/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060921.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, September 21, 2006, Vol. 10, No. 225 Headlines ADELPHIA COMMS: Completes $1.8 Mil. Equipment Sale to ADDvantage ADELPHIA COMMS: Motorola Reserves Right to Unseal Settlement Pact AHPC HOLDINGS: Plante & Moran Raises Going Concern Doubt ALLEGHENY ENERGY: Estimates Higher Costs on Two Scrubber Projects AMARANTH ADVISORS: Transfers Energy Trades to Citadel and JPMorgan AMERICAN CREDIT: Seven Creditors Appointed to Official Committee AMERICAN CREDIT: Committee Taps Parker Poe as Bankruptcy Counsel AMERICAN EQUITY: Improved Balance Sheet Cues Fitch to Lift Ratings AMERICAN TOWER: S&P Holds BB+ Corp. Credit Rating on Neg. Watch ARMSTRONG WORLD: Court Reinstates John Schedler's Claim B-FAST CORP: June 30 Balance Sheet Upside-Down by $27.2 Million BOOKHAM INC: Ernst & Young Raises Going Concern Doubt BOOKHAM INC: Getting $31 Mil. of Gross Proceeds in Pvt. Placement BUILDERS PLUMBING: Chapter 7 Trustee Wants NRS as Collection Agent CALPINE CORP: Wants Court to Approve TIC Settlement Agreement CALPINE CORP: Wants to Assume & Assign Three Contracts CATHOLIC CHURCH: Davenport Diocese May File for Bankruptcy CELL THERAPEUTICS: Inks Exclusive Licensing Pact with Novartis CENTRIX FINANCIAL: Files Voluntary Chapter 11 Petition in Nevada CENTRIX FINANCIAL: Involuntary Chapter 11 Case Summary CENTRIX FINANCIAL: Case Summary & 30 Largest Unsecured Creditors CHAPARRAL ENERGY: Calumet Buy Offer Prompts S&P to Lower Ratings CIRCUIT RESEARCH: Earns $845,975 in Quarter Ended June 30 COI MIDWEST: Court Okays Leven Neale as Bankruptcy Counsel COI MIDWEST: Court Okays Klein & Wilson as Special Counsel COMVERSE TECHNOLOGY: S&P Maintains Negative Watch on BB- Rating CONSECO INC: Intends to Amend $478 Million Credit Facility CONSECO INC: S&P Rates $675 Million Senior Secured Loan at BB- CRAWFORD COMPANY: Moody's Rates $310 Million Credit Facility at B1 CREST 2001-1: Moody's Reviews Ba2 Rating on $30 Mil. Class C Notes DANA CORP: Intermet Can File Avoidance Actions Until December 28 DANA CORP: Six Creditors Want Reclamation Claim Amounts Corrected DAVID NEWELL: Case Summary & 20 Largest Unsecured Creditors DAVID WILLIAMS: Case Summary & 17 Largest Unsecured Creditors DEATH ROW: Kaye Scholer Hired as Chapter 11 Trustee's Counsel DEATH ROW: Chapter 11 Trustee Taps LECG LLC as Accountants DELPHI CORP: New Brunswick Workers Want to Join in Buyout Offers DELTA AIR: Babcock & Brown Supplements Disclosure DELTA AIR: ING & Wilmington Want to Conduct Rule 2004 Probe DELTA AIR: Bankruptcy Proceeding Cue Moody's to Withdraw Ratings DOLE FOOD: Product Warning Cues S&P to Hold Ratings on Neg. Watch EMAGIN CORP: Posts $4.8 Million Net Loss in Second Quarter of 2006 ENTERGY NEW ORLEANS: Seeks to Open Investment Account at Federated ENTERGY NEW ORLEANS: Wackenhut Wants $470,556 Admin. Claim Allowed FITZ HARPER: Case Summary & 17 Largest Unsecured Creditors FLEETPRIDE CORP: Moody's Junks Rating on $150 Million Senior Notes FLEETPRIDE CORP: S&P Junks Rating on Proposed $150 Million Notes FLYI INC: CIT Says Disclosure Statement is Inadequate FLYI INC: Court Gives Nod on Committee Investigation Protocol FORCE PROTECTION: Reports Increased Revenue Due to JERRV Contract FORD MOTOR: Attorney General Lockyer Files Global Warming Suit FORD MOTOR: Consumer Preference Shift Cues Moody's to Cut Ratings FORD MOTOR: S&P Downgrades Corporate Credit Rating to B from B+ FRANK ZAMORA: Case Summary & 15 Largest Unsecured Creditors GENERAL MOTORS: Attorney General Lockyer Files Global Warming Suit GEORGIA GULF: Moody's Lowers Rating on $100 Million Notes to B1 GLOBE BUILDING: 7th Circuit Revives Wisconsin's Wage Claim Lien HARTCOURT COMPANIES: Kabani & Company Raises Going Concern Doubt HOST AMERICA: Delayed FY 2005 10-K Has Going Concern Qualification INCO LTD: Revises Earnings Outlook for 2006 Third Quarter INSIGHT COMMS: Moody's Rates $2.575 Billion Senior Loans at Ba3 INTERMET CORP: Has Until December 28 to File Actions vs. Dana IPC ACQUISITION: Moody's Holds Junk Rating on Second Lien Debt ITC HOMES: Brings In Windermere to Market and Sell Tucson Property JUNIOR HAWTHORNE: Case Summary & Five Largest Unsecured Creditors LANDMARK CDO: Moody's Puts $9 Mil. Class D Notes' Rating on Watch LEXINGTON RESOURCES: Posts $2.3 Mil. Net Loss in 2nd Quarter 2006 MARGO CARIBE: Deloitte & Touche Raises Going Concern Doubt MED GEN: June 30 Balance Sheet Upside-Down by $10.8 Million MIAD SYSTEMS: Has CDN$420,384 Stockholders' Deficit at June 30 MIRANT CORP: To Settle Erisa Litigation for $9.7 Million MUSICLAND HOLDING: Hires Walker Truesdell as Winddown Officer NELSON BOND: Case Summary & 14 Largest Unsecured Creditors NEXTMEDIA OPERATING: Increasing Leverage Cues S&P's Neg. Outlook NORTHWEST AIRLINES: Bankruptcy Cues Moody's to Withdraw Ratings PACHINKO WORLD: McKennon Wilson Raises Going Concern Doubt PACIFIC MAGTRON: Completes Merger with Bio-Herbaceutical Company PARMALAT GROUP: Board Approves 2006 Semi-Annual Report PARMALAT USA: Court Disallows Five Sun Co. and NYC Finance Claims PARMALAT USA: Gets Court Okay to Object to Newly Discovered Claims PENN OCTANE: Has $3.4 Million Working Capital Deficit at June 30 PREDIWAVE CORP: Hires Sun & Company as Tax Accountant PREMIER ENTERTAINMENT: Case Summary & 20 Largest Unsec. Creditors PREMIUM PAPERS: U.S. Trustee Says Panel Composed of Six Creditors PROCARE AUTOMOTIVE: Hires Barnes Wendling as Auditor & Tax Advisor REFCO INC: Ad Hoc Equity Panel Balks at Exclusive Period Extension REFCO INC: Has Until December 12 to Remove State Court Actions REMOTEMDX INC: Posts $11.6 Mil. Net Loss in Third Fiscal Quarter RUSSELL CONINE: Case Summary & Three Largest Unsecured Creditors SANMINA-SCI: S&P Holds BB- Corporate Credit Rating on Neg. Watch SATELITES MEXICANOS: Judge Drain Approves Compensation System SFG LP: Taps Brown McCarroll as Bankruptcy Counsel SITHE/INDEPENDENCE: Dynegy Action Prompts S&P's Developing Watch STATMON TECH: June 30 Balance Sheet Upside-Down by $5.1 Million TAG-IT PACIFIC: Earns $654,642 in Second Quarter Ended June 30 TAHITI RV: Case Summary & 20 Largest Unsecured Creditors TELECONNECT INC: Has $5.7 Million Stockholders' Deficit at June 30 THAXTON GROUP: U.S. Trustee Amends Creditors Committee Membership TITAN FINANCIAL: U.S. Trustee Appoints Three-Member Committee TYSON FOODS: Moody's Rates $1 Billion Senior Facility at Ba1 VESTA INSURANCE: Court Defers Consideration on Claims Transfer VESTA INSURANCE: Gaines Wants to Pay Expenses with Insurance Funds WAMU MORTGAGE: Moody's Rates Class 3-B-12 Certificates at Ba1 WERNER LADDER: Court Allows Rejection of Three Equipment Leases WINN-DIXIE: Wants Stipulation with Anderson News Approved WINN-DIXIE: Wants to Sell Two Store Leases to Fine Foods for $1MM * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ADELPHIA COMMS: Completes $1.8 Mil. Equipment Sale to ADDvantage ---------------------------------------------------------------- ADDvantage Technologies Group, Inc.'s new subsidiary, Broadband Redistribution International, completed the purchase of 82,034 Scientific-Atlanta and 16,889 Motorola surplus digital set-top boxes from Adelphia Communications Corporation at a cost of approximately $1.8 million. The purchase of the equipment from Adelphia, which is currently operating under Chapter 11-Bankruptcy protection, was finalized after the U.S. Bankruptcy Court for the Southern District of New York approved the sale. Broadband Redistribution International will begin to take ownership of the digital set tops on Sept. 18, 2006. These set top boxes will be refurbished using outside vendors as they receive orders for them from customers. This refurbishment will require an additional investment of approximately $2 to $3 million. "We believe that this purchase provides us with an opportunity to leverage our strong presence in the cable equipment industry to successfully distribute the reconditioned set-top boxes we acquired from Adelphia," said Ken Chymiak, ADDvantage's President and Chief Executive Officer. "There is growing demand for such legacy digital equipment from many of our clients throughout the U.S. and South America. We believe the timing of this opportunity will allow us to take full advantage of certain pending regulatory changes, most notably the FCC's mandate for CableCard inclusion in newly manufactured boxes beginning July 1, 2007." David Chymiak, Chairman of ADDvantage Technologies Group, Inc., stated "This significant purchase of digital converters reflects our confidence in our company's ability to add new products and become a dominant provider. Having said this, we do not anticipate achieving meaningful revenues from the sales of these converters until 2007." About ADDvantage Technologies Based in Broken Arrow, Oklahoma, ADDvantage Technologies Group, Inc. (Amex: AEY) -- http://www.addvantagetech.com/-- supplies the cable television industry with a comprehensive line of new and used system-critical network equipment and hardware from leading manufacturers, including Scientific- Atlanta and Motorola, as well as operating a national network of technical repair centers. 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 COMMS: Motorola Reserves Right to Unseal Settlement Pact ----------------------------------------------------------------- Motorola, Inc., tells the U.S. Bankruptcy Court for the Southern District of New York that it reserves its right to move the Court for an order unsealing the Settlement Agreement at the time it is appropriate to do so in connection with Motorola's rights under the Bankruptcy Rules and the Federal Rules of Civil Procedure, both as a litigant in the Adversary Proceeding and as a creditor in the Debtors' bankruptcy cases. Motorola Reserves Rights Motorola, Inc.; General Instrument Corporation, doing business as Broadband Communications Sector of Motorola, Inc., and doing business as Motorola Broadband Communications Section; Synchronous, Inc.; and General Instrument Authorization Services, Inc., are defendants in an adversary proceeding brought by Adelphia Communications Corporation, et al. Michael J. Canning, Esq., at Arnold & Porter LLP, in New York, reminds the Court that the ACOM Debtors sought to file their settlement agreement with Scientific-Atlanta, Inc., under seal because they wish to prevent Motorola from learning the terms of the Settlement Agreement. Mr. Canning argues that as a significant creditor of the Debtors, Motorola has an interest in the disclosure of the terms of the Settlement Agreement. However, Mr. Canning relates, the Debtors have sought to limit disclosure and service of the Settlement Agreement and to exclude Motorola and other creditors from reviewing the Settlement Agreement. The Court allowed the Debtors to file the Settlement Agreement under seal, but preserved the right of a party to file a motion seeking to unseal the Settlement Agreement. According to Mr. Canning, Motorola does not object in principle to approval of the Settlement Agreement, especially insofar as Motorola lacks any factual predicate concerning its terms. Motorola does, however, reserve all of its rights with respect to sealing the Settlement Agreement, including whether filing under seal was appropriate in the first instance and whether grounds exist to unseal the Settlement Agreement. Mr. Canning asserts that the Debtors failed to cite any factual basis or relevant legal authority in support of their view that the Settlement Agreement, which relates to the settlement of discrete claims between the Debtors and Scientific-Atlanta, may properly be sealed under Section 107(b) of the Bankruptcy Code and Rule 9018 of the Federal Rules of Bankruptcy Procedure as disclosing confidential "commercial operations" of the Debtors. In regard to the Adversary Proceeding, Motorola believes that the Settlement Agreement likely contains discoverable information that is relevant to both the allegations made by the Debtors against Motorola and Motorola's defenses to those allegations, including but not limited to issues relating to the general facts underlying the Debtors' allegations; causation; the conduct of the Debtor's officers, directors and employees; apportionment of damages, if any; contribution claims against Scientific-Atlanta; and other grounds as may become evident as a record is developed through discovery. 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) AHPC HOLDINGS: Plante & Moran Raises Going Concern Doubt -------------------------------------------------------- Plante & Moran, PLLC, expressed substantial doubt about AHPC Holdings, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended June 30, 2006. The auditing firm pointed to the Company's recurring losses and negative cash flows from operations. AHPC reported a net loss of $3,314,259 for the year ended June 30, 2006, which compares to a net loss of $1,151,549 during the prior year ended June 30, 2005. Consolidated net sales for the fiscal year ended June 30, 2006 were $25,296,530, which represented a decrease in net sales compared to the fiscal year ended June 30, 2005 of $1,256,711. The decrease in net sales was due to competitive price pressures over the past fiscal year within some of our national account customers for our lower margin products, which resulted in a decrease in sales volumes. Net sales are derived from the sales of finished product net of allowable rebates, discounts and returns. Consolidated gross profit decreased $1,361,938 or 21.7% for the fiscal year ended June 30, 2006 compared to the prior year. The decrease in consolidated gross profit during fiscal 2006 over fiscal 2005 was primarily due to the increases in the raw material costs associated with the rising cost of latex and oil and competitive price pressures. The Company expect gross margins to continue to be affected by the cost of latex, changes in product mix, competition, manufacturing capacity levels and other factors. The Company's balance sheet at June 30, 2006, showed total assets of $8,992,200, total liabilities of $6,199,807 and shareholders' equity of $2,792,393. A full-text copy of the Company's annual report is available for free at http://ResearchArchives.com/t/s?11fe About AHPC Holdings Based in Glendale Heights, AHPC Holdings, Inc. (Nasdaq: GLOV) -- http://www.ahpc.com/-- markets disposable medical examination, foodservice and retail gloves. The Company's wholly owned subsidiary, American Health Products Corporation, supplies branded and private label disposable gloves to the healthcare, foodservice, retail and industrial markets nationwide. ALLEGHENY ENERGY: Estimates Higher Costs on Two Scrubber Projects ----------------------------------------------------------------- Allegheny Energy, Inc., expects the cost of installing flue gas desulfurization equipment or scrubbers at the Fort Martin and Hatfield's Ferry power stations to be higher than previously estimated. The projects are designed to reduce sulfur dioxide emissions from the coal-fired facilities near Maidsville, West Virginia (Fort Martin) and Masontown, Pennsylvania (Hatfield's Ferry) by approximately 95%, or about 237,000 tons per year. Fort Martin The Company also disclosed that the West Virginia Public Service Commission has given authorization to construct and operate scrubbers at the 1,107-megawatt Fort Martin facility and to finance $338 million of the project costs, as well as certain additional financing costs, using a securitization technique. The securitization involves issuing environmental control bonds. Funds collected from West Virginia customers through a surcharge will be dedicated to the repayment of the bonds. The Company estimates project costs to be in the range of $500 million to $550 million, excluding certain financing costs. The estimated cost increase is due to a number of factors, including construction challenges caused by site-specific characteristics, necessary changes in material-handling equipment and higher material costs. The Company is evaluating its options for the project, including the possibility of seeking Commission approval to securitize additional costs. The Company further disclosed that the securitization will result in substantial savings to West Virginia consumers compared to traditional ratemaking and customers' bills will reflect the benefit of lower coal and sulfur dioxide allowance costs when the scrubbers are placed into service. Hatfield's Ferry Based on additional design engineering work for the scrubber installation project at the 1,710-megawatt Hatfield's Ferry facility, the Company expects the cost of the project to be approximately $650 million from the previous cost estimate of approximately $550 million. About Allegheny Energy Headquartered in Greensburg, Pennsylvania, Allegheny Energy, Inc., (NYSE:AYE) -- http://www.alleghenyenergy.com/-- is an investor- owned utility consisting of two major businesses. Allegheny Energy Supply owns and operates electric generating facilities, and Allegheny Power delivers low-cost, reliable electric service to customers in Pennsylvania, West Virginia, Maryland and Virginia. * * * As reported in the Troubled Company Reporter on June 28, 2006 Fitch upgraded the Issuer Default Rating and senior unsecured debt ratings of Allegheny Energy, Inc., to 'BB+' from 'BB-'. The ratings of Allegheny Energy Supply Company, LLC, and Allegheny Generating Company (AYE's non-regulated subsidiaries) were also upgraded by Fitch. The Rating Outlook for AYE, AE Supply and AGC is Stable. AMARANTH ADVISORS: Transfers Energy Trades to Citadel and JPMorgan ------------------------------------------------------------------ Amaranth Advisors has transferred its energy portfolio to Citadel Investment Group and J.P. Morgan Chase & Co., Ann Davis at the Wall Street Journal reports. In a letter to investors obtained by Reuters, Nick Maounis, Amaranth's founder and CEO, confirmed the completion of the transfer to a third party. Amaranth intends to provide additional information on the transfer soon. News of Amaranth's move to transfer its entire energy investment portfolio follows the Fund's announcement on Monday that it has incurred significant losses in energy-related investments after a dramatic move in natural gas prices. Ms. Davis reports that negotiations to divest Amaranth's energy investment began before news of the loss came out. According to Ms. Davis, the transfer is designed to minimize the risk that Amaranth has to close down its entire fund. Mathew Goldstein, writing for TheStreet.com, points to brewing speculation that Amaranth may be close to closing its operations. Reuters reported Tuesday that Amaranth sold over EUR1 billion of its European loan portfolio to cover losses sustained from the natural gas price plunge. However, according to Dow Jones Newswires, The New York Mercantile Exchange said that Amaranth's clearinghouse is not currently in trouble. Amaranth Advisors, based in Greenwich, Connecticut with offices in Toronto, Canada, London, England and Singapore, is an investment management firm. Amaranth specializes in a broad spectrum of alternative investments and trading strategies, through a multi- strategy investment fund and fund dedicated to long-short equities. AMERICAN CREDIT: Seven Creditors Appointed to Official Committee ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of North Carolina discloses that seven creditors were appointed to serve on an Official Committee of Unsecured Creditors in American Credit Company's chapter 11 case: 1. George Saieed 2311 Big Ben Drive Greenville, North Carolina 27858 Tel: (714) 527-5431 2. John and Kim Hallow 2106 Bloomsbury Road Greenville, North Carolina 27858 Tel: (252) 355-5157 3. Beecher Kirkley 1876 Heron Run Hayes, Virginia 23072 Tel: (804) 642-5420 4. Glenn Hardee c/o Sally Allen 386 Vernon White Road Winterville, North Carolina 28590 Tel: (252) 531-5713 5. Fred Meece 114 South Reed Drive Washington, North Carolina 27889 Tel: (252) 946-3932 (H) 6. Robert Saieed Sr. 105 Cheesire Drive Greenville, North Carolina 27858 Tel: (252) 756-5007 7. Benjamin G. Jones 126 Man-O-War Drive Washington, North Carolina 27889 Tel: (252) 946-6995 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Headquartered in Greenville, North Carolina, American Credit Company, aka Resident Lenders of North Carolina, Inc. is a financial services company that provides consumer loans and auto financing. The Debtor filed for chapter 11 protection on July 21, 2006 (Bankr. E.D. N.C. Case No. 06-02189). Gregory B. Crampton, Esq., and Stephani W. Humrickhouse, Esq., at Nicholls & Crampton, P.A., represent the Debtor. The Debtor's financial condition as of May 31, 2006 showed total assets of $21,263,884 and total debts of $18,075,640. AMERICAN CREDIT: Committee Taps Parker Poe as Bankruptcy Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in American Credit Company's chapter 11 case asks the U.S. Bankruptcy Court for the Eastern District of North Carolina for permission to employ Parker Poe Adams & Bernstein, LLP, as its bankruptcy counsel. Parker Poe will: a. assist and advise the Committee in its consultation with Debtor relative to the administration of the Debtor's chapter 11 case; b. attend meetings and negotiate with the representatives of the Debtor; c. assist and advise the Committee in its examination and analysis of the conduct of the Debtor's affairs; d. assist the Committee in the review, analysis, and negotiation of any plan of reorganization/liquidation that may be filed and to assist the Committee in the review, analysis and negotiation of the disclosure statement accompanying any plan of reorganization/liquidation; e. take all necessary action to protect and preserve the interests of the Committee, including the prosecution of actions on its behalf, negotiations concerning all litigation in which the Debtor is involved, and review and analysis of all claims filed against the Debtor's estates; f. prepare generally on behalf of the Committee all the necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Committee; g. appear, as appropriate, before the Bankruptcy Court or any other court of competent jurisdiction and to protect and serve the interests of the Committee before the Bankruptcy Court or other courts of competent jurisdiction; and h. perform all other necessary legal services as requested or required by the Committee in these cases. Brian D. Darer, Esq., a partner at Parker Poe, tells the Court that he will bill $230 per hour for this engagement. Mr. Darer discloses that the other attorneys who will render their services in this engagement bill: Professional Designation Hourly Rate ------------ ----------- ----------- J. William Porter, Esq. Partner $375 William L. Esser IV, Esq. Associate $220 Mr. Darer assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Darer can be reached at: Brian D. Darer, Esq. Parker Poe Adams & Bernstein, LLP Wachovia Capitol Center 150 Fayetteville Street, Suite 1400 Raleigh, North Carolina 27601 Tel: (919) 828-0564 Fax: (919) 834-4564 http://www.parkerpoe.com/ Headquartered in Greenville, North Carolina, American Credit Company, aka Resident Lenders of North Carolina, Inc. is a financial services company that provides consumer loans and auto financing. The Debtor filed for chapter 11 protection on July 21, 2006 (Bankr. E.D. N.C. Case No. 06-02189). Gregory