentive Program, have remained for the wind-down and transition period is important to ongoing restructuring efforts, the chief executive officer, the executive vice presidents, and the Key Managers are the linchpins of their teams, Ms. Chapman says. The Debtors believe that many of the employees who have continued their employment with the Debtors during the pre-Sale and post-closing transition periods have done so, in large part, due to their close working relationships with the chief executive officer, the executive vice presidents and the Key Managers. "The premature departure of the CEO, either of the EVPs, or even just a handful of the Key Managers could result not only in significant financial losses to the estate, but could also trigger more widespread departures among the Debtors' remaining personnel," Ms. Chapman relates. Cognizant of the risk, the Creditors' Committee approached the Debtors with the goal of designing and implementing an enhanced compensation program for the chief executive officer, the executive vice presidents, and Key Managers that would provide them with an incentive to remain with the estates for a period of time sufficient to coordinate and oversee the work that remains to be done. Furthermore, the Creditors' Committee and the Debtors believe, and expect, that an enhanced compensation program will yield the exceptional cooperation and greater integration between the present management, and the Creditors' Committee and its professionals and nominees that is essential to effectuating a smooth transition to the substantially reduced management team that will be winding down the Debtors after their chapter 11 cases are substantially concluded. To facilitate the formulation of the program in what was a necessarily compressed timeframe, the Creditors' Committee deputized one of its members, along with counsel to certain members of the Creditors' Committee, to facilitate negotiations among the Board, the chief executive officer, the executive vice presidents and certain of the Key Managers. After several weeks of discussions among the principal participants, the parties reached an agreement as to the terms of the applicable post-closing compensation arrangements and incentive programs. While the extended programs impose a relatively modest incremental cost on the estates of approximately $4 million, the Debtors and the Creditors' Committee consider it money well spent. Amended Schleyer Agreement Among others, the amendments to the Schleyer Employment Agreement provide that: (a) Mr. Schleyer will resign immediately as chief executive officer and chairman of the Board upon the ACOM Debtors' emergence from Chapter 11; (b) Mr. Schleyer will continue as a consultant to the Debtors to effect a smooth wind-down of the estates; (c) Mr. Schleyer will be paid a bonus of 100% of his base salary for the period from July 31, 2006 until March 31, 2007. The Schleyer Adjusted Base Salary will be paid bi-weekly. A full-text copy of the Amendment is available for free at http://ResearchArchives.com/t/s?11bc Extended EVP Incentive Program In lieu of participation in the Post-Closing Incentive Program, the executive vice presidents will participate in the Extended EVP Post-Closing Incentive Program and continue their employment with the Debtors from Aug. 1, 2006, through Dec. 31, 2006 -- Post Close Period. At the sole discretion of the Creditors' Committee, the EVPs executive vice presidents may continue to be employed by the Company from Jan. 1, 2007, through March 31, 2007 -- Extended Post Close Period. The Extended EVP Post-Closing Incentive Program provides that executive vice presidents employed during the Post Close Period will receive a bonus equal to five months of Adjusted Base Salary. The executive vice presidents employed during the Extended Post Close Period will receive a bonus equal to three months of Adjusted Base Salary. A full-text copy of the Extended EVP Post-Closing Incentive Program Term Sheet is available for free at http://ResearchArchives.com/t/s?11bd Extended Employee Post-Closing Program A group of Key Managers at the level of Senior Vice President or below whose continued employment is of invaluable benefit to the Debtors' estates will be offered participation in the Extended Employee Post-Closing Incentive for an assigned period of time. The program provides that Participants will be entitled to receive a bonus equal to a percentage of their Adjusted Base Salary. The bonus percentage and amount will increase for longer periods of employment with the Debtors. Specifically, Participants assigned an EKERP Period from Aug. 1, 2006, through Nov. 30, 2006, will receive a bonus equal to 50% of an amount equal to the Aggregate Adjusted Base Salary for the period from August 1, 2006, through the earlier of the end of the EKERP Period or Nov. 30, 2006. Participants assigned an additional EKERP Period from Dec. 1, 2006, through April 30, 2007, will receive a bonus equal to 75% of an amount equal to the Aggregate Adjusted Base Salary for the period from Dec. 1, 2006, through the earlier of the end of that EKERP Period or April 30, 2007. Participants employed on or after May 1, 2007, will receive a bonus equal to 100% of an amount equal to the aggregate Adjusted Base Salary for the period from May 1, 2007, until the end of their assigned EKERP Period. A full-text copy of the Extended Post-Close Incentive Program Term Sheet is available for free at http://ResearchArchives.com/t/s?11be About Adelphia Communications Corp. 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 Nos. 148; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADELPHIA COMMS: Wants to Employ Hogan & Hartson as Special Counsel ------------------------------------------------------------------ Adelphia Communications Corporation and its debtor-affiliates seek the authority of the U.S. Bankruptcy Court for the Southern District of New York to employ Hogan & Hartson, LLP, as their special counsel to continue to represent them with respect to contract analyses and negotiations as well as with respect to environmental compliance issues. The Debtors retained Hogan & Hartson as an ordinary course professional in Feb. 2003 pursuant to the OCP Order. Because the firm has almost reached the aggregate cap for ordinary course professionals, and because the Debtors intend to continue to use Hogan & Hartson's services, Shelley C. Chapman, Esq., at Willkie Farr & Gallagher LLP, in New York, says the Debtors have determined that it is necessary to retain Hogan & Hartson as special counsel. According to Ms. Chapman, Hogan & Hartson provides general representation to its clients in numerous areas, including corporate, regulatory and litigation matters and maintains offices throughout the world. The firm has extensive knowledge of the Debtors' businesses and the environmental issues that the Debtors' encountered in the course of their businesses. Hogan & Hartson will be paid on an hourly basis, plus reimbursement of actual and necessary expenses incurred. The firm's rates for attorneys range between $270 per hour and $575 per hour, while rates for paralegals range between $130 per hour and $205 per hour. According to Hogan & Hartson's books and records, it has received, to date, $519,113. Scott H. Reisch, Esq., a partner at Hogan & Hartson LLP, tells the Court that since the Debtors' filing for chapter 11 protection, the Debtors owe his firm outstanding postpetition fees of $59,696 and expenses of $363 through July 31, 2006. Mr. Reisch assures the Court that Hogan & Hartson does not hold or represent any interest adverse to the Debtors or the Debtors' estate. About Adelphia Communications Corp. 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 Nos. 148; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ALIXPARTNERS: Moody's Rates Proposed $435 Mil. Senior Loan at B1 ---------------------------------------------------------------- Moody's Investors Service assigns a B1 first time rating to AlixPartners LLP proposed $435 million senior secured credit facility ($385 million term loan and $50 million revolver) and a B1 corporate family rating. The ratings for the secured credit facility reflect both the overall probability of default of the company, to which Moody's assigns a PDR of B2, and a loss given default of LGD 3 for the credit facility. The rating outlook is stable. On Aug. 3, 2006, AlixPartners entered into an agreement whereby Hellman & Friedman LLC and AlixPartners' managing directors and employees will acquire a majority equity stake in the company in a leveraged recapitalization. Pursuant to the recapitalization, AlixPartners Holdings, Inc., an entity controlled by the company's founder, agreed to sell 80.1% of the AlixPartners' partnership units. The transaction values AlixPartners at $872 million, before fees and expenses. The transaction is expected to close mid October. The transaction is expected to be funded with a $385 million term loan, $296 million of cash equity contributed by the sponsor and $218 of rollover equity from the founder and management. The ratings reflect strong business diversity which helps to mitigate exposure to cyclicality, a relatively small revenue base compared to the company's rated peer group, significant pro forma adjustments to historical financial statements and concerns about employee retention. The ratings are supported by a track record of strong organic growth, stable segment revenues across economic cycles, a high proportion of variable expenses, as well as solid pro forma credit metrics. The B1 rating on the senior secured credit facility reflects an LGD 3 loss given default assessment as this facility is secured by a pledge of substantially all of assets of AlixPartners and its domestic subsidiaries and there is an immaterial amount of junior non-debt obligations. In the case of pledges of foreign stock, the collateral package is limited to 65% of the voting stock and 100% of the non-voting stock of certain of its first tier foreign subsidiaries. The senior secured credit facility is guaranteed by substantially all the domestic subsidiaries of the company. Ratings/assessments assigned: * Corporate Family Rating B1; * Probability-of-default rating B2; * $385 million senior secured 7 year term loan at B1; * $50 million senior secured 6 year revolver at B1. The stable outlook anticipates moderate revenue and EBITA growth over the next 12 to 18 months. Free cash flow from operations is expected to be used to pay down debt. Strong revenue growth accompanied by steady EBITA margins could lead to a change in outlook to positive. The ratings could be upgraded if debt to EBITDA and EBITA to interest are expected to be sustained at under 3.5 times and over 3 times, respectively. A loss of key personnel or a downturn in revenues and/or utilization rates in major lines of business could lead to a negative outlook. The ratings could be downgraded if debt to EBITDA and EBITA to interest are expected to be sustained at over 5 times and under 1.6 times, respectively. A significant debt financed acquisition could also pressure the ratings. Founded in 1981, AlixPartners is a leading international business consulting and advisory firm, offering the following five areas of consulting services financial advisory; performance improvement; turnaround and restructuring; case management; and information technology. AlixPartners has approximately 530 employees operating in 12 offices across the United States, Europe and Asia. Revenues for the twelve month period ending July 31, 2006 was $369.9 million. ALTEON INC: Sells $1.4 Million of Common Stocks ----------------------------------------------- Alteon, Inc., entered into definitive agreements to sell $1.4 million of common stock. The PIPE financing includes new and existing institutional investors, in which the Company will sell approximately 9.5 million Units, consisting of common stock and warrants, for net proceeds of approximately $1.3 million. Each Unit consists of one share of the Company's common stock and one warrant to purchase one share of the Company's common stock. The Units are being sold at a price of $0.15 per Unit and the warrants are exercisable, commencing 6 months from the date of issuance, for a period of 5 years at an exercise price of $0.1875 per share. The Company disclosed that the shares of common stock and warrants to be offered and sold in the financing have not been registered under the Securities Act of 1933, as amended, or state securities laws, and may not be offered or sold in the United States without registration under or exemption from the Securities Act, or any applicable securities laws. The Company has agreed to file a registration statement with the Securities and Exchange Commission for the resale of the shares of common stock and the shares of common stock underlying the warrants sold in the PIPE transaction. Rodman & Renshaw, LLC served as placement agent in the transaction. The Company intends to use the net proceeds from the sale of the common stock to fund the ongoing and planned Phase 2 clinical development programs of ALT-2074, and for general corporate purposes. About Alteon Inc. Headquartered in Parsippany, New Jersey, Alteon Inc. (AMEX: ALT) --- http://www.alteon.com/-- is a product-based biopharmaceutical company engaged in the development of small molecule drugs to treat and prevent cardiovascular diseases and other diseases associated with aging and diabetes. Going Concern Doubt J.H. Cohn LLP expressed substantial doubt about Alteon's ability to continue as a going concern after auditing the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's $13 million net loss and using approximately $14 million of cash in operating activities during the year ended Dec. 31, 2005. AMDL INC: Accumulated Deficit Tops $30.2 Million at June 30 ----------------------------------------------------------- AMDL, Inc., incurred a $693,074 net loss on $17,725 of net revenues for the three months ended June 30, 2006, compared to a $606,576 net loss on $16,550 of net revenues in 2005, the Company disclosed in its second quarter financial statements on Form-10QSB to the Securities and Exchange Commission. Total assets increased from $3,181,841 at Dec. 31, 2005 to $4,201,237 at June 30, 2006. The increase is primarily attributed to the sale of common stock, offset by losses and cash used in operations. The Company's total outstanding current liabilities increased from $197,331 at Dec. 31, 2005 to $411,360 at June 30, 2006. The increase resulted primarily from the increase in general accounts payable. As of June 30, 2006, the Company had an accumulated deficit of $30,272,702. AMEX Compliance On April 26, 2006, the American Stock Exchange sent a letter to the Company stating that based on a review of Company's Form 10- KSB for the year ended Dec. 31, 2005, the Company did not meet certain of the AMEX's Continued Listing Standards as set forth in Part 10 of the AMEX Company Guide. Specifically, the Company did not meet the requirement of stockholders' equity of $4,000,000 and the Company had losses from continuing operations in three out of its four most recent fiscal years. In the letter, AMEX gave the Company until May 26, 2006 to submit a plan of action that the Company has taken and will take to bring the Company into compliance with the AMEX Company Continued Listing Standards. On July 17, 2006, the American Stock Exchange sent a letter to the Company stating that the Company has made a reasonable demonstration of its ability to regain compliance with the AMEX Continued Listing Standards, and based on that demonstration, the AMEX is prepared to continue the listing of the Company's common stock, subject to certain conditions, through the end of the third quarter of 2006. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?11b1 Going Concern Doubt Corbin & Company, LLP, in Irvine, California, expressed substantial doubt about AMDL, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Dec. 31, 2005. The auditing firm pointed to the Company's recurring operating losses, negative cash flows from operations and accumulated deficit at Dec. 31, 2005. About AMDL Inc. Based in Tustin, California, AMDL, Inc. -- http://www.amdl.com/-- a theranostics company, which develops, manufactures, markets, and sells various immunodiagnostic kits for the detection of cancer and other diseases. Its products include DR-70, a test kit is used to assist in the detection of various types of cancer, including lung small and nonsmall cell, stomach, breast, rectal, colon, and liver; and Pylori-Probe, a diagnostic kit which is cleared for sale in the United States. The company markets its products through distributor relationships and to domestic markets through strategic partnerships and relationships with diagnostic companies. It serves various customers, including hospital, clinical, research and forensic laboratories, and doctor's offices. AMERICAN FINANCIAL: Moody's Holds (P)Ba1 Subor. Unsecured Rating ---------------------------------------------------------------- Moody's Investors Service is affirming the debt ratings (Baa3 senior) for American Financial Group, Inc. and its 81% owned subsidiary, Great American Financial Resources, Inc. In the same action, Moody's affirmed the A3 insurance financial strength ratings of American Financial's property and casualty insurance subsidiaries and GAFRI's life insurance subsidiaries. In addition, Moody's changed the ratings' outlook for American Financial and GAFRI to positive from stable. According to Moody's, the positive outlook at American Financial reflects improving trends in both capital adequacy and financial leverage coupled with stronger operating earnings and improved dividend capacity coverage of interest and dividends. Over the past several years, American Financial has taken steps to reduce its financial leverage and intends to operate with a lower leverage profile going forward. Operating earnings have also improved based on a re-underwriting of their book of business and the favorable property & casualty pricing environment which has lead to significantly improved risk-adjusted capitalization. The positive outlook for GAFRI and its lead life insurance subsidiary reflects both the implicit support provided by American Financial as well as GAFRI's own improving standalone financial fundamentals including improved statutory capitalization and profitability. According to Moody's, the ratings' affirmation of American Financial reflects its niche position in many specialty commercial lines, its focus on underwriting profitability, as well as the diversification offered by its life and annuity operations. Moody's believes that management has instituted a performance driven compensation structure, with a significant contingent, deferred component which works well within the often volatile property and casualty industry. These strengths are tempered by American Financial's relatively high operational and financial leverage, the potential for adverse development on core reserves, exposure to gross catastrophe losses, particularly a California earthquake, and concerns surrounding the company's corporate governance structure. In many of the group's business segments, American Financial competes with larger competitors who have greater financial and technical resources. The ratings' affirmation of GAFRI reflects its niche position in the tax-deferred annuity business which has significant barriers to entry on the qualified market side. Other strengths include the company's stable earnings base, improving expense structure, and implicit support from American Financial. However, credit weaknesses include the potential for adverse regulation in the company's core 403(b) market, relatively high financial leverage, and modest earnings coverage. Factors that could prompt a ratings' upgrade for AFG include: financial leverage consistently below 28%, adjusted operating leverage below 5x with strong risk adjusted capital, and pre-tax interest coverage consistently above 6x. In addition, further improvements in corporate governance would be considered a ratings positive. Conversely, failure to sustain improved earnings, adverse development in excess of 5% of reserves, increased operating leverage, financial leverage above 28%, and/or pretax interest coverage levels below 6x could return the ratings to a stable outlook. The last rating action on American Financial occurred on Oct. 28, 2005, when Moody's affirmed the company's ratings and stable outlook. These ratings are affirmed with a positive outlook: * American Financial Group, Inc. -- senior debt at Baa3; provisional senior unsecured at (P)Baa3; provisional subordinated unsecured at (P)Ba1; provisional preferred stock at (P)Ba2; * AAG Holding Company, Inc. -- senior debt at Baa3; provisional senior unsecured at (P)Baa3; provisional subordinated unsecured at (P)Ba1; * American Financial Capital Trust II, III, IV -- provisional preferred securities at (P)Ba1; * American Annuity Capital Trust II -- preferred securities at Ba1; * Great American Insurance Company -- insurance financial strength at A3; * Great American Alliance Insurance Company -- insurance financial strength at A3; * Great American Assurance Company -- insurance financial strength at A3; * Great American Contemporary Insurance Company -- insurance financial strength at A3; * Great American E&S Insurance Company -- insurance financial strength at A3; * Great American Fidelity Insurance Company -- insurance financial strength at A3; * Great American Insurance Company of New York -- insurance financial strength at A3; * Great American Protection Insurance Company -- insurance financial strength at A3; * Great American Security Insurance Company -- insurance financial strength at A3; * Great American Spirit Insurance Company -- insurance financial strength at A3; * Worldwide Casualty Insurance Company -- insurance financial strength at A3; * Republic Indemnity Company of America -- insurance financial strength at A3; * Great American Life Insurance Company -- insurance financial strength at A3. American Financial, located in Cincinnati, Ohio, is a diversified holding company. For the first six months of 2006, American Financial reported $2 billion in total revenue and net income of $224 million. As of June 30, 2006, shareholders' equity was $2.5 billion. American Financial holds an 81% interest in GAFRI Financial Resources, Inc. GAFRI's lead subsidiary is Great American Life Insurance Company. Moody's Insurance Financial Strength Ratings are opinions of the ability of insurance companies to repay punctually senior policyholder claims and obligations. AQUILA INC: Moody's Lifts Rating on $300 Mil. Senior Debt to Ba2 ---------------------------------------------------------------- Moody's Investors Service upgraded the $300 million senior secured bank facility of Aquila, Inc., to Ba2 from Ba3. At the same time, Moody's raised Aquila's corporate family rating to B1 from B2. Moody's rating of Aquila's long-term senior unsecured obligations remains unchanged at B2. The rating outlook is changed to stable from positive. The change to Aquila's corporate family rating reflects the definitive steps that Aquila has taken in recent quarters to reduce both balance sheet debt obligations as well as other contractual claims on cash flow. Year-to-date, the company has reduced debt by $350 million through a tender offer, exited uneconomic tolling arrangements and has built up a sizeable cash balance. As such, Moody's believes the company is now better positioned from a financial perspective, to achieve its back-to- basics strategy of becoming an integrated electric provider with a lower level of business risk. Moody's expects further improvement in 2007 as revenue stands to be enhanced with a positive outcome from its rate case filings in Missouri as well as the lower interest and other costs associated with now divested operations. The upgrade of Aquila's $300 million senior secured bank facility to Ba2 reflects the reduced leverage of Aquila Inc. on a consolidated basis. The facility remains well secured by substantially all of Aquila's Missouri Public Service electric division. Currently undrawn, the facility is dedicated to funding Aquila's 18% ownership in the construction of Iatan 2, a coal- fired electric generating plant located in Weston, Missouri. Today's rating action will widen the notching between the secured bank facility and Aquila's senior unsecured debt as we expect the full $300 million to eventually be drawn during the course of construction. Also considered in the rating is the ongoing limitation of Aquila, under the terms of the bank agreements, to issue additional debt secured by Missouri Electric assets. The rating outlook is stable. Moody's notes that Aquila intends to continue with the sale of non-core assets. The anticipated sale of its Kansas Electric operations this year is expected to increase its cash balance to approximately $800 million and provide liquidity to reduce debt levels further and possibly acquire additional generating capacity. A favorable outcome in the company's pending rate filings, which would impact results in the second half of 2007, along with steady improvement in credit metrics, such that funds from operations to debt is greater than 6% and FFO interest cover is greater than 1.5 times, is likely to have positive implications for the rating and outlook. Headquartered in Kansas City, Missouri, Aquila Inc., is a regulated electric and gas utility serving several mid-continent states. For the twelve month period ending June 30, 2006 Aquila reported revenues of $1.4 billion. AZTEC METAL: Taps Cornerstone Consulting as Restructuring Advisors ------------------------------------------------------------------ Aztec Metal Maintenance Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to retain Cornerstone Consulting Group, LLC, as their restructuring advisors, nunc pro tunc to Aug. 31, 2006. Cornerstone Consulting will: a) interface with third parties, and represent the Debtors on financial matters; b) consult with management on issues regarding employee retention, severance, and other compensation matters; c) consult with management and counsel in connection with operating, financial, and other business matters relating to its ongoing activities; d) advise and assist the Debtors on various lender issues; e) assist the Debtors' management in matters regarding treasury and finance functions; f) assist the Debtors in dealing with its various creditors, as required by management; g) coordinate operations of the Debtors with management and counsel, and assist management with monitoring and reporting thereon to the Bankruptcy Court and all interested parties; h) assist management in reviewing plan-to-actual results and analyses necessary for continuation of operations and as a basis for formulating a plan of reorganization in these cases; and i) review Debtors' operations and expense structure, and help management to determine whether opportunities exist for further expense reductions. The Debtor tells the Court that the firm's professionals will charge at these hourly rates: Designations Hourly Rate ------------ ----------- Principals $375 - $400 Senior Associates $250 - $350 Associates $125 - $225 Staff $125 - $225 The Debtors discloses that the firm received a $25,000 retainer. Robert J. Iommazzo, managing principal of the firm, assures the Court that the firm does not hold any interest adverse to the Debtors, its estates or creditors. Mr. Iommazzo can be reached at: Robert J. Iommazzo Cornerstone Consulting Group, LLC 305 Madison Avenue New York, N.Y. 10165. Tel: (212) 490-2336 Headquartered in Bronx, New York, Aztec Metal Corp. engages in the business of restoration, refinishing & maintenance of metal, marble, masonry & wood surfaces, and installation, facade & construction cleaning. The Company and two of its affiliates filed for chapter 11 protection on Aug. 31, 2006 (Bankr. S.D.N.Y. Case No. 06-12050). Alan D. Halperin, Esq. at Halperin Battaglia Raicht, LLP, represents the Debtors. When Aztec Metal filed for protection from its creditors, it listed total assets of $3,595,188 and total debts of $12,480,942. BANNER BUFFETS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Banner Buffets, LLC dba Whistle Junction Buffet & Grill dba Whistle Junction dba Florida Buffet 1754 North Econlockhatchee Trail Orlando, FL 32825 Bankruptcy Case No.: 06-02383 Type of Business: The Debtor operates a restaurant. Chapter 11 Petition Date: September 15, 2006 Court: Middle District of Florida (Orlando) Judge: Karen S. Jennemann Debtor's Counsel: R. Scott Shuker, Esq. Gronek & Latham LLP 390 North Orange Avenue P.O. Box 3353 Orlando, FL 32802 Tel: (407) 481-5800 Fax: (407) 481-5801 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sysco Food Service Trade Debt $1,632,022 Central Flordia 200 West Story Road Ocoee, FL 34761 LP Foods Distributors Trade Debt $104,357 P.O. Box 609 Plant City, FL 33564 Heathcott Associates Trade Debt $83,830 17300 Chenal Parkway Suite 300 Little Rock, AR 72223 Infinite Energy Trade Debt $55,120 P.O. Box 31514 Tampa, FL 33631 Central Foods Trade Debt $53,341 3310 Reynolds Road Lakeland, FL 33803 Brighthouse Networks $34,491 Ecolab Trade Debt $32,701 Downtown Produce Trade Debt $30,326 Rocky Mountain Data Systems Trade Debt $25,299 The Revere Group Trade Debt $23,242 National Computer Corp. Trade Debt $22,094 Gainesville Regional Utility Trade Debt $20,863 Ecolab Pest Eliminations Trade Debt $16,423 Shaw Industries Trade Debt $15,762 Interplan Trade Debt $13,800 Accountemp Service Company Trade Debt $13,747 International Sign Company Trade Debt $12,567 EnviroClean Systems Inc. Trade Debt $12,271 Shoes for Crews Trade Debt $12,050 Watson Produce Trade Debt $10,804 BARR PHARMACEUTICALS: Pliva Tender Offer Okayed for Publication --------------------------------------------------------------- Barr Pharmaceuticals, Inc., disclosed that the Croatian Financial Services Supervisory Agency has approved for publication its amended tender offer for the purchase of 100% of the shares of PLIVA d.d., based in Zagreb, Croatia. Under the terms of the formal $2.5 billion cash tender offer, PLIVA shareholders who tender their shares will receive HRK820 per share in cash. In accordance with Croatian takeover law and HANFA instructions, Barr anticipates that its formal offer will be published in major Croatian newspapers, including the "Official Gazette," this week. The Company's previous bid of $2.3 billion, or HRK743 per share, in cash was published in the "Official Gazette" on Aug. 18, 2006, initiating the Company's 30-day tender process. On Sept. 4, 2006, a competing bid by the Actavis Group of $2.5 billion, or HRK795 per share, in cash was published in the "Official Gazette." With today's approval of Barr's amended bid by HANFA, the tender offer period is now expected to expire on Oct. 11, 2006. The Company's ability to close its tender offer is only conditioned upon Barr receiving acceptances that result in the Company holding more than 50% of PLIVA shares. "Our increased offer for PLIVA reflects our commitment to successfully completing this transaction, and the value we place on the combination of our two great companies," said Bruce L. Downey, Barr's Chairman and Chief Executive Officer. "Together, as the world's third largest generic pharmaceutical company, we will be able to build sustainable shareholder value, enhance the operations of PLIVA throughout Europe, and provide highly-skilled, high quality employment for the people of Croatia. With this enhanced offer, we hope that shareholders will recognize Barr is the most appropriate partner for PLIVA, and that we can move quickly to finalize this transaction, and turn our focus to the integration of the companies and the construction of a global leader in generic, proprietary and biopharmaceutical products." "As we have repeatedly stated, the benefits of the combination of PLIVA and Barr are beyond question," Mr. Downey continued. "Unlike Actavis, where there is significant geographic and product overlap, Barr and PLIVA have two largely complementary product portfolios and R&D capabilities that will result in the ability to offer customers a broad portfolio of solid oral dosage forms, extended and delayed release products, injectables, creams/ointments and biopharmaceutical products. The PLIVA name and Croatian-based operations will become the headquarters for the European operations and the European facilities will offer Barr the opportunity to move manufacturing of select products to Croatia, increasing both production and employment at the Croatian and other European facilities. We are committed to maximizing and expanding these strengths, to the benefit of shareholders, employees, and the people of Croatia." About PLIVA d.d. PLIVA, established in 1921, is a global generic pharmaceutical company with operations in more than 30 countries worldwide. PLIVA specializes in the development, production and distribution of generic pharmaceutical products, including biologicals, cytostatics, and other value-added generics, as well as active pharmaceutical ingredients. About Barr Barr Pharmaceuticals, Inc. -- http://www.barrlabs.com/-- a holding company that operates through its principal subsidiaries, Barr Laboratories, Inc. and Duramed Pharmaceuticals, Inc., is engaged in the development, manufacture and marketing of generic and proprietary pharmaceuticals. * * * As reported in the Troubled Company Reporter on Aug. 29, 2006, Moody's Investors Service assigned a Ba1 Corporate Family Rating and Ba1 senior unsecured credit facility ratings to Barr Laboratories, Inc. The credit agreement is guaranteed by Barr Pharmaceuticals, Inc. The rating outlook is positive. In addition, Moody's assigned a Speculative Grade Liquidity rating of SGL-2. Unsecured credit facilities rated Ba1 include the Company's unsecured Term Loan A of $2 billion due 2011, unsecured Capital Markets Facility of $500 million due 2007 and unsecured Revolving Credit Facility of $300 million due 2011. The ratings were assigned in conjunction with Barr's $2.3 billion tender offer for Croatian-based Pliva d.d. The combined organization will have revenues of approximately $2.5 billion. BEST MANUFACTURING: Panel Taps Otterbourg as Lead Counsel --------------------------------------------------------- The Official Committee of the Unsecured Creditors appointed in Best Manufacturing Group LLC and its debtor-affiliates' chapter 11 cases, ask the U.S. Bankruptcy Court for the District of New Jersey for permission to employ Otterbourg, Steindler, Houston & Rosen, P.C., as their lead bankruptcy counsel. Otterbourg Steindler will: a) assist and advise the Committee in its consultation with the Debtors relative to the administration of the Debtors' cases; b) attend meetings and negotiate with the representative of the Debtors; c) assist and advise the Committee in its examination and analysis of the conduct of the Debtors' affairs; d) assist the Committee in the review, analysis and negotiation of the filed plan and disclosure statement, as well as any plan(s) of reorganization or related disclosure statement(s) that may be filed; e) assist the Committee in the review, analysis, and negotiation of any financing agreements; f) take all necessary action to protect and preserve the interests of the Committee, including: i) possible prosecution of actions on its behalf, ii) if appropriate, negotiations concerning all litigation in which the Debtors are involved, and iii) if appropriate, review and analysis of claims filed against the Debtors' estates; g) prepare on behalf of the Committee all necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Committee; h) appear, if appropriate, before the Court, the Appellate Courts, and the U.S. Trustee, and protect the interests of the Committee before those Courts and before the U.S. Trustee; and i) perform all other necessary legal services in the Debtors' cases. Scott L. Hazan, Esq., an Otterbourg Steindler member, discloses that the firm's professionals bill: Designation Hourly Rate ----------- ----------- Partner/Counsel $490 - $725 Associate $240 - $525 Paralegal/Legal Assistant $150 - $195 Mr. Hazan assures the Court that his firm does not represent nor hold any interest adverse to the Debtors or their estates and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Hazan can be reached at: Otterbourg, Steindler, Houston & Rosen, P.C. 230 Park Avenue New York, NY 10169 Headquartered in Jersey City, New Jersey, Best Manufacturing Group LLC -- http://www.bestmfg.com/-- and its subsidiaries manufacture and distribute textiles, career apparel and other products for the hospitality, healthcare and textile rental industries. The Company and four of its subsidiaries filed for chapter 11 protection on Aug. 9, 2006 (Bankr. D. N.J. Case No. 06-17415). Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., represent the Debtors. Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, will represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. CARDSYSTEMS SOLUTIONS: Court Extends Bar Date to October 12 ----------------------------------------------------------- The Honorable James M. Marlar of the U.S. Bankruptcy Court for the District of Arizona extended the bar date to file proofs of claims against Cardsystems Solutions Inc. from July 14, 2006, to Oct. 12, 2006. Christian Raisner, Esq., representing cardholders in consumer action filed in San Francisco, said that cardholders have claims affected by the security breach. Judge Marlar directed him to give the names and addresses of the known parties so that they will receive notice of the Debtor's bankruptcy. As reported in the Troubled Company Reporter on July 18, 2006, Cumis Insurance Society Inc. told the Court that at least 297 credit unions may have suffered losses stemming from the security breach at the Debtor in May 2005, affecting Visa and MasterCard holders. Of the 297 credit unions, only 163 appear to have received notice of the Debtor's bankruptcy based upon the Debtor's schedules and corresponding mailing matrix. Cumis explained that it has already incurred certain losses for which it has claims against the Debtor and that it may continue to pay or become liable for additional losses as claims are made against the issuing banks. Cumis provides insurance to credit unions that issue debit and credit cards, and indemnifies its insured credit unions for losses arising from unauthorized use of plastic cards. Headquartered in Sonoita, Arizona, Cardsystems Solutions, Inc. -- http://www.cardsystems.com/-- was acquired by Pay By Touch Payment Solutions, LLC -- http://www.paybytouch.com/-- a biometric authentication, loyalty, membership, payment and other electronic transaction solutions provider. The Company filed for bankruptcy protection on May 12, 2006 (Bankr. D. Ariz. Case No. 06-00515). Frederick J. Petersen, Esq., Michael McGrath, Esq., and Lowell Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtor filed for bankruptcy protection, it disclosed assets amounting to $13,087,515 and debts totaling $23,860,343. CARDSYSTEMS SOLUTIONS: Wants Open-Ended Solicitation Extension -------------------------------------------------------------- Cardsystems Solutions Inc. asks the Honorable James M. Marlar of the U.S. Bankruptcy Court for the District of Arizona to extend its exclusive right to solicit acceptances of its Plan of Liquidation to 90 days after approval of its Disclosure Statement pursuant to Section 1121(c)(3) of the Bankruptcy Code. The Debtor reminded the Court that it filed its Plan and Disclosure Statement contemporaneously with the filing of its voluntary petition on May 12, 2006. The Debtor's counsel, Mesch, Clark & Rothschild, P.C., has received lists of potential claimants and has provided those lists to Donlin Recano & Company, Inc., its claims agent. The Debtor's Liquidating Plan contemplates distributing all of its assets to creditors and equity holders pursuant to the priorities established by Bankruptcy Code. Headquartered in Sonoita, Arizona, Cardsystems Solutions, Inc. -- http://www.cardsystems.com/-- was acquired by Pay By Touch Payment Solutions, LLC -- http://www.paybytouch.com/-- a biometric authentication, loyalty, membership, payment and other electronic transaction solutions provider. The Company filed for bankruptcy protection on May 12, 2006 (Bankr. D. Ariz. Case No. 06-00515). Frederick J. Petersen, Esq., Michael McGrath, Esq., and Lowell Rothschild, Esq., at Mesch, Clark & Rothschild, P.C., represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtor filed for bankruptcy protection, it disclosed assets amounting to $13,087,515 and debts totaling $23,860,343. CCH II: Fitch Junks Ratings on $396.2 Million Senior Notes ---------------------------------------------------------- Fitch Ratings assigned a 'CCC' rating and 'RR4' recovery rating to these senior notes issued by CCH II, LLC: -- $250.0 million of 10.25% senior notes due 2013; -- $146.2 million of 10.25% senior notes due 2013 Fitch also assigned a 'CCC' rating and 'RR4' recovery rating to the $456.6 million of senior secured notes due 2015 issued by CCH I, LLC. CCH II, LLC and CCH I, LLC are indirect subsidiaries of Charter Communications, Inc. Charter has an issuer default rating of 'CCC'. The Rating Outlook for Charter and its subsidiaries is Stable. The notes are being offered as part of a debt exchange launched by CCH I, LLC and CCH II, LLC for various debt securities issued by Charter Communications Holdings, LLC and Charter Communications, Inc. Pursuant to the exchange offer CCH II, LLC offered up to $250 million of new 10.25% senior notes due 2013 and CCH I, LLC offered up to $625 million of 11% senior secured notes due 2015 in exchange for Charter Communications Holdings, LLC notes maturing between 2009 and 2012. The CCH I Notes are secured by a pledge of 100% of the equity interests of CCH I, LLC wholly owned subsidiary CCH II, LLC and by a pledge of 70% of all class A preferred units in CC VIII, LLC that will be contributed to CCH I, LLC by CCHC, LLC. Additionally, CCH II, LLC offered $146.3 million of 10.25% senior notes due 2013 as part of the total consideration offered to exchange up to $450 million of the 5.875% convertible senior notes due 2009 issued by Charter Communications, Inc. Fitch recognizes that the exchange will extend maturities, modestly reduce outstanding debt and increase the company's financial flexibility; however, Fitch believes that the debt exchange is neutral to Charter's overall credit profile. From Fitch's perspective the proposed debt exchange does not materially change or enhance the recovery prospects of the bond holders within Charter's various holding companies. Fitch acknowledges that the notes issued by CCHI will be senior secured. However, because the notes will be secured by the economic interests of a non operating holding company as well as the 70% interest in the CC VIII preferred equity coupled with the restrictions on the security holders' ability to utilize the collateral to remedy a payment default, Fitch does not believe that the security interests provide meaningful credit enhancement to the holders of the CCH I secured debt. Fitch believes that the recovery prospects of the CCH I, LLC note holders are within the same recovery rating scale as the rest of Charter's intermediate holding companies. Overall, Fitch's ratings reflect its highly levered balance sheet and the absence of any meaningful prospects to deliver its balance sheet over the current rating horizon. Fitch believes that Charter's capital structure is increasingly unsustainable. Fitch's ratings incorporate its expectation that Charter will continue to generate negative free cash flow given the company's capital structure, ongoing capital expenditures and the increasing cash interest requirements on debt that has converted or is scheduled to convert to cash interest payment. Additionally, Fitch's ratings reflect Charter's operating profile that, while demonstrating improvement remains weak relative to its peer group and subscriber clusters that do not contribute to Charter's operating leverage and compress EBITDA margins. The Stable Rating Outlook incorporates Charter maintaining unrestricted access to available borrowing capacity from its revolver and continued stabilization of the company's liquidity profile. CHC HELICOPTER: First Quarter Profit Drops on Increased Expenses ---------------------------------------------------------------- CHC Helicopter Corporation reported unaudited financial results for the three months ended July 31, 2006. The Company continues to aggressively expand its fleet to meet current and future contractual agreements. Revenue increased during the first quarter by CDN$41.4 million, excluding the impact of foreign exchange. However, the quarter's results have been affected by the cost of the Company's unprecedented addition of 19 aircraft to its fleet, resulting in a fleet increase of 34 aircraft compared to the first quarter of last year. Furthermore, foreign exchange has also had a significant impact on the Company's earnings growth. As a result of this rapid fleet expansion, the Company experienced significant aircraft introduction costs which consist of recruitment and training, crew duplication and overtime, mobilization costs, and pre-deployment lease and interest costs. There is a timing difference between when these introduction costs are incurred and when an aircraft begins flying and generating revenue, resulting in a significant reduction in earnings during this introduction period. During the first quarter, very few of the 19 new aircraft earned revenue while approximately CDN$3.5 million of introduction costs and approximately CDN$2 million of lease and interest costs were expensed to prepare these aircraft for deployment in fiscal 2007. These introduction costs were particularly high in Europe where several aircraft, including new aircraft types, were added to the fleet. In addition, substantial costs were expensed in the first quarter in the European Operations and Heli-One segments related to scheduled and unscheduled maintenance requirements on newly introduced aircraft, aircraft being modified for current and future contracts and older aircraft on which unscheduled maintenance work was required. These costs totaled approximately CDN$2.7 million, consisting of CDN$2.4 million in operating costs and CDN$0.3 million of lease and interest costs. During the first quarter, the Company continued to be negatively impacted by the strengthening Canadian dollar, consistent with previously reported quarters. Revenue was negatively impacted by FX of approximately CDN$22.3 million. During the first quarter, consolidated revenue increased by CDN$41.4 million or 17% over the same period last year, excluding the negative impact of FX. Revenue increased in all operating segments with Global Operations experiencing a 33% revenue growth this quarter, excluding FX. Flying hours in the first quarter increased by 3,767 hours over the same period last year and by 4,015 hours from the fourth quarter of last year. The first quarter was a strong quarter for Global Operations, with increases in revenue and segment EBITDAR of CDN$25 million and CDN$12.4 million, respectively, from the same period last year, excluding the negative impact of FX. Global Operations has added 13 new aircraft to its fleet compared to the first quarter of last year, which is partially offset by aircraft returned to Heli-One for re-deployment. The addition of new aircraft is a major contributing factor to the increases in revenue and segment EBITDAR in the Global Operations segment. Net earnings for the first quarter were CDN$8.8 million, a decrease of CDN$10.4 million from the first quarter last year. About CHC Helicopter CHC Helicopter Corporation (TSX: FLY.A and FLY.B; NYSE: FLI) -- http://www.chc.ca/-- is the world's largest provider of helicopter services to the global offshore oil and gas industry with aircraft operating in more than 30 countries. * * * CHC's CDN$250 million senior subordinated notes due 2014 carry Moody's B2 rating. CHESAPEAKE CORP: S&P Lifts Senior Unsecured Debt's Rating to B+ --------------------------------------------------------------- Standard & Poor's Ratings Services raised its senior unsecured debt rating on Chesapeake Corp. to 'B+' from 'B' and withdrew its 'BB-' senior secured bank loan rating and '2' recovery rating. The corporate credit rating on Chesapeake is 'BB-', and the outlook is stable. "The rating actions followed the company's announcement that it did not complete its proposed refinancing transaction," said Standard & Poor's credit analyst Lisa Wright. Chesapeake, based in Richmond, Virginia, had about $550 million of lease and post-retirement-adjusted debt outstanding at July 2, 2006. The ratings on paperboard and plastics packaging producer Chesapeake reflect: * its very thin discretionary cash flow; * very aggressive debt leverage; * industry overcapacity; and * competitive pricing pressures. The ratings also reflect some ability to pass on raw-material cost increases to customers and the diversity of the company's end markets and operations. Chesapeake Corp.: * Corporate Credit Rating: BB-/Stable/-- Rating Raised: * Senior Unsecured: to B+ from B Rating Withdrawn: * Senior Secured Bank Loan: to NR from BB- * Recovery Rating: to NR from 2 COMM 2001-J1: Moody's Lifts Rating on $23.3 Million Class F Notes ----------------------------------------------------------------- Moody's Investors Service upgrades the ratings of three classes and affirmed the ratings of seven classes of COMM 2001-J1 Commercial Mortgage Pass-Through Certificates: * Class A-2, $228,540,976, Fixed, affirmed at Aaa * Class X, Notional, affirmed at Aaa * Class X-GB, Notional, affirmed at Aaa * Class X-USB, Notional, affirmed at Aaa * Class X-GT, Notional, affirmed at Aaa * Class B, $46,643,000, Fixed, affirmed at Aaa * Class C, $46,643,000, Fixed, upgraded to Aaa from Aa3 * Class D, $15,547,000, Floating, upgraded to Aa2 from A1 * Class F, $23,321,000, Fixed, upgraded to Baa2 from Ba1 * Class M, $2,472,910, Fixed, affirmed at Aa2 The Certificates are collateralized by eight mortgage loans. The undefeased loans range in size from 4.7% to 23.3% of the pool balance based on current principal balances. As of the Aug. 16, 2006 distribution date, the aggregate certificate balance (including that portion of Class A-2 reissued through the COMM 2001-JF1 Class A-2F transaction) has decreased by approximately 23.5% to $608.8 million from $795.3 million at securitization. The US Bancorp Tower Loan defeased in August. All of the loans amortize on schedules ranging from 8.5 years to 30 years. Moody's is upgrading Classes C, D, and F due to the defeasance of the US Bancorp Tower Loan, the improved performance of several remaining loans and loan amortization. The Graybar Building Loan is secured by a leasehold interest in the Graybar Building, a 1.3 million square foot Class B+ office building located in New York City. The building is currently 96% leased and is performing better than Moody's expectations on a current cash flow basis. The borrower is an affiliate of SL Green Realty Corp. Upon the Anticipated Repayment Date of the loan in 2010, 19 years will remain on the ground lease. Moody's current shadow rating on the loan is Ba2, is the same as at last review and is based on the estimated value of the collateral in 2010 while taking into account the relatively short remaining ground lease term. The Plaza at La Jolla Village Loan is secured by a 633,000 square foot Class A office development located in La Jolla, California. The building is currently 85.4% leased, compared to 97.3% at securitization. The borrower is affiliated with Equity Office Properties and Allstate Insurance Company. Based on Moody's adjusted cash flow of $11.4 million and a normalized capitalization rate, the loan to value ratio is 60.8%, compared to 63% at Moody's last review. Moody's current shadow rating is Baa1, compared to Baa2 at last review. The Boise Towne Square Mall Loan is secured by approximately 597,300 square feet of space in Boise Towne Square, a 1.32 million square foot regional mall located in Boise, Idaho. Mall shop occupancy is currently 91.3%. The borrower is an affiliate of JP Realty Inc. Based on Moody's adjusted cash flow of $11.5 million and a normalized capitalization rate, the LTV is 53.3% compared to 61.5% at last review. Moody's current shadow rating is Aa3, compared to Baa1 at last review. The Golden Triangle Portfolio Loan is secured by four Class B office properties located in Washington, D.C.'s Golden Triangle District. The buildings are currently 84.9% leased. The borrower is affiliated with Charles E. Smith Commercial Realty, a division of Vornado Realty Trust. Based on Moody's adjusted cash flow of $13.9 million and a normalized capitalization rate, the LTV is 50.7% compared to 58.6% at last review. Moody's current shadow rating is Aa2, compared to A3 at last review. The 28 and 40 West 23rd Street Loan is secured by two adjacent Class B office properties located in the Chelsea/Flatiron district of New York City. The buildings are currently 100% leased. The borrower is affiliated with key executives of Williams Real Estate Company. Based on Moody's adjusted cash flow of $9 million and a normalized capitalization rate, the LTV is 57.3% compared to 60.1% at last review. Moody's current shadow rating is A3, compared to Baa1 at last review. CSFB HOME: Moody's Assigns Low-B Ratings on Two Class Certificates ------------------------------------------------------------------ Moody's Investors Service assigns an Aaa rating to the senior certificates issued by CSFB Home Equity Mortgage Trust 2006-4 and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by Aames Capital Corporation (11%), WMC Mortgage Corporation (11%), and other mortgage lenders (78%, none individually originating over 10%) originated, fixed-rate, closed-end second mortgage loans acquired by DLJ Mortgage Capital. The ratings are based primarily on the credit quality of the loans and on protection against credit losses from subordination, excess spread, and overcollateralization. The ratings also benefit from an interest-rate swap agreement provided by Credit Suisse International. Moody's expects collateral losses to range from 7.25% to 7.75%. Select Portfolio Servicing and Ocwen Loan Servicing, LLC will service the loans. These are the actions taken: -- CSFB Home Equity Mortgage Trust 2006-4 -- Home Equity Mortgage Pass-Through Certificates, Series 2006-4 * Cl. A-1, Assigned Aaa * Cl. A-2, Assigned Aaa * Cl. A-3, Assigned Aaa * Cl. M-1, Assigned Aa1 * Cl. M-2, Assigned Aa2 * Cl. M-3, Assigned Aa3 * Cl. M-4, Assigned A1 * Cl. M-5, Assigned A2 * Cl. M-6, Assigned A3 * Cl. M-7, Assigned Baa1 * Cl. M-8, Assigned Baa2 * Cl. M-9, Assigned Baa3 * Cl. B-1, Assigned Ba1 * Cl. B-2, Assigned Ba2 DELAWARE VALLEY: Moody's Withdraw Ca Rating on $250 Million Bonds ----------------------------------------------------------------- Moody's Investors Service withdraws the underlying Ca rating assigned to approximately $250 million of Series 1996 bonds issued by Delaware Valley Obligated Group through the Pennsylvania Hospital and Higher Education Facilities Authority. The rating action reflects Moody's standard practice of withdrawing ratings of organizations that have entered bankruptcy proceedings. The DVOG Series 1996 bonds remain rated Aaa based upon the presence of MBIA's insurance policy. Since the bankruptcy filing in 1998, the creditors, including MBIA, have received certain distributions, although litigation against PricewaterhouseCoopers LLP by the creditors is still ongoing. Amounts received from the PWC litigation, any balances remaining in reserves established to pay costs of the PWC litigation, and from other miscellaneous amounts available for the distribution from the bankruptcy proceedings, will be distributed among all the creditors. DELPHI CORP: Court Defers CBA & GM Contract Hearings to Sept. 28 ---------------------------------------------------------------- The U.S. Bankruptcy Court of the Southern District of New York has granted further adjournments of trial dates previously set by the Court for contested hearings on Delphi Corporation's motions to reject collective bargaining agreements and modify retiree benefits under Sections 1113 and 1114 of the Bankruptcy Code and for authority to reject after notice certain commercial contracts with General Motors Corp. under Section 365 of the Bankruptcy Code. The 1113/1114 motion hearing was previously scheduled to resume on Sept. 18, 2006 and the 365 motion hearing was scheduled to commence on Sept. 28, 2006. The Court has scheduled chambers conferences on Sept. 28, 2006 for status and scheduling purposes with Delphi and the respondents to each motion. The action follows a chambers conference conducted by the Court on Sept. 14, 2006 and meetings between Delphi and its major stakeholders including its statutory committees, labor unions and GM. The adjournments are intended to allow the parties to continue to make progress in their discussions. About General Motors 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. About Delphi Corp. Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/ -- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. DISCOVERY ZONE: Oak Point Buys Defaults Judgments for 12% or More ----------------------------------------------------------------- Montague S. Claybrook, the chapter 7 trustee overseeing the liquidation of Discovery Zone, Inc., and its debtor-affiliated, proposes to sell $1,266,235 of default judgments from prosecution of avoidance actions in the Debtors' bankruptcy cases to Oak Point Partners, Inc. Oak Point has agreed to pay the Trustee $6,000 in cash plus 50% of all recoveries over $50,000. The Trustee reminds the Court that it hired Recovery Services, Inc., in 2003 to pursue collection of the default judgments he obtained. RSI met with modest success, the Trustee relates, and then retained Smith Giacometti, LLC (later replaced by Flaster Greenberg, LLC) in 2005 as special collection counsel. After diligent effort, the Trustee relates, special collection counsel "did not effectuate further recoveries." Oak Point approached the Trustee in July with its offer, and the Trustee believe's Oak Point's deal is good. This transaction, Michael S. DeBaecke, Esq., at Blank Rome LLP, tells the Court, "represents a near final act of estate administration and its approval will enable the Trustee to begin the process of preparing a final report and readying for final distributions." Oak Point Partners, Inc., can be contacted at: Eric Linn President OAK POINT PARTNERS, INC. 120 W. Eastman, Suite 300 Arlington Heights, IL 60004 Telephone (847) 577-1269 Discovery Zone, Inc., Discovery Zone Inc., Discovery Zone (Puerto Rico) Inc., and Discovery Zone Licensing, Inc., sought chapter 11 protection on April 20, 1999 (Bankr. D. Del. Case No. 99-50117), reporting $108 million in assets and $146 million in liabilities. The children's indoor entertainment company's chapter 11 cases were converted to chapter 7 liquidating proceedings in 2000. During the chapter 11 process, 13 owned Discovery Zone Fun Centers, two parcels of undeveloped real estate, and the rights to seven leased properties Fun Centers were sold to CEC Entertainment, Inc., and converted to Chuck E. Cheese's restaurants. Other leased properties were sold back to their landlords or other buyers by Keen Realty Consultants, Inc. DURANGO GEORGIA: Liquidator to Sell Insurance Proceeds Claims ------------------------------------------------------------- Bridge Associates, LLC, as Liquidating Trustee of the Bankruptcy Estate of Durango Georgia Paper Company, has entered into a Sale and Assignment Agreement with Liquidity Solutions Inc. The agreement transfers all of the Debtor's claims against Reliance Insurance Company for the recovery of insurance proceeds. Additional bidders may submit higher and better bids for the claims subject, to the absolute judgment and discretion of the Liquidating Trustee. Bidders seeking to purchase the claim must bid a minimum of $589,190. Any subsequent bidder must bid a minimum of $10,000, over and above the previous bid. All bids must be submitted by 5:00 p.m., on Sept, 29, 2006, to: Mark S. Watson, Esq. Stone & Baxter, LLP 577 Murphy Street, Suite 800 Macon, GA 31201 Phone: (478) 750-9898 Fax: (478) 750-9899 The U.S. Bankruptcy Court for the Southern District of Georgia in Brunswick will convene a hearing at 10:30 a.m., in Oct. 12, 2006, to consider approval of the proposed sale. About Durango Georgia Based in St. Mary's, Georgia, Durango Georgia Paper Company -- http://www.durangopaper.com/-- was a nationally recognized bleached board and kraft paper producer in the U.S. offering coast-to-coast and international service. On Oct. 29. 2002, creditors filed an involuntary chapter 7 petition against Durango. The Company filed for chapter 11 relief on Nov. 20, 2002 (Bankr. S.D. Ga. Case No. 02-21669). George H. Mccallum, Esq., at Stone & Baxter, LLP, Kate D. Strain, Esq., at Hunter, Maclean, Exley & Dunn, PC, and Neil P. Olack, Esq., at Duane Morris LLP, represent the Debtor in its restructuring efforts. Bridge Associates, LLC, was appointed as Liquidating Trustee under the terms of a Plan of Liquidation approved by creditors and confirmed by the Bankruptcy Court in June 2004. EMERALD OUTDOOR: Loses Rights in One of Two Billboard Leases ------------------------------------------------------------ Emerald Outdoor Advertising, LLC, sought protection under chapter 11 of the U.S. Bankruptcy Code on May 5, 2003 (Bankr. E.D. Wash. Case No. 03-03851) and simultaneously filed a motion to assume two leases that allow the debtor to place very large outdoor advertising signs on Indian tribal land. One lease is dated January 9, 1995, and is commonly referred to as the 57th Avenue East Lease or the I-5 Lease. It involves two large signs. The second Lease is dated June 1, 1995, and is commonly referred to as the Pacific Highway East Lease or Highway 99 Lease. It involves one sign. In a decision published at 300 B.R. 775, the Honorable Patricia C. Williams denied Emerald's motion to assume the Leases, holding that a prepetition state court foreclosure action prosecuted by the landowner terminated and extinguished Emerald's Leases because they constituted a junior interest in the property. Emerald appealed that ruling to the U.S. District Court for the Eastern District of Washington. In an unpublished order, the Honorable Robert H. Whaley reversed Judge Williams' ruling, concluding that Emerald's lease had priority over the landowner's deed of trust. Tiffany Jane Harrison, an individual who is a member of the Puyallup Tribe of Indians, owns the land. Ms. Harrison commenced an adversary proceeding (Bankr. E.D. Wash. Adv. Pro. No. A03- 00178) in Emerald's bankruptcy case seeking a declaratory judgment and a bankruptcy court order bidding the debtor farewell. Ms. Harrison took an appeal from Judge Whaley's ruling to the United States Court of Appeals for the Ninth Circuit. In a decision published at 444 F.3d 1077, the Ninth Circuit determined that the Deed of Trust is superior and the two Leases were properly foreclosed by Ms. Harrison, and, as the successful bidder at the foreclosure sale on May 31, 2002, acquired the property free of Emerald's leasehold interest. Now, back in the bankruptcy court, there's a dispute about whether Ms. Harrison has the right to retain the sign structures or whether Emerald has the right to remove the sign structures. The determination of the debtor's rights, including the right to retain the sign structures, will effect the debtor's formulation and confirmation of a chapter 11 plan. Ms. Harrison wants Judge Williams to render a judgment declaring that she has title to the real property free and clear of any interest of the debtor, and enter an order requiring the debtor to vacate the property and leave the sign structures in place because ownership has reverted to plaintiff. There is no dispute regarding the massive foundation work for the signs, and the parties agree it will remain as part of the real estate. Ms. Harrison maintains she is entitled to immediate possession of the sign structures because (1) 11 U.S.C. Sec. 365(d)(4) so requires; (2) RCW 61.24.060 requires surrender 20 days after a foreclosure sale; and (3) the express terms of the Leases require immediate surrender upon termination. Emerald asserts that RCW 59.04.020 is controlling and doesn't entitle Ms. Harrison to immediate possession of the premises or the sign structures because a new tenancy was created post- foreclosure. Emerald points out that it has made monthly rent payments during its chapter 11 proceeding. In a Memorandum Decision published at 2006 WL 2419130, Judge Williams rules that Ms. Harrison owns and is entitled to possession of the sign structure relating to the Pacific Highway East Lease on Highway 99. Judge Williams directs Emerald to remove the sign structure if Ms. Harrison wants it removed. A trial, Judge Williams says, will be necessary to resolve the question of fact which exists as to the ownership and removal of the sign structures relating to the 57th Avenue East Lease on Interstate 5. Emerald Outdoor Advertising is represented in its chapter 11 restructuring by: John F. Bury, Esq. Murphy Bantz and Bury 818 W. Riverside Ave., Suite 631 Spokane, WA 99201-0910 Telephone (509) 838-4458 FOAMEX INTERNATIONAL: Wants Until Dec. 13 to File Chapter 11 Plan ----------------------------------------------------------------- Pursuant to Section 1121(d) of the Bankruptcy Code, Foamex International Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to: (i) further extend the exclusive period in which they may file a Chapter 11 plan through and including Dec. 13, 2006; and (ii) provide them with an additional 60 days, or until Feb. 11, 2007, to solicit acceptances for the Plan. Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates that, after the Debtors completed and assessed their revised business plan and projections, they concluded that sufficient value might exist to justify a recovery for their equity holders under a Plan. The Debtors sought financing with the assistance of their financial advisors Miller Buckfire & Co. LLC, and have succeeded in fully negotiating a commitment for a package of exit loans with three lenders. The Debtors also commenced discussions with D.E. Shaw Laminar Portfolios LLC, Par IV Capital Management LLC, Paloma International LP, Sigma Capital Management LLC, and Goldman Sachs & Co. about purchasing additional Foamex equity through a rights offering. According to Mr. Barry, the Debtors entered into confidentiality agreements with each of the five major equity holders and provided access to the Debtors' management and extensive due diligence information. The Debtors spent a lot of time with the five equity holders exchanging drafts and comments on certain documents relevant to any rights offering. Mr. Barry tells the Court that the Debtors need more time to conclude their negotiations for an additional equity investment and, based on the outcome of the negotiations, to file an amended Plan and accompanying Disclosure Statement. There can be no dispute that Debtors have made good use of their exclusivity extension to make meaningful progress toward completing their reorganization, Mr. Barry says. However, more time is necessary. Pursuant to Del. Bankr. L.R. 9006-2, the filing of this request before the expiration of the extant exclusive period on Sept. 14, 2006, will serve to automatically extend the Debtors' exclusive period until the Court rules on the request without the need for a bridge order. Objections to the Debtors' requested relief must be filed by Sept. 28, 2006. The hearing on this request is slated for Oct. 5, 2006. 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. 26; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FORD MOTOR: Eyes $5 Bil. Cost Cuts in Accelerated Turnaround Plan ----------------------------------------------------------------- Ford Motor Company disclosed Friday plans to further reduce its capacity and work force, and ramp up new product introductions as it accelerates its North America "Way Forward" turnaround plan. Ford will cut its North American salaried-related work force by about a third and offer buyout packages to all Ford and Automotive Components Holdings hourly employees in the U.S. The reductions will contribute significantly to reducing ongoing annual operating costs by about $5 billion. In addition, Ford will renew 70% of its North American product lineup by volume by the end of 2008. "These actions have painful consequences for communities and many of our loyal employees," said Bill Ford, the company's executive chairman. "But rapid shifts in consumer demand that affect our product mix and continued high prices for commodities mean we must continue working quickly and decisively to fix our business. Mark Fields and his team deserve credit for the accelerated Way Forward strategy, which puts us on an even faster product-driven path to success. "Alan Mulally's experience in turning around a major industrial company will help guide the implementation of these measures as he assumes leadership of the company," Mr. Ford continued. "The actions we announced [fri]day - coupled with the North American production cuts we announced last month, the strategic alternatives we are considering for Aston Martin and a push for greater progress from our operating units and brands around the world - are part of a series of actions that Alan and our entire global team will be taking to put the company on a path to sustained profitability and success." Mr. Mulally, whose appointment as CEO and President of Ford was announced last week, echoed support for the Way Forward plan and for the team leading the company's North American turnaround. "The steps we are announcing [fri]day are clearly needed to ensure the ultimate turnaround of the business in Ford's biggest and most important market," Mulally said. "Although the process has been under way for months, I have had a chance to review these actions and am convinced that they provide the sound, product-led underpinnings and cost reductions we will need to achieve our goals. I look forward to helping with the implementation. "Turnarounds of this magnitude succeed when capacity and costs are aligned with a realistic expectation of demand," Mr. Mulally continued. "These actions are certainly consistent with that goal. We will focus intensely on the needs of our customers in North America, and around the world, by pulling forward new products and creating new markets. We are a team united by a shared vision to build the best automobiles in the world at Ford Motor Company." Mark Fields, Ford's President of The Americas, said the Way Forward plan will continue to focus every part of the business on the customer - building stronger Ford, Lincoln and Mercury brands; strengthening the company's North American product lineup; improving quality, and accelerating progress on productivity and competitive costs. "The fundamentals of our Way Forward plan have not changed, but our timetable has changed dramatically," said Mr. Fields. "We've taken a sobering look at the industry and our own business, and the entire team in North America has a renewed sense of urgency and a clear view of what it will take to position this business for profitability. "We know our decisions bring more pain to the business in the short-term, and they require sacrifice from our employees, labor unions, dealers and suppliers," he added. "But, together, we are building a much stronger Ford Motor Company and a more secure future for us all." Mr. Fields said the team will continue to push to move further and faster throughout the business. "Our work is far from over. We recognize that the competitive landscape and cost pressures have significantly challenged our traditional business model, and that recognition is driving more investment in small cars and crossovers, even as we continue to position ourselves to remain the truck leader," Mr. Fields said. "We will remain quick and decisive in executing our Way Forward plan and flexible in reacting to changing conditions in the future." Market share declines, reflecting primarily segment shifts, and higher-than-planned raw material costs will mean full-year profitability for Ford's North American auto operations is not expected before 2009. "Clearly, we could have cut product programs and maintained our goal of North American profitability in 2008," Fields said. "But, even as we further reduce our costs and capacity and make tough- but-necessary decisions throughout our business, we cannot and will not retreat from the critical investments to deliver the right products for our customers." Actions to be implemented by the end of 2008 and resulting financial impact if the revised North America Way Forward turnaround plan include: Product-Led Turnaround: 70% of Ford, Lincoln and Mercury products by volume will be new or significantly upgraded starting Friday through the end of 2008. The new lineup builds on Ford's strength as America's truck leader while expanding in growth segments, such as crossovers. Ford will introduce an all-new full-size crossover based on the Ford Fairlane concept. The seven-passenger vehicle for modern families goes on sale in 2008 and will be produced at Ford's Oakville(Ontario, Canada) Assembly Plant. Ford will continue to lead the American truck market with a new Super Duty pickup confirmed to go on sale in early 2007 and an all-new F-150 pickup confirmed to go on sale in 2008. The vehicles boast powertrain, design and feature upgrades. Ford will continue to lead America's sports car market with new Mustang derivatives each year. The new Lincoln MKS flagship sedan will go on sale in 2008 - packed with more technology and features than any prior Lincoln, including all-wheel drive. Current plans are to produce the vehicle at the company's Chicago Assembly Plant. Lincoln will continue offering the Lincoln Town Car to meet ongoing demand. After assembly ends at Ford's Wixom ( Mich.) Assembly Plant in 2007, Ford intends to move Town Car production to Ford's St. Thomas (Ontario, Canada) Assembly Plant. St. Thomas will be reduced to one shift of production, as previously announced. Product development work is intensifying through 2008 on creating new small cars and even more crossovers that will go on sale in the future. These vehicles will be based on the company's global vehicle architectures, including "B" and "C" platforms not presently used in North America. Major investments continue in new gasoline, flexible-fuel, diesel, hydrogen and hybrid powertrains, including additional E-85 ethanol-powered and hybrid vehicles on the road by the end of 2008. In addition, two out of every three Ford, Lincoln and Mercury vehicles will be offered with fuel-saving 6-speed transmission technology by the end of 2008. The new products and a voluntary consolidation of the Ford and Lincoln Mercury dealer network are designed to significantly improve the dealers' through-put and profitability by the end of 2008. Accelerated Cost Savings, Leaner Structure: Compared with 2005, annual operating costs will be reduced by about $5 billion by the end of 2008. Salaried-related costs will be reduced through the elimination of the equivalent of about 14,000 salaried-related positions, which represents approximately a third of Ford's North American salaried work force. The reduction includes the equivalent of 4,000 positions eliminated in the first quarter of 2006. The additional reductions will be achieved through early retirements, voluntary separations and, if necessary, involuntary separations - with most employees expected to depart by the end of the first quarter in 2007. An agreement with the UAW will expand early retirement offers and separation packages to all Ford U.S. hourly employees, including Ford employees at the company's ACH plants. Employees will begin receiving details by mid-October, and those accepting offers will leave the company by September 2007. Ford will accelerate by four years its previously announced goal of reducing 25,000 to 30,000 North American manufacturing employees by the end of 2012. The reductions now will be completed by the end of 2008. The sale or closure of all ACH facilities by the end of 2008 will result in additional employee reductions. Ford continues to work with the UAW to improve the competitiveness of its U.S. manufacturing facilities. As a result, new competitive operating agreements have been ratified by UAW locals in 30 different U.S. Ford and ACH facilities - and nearly $600 million in annual savings is projected to be realized. Capacity Further Aligned with Consumer Demand North America manufacturing capacity is being adjusted to 3.6 million units by the end of 2008, down 26% versus 2005 - in line with consumer demand and as announced earlier. Nine facilities will be idled and cease production through 2008, including seven already announced. The two additional plants are the Maumee ( Ohio) Stamping Plant and the Essex ( Ontario, Canada) Engine Plant. Ford's Norfolk ( Va.) Assembly Plant will be idled a year earlier than planned, and a shift reduction, in advance of idling the facilities, now is planned at Norfolk and Twin Cities ( Minn.) Assembly. Facilities affected by the end of 2008 include the following: * Atlanta Assembly - to be idled in October 2006 * Batavia Transmission - to be idled in 2008 * Essex Engine - to cease operations in 2007 * Maumee Stamping - intended to be idled in 2008 * Norfolk Assembly - to be idled in 2007, a year earlier than previously planned, with a shift reduction planned in January 2007 * St. Louis Assembly - already idled in March 2006 * Twin Cities Assembly - to be idled in 2008, with a shift reduction planned in 2007 * Windsor Casting - to be idled in 2007 * Wixom Assembly - to be idled in 2007 * Dearborn Truck Plant will add a third crew, beginning in 2007, for F-150 truck production. All ACH operations will be sold or closed by the end of 2008. Including Maumee Stamping and Essex Engine, Ford has announced plans to cease production at 16 North American manufacturing facilities by the end of 2012, including seven assembly plants. Financial Impact "Though North America's return to profitability will take longer than planned, the actions we're taking are the right ones, and are fundamental and necessary steps to improving our business structure," said Mr. Don Leclair, the company's Chief Financial Officer. "The planned improvements in our auto operations, in conjunction with Ford Credit - which remains a core asset - will leave us well-positioned for the future. "We are starting from a position of strong liquidity, including our cash, credit lines and VEBA," Mr. Leclair added. "We will continue to focus on enhancing our liquidity, building upon our decision to explore strategic alternatives for Aston Martin and the board's intent to eliminate our quarterly dividend." Automotive Operations Full-year pre-tax special items for 2006 are expected to be significantly increased from the $3.8 billion estimated previously to reflect the accelerated Way Forward actions. Further details will be provided when Ford announces Third Quarter financial results next month. Full-year profitability in North American automotive operations not expected before 2009. Ford and Lincoln Mercury U.S. market share is projected to be in the low-16% range at the end of 2006. A further share decline is expected as production of the Ford Taurus sedan and Mercury Monterey minivan ends in 2006 and production of the Ford Freestar minivan ends in 2007. The end of these vehicles will reduce the company's sales to daily rental fleets. With the investment in new products and improvements in quality, Ford expects to be in the 14 to 15% market share range going forward - with a focus on profitable retail share. South America and Ford of Europe still are expected to be solidly profitable in 2006. However, full-year operating losses now are expected in 2006 for Asia Pacific and Africa, as well as the Premier Automotive Group - primarily reflecting lower volumes. Liquidity Ford Motor Company's 2006 year-end liquidity is expected to include automotive gross cash of about $20 billion, including marketable and loaned securities and the effects of $3.4 billion of VEBA. The company will continue to have committed automotive credit facilities totaling more than $6 billion . Ford Motor Company's Board indicates that it will suspend payment of the quarterly dividend on its common and Class B Stock beginning in the fourth quarter of 2006. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees 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 and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Aug. 22, 2006, Dominion Bond Rating Service placed long-term debt rating of Ford Motor Company Under Review with Negative Implications following announcement that Ford will sharply reduce its North American vehicle production in 2006. DBRS 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). Fitch Ratings also downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'B' from 'B+'. Fitch also lowered the Ford's senior unsecured rating to 'B+/RR3' from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB- /RR2' from 'BB/RR2'. The Rating Outlook remains Negative. Standard & Poor's Ratings Services also placed its 'B+' long-term and 'B-2' short-term ratings on Ford Motor Co., Ford Motor Credit Co., and related entities on CreditWatch with negative implications. As reported in the Troubled Company Reporter on July 24, 2006, Moody's Investors Service lowered the Corporate Family and senior unsecured ratings of Ford Motor Company to B2 from Ba3 and the senior unsecured rating of Ford Motor Credit Company to Ba3 from Ba2. The Speculative Grade Liquidity rating of Ford has been confirmed at SGL-1, indicating very good liquidity over the coming 12 month period. The outlook for the ratings is negative. FOSTER WHEELER: Secures New $350 Mil. Domestic Credit Facility -------------------------------------------------------------- Foster Wheeler Ltd. has executed an agreement for a new $350 million, five-year senior secured domestic credit facility. The Company expects to close on the new facility in October 2006. When the new facility closes, the Company will be able to utilize the facility by issuing letters of credit up to the full $350 million limit. The Company will also have the option to use up to $100 million of the $350 million limit for revolving borrowings, an option which the Company has no immediate plans to use. The new facility will replace an existing credit facility that otherwise would not have expired until March 2010. The existing facility allows the Company to issue letters of credit up to a $250 million limit with the option to use up to $75 million of the $250 million limit for revolving borrowings. "This new agreement will provide the increased bonding capacity and financial flexibility that we require to support our growing operations and increased volume of business," said John T. La Duc, executive vice president and chief financial officer. "At current usage levels, this new facility will also reduce our bonding costs by approximately $8 million per year, a substantial cost saving compared with our previous agreement. This latest accomplishment provides us with an even stronger platform to continue to grow our business by winning new orders, building quality backlog, and delivering best-in-class products and services which consistently meet or exceed our clients' expectations." BNP Paribas is the sole lead arranger and bookrunner. About Foster Wheeler With operational headquarters in Clinton, New Jersey, Foster Wheeler Ltd. -- http://www.fwc.com/-- offers a broad range of engineering, procurement, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. * * * As reported in the Troubled Company Reporter on Aug 7, 2006, Standard & Poor's Ratings Services assigned its 'BB-' bank loan rating and '1' recovery rating on Foster Wheeler Ltd.'s proposed five-year, $350 million senior secured credit facilities due 2011, reflecting a high expectation of full recovery of principal (100%) in the event of a payment default. As reported in the Troubled Company Reporter on May 30, 2006, Moody's Investors Service upgraded Foster Wheeler's corporate family rating to B1 from B3 and assigned a Ba3 rating to the Company's $250 million senior secured bank revolving credit facility. The rating outlook is changed to Positive. FREESCALE SEMICON: Inks $17.6 Bil. Merger Deal with Equity Group ---------------------------------------------------------------- Freescale Semiconductor, Inc., has entered into a definitive merger agreement to be acquired by a private equity consortium in a transaction with a total equity value of $17.6 billion. The consortium is led by The Blackstone Group, and includes The Carlyle Group, Permira Funds and Texas Pacific Group. Under the terms of the merger agreement, the consortium will acquire all of the outstanding Class A and Class B shares of Freescale for $40 per share in cash, representing a premium of approximately 36% over Freescale's average closing share price during the 30 trading days ended Sept. 8, 2006. The company first acknowledged it was in discussions with third parties regarding a possible transaction on Sept. 11, 2006. The board of directors of Freescale has unanimously approved the merger agreement and resolved to recommend that Freescale's stockholders adopt the agreement. There is no financing condition to the obligations of the private equity consortium to consummate the transaction, and equity and debt commitments for the full amount of the merger consideration have been received. It is currently anticipated that substantially all of the company's outstanding Notes will either be tendered for or repaid. The merger is subject to customary conditions to closing, including the affirmative vote of Freescale stockholders and requisite antitrust approvals. The merger agreement contains a provision under which Freescale may solicit alternative proposals from third parties during the next 50 calendar days. In addition, Freescale may, at any time, subject to the terms of the merger agreement, respond to unsolicited proposals. If the company accepts a superior proposal, a break-up fee would be payable by the company. There can be no assurance of any alternative proposal. Goldman, Sachs & Co. serves as financial advisor to Freescale and provided a fairness opinion in connection with the transaction. Wilson Sonsini Goodrich & Rosati Professional Corporation serves as legal adviser to Freescale in connection with the transaction. Credit Suisse Securities (USA) LLC, Citigroup Corporate and Investment Banking and Blackstone Corporate Advisory Services act as financial advisors to the private equity consortium. Skadden, Arps, Slate, Meagher & Flom LLP serves as legal adviser to the private equity consortium in connection with the transaction. About Freescale Freescale Semiconductor, Inc. -- http://www.Freescale.com/-- designs and manufactures embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. The company is based in Austin, Texas, and has design, research and development, manufacturing or sales operations in more than 30 countries. FREESCALE SEMICON: Asset Sale Cues Moody's to Review Ratings ------------------------------------------------------------ Moody's Investors Service places Ba1 corporate family and senior unsecured debt ratings on review for possible downgrading following the announcement for the sale of the company. Freescale entered into a definitive agreement for the sale of the company to a group of private investment firms. The transaction is valued at $17.6 billion, or $40 a share. In accordance with the merger agreement, Freescale will solicit alternative proposals from other parties over the next 50 calendar days. The review will focus on: -- the operating strategy of the company under the new ownership; and, -- the proposed financing and capital structure arising from this acquisition. The ratings could be subject to a multi-notch downgrade depending in the level of debt incurred in the transaction. The company expects to repay substantially all of the $850 million senior unsecured notes either through a tender offer or a change of control put at the option of noteholders. Since Freescale is currently rated below investment-grade by Moody's, the change of control provision contained in the note indenture is currently operative. Accordingly, a sale of the company would require Freescale to repurchase the senior unsecured notes at the option of noteholders at a price of 101% of face value plus accrued and unpaid interest. Once the notes are substantially tendered for or repaid, Moody's will withdraw the ratings. These ratings are under review for possible downgrade: * Corporate Family Rating -- Ba1 * Senior Unsecured Guaranteed Notes with various maturities totaling $850 million -- Ba1 * Speculative Grade Liquidity Rating -- SGL-1 Headquartered in Austin, Texas, Freescale designs and manufactures embedded semiconductors for the transportation, networking and wireless markets. FTI CONSULTING: Moody's Rates Proposed $215 Mil. Sr. Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to FTI Consulting, Inc.'s proposed $215 million of senior unsecured notes and lowered the ratings on its $150 million senior subordinated convertible notes to B1 from Ba3. Moody's affirmed the Ba2 corporate family rating and the Ba2 rating on FTI's existing senior unsecured notes. The rating outlook remains stable. The rating actions followed FTI's recent announcement that it entered into an agreement to acquire Financial Dynamics International from Advent International and its management for $259 million, excluding fees and expenses and an earn out obligation. FD is a leading business and financial communications consulting firm based in London, employing over 450 people in 17 offices situated in major business and capital market locations in Europe, the U.S., Asia, the Middle East and South Africa. The transaction is expected to be funded with the new $215 million of senior unsecured notes, $22 million of FTI common equity, $15 million of seller notes and revolver borrowings. The acquisition is expected to close in the fourth quarter of 2006. The ratings reflect increased size and diversification attributable to the FD acquisition, progress in renewing and staggering the expiration dates of long term contracts with key senior managing directors, good growth prospects and high operating margins. The ratings are constrained by credit metrics that are weak for the rating category pro forma for the acquisition, integration and employee retention risks related to recent acquisitions, continued dependence on senior management of its business units and weak performance of the corporate finance/restructuring unit year-to-date in 2006. The lowering of the rating on the senior subordinated convertible notes to B1 from Ba3 reflects the additional $215 million of more senior ranking debt to the capital structure. Moody's took these rating actions: * Assigned $215 million senior unsecured notes due 2016, rated Ba2 * Affirmed $200 million senior unsecured notes due 2013, rated Ba2 * Downgraded $150 million senior subordinated convertible notes due 2012, to B1 from Ba3 * Affirmed corporate family rating, rated Ba2 * Affirmed speculative grade liquidity rating, SGL-1 The stable outlook anticipates a successful integration of the FD business and continued moderate organic revenue and profitability growth. Moody's expects continued strength in the technology business and an improvement in margins in the corporate finance/restructuring segment. The ratings outlook could be changed to negative if anticipated improvements in credit metrics are not expected to be achieved in 2007. The ratings could be downgraded if revenue growth stagnates or operating margins fail to improve from levels achieved in the first half of 2006 such that debt to EBITDA remains above 3.5 times and free cash flow to debt remains below 7%. Profitability could be pressured by difficulties integrating FD, loss of key management personnel or a weaker business climate for the company's services. Another large debt financed acquisition could also pressure the rating. Given FTI's weak pro forma credit metrics, the ratings are unlikely to upgraded in the near term. The outlook could be changed to positive if the company achieves greater that expected revenue growth or expands operating margins such that debt to EBITDA and free cash flow to debt are expected to be sustained at less than 2.5 times and over 15%, respectively. Based in Baltimore, Maryland, FTI provides problem-solving consulting and technology services to major corporations, financial institutions, and law firms primarily in the United States. The company reported revenue of $628 million for the twelve month period ending June 30, 2006. GANNETT PEAK: Moody's Puts (P)Ba2 Rating on Class D Notes --------------------------------------------------------- Moody's Investors Service is assigning provisional ratings to notes issued by Gannett Peak CLO I, Ltd. These are the provisional ratings assigned: -- (P)Aaa to $369,100,000 Class A-1a Senior Secured Floating Rate Notes, Due 2020; -- (P)Aaa to $60,000,000 Class A-1b Senior Secured Revolving Floating Rate Notes, Due 2020; -- (P)Aa2 to $41,000,000 Class A-2 Senior Secured Floating Rate Notes, Due 2020; -- (P)A2 to $26,000,000 Class B-1 Senior Secured Deferrable Floating Rate Notes, Due 2020; -- (P)A2 to $9,000,000 Class B-2 Senior Secured Deferrable Fixed Rate Notes, Due 2020; -- (P)Baa2 to $33,500,000 Class C Senior Secured Deferrable Floating Rate Notes, Due 2020; -- (P)Ba2 to $19,000,000 Class D-1 Secured Deferrable Floating Rate Notes, Due 2020; -- (P)Ba2 to $5,000,000 Class D-2 Secured Deferrable Fixed Rate Notes, Due 2020 and -- (P)A3 to the Type I Composite Obligation. Moody's provisional ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to the Noteholders relative to receiving the present value of such payments. The ratings of the Notes reflect the credit quality of the underlying assets -- which consist primarily of senior secured loans -- as well as the credit enhancement for the Notes inherent in the capital structure and the transaction's legal structure. The rating of theType I Composite Obligation addresses solely the ultimate return of the Type I Rated Amount and Type I Notional Interest Amount. This cash flow CLO is managed by McDonnell Investment Management, LLC. GARDEN RIDGE: Judge Baxter Finds Excusable Neglect for Late Claim ----------------------------------------------------------------- One week after the deadline for filing proofs of claim in Garden Ridge Corporation's chapter 11 cases, Lancaster Colony Corporation filed its proof of claim. The Post Effective Date Committee created under the chapter 11 plan confirmed in Garden Ridge's cases objected to the tardy filing and asked the Court to disallow Lancaster's claim. Lancaster admits that it made a mistake and missed the deadline, but asks the Court to find that the delay was the result of excusable neglect under the factors taught in Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 395, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993), and not to artificially enforce the deadline. The Committee says Lancaster has no excuse. In a decision published at 2006 WL 2467291, the Honorable Randolph Baxter examines the four Pioneer factors and finds that three weigh in Lancaster's favor and one weighs in favor of the Committee: (A) the danger of prejudice to the debtor -- Judge Baxter says the Committee's view of prejudice is too narrow and Lancaster's claim wasn't a surprise to anybody. This factor weighs in Lancaster's favor. (B) the length of the delay and its potential impact on judicial proceedings -- Judge Baxter observes that the Committee is still reconciling claims, and it will be some time before the preferred stock distribution called for under the Plan will occur. This factor weighs in Lancaster's favor too. (C) the reason for the delay, including whether it was within the reasonable control of the creditor -- Judge Baxter points to Lancaster's own words: "We are not arguing that the debtors did anything wrong that caused us to file a proof of claim. It was simply carelessness on our part," and says this factor weighs in the Committee's favor. (D) whether the creditor acted in good faith -- The record is void of anything that suggests Lancaster did not act in good faith, Judge Baxter observes. Lancaster admits it made a mistake, but it acted quickly to correct it. Therefore, this factor weighs in Lancaster's favor. Judge Baxter concludes that excusable neglect is present in this case. Prejudice, length of delay, and good faith all support Lancaster's request for allowance of its claim. "Although Lancaster was careless in its obligation to file its claim by the deadline, that fact standing alone does not support the denial of its claim," Judge Baxter says. "[T]he concept of excusable neglect clearly anticipates [carelessness by the claimant], i.e., neglect on the part of the one seeking to be excused." O'Brien Envtl. Energy, Inc., 188 F.3d 116 at 128 (3d Cir. 1999). Headquartered in Houston, Texas, Garden Ridge Corporation -- http://www.gardenridge.com/-- is a megastore home decor retailer that offers decorating accessories like baskets, candles, crafts, home accents, housewares, party supplies, pictures and frames, pottery, seasonal items, and silk and dried flowers. The Company and its debtor-affiliates filed for chapter 11 protection on February 2, 2004 (Bankr. D. Del. Case No. 04-10324). Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP, represents the Debtors. When the Debtors filed for protection from their creditors, they listed estimated debts and assets of over $100 million. The Bankruptcy Court confirmed the Debtors' First Amended Joint Plan of Reorganization on Apr. 28, 2005. The Plan took effect on May 12, 2005. David B. Stratton, Esq., at Pepper Hamilton LLP represents the Post-Effective Date Committee GMAC COMMERCIAL: Moody's Holds C Rating on $15.2 Mil. Certificates ------------------------------------------------------------------ Moody's Investors Service upgrades ratings of four classes and affirmed the ratings of five classes of GMAC Commercial Mortgage Securities, Inc., Mortgage Pass-Through Certificates, Series 1997-C2: * Class A-3, $93,198,829, Fixed, affirmed at Aaa * Class X, Notional, affirmed at Aaa * Class B, $69,725,000, Fixed, affirmed at Aaa * Class C, $69,725,000, Fixed, upgraded to Aaa from Aa2 * Class D, $32,181,000, Fixed, upgraded to Aaa from A2 * Class E, $50,953,000, Fixed, upgraded to A1 from Ba1 * Class F, $48,271,000, Fixed, upgraded to Ba3 from B2 * Class G, $13,409,000, Fixed, affirmed at B3 * Class H, $15,261,921, Fixed, affirmed at C As of the August 15, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 63.4% to $392.7 million from $1.1 billion at securitization. The Certificates are collateralized by 67 loans ranging in size from less than 1% to 5.7% of the pool. In August the $135.7 million Integrated Health Services Loan, which represented 25.7% of the pool, paid off in full. This payoff resulted in a $1.4 million loss due to a liquidation fee paid to the special servicer. Eleven loans, representing 16.8% of the pool balance, have defeased and are collateralized by U.S. Government securities. Thirteen loans have been liquidated from the trust, resulting in aggregate realized losses of approximately $54.5 million. One loan, representing less than 1.0% of the pool, is in special servicing. Moody's is only estimating a minimal loss for this loan. Eighteen loans, representing 17.7% of the pool, are on the master servicer's watchlist. Moody's was provided with full year 2005 operating results for approximately 92% of the performing loans. Moody's weighted average loan to value ratio is 76.9%, compared to 91.7% at Moody's last full review in September 2005 and compared to 91.4% at securitization. Moody's is upgrading Classes C, D, E and F due to increased credit support and defeasance. The top three loans represent 15.6% of the outstanding pool balance. The largest loan is the One Westside Plaza Loan ($22.4 million - 5.7%), which is secured by a 93,000 square foot retail center located in Los Angeles, California. The center is 99.6% leased and is anchored by Marshall's and Linens-n-Things, which collectively occupy 86.8% of the premises on long term leases. Moody's LTV is 70.3%, essentially the same as at last review. The second largest loan is the North Isle Village Loan ($20.4 million - 5.2%), which is secured by a 769-unit cooperative apartment complex located in Suffolk County, Long Island. Approximately 68.0% of the units are owner occupied and the remaining units are rentals. The property is 99.0% occupied but performance has been impacted by increased real estate tax and utility expenses. Moody's LTV is 89.8%, essentially the same as at last review. The third largest loan is the Fruitvale Shopping Center Loan ($18.7 million - 4.7%), which is secured by a 163,000 square foot retail center located in Oakland, California. The property is 99.4% occupied and anchored by Albertson's and Office Depot, which collectively occupy 57.0% of the premises on long term leases. Moody's LTV is 65.3%, compared to 73.0% at last review. The pool collateral is a mix of retail (33.5%), multifamily (31.2%), U.S. Government securities (16.8%), lodging (8.5%), office and mixed use (5.4%), healthcare (2.6%) and industrial and self storage (2.0%). The collateral properties are located in 22 states. The highest state concentrations are California (38.4%), New York (18.7%), Florida (8.1%), Texas (5.2%) and Iowa (4.9%). All the loans are fixed rate. GOLDEN EAGLE: Posts $613,070 Net Loss in Second Quarter ------------------------------------------------------- Golden Eagle International, Inc., incurred a $613,070 net loss on zero revenue for the three months ended June 30, 2006, compared to a $541,812 net loss on zero revenue in 2005, the Company disclosed in its second quarter financial statements on Form-10Q to the Securities and Exchange Commission. The Company's June 30 balance sheet also showed strained liquidity with $223,175 in total current assets available to pay $2,016,112 in total current liabilities coming due within the next 12 months. As of June 30, 2006, the Company's accumulated deficit widened to $45.2 million from a $44.1 million deficit at Dec. 31, 2005. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?11b4 Going Concern Doubt Chisholm, Bierwolf & Nilson, LLC, expressed substantial doubt about Golden Eagle International Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's negative working capital and substantial losses since its inception. The Company currently has no mineral production and requires significant additional financing to satisfy its outstanding obligations and resume and expand mining production. Based in Salt Lake City, Utah, Golden Eagle International, Inc. -- http://www.geii.com/-- engages in mining and exploration of gold and copper projects in the Republic of Bolivia. The company owns two mineral prospects, including the combined Cangalli and Tipuani Valley gold properties in western Bolivia, and the Buen Futuro properties in the Precambrian Shield area of eastern Bolivia. It also has interest in the Rio Mojos gold project area that covers 7,163 acres along a 25-mile section of the Mojos River, through a joint venture. GRADUATE HEALTH: Moody's Withdraws Ca Rating on $156 Million Bonds ------------------------------------------------------------------ Moody's Investors Service withdraws the Ca rating assigned to approximately $156 million of Series 1991 and Series 1993 bonds issued by Graduate Health System through the Philadelphia Hospital and Higher Education Facilities Authority. The rating action reflects our standard practice of withdrawing ratings of organizations that have entered bankruptcy proceedings. Since the bankruptcy filing in 1998, bondholders have received distributions in the amount of $75 million. Litigation against PricewaterhouseCoopers LLP by the creditors is still ongoing. Amounts received from the PWC litigation, any balances remaining in reserves established to pay costs of the PWC litigation, and from other miscellaneous amounts available for the distribution from the bankruptcy proceedings, will be distributed among all the creditors. HEALTH CARE: Planned Windrose Buy Cues Fitch's Positive Watch ------------------------------------------------------------- Fitch Ratings placed the ratings of Health Care REIT (NYSE: HCN) on Rating Watch Positive following the company's announcement of its intention to acquire Windrose Medical Properties Trust (NYSE: WNS or Windrose). These ratings are affected: -- Issuer default rating 'BBB-' -- Unsecured bank credit facility 'BBB-' -- Senior unsecured notes 'BBB-' -- Preferred stock 'BB+' The rating action affects approximately $1.5 billion of outstanding securities. Fitch notes that the acquisition would increase the company's asset base by approximately 25% and would broaden its investment portfolio to include medical office buildings, outpatient facilities and specialty hospitals. The Windrose properties are well-leased at 94.2% as of June 30, 2006. The addition of these facilities to the portfolio will decrease HCN's reliance on revenue from its top tenants. HCN's top five tenants represented 42% of its total investment balance as of June 30, 2006. Pro forma for the acquisition, HCN's top five tenants would represent 35%. Moreover, the acquisition would also reduce HCN's exposure to government reimbursement risk. Skilled nursing facilities, which generate the vast majority of revenue from government sources, would decline from 45% of HCN's total portfolio to 37% with the addition of the Windrose portfolio. Fitch also notes that HCN has indicated that it intends to maintain debt service coverage ratios and leverage within existing ranges after the closing of the acquisition. HCN's interest coverage as measured by recurring EBITDA over total interest expense was 3.2x for the last 12 months and fixed charge coverage after adjusting for capital expenditures and preferred dividends was 2.5x for the last 12 months. HCN's total debt to undepreciated book capital was 44.1% and total debt plus preferred securities to total undepreciated book capital was 52.4% at June 30, 2006. In addition to the company's solid operating performance, an important contributor to HCN's existing ratings is the company's relatively liquid balance sheet which is due in part to its unsecured funding strategy. As of June 30, 2006, HCN's portion of secured debt was 4% of total debt. After the closing of the acquisition, however, HCN's percentage of secured debt would rise to 13%. Fitch anticipates that the company would reduce this exposure meaningfully over the next several quarters. Fitch also notes that there is a moderate degree of execution risk associated with this acquisition. Although existing HCN management has limited expertise with respect to managing a platform of medical office buildings, the company will retain key executives from Windrose. Fitch would expect to see evidence of a smooth integration of Windrose into HCN prior to resolving the Rating Watch. IFSA STRONGMAN: Posts $297,315 Net Loss in Quarter Ended June 30 ---------------------------------------------------------------- IFSA Strongman, Inc., reported a $297,315 net loss on $150,936 of sale for the quarterly period ended June 30, 2006. This compares to a $620,099 net loss on $331,388 of sales for the period ended June 30, 2005. At June 30, 2006, the Company's balance sheet showed $1,688,787 in total assets, $680,018 in total liabilities, and $1,008,769 in stockholders' equity. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?11c0 Going Concern Doubt As reported on the Trouble Company Reporter on July 21, 2006, Bouwhuis, Morrill & Company, LLC, in Layton, Utah, raised substantial doubt about IFSA Strongman, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's negative cash flows and losses from operations since inception. About IFSA Strongman Based in London, England, IFSA Strongman, Inc., fka Synerteck Inc. -- http://www.ifsastrongman.com/-- is an integrated media, entertainment and athlete representation company, principally engaged in the development, production and marketing of television programs, live events and the licensing and sale of branded consumer products. The content of their entertainment and consumer products is centered on the various strongman competitions and events worldwide. IMPSAT FIBER: 2006 Second Quarter Net Loss Narrows to $3.5 Million ------------------------------------------------------------------ IMPSAT Fiber Networks, Inc., filed its financial statements for the second quarter ended June 30, 2006, with the Securities and Exchange Commission. Commenting on the results of the second quarter of 2006, IMPSAT chief executive officer Ricardo Verdaguer stated, "I am pleased to announce that during the second quarter of 2006 we reached remarkable achievements in revenue growth and EBITDA margins. "As a consequence of our customer-driven strategy and our improved solutions portfolio, our net revenues grew by 13% relative to the second quarter of 2005. Furthermore, this was our 10th consecutive quarter of revenue growth. In addition, our cost control efforts, together with leveraged fixed expenses, are paying off in higher EBITDA margins, which increased from 19.0% of Net Revenues in the second quarter of 2005 to 23.4% in the same period of 2006. Also, we continued expanding our Brazilian operations, where revenues and EBITDA grew by 46.1% and 121.2% respectively." Revenues Net revenues during the second quarter of 2006 totaled $69.4 million, an increase of $8 million, or 13.0%, compared with the second quarter of 2005. All product lines increased revenues period-over-period. -- Broadband and Satellite revenues increased $3.7 million, or 8.8%, period-over-period, driven by growth of IP solutions in Brazil, Colombia, and Ecuador. -- Internet revenues increased 16.2% period over period due to higher managed security services and the expansion of internet access to corporate customers. Brazil, Argentina, and Colombia were the subsidiaries with the highest growth. -- Value Added Services revenues increased by 44.6% as compared to the second quarter of 2005. Growth was led by housing, hosting, and managed services in our data centers, particularly in Brazil. -- Telephony revenues grew by 9.9% compared to the second quarter of 2005, led by higher sales to corporate customers in Brazil and Peru. For the six months ended June 30, 2006, net revenues totaled $138 million, an increase of $16.7 million, or 13.7%, as compared to the same period in 2005. IMPSAT's growth in revenues over the prior quarters is a combination of several factors including: (a) its increased customer base, which expanded from 3,912 customers at June 30, 2005, to 4,530 on June 30, 2006; (b) cross-selling and up-selling to existing and new customers; (c) bundling of existing and new services; (d) stable or improved macroeconomic conditions throughout the Latin American region; and (e) appreciation of local currencies, mainly in Brazil. Operating Expenses Operating Expenses for the three months ended June 30, 2006, totaled $66.9 million, an increase of $2.7 million, or 4.3%, compared to the second quarter of 2005. This increase is related to a $1.7 million increase in direct costs, a $1.3 million increase in salaries and wages, a $400,000 increase in selling, general and administrative expenses, and a $700,000 decrease in depreciation and amortization charges. Direct Costs for the second quarter of 2006 totaled $33.3 million, an increase of $1.7 million, or 5.4%, compared to the first quarter of 2005. The principal components of direct costs were as follows: Contracted Services decreased by $200,000 compared to the second quarter of 2005. Contracted services include installation and maintenance services. The decrease is related to maintenance works rescheduled for the following quarters. Other Direct Costs principally include provisions for doubtful accounts, licenses and other fees, sales commissions paid to our salaried work force and to third-party sales representatives, and node expenses. Other Direct Costs for the second quarter of 2006 increased by $1.9 million compared to the second quarter of 2005. The increase is related primarily to higher services delivered to customers, an increase in energy costs, doubtful accounts recoveries during 2005, and the appreciation of the local currency in Brazil. Leased Capacity Costs did not change in the three months ended June 30, 2006, as compared to the same period in 2005. Higher capacity needs to fulfill higher services demanded, were offset by price renegotiations. Salaries and Wages for the second quarter of 2006 totaled $13.6 million, a $1.3 million increase as compared to the second quarter of 2005. The effect of currency revaluation in Brazil, and salary adjustments related to higher cost of living were partially offset by savings due to lower headcount. The aggregate number of employees decreased from 1,253 at June 30, 2005, to 1,220 at June 30, 2006. Selling, General and Administrative expenses totaled $6.3 million for the second quarter of 2006, an increase of 6.9% compared with the $5.9 million of the second quarter of 2005. This increase is primarily related to higher legal advisory fees. EBITDA EBITDA for the three months ended June 30, 2006, totaled $16.2 million, compared with $11.7 million in the second quarter of 2005. The $4.5 million, or 38.8%, increase in EBITDA is directly related to higher revenues and a stable cost structure. EBITDA represented 23.4% of Net Revenues during the second quarter of 2006 compared with 19.0% during the second quarter of 2005. For the first two quarters of 2006 EBITDA totaled $31.8 million, compared with $22.3 million during the same period of 2005. Interest Expense Net interest expense for the three months ended June 30, 2006, totaled $7.0 million, compared with net interest expense of $8.9 million for the second quarter of 2005. The decrease in its net interest expense is related to lower total indebtedness and to lower taxes over interest payments. Effect of Foreign Exchange Losses and Gains Impsat recorded a net gain on foreign exchange for the second quarter of 2006 of $3 million, principally due to the impact of the appreciation of the Brazilian Real on the book value of monetary assets and liabilities in Brazil. This compares to a net gain on foreign exchange of $11.9 million for the same period of 2005. Net Loss For the three months ended June 30, 2006, the company recorded a net loss of $3.5 million, compared with a net loss of $7 million during the second quarter of 2005. Liquidity and Capital Resources Cash and cash equivalents at June 30, 2006, were $23.1 million. This compares with cash and cash equivalents of $24.1 million at Dec. 31, 2005. Total indebtedness as of June 30, 2006, was $241 million as compared with $248.1 million on Dec 31, 2005. Of the total indebtedness at June 30, 2006, $28.1 million represented short-term debt and the current portion of long-term debt, with the balance of $212.8 million representing long-term debt. At June 30, 2006, the Company's balance sheet showed $404.385 million in total assets, $364.541 million in total liabilities, and $39.844 million in total stockholders' equity. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?11b5 Going Concern Doubt In its audit report on the consolidated financial statements for year ended Dec. 31, 2005, auditors working for Deloitte & Touche LLP noted that IMPSAT Fiber Networks, Inc.'s current liquidity position, high debt obligations, and negative operating results raised substantial doubt as to its ability to continue as a going concern. About IMPSAT Fiber Networks IMPSAT Fiber Networks, Inc. -- http://www.impsat.com/-- provides private telecommunications networks and Internet services in Latin America. The company owns and operates 15 data centers and metropolitan area networks in some of the largest cities in Latin America, providing services to more than 4,200 national and multinational companies, financial institutions, governmental agencies, carriers, ISPs, and other service providers throughout the region. Impsat has operations in Argentina, Colombia, Brazil, Venezuela, Ecuador, Chile, Peru, the United States, and throughout Latin America and the Caribbean. INTRAWEST CORP: Moody's Withdraws B1 Ratings on $397 Million Notes ------------------------------------------------------------------ Moody's Investors Service withdrew the ratings on the debt issues of Intrawest Corporation. The individual debt issues were repaid in full with proceeds from additional financings. The ratings withdrawn are: -- $125 million 10.5% senior notes due 2010 rated B1 -- $135 million 10.5% senior notes due 2010 rated B1 -- $137 million 10.5% senior notes due 2010 rated B1 Intrawest operates nine mountain ski resorts in North America, five in the United States and four in Canada. The company also owns, develops, and manages residential and commercial in areas adjoining its resorts. Additionally, the company owns Abercrombie & Kent Group a luxury travel company, as well as a resort community and golf course in Florida, and Alpine Helicopter Ltd. a Canadian helicopter skiing and hiking company. INVICTA GROUP: June 30 Balance Sheet Upside-Down By $2.3 Million ---------------------------------------------------------------- Invicta Group Inc. reported $105,350 in total assets and $2,433,592 in total liabilities resulting in $2,328,242 stockholders' deficit at June 30, 2006. The Company also reported a $41,439 net loss on $228,660 of revenues for the three months ended June 30, 2006. The Company's June 30 balance sheet also showed strained liquidity with $105,350 in total current assets available to pay $2,182,782 in total current liabilities coming due within the next 12 months. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?11ba Going Concern Doubt Baum & Company, P.A., in Coral Springs, Florida, raised substantial doubt about Invicta Group's Inability 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 incurred losses of $6,364,000 since inception and negative working capital of $2,142,940 at June 30, 2006. About Invicta Group Headquartered in Miami, Florida, Invicta Group, Inc. -- http;//www.travelhotlink.com. -- operates and offers internet services to travel industries. It also owns a Las Vegas tour operator that offers travel and entertainment products for Las Vegas travelers. The Company has strategic alliance agreement with IQWARE, Inc. ISTAR FINANCIAL: Sells $1.2 Billion Senior Unsecured Notes ---------------------------------------------------------- iStar Financial Inc., has agreed to sell $700 million of Fixed Rate Notes and $500 million of Floating Rate Notes. All of the Notes are senior unsecured debt securities of the Company. The $700 million Fixed Rate 5.95% Senior Notes due 2013 are being sold at 99.755% of their principal amount to yield 5.992% per annum. The $500 million Floating Rate Senior Notes due 2009 will bear interest at a rate per annum equal to 3-month LIBOR plus 0.34%. The offering of the Fixed Rate Notes is expected to close on Sept. 22, 2006 and the offering of the Floating Rate Notes is expected to close on Sept. 18, 2006. The Company expects to use the proceeds from the sale of the Notes to repay outstanding balances on its unsecured revolving credit facility. The Notes have not been registered under the Securities Act of 1933, as amended, and will be sold only to qualified institutional buyers and non-US persons in reliance on the exemptions from the registration requirements of that Act provided by Rule 144A and Regulation S. The Notes may not be offered or sold in the United States absent registration or an applicable exemption from registration. iStar Financial (NYSE: SFI) -- http://www.istarfinancial.com/-- is a publicly traded finance company focused on the commercial real estate industry. The Company provides custom- tailored financing to high-end private and corporate owners of real estate nationwide, including senior and junior mortgage debt, senior and mezzanine corporate capital, and corporate net lease financing. The Company, which is taxed as a real estate investment trust, seeks to deliver a strong dividend and superior risk-adjusted returns on equity to shareholders by providing the highest quality financing solutions to its customers. * * * Moody's Investors Service upgraded iStar Financial Inc.'s preferred stock rating to Ba1 from Ba2, with a stable outlook. Fitch Ratings also raised the Company's preferred stock rating to 'BB+' from 'BB' in January 2006. Fitch said the Rating Outlook is Stable. JORDAN INDUSTRIES: June 30 Balance Sheet Upside-Down by $242.2MM ---------------------------------------------------------------- Jordan Industries, Inc., reported a $2.03 million net income on $187.5 million of net revenues for the three months ended June 30, 2006, compared to a $2.7 million net income on $183.8 million of net revenues in 2005, the Company disclosed in its second quarter financial statements on Form-10Q to the Securities and Exchange Commission. At June 30, 2006, the Company's balance sheet showed $607.9 million in total assets and $850.4 million in total liabilities, resulting in a $242.2 million stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $293.2 million in total current assets available to pay $473.1 million in total current liabilities coming due within the next 12 months. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?11b2 Going Concern Doubt Ernst & Young LLP in Chicago, Illinois, raised substantial doubt about Jordan Industries' ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditors pointed to the company's substantial debt maturing within the next year. About Jordan Industries Based in Deerfield, Illinois, Jordan Industries, Inc., is a closely held company organized to acquire and operate a diverse group of businesses through leveraged buy-outs. The Company is comprised of seventeen businesses which are divided into five strategic business units: Specialty Printing and Labeling, Consumer and Industrial Products, Jordan Specialty Plastics, Jordan Auto Aftermarket and Kinetek. * * * As reported in the Troubled Company Reporter on June 7, 2006, Moody's Investors Service downgraded Jordan Industries' Corporate family rating to Caa3 from Caa2 and changed the rating outlook to negative from stable. At the same time, Moody's affirmed ratings for the $27 million of 10.375% senior unsecured notes, due August 2007 at Ca, and for the $95 million of 11.75% senior subordinated discount debentures, due 2009 at C. JILLIAN'S ENT: Court OKs $3.5 Million Second Interim Distribution ----------------------------------------------------------------- The Honorable David T. Stosberg of the U.S. Bankruptcy Court for the Western District of Kentucky in Louisville authorized Steven L. Victor to make a $3,585,499.61 second interim distribution to unsecured and sub-debt creditors. Mr. Victor is the Plan Administrator appointed pursuant to the confirmed First Amended Joint Liquidation Plan of Jillian's Entertainment Holdings, Inc., and its debtor-affiliates. Mr. Victor is authorized to make interim distributions with an appropriate holdback and reserve for distributions to be made on account of certain other claims. In July 2005, after making an appropriate Reserve, the Administrator made an interim distribution. In this distribution, Mr. Victor has a total reserve of $4,253,251.66 on account of: Description Amount ----------- ------ Secured Tax Claims $120,851.16 Trustee Fees 50,250.00 Administrative Claims $1,084,021.28 Self-Insured Retention for Postpetition Personal Injury Claims 150,000.00 Professional Administrative Claims 1,165,000.00 Priority Tax Claims 234,494.09 Other Priority Claims 23,473.85 Unsecured Claims (Per Plan) 500,000.00 First Interim Distribution to Unsecured Creditors 425,161.28 Contingency 500,000.00 Headquartered in Louisville, Kentucky, Jillian's Entertainment Holdings, Inc. -- http://www.jillians.com/-- operates more than 40 restaurant and entertainment complexes in about 20 states. The Company filed for chapter 11 protection on May 23, 2004 (Bankr. W.D. Ky. Case No. 04-33192). Edward M. King, Esq., at Frost Brown Todd LLC and James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets of more than $100 million and estimated debts of over $100 million. Judge David T. Stosberg confirmed the Debtors' Amended Joint Liquidating Plan on Dec. 12, 2004. Steven L. Victor is the Plan Administrator. KAISER ALUMINUM: Leblanc & Waddell Wants $300K Admin. Claim Paid ---------------------------------------------------------------- Brett D. Fallon, Esq., at Morris, James, Hitchens & Williams LLP, in Wilmington, Delaware, relates that Leblanc & Waddell represented the interests of the CTPV and NIHL claimants in Kaiser Aluminum Corporation's Chapter 11 cases. LeBlanc & Waddell filed nine Louisiana state court lawsuits in the 34th Judicial Court for the Parish of St. Bernard, involving over 400 plaintiffs against Kaiser between June 1997 and January 2002. The Louisiana state court actions remain stayed as a consequence of Kaiser's bankruptcy filing. Through the course of their pre-bankruptcy negotiations, Leblanc & Waddell and Kaiser began crafting an agreement, which formed the starting point for the eventual NIHL Trust Distribution Procedures, Mr. Fallon says. LeBlanc & Waddell states that it has taken all necessary measures to protect the interests of the NIHL and CTPV claimants as well as made efforts to assist and contribute to Kaiser's emergence from bankruptcy. Pursuant to Sections 503(b)(3)(D) and 503(b)(4) of the Bankruptcy Code, LeBlanc & Waddell seeks the allowance and payment of its $300,000 administrative claim for reimbursement of a portion of the costs and expenses incurred in its participation in Kaiser's Chapter 11 cases from April 1, 2002 through September 5, 2006. According to Mr. Fallon, the actual amount expended exceeds $500,000 but LeBlanc & Waddell is only requesting for $300,000, which is the amount of expenses incurred by its special bankruptcy counsel, Baldwin Haspel LLC. LeBlanc & Waddell did not divide its billing into project categories as required by the Court's Local Rules since it was not retained as a professional, Mr. Fallon explains. Thus, LeBlanc & Waddell further asks the Court to waive a strict compliance with Del. Bankr. L.R. 2016-2 and Form 102. Mr. Fallon tells the U.S. Bankruptcy Court for the District of Delaware that Kaiser acknowledges LeBlanc & Waddell's contribution to its successful emergence from bankruptcy and is supporting the firm's application for administrative expense payment. About Kaiser Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. Lazard Freres & Co. serves as the Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July 6, 2006. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 105; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 609/392-0900) KAISER ALUMINUM: Supplements Objection to Agrium's Stay Motion -------------------------------------------------------------- Kaiser Aluminum & Chemical Corp. and Kaiser Aluminum Properties, Inc., asserted that the request filed by Agrium, Inc., and Agrium U.S. Inc. is meritless and should be denied in all respects, the Troubled Company Reporter reported on Sept. 6, 2006. The Agrium Companies sought the U.S. Bankruptcy Court for the District of Delaware to: (a) declare that the automatic stay does not apply; (b) interpret Kaiser Aluminum & Chemical Corp.'s Plan to determine the appropriate treatment of their claim; and (c) modify the discharge injunction to permit them to liquidate their claims against the estate, or the Reorganized Debtors, and pursue their claims against any available insurance. Kimberly D. Newmarch, Esq., at Richards, Layton & Finger in Wilmington, Delaware, said that the Agrium Companies' contingent contribution claim fails to meet these requirements to be entitled to administrative priority: -- the administrative expense arose out of a postpetition transaction with the debtor-in-possession; and -- the expense directly and substantially benefited the estate. Kaiser Supplements Objection Kaiser Aluminum & Chemical Corporation and Kaiser Aluminum Properties, Inc., inform the Court that they found in their off- site records a 1985 purchase agreement between KACC and the Agrium Companies' corporate predecessor, S&P Investments Corp. Pursuant to the Agreement, KACC indemnified S&P from all liability arising from the operation of the facility in Cantrall, Illinois, as well as certain liabilities arising after the effective date of the Agreement. The existence of the Agreement, which the Agrium Companies conveniently ignored, completely undercuts their erroneous arguments in their request, Kimberly D. Newmarch, Esq., at Richards, Layton & Finger in Wilmington, Delaware, asserts. Ms. Newmarch says that the prepetition contract that indemnified S&P proves that the Agrium Companies' contribution claim unquestionably dates from the effective date of the Agreement, thus their arguments that their claim arose postpetition and that they are entitled to administrative priority are wholly meritless. KACC and KAPI maintain that the Agrium Companies' request for relief from the automatic stay and discharge injunction should be summarily denied. About Kaiser Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. Lazard Freres & Co. serves as the Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July 6, 2006. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 105; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 609/392-0900) KINETEK INC: June 30 Stockholders' Deficit Narrows to $28.8 Mil. ---------------------------------------------------------------- Kinetek, Inc., filed its financial statements for the second quarter ended June 30, 2006, with the Securities and Exchange Commission. For the second quarter of 2006, the Company reported a net income of $2,824,000 on $96,462,000 of revenues compared with a net loss of $463,000 on $87,433,000 of net sales for the same period in 2005. At June 30, 2006, the Company's balance sheet showed $384,191,000 in total assets and $413,000,000 in total liabilities, resulting in a $28,809,000 stockholders' deficit. At Dec. 31, 2005, the Company had a $32,194,000 deficit. The Company's June 30 balance sheet also showed strained liquidity with $149,982,000 in total current assets available to pay $375,930,000 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?11b9 Bank & Bond Debt Mature This Year As reported in the Troubled Company Reporter on April 12, 2006, the Company's 10-3/4% Senior Notes will mature on Nov. 15, 2006, and its Credit Agreement will expire on Dec. 18, 2006. The Company is actively pursuing alternative financing to satisfy existing creditors while providing working capital necessary to support ongoing operations and the Company's acquisition strategy. Going Concern Doubt As reported in the Troubled Company Reporter on April 12, 2006, auditors working for Ernst & Young LLP in Chicago, Illinois, raised substantial doubt about Kinetek, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditors pointed to the company's substantial debt maturing within the next year. About Kinetek Kinetek, Inc. -- http://www.kinetekinc.com/-- is a group of companies that manufactures AC Motors, DC Motors, Gearmotors, Motor Speed Controls, and Gearing systems for a wide range of markets. * * * Kinetek, Inc.'s senior unsecured debt carries Moody's Investors Service's Caa3 rating. Standard & Poor's Rating Service lowered its ratings on Kinetek Inc. and its subsidiary Kinetek Industries Inc. including lowering its corporate credit rating to 'B-' from 'B'. S&P also assigned 'B' rating to the company's senior secured credit facilities and 'B-' rating to the company's senior secured notes. LEGACY ESTATE: John Ryan Wants Case Converted to Chapter 7 ---------------------------------------------------------- John M. Ryan asks the U.S. Bankruptcy Court for the Northern District of California in Santa Rosa to convert The Legacy Estate Group LLC's chapter 11 case to chapter 7 liquidation proceeding. The closing of the sale of the Debtor's assets to FAB Acquisition Company LLC prompts Mr. Ryan to move the case for conversion or in the alternative, to appoint a Chapter 11 Trustee and to dissolve the Official Committee of Unsecured Creditors. Mr. Ryan is the holder of non-contingent but unliquidated claims estimated to approximately $2 million. Michael St. James, at St. James Law, P.C., informs the Court that the Debtor suffered substantial or continuing loss, which is reflected in its monthly operating reports. The latest MOR filed on Aug. 21, 2006, for the month ended July 2006, shows a cumulative loss of $14.6 million and an operating loss of $5.8 million. Mr. James argues that after the Court-approved sale of the Debtor's assets, there is no business left for the Debtor to rehabilitate. Mr. James contends that the burden of professional fees must be reduced. At present period, professional fees has led to the accrual of extraordinary fees of more than $4.5 million in nine months. According to Mr. James, the Debtor has not filed a plan or disclosure statement, no substantive or material litigation was prosecuted, and no trials or evidentiary hearings conducted. Mr. James adds that converting the case or appointing a Trustee will advance the administration of the Debtor's estate and is in the best interest of the creditors and the estate. Headquartered in Saint Helena, California, The Legacy Estate Group LLC -- http://www.freemarkabbey.com/-- owns Freemark Abbey Winery, which produces a range of red, white, and dessert wines. Legacy Estate and Connaught Capital Partners, LLC, filed for chapter 11 protection on November 18, 2005 (Bankr. N.D. Calif. Case No. 05-14659). John Walshe Murray, Esq., Lovee Sarenas, Esq., and Robert A. Franklin, Esq., at the Law Offices of Murray and Murray represent the Debtors in their restructuring efforts. Lawyers at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts between $50 million and $100 million. MASTR ASSET: Moody's Puts Ba2 Rating on Class M-11 Certificates --------------------------------------------------------------- Moody's Investors Service assigns an Aaa rating to the senior certificates issued by MASTR Asset Backed Securities Trust 2006-HE3 and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by WMC Mortgage Corp. (57.9%), Meritage Mortgage Corporation (20.6%), EquiFirst Corporation (16.6%) and First Street Financial, Inc. (4.9%) originated adjustable-rate and fixed-rate subprime mortgage loans acquired by UBS Real Estate Securities Inc. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, excess spread, an interest rate swap agreement, and a cap contract. Moody's expects collateral losses to range from 4.90% to 5.40%. HomEq Servicing Corporation will act as servicer of the loans and Wells Fargo Bank, N.A. will act as master servicer. Moody's has assigned HomEq its servicer quality rating of SQ1- as primary servicer. Moody's has assigned Wells Fargo Bank, N.A. its servicer quality rating of SQ1 as master servicer. These are the complete rating actions: Issuer: MASTR Asset Backed Securities Trust 2006-HE3 * Cl. A-1, Assigned Aaa * Cl. A-2, Assigned Aaa * Cl. A-3, Assigned Aaa * Cl. A-4, Assigned Aaa * Cl. M-1, Assigned Aa1 * Cl. M-2, Assigned Aa2 * Cl. M-3, Assigned Aa3 * Cl. M-4, Assigned A1 * Cl. M-5, Assigned A2 * Cl. M-6, Assigned A3 * Cl. M-7, Assigned Baa1 * Cl. M-8, Assigned Baa2 * Cl. M-9, Assigned Baa3 * Cl. M-10, Assigned Ba1 * Cl. M-11, Assigned Ba2 MILLENIUM BIOLOGIX: Closes $1 Million Debenture Financing --------------------------------------------------------- Millenium Biologix Corporation closed $1 million of its convertible debenture financing from two of its existing investors. Included in the $1 million is $500,000 from the conversion of a demand loan from one of the investors. The Debentures are secured by a general charge over the assets of the Company and its subsidiary, subject to existing prior ranking security. As reported in the Troubled Company Reporter on Sept. 5, 2006, the conversion price at which the Debentures may be converted into common shares of the Company is $0.03 per share. Each of the 33,333,332 warrants being issued as part of the $1 million Debenture financing may be exercised to acquire common shares at a price of $0.0239 per share during the three year period following closing. The Company is continuing its efforts to obtain commitments from other investors for up to an additional $2 million of Debentures. There can be no assurance that such efforts will be successful. These efforts, together with other initiatives being pursued by the Company, are intended to provide it with further financial resources to continue to develop its core technologies and more time to attempt to address its longer term financial needs. Appointment of Medical Capital Advisors Millenium appointed Medical Capital Advisors (Boston, New York) to assist the Company in exploring financing, partnering and other strategic options to enhance shareholder value. "We remain convinced that Millenium's technologies have significant value and the engagement of Medical Capital Advisors to assist the Company in realizing this value is a critical undertaking for our shareholders" said Brian Fielding, Millenium's CEO. "We are very pleased to be working with a firm of Medical Capital Advisors caliber on this important initiative." About Medical Capital Advisors Medical Capital Advisors is a specialized investment-banking advisors to the medical technology industry. About Millenium Biologix Headquartered in Ontario, Canada, Millenium Biologix Corporation (TSX: MBC) -- http://www.millenium-biologix.com/-- is focused on the development and commercialization of next generation cell culture and tissue engineering systems that will drive change from synthetic implants to more effective biologics-based solutions. * * * As of April 30, 2006, the Company had cash of $3.2 million. The Company continues to review various strategic options, including seeking investors for a private placement financing to obtain the resources necessary to continue execution of the business plan. The implementation of the Company's strategy is dependent on successfully securing these necessary resources in the very near term. In the event the Company is unable to raise financing within the next two months, there is substantial doubt as to the Company's ability to continue as a going concern, which could require the partial or complete divestiture of one or more of its core technologies. The Company disclosed that for the three months ended June 30, 2006, the Company incurred a loss of $3,647,910 and negative cash flow from operations of $3,113,711. The Company has accumulated a deficit of $41,136,426 as at June 30, 2006. All of these factors continue to raise substantial doubt about the Company's ability to continue as a going concern. On Aug. 17, 2006, the Company was informed by the Toronto Stock Exchange that the common shares of the Company have been suspended from trading for failure to meet the continued listing requirements, and that the Company will be delisted at the close of business on Sept. 15, 2006. The Company is in discussions with the TSX to lift the suspension and reverse the delisting order. MOOSE OIL: Landowner Obtains Judgment for Unpaid Royalties ---------------------------------------------------------- Doris Barnes owns land in Lavaca County, Texas, and executed a mineral lease of that land in favor of American Exploration Company. Louis Dreyfus Natural Gas Corp acquired American's interest and then conveyed that interest to Dominion. Dominion Oklahoma Texas Exploration & Production, Inc. Moose Oil and Gas Company (Bankr. S.D. Tex. Case No. 02-33891) and Moose Operating Company, Inc., leased adjacent land and assigned some of the leasehold interests to parties referred to in court documents as the Moose Assignees. Dominion, Moose, and the Moose Assignees entered into a Working Interest Unit Agreement and Joint Operating Agreement that included Ms. Barnes' property. Ms. Barnes filed suit (Bankr. S.D. Tex. Adv. Pro. No. 02-6012) against O. Lee Tawes III, a Moose Assignee, and Marlin Data Research for royalties on mineral production from the Baker Barnes #1 and #2 wells for the period prior to February, 2002, and to recognize her right to royalties which have been suspended for production since that date. Mr. Tawes signed the Working Interest Unit Agreement and the Joint Operating Agreement in 1998, prior to the mineral production at issue in this adversary proceeding. Production was achieved from four wells. With respect to the Baker-Barnes #1 and # 2 wells (called the "Non-Consent Wells"), Moose and the Moose Assignees (including Tawes) were Consenting Parties to drilling the Non-Consent Wells and Dominion was a Non- Consenting Party. Under the terms of the Joint Operating Agreement, Consenting Parties were responsible for the expenses of drilling the wells and were responsible for payment of royalties due with respect to leases contributed to the Unit by Non- Consenting Parties. Consenting Parties were entitled to recover 400% of their expenditures on the Non-Consent Wells before Non- Consent Parties were entitled to payment of any revenue from the wells. On February 13, 2002, at a foreclosure sale, Marlin and Mr. Tawes purchased Moose's interest in the Baker Unit and specifically in the "Non-Consent Wells." Production of those two wells after February 2002, has been suspended and is held in a Royalty Suspense Account and in a Working Interest Suspense Account. As of February, 2002, Ms. Barnes undisputed royalty in the Non- Consent Wells was $291,846.00. Ms. Barnes contends that she is entitled to recover all unpaid royalties from the Non-Consent Wells from both Mr. Tawes and Marlin and from production payments due them that are being held in suspense by the operator of the wells. Mr. Tawes and Marlin contend that they have neither privity of contract nor privity of estate with Ms. Barnes and, therefore, are not personally liable to Ms. Barnes. The Defendants further contend that their suspended production payments are not liable for that payment. In a decision published at 2006 WL 2422829, the Honorable Wesley W. Steen concludes that: (1) judicial estoppel did not preclude Ms. Barnes' claims; (2) under Texas law, because the working interest owners acquired debtor's interest subsequent to severance of the minerals for which royalties were due, there was no basis for imposing liability on them for payment of royalties as assignees or successors to debtor; (3) the working interest owners were not the "first purchasers" of the oil and gas production within meaning of the Texas statute governing security interests in oil and gas interests; and (4) under Texas law, Ms. Barnes was a third party beneficiary of the obligation of the working interest owner, as a "consenting party" under the Joint Operating Agreement, to pay royalties owed by lessee as a "non-consenting party." Accordingly, Judge Steen issued a judgment in favor of Ms. Barnes against Mr. Tawes for unpaid royalty that is not suspended. Moose Oil is represented by: Mark C. Harwell, Esq. Cotham Harwell & Evans 1616 South Voss, Suite 200 Houston, TX 77057 Telephone (713) 647-7511 The Chapter 7 Trustee overseeing Moose Oil's liquidation is: Alan S. Gerger, Esq. Dunn Neal & Gerger, LLP 3050 Post Oak Blvd., Suite 400 Houston, TX 77056 Telephone (713) -403-7400 MORGAN STANLEY: Moody's Junks Rating on $2.5 Mil. Class M Certs. ---------------------------------------------------------------- Moody's Investors Service downgrades ratings of three classes and affirmed the ratings of 12 classes of Morgan Stanley Dean Witter Capital I Trust 2001-TOP3, Commercial Mortgage Pass-Through Certificates, Series 2001-TOP3: * Class A-2, $43,524,080, Fixed, affirmed at Aaa * Class A-3, $68,096,034, Fixed, affirmed at Aaa * Class A-4, $617,439,000, Fixed, affirmed at Aaa * Class X-1, Notional, affirmed at Aaa * Class X-2, Notional, affirmed at Aaa * Class B, $30,843,000, Fixed, affirmed at Aa1 * Class C, $28,273,000, Fixed, affirmed at A1 * Class D, $12,852,000, Fixed, affirmed at A3 * Class E, $17,992,000, WAC, affirmed at Baa2 * Class F, $11,566,000, WAC, affirmed at Baa3 * Class G, $11,566,000, Fixed, affirmed at Ba1 * Class H, $10,281,000, Fixed, affirmed at Ba2 * Class J, $8,996,000, Fixed, downgraded to B1 from Ba3 * Class L, $5,140,000, Fixed, downgraded to B3 from B2 * Class M, $2,570,000, Fixed, downgraded to Caa1 from B3 As of the Aug. 15, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 14.2% to $881.8 million from $1 billion at securitization. The Certificates are collateralized by 144 mortgage loans. The loans range in size from less than 1.0% to 6.1% of the pool, with the top ten loans representing 38.3% of the pool. The pool consists of three shadow rated loans, representing 13.3% of the pool, and a conduit component, representing 86.7% of the pool. Five loans, representing 7.9% of the pool, have defeased and have been replaced with U.S. Government securities. Four loans have been liquidated from the trust resulting in aggregate realized losses of approximately $1.5 million. There are no loans in special servicing. Twenty-eight loans, representing 14.3% of the pool, are on the master servicer's watchlist. Moody's was provided with full year 2005 operating results for 93.8% of the performing loans. Moody's loan to value ratio for the conduit component is 79.6%, compared to 75.9% at last review and compared to 75.7% at securitization. Moody's is downgrading Classes J, L and M due the poorer performance of two of the shadow rated loans and LTV dispersion. Based on Moody's analysis, 12.6% of the conduit pool has a LTV greater than 100.0%, compared to 1.7% at securitization. The largest shadow rated loan is the Marriott Village Loan ($50 million - 5.7%), which is secured by three Marriott branded hotels located in Orlando, Florida. Situated on a 23-acre parcel, the Marriott Village properties are located in the Buena Vista submarket of Orlando, approximately 1.5 miles from the entrance to Walt Disney World. The hotels, which total 1,100 guestrooms, were built in 2000 and include Courtyard by Marriott (312 rooms; 34.6% allocated loan balance), SpringHill Suites (400 rooms; 35.4%) and Fairfield Inn (388 rooms; 30%). Between December 2001 and December 2004, the hotels were triple net leased to Marriott International, which guaranteed annual lease payments of $10.88 million. Per specific conditions of the CNL-Marriott agreement, the minimum rent guarantee expired in December 2004, when CNL ended Marriott's tenancy and converted the operating lease to a management agreement. Moody's original stabilized RevPAR and net operating income were $73 and $11.2 million. Current net operating income is $7.05 million based on year end 2005 financials. Current RevPAR is $64.07. The properties are managed by Marriott International, Inc. (Moody's senior unsecured rating Baa2; stable outlook). The loan is interest only and matures in December 2007. The loan sponsor is CNL Hospitality, Inc., a publicly traded REIT. Moody's current shadow rating is below investment grade. Moody's shadow rating at securitization was A1. The second shadow rated loan is the Federal Plaza Loan ($34.3 million - 3.9%), which is secured by a 242,000 square foot anchored retail center located approximately 20 miles north of Washington, D.C. in Rockville, Maryland. The anchored retail center was built in 1970 and renovated in 1991. The center is 100.0% occupied as it was at last review, compared to 98.4% at securitization. Major tenants include TJ Maxx (12.8% GLA; lease expiration January 2007), CompUSA (11.7% GLA; lease expiration April 2011), and Ross Dress for Less (12.1% GLA; lease expiration January 2014). The loan sponsor is Federal Realty Investment Trust (Moody's senior unsecured rating Baa2; positive outlook), a publicly traded REIT. Moody's current shadow rating is Baa1, compared to Baa2 at last review and compared to Baa3 at securitization. The third shadow rated loan is the 111 Pine Street Loan ($33.3 million - 3.7%), which is secured by a 210,000 square foot office building located in the Financial District of San Francisco, California. The 18-story structure was built in 1965 and renovated in 1993. The property is 100.0% occupied, compared to 99.3% at last review and compared to 97.0% at securitization. The largest tenants are First Republic Bank (Moody's long term issuer rating Baa2 -- stable outlook; 50.0% NRA; lease expiration July 2010) and the California Department of Financial Institutions (12.6% NRA; lease expiration April 2008). The San Francisco office market has experienced a significant decline since securitization, which has impacted the property's rental rates. As of the second quarter of 2006, the submarket asking rents were $26.75 per square foot compared to $64 per square foot at securitization. The property's overall performance, when compared to origination, has declined to a decrease in rents as tenant leases expired. The borrower's reported net operating income is $3.4 million, compared to $4.1 million at last review and compared to $6.1 million at securitization. Moody's current shadow rating is below investment grade. Moody's shadow rating at securitization was Baa1. The top three conduit loans represent 13.1% of the outstanding pool balance. The largest conduit loan is the 140 Kendrick Street Loan ($53.9 million - 6.1%), which is secured by three Class A office buildings located approximately 10 miles west of downtown Boston in Needham, Massachusetts. The buildings total 381,000 square feet and were built in 2000. The property is 100% leased to Parametric Technology Corporation through November 2012 and serves as its corporate headquarters. The property has performed at the same level since securitization; occupancy remains at 100.0%. The loan sponsors are the New York State Common Retirement Fund and Boston Properties, Inc. (Moody's preferred shelf rating (P)Baa3; stable outlook), a publicly traded REIT. Moody's LTV is 74.9%, compared to 77.3% at last review and at securitization. The second largest conduit loan is the Seattle Trade & Technology Loan ($43.7 million - 5%), which is secured by a five-story, 332,000 square foot office building located in the Denny Regrade submarket of downtown Seattle, Washington. The property is 100% occupied by two tenants, the same as at securitization. The building was constructed in 1917 and renovated in 1999. The property serves as the corporate headquarters for RealNetworks, Inc. (83% NRA; lease expiration October 2013). The second tenant is the Art Institute of Seattle (17% NRA; lease expiration October 2012). Moody's LTV is 84.5%, compared to 79.7% at last review and compared to 80.9% at securitization. The third largest conduit loan is the York Galleria Loan ($24.8 million - 2.8%), which is secured by a 487,400 square foot segment of a 769,300 square foot two-story enclosed mall located in York, Pennsylvania, 20 miles south of Harrisburg and 45 miles north of Baltimore. This note represents a 50% portion of pari passu loan. The mall was built in 1989 and renovated in 1992. The property is 100% occupied, compared to 85% at securitization. Major tenants include Sears (29.4% GLA; lease expiration November 2009), J.C. Penney (23% GLA; lease expiration October 2009). Boscov's and Bon Ton are non-collateral anchor tenants. Moody's LTV is 80.7%, compared to 74.1% at last review and compared to 75.9% at securitization. The pool's collateral is a mix of office (33.5%), retail (24.2%), industrial (18.1%), multifamily and mobile home (8.1%), U.S. Government securities (7.9%), hotel (5.7%) and self storage (2.7%). The collateral properties are located in 30 states and Washington, D.C. The highest state concentrations are California (26.7%), Massachusetts (9.2%), Florida (7.9%), Pennsylvania (6.0%) and Washington (5.5%). All of the loans are fixed rate. NATIONSRENT COS: Ashtead Buy Prompts Moody's to Withdraw Ratings ---------------------------------------------------------------- Moody's Investors Service withdrew the ratings for NationsRent Companies, Inc.: * Corporate Family Rating -- B2; * Senior Secured -- B2; and * Senior Unsecured -- Caa1. Effective August 31, 2006, Ashtead Group Plc completed its acquisition of NationsRent. All the outstanding notes were redeemed or satisfied as part of the acquisition. Additionally, NationsRent has filed a Form 15 with the US Securities and Exchange Commission terminating its requirement to file financial statements. Ashtead Group Plc, through its Sunbelt Rentals, Inc. subsidiary, is one of the largest equipment rental companies in the US. NationsRent Companies, Inc. is a subsidiary of Sunbelt Rentals, Inc. NORTHWEST AIRLINES: District Ct. Okays Prelim. Injunction vs. AFA ----------------------------------------------------------------- The Honorable Victor Marrero of the U.S. District Court for the Southern District of New York overturned, on Sept. 15, 2006, a bankruptcy court decision and granted Northwest Airlines Corp.'s request for a preliminary injunction to prevent a threatened strike or work action by the company's flight attendants, represented by the Association of Flight Attendants-CWA. "Judge Marrero's decision to grant Northwest the injunction allows our customers to continue to book Northwest Airlines with confidence, knowing that we will get them to their destinations reliably," Doug Steenland, president and chief executive officer, said. "While the court decision is reassuring to our customers, we remain committed to negotiating a consensual agreement with our flight attendants. We hope to accomplish that goal in the near future." As reported in the Troubled Company Reporter on Aug. 28, 2006, the District Court issued an injunction against any work actions by the AFA after Northwest appealed Bankruptcy Court Judge Allan Gropper's denial of the company's request for a preliminary injunction, to provide the District Court time to consider Northwest's appeal from Judge Gropper's ruling. Upon review, Judge Marrero concluded that Judge Gropper had erred in denying Northwest's request for an injunction. Flight Attendant Discussions Northwest and the unions representing its flight attendants have negotiated two tentative agreements. In July, flight attendants rejected a tentative contract agreement that Northwest had negotiated with AFA and that would have met the targeted $195 million in annual labor cost savings. AFA endorsed that tentative agreement and recommended that its members vote in favor of it. As a result of the contract rejection, and in accordance with a previous decision of the Bankruptcy Court, Northwest implemented contract terms and conditions for its flight attendants that met the required $195 million of annual labor cost savings for that group. Northwest has reached agreements on permanent wage and benefit reduction agreements with the Air Line Pilots Association, the International Association of Machinists and Aerospace Workers, Aircraft Technical Support Association, the Transport Workers Union of America, and the Northwest Airlines Meteorologists Association. Two rounds of salaried and management employee pay and benefit cuts have also been instituted and the needed aircraft maintenance employee labor cost savings have been achieved, which allowed Northwest to meet its goal of achieving $1.4 billion in annual labor savings. Since beginning its restructuring process in September of last year, Northwest has remained focused on its plan to realize $2.5 billion in annual business improvements in order to return the company to profitability on a sustained basis. The restructuring plan continues to be centered on three goals: * resizing and optimization of the airline's fleet to better serve Northwest's markets; * realizing competitive labor and non-labor costs; and * restructuring and recapitalization of the airline's balance sheet. About Northwest Airlines Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. NORTHWEST TIMBERLINE: Court Finds No Chance of a Reorganization --------------------------------------------------------------- Chevron U.S.A. Inc. moved for Relief from the Automatic Stay and filed Motions to Convert the chapter 11 cases commenced by Northwest Timberline Enterprises, Inc., and Construction and Real Estate Information Services, Inc., to chapter 7 liquidation proceedings. Chevron holds secured claims against both debtors, and claims to be owed $1,557,197.46 by NWTE and $1,507,219.19 by CREIS. Chevron's claims are secured by liens on virtually all the Debtors' assets, and is undersecured by a wide margin. The Debtors Northwest Timberline Enterprises, Inc. (Bankr. N.D. Tex. Case No. 04-36426), and Construction and Real Estate Information Services, Inc. (Bankr. N.D. Tex. Case No. 04-36448) are affiliated debtors, but their bankruptcy cases have not been consolidated for procedural purposes. Each Debtor owns and operates separate gas stations and convenience stores. NWTE's operations are located at 3311 West Northwest Highway, Dallas, Texas, and CREIS' operations are located at 8817 Clark Road, Dallas, Texas. Saeed Mahboubi is the common connection to the two Debtors that makes them "affiliated" Debtors. Mr. Mahboubi is the president and 70% shareholder of NWTE and is also the president and 70% shareholder of CREIS. Proposed Chapter 11 Plan The Debtors have been pursuing a joint plan in their cases since December 27, 2004, when a first plan in each case was filed. A first amended plan was filed on March 8, 2005, and a second amended plan was filed on May 2, 2005. A plan supplement to the second amended plan was filed on May 9, 2005. A second plan supplement to the second amended plan was filed November 20, 2005. Then, a modification to the second amended plan was filed on May 19, 2006. As of this date, neither Chevron nor the taxing authorities support the Joint Plan. On June 24, 2005, the Honorable Steven A. Felsenthal decided that a Chapter 11 trustee might be the most reasonable solution "to explore a more businesslike resolution of these cases," and signed an order authorizing the appointment of Mr. Robert Yaquinto as a Chapter 11 Trustee on June 27, 2005. Mr. Yaquinto conducted an auction on December 13, 2005, in which he accepted bids in two different forms: bids for all of the owned assets of the Debtors or, alternatively, bids for the equity interests of the Debtors. Chevron credit bid $1.1 million in each case for the debtors' assets. No other bids were received for the proposed asset sales. As for the equity sale, two bidders proved interested in the equity interests in the Debtors: John T. Evans of the John T. Evans Co., Inc., and Charles A. Burton of the Burton Oil Co., Inc. Both had purportedly previously provided the Chapter 11 Trustee with evidence of financial ability to pay. Evans was declared the higher bidder for the equity, with a bid of $130,000 per Debtor, for a total bid of $260,000. On March 6, 2006, the Chapter 11 Trustee filed a report of the results of the auction. He articulated the results of the auction and also the pros and cons of a sale of the assets versus a sale of the equity of NWTE and CREIS. Ultimately, the Chapter 11 Trustee recommended the Evans Bid over Chevron's credit bid for the assets, simply because there was a possibility of a dividend to unsecured creditors with such bid. However, the Honorable Stacey G. Jernigan observes in an opinion published at 2006 WL 2468090, the Chapter 11 Trustee's recommendation was lukewarm at best, and expressed concern about whether the Evans' bid would lead to a confirmable plan. Moreover, the Chapter 11 Trustee's recommendation seemed to ignore the stark reality that more than 90% of the dividend that the $260,000 might enable to be realized for unsecured creditors would go to Chevron -- the holder of more than 90% of the unsecured creditor pool and the party opposing (or competing with) the $260,000 bid. With regard to the winning equity bidder, Judge Jernigan recalls, Mr. Evans testified on May 30, 2006 that: (a) He has known Mr. Mahboubi, the Debtors' President, for many years. (b) Mr. Evans believed himself to have a personal net worth of approximately $5 million. However, it is likely that some to-be-formed company (rather than Mr. Evans personally) will actually become the owner of the NWTE and CREIS stock. (c) Mr. Evans has no experience running a type of business similar to the Debtors' gas stations and convenience stores. The Debtors' Current Joint Plan contemplates a $260,000 new equity infusion and a restructuring of most of the Debtors' debt. In addition to the $260,000 of new equity, the Debtors' Current Joint Plan -- specifically in the most recent plan modifications dated May 19, 2006 -- contemplates that the Debtors will enter into a new $315,000 senior, secured loan from an entity called Property Tax Lending L.P. This is the amount projected by the Debtors as necessary to pay all ad valorem taxes that have accrued on the Debtors' properties up through 2005. There was no evidence before the Court as to whom exactly the lender PTL is. Under the PTL Loan, PTL will be entitled to receive repayment of its loan from the Debtors over 10 years at a 13% interest rate per annum. Repayment of the loan is such that one-half of the accruing interest will be due and payable monthly for the first twelve months, and then interest only will be due and payable during years two and three after confirmation of the Current Joint Plan. Thereafter, the balance on the PTL Loan will be amortized in equal monthly payments over a period of 84 months. One of the most significant aspects worthy of mentioning about this proposed PTL Loan is that it is a negative amortization loan initially after confirmation of the plan-meaning essentially that the principal balance of the loan is growing, since interest is accruing faster than it is being paid. Subordinate to the PTL Loan and 2006 tax claims, the Current Joint Plan proposes to pay "$940,000 less payments made during the case" on account of Chevron's allowed secured claims in each case, in monthly payments at a 7% interest rate per annum, with a 25 year amortization and balloon payments at the end of seven years. Moving further through the Current Joint Plan, it proposes to pay holders of unsecured claims who are owed more than $10,000 (including Chevron's deficiency claim), 10% of their allowed claims on the initial distribution date and 20% over 60 months in equal monthly installments. Holders of unsecured claims less than $10,000 (the dozen or so at most that there are), will receive 10% of their allowed claims on the initial distribution date of the plan and 40% of their claims in monthly payments over 24 months. Chevron does not -- and says it will not -- support this proposed chapter 11 plan. Chevron Wants Out Chevron argues that the fundamental issue with regard to its Motions to Lift Stay and Motions to Convert is whether the Debtors are able to effectuate a confirmable plan. Chevron says the court should simply lift the automatic stay or, alternatively, convert the cases to Chapter 7, at this point, because of the inability of the Debtors to effectuate a plan (more than two years down the road in these cases) -- this being the "cause" to lift the stay or "cause" to convert required under 11 U.S.C Sec. 362(d) and 1112(b)(2). Among other problems with confirmation alleged by Chevron are: (a) unfair or improper treatment of Chevron's claim proposed under the Plan under 11 U.S.C. Sec. 1129(a) and (b) because repayment of Chevron's claims is proposed at far too low a rate of annual interest and subordination of Chevron's liens to the proposed PTL Loan is also improper; and (b) lack of feasibility. The Ruling After extensive briefing and testimony, Judge Jernigan concludes that the debtors' chapter 11 cases are essentially two-party disputes with Chevron. The Debtors have no equity in the property securing Chevron's claims, can't satisfy their burden of showing that they have any reasonable prospect of reorganizing, or that the collateral pledged to Chevron was "essential for an effective reorganization that is in prospect" as the High Court in United Sav. Ass'n v. Timbers of Inwood Forest Assocs., 484 U.S. 365, 376, 108 S.Ct. 626, 98 L.Ed.2d 740 (1988), says is required. During the two years that they have operated in Chapter 11, Judge Jernigan observes