B. Crampton, Esq., and Stephani W. Humrickhouse, Esq., at Nicholls & Crampton, P.A., represent the Debtor. The Debtor's financial condition as of May 31, 2006 showed total assets of $21,263,884 and total debts of $18,075,640. AMERICAN EQUITY: Improved Balance Sheet Cues Fitch to Lift Ratings ------------------------------------------------------------------ Fitch Ratings upgraded the Issuer Default Rating of American Equity Investment Life Holding Company to 'BB+' from 'BB' and insurer financial strength rating to 'BBB+' from 'BBB' of its insurance operating subsidiaries, American Equity Investment Life Insurance Company and American Equity Investment Life Insurance of New York. The Rating Outlook for all ratings is Stable. Fitch's rating actions are based on AEL's improved balance sheet including declining financial leverage at the holding company level and improved risk-adjusted capital at the operating company level. Additional strengths include: * AEILIC's high credit quality and liquid bond portfolio; * a strong position in the fixed index annuity market; * strong servicing reputation with its chosen distribution network; * national marketing organizations; and * demonstrated access to the capital markets. Fitch also views favorably AEL's good operating performance including a rapid three-year growth in sales, revenues and assets and good profitability as measured by return on equity. Fitch's concerns include the monoline nature of AEILIC's product portfolio and the lack of diversification in revenue and earnings streams and distribution channels. Interest rate risk is AEILIC's chief balance sheet risk, as the market values of its assets and liabilities are very sensitive to changes in interest rates. Fitch views favorably AEL's improvements in asset liability management in recent years and notes the company's fixed index annuities include product features such as surrender charges and terms that are designed to limit withdrawals. Like many fixed annuity books of business, AEL's primary business risk is to a spike in interest rates concurrent with increased surrender rates. Fitch observes the investment portfolio's significant allocation to zero coupon and callable securities, and believes that the company has relatively high levels of interest rate sensitivity as well as reinvestment risk. Fitch estimates that after AEL's $200 million capital contribution in August 2006, AEILIC's current statutory capitalization as measured by risk-adjusted capital is in excess of 400% of the company action level and provides a cushion for adverse interest rate scenario events, as well as room for growth. While Fitch considers AEILIC's current risk-adjusted capital to be adequate for the rating level, Fitch notes the strong sales generation capacity of the company's NMOs and believes that continued access to the capital markets is essential to maintain current financial leverage at the AEL and statutory capitalization levels in a range of 300% to 350% risk-based capital over the intermediate term. While Fitch views favorably the decline in AEL's equity-adjusted financial leverage to approximately 33% since year-end 2005 from over 41% at year-end 2004, Fitch regards interest coverage as moderate at 4.0x on a FAS-133 adjusted operating basis and 2.0x on an AEILIC maximum common stock dividend coverage basis. Fitch's Stable Outlook is driven by expectations for AEILIC to maintain good risk adjusted capital, which should be in excess of 350% at year-end 2006, and a high-quality fixed income portfolio. While AEILIC's sales of fixed index annuity products has slowed in the first half of 2006, consistent with the industry trend, the maintenance of its position as a significant player in the fixed index annuity marketplace has continued. Fitch believes that solid sales levels will continue to be generated by its NMO-based distribution channels. Interest margins are expected to remain at sound levels and Fitch expects continued solid GAAP-based operating profitability. Fitch expects AEL will continue to access the capital markets on a regular basis in support of growth and to maintain an adjusted financial leverage below 40%. GAAP-based adjusted operating EBIT fixed coverage is expected to exceed 3.0x for 2006. AEILIC, the main operating subsidiary of AEL, is headquartered in Des Moines, Iowa, and reported total assets of approximately over $11.2 billion and total adjusted capital of $742 million at June 30, 2006. Fitch upgrades these ratings: American Equity Investment Life Holding Company: -- Issuer Default Rating to 'BB+' from 'BB' -- $260 million senior convertible debentures 5.25% due 2024 to 'BB' from 'BB-' -- Trust preferred securities to 'BB-' from 'B+' American Equity Investment Life Insurance Company: -- Insurer financial strength rating to 'BBB+' from 'BBB' American Equity Investment Life Insurance of New York: -- Insurer financial strength rating to 'BBB+' from 'BBB' AMERICAN TOWER: S&P Holds BB+ Corp. Credit Rating on Neg. Watch --------------------------------------------------------------- Standard & Poor's Ratings Services' ratings for Boston-based wireless tower operator American Tower Corp. and its related entities remained on CreditWatch with negative implications, including the 'BB+' corporate credit rating. The '1' recovery ratings for the company's bank loans are not on CreditWatch. "This update follows the company's Sept. 19 press release on the status of its financial statement filings," said Standard & Poor's credit analyst Catherine Cosentino. Due to issues identified in its review of its historical stock option granting practices and related accounting, the company has indicated that it will need to restate previously issued financial statements for the period 2003 through March 31, 2006, and restate selected financial data for the period 2001 through 2005 to record charges for stock-based compensation expenses related to certain option grants and to account for the tax-related consequences. The company indicated that these restated financials are expected to be filed with the SEC within three to five weeks of today's press release. In the meantime, the company also obtained waivers from its secured bank lenders for its two credit facilities for the event of default constituted by its failure to file financial statements for the period ended June 30, 2006. This waiver, which expires on Nov. 15, 2006, also waives defaults that have arisen or may arise in connection with the stock option matter and the company's restatement. However, if more than 80% of the lenders deliver a notice to American Tower for failure to deliver financial reports, the waiver will be extended only for 30 days following such notice. In addition, if 25% of the company's convertible note holders give notice of the company's failure to file financial reports, the company would have 60 days to cure this event of default (30 days for the subordinated and senior note holders). American Tower expects to file its statements before the expiration of any of these cure periods. Standard & Poor's will monitor the company's ability to provide financial statements to its creditors before the Nov. 15 waiver deadline under the bank loans. If it appears that American Tower will be unable to meet this waiver deadline and obtain additional waivers extensions, the ratings would be lowered significantly. ARMSTRONG WORLD: Court Reinstates John Schedler's Claim ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware reinstated Claim No. 319 against Armstrong World Industries, Inc., and its debtor-affiliates. John Schedler entered into an employment agreement on April 20, 1999, with DD Martin Surfacing, Inc., presently known as Nitram Liquidators, Inc. Mr. Schedler subsequently filed Claim No. 319 against Armstrong World Industries, Inc., asserting a general unsecured claim for $239,142 arising under the Employment Agreement. In accordance with the Debtor's 10th omnibus objection to non- substantive claims filed on March 26, 2003, the Court reclassified Claim No. 319 as a claim against Nitram and expunged the Claim to the extent it was asserted against the Debtor. However, since Mr. Schedler did not receive notice of the hearing on the Tenth Omnibus Objection, the parties agreed that the Tenth Omnibus Order will be deemed vacated with respect to Claim No. 319. The Claim will be reinstated to assert a general unsecured claim, prior to the Debtors filing for chapter 11 protection, against the Debtor for $239,142. Reinstatement of Claim No. 319 is without prejudice to the Debtor's right to object to the Claim on any ground in the future. About Armstrong World Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world. The Company and its debtor-affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The Debtors tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. When the Debtors filed for protection from their creditors, they listed $4,032,200,000 in total assets and $3,296,900,000 in liabilities. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. (Armstrong Bankruptcy News, Issue No. 100; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) B-FAST CORP: June 30 Balance Sheet Upside-Down by $27.2 Million --------------------------------------------------------------- b-Fast Corp., filed its quarter financial statements for the three months ended June 30, 2006, with the Securities and Exchange Commission. The Company reported an $232,000 net loss on $1,156,000 of net sales for the three months ended June 30, 2006. At June 30, 2006, the Company's balance sheet showed $6,576,000 in total assets, $4,644,000 in redeemable preferred stock, $29,185,000 in total current liabilities, and a $27,253,000 stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $691,000 in total current assets available to pay $29,185,000 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?11df Going Concern Doubt WithumSmith+Brown, P.C., in Princeton, New Jersey, raised substantial doubt about b-Fast Corp's Inability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Sep 30, 2005. The auditor pointed to the Company's working capital deficit of $27,697,000 and a stockholders' deficiency of $26,162,000 as of September 30, 2005. About b-Fast Corp Headquartered in Newtown, Pennsylvania, b-Fast Corp. provides ground support services for general aviation aircraft at the Harrisburg International Airport in Middletown, Pennsylvania. BOOKHAM INC: Ernst & Young Raises Going Concern Doubt ----------------------------------------------------- Ernst & Young LLP expressed substantial doubt about Bookham, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended July 1, 2006. The auditing firm pointed to the Company's recurring operating losses. Bookham posted an $87.5 million net loss for the fiscal year ended July 1, 2006, compared with a net loss of $248 million in fiscal 2005. Net revenue for fiscal 2006 was $231.6 million, compared with $200.3 million in fiscal 2005. "We achieved 16% revenue growth in fiscal 2006 and significantly improved our overall financial structure with the elimination of our long-term debt," said Dr. Giorgio Anania, president and chief executive officer of Bookham. "On the operations front, we extended our supply agreement with Nortel through calendar 2006 and completed the move of our assembly and test manufacturing to Shenzhen, which is already delivering better performance and substantial cost savings. In addition, we introduced several new products, including wideband tunable laser products, next generation high power 980 pumps, new optical amplifiers and extended temperature XFPs and SFP DWDM transceiver products, all of which, we believe, will be key to our revenue growth in fiscal 2007." Revenue in the fourth quarter of fiscal 2006 was $55 million, compared with $53.4 million in the third quarter of fiscal 2006 and $61 million in the fourth quarter of fiscal 2005. Revenue from customers other than Nortel increased 25% sequentially to $36.5 million from $29.3 million last quarter. Revenue from Nortel in the fourth quarter declined as previously forecast to $18.5 million compared with $24.1 million in the prior quarter. Net loss in the fourth quarter was $270 million. Included in fourth quarter GAAP net loss are restructuring charges of approximately $5.2 million. Fourth quarter net loss compares with a net loss of $48 million in the third quarter and a net loss of $39 million in the fourth quarter of fiscal 2005. "We are making good progress on the cost reduction plans we announced in May. Our lasers prototype line with associated engineering support will be transferring to our Shenzhen, China facility in the August to October timeframe, and our chip-on- carrier line will be starting up in Shenzhen in September with the move to be completed before year-end. We are also in the process of transferring a certain number of development, manufacturing support and administrative functions to Shenzhen to continue driving down our overhead cost structure. This will result in significant reductions in Western-world staff, especially in our Paignton, UK site, which will occur between the middle of August and November of this year," said Dr. Anania. "We initially expected these moves would result in quarterly cost savings of between $5 million and $6 million per quarter. We now expect cost savings of about $4 million per quarter in the December quarter with an additional $1.5 million to $2.5 million achieved by the March 2007 quarter," added Dr. Anania. A full-text copy of the Company's annual report is available for free at http://researcharchives.com/t/s?11fa Outlook and Guidance "The market outlook for telecom optical components remains strong and as a key player in the telecom optical components space we are experiencing the benefits from this positive momentum," said Dr. Anania. "We are seeing solid demand for our new products and believe this will translate into additional growth for these products over the next several quarters." About Bookham Inc. Bookham, Inc. -- http://www.bookham.com/-- designs, manufactures and markets optical components, modules and subsystems that generate, detect, amplify, combine and separate light signals principally for use in high-performance fiber optics communications networks. The Company has manufacturing facilities in the UK, US, Canada, China and Switzerland; and offices in the US, UK, Canada, France and Italy and employs approximately 2000 people worldwide. BOOKHAM INC: Getting $31 Mil. of Gross Proceeds in Pvt. Placement ----------------------------------------------------------------- Bookham, Inc., disclosed Tuesday that certain institutional investors have exercised their right to purchase 2,898,667 shares of common stock and warrants to purchase up to 724,667 shares of common stock pursuant to a second closing of a private placement contemplated by a securities purchase agreement dated Aug. 31, 2006. In the initial closing on Sept. 1, 2006, investors purchased 8,696,000 newly issued shares of common stock at $2.70 per share, and warrants to purchase up to 2,174,000 shares of common stock. The warrants have a term of five years and become exercisable after March 1, 2007, at an exercise price of $4.00 per share. In the second closing, Bookham will receive additional gross proceeds of $7.9 million resulting in total gross proceeds of $31.4 million for this private placement. Cowen and Company, LLC, acted as the sole placement agent for this offering. Pursuant to an agreement with the investors, the Company will file a registration statement with the U.S. Securities and Exchange Commission covering the resale of the shares of common stock issued to the investors as well as the shares of common stock issuable upon exercise of the warrants, subject to certain terms and conditions. The securities offered in the private placement were not registered under the Securities Act of 1933, as amended or any state securities laws, and may not be offered or sold in the United States absent registration, or an applicable exemption from registration, under the Act and applicable state securities laws. About Bookham Inc. Bookham, Inc. -- http://www.bookham.com/-- designs, manufactures and markets optical components, modules and subsystems that generate, detect, amplify, combine and separate light signals principally for use in high-performance fiber optics communications networks. The Company has manufacturing facilities in the UK, US, Canada, China and Switzerland; and offices in the US, UK, Canada, France and Italy and employs approximately 2000 people worldwide. BUILDERS PLUMBING: Chapter 7 Trustee Wants NRS as Collection Agent ------------------------------------------------------------------ David Grochocinski, the Chapter 7 Trustee overseeing the liquidation of Builders Plumbing & Heating Supply Co. and its debtor-affiliates, asks the U.S. Bankruptcy Court for the Northern District of Illinois to employ National Recovery Services as his collection agent. The firm is expected to assist the Trustee in the recovery of certain funds that may inure to the Debtors' estate arising out of a class action lawsuit concerning an alleged price fixing arrangement for purchase of bathroom and plumbing supplies by visa, mastercharge, or mastermoney. The Trustee together with Silverman Consulting, his financial advisor, reviewed the agreement and potential claims and believe that retention of the firm may result in claims payable to the estate. The Debtor tells the Court that the firm has agreed a contingent fee of 1/3 of any claims paid to the estate based on claims filed in the litigation. Shannon Hamilton, vice president of the firm, assures the Court that the firm is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. About Builders Plumbing Headquartered in Addison, Illinois, Builders Plumbing & Heating Supply Co. is a plumbing product distributor. The Debtor and its affiliates filed for chapter 11 protection on December 5, 2003 (Bankr. N.D. Ill. Case No. 03-49243). Brian A. Audette, Esq., David N. Missner, Esq., and Marc I. Fenton, Esq., at DLA Piper Rudnick represent the Debtors. The Debtors' chapter 11 cases were converted into chapter 7 liquidation proceedings on Mar. 11, 2004. David E. Grochocinski, the chapter 7 trustee, is represented by Kathleen M. McGuire, Esq., at Grochocinski, Grochocinski & Lloyd. Mark Melickian, Esq., represents the Official Committee of Unsecured Creditors. When the Company filed for protection from their creditors, they listed assets of $62,834,841 and debts of $57,559,894. CALPINE CORP: Wants Court to Approve TIC Settlement Agreement ------------------------------------------------------------- Calpine Corp. and its debtor-affiliates ask authority from the U.S. Bankruptcy Court for the Southern District of New York to enter into a Settlement Agreement with The Industrial Company Wyoming, Inc. If the Settlement is not consummated, the Debtors seek the Court's authority to post a bond if TIC places a lien on the Mankato Energy Center Project. Debtor Calpine Construction Management Company, Inc., was created to serve as general contractor for the Debtors' energy projects, including the Mankato Energy Center project. Mankato Energy Center, LLC, a non-debtor subsidiary, owns a 750-megawatt combined cycle gas turbine electrical power plant. Mankato and CCMCI's contract requires CCMCI to post a bond for any lien that may be asserted against the Project due to any alleged default. The Project is now completed, and is providing electricity under a long-term "off-take" agreement. CCMI hired The Industrial Company Wyoming, Inc., a subcontractor, to assist in building the Mankato property pursuant to a subcontract dated April 2005. TIC Wyoming began work in May 2005 and substantially completed its part of the Project in March 2006. David R. Seligman, Esq., at Kirkland & Ellis LLP, in New York, relates that since the inception of the Mankato Project, there have been disagreements between CCMCI and TIC pursuant to their Subcontract regarding the proper allocation of responsibilities between the parties. TIC alleged that CCMCI caused various delays and defaults under the Subcontract. Accordingly, TIC filed a proof of claim for $7,984,777 against the Debtors. CCMCI also filed claims against TIC regarding its performance, liquidated damages, and certain adjustments and credits to the contract price under the Subcontract. As Mankato Energy is not a debtor and, therefore does not have the protection of the automatic stay, the Debtors anticipate that TIC might attempt to file a mechanics lien with respect to the Mankato property regarding the parties' disputes under the Subcontract. While Mankato Energy and CCMCI certainly would challenge any lien, litigating the validity of TIC's mechanics lien and Claim and estate would be costly and uncertain, Mr. Seligman contends. Moreover, if TIC successfully asserts a mechanics lien on the Mankato property, it is possible that the Mankato project lenders could declare a default under various financing agreements, thereby raising the risk of foreclosure, Mr. Seligman says. Consequently, the Debtors have decided to explore the possibility of a settlement with CCMCI. The Debtors then engaged in arm's- length negotiations and the parties ultimately reached an agreement to resolve their dispute. The Settlement Agreement provides, among other things, that: (a) the Subcontract will be amended to increase the Agreement Amount as defined in the Subcontract by $5,077,000 for a total Agreement Amount of $14,746,949; (b) CCMCI will release $435,000 to TIC; and (c) the parties will mutually release all claims in connection with the Subcontract, the Agreement Amount Dispute, the Performance Dispute or the TIC Claims, including any rights to any proof of claim filed by TIC, provided that the Released Claims will not include any of Calpine Construction's claims against TIC for breach of any warranty or default under the Subcontract occurring after the date of the Settlement. To the extent, however, that the Settlement is not consummated and CCMCI asserts a mechanics lien on the Mankato Project, the Debtors believe that posting a bond or other adequate security, including cash, under the Mankato Contract to avoid a default under the various financing agreements is nonetheless in the sound exercise of their business judgment. Mr. Seligman points out that if TIC asserted a lien on the Mankato property and the Debtors did not post a bond, Mankato Energy would be in default under its project lending agreements, which could result in Mankato Energy being unable to draw on the funds necessary to finish this and other non-debtor projects. Mr. Seligman asserts that the Debtors have the ability to post a bond under their DIP financing facility. Posting a bond would preserve their rights to litigate CCMCI claims in the absence of a settlement. Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CALPINE CORP: Wants to Assume & Assign Three Contracts ------------------------------------------------------ In connection with the proposed sale of the Russell City Project Assets, Calpine Corp. and its debtor-affiliates seek authority of the U.S. Bankruptcy Court for the Southern District of New York to further assume three contracts: 1. A Project Labor Agreement, dated Nov. 24, 1999, between certain of the Debtors and the State Building and Construction Trades Council of California and its affiliated unions; 2. A Maintenance Agreement, dated May 25, 2000, between certain of the Debtors and the State Building and Construction Trades Council of California and its affiliated unions; and 3. A letter agreement, dated May 20, 1999, between Calpine Corporation and International Brotherhood of Electrical Workers Local #1245. The Debtors also seek the Court's permission to assign the Additional Assumed Contracts to Russell City Energy Company, LLC. Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Davenport Diocese May File for Bankruptcy ---------------------------------------------------------- Courtney Brennan, writing for WQAD.com, states that the Davenport Catholic Diocese will likely file for chapter 11 bankruptcy after it lost a sexual abuse lawsuit last two days ago in Scott County court. As a result of the court-approved litigation, Michl Udhe will receive $1.5 million claim from the Davenport Diocese. The Diocese was reported that it didn't have an insurance policy to cover the settlement. Ms. Brennan says Davenport parishioners are troubled that their church will fold because of the lawsuit. Bankruptcy attorney Barry Barash stated in an interview with Ms. Brennan that the Diocese would probably file for bankruptcy, which would give the Diocese more time to reorganize, fid out what assets could be sold and how to earn enough money to pay Mr. Udhe. Mr. Barash further said that putting a monetary value on a diocese is difficult, but it can be done. Churches have assets just like other businesses, in loose cash, vehicles, furniture, fixtures and buildings. Saint Anthony's in downtown Davenport is a perfect example of the diocese's prime real estate. But to the parishioners, it's not a building that should be put up for sale, Mr. Barash added. As reported in the Troubled Company Reporter on Oct. 20, 2004, the Diocese, according to Bishop William E. Franklin, was prepared to file for chapter 11 protection during that week if claimants in sex abuse lawsuits against the Diocese won't accept a settlement or if the local court insists that a trial currently scheduled to begin on Nov. 1, 2004, goes forward. CELL THERAPEUTICS: Inks Exclusive Licensing Pact with Novartis -------------------------------------------------------------- Cell Therapeutics, Inc., entered into an exclusive worldwide licensing agreement with Novartis for the development and commercialization of XYOTAX(TM), an investigational agent in Phase III for the treatment of non-small cell lung cancer and other cancers. The Company disclosed that total product registration and sales milestones for XYOTAX under the agreement could reach as much as $270 million. Novartis has also agreed to make a $15 million equity investment in the Company. The Company will have the option of co-detailing XYOTAX in the United States under the direction of Novartis, under a separate agreement if the Company exercises the option. The closing of the transaction is subject to antitrust regulatory clearance and certain other closing conditions. The agreement also provides Novartis with an option to develop and commercialize Pixantrone, an investigational agent designed to potentially increase anti-tumor activity and decrease the potential for cardiac toxicity associated with the currently marketed anthracyclines. If Novartis exercises its option on Pixantrone, it would pay the Company a $7.5 million fee and up to $104 million in registration and sales related milestones. "This agreement brings the strength of one of the most innovative leaders in oncology to the development and commercialization of XYOTAX, an agent that could be demonstrated in ongoing trials to prolong survival in women with lung cancer and potentially become the first gender specific therapy for this disease," James A. Bianco, M.D., president and chief executive officer, said. "It also provides pixantrone with potential access to a market leader in blood related cancer therapeutics to fully maximize its commercial potential." Dr. Bianco, added: "This collaboration takes CTI one step closer to rebuilding its commercial presence in the United States and its goal of becoming a profitable cancer focused company. It also allows us to continue our growth through an acquisition strategy looking for other novel targeted agents to add to our development pipeline and into our future commercial infrastructure." The common stock to be issued to Novartis has not been registered under the Securities Act of 1933, as amended, or any state securities laws. The common stock may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933, as amended, and any applicable state laws. About Novartis Headquartered in Basel, Switzerland, Novartis, AG, (NYSE: NVS) -- http://www.novartis.com/-- is a world leader in offering medicines to protect health, treat disease and improve well-being. Its goal is to discover, develop and successfully market innovative products to treat patients, ease suffering and enhance the quality of life. Novartis Group companies employ approximately 97,000 people and operate in over 140 countries around the world. About Cell Therapeutics Based in Seattle, Washington, Cell Therapeutics, Inc., (NASDAQ and MTAX: CTIC) -- http://www.cticseattle.com/-- engages in the development, acquisition, and commercialization of treatments for cancer. The company was co-founded by James A. Bianco, Louis A. Bianco, and Jack W. Singer in 1991. At June 30, 2006, the Company's equity deficit narrowed to $102.173 million from a $107.097 equity deficit at Dec. 31, 2005. CENTRIX FINANCIAL: Files Voluntary Chapter 11 Petition in Nevada ---------------------------------------------------------------- Centrix Financial LLC filed for voluntary Chapter 11 petition with the U.S. Bankruptcy Court for the District of Nevada following the Company's plan to be acquired by an investment group, the Denver Business Journal reports. Centrix said in an interview last week that it has agreed to enter into a purchase agreement with the group, including Robert Sutton, the Company's chairman and CEO, Falcon Investment Advisors LLC of Boston and New York, and Everest Reinsurance Holdings Inc. of New Jersey. The purchase price was not disclosed. The proposed sale is subject to Court approval. Falcon became the Company's senior lender in January and Everest provides insurance portfolio. Falcon provides DIP financing to the Company during the Chapter 11 proceeding, according to the news. In July, report shows that Centrix dropped its sponsorship of the Grand Prix of Denver. It has consolidated operations and cut its workforce from 1,500 to 400 employees. Involuntary Chapter 11 Filing IFC Credit Corp, Suntrust Leasing and Wells Fargo Equipment Finance, three creditors of Centrix Financial filed involuntary chapter 11 petition with the U.S. Bankruptcy Court for the District of Colorado on last Friday, claiming they are owed more than $4.6 million. According to Lee Kutner, the creditors' attorneys, the companies, which leased equipment, software and other products to the Debtor, have not been paid for several months. Andy Vuong, writing for Denver Post, says that Centrix has 20 days to respond to the involuntary filing. A judge still needs to approve the petition, Mr. Vuong adds. CENTRIX FINANCIAL: Involuntary Chapter 11 Case Summary ------------------------------------------------------ Alleged Debtor: Centrix Financial, LLC 6782 South Potomac Street Centennial, CO 80122 Involuntary Petition Date: 06-16403 Case Number: September 15, 2006 Chapter: 11 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Petitioners' Counsel: Lee M. Kutner, Esq. Kutner Miller, P.C. 303 East 17th Avenue, Suite 500 Denver, CO 80203 Tel: (303) 832-2400 -- and -- David von Gunten, Esq. Von Gunten Law LLC 2303 East Dartmouth Avenue Englewood, CO 80113 Tel: (303) 504-0055 Fax: (303) 504-0044 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ IFC Credit Corp. Lease Payments $2,152,176 c/o Patrick Witowski 8700 Waukegan Road, Suite 100 Morton Grove, IL 60053 Suntrust Leasing Lease Payments $2,148,164 c/o Michael J. Powers 300 Joppa Road, Suite 700 Towson, MD 21286 Wells Fargo Equipment Lease Payments $345,000 Finance, Inc. [address not provided] CENTRIX FINANCIAL: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Centrix Financial LLC 6782 South Potomac Street Centennial, CO 80112 Bankruptcy Case No.: 06-50682 Debtor-affiliate filing separate chapter 11 petition on Sept. 20, 2006: Entity Case No. ------ -------- Centrix Services, LLC 06-50691 Debtor-affiliates filing separate chapter 11 petitions on Sept. 19, 2006: Entity Case No. ------ -------- Centrix Resource Managers Inc. 06-50685 Centrix Servicing LLC 06-50686 Centrix Support LLC 06-50687 Centrix Technology Support Services LLC 06-50688 Type of Business: The Debtor provides subprime auto loans. Chapter 11 Petition Date: September 19, 2006 Court: District of Nevada (Reno) Judge: Gregg W. Zive Debtors' Counsel: Craig D. Hansen, Esq. Squire Sanders & Dempsey LLP 40 North Central Avenue #2700 Phoenix, AZ 85004 Tel: (602) 528-4000 Estimated Assets: More than $100 Million Estimated Debts: More than $100 Million Debtors' Consolidated List of 30 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Centrix Funds $14,338,360 5690 DTC Boulevard, Ste. 345 Greenwood Village, CO 80111 CU of Texas $6,195,668 8131 N. LBJ Freeway Dallas, TX 75251 New Horizons CCU $3,376,504 99 South Broadway Denver, CO 80209 Corporate America Family CU $3,100,102 2075 Big Timber Rd. Elgin, IL 60123 IBM Credit LLC $1,931,274 One North Castle Drive Armonk, NY 10504 Velocity CU (Austin Metro) $1,691,119 610 East 11th St. Austin, TX 78701 Mission FCU - Velocity CU $1,419,460 5785 Oberlin Dr. San Diego, CA 92121 ARCH Insurance Company $1,400,000 3100 Broadway, Ste. 511 Kansas City, MO 64111 Great American Insurance Company $1,329,704 1100 E. Washington, Ste. 200 Grayslake, IL 60030 Eastern Financial Florida CU $1,225,720 3700 Lakeshore Dr. Miramar, FL 33027 Credit Union 1 $1,191,774 200 E. Champaign Ave. Rantoul, IL 61866 Tom Bollum $1,000,000 774 Mays Blvd. #10 PMB-412 Incline Village, NV 89451 United One CU $993,945 1117 South 10th St. Manitowoc, WI 54220 Texas Partners FCU $913,677 1011 Wales Dr. P.O. Box 1389 Killeen, TX 76549 Connexus CU $987,979 2600 Pine Ridge Blvd. Waussau, WI 54401 Meadows CU $963,320 3350 Salt Creek Lane, Ste. 100 Arlington Heights, IL 60005 First Community CU $903,601 P.O. Box 840129 Houston, TX 77284 IFC Credit Corporation $841,871 8700 Waukegan Road, Ste. 100 Morton Grove, IL 60053 GMAC Commercial Finance, LLC $781,063 210 Interstate North Parkway Ste. 315 Atlanta, GA 30337 Security Service FCU - TX $775,832 16211 La Cantera Pkwy. San Antonio, TX 78256 First Financial CU $762,510 1616 W. Cameron Ave. West Covina, CA 91790 Memphis Area Teachers CU $731,564 7845 US Hwy. 64 Memphis, TN 38133 Arizona Central Credit Union $678,529 2020 N. Central Ave., Ste. 800 Phoenix, AZ 85004 Dealertrack, Inc. $582,215 1111 Marcus Ave., Ste. M04 Lake Success, NY 11042 Security Service FCU - CO $554,806 1485 Kelly Johnson Blvd. Colorado Springs, CO 80920 Southwest Oklahoma FCU $504,360 1806 N. W. Liberty Lane Lawton, OK 73507 Midwest United CU $477,593 1800 S. Outer Rd. Blue Springs, MO 64015 SunTrust Leasing Corporation $474,061 P.O. Box 79194 Baltimore, MD 21279 Advancial FCU $444,653 1845 Woodall Rodgers Fwy., Ste. 1300 Dallas, TX 75201 Allegacy FCU $440,170 P.O. Box 1456 Winston-Salem, NC 27102 CHAPARRAL ENERGY: Calumet Buy Offer Prompts S&P to Lower Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered the corporate credit rating on exploration and production company Chaparral Energy Inc. to 'B' from 'B+', following the announcement that Chaparral intends to purchase Calumet Oil Co. (unrated) for $510 million in cash. Chaparral's senior unsecured ratings were also lowered to 'CCC+' from 'B', reflecting increasing secured debt levels. Finally, the outlook was revised to negative from stable. Pro forma the Calumet acquisition, Oklahoma City, Oklahoma-based Chaparral is expected to have around $1 billion of debt. The rating actions reflect increased debt leverage of roughly $6 per barrel of oil equivalent resulting from the acquisition of Calumet (309 billion cubic feet equivalent), which is inconsistent with the expectations for the former rating. In addition, the acquisition of Calumet and its funding point to a more aggressive growth strategy for Chaparral, which was expected to reduce debt leverage. The ratings on Chaparral reflect: * its aggressive growth strategy; * high debt leverage; * elevated cost structure; and * small reserve base. The ratings also incorporate Chaparral's: * solid reserve life; * high operatorship of its properties; and * extensive hedging program. "The negative outlook reflects concerns about Chaparral's ability to reduce debt leverage and maintain adequate liquidity in the near to medium term, and the likelihood for negative rating actions if liquidity becomes strained," said Standard & Poor's credit analyst Paul B. Harvey. "If Chaparral can ensure adequate liquidity and reduce outstanding borrowings through a meaningful infusion of equity, ratings would be stabilized," he continued. CIRCUIT RESEARCH: Earns $845,975 in Quarter Ended June 30 --------------------------------------------------------- Circuit Research Labs, Inc., filed its quarter financial statements for the three months ended June 30, 2006, with the Securities and Exchange Commission. The Company reported an $845,975 net income on $3,852,356 of net sales for the three months ended June 30, 2006. At June 30, 2006, the Company's balance sheet showed $12,371,661 in total assets and $8,576,072 in total liabilities, and $3,795,589 in stockholders' equity. The Company's June 30 balance sheet also showed strained liquidity with $4,212,664 in total current assets available to pay $5,943,379 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?11dc Going Concern Doubt Altschuler, Melvoin and Glasser, LLP, in Chicago, Illinois, raised substantial doubt about Circuit Research'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 difficulties in meeting its financing needs and negative working capital position. About Circuit Research Circuit Research Labs, Inc. -- http://www.crlsystems.com/-- develops, manufactures and markets electronic audio processing, transmission encoding and noise reduction equipment. The products control the audio quality and range of radio, television, cable and Internet audio reception and allow radio and television stations to broadcast in mono and stereo. COI MIDWEST: Court Okays Leven Neale as Bankruptcy Counsel ---------------------------------------------------------- COI Midwest Investment LLC obtained authority from the U.S. Bankruptcy Court for the Central District of California to employ Levene, Neale, Bender, Rankin & Brill L.L.P., as its bankruptcy counsel. As reported in the Troubled Company Reporter on Aug. 8, 2006, Levene Neale is expected to: a. advise the Debtor with regard to the requirements of the Court, Bankruptcy Code, Bankruptcy Rules and the Office of the U.S. Trustee as they pertain to the Debtor; b. advise the Debtor with regard to certain rights and remedies of its bankruptcy estate and the rights, claims and interests of creditors; c. represent the Debtor in any proceedings or hearing in the Court involving its estate unless the Debtor is represented in such proceeding or hearing by other special counsel; d. conduct examinations of witnesses, claimants or adverse parties and represent the Debtor in any adversary proceeding except to the extent any advesary proceeding is in the area outside of Levene Neale's expertise or beyond Levene Neale's staffing capabilities; e. prepare and assist the Debtor in the preparation of reports, applications, pleadings and orders including, but not limited to, applications to employ professionals, interim statements and operating reports, initial filing requirements, schedules and statement of financial affairs, lease pleadings, cash collateral pleadings, financing pleading, and pleadings with respect to the Debtor's use, sale or lease of property outside the ordinary course of business; f. represent the Debtor with regard to obtaining use of cash collateral including, but not limited to, negotiation and seeking Court approval of any cash collateral pleading or stipulation and prepare any pleadings relating to obtaining use of cash collateral; g. assist the Debtor in negotiation, formulation, preparation and confirmation of a plan of reorganization and the preparation and approval of a disclosure statement in respect of the plan; and h. perform any other services which may be appropriate in Levene Neale's representation of the Debtor during its bankruptcy case. David B. Golubchik, Esq., a partner at Levene Neale, discloses that the Debtor has agreed to pay a $50,000 retainer to Levene Neale. Mr. Golubchik assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in the City of Industry, California, COI Midwest Investments LLC leases its real property in Canyon Road. The Company filed for bankruptcy protection on June 1, 2006 (Bankr. C.D. Calif. Case No. 06-12329). Ron Bender, Esq., and David B. Golubchik, Esq., at Levene, Neale, Bender, Rankin & Brill, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it reported assets amounting between $10 million and $50 million and debts aggregating between $1 million and $10 million. COI MIDWEST: Court Okays Klein & Wilson as Special Counsel ---------------------------------------------------------- COI Midwest Investment LLC obtained authority from the U.S. Bankruptcy Court for the Central District of California to employ Klein & Wilson as its special litigation counsel. Prime Measurement Lease As reported in the Troubled Company Reporter on Aug. 8, 2006 the Debtor told the Court that its primary asset is a real property located at 900 South Turnbull Canyon Road in City of Industry, California. The property is being leased to Prime Measurement Products, Inc. The Debtor related that Prime ceased making payments and being its sole source of operating revenue, it was unable to service its secured debt. The Debtor reminded the Court that it filed for chapter 11 protection in order to prevent foreclosure actions by its secured creditor on the property as well as preserve the value of the property. The Debtor said that despite the default, Prime continues to occupy the property. The Debtor disclosed that it is currently engaged in negotiations with Prime in an attempt to effectuate a settlement. Klein & Wilson's Retention The Debtor said that in the event a settlement is reached, Klein & Wilson will assist the Debtor in monitoring Prime's compliance with the settlement and provide services in the event of default under the settlement. Otherwise, Klein & Wilson will assist the Debtor in commencing and prosecuting an unlawful detainer action against Prime and assist the Debtor in addressing the current defaults under the lease. Mark Wilson, Esq., a partner at Klein & Wilson, tells the Court that attorneys at the firm bill at $325 per hour while legal assistants bill between $95 to $125 per hour. Mr. Wilson discloses that the Debtor will pay the firm a $10,000 retainer. Mr. Wilson assures the Court that the firm does not hold or represent any interest adverse to the Debtor or its estate. About COI Midwest Headquartered in the City of Industry, California, COI Midwest Investments LLC leases its real property in Canyon Road. The Company filed for bankruptcy protection on June 1, 2006 (Bankr. C.D. Calif. Case No. 06-12329). Ron Bender, Esq., and David B. Golubchik, Esq., at Levene, Neale, Bender, Rankin & Brill, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it reported assets amounting between $10 million and $50 million and debts aggregating between $1 million and $10 million. COMVERSE TECHNOLOGY: S&P Maintains Negative Watch on BB- Rating --------------------------------------------------------------- Standard & Poor's Ratings Services' 'BB-' corporate credit and senior unsecured debt ratings on Woodbury, New York-based Comverse Technology Inc. remained on CreditWatch with negative implications, where they were placed on March 15, 2006. "The ratings were placed on CreditWatch following the company's announcement that its board of directors had created a special committee to review matters relating to the company's stock option grants, which has resulted in the ongoing delay of the filing of financial statements, potential restatement of prior periods, and departure of members of senior management," said Standard & Poor's credit analyst Ben Bubeck. Furthermore, while the NASDAQ Listing Qualifications Panel granted the company continued listing on the NASDAQ, this extension was subject to the condition that Comverse files its financial statements by Sept. 25, 2006, or face delisting. Under indentures to Comverse's convertible notes, a stock exchange delisting could give note holders the right to put the notes back to the company for cash. However, it should be noted that the company reported cash balances of nearly $1.9 billion as of July 31, 2006, compared with approximately $500 million of notes. Therefore, the company is expected to be able to meet a potentially accelerated maturity with current balance sheet liquidity. Comverse recently announced that the NASDAQ Listing and Hearing Review Council issued a stay of, and called for a review of, the NASDAQ Listing Qualifications Panel's decision to establish a deadline of Sept. 25, 2006, for the company to file its delayed financial statements, and informed the company that it may submit in writing additional information for consideration by Oct. 13, 2006. Standard & Poor's will continue to monitor developments with Comverse, including the financial restatements, changes to the strategy and corporate governance practice that may stem from the management departures, potential litigation, and debt maturity acceleration to determine what, if any, affect they have on debt ratings. CONSECO INC: Intends to Amend $478 Million Credit Facility ---------------------------------------------------------- Conseco, Inc., engaged Banc of America Securities LLC and J.P. Morgan Securities Inc. to act as lead arrangers and joint bookrunners in connection with the amendment of its existing senior secured credit agreement, under which there is currently $478 million outstanding. The amendment is expected to provide for, among other things, an increase in the principal amount of the facility to $675 million, an extension of the due date from 2010 to 2013, and covenant modifications. The net proceeds of approximately $200 million would be used to strengthen the capital of the Company's insurance subsidiaries. Headquartered in Carmel, Indiana, Conseco, Inc. (NYSE:CNO) -- http://www.conseco.com/-- through its subsidiaries, engages in the development, marketing, and administration of supplemental health insurance, annuity, individual life insurance, and other insurance products throughout the United States. The company operates in two segments, Bankers Life and Conseco Insurance. The Bankers Life segment markets and distributes Medicare supplement insurance, life insurance, long term care insurance, and certain annuity products to the senior market. CONSECO INC: S&P Rates $675 Million Senior Secured Loan at BB- -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' senior debt rating to Conseco Inc.'s $675 million senior secured term loan due 2013. The proceeds will be used to refinance the $478 million outstanding on an existing facility and provide capital to Conseco's insurance subsidiaries. Standard & Poor's also affirmed its 'BB+' financial strength and counterparty credit ratings on Conseco's core insurance subsidiaries: * Bankers Life & Casualty Co., * Colonial, * Penn Life Insurance Co., * Conseco Health Insurance Co., * Conseco Insurance Co., * Conseco Life Insurance Co., and * Conseco Life Insurance Co. of NY. The outlook on the subsidiaries remains positive and the outlook on the holding company is stable. "The assigned 'BB-' rating primarily reflects the underlying financial strength of Conseco's insurance operations, which we still consider to be speculative grade," said Standard & Poor's credit analyst Jon Reichert. With the incremental new debt, debt/capital will be about 17% and debt plus preferred securities/capital will be about 29%. GAAP fixed-charge coverage is projected to be more than 4x in 2006 with statutory fixed-charge coverage at more than 1.3x. The positive outlook on the operating units continues to reflect Standard & Poor's belief that the insurance operation will be able to generate sales and earnings commensurate with an investment- grade rating in the next six to nine months. Although the planned infusion of capital will make the insurance companies' capitalization more commensurate with an investment- grade rating, Standard & Poor's needs to see at least a stabilization in GAAP operating earnings before raising the ratings to investment grade. Ongoing pretax GAAP operating earnings from the core insurance subsidiaries declined 3% through the first half of 2006, compared with the prior year period. If GAAP earnings deteriorate further, the outlook on the operating units could be revised to stable. CRAWFORD COMPANY: Moody's Rates $310 Million Credit Facility at B1 ------------------------------------------------------------------ Moody's Investors Service assigned a B1 rating to the $310 million senior secured credit facility expected to be entered into by Crawford and Company. The credit facility consists of a $235 million 7-year term loan B, a $50 million 5-year revolving credit facility, and a $25 million 5-year synthetic letter of credit facility. Proceeds from the facility are expected to be used to refinance Crawford debt and to fund the purchase of Broadspire Management Services, Inc. In the same action, Moody's assigned a Corporate Family Rating to Crawford of B1. The outlook for the ratings is stable. Moody's B1 rating is based on Crawford's substantial financial leverage, which leads to a low level of financial flexibility, and marginal interest and fixed expense coverage. Moody's notes that additional debt-like obligations such as a pension funding shortfall and lease obligations further increase financial leverage. In addition, Crawford's profitability has been somewhat weak in recent years. Also, a risk to the company over the medium term relates to its acquisition of Broadspire, and the associated integration risk and added operational risk as the two operations are brought together. Helping to offset these risks is Crawford's status as a market leader in many of its specific lines of business. Moody's believes Crawford has a well established franchise within the claims management sector and incorporates sophisticated claims management tools. Further credit positives are the excellent geographic diversification, enabling contracts with large multi- national institutions, and strong customer relationships with numerous large and small institutions in multiple lines of business. Crawford has a fairly stable revenue and earnings profile, due to the relatively high switching costs faced by customers and the lack of exposure to insurance underwriting risk. Moody's expects that Crawford will continue to maintain profit margins of between 3% and 6%; financial leverage on a Moody's adjusted debt-to-EBITDA basis of approximately 4x to 5x (3.5x to 4.5x on an unadjusted basis); free cash flow-to-debt of about 5% to 8% and interest coverage of between 1.5x and 3x. Crawford and Company (NYSE: CRDA and CRDB) is a claims management service company headquartered in Atlanta, Georgia. For the first half of 2006, Crawford reported total revenue of $431 million, and net income of $10 million. Shareholders' equity at June 30, 2006 was $187 million. CREST 2001-1: Moody's Reviews Ba2 Rating on $30 Mil. Class C Notes ------------------------------------------------------------------ Moody's Investors Service placed on watch for possible upgrade these notes issued by Crest 2001-1, Limited, a collateralized debt obligation issuer: -- The $30,000,000 Class B-1 Fixed Second Priority Fixed Rate Term Notes Due 2034 Prior Rating: A3 Current Rating: A3 (on watch for possible upgrade) -- The $35,000,000 Class B-2 Floating Second Priority Fixed Rate Term Notes Due 2034 Prior Rating: A3 Current Rating: A3 (on watch for possible upgrade) -- The $30,000,000 Class C Third Priority Fixed Rate Term Notes, Due 2034 Prior Rating: Ba2 Current Rating: Ba2 (on watch for possible upgrade) The rating actions reflect the improvement in the credit quality of the transaction's underlying collateral portfolio, consisting of primarily real estate investment trusts. The transaction, which closed in 2001, has seen an improvement in the overcollateralization tests, as well as a 10% paydown of the Class A Notes. DANA CORP: Intermet Can File Avoidance Actions Until December 28 ---------------------------------------------------------------- Dana Corporation and its debtor-affiliates entered into a stipulation with Intermet Corporation and its debtor- affiliates resolving Intermet's requests to: (a) have the automatic stay lifted to allow Intermet to commence an avoidance action against the Dana Debtors in the U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division; or in the alternative (b) have the Dana Debtors directed to enter into an appropriate tolling agreement. To resolve the dispute, the Dana Debtors agree that: (a) the deadline to file any avoidance actions pursuant to Section 547 of the Bankruptcy Code is extended until December 28, 2006; (b) the Dana Debtors will not object to the filing of any Avoidance Action during the Tolling Period on the grounds that the filing is untimely; (c) the Dana Debtors reserve their rights to contest any Avoidance Action brought against them during the Tolling Period on grounds other than untimeliness; (d) the Intermet Debtors reserve their rights against the Dana Debtors including, without limitation, rights to pursue any motion to lift the automatic stay in connection with the Avoidance Action; and (e) the Stipulation does not affect the general bar date for filing claims in the Dana Chapter 11 Cases or the applicability of the Bar Date to any claims the Intermet Debtors may have against the Dana Debtors in the Dana Chapter 11 Cases. In its request, as published in the Troubled Company Reporter on Sept. 12, 2006, Intermet told the Court that Intermet Debtors' Books and Records reveal that they made one or more transfers by check, wire transfer, or its equivalent of an interest in their property, aggregating $1,383,908, to one or more of the Dana Debtors on or within 90 days before Intermet filed for bankruptcy. The Intermet Debtors believe that those Transfers constitute preferential transfers, which, subject to defenses available to the transferees, may be avoided and recovered for their benefit. The Michigan Bankruptcy Court set Sept. 28, 2006, as the last day for filing any avoidance actions. Richard M. Meth, Esq., at Pitney Hardin, LLP, in New York, asserted that without immediate relief from the automatic stay, the Intermet Debtors will be unable to commence the Avoidance Action by the Filing Date, and thus will be prejudiced by the loss of a valuable cause of action. Mr. Meth argued that the harm that will fall on the Intermet Debtors if they are prevented from timely filing the Avoidance Action outweighs any potential added burden that the Dana Debtors might incur in having to defend the Avoidance Action. About Intermet Troy, MI-based Intermet Corporation -- http://www.Intermet.com/-- emerged from bankruptcy in November 2005. Intermet provides machining and tooling services for the automotive and industrial markets specializing in the design and manufacture of cast automotive components for the global light truck, passenger car, light vehicle and heavy-duty vehicle markets. Intermet, along with its debtor-affiliates, filed for chapter 11 protection on Sept. 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through 04- 67614). Salvatore A. Barbatano, Esq., at Foley & Lardner LLP, represented the Intermet Debtors. When the Intermet Debtors filed for protection from their creditors, they listed $735,821,000 in total assets and $592,816,000 in total debts. About Dana Corporation Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANA CORP: Six Creditors Want Reclamation Claim Amounts Corrected ----------------------------------------------------------------- Approximately six more creditors ask the U.S. Bankruptcy Court for the Southern District of New York to allow the correct amount of their reclamation claims against Dana Corporation and its debtor- affiliates: Asserted Creditor Amount -------- -------- Gunite Corporation $1,284,628 Schaeffler Group USA, Inc. 578,740 Versa Iron & Machine 196,442 Schaeffler Canada, Inc. 174,892 Americraft Carton, Inc. 149,203 Schrader-Bridgeport International 52,786 Imperial Fabricating Co. of Texas 52,454 Each of the Creditors provided goods to the Debtors within 45 days of the Petition Date and in the ordinary course of business. According to the Creditors, they have satisfied the elements of their reclamation claims by timely filing the necessary documents and providing the Debtors with all additional requested information. With respect to the requirement that "the debtor was insolvent at the time the goods were received," the Creditors say they did not have the opportunity to examine the Debtors' records to determine whether or not the Debtors were insolvent when they received the Goods. Some of the Creditors assert that a portion of their reclamation claims relate to goods that were shipped to and received by the Debtors within 20 days of the Petition Date, thus qualifying for administrative priority: Administrative Creditor Priority Claim -------- -------------- Gunite Corporation $1,284,628 Versa Iron & Machine 196,442 Imperial Fabricating Co. of Texas 52,454 Americraft Carton, Inc. 10,674 About Dana Corporation Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DAVID NEWELL: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: David P. Newell and Cheryl D. Newell dba Carousel Food Mart 573 Rhodes Road Apalachin, NY 13732 Bankruptcy Case No.: 06-62271 Type of Business: The Debtor operates a gas station and convenience store. Chapter 11 Petition Date: September 19, 2006 Court: Northern District of New York (Utica) Debtor's Counsel: Kelly C. Griffith, Esq. Harris Beach LLP One Park Place 4th Floor 300 South State Street Syracuse, NY 13202 Tel: (315) 423-7100 Total Assets: $1,564,891 Total Debts: $1,669,178 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ First USA Bank $32,763 c/o Sharinn & Lipshie, P.C. 200 Garden City Plaza, Ste. 506 Garden City, NY 11530 Cortland Pump & Equipment $1,987 842 Bennie Road Cortland, NY 13045 Paul A. Newell $30,000 211 McFadden Road Apalachin, NY 13732 First USA VISA $25,323 P.O. Box 15548 Wilmington, DE 19886 Bank One VISA $23,133 P.O. Box 15153 Wilmington, DE 19886 MBNA Mastercard $21,545 P.O. Box 1591 Wilmington, DE 19850 Williams Oil Co., Inc. $20,644 York Avenue North P.O. Box 207 Towanda, PA 18848 Jones-McIntosh Tobacco $19,199 4036 New Court Avenue Syracuse, NY 13206 AT&T Universal Mastercard $19,059 c/o Sharinn & Lipshie, P.C. 200 Garden City Plaza, Ste. 506 Garden City, NY 11530 Travlers Indemnity & Affiliates $15,841 c/o Haylor, Freyer & Coon, Inc. 700 Harry L. Drive Johnson City, NY 13790 Card Provisions - Roland Card $9,302 5907 Fernholm Village Drive Ponhatan, VA 23139 State Insurance Fund $9,176 199 Church Street New York, NY 10007 New York State Electric & Gas Corp. $8,007 P.O. Box 5600 Ithaca, NY 14852 Philip Strawn, CPA $5,700 346 Conklin Avenue Binghamton, NY 13903 Coughlin & Gerhart, LLP $4,814 20 Hawley Street Binghamton, NY 13902 Piaker & Lyons, CPA $3,037 92 Hawley Street Binghamton, NY 13901 Jason Bender $3,000 213 Earl Road Vestal, NY 13850 St. Paul Travelers Indemnity Co. $2,718 c/o D&B RMS 300 Arboretum Place P.O. Box 26446 Richmond, VA 23261 Paul A. Newell $2,000 211 McFadden Road Apalachin, NY 13732 Rocco J. Testani, Inc. $1,517 29 Phelps St. P.O. Box 746 Binghamton, NY 13902 DAVID WILLIAMS: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: David H. Williams 14A Powder Horn Hill Road Wilton, CT 06897 Bankruptcy Case No.: 06-50386 Chapter 11 Petition Date: September 18, 2006 Court: District of Connecticut (Bridgeport) Debtor's Counsel: Scott M. Charmoy, Esq. Charmoy & Charmoy 1700 Post Road, Suite D-3 P.O. Box 745 Fairfield, CT 06430 Tel: (203) 254-9393 Fax: (203) 254-9797 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service 1040 Income Taxes $58,116 135 High Street, Stop 155 Hartford, CT 06103 Kinecta Federal Credit Union Merchandise $21,659 P.O. Box 10003 Manhattan Beach, CA 90267-7503 Hilliard Williams Loan $15,000 15831 Barons Way Drive Chesterfield, MO 63017 University Federal Credit Union Loan $5,300 P.O. Box 9350 Austin, TX 78766-9350 Merchandise $6,364 Citibank Visa Merchandise $11,042 P.O. Box 6062 Sioux Falls, SD 57117 Rucci, Burnham, Carta, Services $4,943 Carello & Reilly, LLP Silver Hill Hospital Judgment $3,000 BC Life & Health Insurance Services $2,001 AT&T Wireless Services $1,896 (Cingular Wireless) Department of Revenue Services Income Taxes $1,494 Foley's Pump Service Services $1,409 Wells Fargo Loan $1,109 Travelers Insurance Services $899 Town of Wilton Property Taxes $810 Gregory S.C. Chann, DMD Services $510 Connecticut Light & Power Services $475 AT&T Wireless Services $383 DEATH ROW: Kaye Scholer Hired as Chapter 11 Trustee's Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California in Los Angeles allowed R. Todd Neilson, the Chapter 11 Trustee appointed in Death Row Records Inc.'s bankruptcy case, to retain Kaye Scholer LLP as his general bankruptcy counsel, nunc pro tunc to July 19, 2006. As reported in the Troubled Company Reporter on Aug. 15, 2006, Kaye Scholer will: a) determine the viability of proposing and confirming a plan of reorganization; b) pursue adversary proceedings where appropriate to avoid prepetition and postpetition preferential or fraudulent transfers and to recover estate property; c) prosecute claims objections where appropriate to the extent that funds are generated for the estate; d) investigate the propriety of certain insider loans; e) analyze the assets of the Debtor's estate; and f) perform services related to other legal matters as may arise in the administration of the Debtor's estate. The attorneys currently designated to represent the Trustee and their standard hourly rates include: Attorney Hourly Rate -------- ----------- Ronald L. Leibow, Esq. $685 Pater L. Haviland, Esq. $650 Rhonda R. Trotter, Esq. $520 Corrine J. Rebhun, Esq., $460 To the best of the Trustee's knowledge, Kaye Scholer does not hold or represent any interest adverse to the Debtor or the Estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Compton, California, Death Row Records Inc. -- http://www.deathrowrecords.net/-- is an independent record producer. The company and its owner, Marion Knight, Jr., filed for chapter 11 protection on April 4, 2006 (Bankr. C.D. Calif. Case No. 06-11205 and 06-11187). Daniel J. McCarthy, Esq., at Hill, Farrer & Burrill, LLP, and Robert S. Altagen, Esq., represent the Debtors in their restructuring efforts. R. Todd Neilson serves as Chapter 11 Trustee for the Debtor's estate. When the Debtors filed for protection from their creditors, they listed total assets of $1,500,000 and total debts of $119,794,000. DEATH ROW: Chapter 11 Trustee Taps LECG LLC as Accountants ---------------------------------------------------------- R. Todd Neilson, the Chapter 11 Trustee appointed in Death Row Records Inc.'s bankruptcy case, asks the U.S. Bankruptcy Court for the Central District of California in Los Angeles for authority to employ LECG LLC as his accountants and financial advisors. LECG LLC is expected to: a) analyze all transactions pursuant to the Debtor's cessation of business; b) review all payments made on account of distribution contracts; c) analyze daily transactions; d) investigate all transfers of funds and purchases of investments; e) complete Chapter 11 operating and interim reports in compliance with U.S. Trustee's Office guidelines; f) assist the Trustee in the identification of assets, including causes of action; g) assist the Trustee in the pursuit of any litigation he may pursue, including providing any expert witness testimony that may be necessary; h) perform any necessary tax work and other analysis which is required by the Trustee to properly administer the estate and conclude the case; i) assist the Trustee in preparation of state and federal income tax returns for the estate; j) communicate with taxing authorities on behalf of the estate; and k) assist with such other financial advisory or accounting services requested by the Trustee. The Trustee says that Ernst & Young's professionals will be paid based on their customary hourly rates. A copy of those rates are available for free at http://researcharchives.com/t/s?1202 To the best of the Trustee's knowledge, does not have any interest materially adverse to the Debtor's estate or other interested parties. Headquartered in Compton, California, Death Row Records Inc. -- http://www.deathrowrecords.net/-- is an independent record producer. The company and its owner, Marion Knight, Jr., filed for chapter 11 protection on April 4, 2006 (Bankr. C.D. Calif. Case No. 06-11205 and 06-11187). Daniel J. McCarthy, Esq., at Hill, Farrer & Burrill, LLP, and Robert S. Altagen, Esq., represent the Debtors in their restructuring efforts. R. Todd Neilson serves as Chapter 11 Trustee for the Debtor's estate. When the Debtors filed for protection from their creditors, they listed total assets of $1,500,000 and total debts of $119,794,000. DELPHI CORP: New Brunswick Workers Want to Join in Buyout Offers ---------------------------------------------------------------- A hundred employees at Delphi Corporation's former facility in New Brunswick, New Jersey, inform the Honorable Robert. D. Drain of the U.S. Bankruptcy Court for the Southern District of New York that not everyone received the buyouts as most were made to believe. These 100 employees were among those that have not received the buyout offers. The employees assert that Delphi and IUE-CWA once again have discriminated against them. Following the sale of Delphi's battery business to Johnson Controls Inc., IUE-CWA's local 416 union leadership assured permanent employees some form of monetary compensation. In a memo posted in June, the union said that workers would be receiving these amounts: Amount Years of Service ------ ---------------- $40,000 Between one and three years $70,000 Three to less than 10 years $140,000 10 years and above In an all-employee meeting, the employees found out that the terms of the sale to JCI includes a provision stating that: "Delphi Corporation in consultation with the leadership of I.U.E. sold Delphi New Brunswick Operations with one hundred employees to Johnson Controls Inc." Delphi and the union had distributed an attrition form for employees to complete indicating their position in the buyout agreement. In the memo, every permanent employee with one year or above of work service was given an option to choose between buyout and leave, buy down and stay, and forceful stay with no option of buyout. The employees point out that 95% of them choose buyout but Delphi management in consultation with the Union blatantly ignored this. Apparently, Delphi did what they did because they had to honor their position in selling 100 people to JCI, the employees relate. The employees tell Judge Drain that on August 1, 2006, the first day of operation for Johnson Controls, 66 employees were laid off. The employees contend that the lay-offs were a clear indication that JCI did not need that many employees at that time. Thus, the employees now are asking why they were transferred in the first place. "We . . . are reaffirming our position that [our] transfer to Johnson Controls was and is still not our wish, we choose buyout monetary compensation and that we feel very degrading that we were sold as part of Delphi's property," the employees lament. About Delphi Corp. Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/ -- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: Babcock & Brown Supplements Disclosure ------------------------------------------------- The Hon. Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court for the Southern District of New York gave its final approval for Delta Air Lines, Inc., and its debtor-affiliates to employ Babcock & Brown LP as their financial advisor with respect to aircraft financing in their Chapter 11 cases, the Troubled Company Reporter reported on Aug. 4, 2006. Babcock Supplements Disclosure Mathew A. Landess, an employee at Babcock & Brown LP, discloses that it has come to his firm's attention that the Debtors may be interested in selling certain aircraft to third-party purchasers. Mr. Landess says that while Babcock is generally representing the Debtors with respect to aircraft financing and related issues, the Debtors have informed Babcock that the firm will not be advising them with respect to any potential sale of the Aircraft. Mr. Landess informs the Court that Babcock's distinct wholly- owned subsidiary, Babcock & Brown Aircraft Management LLC, may be interested in a purchase or other transaction with respect to the Aircraft if the Debtors choose to divest themselves of the Aircraft in the future. Consistent with Babcock's previous disclosures and subject to the Debtors obtaining necessary Court approvals with respect to any future sales of the Aircraft, BBAM may proceed with a purchase or other transaction related to the Aircraft unless the Court or any party-in-interest in the Debtors' Chapter 11 cases objects. Mr. Landess also informs the Court that Babcock recently discovered that it represents at least one client who may also be interested in purchasing the Aircraft. Since Babcock will not be advising the Debtors with respect to any sale of the Aircraft, and since only Babcock professionals separate from those involved in advising the Debtors would be involved in representing or assisting any proposed purchasers of the Aircraft, Babcock intends to continue to pursue the transactions on behalf of its clients absent any objections from the Court or parties-in-interest. Mr. Landess assures the Court that Babcock will establish and maintain an ethical wall between its professionals advising the Debtors and those advising other clients with respect to the Aircraft. Babcock does not believe that: (a) any purchase or transaction related to the Aircraft involving BBAM; or (b) Babcock providing advice to any clients with respect to the Aircraft, creates a material conflict of interest in the Debtors' Chapter 11 cases and renders Babcock not "disinterested." Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELTA AIR: ING & Wilmington Want to Conduct Rule 2004 Probe ----------------------------------------------------------- ING Bank N.V., is the loan participant, and Wilmington Trust Company, is the Indenture Trustee under four similarly structured leveraged-leases of aircraft equipment with Comair, Inc., with respect to four Embraer EMB-120 aircraft bearing FAA Registration Nos. N259CA, N257CA, N267CA and N268CA, and related engines, propellers and other items. An owner trustee is also a party to each of the Leases. Each Aircraft is subject to a lease, which has been assigned by the owner trustee to Wilmington Trust. As reported in the Troubled Company Reporter on July 14, 2006, the U.S. Bankruptcy Court for the Southern District of New York gave Delta Air Lines, Inc., and its debtor-affiliates permission to reject the leases of 14 Embraer EMB-120 aircraft and their related engines, propellers, and other specified equipment, effective as of June 28, 2006. The Debtors sent certificates of insurance to ING Bank and Wilmington Trust for two of the Aircraft, bearing FAA Registration Nos. N267CA and N268CA. The Certificates referenced a mortgage and security agreement, dated November 25, 2002, between Bombardier Capital, Inc., as mortgagee, and Comair, as the borrower. Evan C. Hollander, Esq., at White & Case LLP, in New York, relates that: -- between 1993 and March 2003, the Debtors purchased, leased or acquired the right to use a number of Canadair Regional Jets from Bombardier; -- the Debtors have used the Bombardier Jets to, among other things, replace the Aircraft in their fleet operations; -- the Debtors' decision to cease operating the Aircraft and warehouse them was related to a financial arrangement between one or more of the Debtors and Bombardier; -- as part of the transactions with Bombardier concerning the Bombardier Jets, the Debtors received some form of financial consideration related to the Aircraft or Leases, and Bombardier received some rights with respect to the Aircraft or Leases; and -- the Debtors continued to receive financial consideration postpetition resulting in the postpetition transfer of value to the Debtors related to the Aircraft or Leases. By this motion, pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, ING Bank and Wilmington Trust ask the Court to direct the Debtors and Bombardier to produce these documents: (1) All documents concerning or reflecting payments, credits, or other valuable consideration of any kind or nature paid or transferred by Bombardier or any agent or affiliate of Bombardier to the Debtors relating to, concerning or involving in any way the Aircraft or Leases; (2) Any and all communications between Bombardier and the Debtors concerning or relating in any way to the Aircraft or Leases, including, but not limited to, any documents showing a relationship of any kind or nature between the Aircraft and the Debtors efforts to lease, purchase, or otherwise acquire rights to Bombardier Canadair Regional Jets; (3) All documents concerning, reflecting, or involving in any way the decision by Debtors to remove and keep the Aircraft out of the Debtors' active fleet operations; (4) All documents concerning, reflecting, or involving in any way any rights or obligations that Bombardier may have with respect to the Aircraft or Leases; (5) All documents concerning or reflecting the Bombardier Mortgage and Sale Agreement, including, but not limited to, documents concerning or reflecting the negotiation, execution and implementation of the Bombardier Mortgage and Sale Agreement; and (6) Any and all communications between Bombardier and the Debtors concerning or relating in any way to the Bombardier Mortgage and Sale Agreement, including, but not Limited to, any documents showing a relationship of any kind or nature between the Bombardier Mortgage and Sale Agreement and the Aircraft or Leases. Mr. Hollander explains that ING Bank and Wilmington Trust seek to obtain information regarding: (i) whether the Debtors have received any value from a third party in connection with the Aircraft or Leases; and (ii) the relationship between the Debtors' purchase, lease or acquisition of the right to use the Bombardier Jets and the Aircraft or Leases. Specifically, the information is relevant to assess the nature of ING Bank and Wilmington Trusts' claim against the Debtors' estate, Mr. Hollander asserts. Mr. Hollander maintains that the examination sought by ING Bank and Wilmington Trust fits squarely within the proper scope of a Rule 2004 examination. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELTA AIR: Bankruptcy Proceeding Cue Moody's to Withdraw Ratings ---------------------------------------------------------------- Moody's Investors Service withdraws ratings assigned to the debt issued by Delta Air Lines, Inc., as well as the ratings assigned to Delta's Equipment Trust Certificates and Enhanced Equipment Trust Certificates. The EETC's supported by monoline insurance company policies are not affected by this action, and are rated Aaa with a stable outlook. The rating of the Comair, Inc. Pass Through Certificates is also not affected as that debt is supported by Export Development Canada. Moody's withdraws the ratings of the unsupported debt (senior unsecured rating at C) because of the ongoing bankruptcy proceedings of the airline. In the case of the ETC and EETC transactions, Moody's withdrew its ratings due to the lack of sufficient information about the status of those securities to maintain a current opinion. Delta filed for protection under Chapter 11 of the U.S. Bankruptcy Code in September 2005 and has defaulted on its debt obligations. The company's reorganization efforts are likely to generate little recovery for unsecured debt holders, in Moody's view. Some recovery for holders of ETC's and EETC's is anticipated but will be highly dependent on the value of the aircraft collateral, the structure of the individual transactions and the outcome of negotiations between Delta and the certificate holders. Without available information Moody's is unable to maintain current ratings for these transactions. Delta Air Lines, Inc. is headquartered in Atlanta, Georgia. Outlook Actions: Issuer: Delta Air Lines, Inc. -- Outlook, Changed To Stable From Negative Withdrawals: Issuer: Atlanta (City of) GA -- Revenue Bonds, Withdrawn, previously rated C Issuer: Chicago (City of) IL -- Revenue Bonds, Withdrawn, previously rated C Issuer: Chicago O'Hare International Airport, IL -- Senior Subordinated Revenue Bonds, Withdrawn, previously rated C Issuer: Clayton County Development Authority, GA -- Revenue Bonds, Withdrawn, previously rated C -- Senior Unsecured Revenue Bonds, Withdrawn, previously rated C Issuer: Dallas-Fort Worth Intl. Airp. Fac. Imp. Corp. -- Senior Unsecured Revenue Bonds, Withdrawn, previously rated C Issuer: Dallas-Fort Worth TX, Regional Airport -- Revenue Bonds, Withdrawn, previously rated C Issuer: Delta Air Lines, Inc. -- Corporate Family Rating, Withdrawn, previously rated Caa2 -- Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-4 -- Senior Secured Enhanced Equipment Trust, Withdrawn, previously rated Caa3 -- Senior Secured Equipment Trust, Withdrawn, previously rated Ca -- Senior Secured Shelf, Withdrawn, previously rated (P)B3 -- Senior Unsecured Conv./Exch. Bond/Debenture, Withdrawn, previously rated C -- Senior Unsecured Medium-Term Note Program, Withdrawn, previously rated C -- Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated C -- Senior Unsecured Shelf, Withdrawn, previously rated (P)C Issuer: Development Authority of Fulton County, GA -- Senior Unsecured Revenue Bonds, Withdrawn, previously rated C Issuer: Hillsborough County Aviation Authority, FL -- Revenue Bonds, Withdrawn, previously rated C -- Senior Subordinated Revenue Bonds, Withdrawn, previously rated C -- Senior Unsecured Revenue Bonds, Withdrawn, previously rated C Issuer: Kenton County Airport Board, KY -- Senior Unsecured Revenue Bonds, Withdrawn, previously rated C Issuer: Massachusetts Port Authority -- Senior Unsecured Revenue Bonds, Withdrawn, previously rated Caa2 Issuer: Port Authority of New York and New Jersey -- Senior Unsecured Revenue Bonds, Withdrawn, previously rated C Issuer: Portland (Port of) OR -- Senior Unsecured Revenue Bonds, Withdrawn, previously rated C Issuer: Regional Airports Improvement Corporation, CA -- Revenue Bonds, Withdrawn, previously rated C -- Senior Unsecured Revenue Bonds, Withdrawn, previously rated C Issuer: Salt Lake City, UT -- Senior Unsecured Revenue Bonds, Withdrawn, previously rated C DOLE FOOD: Product Warning Cues S&P to Hold Ratings on Neg. Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services' ratings for Westlake Village, California-based Dole Food Co. Inc. remained on CreditWatch with negative implications following the company's announcement that consumers should dispose of Dole-branded packaged fresh spinach products (including "Spinach," "Baby Spinach," and "Spring Mix" names) stamped with a Best-If-Used-By date of Aug. 17, through Oct. 1, 2006. The warning follows an outbreak of E. coli in several states that was believed to have originated from spinach products. "The ratings initially were placed on CreditWatch with negative implications on Aug. 9, 2006, following materially weaker-than- expected financial performance in the first half of fiscal 2006, which typically represents a substantial portion of cash flow" said Standard & Poor's credit analyst Alison Sullivan. On Sept. 15, 2006, a voluntary recall was issued by Natural Selection Foods LLC of packaged fresh spinach that the company produced and packaged under 28 different brand names, including Dole. All spinach items under the Dole label were produced and packaged by Natural Selection Foods. As part of Standard & Poor's resolution of the CreditWatch listing, the rating agency will monitor the investigation for further developments and any impact on future pre-packaged salad sales or damage to the Dole brand image. Standard & Poor's also will review Dole's operating and financial plans with management before resolving the CreditWatch listing. EMAGIN CORP: Posts $4.8 Million Net Loss in Second Quarter of 2006 ------------------------------------------------------------------ eMagin Corp. filed its financial statements for the second quarter ended June 30, 2006, with the Securities and Exchange Commission. For the second quarter ended June 30, 2006, the Company reported a net loss of $4,838,000 on $1,674,000 of net revenues compared with a net loss of $4,498,000 on $652,000 of net revenues for the same period in 2005. At June 30, 2006, the Company's balance sheet showed $7,051,000 in total assets, $4,875,000 in total liabilities, and $2,176,000 in total shareholders' equity. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?1208 Going Concern Doubt As reported in the Troubled Company Reporter on July 27, 2006, Eisner, L.L.P, in New York, raised substantial doubt about eMagin Corp.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses from operations, which it believes will continue through 2006. About eMagin Headquartered in Bellevue, Wahsington, eMagin Corp. (AMEX: EMA) -- http://www.emagin.com-- manufactures and markets virtual imaging products and information technology softwares. In addition, eMagin offers engineering support, as well as various support products, including developer kits and personal computer interface kits. The company offers its products to OEMs in the military, industrial, medical, and consumer market sectors through direct technical sales in North America, Asia, and Europe. ENTERGY NEW ORLEANS: Seeks to Open Investment Account at Federated ------------------------------------------------------------------ Entergy New Orleans, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Louisiana to waive the requirements of Section 345(b) and authorize it to open an investment account at Federated Investors with the flexibility to invest short-term or on a daily basis, in a money market fund that is managed to provide safety of principal and daily liquidity for ENOI. The Court previously authorized ENOI to maintain its existing Cash Management System. Entergy Services, Inc., provides, among other things, accounting and cash management services to ENOI and other Entergy Corporation affiliates as part of ENOI's cash management system. Nan Roberts Eitel, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., in New Orleans, Louisiana, explains that all ENOI and ESI accounts are maintained at depository institutions approved by the United States Trustee for Region 5. Ms. Eitel says that one of the ESI account is maintained at Federated Investors, Inc., which is covered by the Court's Cash Management Order. ESI uses its Federated Investors account to invest excess cash that it manages as agent for the Entergy operating companies from the sale of excess power. Ms. Eitel tells the Court that since the Petition Date, ENOI has been able to sell excess power, which enabled it to periodically have cash in the Federated Investors account postpetition due to the lag times in setting sales of the Debtor's excess power. Although Section 345(b) of the Bankruptcy Code imposes certain requirements on the investment of a debtor's funds, including requiring deposit at a Federal Deposit Insurance Corporation insured institution or a similar arrangement, Section 345(b)(2) permits the Court to vary the requirements of Section 345 for "just cause." Ms. Eitel says that because of ENOI's historical participation in ESI as agent account at Federated Investors with respect to excess cash from bulk power sales and its need to manage its excess cash to provide the "maximum reasonable net return" on its cash, just cause exists for ENOI to open a Federated Investors account as part of its Cash Management System. Ms. Eitel tells the Court that the pertinent fund at Federated Investors invests in corporate money market securities, including commercial paper, repurchase agreements, variable rate instruments and bank instruments and has an "A" rating from Moody's. ENOI intends to invest with Federated Investors from $4,000,000 to $30,000,000 on any given day. The maximum amount that ENOI would ever have invested at Federated will not exceed $50,000,000, but ENOI does not reasonably expect to exceed $30,000,000 any time. The range of expected return at Federated substantially exceeds the earnings credit rate for the ENOI general fund account, which is used principally to set off ENOI's bank fees, Ms. Eitel avers. She cites June 2006, when the proposed fund at Federated earned an average of 4.96%. ENOI will use the Federated Investors account in accordance with these procedures: (1) once ENOI's daily cash position has been determined, it will create an automated redemption and purchase report based upon its net cash position; (2) if ENOI has excess cash for the given day, it will create a bank account transfer from the ENOI general fund account into the proposed ENOI Federated Investors account of all amount exceeding $1,000, and a corresponding trade will be made via Federated's online system; and (3) if ENOI does not have cash available for the given day due to outgoing transfers, a redemption will take place in the Federated Investors system to transfer money from the Federated Investors account into the ENOI general fund account. Given its sophistication and its need to manage its excess cash to provide the "maximum reasonable net return" on its cash, ENOI submits that just cause exists for the opening of a Federated account as part of its Cash Management System. About Entergy Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERGY NEW ORLEANS: Wackenhut Wants $470,556 Admin. Claim Allowed ------------------------------------------------------------------ Wackenhut Corporation asks the U.S. Bankruptcy Court for the Eastern District of Louisiana to allow its $470,556 administrative claim, and to direct Entergy New Orleans, Inc., to promptly pay the claim. In its amended request to pay critical vendor claims, the Debtor identified Wackenhut among the third-party suppliers and contractors that are essential to its restoration and recovery operations. Wackenhut held a $40,000 prepetition claim for critical security services that it provided at the Debtor's electrical and gas facilities. Marguerite K. Kingsmill, Esq., at Kingsmill Riess, L.L.C., in New Orleans, Louisiana, says that as a condition to receiving payment of its prepetition claim, Wackenhut agreed to continue providing uniformed security guard services to the Debtor at several of its electrical and gas facilities located in New Orleans, Louisiana. In reliance of the Dec. 6, 2005 order approving the Amended Critical Vendor Motion, Wackenhut provided security services to ENOI until May 18, 2006, when the Debtor elected to terminate the Contract Order governing its relationship with Wackenhut. Ms. Kingsmill says that Wackenhut is entitled to have its $470,556 outstanding invoices be recognized and paid as an administrative expense pursuant to Section 503(b)(1)(A) of the Bankruptcy Code, because it relates solely to postpetition transactions between Wackenhut and the Debtor. In light of its postpetition services to the Debtor, there is no question that Wackenhut rendered services constituting "actual and necessary costs and expenses of preserving the estate" as they arose from postpetition transactions that benefited the estate, Ms. Kingsmill emphasizes. About Entergy Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FITZ HARPER: Case Summary & 17 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Fitz N. Harper 5220 Forest View Circle Mableton, GA 30126 Bankruptcy Case No.: 06-71459 Type of Business: The Debtor previously filed for chapter 11 protection on January 15, 1991 (Bankr. W.D. Pa. Case No. 91-10256). The Debtor is also a stockholder of International Management Associates, LLC and its affiliates, which filed for chapter 11 protection on March 16, 2006 (Bankr. N.D. Ga. Case Nos. 06-62966 through 06-62976). Chapter 11 Petition Date: September 18, 2006 Court: Northern District of Georgia (Atlanta) Judge: Paul W. Bonapfel Debtor's Counsel: Theodore N. Stapleton, Esq. Theodore N. Stapleton, P.C. Suite 1740, Two Paces West 2727 Pace Ferry Road Atlanta, GA 30339 Tel: (770) 436-3334 Fax: (770) 436-5398 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Estate of IMA Loans $3,348,370 c/o John Mills 1100 Peachtree Street, Suite 2800 Atlanta, GA 30309-4530 Bank of America Loans $200,000 c/o Paul Alexander 8th Floor, 1170 Peachtree Street Atlanta, GA 30309 Wachovia Bank, NA Talent Source LOC $93,935 171- 17th Street Building 100, 8th Floor Atlanta, GA 30303 Suntrust Student Loan $70,408 American Education Services P.O. Box 2461 Harrisburg, PA 17105-2461 Wachovia Bank Auto Loan $60,868 P.O. Box 15289 Wilmington, DE 19886-5290 Line of Credit $50,000 Fitz Harper $37,151 M.D.P.C. Loan Axis Capital, Inc. Account $38,866 Ian Taylor $33,750 Sallie Mae Student Loan $30,487 Dennis Pemberton $27,000 Darryl Parnham $18,562 William Perkins $16,500 Georgia Department of Labor Taxes $15,000 Michael Carter $13,500 Platinum Plus $10,908 Bankcard Services $4,800 Chase $4,623 Cash Recovery $3,640 FLEETPRIDE CORP: Moody's Junks Rating on $150 Million Senior Notes ------------------------------------------------------------------ Moody's Investors Service assigned a Caa1 rating to FleetPride Corporation's $150 million senior unsecured note offering. FleetPride's existing long-term ratings have been affirmed, and the rating outlook is stable. Rating assigned: * Senior unsecured notes due in 2014, Caa1 Ratings affirmed: * Corporate Family, B3 * 1st lien revolving credit, B2 * 1st lien term loan, B2 * Unsecured bridge loan, Caa1 The Outlook is stable. The last rating action was on July 27, 2006 at which time a Caa1 rating was assigned to the unsecured bridge loan. Ratings were initially assigned on June 15, 2006 to term financing arranged for Investcorp's acquisition of FleetPride. Initial plans included the issuance of unsecured notes, but that offering was cancelled and left an unsecured bridge loan in place. Proceeds from the Notes will be used to repay the bridge loan and, upon repayment, the Caa1 rating on the bridge loan will be withdrawn. The new Note offering will have up-stream guarantees from material subsidiaries. However, the Notes will be effectively subordinated to the company's 1st lien revolving credit and term loans to the extent of the collateral securing those bank facilities. Consequently, the Caa1 rating on the Notes reflects lower recovery expectations. The financing will not impact FleetPride's overall leverage or capital structure nor have a material impact on expectations for the company's interest coverage or cash flows. The Corporate Family rating of B3 reflects the considerable financial leverage deployed in FleetPride's capital structure, which will be in the high 6 times range, and the inherent operating leverage in the company's distribution model. It also recognizes limited free cash flow metrics, and resultant weak coverage ratios. The rating balances these characteristics as well as the relative modest size of the company with stability of demand from favorable growth prospects for replacement parts for commercial vehicles, and certain marketing advantages the company enjoys from its scale, breadth of its product offerings, and footprint of locations. FleetPride Corporation, based in The Woodlands, Texas, operates 156 branch locations in 36 states. The company distributes brand name heavy-duty vehicle parts as well as select private label brands. In addition the company provides a limited range of re- manufactured products as well as truck and trailer repair services. Revenues in 2005 were $582 million. FLEETPRIDE CORP: S&P Junks Rating on Proposed $150 Million Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' rating to FleetPride Corp.'s proposed $150 million senior unsecured notes due 2014. At the same time, Standard & Poor's affirmed the ratings on the Woodlands, Texas-based truck parts distributor, including the 'B' corporate credit rating, reflecting the company's very aggressive leverage, which more than offsets its national market position. The rating agency expects to withdraw the 'CCC+' rating on the company's existing $150 million unsecured senior bridge loan facility, which expires June 6, 2007, after FleetPride has repaid this loan with proceeds from the proposed notes offering. The outlook is negative but Standard & Poor's expects to revise the outlook to stable, following completion of the issuance and elimination of the bridge loan debt. At June 30, 2006, FleetPride had total balance sheet debt of $340 million, including $25 million of discount notes issued by FPC Holdings Inc., parent of FleetPride Corp. FLYI INC: CIT Says Disclosure Statement is Inadequate ----------------------------------------------------- C.I.T. Leasing Corporation asserts that the Disclosure Statement fails to provide adequate information to enable creditors and parties-in-interest to make an intelligent and informed determination of whether to support or oppose the substantive consolidation proposed under the FLYi, Inc., and its debtor- affiliates' Joint Plan of Liquidation and the proposed 50-50 allocation of the United Airlines, Inc., claims settlement proceeds between the estates of FLYi, Inc., and Independence Air, Inc. Christopher M. Winter, Esq., at Duane Morris LLP, in Wilmington, Delaware, contends that the Disclosure Statement does not: -- discuss why the Debtors' estates are being substantively consolidated; -- compare the treatment of claims of the various Debtors under separate estates and in a substantive consolidation scenario; -- discuss whether FLYi obtains windfall by remaining an independent estate under the Plan; -- give the basis for the proposed 50-50 allocation of the United Proceeds between FLYi and Independence; and -- explain why all priority and administrative claims of the estates will be deemed claims against Independence, especially when the Independence estates are to receive only half of the UAL Proceeds. The Disclosure Statement only provides a very brief list of factors to determine whether portions of the Intercompany Claim are debt or equity, Mr. Winter argues. Consequently, creditors cannot determine if and to what extent the factors support the proposal to treat the Intercompany Claim as debt rather than as equity. CIT thus asks the U.S. Bankruptcy Court for the District of Delaware to: (a) disapprove the Disclosure Statement; or (b) direct the Debtors to supplement the Disclosure Statement with adequate information regarding the Plan's substantive consolidation of the Global Resolution. Before the Debtors filed for bankruptcy, CIT leased aircraft and engines to Independence Air, Inc., pursuant to certain Aircraft Lease Agreements. In connection with the Lease Agreements, CIT filed a $5,872,926 claim and a $5,477,879 administrative claim against the Debtors. Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent of Independence Air Inc., a small airline based at Washington Dulles International Airport. The Debtor and its six affiliates filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del. Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon, Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. Brett H. Miller, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors listed assets totaling $378,500,000 and debts totaling $455,400,000. (FLYi Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FLYI INC: Court Gives Nod on Committee Investigation Protocol ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave FLYi, Inc., and debtor-affiliates authority to implement the Investigation Protocol. As reported in the Troubled Company Reporter on Aug. 25, 2006, the Official Committee of Unsecured Creditors sought a full investigation of potential claims of the Debtors against the Debtors' current and former officers, directors, employees, agents and professionals, as well as certain other third parties, regarding the bankruptcy cases, Margaret Whiteman, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, informed Court. The Debtors related that they were not aware of the Committee's actions. The Debtors were not aware of any insider dealings with respect to their prepetition activities, and neither the Debtors nor their officers were subject to any securities or breach of fiduciary duties lawsuits, Ms. Whiteman avers. According to Ms. Whiteman, the Committee has indicated that there are allegations that, for instance, the Debtors and their officers may not have exercised due care in making key decisions that led up to their Chapter 11 filing. The Debtors disagreed with the Committee's allegations. However, the Debtors understand that the Committee has the right and a fiduciary obligation to conduct an investigation of any Potential Claims. "What the Debtors have requested, however, is that the Committee conduct any investigation with promptness," Ms. Whiteman says. The Debtors wish to clear their officers and employees of any alleged wrongdoing and believe it is appropriate to give these parties some certainty sooner, rather than later, Ms. Whiteman states. As part of the Plan discussions, the Debtors and the Committee have reached a settlement as to how the investigation and all other issues will be handled. The salient terms of the Investigation Protocol are: (a) The investigation of Causes of Action will be commenced promptly and the Debtors' Joint Plan of Liquidation will provide that Causes of Action must be filed by no later than Feb. 28, 2007 or they will be released under the Plan. The Committee or a liquidating trust may seek extension of the bar date for filing Causes of Action. However, the Causes of Action Bar D could not be extended beyond May 31, 2007; (b) If any Causes of Action are filed, they will be limited to: (1) those Causes of Action which the investigation recommends be brought; and (2) any other Causes of Action that: -- after the filing of a Cause of Action are identified for the first time in discovery; and -- could not reasonably have been discovered and asserted during the investigation. Otherwise, the Plan will provide that the Debtors and their officers will be released and no third party will be entitled to seek to assert any Causes of Action on behalf of the Debtors' estates; (c) The Plan will provide the standard Delaware "Bruno's" exculpation for postpetition acts of the Debtors, their officers and the Committee members in the form described in the Plan, which excludes exculpation for gross negligence or willful misconduct; (d) The Debtors will reimburse reasonable attorneys' fees and expenses, up to $500,000, of: (1) the Debtors' current and former officers, directors, and employees incurred in connection with the investigation contemplated by the Protocol; (2) the Debtors' current directors already incurred during the Chapter 11 cases leading up to the Committee's investigatory process; and (3) current or former professionals of the Debtors to whom the Debtors and the Committee or liquidating trustee agree; (e) The parties will discuss among themselves and with the Office of the U.S. Trustee the continuing need for the existing members of the Debtors' board of directors after Nov. 1, 2006. The Committee will support the extension, renewal, or replacement of the D&O policies, and payment of the required premiums, as is necessary through the Effective Date of the Plan; and (f) Anthony Schnelling of Bridge Associates will be the liquidating trustee. Ms. Whiteman argued that the Protocol should be approved for four reasons: 1. It will provide a clear path for the Debtors and the Committee to complete certain key remaining aspects of the Debtors' bankruptcy cases; 2. It is necessary to the administration of the Debtors' cases; 3. It represents a settlement of certain key disputes between the Debtors and the Committee; and 4. It involves the use of property of the Debtors' estates. The Debtors have consented to the Committee's standing to bring and prosecute any of the Causes of Action through the Effective Date, Mr. Whiteman emphasizes. About FLYi Inc. Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent of Independence Air Inc., a small airline based at Washington Dulles International Airport. The Debtor and its six affiliates filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del. Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon, Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. Brett H. Miller, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors listed assets totaling $378,500,000 and debts totaling $455,400,000. (FLYi Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). FORCE PROTECTION: Reports Increased Revenue Due to JERRV Contract ---------------------------------------------------------------- Force Protection, Inc., filed its financial statements for the second quarter ended June 30, 2006, with the Securities and Exchange Commission. For the second quarter ended June 30, 2006, the Company reported a net income of $1,234,015 on $56,074,537 of net sales compared with net income of $130,633 on $18,295,357 of net sales for the same quarter in 2005. The increase in revenues was due to higher vehicle production volumes compared with last year, primarily as a result of the JERRV contract that was awarded in May 2005. At June 30, 2006, the Company's balance sheet showed $37,394,201 in total assets, $29,146,929 in total current liabilities, and $8,247,272 in total stockholders' equity. JERRV Contract During the second quarter of 2005, the Company announced the award of contract M67854-05-D-5091 by the U.S. Marine Corps for delivery of 122 Cougar Joint EOD Rapid Response Vehicles to be delivered during 2005 and 2006. During the quarter ended June 30, 2006, the Company reached agreement with the U.S. Marine Corps Contracting Officer on a final definitized price for the JERRV contract in the total amount of $89,739,728 representing a reduction of $3,364,405 in the originally stated total contract price. As of June 30, 2006, the Company has a provision of $326,999 for potential price adjustments on revenue recognized. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?11e9 Going Concern Doubt Jaspers + Hall, PC, expressed substantial doubt about Force Protection, Inc.'s ability to continue as a going concern after it audited the Company's consolidated financial statements for the year ended Dec. 31, 2005, and 2004. The auditing firm pointed to the Company's cumulative recurring losses, negative cash flows from operations, and the need to obtain outside sources of working capital. About Force Protection Headquartered in Ladson, South Carolina, Force Protection, Inc. -- http://www.forceprotectioninc.com/-- manufactures ballistic and mine-protected vehicles through its wholly owned subsidiary. These specialty vehicles are protected against landmines, hostile fire, and Improvised Explosive Devices. The Company manufactures its vehicles using proprietary technology derived from South African vehicle development programs carried out from 1972 through 1994, and incorporates design developments into the vehicles to improve their protection and functionality. Force Protection's mine and ballistic protection technology is among the most advanced in the world. The vehicles are manufactured outside Charleston, South Carolina. FORD MOTOR: Attorney General Lockyer Files Global Warming Suit -------------------------------------------------------------- Attorney General Bill Lockyer yesterday filed a lawsuit against U.S. and Japanese auto manufacturers, alleging their vehicles' emissions have contributed significantly to global warming, harmed the resources, infrastructure and environmental health of California, and cost the state millions of dollars to address current and future effects. "Global warming is causing significant harm to California's environment, economy, agriculture and public health. The impacts are already costing millions of dollars and the price tag is increasing," said Mr. Lockyer. "Vehicle emissions are the single most rapidly growing source of the carbon emissions contributing to global warming, yet the federal government and automakers have refused to act. It is time to hold these companies responsible for their contribution to this crisis." Filed in U.S. District Court for the Northern District of California, the complaint names as defendants: Chrysler Motors Corporation, General Motors Corporation, Ford Motor Company, Toyota Motor North America, Inc., Honda North America, and Nissan North America. The lawsuit is the first of its kind to seek to hold manufacturers liable for the damages caused by greenhouse gases that their products emit. Mr. Lockyer filed the lawsuit on behalf of the People of the State of California. The complaint alleges that under federal and state common law the automakers have created a public nuisance by producing "millions of vehicles that collectively emit massive quantities of carbon dioxide," a greenhouse gas that traps atmospheric heat and causes global warming. Under the law, a "public nuisance" is an unreasonable interference with a public right, or an action that interferes with or causes harm to life, health or property. The complaint asks the court to hold the defendants liable for damages, including future harm, caused by their ongoing, substantial contribution to the public nuisance of global warming. As stated in the complaint, the automakers produce vehicles that emit a combined 289 million metric tons of carbon dioxide in the United States each year. Those emissions, the complaint alleges, currently account for nearly 20 percent of the carbon dioxide emissions in the United States and more than 30 percent in California. The defendants rank "among the world's largest contributors to global warming and the adverse impacts on California," according to the complaint. The filing comes as Mr. Lockyer fights the auto industry's attempt to invalidate California's landmark global warming regulations curbing tailpipe emissions. In their federal-court lawsuit, the automakers claim the regulations, adopted in 2005 through legislation sponsored by Assembly Member Fran Pavley, are pre- empted by federal law. Lockyer is defending the rules against the industry's legal challenge. Mr. Lockyer noted the Bush Administration's inaction on global warming has forced California and other states to take action on their own. The U.S. Supreme Court is currently reviewing a lawsuit filed by Lockyer, 11 other Attorneys General, two cities and major environmental groups challenging the U.S. Environmental Protection Agency's refusal to regulate greenhouse gas emissions. Numerous parties have submitted amicus briefs supporting the states, including climate scientists, three former EPA Administrators, former Secretary of State Madeleine Albright, and environmental and religious groups. In addition, Mr. Lockyer, along with nine other state Attorneys General, the District of Columbia and the City of New York, filed a lawsuit earlier this year challenging the Bush Administration's new fuel economy standards for SUVs and light trucks. That complaint alleges the rules fail to address the effects on the environment and global warming. "We are seeing the harmful impacts of global warming today, and if we continue with 'business as usual,' we can expect to see more and larger impacts in the future," said Mr. Lockyer. "As a coastal state, an agricultural state, and a state that relies on its Sierra snow pack, California has an enormous stake in acting now to combat global warming." 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. FORD MOTOR: Consumer Preference Shift Cues Moody's to Cut Ratings ----------------------------------------------------------------- Moody's Investors Service lowered the ratings of Ford Motor Company (corporate family rating and senior unsecured to B3 from B2) and Ford Motor Credit Company (senior unsecured to B1 from Ba3). Ford's Speculative Grade Liquidity rating has also been lowered to SGL-3 from SGL-1. The rating outlook is negative. These rating actions conclude a review for possible downgrade that was initiated on Aug. 18, 2006. The downgrade of Ford's long-term ratings reflects the intense pressure the company is facing as a result of the shift in consumer preference away from trucks and SUVs, and toward more fuel efficient vehicles. Although Ford's recently reported initiative to accelerate its Way Forward restructuring plan will attempt to address all of the key risks arising from this shift in demand, Moody's believes the company's operating performance and cash flow will be very weak through 2009 even if the execution of the plan is highly successful. Moreover, the rating agency anticipates that it will be challenging for the company to achieve all of the cost, revenue and pricing objectives contemplated by the plan. As Ford attempts the transition toward its new business model, it will be critical for the company to maintain strong liquidity in order to cover the considerable cash outflows it will face during 2006 and 2007. Bruce Clark, senior vice president with Moody's said, "Ford's $23 billion in cash and $6 billion in committed bank lines give it a sizable cushion to cover near-term expenditures. However, the company's historically robust liquidity will be significantly reduced by these expenditures and could be further eroded by events such as a slowdown in the US economy, a spike in oil prices, an escalation in price discounting, or a UAW work action in 2007. Consequently, Ford may need to supplement these resources with asset sales and other strategic alternatives that are currently being investigated." Mr. Clark went on to note that, "Ford will also have to be consistently successful in executing each element of this plan without any major missteps. If it doesn't remain solidly on track for reestablishing a viable business model by 2009, additional restructurings would likely be necessary. But, by then the company will have run through much of its liquidity. Ford really has to get it right this time." The lowering of the Speculative Grade Liquidity rating to SGL-3 reflects the sizable cash outflow that will result from operating losses and restructuring charges during the next twelve months, and the resulting erosion in Ford's liquidity position. The negative outlook reflects the considerable challenges that Ford will face in executing the key elements of its restructuring plan during the next three years. It also acknowledges that factors beyond Ford's control could further undermine the company's financial performance despite any progress in executing the plan. These factors include a more competitive pricing environment, rising fuel prices, continued erosion in its domestic supplier base, or a slowdown in the US or European economies. In downgrading Ford Credit's rating, Moody's maintained a two- notch rating differential from Ford's rating, reflecting Ford Credit's lower expected loss as well as its extensive business and financial ties with its parent. Moody's believes that creditors of Ford Credit would experience better asset recovery than would creditors of Ford in a default scenario. However, heightened uncertainty relating to Ford's deeper operating challenges and execution risks associated with its implementation of the Way Forward plan limit the possibility of a wider notching differential. Moody's vice president Mark Wasden said, "The negative operating trends at Ford have increased Ford Credit's stand-alone risk profile; of particular concern, Ford's longer turnaround horizon means that Ford Credit's opportunity to access unsecured funding will be constrained for a longer period of time, to the detriment of its liquidity profile." Mr. Wasden added that he believes that management is likely to pursue a number of strategies to bolster overall liquidity, including greater use of asset securitization. Higher levels of securitization, though, could increase asset recovery risks for unsecured creditors, in that their claims on Ford Credit's assets are structurally subordinated to those of secured creditors, which risk is included in the rating. The rating also incorporates Moody's expectation that Ford Credit's operating results are expected to be pressured by lower origination volumes and asset levels and narrower interest margins. These challenges notwithstanding, Moody's believes Ford Credit's stand-alone profile is modestly stronger than its current debt rating would indicate. "Ford's assertion that it intends to maintain control of Ford Credit means that Ford Credit's profile continues to be subject to the direction and oversight provided by Ford, which links Ford Credit's ratings with Ford's," said Wasden. The major elements of Ford's accelerated restructuring plan include: -- reducing hourly employment levels by 25,000 to 30,000 workers and thereby achieving 100% manned capacity utilization by 2008; -- lowering operating costs by $5 billion; increasing the product renewal rate in North American from an originally planned level of approximately 55% to 70% during the next two and a half years; and -- maintaining US market share at 14% to 15% despite the discontinuance of the high volume Taurus and Freestar lines. Ford Motor Company, headquartered in Dearborn, Michigan, is the world's third largest automobile manufacturer. Ford Motor Credit Company, also headquartered in Dearborn, Michigan, is the world's largest auto finance company. FORD MOTOR: S&P Downgrades Corporate Credit Rating to B from B+ --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Ford Motor Co., Ford Motor Credit Co. and all related units -- except FCE Bank PLC -- to 'B' from 'B+' and its short-term ratings on these entities to 'B-3' from 'B-2.' The ratings on FCE Bank, Ford Credit's European bank, were lowered to 'B+/B-3' from 'BB-/B-2', maintaining the one-notch rating differential between FCE and its parent that was established in July. All ratings were removed from CreditWatch with negative implications, where they were placed Aug. 18, 2006, following Ford's announcement of a dramatic cut in light truck production for the fourth quarter. The outlook is negative. Ford Motor's consolidated debt outstanding totaled $153 billion at June 30, 2006. "The downgrade reflects the seemingly relentless deterioration in Ford's North American automotive operations, which are now expected to remain unprofitable until at least 2009," said Standard & Poor's credit analyst Robert Schulz. The array of challenges that have plagued Ford in recent years -- market share erosion, adverse product mix trends, and high dealer inventories and raw material costs -- have continued to worsen in 2006 or even accelerate, leading to a higher than anticipated use of cash since Standard & Poor's last lowered Ford's ratings in June. Standard & Poor's expects that 2007 will also be a challenging year for cash usage. The recent announcements of an expanded cost reduction program in North America, while important, cannot be expected to gain much real traction until 2007, and the cash costs of headcount reduction will mostly occur in 2007. Of particular concern has been the dramatic falloff in the fullsize pickup truck market in recent months after the segment held up well through the first quarter of this year. Ford's F- series pickups, which represent one-third of Ford-brand sales and a far greater share of profitability, were down 13% through the first eight months of the year, although last summer's volumes were abnormally boosted by the employee discount program. The decline in sports-utility vehicle sales began much earlier, but has hit Ford particularly hard in 2006, with sales of the Expedition and Explorer both down more than 30% this year through August. In the first eight months of 2006, Ford sold nearly a quarter million fewer pickups and SUVs than a year ago, a 17% drop. As consumers have shifted into more fuel-efficient vehicles, Ford's ratio of light truck to overall vehicle sales fell to 62% from 67% in the year-earlier period. This mix shift has a greatly magnified impact on Ford's bottom line because of the smaller