that they have consistently operated at a deficit, have failed to ever generate positive cash flow, and have no unencumbered assets to fund a plan. Accordingly, Judge Jernigan rules that Chevron is granted relief from the automatic stay in both debtors' cases. ONEIDA LTD: Completes $170MM Financing & Emerges From Chapter 11 ---------------------------------------------------------------- Oneida Ltd. completed its $170 million exit financing and emerged from Chapter 11 on Sept. 15, 2006, as a privately held company. The company's new shareholders are led by Quadrangle Group LLC and also include JPMorgan, Litespeed Partners LLC, and D. E. Shaw Laminar Portfolios, L.L.C. "The completion of this financing marks the final step in Oneida's recapitalization process," James E. Joseph, President of Oneida, said. "We now have both equity and debt capital in the right proportions to support our growth initiatives and profit improvement programs. We look forward to reinforcing and expanding our relationships with Oneida's customers, suppliers and business partners. Their support over the past six months has been vital to the success of this process." Oneida's prenegotiated plan of reorganization was confirmed by the U.S. Bankruptcy Court for the Southern District of New York on August 30, 2006. Concurrent with its emergence from Chapter 11, Oneida entered into a $170 million senior secured long-term credit facility led by Credit Suisse, consisting of an $80 million asset- based revolving credit facility and a $90 million term loan. Oneida's common and preferred stockholders will not receive any distributions under the plan and their equity was cancelled as of the plan's effective date. Headquartered in Oneida, New York, Oneida Ltd. (OTC: ONEI) -- http://www.oneida.com/-- manufactures stainless steel and silverplated flatware for both the Consumer and Foodservice industries, and supplies dinnerware to the foodservice industry. Oneida also supplies a variety of crystal, glassware and metal serveware for the tabletop industries. The Company and its 8 debtor-affiliates filed for Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case Nos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., at Shearman & Sterling LLP represents the Debtors. Credit Suisse Securities (USA) LLC is the Debtors' financial advisor. Scott L. Hazan, Esq., and Lorenzo Marinuzzi, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represent the Official Committee of Unsecured Creditors. Robert J. Stark, Esq., at Brown Rudnick Berlack Israels LLP represents the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed $305,329,000 in total assets and $332,227,000 in total debts. On May 12, 2006, Judge Gropper approved the Debtors' disclosure statement. The pre-negotiated plan of reorganization of Oneida Ltd. was confirmed, on Aug. 31, 2006. OPEN TEXT: Hummingbird Shareholders Approve Acquisition Bid ----------------------------------------------------------- Shareholders of Hummingbird Ltd. have overwhelmingly approved Open Text Corp.'s proposed acquisition of Hummingbird by way of plan of arrangement at a price of $27.85 per share. At a special meeting of the Company's shareholders held Friday, shareholders representing more than 56.9% of all shares outstanding and 99.9% of all votes cast voted in favor of the transaction, significantly exceeding the required 66% of the votes cast. The closing of the transaction is subject to court approval in Canada as well as the satisfaction or waiver of the other conditions specified in the arrangement agreement between Hummingbird, Open Text and a subsidiary of Open Text. Hummingbird will now seek final court approval for the arrangement on Friday, Sept. 22, 2006. If court approval is obtained and the other conditions to closing are satisfied or waived, the transaction is expected to close on or about Oct. 3, 2006. About Hummingbird Hummingbird Ltd. -- http://www.hummingbird.com/-- is a global provider of enterprise software solutions. The Company's enterprise software solutions fall into two principal categories: enterprise content management solutions, and network connectivity solutions. Founded in 1984, Hummingbird employs over 1,400 people and serves more than 33,000 customers, including 90% of Fortune 100. Hummingbird solutions are sold directly from 40 offices worldwide and through an Alliance Network of partners and resellers. About Open Text Open Text Corp -- http://www.opentext.com/-- provides Enterprise Content Management solutions that bring together people, processes and information in global organizations. The company supports approximately 20 million seats across 13,000 deployments in 114 countries and 12 languages worldwide. OPEN TEXT: Moody's Rates $390 Million Senior Secured Loan at Ba3 ---------------------------------------------------------------- Moody's Investors Service assigns a first-time Ba3 rating to the senior secured facilities and B1 rating to the corporate family of Open Text Corp., a leading provider of enterprise content management software. The ratings reflect both the overall probability of default of the company, to which Moody's assigns a PDR of B2, and a loss-given-default of LGD-2 for the senior secured facilities. Moody's also assigned a SGL-1 speculative grade liquidity rating, reflecting very good liquidity. The ratings outlook is stable. Open Text is acquiring one of its competitors, Hummingbird Ltd., a Canadian-based publicly traded company for $499 million (including fees and expenses) to create the second largest ECM provider with roughly $670 million in pro forma revenue. Net proceeds from the $390 million senior secured term loan together with approximately $109 million of cash-on-hand will be used to finance the purchase in a leveraged transaction. The $75 million senior secured revolving credit facility will be undrawn at closing and will be available for working capital and liquidity purposes. Open Text's B1 corporate family rating reflects its recession- resistant operating cash flow, enhanced scale and product offering post-acquisition and cross-platform solutions, which help mitigate its high pro forma financial leverage against the backdrop of a rapidly consolidating industry. Moody's believes the combined company's market presence (across basic, enhanced and extended applications) as the leading independent ECM provider, ability to leverage complementary products from prior acquisitions, high gross margins and free cash flow generation collectively support the B1 rating. The rating incorporates Moody's expectations that margins for normalized EBITDA (EBITDA before restructuring charges less average annualized restructuring charges) will approach the 20-25% range and that total debt to normalized EBITDA will migrate to under 3.6x over the next 12 - 18 months. Moody's notes both Open Text and Hummingbird have been fairly acquisitive over the last several years, which has led to periodic asset impairments, workforce rationalizations, and cash restructuring charges to exit unprofitable areas and realign product development. Furthermore, Open Text's gross margins have come under slight pressure due to additional customer support and service personnel costs from prior acquisitions. The rating, which also acknowledges the company's access to new vertical markets and potential cost synergies from the Hummingbird acquisition, reflects Moody's expectation of modest-sized acquisition activity going forward, which is supported by the company's acquisition track record prior to Hummingbird. Finally, Moody's expects the ECM market to continue its consolidation trend and become increasingly competitive longer-term as larger incumbents seek to offer better pricing and more functionality to suite platforms amid vendor reduction programs. The stable outlook reflects the reasonably predictable software license/networking business model as well as Moody's expectation that Open Text will be able to improve financial leverage and credit protection measures by successfully integrating Hummingbird into its business, minimizing customer loss and realizing the planned efficiencies via the combination of two very similar businesses. The outlook also recognizes management's plan to maintain its customer base while profitably growing the business through cross-sell opportunities into Hummingbird's reseller channel and extending Open Text's strategic partner program into Hummingbird's installed base. Furthermore, the stable outlook anticipates the company will successfully implement its debt reduction program and future acquisition activity will be minimal. The $390 million senior secured term loan and $75 million senior secured revolver are secured by first priority liens on substantially all tangible and intangible assets of Open Text and benefit from upstream guarantees provided by the company's subsidiaries. Due to the protection provided by the collateral package and the senior position of the bank facilities in the company's debt structure, the term loan and revolver are rated Ba3, reflecting a LGD-2 loss-given-default assessment. These first-time ratings are assigned to Open Text: * Corporate Family Rating -- B1 * Probability of Default Rating -- B2 * $75 million Senior Secured Revolver due 2011 -- Ba3 * $390 million Senior Secured Term Loan due 2013 -- Ba3 * Speculative Grade Liquidity Rating -- SGL-1 Open Text Corp., headquartered in Waterloo, Ontario, Canada, is the largest independent provider of enterprise content software used by global organizations on intranets, extranets, and the Internet. The company's software applications allow users to capture, manage, store, preserve, and deliver content, and documents related to organizational processes. For fiscal year ended June 30, 2006, revenues were $409.3 million. Pro forma for the Hummingbird acquisition, revenues are estimated at $668.1 million. PEABODY ENERGY: Fitch Rates New $2.75 Billion Sr. Facility at BB+ ----------------------------------------------------------------- Fitch Ratings lowered the ratings of Peabody Energy Corporation's Issuer Default Rating as well as its $650 million senior notes due 2013 and its $250 million senior notes due 2016 to 'BB+' from 'BBB-' and rated the company's new $2.75 billion senior unsecured bank facility 'BB+'. The ratings are removed from Negative Rating Watch where they were placed July 6, 2006, following the announcement of the debt financed acquisition of Excel Coal Limited. The Rating Outlook is stable. On July 5, 2006, Peabody announced an agreement to acquire Excel Coal Limited for a total acquisition price of approximately $1.34 billion plus assumed debt of approximately $170 million. The transaction is to be an all cash deal and be debt financed. The financing will double Peabody's current debt load and increase total debt/Operating EBITDA from 1.6x to 3.0x pro forma for the latest 12 months ended June 30, 2006. Peabody has significant employee-related liabilities, some of which related to past operations, and significant reclamation obligations. The transaction is subject to customary regulatory and shareholder approvals and is expected to close early in the fourth quarter of 2006. Excel has three near term development projects which will lead to growth in cash flows for 2007 and 2008. The transaction diversifies Peabody's Australian operations and increases its scale in this fast growing market. The ratings reflect Peabody's large, well diversified operations, good control of low cost production, strong liquidity and moderate leverage. The outlook is for coal producers to continue to benefit from a strong pricing environment over the near term. Peabody is the largest US coal producer fueling 10% of domestic electricity generation. Pro forma for the Excel acquisition and completed development, the company will be the fifth largest coal producer in Australia. Peabody's operations are well diversified with new activity concentrated in the Powder River Basin and the Illinois Basin where it dominates. Peabody has over 9 billion tons of coal reserves. POPULAR CLUB: Committee Hires Ravin Greenberg as Counsel -------------------------------------------------------- The Honorable Novalyn L. Winfield of the U.S. Bankruptcy Court for the District of New Jersey authorized the Official Committee of Unsecured Creditors appointed in Popular Club Plan, Inc.'s Chapter 11 case to retain Ravin Greenberg PC as its counsel. Ravin Greenberg will render all necessary court appearances, research, preparation and drafting of pleadings and other legal documents, hearing preparation and related work, negotiations and advice with respect to the Debtor's Chapter 11 proceeding. The current hourly rates for Ravin Greenberg's attorneys are: Attorney Hourly Rate -------- ----------- Nathan Ravin, Esq. $450 Howard Greenberg, Esq. $550 Stephen B. Ravin, Esq. $430 Bruce J. Wisotsky, Esq. $410 Larry Lesnik, Esq. $400 Morris S. Bauer, Esq. $390 Brian L. Baker, Esq. $300 Sheryll S. Tahiri, Esq. $265 Alyson Weckstein Teigel, Esq. $275 Chad B. Friedman, Esq. $225 To the best of the Committee's knowledge, Ravin Greenberg does not hold or represent any interest adverse to the Debtor's estate and is a "disinterested person" as that term is defined in Section 101(14) of the bankruptcy Code. Based in Roseland, New Jersey, Ravin Greenberg PC -- http://www.ravingreenberg.com/-- has been a pre-eminent practitioner in the United States Bankruptcy Court for more than six decades. The firm's unique combination of personal service, professionalism and creativity assure clients that every viable alternative will be carefully considered. Ravin Greenberg can be reached at: Ravin Greenberg PC 101 Eisenhower Parkway Roseland, NJ 07068 Tel: (973) 226-1500 Fax: (973) 226-6888 Headquartered in Garfield, New Jersey, Popular Club Plan, Inc. -- http://www.popularclub.com/-- is a catalog retailer. The Company filed for chapter 11 protection on Aug. 4, 2006 (Bankr. D. N.J. Case No. 06-17231). Barry W. Frost, Esq., at Teich Groh, represents the Debtor. When the Debtor filed for protection from its creditors, it listed total assets of $10,740,500 and total debts of $5,496,884. POWER EFFICIENCY: Has $147,510 Stockholders' Deficit at June 30 --------------------------------------------------------------- Power Efficiency Corporation filed its financial statements for the second quarter ended June 30, 2006, with the Securities and Exchange Commission. For the second quarter of 2006, the Company reported a $1,693,631 net loss on $44,390 of total revenues compared with a $611,507 net loss on $94,694 of total revenues for the same period in 2005. At June 30, 2006, the Company's balance sheet showed $2,528,051 in total assets and $2,675,561 in total liabilities, resulting in a $147,510 stockholders' deficit. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?11b7 Going Concern Doubt In its audit report on the financial statements for the year ended Dec. 31, 2005, Sobel & Co., LLC, in Livingston, New Jersey, noted that Power Efficiency Corporation's deficiency of cash from operations and insufficient liquidity to continue its operations raised substantial doubt as to its ability to continue as a going concern. About Power Efficiency Corp. Power Efficiency Corporation designs, develops, and sells, Performance Controller that educe energy consumption in alternating current induction motors. The product extends motor life, minimizes maintenance, results in cooler running, reduces stress and strain on the motor, and reduces stress and strain on accompanying electrical and mechanical systems. PULL'R HOLDINGS: Has Final Access to $300,000 Loan from Merrill --------------------------------------------------------------- The Hon. Richard M. Neiter of the U.S. Bankruptcy Court for the Central District of California in Los Angeles authorized, on a final basis, Pull'R Holdings LLC and its debtor-affiliate, Maasdam Pow'r Pull Inc., to obtain letters of credit not to exceed $300,000 from Merrill Lynch Business Financial Services Inc. As reported in the Troubled Company Reporter on Aug. 7, 2006, the Debtors granted Merrill Lynch a super-priority administrative claim status pursuant to Section 364(c)(1) of the Bankrutpcy Code to secure the obligations arising from the DIP loan and the use of cash collateral. Judge Neiter also allowed the Debtors to use cash collateral on a final basis in accordance with an agreed budget. The Debtors are presently indebted to Merrill Lynch under the prepetition financing agreements in the principal amount of approximately $6,849,925. The Debtors will use the cash collateral and the proceeds of the loan to continue their operations, sustain business value, pay Merrill Lynch for fees in connection with the letter of credit facility, and pay professional fees and expenses. Headquartered in Santa Fe Springs, California, Pull'R Holdings LLC -- http://www.pullr.com/-- sell contractors' equipment and tools. The Company is known for brands such as Bucket Boss, Dead On Tools, and the Maasdam Pow'R-Pull line. The Company and its affiliate, Maasdam Pow'r Pull Inc., filed for bankruptcy protection on April 27, 2006 (Bankr. C.D. Calif. Case No. 06-11669). Lawrence Diamant, Esq., at Robinson, Diamant & Wolkowitz, APC, represent the Debtors in their restructuring efforts. Aram Ordubegian, Esq., and David R. Weinstein, Esq., at Weinstein, Weiss & Ordubegian represent the Official Committee of Unsecured Creditors. When the Debtors filed for bankruptcy, they reported $1 million to $10 million in total assets and $10 million to $50 million in total debts. RELIANCE GROUP: Durango Liquidator to Sell Insurance Claims ----------------------------------------------------------- Bridge Associates, LLC, as Liquidating Trustee of the Bankruptcy Estate of Durango Georgia Paper Company, has entered into a Sale and Assignment Agreement with Liquidity Solutions Inc. The agreement transfers all of the Debtor's claims against Reliance Insurance Company for the recovery of insurance proceeds. Additional bidders may submit higher and better bids for the claims subject, to the absolute judgment and discretion of the Liquidating Trustee. Bidders seeking to purchase the claim must bid a minimum of $589,190. Any subsequent bidder must bid a minimum of $10,000, over and above the previous bid. All bids must be submitted by 5:00 p.m., on Sept, 29, 2006, to: Mark S. Watson, Esq. Stone & Baxter, LLP 577 Murphy Street, Suite 800 Macon, GA 31201 Phone: (478) 750-9898 Fax: (478) 750-9899 The U.S. Bankruptcy Court for the Southern District of Georgia in Brunswick will convene a hearing at 10:30 a.m., in Oct. 12, 2006, to consider approval of the proposed sale. About Durango Georgia Based in St. Mary's, Georgia, Durango Georgia Paper Company -- http://www.durangopaper.com/-- was a nationally recognized bleached board and kraft paper producer in the U.S. offering coast-to-coast and international service. On Oct. 29. 2002, creditors filed an involuntary chapter 7 petition against Durango. The Company filed for chapter 11 relief on Nov. 20, 2002 (Bankr. S.D. Ga. Case No. 02-21669). George H. Mccallum, Esq., at Stone & Baxter, LLP, Kate D. Strain, Esq., at Hunter, Maclean, Exley & Dunn, PC, and Neil P. Olack, Esq., at Duane Morris LLP, represent the Debtor in its restructuring efforts. Bridge Associates, LLC, was appointed as Liquidating Trustee under the terms of a Plan of Liquidation approved by creditors and confirmed by the Bankruptcy Court in June 2004. About Reliance Headquartered in New York, New York, Reliance Group Holdings, Inc. -- http://www.rgh.com/-- is a holding company that owns 100% of Reliance Financial Services Corporation. Reliance Financial, in turn, owns 100% of Reliance Insurance Company. The holding and intermediate finance companies filed for chapter 11 protection on June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing $12,598,054,000 in assets and $12,877,472,000 in debts. The insurance unit is being liquidated by the Insurance Commissioner of the Commonwealth of Pennsylvania. The Court confirmed the Creditors' Committee's Plan of Reorganization on Jan. 25, 2005. RIO VISTA: Posts $434,000 Net Loss in 2006 Quarter Ended -------------------------------------------------------- Rio Vista Energy Partners L.P. reported a $434,000 net loss on $21,299,000 of revenues for the ended June 30, 2006. The Company's June 30 balance sheet also showed strained liquidity with $4,733,000 in total current assets available to pay $6,041,000 in total current liabilities coming due within the next 12 months. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?11bf Going Concern Doubt As reported on the Troubled Company Reporter on May 5, 2006, Burton Mccumber & Cortez, L.L.P., in Brownsville, Texas, raised substantial doubt about the ability of Rio Vista Energy Partners L.P. to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2004, and 2005. About Rio Vista Headquartered in Houston, Texas, Rio Vista Energy Partners L.P. buys, transports and sells liquefied petroleum gas. Rio Vista owns and operates terminal facilities in Brownsville, Texas and in Matamoros, Tamaulipas, Mexico and approximately 23 miles of pipelines, which connect the Brownsville Terminal Facility to the Matamoros Terminal Facility. The primary market for Rio Vista's LPG is the northeastern region of Mexico, which includes the states of Coahuila, Nuevo Leon and Tamaulipas. RIVERSTONE NETWORKS: Derivative Action Settlement Pact Approved --------------------------------------------------------------- In a Memorandum Opinion published at 2006 WL 2422753, the Honorable Christopher S. Sontchi concludes that RNI Wind Down Corp. satisfied the standard under Rule 9019 of the Federal Rules of Bankruptcy Procedure for approval of a proposed amended settlement of a series of derivative actions filed between August 2002 and March 2004 in the Superior Court of California and the United States District Court for the Northern District of California against Riverstone Networks, Inc. and its directors and officers. The amended settlement at issue was an amendment to the parties' original settlement previously approved by the California District Court over the objection of Charles L. Grimes under the more stringent standards applicable to the settlement of a derivative action. The amended settlement resulted in an additional benefit to the debtors' estates in the amount of $950,000. Thus, it was significantly more favorable to the debtors' estates than the original settlement. Finally, Judge Sontchi says, to the extent the Martin factors (probability of success, difficulties in collection, complexity of the litigation and the paramount interest of the creditors) were relevant, taken as a whole they favor approval of the amended settlement. Based in Santa Clara, California, Riverstone Networks, Inc., nka RNI Wind Down Corporation -- http://www.riverstonenet.com/-- provided carrier Ethernet infrastructure solutions for business and residential communications services. The company and four of its affiliates filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del. Case Nos. 06-10110 through 06-10114). Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors. Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP, represents the Official Committee of Unsecured Creditors. The firm Brown Rudnick Berlack Israels LLP serves as counsel to the Official Committee of Equity Security Holders. As of Dec. 24, 2005, the Debtors reported assets totaling $98,341,134 and debts totaling $130,071,947. Judge Sontchi held a hearing on Sept. 12, 2006, and confirmed Riverstone's Chapter 11 Plan. That Plan will distribute the $207 million Lucent Technologies paid for Riverstone's assets to creditors and shareholders. Unsecured creditors will be paid in full, together with 5% interest. Shareholders get whatever's left over. Court documents estimate Riverstone shareholder recoveries at $1.00 to $1.80 per share. ROYAL GROUP: Gets Required Consents from 7.1% Senior Noteholders ---------------------------------------------------------------- In response to its Aug. 28, 2006 Offer to Purchase and Consent Solicitation Statement, Royal Group Technologies Limited has received tenders from holders representing in excess of 66-2/3% of its Series D senior unsecured 7.10% notes due Nov. 14, 2007. The tenders were accompanied by consents to permit Royal Group to amend certain terms of the purchase agreement under which the Series D notes were issued in 1997. Those amendments will become operative upon the Company's acceptance of the tendered notes for payment and delivery of its written consent to the amendments. The tender offer will remain open until Sept. 26, 2006, or as otherwise extended by the Company. Those holders who have not yet tendered their notes and delivered their consents to the proposed amendments will have more than five business days from the date of their receipt of this notice to accept the Company's offer, as is required under Section 8.6 of the original Series D purchase agreement. Holders who do not tender their Series D notes will be bound by the amendments notwithstanding that they have not provided their consent. The Total Consideration per $1,000 principal amount of Series D notes tendered will be $1018.60. Holders who tender their Series D notes prior to expiration of the tender offer will receive the Total Consideration, plus accrued and unpaid interest from the date of the last interest payment up to the date of payment. Holders who do not tender their Series D notes will receive the Consent Payment, as defined in the Offer to Purchase and Consent Solicitation Statement. Neither the Company nor its Board of Directors makes any recommendation in connection with the Offer to Purchase or the Consent Solicitation Statement, issued following execution of the proposed plan of arrangement with Rome Acquisition Corp., a wholly owned subsidiary of Georgia Gulf Corporation. About Royal Group Headquartered in Ontario, Canada, Royal Group Technologies Limited (TSX & NYSE: RYG) -- http://www.royalgrouptech.com-- produces innovative, attractive, durable, and low-maintenance home improvement and building products, which are primarily utilized in both the renovation and new construction sectors of the North American construction industry. The Company has manufacturing operations located throughout North America in order to provide industry-leading service to its extensive customer network. * * * As reported in the Troubled Company Reporter on June 14, 2006, Standard & Poor's Ratings Services said its 'BB' long-term corporate credit and senior unsecured debt ratings on Woodbridge, Ontario-based Royal Group Technologies Ltd. will remain on CreditWatch with negative implications, where they were placed March 16, 2006. The continued CreditWatch follows Georgia Gulf Corp.'s (BB+/Watch Neg/--) takeover proposal for CDN$1.7 billion, including CDN$491 million of assumed net debt. RURALMETRO CORP: Equity Deficit Narrows to $91 Million at June 30 ----------------------------------------------------------------- Rural/Metro Corporation reported net revenue for the fourth quarter increased 7.1%, or $9.2 million, to $139.1 million, compared to $129.9 million in the fourth quarter of the prior year. For the fiscal quarter ended June 30, 2006, net income was $1.2 million versus a net income of $83.8 million in the fourth quarter of fiscal 2005. The decrease from the prior-year period is primarily attributable to an $83.9 million deferred tax benefit recognized in the fourth quarter of fiscal 2005. For the fiscal year ended June 30, 2006, net revenue increased 9.4% to $548.5 million, compared to $501.5 million for fiscal 2005. Net income for the fiscal year was $3.5 million compared to net income of $88.3 million in fiscal 2005. Certain items affecting fiscal 2006 results included respective $5.7 million and $0.8 million pre-tax losses related to the company's exit from the New Jersey and Augusta, Georgia, medical transportation markets, and recognition of a $2.5 million pre-tax charge related to an ongoing government investigation into certain of the company's former Texas operations. The amounts are included in the loss from discontinued operations in fiscal 2006. The Company's balance sheet at June 30, 2006 showed total assets of $299 million and total liabilities of $390 million, resulting in a total stockholders' deficit of $91 million. The Company's total stockholders' deficit at June 30, 2005 stood at $97 million. Headquartered in Scottsdale, Arizona, Rural/Metro Corporation -- http://www.ruralmetro.com/-- provides emergency and non- emergency medical transportation, fire protection, and other safety services in 23 states and approximately 350 communities throughout the United States. SATELITES MEXICANOS: Court Gives Final Nod on Milbank as Counsel ---------------------------------------------------------------- The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York, granted Satelites Mexicanos, S.A. de C.V.'s application to employ Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel on a final basis. As reported in the Troubled Company Reporter on Aug. 22, 2006, Judge Drain granted the Debtor's application to employ Milbank Tweed on an interim basis. As legal counsel, Milbank & Tweed is expected to: (a) advise the Debtor of its rights, powers, and duties as Debtor and debtor-in-possession in the continued management And operation of its business and properties; (b) advise and assist the Debtor in connection with the solicitation and confirmation of the plan of reorganization and related documents; (c) advise the Debtor concerning actions that it might take to collect and recover property for the benefit of its estate; (d) prepare on behalf of the Debtor all necessary and Appropriate applications, motions, draft orders, other pleadings, notices, schedules, and other documents, and review all financial and other reports to be filed in the Debtor's Chapter 11 case; (d) advise the Debtor concerning, and prepare responses to, applications, motions, other pleadings, notices, and other papers that may be filed and served in the Debtor's Chapter 11 case; (e) review the nature and validity of any liens asserted against the Debtor's property and advise the Debtor concerning the enforceability of those liens; (f) advise and assist the Debtor in connection with any potential asset dispositions; (g) advise the Debtor concerning executory contract and unexpired lease assumptions, assignments and rejections; (h) assist the Debtor in reviewing, estimating, and resolving claims asserted against its estate; (j) commence and conduct any and all litigation necessary or appropriate to assert rights held by the Debtor, protect assets of its estate, or otherwise further the goal of completing a successful reorganization; (k) advise and assist the Debtor with the preparation and filing of various documents required for the Debtor's compliance with U.S. securities laws; and (l) perform all other necessary legal services in connection with the Debtor's Chapter 11 case and other general corporate matters concerning the Debtor's business. The Debtor will pay Milbank for its services in accordance with the firm's standard hourly rates: Position Hourly Rate -------- ----------- Partners $600 - $850 Of Counsel $590 - $715 Associates & Senior Attorneys $225 - $565 Legal Assistants $155 - $295 Mr. Barr assures the Court that Milbank does not represent and will not represent any entity, other than the Debtor, in matters related to its Chapter 11 case. Mr. Barr, however, discloses that Milbank currently represents The Bank of New York Company, Inc., the indenture trustee for the Debtor's 10-1/8% Unsecured Senior Notes due November 1, 2004, and Citibank, N.A., the indenture trustee for the Senior Secured Floating Rate Notes due June 30, 2004, on matters unrelated to the bankruptcy case. Fees derived from Citibank matters represented over 1% of Milbank's 2005 revenues. According to Mr. Barr, Milbank has obtained a waiver from Bank of New York and Citibank to allow it to represent the Debtor. In the event the Debtor seeks advice with respect to an adversary proceeding in which either Bank is named as an adverse party or with respect to a challenge of the claims of the unsecured creditors for which the Banks act as trustee, Mr. Barr says the Debtor will retain conflicts counsel. About Satelites Mexicanos Satelites Mexicanos, S.A. de C.V., provides fixed satellite services in Mexico. Satmex provides transponder capacity via its satellites to customers for distribution of network and cable television programming, direct-to-home television service, on-site transmission of live news reports, sporting events and other video feeds. Satmex also provides satellite transmission capacity to telecommunications service providers for public telephone networks in Mexico and elsewhere and to corporate customers for their private business networks with data, voice and video applications. Satmex also provides the government of the United Mexican States with approximately 7% of its satellite capacity