vehicles' lower margins, and is unlikely to reverse. The rating outlook on Ford is negative. Standard & Poor's concerns include Ford's increasingly negative cash flow in its North American automotive operations. The ratings could be lowered if further setbacks, whether industry related or Ford specific, were to increase the use of cash, delay cash savings from the latest cost-cutting and restructuring efforts, or constrict liquidity. Also, if Ford Motor eventually chooses to replace its unsecured bank facilities with secured financings, the rating for Ford's senior unsecured debt would likely be lowered up to two notches below the corporate credit rating. Ford would need to reverse its current financial and operational trends, and sustain such a reversal, before Standard & Poor's would revise its outlook to stable. FRANK ZAMORA: Case Summary & 15 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Frank Zamora, III Diana C. Zamora 1971 Alpet Drive Morgan Hill, CA 95037 Bankruptcy Case No.: 06-51845 Chapter 11 Petition Date: September 18, 2006 Court: Northern District of California (San Jose) Judge: Marilyn Morgan Debtor's Counsel: Charles B. Greene, Esq. 84 West Santa Clara Street, Suite 770 San Jose, CA 95113 Tel: (408) 279-3518 Fax: (408) 279-4264 Total Assets: $5,400,000 Total Debts: $4,101,719 Debtor's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Irwin Eskanos, et. al. Lawsuit $304,250 c/o Eskanos & Adler #106CV064639 2325 Clayton Road Concord, CA 94520 Irene Castro Business Loan $210,000 929 Clintona Avenue San Jose, CA 95125 Veronica Castro Business Loan $150,000 373 Bluefield San Jose, CA 95136 Dora Zamora Business Loan $80,000 21810 Woelh Court San Jose, CA 95132 Craig Isom Business Loan $75,000 933 South 1850 West Cedar City, UT 84720 James Castro Business Loan $50,000 Justin Zamora Business Loan $35,000 Kevin Zamora Business Loan $35,000 Nicole Z. Hunington Business Loan $35,000 Dave Carris Business Loan $5,500 Beta Finance Business Loan $3,685 Red Coach Fire Protection Co. $2,284 J. Hanestad Lawsuit Unknown #105CV048283 The CTI Group, et. al. Lawsuit Unknown #106CV067921 U.S. Bancorp Equipment Lawsuit Unknown #106CV069818 GENERAL MOTORS: Attorney General Lockyer Files Global Warming Suit ------------------------------------------------------------------ Attorney General Bill Lockyer yesterday filed a lawsuit against U.S. and Japanese auto manufacturers, alleging their vehicles' emissions have contributed significantly to global warming, harmed the resources, infrastructure and environmental health of California, and cost the state millions of dollars to address current and future effects. "Global warming is causing significant harm to California's environment, economy, agriculture and public health. The impacts are already costing millions of dollars and the price tag is increasing," said Mr. Lockyer. "Vehicle emissions are the single most rapidly growing source of the carbon emissions contributing to global warming, yet the federal government and automakers have refused to act. It is time to hold these companies responsible for their contribution to this crisis." Filed in U.S. District Court for the Northern District of California, the complaint names as defendants: Chrysler Motors Corporation, General Motors Corporation, Ford Motor Company, Toyota Motor North America, Inc., Honda North America, and Nissan North America. The lawsuit is the first of its kind to seek to hold manufacturers liable for the damages caused by greenhouse gases that their products emit. Mr. Lockyer filed the lawsuit on behalf of the People of the State of California. The complaint alleges that under federal and state common law the automakers have created a public nuisance by producing "millions of vehicles that collectively emit massive quantities of carbon dioxide," a greenhouse gas that traps atmospheric heat and causes global warming. Under the law, a "public nuisance" is an unreasonable interference with a public right, or an action that interferes with or causes harm to life, health or property. The complaint asks the court to hold the defendants liable for damages, including future harm, caused by their ongoing, substantial contribution to the public nuisance of global warming. As stated in the complaint, the automakers produce vehicles that emit a combined 289 million metric tons of carbon dioxide in the United States each year. Those emissions, the complaint alleges, currently account for nearly 20 percent of the carbon dioxide emissions in the United States and more than 30 percent in California. The defendants rank "among the world's largest contributors to global warming and the adverse impacts on California," according to the complaint. The filing comes as Mr. Lockyer fights the auto industry's attempt to invalidate California's landmark global warming regulations curbing tailpipe emissions. In their federal-court lawsuit, the automakers claim the regulations, adopted in 2005 through legislation sponsored by Assembly Member Fran Pavley, are pre- empted by federal law. Lockyer is defending the rules against the industry's legal challenge. Mr. Lockyer noted the Bush Administration's inaction on global warming has forced California and other states to take action on their own. The U.S. Supreme Court is currently reviewing a lawsuit filed by Lockyer, 11 other Attorneys General, two cities and major environmental groups challenging the U.S. Environmental Protection Agency's refusal to regulate greenhouse gas emissions. Numerous parties have submitted amicus briefs supporting the states, including climate scientists, three former EPA Administrators, former Secretary of State Madeleine Albright, and environmental and religious groups. In addition, Mr. Lockyer, along with nine other state Attorneys General, the District of Columbia and the City of New York, filed a lawsuit earlier this year challenging the Bush Administration's new fuel economy standards for SUVs and light trucks. That complaint alleges the rules fail to address the effects on the environment and global warming. "We are seeing the harmful impacts of global warming today, and if we continue with 'business as usual,' we can expect to see more and larger impacts in the future," said Mr. Lockyer. "As a coastal state, an agricultural state, and a state that relies on its Sierra snow pack, California has an enormous stake in acting now to combat global warming." 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. * * * As reported in the Troubled Company Reporter on July 28, 2006, Standard & Poor's Ratings Services held all of its ratings on General Motors Corp. -- including the 'B' corporate credit rating, but excluding the '1' recovery rating -- on CreditWatch with negative implications, where they were placed March 29, 2006. The CreditWatch update followed GM's announcement of second quarter results and other recent developments involving its bank facility and progress on the GMAC sale. As reported in the Troubled Company Reporter on July 27, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of General Motors Corporation and General Motors of Canada Limited to B. The commercial paper ratings of both companies are also downgraded to R-3 (low) from R-3. As reported in the Troubled Company Reporter on June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new $4.48 billion senior secured bank facility. The 'RR1' is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to $4.5 billion being proposed by General Motors Corporation, affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. The rating outlook is negative. GEORGIA GULF: Moody's Lowers Rating on $100 Million Notes to B1 --------------------------------------------------------------- Moody's Investors Service lowered the corporate family rating of Georgia Gulf Corporation to Ba3 from Ba2. In addition, Moody's lowered the ratings on its $100 million guaranteed unsecured notes due 2013 to B1 from Ba3. Moody's also assigned B1 ratings to the company's new guaranteed senior unsecured notes due 2014 and a B2 rating to its guaranteed senior subordinated notes due 2016. The company plans to issue roughly $750 million in new notes ($500 million unsecured and $250 million subordinated). However, these amounts may change depending on market demand. Finally, Moody's affirmed the Ba2 ratings on the company's new $1.175 billion senior secured facilities. The new credit facilities and notes will finance the $1.5 billion acquisition of Royal Group Technologies Ltd. In addition to the above rating actions, Moody's withdrew ratings on GGC's prior $300 million senior secured revolver. The outlook on the company's debt is negative due to the significant uncertainties over the ultimate cost that may be incurred by GGC to resolve existing investigations by authorities in Canada and the US, outstanding and potential litigation at RGT, successfully implement corrective actions within RGT, and the restructuring of its operations. Downgrades: * Issuer: Georgia Gulf Corporation -- Corporate Family Rating, Downgraded to Ba3 from Ba2 -- Senior Unsecured Regular Bond/Debenture, Downgraded to B1 from Ba3 Assignments: * Issuer: Georgia Gulf Corporation -- Senior Subordinated Regular Bond/Debenture, Assigned B2 -- Senior Unsecured Regular Bond/Debenture, Assigned B1 Outlook Actions: * Issuer: Georgia Gulf Corporation -- Outlook, Changed To Negative From Rating Under Review Withdrawals: * Issuer: Georgia Gulf Corporation -- Senior Secured Bank Credit Facility, Withdrawn, previously rated Ba2 Georgia Gulf's Ba3 corporate family rating reflects the significant increase in leverage at the company (roughly 4.8x debt to EBITDA as of year-end 2005 based on GAAP financials), the expectation that GGC can extract substantial synergies over the next 12-18 months due to restructuring of RGT's operations and the benefits of vertical integrations, that divestitures will facilitate significant debt reduction (over $300 million) by the end of 2007, and that this acquisition should reduce the volatility in Georgia Gulf earnings over time. The ratings recognize that GGC is expanding into a downstream market, which reduces some of the business risk normally associated with such a large transaction. Furthermore, the ratings assume that management will utilize all free cash flow and proceeds from divestitures to reduce debt. The ratings are tempered by the anticipated downturn in PVC resin margins in 2007 and 2008, as well as a slowdown in new home construction and a modest decline in residential remodeling and repair -- two of RGT's largest end markets. The negative outlook reflects the significant risks associated with this transaction due to on-going regulatory and criminal investigations at RGT, existing and potential litigation related to past actions by former executives at RGT, an unrelated "price- fixing" investigation in window coverings, exiting a high cost VCM supply contract, significant potential tax liabilities in Quebec, operational risks related to the restructuring of RGT's operations, implementing corrective actions to comply with Sarbanes-Oxley requirements, and installing a new IT system. In addition, the size of this transaction and the number operating facilities raises the level of integration risk related to this transaction. The key rating drivers are Management Strategy, Financial Strength and Cost Position. If GGC is unable to reduce balance sheet debt to $1.5 billion by the end of 2007, keep pro forma EBITDA above $400 million in 2007 or if cash expenditures related to RGT's legacy issues, mentioned above, are significantly greater than currently anticipated, Moody's could reassess the appropriateness of GGC's Ba3 corporate family rating. If debt reduction is greater than anticipated over the next 12 months and RGT's legacy liabilities are successfully resolved Moody's could revise the outlook to stable. Georgia Gulf Corporation, headquartered in Atlanta, Georgia, produces commodity chemicals including chlorovinyls (chlorine, caustic soda, vinyl chloride monomer, vinyl resins and vinyl compounds), PVC fabricated products (pipe, siding, window profiles, plastic lumber, etc.), and aromatics (cumene, phenol and acetone). The company generated pro forma revenues of $3.65 billion for the LTM ending June 30, 2006, which are adjusted to include the pending acquisition of Royal Group Technologies Ltd. GLOBE BUILDING: 7th Circuit Revives Wisconsin's Wage Claim Lien --------------------------------------------------------------- The State of Wisconsin asserted a first priority lien on the net proceeds from the sale of Globe Building Materials, Inc.'s assets in Feb. 2002, and Peggy Lautenschlager, the Attorney General for the State of Wisconsin, sought to recover wages owed to former Globe employees in her state through a statutory lien. Specifically, on or about July 24, 2001, the State of Wisconsin's Department of Workforce Development filed a Notice of Lien with the State Department of Financial Institutions and the Office of the Chippewa Wisconsin County Clerk. The State asserted its wage lien under Wis. Stat. 109.09(2) against all real and personal property then owned or thereafter acquired by Globe within its boundaries. The lien was properly perfected by its filing. Gordon E. Gouveia, the Chapter 7 Trustee overseeing Globe's liquidation, filed an adversary proceeding (Bankr. N.D. Ind. Adv. Pro. No. 03-6082) to avoid the State's lien under 11 U.S.C. Sec. 545(2). On September 13, 2004, the Honorable J. Phillip Klingeberger entered judgment in favor of trustee in a decision reported at 328 B.R. 769. The bankruptcy court found there was no genuine issue of material fact and held that 11 U.S.C. Sec. 545(2) allowed the trustee to avoid the wage lien because Wis. Stat. 109.09 delineates the conditions under which the lien takes precedence, and the statutory language does not account for the trustee's hypothetical bona fide purchaser status. The State appealed. The Honorable Rudy Lozano of the United States District Court for the Northern District of Indiana affirmed Judge Klingeberger's ruling in an unreported decision (Dist. N.D. Ind. No. 04 C 481). The State appealed again to the United States Court of Appeals for the Seventh Circuit. In a decision reported at 2006 WL 2574041, the Seventh Circuit says that a chapter 7 trustee, standing in the shoes of a bona fide purchaser on the date of the bankruptcy filing, can't avoid the State's statutory wage lien because: (1) Wisconsin's wage lien statute did not provide for the lien's precedence of the rights of bona fide purchasers; (2) the lien was not perfected until after the bankruptcy petition was filed; and (3) Wisconsin law did not provide for the wage lien's retroactive perfection. Globe Building Materials, Inc., filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code on January 19, 2001 (Bankr. N.D. Ind. Case No. 01-60182). Before ceasing operations, Globe manufactured, sold, and distributed residential roofing materials. The company's primary assets consisted of three manufacturing plants (one located in Wisconsin), machinery, equipment, inventory, and receivables. On April 4, 2001, the case was converted to Chapter 7, and Gordon E. Gouveia was appointed Trustee for the Debtor's estate. HARTCOURT COMPANIES: Kabani & Company Raises Going Concern Doubt ---------------------------------------------------------------- Kabani & Company, Inc., expressed substantial doubt about The Hartcourt Companies, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended May 31, 2006 and the transitional period ended May 31, 2005. The auditing firm pointed to the Company's accumulated deficit of $67.7 million as of May 31, 2006 and negative cash flow from operations amounting $1.6 million for the year ended May 31, 2006. The Company recorded a $2.8 million net loss for the year ended May 31, 2006, as compared to a net loss of $13.8 million for the same periods in 2005. Loss from discontinued operations for the fiscal years ended May 31, 2006 and May 31, 2005 are $2.4 million and $8.7 million respectively. Hartcourt recorded operating revenue of $42.1 million for the fiscal year ended May 31, 2006, compared to $65.1 million for the same period in 2005, or a 35% decrease. The decrease is mainly due to the decline of sales revenue from Hangzhou Huaqing Monitoring Technology Co., Ltd, during this fiscal year. At May 31, 2006, the Company's balance sheet showed Total Assets of $9,533,233, total current liabilities of $5,928,701, Minority Interests of $738,977 and shareholders' equity of $2,865,555. The Company's current assets exceeded its current liabilities by approximately $1.5 million as of May 31, 2006. A full-text copy of the Company's annual report it available for free at http://researcharchives.com/t/s?11f9 About Hartcourt Hartcourt Companies Inc. -- http://www.hartcourt.com/-- is a business development company specializing in the Chinese Information Technology market. It researches and identifies Chinese companies in the IT industry that meet its acquisition criteria. The Company then acquires equity ownership or assets in the targeted companies to be part of its investment portfolio. Hartcourt distributes internationally well-known brand named IT hardware products and related software and services. The main products are Samsung branded notebooks and monitors. The Company also distributes audio and video conferencing products. HOST AMERICA: Delayed FY 2005 10-K Has Going Concern Qualification ------------------------------------------------------------------ Host America Corporation has filed with the Securities and Exchange Commission its delayed Annual Report on Form 10-K for the fiscal year ended June 30, 2005, which includes restated financial results for the year ended June 30, 2004. Host America said that it expects to file its Annual Report on Form 10-K for the year ended June 30 2006, and the interim reports on Form 10-Q as soon as practicable, and then resume regular, timely financial reporting. The consolidated financial statements in the Annual Report were audited by Mahoney Cohen & Company CPA, P.C., which became the company's independent registered public accounting firm on June 29, 2006. Mahoney Cohen expressed substantial doubt about Host America's ability to continue as a going concern after auditing the Company's financial statements for the years ended June 30, 2005, and 2004. The auditing firm pointed to the Company's recurring losses from continuing operations, negative cash flows and a stockholders' deficiency at June 30, 2005. Mahoney Cohen also said the Company's involvement in certain significant litigation can have an adverse effect on its operations. "This is a very significant milestone in Host America's recovery program," said David Murphy, acting chief executive officer. "While the results in fiscal 2005 showed a significant loss of $9.7 million on revenues of $30.8 million, these losses were mainly the result of non-cash impairment charges, and the costs associated with our entry into the Energy Management business which includes the costs associated with settlement of litigation. We expect that fiscal 2006 results will also show significant non- cash charges." The restatement of the Fiscal 2004 results also included non-cash impairment charges that had a material impact on the company's loss for that period. "We believe that we are exhibiting a full and accurate reflection of the financial position and believe we are accurately reflecting the historical results of the company and its business units", Mr. Murphy added. "We are also confident that we have proper valuations for our assets going forward, and, most important, that we have financial review procedures in place to manage the business, meet the regulatory requirements for timely reporting and provide shareholder communications in the years ahead." Additionally, Mr. Murphy commented, "Our Energy Management business has moved its new and innovative light controller into beta testing. We are pleased that there were positive initial results at the facilities of potential multi-location customers. We have moved ahead with the development of a new name for the product line, and marketing material is currently being developed. The Food Service business is continuing its solid performance, maintaining strong relationships with existing clients and successfully introducing new concepts to customers." Mr. Murphy noted that the company has also recently completed two private financings aggregating $850,000 - a $500,000 private placement of common shares and warrants and a $350,000 Secured Promissory Note Agreement entered into with five persons, including members of the Board of Directors and management of the company, "which shows their confidence in the future of our company," Mr. Murphy said. Mr. Murphy also said that the company is in the process of a strategic review of its business operations and has made progress in implementing new initiatives at its important Energy Management business as well as strengthening its food services business. He said that a date for the delayed Annual Meeting of Shareholders will be announced shortly after the filing of the Annual Report on Form 10-K for FY 2006. A full-text copy of the Company's annual report is available for free at http://researcharchives.com/t/s?11f8 About Host America Headquartered in Hamden, Conn., The Host America Corporation -- http://www.hostamericacorp.com/-- provides customized energy management and conservation solutions for commercial, industrial and real estate customers. The Company's food management business provides outsource food management on a long-term contract basis for corporations, schools, Meals on Wheels, and Head Start programs. The Company employs approximately 524 employees. INCO LTD: Revises Earnings Outlook for 2006 Third Quarter --------------------------------------------------------- Inco Limited anticipates record earnings for the third quarter of 2006 given the continued strength in the market for its nickel products. Inco expects its adjusted net earnings to exceed significantly both current analyst estimates and the company's record second quarter results. The company has lowered its production estimates for nickel and copper for the third quarter following equipment breakdowns at its Ontario and Manitoba operations. These production losses are in addition to the previously announced extended outage at the company's Indonesian operations and the ongoing strike at its Voisey's Bay operations in Labrador. The company has now restored full production at both Indonesian and Ontario operations and expects the Manitoba operations to return to full production in early October. Contract talks between Inco and the union representing workers at Voisey's Bay resumed this week. Nickel and copper prices have increased considerably during the third quarter. The LME benchmark cash nickel price has averaged $13.18 per pound ($29,048 per ton) for the third quarter-to-date compared with the second quarter average of $9.09 per pound ($20,036 per ton). The LME benchmark cash copper price has averaged $3.49 per pound ($7,688 per ton) for the third quarter- to-date compared with the second quarter average of $3.29 per pound ($7,251 per ton). Using actual nickel and copper prices for July and August and assuming nickel and copper prices for