for national security and public purposes without charge, under the terms of the Orbital Concessions. The Debtor filed for chapter 11 petition on August 11, 2006 (Bankr. S.D.N.Y. Case No. 06-11868). Luc A. Despins, Esq., at Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the U.S. Bankruptcy proceedings. Attorneys from Galicia y Robles, S.C., and Quijano Cortina Lopez y de la Torre give legal advice in the Debtor's Mexican Bankrutpcy proceedings. UBS Securities LLC and Valor Consultores, S.A. de C.V., give financial advice to the Debtor. Steven Scheinman, Esq., Michael S. Stamer, Esq., and Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld LLP give legal advice to the Ad Hoc Existing Bondholders' Committee. Dennis Jenkins, Esq., and George W. Shuster, Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP give legal advice to Ad Hoc Senior Secured Noteholders' Committee. As of July 24, 2006, the Debtor has $905,953,928 in total assets and $743,473,721 in total liabilities. On May 25, 2005, certain holders of Satmex's Existing Bonds and Senior Secured Notes filed an involuntary chapter 11 petition against the Company (Bankr. S.D.N.Y. Case No. 05-13862). On June 29, 2005, Satmex filed a voluntary petition for a Mexican reorganization, known as a Concurso Mercantil, which was assigned to the Second Federal District Court for Civil Matters for the Federal District in Mexico City. On August 4, 2005, Satmex filed a petition, pursuant to Section 304 of the Bankruptcy Code to commence a case ancillary to the Concurso Proceeding and a motion for injunctive relief seeking, among other things, to enjoin actions against Satmex or its assets (Bankr. S.D.N.Y. Case No. 05-16103). (Satmex Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SATELITES MEXICANOS: Court Rules on First 90-Day Fee Application ---------------------------------------------------------------- The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York, ruled that each professional whose retention has been approved by the Court may seek, in its first request for compensation and reimbursement of expenses, payment for work performed and reimbursement for expenses incurred during the period beginning on the date of the professional's retention and ending on Sept. 20, 2006. The first 90-day fee application period will conclude on Nov. 20, 2006. However, if Satelites Mexicanos, S.A. de C.V.'s Chapter 11 Plan of Reorganization becomes effective prior to that date, each professional instead will have the time provided in the Chapter 11 Plan to file a final application for compensation and reimbursement of expenses. About Satelites Mexicanos Satelites Mexicanos, S.A. de C.V., provides fixed satellite services in Mexico. Satmex provides transponder capacity via its satellites to customers for distribution of network and cable television programming, direct-to-home television service, on-site transmission of live news reports, sporting events and other video feeds. Satmex also provides satellite transmission capacity to telecommunications service providers for public telephone networks in Mexico and elsewhere and to corporate customers for their private business networks with data, voice and video applications. Satmex also provides the government of the United Mexican States with approximately 7% of its satellite capacity for national security and public purposes without charge, under the terms of the Orbital Concessions. The Debtor filed for chapter 11 petition on Aug. 11, 2006 (Bankr. S.D.N.Y. Case No. 06-11868). Luc A. Despins, Esq., at Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the U.S. Bankruptcy proceedings. Attorneys from Galicia y Robles, S.C., and Quijano Cortina Lopez y de la Torre give legal advice in the Debtor's Mexican Bankrutpcy proceedings. UBS Securities LLC and Valor Consultores, S.A. de C.V., give financial advice to the Debtor. Steven Scheinman, Esq., Michael S. Stamer, Esq., and Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld LLP give legal advice to the Ad Hoc Existing Bondholders' Committee. Dennis Jenkins, Esq., and George W. Shuster, Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP give legal advice to Ad Hoc Senior Secured Noteholders' Committee. As of July 24, 2006, the Debtor has $905,953,928 in total assets and $743,473,721 in total liabilities. On May 25, 2005, certain holders of Satmex's Existing Bonds and Senior Secured Notes filed an involuntary chapter 11 petition against the Company (Bankr. S.D.N.Y. Case No. 05-13862). On June 29, 2005, Satmex filed a voluntary petition for a Mexican reorganization, known as a Concurso Mercantil, which was assigned to the Second Federal District Court for Civil Matters for the Federal District in Mexico City. On Aug. 4, 2005, Satmex filed a petition, pursuant to Section 304 of the Bankruptcy Code to commence a case ancillary to the Concurso Proceeding and a motion for injunctive relief seeking, among other things, to enjoin actions against Satmex or its assets (Bankr. S.D.N.Y. Case No. 05-16103). (Satmex Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SECURITIZED ASSET: Moody's Rates Class B-5 Certificates at Ba2 -------------------------------------------------------------- Moody's Investors Service assigns an Aaa rating to the senior certificates issued by Securitized Asset Backed Receivables LLC Trust 2006-HE1 and ratings ranging from Aa2 to Ba2 to the subordinate certificates in the deal. The securitization is backed by Fremont Investment & Loan, Aegis Mortgage Corporation, and Decision One Mortgage Company LLC originated, adjustable-rate (83%) and fixed-rate (17%), subprime mortgage loans acquired by Sutton Funding LLC. The ratings are based primarily on the credit quality of the loans and on protection against credit losses provided by subordination, excess spread, and overcollateralization. The ratings also benefit from an interest-rate swap agreement and an interest-rate cap agreement, both provided by Barclays Bank PLC. Moody's expects collateral losses to range from 5.55% to 6.05%. HomEq Servicing Corporation will service the loans. Moody's has assigned HomEq its servicer quality rating of SQ1- as a servicer of subprime mortgage loans. These are the action made: * Securitized Asset Backed Receivables LLC Trust 2006-HE1 * Mortgage Pass-Through Certificates, Series 2006-HE1 * Cl. A-1, Assigned Aaa * Cl. A-2A, Assigned Aaa * Cl. A-2B, Assigned Aaa * Cl. A-2C, Assigned Aaa * Cl. A-2D, Assigned Aaa * Cl. M-1, Assigned Aa2 * Cl. M-2, Assigned A2 * Cl. M-3, Assigned A3 * Cl. B-1, Assigned Baa1 * Cl. B-2, Assigned Baa2 * Cl. B-3, Assigned Baa3 * Cl. B-4, Assigned Ba1 * Cl. B-5, Assigned Ba2 The Class A-1, Class B-4 and Class B-5 certificates were sold in privately negotiated transactions without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A. SILICON GRAPHICS: Court Approves Revised KPMG Hourly Rates ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York allowed Silicon Graphics, Inc., and its debtor-affiliates to supplement and clarify its application to employ KPMG LLP, solely with respect to the rates under which the firm will provide accounting and audit services. As reported in the Troubled Company Reporter on Aug. 24, 2006, the Debtors and KPMG executed a revised engagement letter to accurately reflect the firm's customary hourly rates. The revised rates are: Professional Hourly Rate ------------ ----------- Partners/Directors $660 to $780 Directors/Senior Managers/Managers $495 to $750 Senior/Staff Accountants $250 to $470 Paraprofessionals $100 to $195 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. The Debtors' exclusive plan-filing period will expire on Dec. 29, 2006, and its exclusive solicitation period will expire on Feb. 28, 2007. (Silicon Graphics Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SILICON GRAPHICS: Wants to Enter Into Christensen Lease ------------------------------------------------------- Silicon Graphics, Inc., and its debtor-affiliates seek the U.S. Bankruptcy Court for the Southern District of New York's approval to enter into a lease with Christensen Holdings, L.P., for a 128,154 square feet of office space in a building located at 1140-1154 East Arques Avenue, in Sunnyvale, California. As previously reported, the Debtors are required to vacate their leases of nonresidential real property in Mountain View, California, by Dec. 31, 2006. After arm's-length negotiations, the Debtors reached an agreement with Christensen, whereby, as landlord, Christensen grants Silicon Graphics, Inc., a nonexclusive right to use outside areas and certain common parking space of the property, Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in New York, tells the Court. The Lease term is for 60 months beginning on the commencement date of the Lease, which is to be determined by the parties. If the Commencement Date has not occurred on or before Jan. 1, 2007, due to Silicon Graphics' failure, then beginning that date, Silicon Graphics must pay base rent and additional rent, Mr. Youngman says. Pursuant to the Lease, Silicon Graphics must pay to the Landlord, in advance, on or before the first day of each calendar month of the Term, without further notice and without offset or deduction, monthly installments of: Month of Term Base Rent ------------- --------- 1 through 12 $125,206 13 through 24 130,333 25 through 36 135,459 37 through 48 140,585 49 through 60 145,711 Silicon Graphics also agrees to pay as "Additional Rent" its proportionate share of certain costs, specifically: (i) taxes and assessments; (ii) insurance costs; (iii) outside area expenses; (iv) maintenance and repair costs; and (v) management costs. All utilities and other services furnished to Silicon Graphics or the Premises will be paid directly by Silicon. On or prior to October 5, 2006, Silicon Graphics will deposit $920,400 with the Landlord as security for the performance of the Lease. On the third anniversary of the Commencement Date, and upon the occurrence of certain conditions, the Security Deposit will be reduced to $460,200. The Landlord must maintain throughout the Term special form insurance covering the Building for its full replacement cost and, at its option, earthquake coverage. Pursuant to the Lease, Silicon Graphics must maintain: (1) commercial general liability insurance covering the Premises, insuring Silicon Graphics, and naming the Landlord and its lenders as additional insureds against any liability arising out of the use of, occupancy, or maintenance of the Premises for a coverage of at least $2,000,000 per occurrence; and (2) a policy of special form insurance with standard coverage endorsement to the extent of the full replacement cost on all of its fixtures and equipment on the Premises, which proceeds must be used to repair or replace fixtures and equipment insured during the Term. The parties agree to indemnify each other against and from, among other things, any claims and expenses, which indemnification obligations survive the termination of the Lease. Furthermore, Mr. Youngman says, the occurrence of certain events will constitute an "Event of Default" on the part of Silicon Graphics, including its failure to: -- pay any installment of Base Rent or Additional Rent due for a period of three calendar days after written notice from the Landlord; -- restore the Security Deposit to the amount and within the requisite time period as provided by the Lease; and -- perform covenants or obligations under the Lease, which failure continues for 30 calendar days after the Landlord's written notice. By an Event of Default, the Landlord may terminate the Lease and recover from Silicon Graphics, among other things, unpaid rent earned at the time of termination, other amounts necessary to compensate the Landlord for Silicon Graphics' failure to perform, and reasonable attorneys' fees. Silicon Graphics will have the option to extend the initial Term of the Lease for an additional five years with respect to the Premises, on the same terms provided in the Lease, except that the Base Rent payable will be 95% of the then fair market rental value of the Premises. Lease Must be Approved Mr. Youngman asserts that entry into the Lease will enable the Debtors to comply with the terms of a certain settlement agreement with the Mountain View landlords and terminate their occupancy of the Mountain View Leases without the risk of becoming a holdover tenant. Furthermore, the Premises will better serve the Debtors' office space requirements. The terms of the Lease are also more favorable than the terms of the Mountain View Leases, Mr. Youngman explains. A full-text copy of an unexecuted copy of the Lease is available for free at http://researcharchives.com/t/s?11b8 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. The Debtors' exclusive plan-filing period will expire on Dec. 29, 2006, and its exclusive solicitation period will expire on Feb. 28, 2007. (Silicon Graphics Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SOLO CUP: Moody's Junks Rating on $80 Million Senior Secured Loan ----------------------------------------------------------------- Moody's Investors Service lowers Solo Cup Company's Corporate Family Rating to B3 from B2. Moody's also lowered ratings on Solo Cup's second lien credit facility and senior subordinated notes one notch to Caa1 and Caa2, respectively. The rating on the first lien credit facility remains unchanged at B2. The ratings remain on review for possible downgrade. On Aug. 16, 2006 Moody's placed Solo Cup on review for possible downgrade after the company announced that there would be a temporary delay in filing financial statements with the U.S. Securities and Exchange Commission and that it was undertaking an internal review of certain accounting matters related to timely recognition of certain customer credits, accounts payable and accrued expenses, and the valuation of certain assets. The review was to cover fiscal periods commencing with the SF Holdings transaction in February 2004 in which Solo Cup acquired Sweetheart Cup Company. Moody's believes that Solo Cup's integration of Sweetheart has been less smooth than originally envisioned, with higher than expected expenses owing to persistent duplicative costs. The integration of computer systems is behind Moody's prior expectations, with the company indicating on its August 16 conference call that its new IT platform would be implemented later than expected and that spending on the system has been a factor in elevated expense levels. For the quarter ended April 2, 2006 Solo Cup exhibited adjusted total debt to trailing twelve months EBITDA of well over 6 times and EBIT interest coverage of less than 1 times, after application of Moody's standard adjustments for operating leases and pensions. These financial metrics are weak for the B2 rating category, implying a low return on assets and an inability to cover interest expense. In combination with the uncertainty that has arisen as a result of the failure to file financial statements and the need for the review of accounting practices, the financial profile is inconsistent with a B2 corporate family rating. Moody's took the rating actions: -- Corporate Family Rating, lowered to B3 from B2 -- $80 million senior secured second lien term loan due March 31, 2012, lowered to Caa1 from B3 -- $325 million 8.5% subordinated notes due Feb. 15, 2014, lowered to Caa2 from Caa1 These ratings remain unchanged: -- $150 million senior secured revolving credit facility maturing Feb. 27, 2010, B2 -- $638 mil. senior secured term loan B due Feb. 27, 2011, B2 The ratings remain on review for possible downgrade, pending the outcome of the accounting review and the filing of financial statements. After the company files its financial statements, Moody's will assess the company's historical and prospective financial performance, leeway to operate under financial covenants, and stability of its competitive profile. Headquartered in Highland Park, Illinois, Solo Cup Company with annual revenues of about $2.4 billion is one of the largest domestic manufacturers of disposable paper and plastic food and beverage containers used in the foodservice and retail consumer markets. Products include cups, lids, straws, napkins, cutlery, and plates. SOLOMON TECH: June 30 Balance Sheet Upside-Down by $2 Million ------------------------------------------------------------- Solomon Technologies Inc. reported a $594,810 net loss on $7,547 of sales for the months ended June 30, 2006. At June 30, 2006, the Company's balance sheet showed $771,283 in total assets and $2,810,292 in total liabilities resulting in a $2,039,009 stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $101,061 in total current assets available to pay $2,810,292 in total current liabilities coming due within the next 12 months. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?11bb Going Concern Doubt UHY LLP, Hartford, Connecticut, raised substantial doubt about Trans Energy's Inability 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 incurred significant recurring operating losses. About Solomon Tech Headquartered in Tarpon Springs, Florida, Solomon Technologies, Inc. -- http://www.solomontechnologies.com-- manufactures electric power drive systems. The Company also offers optional generators for hybrid charging configurations, optional inverters for AC applications, and a DC to DC charger. SONIC CORP: Inks $775 Million Credit Agreement ---------------------------------------------- Sonic Corp., in connection with its modified "Dutch Auction" tender offer, has signed a $775 million credit agreement with a syndicate of financial institutions led by Banc of America Securities LLC and Lehman Brothers Inc. The Credit Agreement provides for a new senior secured credit facility, which consists of a $100 million, five-year revolving credit facility and a $675 million, seven-year term loan facility. The proceeds of the term loan facility and a portion of the revolving credit facility will be used to fund the purchase of shares tendered in the tender offer, refinance certain of the Company's existing indebtedness and pay the related fees and expenses. Funding under the Credit Agreement is subject to certain conditions, including the condition that shares of the Company's common stock have been accepted for payment in the tender offer. Interest on loans under the new senior secured credit facility will be payable at per annum rates equal to: (1) in the case of the revolving credit facility, initially, LIBOR plus 175 basis points and adjusting over time based upon the Company's leverage ratio; and (2) in the case of the term loan facility, initially, LIBOR plus 200 basis points and adjusting over time based upon the Company's credit ratings with Moody's Investors Service Inc. The Company will pay a commitment fee on the unused portion of the revolving credit facility, starting at .375% and adjusting over time based upon the Company's leverage ratio. After completion of the tender offer the Company may pursue a refinancing of its new senior secured credit facility with a securitized transaction and has engaged Lehman Brothers as its sole structuring advisor to evaluate the securitized transaction. Stockholders with questions or who would like additional copies of the tender offer documents may call the information agent, Georgeson Inc. at (866) 295-3782. Banks and brokers may call (212) 440-9800. Headquartered in Oklahoma City, Oklahoma, Sonic Corp., (Nasdaq: SONC) -- http://www.sonicdrivein.com/-- operates and franchises the largest chain of drive-in restaurants in the United States. As of May 31, 2006, the company owned and operated 604 restaurants and franchised 2,525 restaurants in 33 U.S. States and in Mexico with significant presence in the Southern and Midwestern United States. * * * As reported in the Troubled Company Reporter on Aug. 16, 2006 Moody's Investors Service assigned a Ba3 corporate family rating to Sonic Corp., in addition to assigning a Ba3 rating to the company's proposed $775 million senior secured credit facility consisting of a $100 million revolver and a $675 million term loan B. These are first-time ratings for Sonic following the Company's announcement to finance a Dutch auction tender for approximately $560 million in share repurchases and to refinance existing debt. At the same time, a SGL-2 Speculative Grade Liquidity rating was also assigned. The rating outlook is stable. SOS REALTY: Court Extends Exclusive Plan-Filing Period to Dec. 7 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts in Boston extended until Dec. 7, 2006, the period within which SOS Realty LLC has the exclusive right to file a chapter 11 plan of reorganization. The Court also extended the Debtor's exclusive period to solicit acceptances of that plan to Feb. 8, 2007. The Debtor informs the Court that it has made a substantial progress towards effective reorganization. It has secured the cooperation of its most vocal creditors, retained the services of a general contractor and has also secured DIP financing, all in order to complete construction of the building and parking space project and generate funds to pay creditors from the sale of the condominium units. The extension will give the Debtor more time to formulate and negotiate a successful plan of reorganization. Based in West Roxbury, Massachusetts, SOS Realty LLC, owns a condominium development known as the "Washington Grove Condominiums." The company filed for chapter 11 protection on May 11, 2006 (Bankr. D. Mass. Case No. 06-11381). Jennifer L. Hertz, Esq., at Duane Morris LLP, represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been filed in the Debtor's case. In its schedules of assets and liabilities, it listed $12,009,000 in total assets and $6,734,279 in total liabilities. SOS REALTY: General Claims Bar Date Set on October 20 ----------------------------------------------------- The Honorable Joan N. Feeney of the U.S. Bankruptcy Court for the District of Massachusetts in Boston set Oct. 20, 2006, at 4:30 p.m. Eastern Time, as the deadline for filing proofs of claim arising before May 11, 2006, against SOS Realty LLC. Creditors must file written proofs of claim, and those forms must be delivered to: Clerk of the Bankruptcy Court District of Massachusetts 1101 Thomas P. O'Neill Jr. Federal Building 10 Causeway Street Boston, MA 02222 Governmental units have until Nov. 7, 2006, to file their proofs of claim. Based in West Roxbury, Massachusetts, SOS Realty LLC, owns a condominium development known as the "Washington Grove Condominiums." The company filed for chapter 11 protection on May 11, 2006 (Bankr. D. Mass. Case No. 06-11381). Jennifer L. Hertz, Esq., at Duane Morris LLP, represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been filed in the Debtor's case. In its schedules of assets and liabilities, it listed $12,009,000 in total assets and $6,734,279 in total liabilities. STEEL PARTS: Case Summary & 25 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Steel Parts Corp. 39111 West Six Mile Road Livonia, MI 48152 Bankruptcy Case No.: 06-52972 Type of Business: The Debtor is a supplier of automatic transmissions, suspension and steering components and assemblies, and other automotive parts. See http://www.steelparts.com/ Chapter 11 Petition Date: September 15, 2006 Court: Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtor's Counsel: Barbara Rom, Esq. Hannah Mufson McCollum, Esq. Pepper Hamilton LLP 100 Renaissance Center, 36th Floor Detroit, MI 48243-1157 Tel: (313) 259-7110 Debtor's Claims and Noticing Agent: The BMC Group, Inc. 77 West Wacker Drive Suite 1400 Chicago, IL 60601 Tel: (312) 423-1400 Fax: (312) 276-4580 http://www.bmcgroup.com/ Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 25 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ford Resale Gibraltar Cleveland Trade $1,458,984 4310 East 49th Street Cuyahoga Heights, OH 44125 Ford Resale Gibraltar Buffalo Trade $690,941 1050 Military Road Buffalo, NY 14217 Worthington Steel Co. Trade $479,830 1152 Industrial Boulevard Louisville, KY 40219 Tipton County Treasurer Taxes $195,289 Court House Tipton, IN 46072 Delphi Italy Trade $132,413 Via Enrigues, 37 57121 Livorno, Italy Kenwal Steel Trade $121,700 Ford Resale Worthington Trade $70,140 Gibraltar Strip Steel Trade $67,203 Marshall Manufacturing Trade $64,448 Valmac Industries Inc. Trade $62,812 Custom Coating Trade $59,203 KPMG LLP Trade $45,685 Progress Tool & Die Trade $38,683 Porter Wright Morris Trade $36,137 Air Products and Chemicals Trade $31,047 Baden Tax Management LLC Trade $28,174 MC Manufacturing, LLC Trade $24,249 Marsh USA, Inc. Trade $23,298 NCOC Inc. Trade $23,112 ALMCO, Inc. Trade $22,260 Orbis Division of Menasha Corp. Trade $20,672 GM Worthington Trade $20,656 Greenwalt Sponsel & Co. Trade $19,550 Haggard and Stocking Assoc. Trade $18,932 Ford Resale Steel Tech. Trade $3,144 STRUCTURED ASSET: Moody's Rates Class B2 Certificates at Ba2 ------------------------------------------------------------ Moody's Investors Service assigns an Aaa rating to the senior certificates issued by Structured Asset Securities Corporation 2006-BC2 and a ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by BNC Mortgage, Inc. (38%), People's Choice Home Loans, Inc. (17%), Countrywide Home Loans, Inc. (11%), and other mortgage lenders (34%, none individually originating over 10%) originated, adjustable-rate (70%) and fixed-rate (30%), subprime mortgage loans acquired by Lehman Brothers Holdings Inc. The ratings are based primarily on the credit quality of the loans and on protection against credit losses by a subordination, excess spread, and overcollateralization. The ratings also benefit from interest-rate swap and interest-rate cap agreements provided by HSBC Bank USA, National Association. After taking into account the benefit from the mortgage insurance, Moody's expects collateral losses to range from 4.60% to 5.10%. Wells Fargo Bank, N.A., Countrywide Home Loans Servicing LP, and JPMorgan Chase Bank, National Association will service the loans and Wells Fargo Bank, N.A. will act as master servicer. Moody's has assigned JPMorgan its servicer quality rating of SQ1 as a servicer of subprime mortgage loans. Moody's has assigned Wells Fargo its servicer quality rating of SQ1 as a master servicer of mortgage loans. These are the complete ratings: Structured Asset Securities Corporation Mortgage Pass-Through Certificates, Series 2006-BC2 * Cl. A1, Assigned Aaa * Cl. A2, Assigned Aaa * Cl. A3, Assigned Aaa * Cl. A4, Assigned Aaa * Cl. M1, Assigned Aa1 * Cl. M2, Assigned Aa2 * Cl. M3, Assigned Aa3 * Cl. M4, Assigned A1 * Cl. M5, Assigned A2 * Cl. M6, Assigned A3 * Cl. M7, Assigned Baa1 * Cl. M8, Assigned Baa1 * Cl. M9, Assigned Baa2 * Cl. B1, Assigned Ba1 * Cl. B2, Assigned Ba2 TARGUS GROUP: Moody's Junks Rating on $85 Million Second-Lien Loan ------------------------------------------------------------------ Moody's Investors Service downgrades all ratings of Targus Group International, Inc. including the first-lien secured bank loan to B2 and the second-lien secured bank loan to Caa1. The ratings downgrades are prompted by the decline in operating margin over the past year that has caused substantial deterioration in credit metrics. Operating profit has risen at a much slower pace than revenue as the company has written off obsolete inventory, one of the company's major customers (Office Depot) has transitioned to a consignment relationship, and the company ended up paying for unplanned air freight and repackaging costs in order to meet retailer deadlines for new products. The rating outlook is revised to negative from stable. These are the downgrades: -- $230 million first-lien secured bank facilities to B2 from B1, -- $85 million second-lien secured term loan to Caa1 from B3, -- Corporate family rating to B2 from B1. The downgrade of the corporate family rating to B2 of Targus reflects the decline in quantitative credit metrics that have occurred since the November 2005 rating assignment of B1, when Moody's expected that leverage would begin to improve in 2006. Certain qualitative credit metrics also have not proved as stable as believed when ratings were originally assigned. Virtually all key credit metrics, such as leverage, interest coverage, free cash flow, and scale, are consistent with Caa characteristics. EBIT margin has deteriorated to B-rating levels and bargaining power with customers has declined to Ba-rating levels over the previous year. However, partially offsetting these risks are the revenue diversity from a worldwide geographic footprint, three separate distribution channels (retailers, original equipment manufacturers, and computer distributors), and two major product categories (notebook cases and computer accessories) and the favorable growth trends for notebook cases and computer accessories as global notebook computer unit sales continue to rapidly increase. The negative outlook recognizes Moody's concern that ratings could decline over the next 12 to 18 months if operating performance, free cash flow, and leverage remain weak. Significant deterioration in the company's currently adequate liquidity position would also place downward pressure on the ratings. Ratings would decline if, over a reasonable period, debt to EBITDA does not improve from levels currently in excess of 7 times, outflows for cash interest expense, capital expenditures, and working capital cause continued free cash flow deficits, or liquidity declines such that the revolving credit facility is utilized over an extended period. Greater than expected downward pricing pressure or inability to grow shipments at the same pace as notebook computer shipments could also cause further downward rating pressure. Given the negative outlook, Moody's currently believes that an upgrade is unlikely. In Moody's opinion, stabilization of ratings at current levels would require greater financial flexibility as represented by working capital efficiency improving to historical norms, achievement of break-even cash flow, and a sustained reversal of weakening credit metrics such that free cash flow to debt improves to positive low-single digit figures, leverage falls toward 6 times, and EBIT completely covers interest expense. Targus Group International, Inc, headquartered in Anaheim, California, designs, develops, and distributes notebook computer cases and computer accessories. The company sells its products to original equipment manufacturers, third-party distributors, and retailers worldwide. Targus generated revenue of $432 million for the twelve months ending June 30, 2006. TELCORDIA TECH: Moody's Reviews Low-B Ratings and May Downgrade --------------------------------------------------------------- Moody's Investors Service places ratings of Telcordia Technologies, Inc. on review for possible downgrade. The review is prompted by the continued year over year declines in revenue and EBITDA and a substantial reduction in liquidity since the beginning of their fiscal year. Legacy operations systems support revenue has declined faster than expected during the first six months of the fiscal year while the ramp up in next generation software business has been slower than expected. The seasonal decline in cash of over $100 million in the first two fiscal quarters was greater than expected and of particular concern although there is the expectation of significant cash inflows from the receipt of life cycle program maintenance contract payments in the fiscal 4th quarter. The review could result in a ratings decline of one or more notches. The review will focus on: -- declining cash flow from operations including the amount and timing of one time items; -- the competitive landscape and outlook for various product lines; -- recently completed and further planned headcount reductions and associated severance costs; -- timing and amount of future LCP payments; and, -- short and medium term sources of liquidity. Ratings under review for downgrade include: * $100 million senior secured revolving credit facility maturing 2011 rated at B1 * $570 million senior secured term loan maturing 2012 rated at B1 * $300 million senior subordinated notes due 2013 rated at B3 * Corporate Family Rating of B1 Telcordia Technologies Inc. is a major provider of operations systems support software and network systems products for telecommunications providers. The company is headquartered in Piscataway, New Jersey. TRIMARAN CLO: Moody's Rates $12 Million Class B-2L Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service assigns ratings to Notes issued by TRIMARAN CLO VI LTD. Moody's assigns these ratings: -- Aaa to the $201,000,000 Class A-1L Floating Rate Notes Due November 2018 and to the up to $25,000,000 Class A-1LR Floating Rate Revolving Notes Due November 2018; -- Aa2 to the $16,000,000 Class A-2L Floating Rate Notes Due November 2018; -- A2 to the $19,000,000 Class A-3L Floating Rate Notes Due November 2018; -- Baa2 to the $10,000,000 Class B-1L Floating Rate Notes Due November 2018; and -- Ba2 to the $12,000,000 Class B-2L Floating Rate Notes Due November 2018. Moody's ratings of these notes address the ultimate cash receipt of all required interest and principal payments required by the governing documents and are based on the expected losses posed to holders of notes relative to the promise of receiving the present value of such payments. The ratings reflect Moody's evaluation of the underlying collateral as of the Closing Date, the transaction's structure, and the draft legal documentation. This cash-flow CLO is managed by Trimaran Advisors, LLC. This transaction, underwritten by Bear, Stearns & Co. Inc., is a securitization of primarily U.S. dollar denominated senior secured bank loans. TRANS ENERGY: Terminates HJ & Associates as Principal Auditors -------------------------------------------------------------- Trans Energy, Inc., terminated the services of HJ & Associates, LLC as its certifying accountant. The Company disclosed that HJ & Associates, has served as the certifying accountant for its financial statements from its inception. From the date on which HJ & Associates was engaged until the date HJ & Associates was terminated, there were no disagreements with HJ & Associates on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. Engagement of Malone & Bailey The Company also disclosed that it entered into an engagement letter with Malone & Bailey, PC to assume the role of its new certifying accountant. Malone & Bailey, PC has been asked to audit the year ended Dec. 31, 2006. During the two most recent fiscal years and the subsequent interim periods prior to the engagement of Malone & Bailey, PC, the Registrant did not consult with Malone & Bailey, PC with regard to: (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's financial statements; or (ii) any matter that was either the subject of a disagreement or a reportable event. The decision to change principal auditors and the engagement of the new principal auditor was recommended and approved by the Company's Board of Directors. Trans Energy, Inc., -- http://www.transenergy.com-- has been in the business of production, transportation, transmission, sales and marketing of oil and natural gas in the Appalachian and Powder River basins since 1993. With interests in West Virginia, Ohio, Pennsylvania, Virginia, Kentucky, New York, and Wyoming; Trans Energy and its subsidiaries own and operate oil and gas wells, gas transmission lines, transportation systems and well construction equipment and services. Going Concern Doubt HJ & Associates, LLC, in Salt Lake City, Utah, raised substantial doubt about Trans Energy Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's losses from operations, accumulated deficit and working capital deficit. UNITED INVESTORS: Equity Deficit Widens to $4.3 Mil. at June 30 --------------------------------------------------------------- United Investors Growth Properties reported a $152,000 net loss on $229,000 of net revenues for the three months ended June 30, 2006, compared to a $93,000 net loss on $210,000 of net revenues in 2005, the Company disclosed in its second quarter financial statements on Form-10QSB to the Securities and Exchange Commission. At June 30, 2006, the Company's balance sheet showed $2,989,000 in total assets and $5,378,000 in total liabilities, resulting in a $4,380,189 stockholders' deficit. The Company's total stockholders' deficit at March 31, 2006, stood at $2,237,000. At June 30, 2006, the Company had cash and cash equivalents of approximately $86,000 compared to approximately $98,000 in. Cash and cash equivalents decreased approximately $49,000 from Dec. 31, 2005, due to approximately $89,000 and $17,000 of cash used in investing and financing activities, respectively, partially offset by approximately $57,000 of cash provided by operating activities. Cash used in financing activities consisted of principal payments made on the mortgage encumbering the investment property slightly offset by an advance received from an affiliate. Cash used in investing activities consisted of property improvements and replacements and net deposits to restricted escrows. The Company invests its working capital reserves in interest bearing accounts. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?11b0 Going Concern Doubt Ernst & Young LLP expressed substantial doubt about United Investors' ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Dec. 31, 2005. The auditing firm pointed to the Company's recurring operating losses and suffers from inadequate liquidity. Headquartered in Greenville, South Carolina, United Investors Growth Properties was established in 1988 to invest in and operate residential and commercial real estate. The firm's general partner and manager, United Investors Real Estate, is a subsidiary of multifamily real estate giant AIMCO. The firm held a portfolio of about five residential and retail properties, but sold or lost most of those asset through foreclosure. The partnership now owns and manages one Memphis apartment community with about 140 individual units. AIMCO and its affiliates own 36% of United Investors Growth Properties. VISIPHOR CORP: Inks Software OEM Agreement with Civica ------------------------------------------------------ Visiphor Corporation entered into a software OEM Agreement with Civica Software. The companies will jointly deliver new software products, the first being InForce Connect. This product provides a combination of Visiphor's federated query capability with Civica's electronic bulletin system to public safety officials. InForce Connect is the latest addition to Visiphor's Briyante Integration Environment family of solutions for Law Enforcement and Justice. Visiphor and Civica have complimentary software offerings and under this agreement, they will market each other's software products. "We see great synergy and business opportunity from our new business relationship with Civica," said Roy Trivett, president and CEO of Visiphor. "Our customers will now have continuous, real-time access to news and alerts across an entire region of agencies. This breakthrough is accomplished despite the fact that the agencies are supported by a variety of disparate information technologies." "Local government agencies want to share information securely over the internet," said Martin Alper, Chairman Civica Software. "The value of our Web products are significantly enhanced by their integration into Visiphor's rapidly deployable data sharing networks. The solution is technologically advanced, yet affordable and simple to operate." Debt Settlement The Company also completed the debt settlement of $413,337 in debt owing to two non-arms length parties through the issuance of 918,525 Common Shares at $0.45 per share. The common shares are subject to a hold period that expires on Dec. 31, 2006. About Civica Headquartered in Newport Beach, California, Civica Software, a division of Pixelpushers, Inc., builds e-government solutions, ranging from government intranets to full Website content management. As a core offering, the CrimeConnect software solution is a secure Web-based tactical crime information sharing system that enables multiple jurisdictions to share information on a real-time basis. Civica also distributes PlateScan, a powerful license plate recognition system for stationary or vehicle-mounted cameras, identifying stolen vehicles, etc. About Visiphor Based in Burnaby, British Columbia, Visiphor Corporation (OTCBB: VISRF; TSX-V: VIS; DE: IGYA) -- http://www.imagistechnologies.com/ -- fka Imagis Technologies Inc, specializes in developing and marketing software products that enable integrated access to applications and databases. The company also develops solutions that automate law enforcement procedures and evidence handling. These solutions often incorporate Visiphor's proprietary facial recognition algorithms and tools. Using industry standard "Web Services", Visiphor delivers a secure and economical approach to true, real-time application interoperability. The corresponding product suite is referred to as the Briyante Integration Environment. Going Concern Doubt As reported in the Troubled Company Reporter on Nov. 24, 2005, KPMG LLP expressed substantial doubt about Visiphor's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2004 and 2003. The auditing firm pointed to the Company's recurring losses from operations, deficiency in operating cash flow and deficiency in working capital. WELD WHEEL: Hires Silverman Consulting as Turnaround Consultants ---------------------------------------------------------------- The Honorable Jerry W. Venters of the U.S. Bankruptcy Court for the Western District of Missouri in Kansas City authorized Weld Wheel Industries, Inc., and its debtor-affiliates to retain Silverman Consulting as their turnaround consultant. The Debtors selected Silverman as its turnaround consultants because of the firm's extensive experience providing advisory services to financially-distressed companies. Silverman is expected to: a) assist in the Debtors' sale of substantially all of their assets; b) assist as directed in implementing actions that may be required to support the Debtors' efforts, through communications with the Debtors' various stakeholders. Silverman will, as requested, assist and direct negotiations involving the Debtors' present lenders, and as necessary, landlords, vendors and others. c) provide other services to which Silverman and the Debtors may agree. The Debtors disclose that Silverman's compensation will be subject to the ultimate allowance by the Court and upon the availability of sufficient assets and funds in the estates. Craig R. Graff, at Silverman Consulting, assures the Court that his firm does not hold or represent any interest adverse to the estates and is a "disinterested persons," as that term is defined in Section 101(14) of the Bankruptcy Code. Weld Wheel Industries, Inc. -- http://www.weldracing.com/-- manufactures forged alloy wheels to enhance the performance and appearance of racecars, off-road trucks, luxury pickups, SUV's, premium motorcars, customs, hot rods, and motorcycles. Weld Wheel and its two debtor-affiliates filed for Chapter 11 protection on Aug. 17, 2006 (Bankr W.D. Mo. Case No. 06-42105). Cynthia Dillard Parres , Esq., and Laurence M. Frazen, Esq., at Bryan Cave LLP, represents the Debtors. The Official Committee of Unsecured Creditors has selected Spencer Fane Britt & Browne LLP as counsel. When the Debtor sought protection from its creditors, it estimated its assets and debts at $10 to $50 million. WELD WHEEL: White Oak to Assist in Asset Sale as Investment Banker ------------------------------------------------------------------ The Honorable Jerry W. Venters of the U.S. Bankruptcy Court for the Western District of Missouri in Kansas City authorized Weld Wheel Industries, Inc., and its debtor-affiliates to retain White Oak Capital Advisors LLC as their Investment Banker. The Debtors sought to retain White Oak because of the firm's extensive experience in the marketing and sale of businesses and its familiarity with the Debtors' financial affairs. White Oak has also provided investment banking services to the Debtors prior to their bankruptcy filing, including the solicitation of a "stalking horse" purchase offer from Platinum Equity Advisors, Inc., the negotiation of the purchase contract and the documentation of a binding purchase agreement with Platinum Equity for the purchase of substantially all of the Debtors' assets. In this engagement, White Oak will: a) solicit higher and better offers for the Debtors' assets than that made by Platinum Equity; b) provide on a timely basis any information relevant to the sale of the Debtors' assets to Debtors and these parties; -- PNC Bank, National Association and its professionals; and -- The Official Committee of Unsecured Creditors and its professionals. c) contact prospective buyers on the Debtors' behalf and arrange for and orchestrate meetings between these prospects and Debtors; d) assist Debtors in preparing confidential memoranda describing the Debtors' assets and preparing such analyses and data as requested by prospects; e) work with Debtors' legal counsel and other retained professionals as necessary as requested by Debtors; f) market the Debtors' assets in a time frame acceptable to Debtors, PNC and the Committee; g) assist in all negotiations and in all document review as reasonably requested by Debtors; and h) assist in the closing of a Transaction with Platinum Equity or such other party that makes a higher and better offer. The Debtors will pay White Oak a success fee based on the gross proceeds realized from a sale of substantially all of their assets. Based on the purchase contract between the Debtors' and Platinum Equity, the amount of the success fee will not be less than $485,000. Murray Lessinger, at White Oak, assures the Court that his firm does not hold or represent any interest adverse to the Debtors or their estates. Weld Wheel Industries, Inc. -- http://www.weldracing.com/-- manufactures forged alloy wheels to enhance the performance and appearance of racecars, off-road trucks, luxury pickups, SUV's, premium motorcars, customs, hot rods, and motorcycles. Weld Wheel and its two debtor-affiliates filed for Chapter 11 protection on Aug. 17, 2006 (Bankr W.D. Mo. Case No. 06-42105). Cynthia Dillard Parres , Esq., and Laurence M. Frazen, Esq., at Bryan Cave LLP, represents the Debtors. The Official Committee of Unsecured Creditors has selected Spencer Fane Britt & Browne LLP as counsel. When the Debtor sought protection from its creditors, it estimated its assets and debts at $10 to $50 million. WESCO AIRCRAFT: S&P Rates Proposed $165 Million Senior Loan at B- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to aerospace supplier Wesco Aircraft Hardware Corp. The outlook is stable. At the same time, Standard & Poor's assigned its 'B+' bank loan rating and '2' recovery rating, indicating substantial (80%-100%) recovery of principal in the event of a payment default, to the company's proposed $510 million first-lien credit facilities consisting of: * a $75 million senior secured revolving credit facility; and * a $435 million senior secured term loan. Standard & Poor's also assigned its 'B-' bank loan rating and '5' recovery rating, indicating negligible (0-25%) recovery of principal in the event of a payment default, to the firm's proposed $165 million senior secured second-lien term loan. "The corporate credit rating on Wesco reflects high debt leverage, weak cash flow protection measures, modest scale of operations [sales about $360 million for the 12 months ended June 30, 2006], and risks associated with cyclical demand for commercial aircraft, the company's largest end market," said Standard & Poor's credit analyst Roman Szuper. "This more than offsets the firm's position as a leading distributor of small aerospace components and good profit margins." The rating also incorporates expectations that Wesco will employ its free cash flow to reduce its high debt level. The Carlyle Group, one of the world's largest private equity firms, is acquiring a majority interest in Valencia, California- based Wesco, with the balance to be held by current management. Pro forma for the transaction, the company's financial profile will be highly leveraged (financial information is not publicly disclosed as Wesco is a private entity). Internal cash flow generation will likely be limited by working capital (especially inventory) requirements to support growth of the business. A gradual, albeit steady, debt reduction is anticipated, which should improve key credit protection measures to levels appropriate for the rating. Commercial aircraft manufacturing is Wesco's largest end market, accounting for about two-thirds of sales. The sector's long-term growth prospects are generally favorable, supported by an expected global economic growth and the need to replace older planes. Wesco's stability is enhanced by sales to the military sector (about one-third) and a broad customer base. Wesco is the leading distributor (15%-20% market share) of high- volume, low-cost (generally priced below $250 per unit) aerospace parts, such as fasteners, rivets, nuts, bolts, screws, and clamps. These, known as "C class" components, comprise about 90% of the firm's sales. The company also provides supply chain management services, including just-in-time. A generally favorable market environment, efficient operations, and a commitment to debt reduction should gradually strengthen the company's financial profile to a level appropriate for the rating. An outlook revision to either positive or negative is not likely in the near term. WEST HILLS: Files Schedules of Assets and Liabilities ----------------------------------------------------- West Hills Park Joint Venture and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the Southern District of Texas their schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $30,615,000 B. Personal Property $18,714,717 C. Property Claimed as Exempt D. Creditors Holding $27,285,898 Secured Claims E. Creditors Holding Unsecured Priority Claims F. Creditors Holding $444,837 Unsecured Nonpriority Claims ----------- ----------- Total $49,329,717 $27,730,735 Headquartered in Montgomery, Texas, West Hills Park Joint Venture filed its chapter 11 protection on Aug. 17, 2006 (Bankr. S.D. Tx Case No. 06-33996). Lawrence J. Maun, Esq. at Lawrence J. Maun, P.C., represents the Debtors in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy proceedings. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 Million to 50 Million. ZOOMERS HOLDING: Hires Trenam Kemker as Bankruptcy Counsel ---------------------------------------------------------- The Honorable Alexander L. Paskay of the U.S. Bankruptcy Court for the Middle District of Florida in Fort Myers authorized Zoomers Holding Company, LLC, to retain Richard J. McIntyre, Esq., at Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A., as its counsel. In this engagement, Mr. McIntyre will: a) give the Debtor legal advice with respect to its powers and duties, as a debtor-in-possession, in the continued operation of its business and management of its property; b) take necessary actions to recover any avoidable transfers and to avoid any liens against the Debtor's property obtained within 90 days of the filing of the Petition in Chapter 11, and at a time when Debtor was insolvent; c) enjoin or stay any and all suits against the Debtor affecting its ability to continue in business or affecting property in which the Debtor has equity; d) represent the Debtor in all adversary suits, contested matters and matters involving administration of its Chapter 11 case, whether brought in federal or state court; e) prepare on behalf of Debtor necessary petitions, answers, orders, reports, and other legal papers; f) represent the Debtor in any negotiations with potential financing sources, and to prepare any contracts, security instruments, or other documents necessary to obtain financing; g) represent the Debtor in significant litigation; and h) perform all other necessary and appropriate legal services for the Debtor Ronald Heromin, the Debtor's member has agreed to pay out of his Own personal monies, the sum of $15,000 to Trenam Kemker as a postpetition retainer. To secure the fees of the Debtor to the firm, Ronald and Deirdre Heromin will also provide the firm with mortgages upon real property they own. To the best of Debtor's knowledge, Trenam Kemker represents no interest adverse to Debtor or the Estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Osprey, Florida, Zoomers Holding Company, LLC, filed for chapter 11 protection on Apr. 28, 2006 (Bankr. M.D. Fla. Case No. 06-02008). No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. * Bankruptcy Attorneys at Traub Bonacquist Join Dreier LLP ---------------------------------------------------------- Dreier LLP has disclosed that all of the attorneys of Traub, Bonacquist & Fox LLP, a leading New York bankruptcy and corporate restructuring firm, have joined Dreier LLP. The acquisition adds a marquee bankruptcy and distressed business/asset transactional practice to Dreier LLP's existing bankruptcy and corporate reorganization capabilities. Paul R. Traub, Esq., Steven E. Fox, Esq., Susan F. Balaschak, Esq., Maura I. Russell, Esq., and Wendy G. Marcari, Esq., join Dreier LLP as partners. Anthony B. Stumbo, Esq., Brett J. Nizzo, Esq., and Kristin Lamar, Esq., join as associates. Mr. Traub, the founding member and managing partner of Traub, Bonacquist & Fox LLP, will co-chair Dreier LLP's Bankruptcy and Corporate Reorganization practice with Norman N. Kinel. Mr. Kinel has led the Firm's bankruptcy practice since joining Dreier LLP in 2003. "The Traub Group enjoys an extraordinary reputation in the bankruptcy bar for its results and expertise," stated Marc S. Dreier, Managing Partner of Dreier LLP. "We are delighted and very fortunate to have Paul and his team join us. The breadth of their experience and distressed business/asset transactional expertise is a great complement to our present capabilities in bankruptcy and reorganization." "Joining Dreier LLP enables us to provide our clients with the resources, relationships and wide-ranging capabilities of a full service law firm," Mr. Traub stated. "We also share Marc Dreier's vision of a cutting edge, entrepreneurial firm that applies creative thinking to client issues." Mr. Kinel stated that "the addition of Paul Traub and his colleagues is an exciting move forward for Dreier LLP. The combination of attorneys gives us a department of virtually unlimited ability to handle bankruptcy related representations of any size or complexity throughout the country." The Traub Group focuses on insolvency and corporate restructuring, debtor and creditor rights, strategic asset acquisitions and dispositions, distressed financings, and bankruptcy-related litigation. Mr. Traub is a recognized leader in structuring and implementing strategic business and/or asset disposition transactions across a variety of industry lines. Members of the Group have performed transactional work in dozens of cases with sellers, purchasers, lenders and secured and unsecured creditors of financially troubled companies in non- judicial restructurings and Chapter 11 reorganizations throughout the United States and Canada. Among other engagements, the Traub Group has represented strategic purchasers and sellers of assets in: joan & david (Chapter 11, New York, NY), Rhodes, Inc. (Chapter 11, Atlanta, GA), Quality Stores, Inc. (Chapter 11, Grand Rapids, MI), Bonus Stores, Inc. (Chapter 11, Wilmington, DE), Party America, Inc. (Chapter 11, Los Angeles, CA), Shoe Corporation of America, Inc. (Chapter 11, Columbus, OH), and WSS Media, Inc. (Minneapolis, MN). In addition, the Traub Group has been engaged for its distressed asset disposition expertise by secured creditors in Mastercraft Interiors, Ltd. (Chapter 11, Greenbelt, MD), Hechinger's Investment Company, Inc. (Chapter 11, Wilmington, DE), Gadzooks, Inc. (Chapter 11, Dallas, TX), among numerous others. Members of the Group have served as lead counsel to official and unofficial creditors' committees, official equity committees, retiree committees, debtors and post-confirmation committees and trustees in complex Chapter 11 cases. They have been involved in bankruptcies and reorganizations in the retail, healthcare, manufacturing, distribution, utilities, telecommunications, technology, real estate, airline, and entertainment industries, among others. Representative matters include the representation of: official committees in Kmart Corporation (Chapter 11, Chicago, IL), FAO Schwarz, Inc. (Chapter 11, Wilmington, DE), Zany Brainy, Inc. (Chapter 11, Wilmington, DE), KB Toys, Inc. (Chapter 11, Wilmington, DE), Moltech Power Systems, Inc. (Chapter 11, Gainesville, FL); debtors in Le Gourmet Chef, Inc. (Chapter 11, Newark, NJ), Jacobson Stores Inc. (Chapter 11, Detroit, MI), TW, Inc., f/k/a Nobody Beats the Wiz, Inc. (Chapter 11, Wilmington, DE), Chaffin Acquisition Corp., d/b/a Gibson's Discount Stores (Dodge City, KS), and JumboSports, Inc. (Chapter 11, Tampa, FL); and secured creditors in Goody's Family Clothing, Inc. (Knoxville, TN), Mastercraft Interiors, Ltd. (Chapter 11, Greenbelt, MD), Hechinger's Investment Company, Inc. (Chapter 11, Wilmington, DE), and Bag 'n Baggage, Ltd. (Chapter 11, Dallas, TX). About Dreier LLP Dreier LLP was represents a wide range of institutional, entrepreneurial and individual clients in diverse sectors of financial, industrial and service oriented markets. The firm's principal practices are commercial litigation, real estate, bankruptcy and corporate reorganization, employment law, corporate and securities, entertainment and intellectual property. T The firm's affiliate, Schlesinger Gannon & Lazetera LLP, has an extensive practice in the area of trusts and estates law. Pitta & Dreier LLP is an affiliate which specializes in labor law, and Pitta, Bishop, Del Giorno & Dreier LLP specializes in government relations. In the ten years since its founding, Dreier LLP has grown to a firm of more than 100 attorneys, with its principal office at 499 Park Avenue in Manhattan, and additional offices in Los Angeles, Albany and Stamford, Connecticut. * BOND PRICING: For the week of September 11 -- September 15, 2006 ------------------------------------------------------------------ Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 01/15/04 1 ABC Rail Product 10.500% 12/31/04 1 Adelphia Comm. 3.250% 05/01/21 0 Adelphia Comm. 6.000% 02/15/06 1 Adelphia Comm. 7.500% 01/15/04 58 Adelphia Comm. 7.750% 01/15/09 60 Adelphia Comm. 7.875% 05/01/09 56 Adelphia Comm. 8.125% 07/15/03 60 Adelphia Comm. 8.375% 02/01/08 60 Adelphia Comm. 9.250% 10/01/02 59 Adelphia Comm. 9.375% 11/15/09 62 Adelphia Comm. 9.500% 02/15/04 54 Adelphia Comm. 9.875% 03/01/05 55 Adelphia Comm. 9.875% 03/01/07 59 Adelphia Comm. 10.250% 06/15/11 63 Adelphia Comm. 10.250% 11/01/06 58 Adelphia Comm. 10.500% 07/15/04 58 Adelphia Comm. 10.875% 10/01/10 60 Allegiance Tel. 11.750% 02/15/08 45 Allegiance Tel. 12.875% 05/15/08 48 Amer & Forgn Pwr 5.000% 03/01/30 67 Amer Color Graph 10.000% 06/15/10 70 Ames Dept. Stores 10.000% 04/15/06 0 Antigenics 5.250% 02/01/25 64 Anvil Knitwear 10.875% 03/15/07 69 Armstrong World 6.350% 08/15/03 67 Armstrong World 6.500% 08/15/05 68 Armstrong World 7.450% 05/15/29 65 Armstrong World 9.000% 06/15/04 66 At Home Corp. 4.750% 12/15/06 0 ATA Holdings 12.125% 06/15/10 2 Autocam Corp. 10.875% 06/15/14 61 Avado Brands Inc 11.750% 06/15/09 1 Bank New England 8.750% 04/01/99 4 Bank New England 9.500% 02/15/96 11 BBN Corp 6.000% 04/01/12 0 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 56 Calpine Corp 4.000% 12/26/06 25 Calpine Corp 4.750% 11/15/23 49 Calpine Corp 6.000% 09/30/14 39 Calpine Corp 7.625% 04/15/06 73 Calpine Corp 7.750% 04/15/09 74 Calpine Corp 7.750% 06/01/15 35 Calpine Corp 7.875% 04/01/08 74 Calpine Corp 8.500% 02/15/11 51 Calpine Corp 8.625% 08/15/10 52 Calpine Corp 8.750% 07/15/07 73 Calpine Corp 10.500% 05/15/06 74 Cell Therapeutic 5.750% 06/15/08 58 Charter Comm Hld 10.000% 05/15/11 71 Chic East Ill RR 5.000% 01/01/54 50 CIH 9.920% 04/01/14 66 CIH 10.000% 05/15/14 65 CIH 11.125% 01/15/14 67 Clark Material 10.750% 11/15/06 0 Collins & Aikman 10.750% 12/31/11 8 Color Tile Inc 10.750% 12/15/01 0 Columbia/HCA 7.500% 11/15/95 69 Comcast Corp 2.000% 10/15/29 39 Comprehens Care 7.500% 04/15/10 65 Cray Research 6.125% 02/01/11 5 Curagen Corp 4.000% 02/15/11 73 Dal-Dflt09/05 9.000% 05/15/16 24 Dana Corp 5.850% 01/15/15 71 Dana Corp 7.000% 03/15/28 74 Delco Remy Intl 9.375% 04/15/12 58 Delco Remy Intl 11.000% 05/01/09 62 Delphi Trust II 6.197% 11/15/33 67 Delta Air Lines 2.875% 02/18/24 24 Delta Air Lines 7.541% 10/11/11 38 Delta Air Lines 7.700% 12/15/05 24 Delta Air Lines 7.900% 12/15/09 24 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 25 Delta Air Lines 8.540% 01/02/07 73 Delta Air Lines 9.200% 09/23/14 73 Delta Air Lines 9.250% 03/15/22 24 Delta Air Lines 9.375% 09/11/07 63 Delta Air Lines 9.750% 05/15/21 23 Delta Air Lines 9.875% 04/30/08 68 Delta Air Lines 10.000% 06/01/11 58 Delta Air Lines 10.000% 06/05/13 74 Delta Air Lines 10.000% 08/15/08 26 Delta Air Lines 10.060% 01/02/16 73 Delta Air Lines 10.080% 06/16/07 65 Delta Air Lines 10.125% 05/15/10 26 Delta Air Lines 10.375% 02/01/11 24 Delta Air Lines 10.375% 12/15/22 22 Deutsche Bank NY 8.500% 11/15/16 68 Dov Pharmaceutic 2.500% 01/15/25 57 Dura Operating 8.625% 04/15/12 73 Dura Operating 9.000% 05/01/09 16 Dura Operating 9.000% 05/01/09 59 Duty Free Int'l 7.000% 01/15/04 0 Dyersburg Corp 9.750% 09/01/07 0 Eagle-Picher Inc 9.750% 09/01/13 74 Encysive Pharmac 2.500% 03/15/12 74 Epix Medical Inc. 3.000% 06/15/24 70 Fedders North AM 9.875% 03/01/14 70 Federal-Mogul Co. 7.375% 01/15/06 56 Federal-Mogul Co. 7.500% 01/15/09 58 Federal-Mogul Co. 8.160% 03/06/03 50 Federal-Mogul Co. 8.330% 11/15/01 58 Federal-Mogul Co. 8.370% 11/15/01 53 Federal-Mogul Co. 8.800% 04/15/07 58 Finova Group 7.500% 11/15/09 30 Ford Motor Co 7.125% 11/15/25 75 Ford Motor Co 7.400% 11/01/46 75 Ford Motor Co 7.700% 05/15/97 74 GB Property Fndg 11.000% 09/29/05 51 Graftech Intl 1.625% 01/15/24 74 Gulf Mobile Ohio 5.000% 12/01/56 73 Gulf States Stl 13.500% 04/15/03 0 HNG Internorth 9.625% 03/15/06 36 Home Prod Intl 9.625% 05/15/08 67 Inland Fiber 9.625% 11/15/07 65 Insight Health 9.875% 11/01/11 48 Iridium LLC/CAP 10.875% 07/15/05 25 Iridium LLC/CAP 11.250% 07/15/05 26 Iridium LLC/CAP 13.000% 07/15/05 23 Iridium LLC/CAP 14.000% 07/15/05 26 Isolagen Inc. 3.500% 11/01/24 72 K&F Industries 9.625% 12/15/10 70 Kaiser Aluminum 9.875% 02/15/02 33 Kaiser Aluminum 12.750% 02/01/03 10 Kellstrom Inds 5.500% 06/15/03 0 Kitty Hawk Inc 9.950% 11/15/04 2 Kmart Corp 8.540% 01/02/15 28 Kmart Corp 8.990% 07/05/10 4 Kmart Corp 9.350% 01/02/20 12 Kmart Funding 8.800% 07/01/10 30 Liberty Media 3.750% 02/15/30 56 Liberty Media 4.000% 11/15/29 63 Lifecare Holding 9.250% 08/15/13 75 Macsaver Financl 7.400% 02/15/02 4 Macsaver Financl 7.600% 08/01/07 3 Macsaver Financl 7.875% 08/01/03 0 Merisant Co 9.500% 07/15/13 66 Merrill Lynch 10.000% 08/15/12 72 Movie Gallery 11.000% 05/01/12 66 MSX Int'l Inc. 11.375% 01/15/08 70 Muzak LLC 9.875% 03/15/09 56 New Orl Grt N RR 5.000% 07/01/32 66 Northern Pacific RY 3.000% 01/01/47 56 Northern Pacific RY 3.000% 01/01/47 56 Northwest Airlines 6.625% 05/15/23 48 Northwest Airlines 7.248% 01/02/12 20 Northwest Airlines 7.625% 11/15/23 48 Northwest Airlines 7.875% 03/15/08 50 Northwest Airlines 8.700% 03/15/07 47 Northwest Airlines 8.875% 06/01/06 48 Northwest Airlines 9.179% 04/01/10 23 Northwest Airlines 9.875% 03/15/07 51 Northwest Airlines 10.000% 02/01/09 49 Northwest Airlines 10.500% 04/01/09 50 Northwest Stl&Wir 9.500% 06/15/01 0 NTK Holdings Inc 10.750% 03/01/14 68 Oakwood Homes 8.125% 03/01/09 7 Oscient Pharm 3.500% 04/15/11 68 OSU-Dflt10/05 13.375% 10/15/09 0 Outboard Marine 7.000% 07/01/02 0 Outboard Marine 9.125% 04/15/17 0 Outboard Marine 10.750% 06/01/08 4 Overstock.com 3.750% 12/01/11 74 Owens Corning 7.000% 03/15/09 57 Owens Corning 7.500% 05/01/05 56 Owens Corning 7.500% 08/01/18 57 Owens Corning 7.700% 05/01/08 57 Owens-Corning Fiber 8.875% 06/01/02 55 Owens-Corning Fiber 9.375% 06/01/12 75 PCA LLC/PCA Fin 11.875% 08/01/09 20 Pegasus Satellite 9.625% 10/15/49 11 Pegasus Satellite 9.750% 12/01/06 12 Pegasus Satellite 12.375% 08/01/06 9 Pegasus Satellite 12.500% 08/01/07 12 Phar-mor Inc 11.720% 09/11/02 0 Piedmont Aviat 10.250% 01/15/49 1 Pixelworks Inc 1.750% 05/15/24 71 Plainwell Inc 11.000% 03/01/08 2 Pliant Corp 13.000% 07/15/10 40 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 50 Primus Telecom 8.000% 01/15/14 64 PSINET Inc 10.500% 12/01/06 0 Radnor Holdings 11.000% 03/15/10 24 Railworks Corp 11.500% 04/15/09 1 Read-Rite Corp. 6.500% 09/01/04 18 RJ Tower Corp. 12.000% 06/01/13 38 Rotech Healthcare 9.500% 04/01/12 70 Salton Inc 12.250% 04/15/08 74 Solectron Corp 0.500% 02/15/34 73 Tekni-Plex Inc. 12.750% 06/15/10 73 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 65 Triton Pcs Inc. 8.750% 11/15/11 69 Triton Pcs Inc. 9.375% 02/01/11 70 Tropical Sportsw 11.000% 06/15/08 7 Twin Labs Inc. 10.250% 05/15/06 2 United Air Lines 7.270% 01/30/13 56 United Air Lines 7.870% 01/30/19 54 United Air Lines 9.020% 04/19/12 56 United Air Lines 9.350% 04/07/16 30 United Air Lines 9.560% 10/19/18 61 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% 01/01/49 22 US Air Inc. 10.700% 01/15/49 23 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. 10.750% 01/01/49 0 US Air Inc. 10.750% 01/15/49 25 USAutos Trust 5.100% 03/03/11 75 Venture Holdings 9.500% 07/01/05 1 Venture Holdings 11.000% 06/01/07 0 Vesta Insurance Group 8.750% 07/15/25 10 Werner Holdings 10.000% 11/15/07 22 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 Winn-Dixie Store 8.875% 04/01/08 71 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, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q. Salta, Melvin C. Tabao, 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 ***