September equal the month- to-date average LME nickel price of $13.68 per pound ($30,157 per ton) and the month-to-date average LME copper price of $3.46 per pound ($7,637 per ton), the company currently estimates its adjusted net earnings for the third quarter to be approximately $610 to $630 million based on revised production estimates. This is approximately 44 per cent above the current First Call consensus mean estimate of $1.88 per share and more than three times the company's adjusted net earnings per share for the third quarter of 2005. Third quarter nickel production is now expected to be 118 to 123 million pounds (54,000 to 56,000 tons) compared with previously- announced estimates of 135 to 140 million pounds (61,000 to 63,000 tons), primarily as a result of downstream production issues at the company's Manitoba, Indonesian and Ontario operations. Third quarter copper production is expected to be 60 to 65 million pounds (27,000 to 29,000 tons) compared with the previously- announced estimate of 76 million pounds (34,000 tons), primarily as a result of the ongoing strike at Voisey's Bay and reduced oxygen availability at the company's smelter in Sudbury, Ontario. Inco's forecast platinum-group metals production for the third quarter is just slightly below 80,000 troy ounces as such production was largely unaffected by the equipment breakdowns or strike. Several factors have contributed to the reduction in third quarter production estimates. At the company's Indonesian subsidiary, PT Inco, repairs to an electric furnace damaged by fire in late May 2006, took longer than originally anticipated, reducing PT Inco's production of nickel-in-matte during the third quarter. The operation is now back to operating at full capacity. At the company's Sudbury, Ontario operations, a motor failure on one of the oxygen plants in July 2006 and the long lead-time to purchase and install a replacement motor will reduce finished nickel and copper production. At the company's Manitoba operations a production incident during the second week of September resulted in damage to the furnace and a converter and has led to the temporary suspension of the operation of one of the two smelter furnaces. Nickel refining operations in Manitoba are expected to return to stable operations in early October. "Inco's processing operations have been delivering at record production levels, as demonstrated by the company's first half results. Both the Ontario and Indonesian operations are now operating at plan production levels and Manitoba will resume operating at plan production levels in October," said Mark Cutifani, President, North America and Europe of Inco. "Our operations team is continuing to push operations performance to new levels and is focused on addressing the reliability of performance as part of our long-term improvement strategy." The strike by production workers at Voisey's Bay Nickel Company Limited is not expected to affect Inco's production of finished nickel or cobalt in the third quarter as Inco has sufficient stocks of nickel concentrates available for processing at its smelting and refining operations at Sudbury, Ontario and Thompson, Manitoba. However, the strike at Voisey's Bay has affected Inco's production of copper concentrate that is sold to customers in Europe. Meanwhile, very strong demand, especially from the stainless steel industry, and struggling production from a number of producers have created a very tight market and driven nickel prices to record levels. "Inventories throughout the supply chain are at the lowest levels we have ever seen," said Executive Vice- President Marketing, Peter Goudie. "Our customers are looking for more nickel and we are doing all we can to supply them, but it is difficult to meet all demands. As we have suggested would happen, the nickel market is now in a place where the industry has never been before. This is creating, as expected, considerable volatility in prices as the market adapts to the new pricing levels." Inco continues to expect that robust market conditions will lead to record second half earnings, despite the lower production estimates. "We believe that the great strength we are seeing in the nickel market will continue through the remainder of the year, and we continue to expect unprecedented earnings and cash flow in the second half of 2006," said Chairman and CEO Scott Hand. About Inco Ltd. Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N) -- http://www.inco.com/-- produces nickel, which is used primarily for manufacturing stainless steel and batteries. Inco also mines and processes copper, gold, cobalt, and platinum group metals. It makes nickel battery materials and nickel foams, flakes, and powders for use in catalysts, electronics, and paints. Sulphuric acid and liquid sulphur dioxide are produced as byproducts. The company's primary mining and processing operations are in Canada, Indonesia, and the U.K. * * * Inco Limited's 3-1/2% Subordinated Convertible Debentures due 2052 carry Moody's Investors Service's Ba1 rating. INSIGHT COMMS: Moody's Rates $2.575 Billion Senior Loans at Ba3 --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating and loss given default assessment of LGD3 to the $350 million senior secured revolving credit facility, $500 million senior secured term loan A, and $1.725 billion senior secured term loan B of Insight Midwest Holdings, LLC. The facilities will be fully and unconditionally guaranteed by Insight Midwest and Midwest Holdings subsidiaries. The new facilities will replace Midwest Holding's existing revolving credit facility, term loan A and term loan C as well as Insight Midwest, L.P 10-1/2% senior notes and a portion of Midwest's 9-3/4% senior notes. The refinancing increases the size of available revolving credit, reduces mandatory amortization and increases the overall proportion of secured debt in Insight's capital structure. Midwest Holdings is a wholly owned subsidiary of Insight Midwest LP, which is 50% owned by Insight Communications Company, Inc. and 50% owned by Comcast Corporation. Also, consistent with the Moody's Loss Given Default methodology, Moody's upgraded Insight Communications Co., Inc. 12-1/4% senior discount notes to B3 from Caa1 and assigned an LGD6 assessment; as well as downgraded its 9-3/4% senior notes at Midwest to B3 from B2 and assigned an LGD5 assessment. Moody's affirmed Insight's B1 corporate family rating and assigned the overall company's probability of default a PDR of B1. The ratings reflect the company's high leverage (6.2 times), lack of interest coverage after capital expenditures during 2006, heightened business risk from increasing competition, and concerns over the eventual dissolution of its partnership with Comcast Corporation. Insight's technologically advanced cable plant and well-clustered assets, expected benefits from continued growth of high speed data subscribers and from the roll out of new services, and its enhanced liquidity profile following the financing support the ratings. Moody's Global Cable Television Industry Methodology characterizes Insight in the single B category, in line with its B1 corporate family rating. These are the rating actions: * Insight Communications Co., Inc. -- Corporate Family Rating -- B1 affirmed, PDR B1 -- 12-1/4% Senior Unsecured Discount Notes -- upgraded to B3 from Caa1, LGD6, 94% -- Outlook -- Stable * Insight Midwest, L.P. -- 10-1/2% Senior Unsecured Notes -- B2 affirmed to be withdrawn -- 9-3/4% Senior Unsecured Notes -- B3 downgraded from B2, LGD5, 89% * Insight Midwest Holdings, LLC (Midwest Holdings) -- $425 million Senior Secured Reducing Revolver -- Ba3 affirmed to be withdrawn -- $425 million Senior Secured Term Loan A -- Ba3 affirmed to be withdrawn -- $1.125 billion Senior Secured Term Loan C -- Ba3 affirmed to be withdrawn -- $350 million Senior Secured Revolving Credit Facility -- Ba3 assigned, LGD3, 41% -- $500 million Senior Secured Term Loan A--Ba3 assigned, LGD3, 41% -- $1.725 billion Senior Secured Term Loan B--Ba3 assigned, LGD3, 41% Insight Communications is a domestic cable television operator with 50% ownership interests in entities serving 1.3 million subscribers located in Ohio, Indiana, Kentucky and Illinois. The company maintains its headquarters in New York, New York. INTERMET CORP: Has Until December 28 to File Actions vs. Dana -------------------------------------------------------------- Dana Corporation and its debtor-affiliates entered into a stipulation with Intermet Corporation and its debtor- affiliates resolving Intermet's requests to: (a) have the automatic stay lifted to allow Intermet to commence an avoidance action against the Dana Debtors in the U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division; or in the alternative (b) have the Dana Debtors directed to enter into an appropriate tolling agreement. To resolve the dispute, the Dana Debtors agree that: (a) the deadline to file any avoidance actions pursuant to Section 547 of the Bankruptcy Code is extended until December 28, 2006; (b) the Dana Debtors will not object to the filing of any Avoidance Action during the Tolling Period on the grounds that the filing is untimely; (c) the Dana Debtors reserve their rights to contest any Avoidance Action brought against them during the Tolling Period on grounds other than untimeliness; (d) the Intermet Debtors reserve their rights against the Dana Debtors including, without limitation, rights to pursue any motion to lift the automatic stay in connection with the Avoidance Action; and (e) the Stipulation does not affect the general bar date for filing claims in the Dana Chapter 11 Cases or the applicability of the Bar Date to any claims the Intermet Debtors may have against the Dana Debtors in the Dana Chapter 11 Cases. In its request, as published in the Troubled Company Reporter on Sept. 12, 2006, Intermet told the Court that Intermet Debtors' Books and Records reveal that they made one or more transfers by check, wire transfer, or its equivalent of an interest in their property, aggregating $1,383,908, to one or more of the Dana Debtors on or within 90 days before Intermet filed for bankruptcy. The Intermet Debtors believe that those Transfers constitute preferential transfers, which, subject to defenses available to the transferees, may be avoided and recovered for their benefit. The Michigan Bankruptcy Court set Sept. 28, 2006, as the last day for filing any avoidance actions. Richard M. Meth, Esq., at Pitney Hardin, LLP, in New York, asserted that without immediate relief from the automatic stay, the Intermet Debtors will be unable to commence the Avoidance Action by the Filing Date, and thus will be prejudiced by the loss of a valuable cause of action. Mr. Meth argued that the harm that will fall on the Intermet Debtors if they are prevented from timely filing the Avoidance Action outweighs any potential added burden that the Dana Debtors might incur in having to defend the Avoidance Action. About Dana Corporation Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). About Intermet Troy, MI-based Intermet Corporation -- http://www.Intermet.com/-- emerged from bankruptcy in November 2005. Intermet provides machining and tooling services for the automotive and industrial markets specializing in the design and manufacture of cast automotive components for the global light truck, passenger car, light vehicle and heavy-duty vehicle markets. Intermet, along with its debtor-affiliates, filed for chapter 11 protection on Sept. 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through 04- 67614). Salvatore A. Barbatano, Esq., at Foley & Lardner LLP, represented the Intermet Debtors. When the Intermet Debtors filed for protection from their creditors, they listed $735,821,000 in total assets and $592,816,000 in total debts. IPC ACQUISITION: Moody's Holds Junk Rating on Second Lien Debt -------------------------------------------------------------- Moody's reported rating changes to four companies following a refinement in the application of its new methodology for assessing loss given default. The agency has changed the loan ratings and probability of default ratings on three companies and has changed the PDR on one additional company. All other ratings, including corporate family ratings, are unaffected by this change. These ratings are changed: * Wesco Aircraft Hardware Corp.: -- First priority senior secured credit facilities to B1 (LGD 3) from Ba3 (LGD 2); -- Corporate Probability of Default Rating to B2 from B3. * Stolle Machinery Company, LLC: -- First priority senior secured credit facilities to B1 (LGD 3) from Ba3 (LGD 2); -- Corporate Probability of Default Rating to B2 from B3. * IPC Acquisition Corp.: -- First priority senior secured credit facilities to B1 (LGD 3) from Ba3 (LGD 2); -- Corporate Probability of Default Rating to B2 from B3. * Persona Communications Corp.: -- Corporate Probability of Default Rating to B2 from B3. These ratings are affirmed: * Wesco Aircraft Hardware Corp.: -- Corporate family rating at B2; -- Second lien credit facilities at Caa1 (LGD 5). * Stolle Machinery Company, LLC: -- Corporate family rating at B2; -- Second lien secured term loan at Caa1 (LGD 5). * IPC Acquisition Corp.: -- Corporate family rating at B2; -- Second lien credit facilities at Caa1 (LGD 5). * Persona Communications Corp.: -- Corporate family rating at B2; -- 1st lien senior secured credit facilities at Ba3 (LGD 3); -- 2nd lien senior secured credit facilities at Caa1 (LGD 5). The ratings of all four companies were assigned between Sept. 6, 2006 and Sept. 16, 2006. The changes were made as a result of an adjustment to Moody's assumptions regarding expected loss given default recovery rates at the family level. The corporate family ratings were affirmed as there were no changes to Moody's opinion regarding the strength of the underlying credits. ITC HOMES: Brings In Windermere to Market and Sell Tucson Property ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Arizona gave ITC Homes Inc. authority to employ Windermere Tucson High Desert Properties LLC as broker. Windermere replaces the Debtor's former broker Dustin Allred Real Estate. Windermere will market and sell the Debtor's property located at No. 60710 East Eagle Heights Drive in Tucson, Arizona, and obtain the highest and best offer for the property. For its services, Windermere will be paid, upon the closing of the sale of the property, a 6% commission of the sale price of the home. To the best of the Debtor's knowledge, Windermere does not hold or represent any material interest adverse to the Debtor or the bankruptcy estate with respect to the professional services it will render. Based in Tucson, Arizona, Windermere Tucson High Desert Properties LLC -- http://www.windermere.com/-- is a real estate company wholly owned by Windermere Real Estate. Vail, AZ-based ITC Homes, Inc. -- http://www.itchomesinc.net/-- develops residential real estates. The Company filed for chapter 11 protection on Jan. 26, 2006 (Bankr. D. Ariz. Case No. 06- 00053). Scott D. Gibson, Esq., at Gibson, Nakamura & Decker, PLLC, represents the Debtor. 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 of $10 million to $50 million. JUNIOR HAWTHORNE: Case Summary & Five Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Junior Hawthorne Holdings, LLC 27 Forest Club Drive Chesterfield, MO 63005 Bankruptcy Case No.: 06-44365 Chapter 11 Petition Date: September 20, 2006 Court: Eastern District of Missouri (St. Louis) Judge: Barry S. Schermer Debtor's Counsel: A. Thomas DeWoskin, Esq. Danna McKitrick, P.C. 150 North Meramec, 4th Floor St. Louis, MO 63105 Tel: (314) 726-1000 Fax: (314) 725-6592 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ National City Bank Line of Credit $19,477 National City Card Services P.O. Box 856176 Louisville, KY 40285-6440 Monarch-Chesterfield Levee Taxes $2,085 Levee District c/o Nicole B. Poirier 190 Carondelet Plaza, Suite 600 St. Louis, MO 63105 Ameren UE Electric Bill $917 P.O. Box 66529 St. Louis, MO 63166 National City Bank Overdraft Fees $800 Chesterfield, MO Onyx Waste Services Trash Services $200 13932 St. Charles Rock Road Earth City, MO 63045 LANDMARK CDO: Moody's Puts $9 Mil. Class D Notes' Rating on Watch ----------------------------------------------------------------- Moody's Investors Service placed on watch for possible upgrade the ratings on these notes issued in 2001 by Landmark CDO Limited, a high yield structured finance collateralized debt obligation. * $20,000,000 Class B Floating Rate Notes Due 2013 -- Prior Rating: A1 -- Current Rating: A1, on watch for possible upgrade * $10,000,000 Class C-1 Floating Rate Notes Due 2013 -- Prior Rating: Baa2 -- Current Rating: Baa2, on watch for possible upgrade * $16,000,000 Class C-2 Fixed Rate Notes Due 2013 -- Prior Rating: Baa2 -- Current Rating: Baa2, on watch for possible upgrade * $7,000,000 Class D-1 Floating Rate Notes Due 2013 -- Prior Rating: Ba2 -- Current Rating: Ba2, on watch for possible upgrade * $2,000,000 Class D-2 Fixed Rate Notes Due 2013 -- Prior Rating: Ba2 -- Current Rating: Ba2, on watch for possible upgrade According to Moody's, the rating actions reflect the ongoing delevering of the transaction. LEXINGTON RESOURCES: Posts $2.3 Mil. Net Loss in 2nd Quarter 2006 ----------------------------------------------------------------- Lexington Resources Inc.'s net loss for the three months ended June 30, 2006 widened to $2,347,496 from net loss of $173,118 in the three months ended June 30, 2005. The Company's revenues for the quarter ended June 30, 2006 also increased to $645,314 from revenues of $263,203 in the same quarter last year. The Company's balance sheet at June 30, 2006 showed total assets of $19,752,619, total liabilities of $ 5,501,658, and total shareholders' equity of $14,250,961. Full text copies of the Company's financial statements for the quarter ended June 30, 2006 are available for free at: http://researcharchives.com/t/s?11ee In May 2005, the Troubled Company Reporter relates that Dale Matheson Carr-Hilton Labonte expressed substantial doubt about Lexington Resources Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Dec. 31, 2004. The auditors pointed to the Company's $1.9 million working capital deficit, $9.2 million losses since inception and further losses anticipated in the development of its oil and gas properties. Lexington Resources, Inc. (OTCBB: LXRS) (FSE: LXR) (BER: LXR) (WKN: AOBKLP) -- http://www.lexingtonresources.com/-- acquires and develops oil and natural gas properties in the United States. The Company owns a 590 gross acre section of farm-out acreage in Pittsburg County, Oklahoma for the development and production of coal bed methane gas known as the Wagnon Property. The Company is producing gas from four wells drilled on the Wagnon Property. Lexington has a 53.2% back-in working interest in each of the wells. Its current operational focus is gas development initiatives in the Arkoma Basin, Oklahoma, and the Fort Worth Basin, in Dallas, Texas. MARGO CARIBE: Deloitte & Touche Raises Going Concern Doubt ---------------------------------------------------------- Deloitte & Touche LLP expressed substantial doubt about Margo Caribe, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended Dec. 31, 2005. The auditor pointed to the Company's continuing losses since 2003 to 2005. For the years ended Dec. 31, 2005, 2004, and 2003 the Company incurred net losses of approximately $2,203,000, $617,000, and $1,492,000, respectively. The net loss for the year ended Dec. 31, 2005, was mainly caused by a reduction in sales for the Puerto Rico operations due, in part, to: -- the poor performance of the Puerto Rico economy, -- an increase in interest expense related to the financing of the unit State Line acquisition, and -- certain non-recurring expenses recorded during the 2005. State Line recorded a net loss for the year ended Dec. 31, 2005, of $850,000. The results of State Line reflect certain non- recurring expenses recorded during the first year of operations. Margo Caribe's consolidated net sale increased $1,246,000 or 15% to $9,669,000 in 2005, compared with the $8,423,000 in 2004, due to the sales recorded by State Line, which reported sales amounting to approximately $2,497,000 during the unit's first year of operations as part of the Company. The Company's Puerto Rico operations reported a decrease in net sales of $1,251,000 in 2005, compared with 2004. Gross profit remained stable at 31% for both 2005 and 2004, mainly due to the improvement in the Nursery segment's gross profit that improved by 17% to 19.5% in 2005, from 16.6% in 2004. The improvement in the gross profit margin in the Nursery division is mainly related to the Company's determination to place greater emphasis on the marketing of bedding and other plants that mature more rapidly and become available for sale in a shorter period of time. This allows the Company to improve the quality of the products sold and minimize the disposal of plants that become obsolete after a certain period of time. To implement this strategy, the Company purchases plants from local independent growers for resale, as needed, to avoid increases in inventory levels. The improvement in the gross profit margin in the Nursery division was also the result of price increases introduced during the last quarter of the year. The effects of Tropical Storm Jeanne on the Island during the last quarter of 2004 and first quarter of 2005 also affected the net sales for the periods, mainly attributable to delays in certain residential and commercial developments because of the lack of electric power and other adverse results of the aforementioned tropical storm. This also affected the sale of lawn and garden products and the revenues of the landscaping segment. Margo Caribe posts these revenues in the landscaping service: -- $1,415,000 in 2003, -- $1,841,000 in 2004, and -- $1,480,000 in 2005. The landscaping segment's decrease in revenues in 2004 when compared to 2004 was mainly due to: -- the delays in residential projects, -- the decrease in revenues derived from certain major landscaping contracts, and -- the cancellation of certain maintenance contracts. During the years 2005 and 2004 major contracts produced $95,000 and $541,000 in revenues, respectively. Gross profit for the division for 2005 remained similar to 2004 at 28%. Margo Caribe reports these results in net sales of the lawn and garden segment: -- $3,279,000 in 2003, -- $3,740,000 in 2004, and -- $3,395,000 in 2005. The decrease in sales for the lawn and garden segment was mainly attributable to the effects of the slow down in the Island's economy during 2005. Increases in fuel costs and basic services -- like water and power -- combined with decreases in governmental spending, are some of the external factors affecting 2005 net sales. These factors tend to reduce discretionary consumer spending. Sales to the Company's major customer for the lawn and garden segment reflected a decrease of $217,000 or 9%. Other major chains also reflected decreases in sales since the inventory turnover of certain products as well as their sales decreased during the year due to economic conditions. In November 2005, the Company introduced an overall price increase to offset part of the decrease in its sales volume. The increase in net sales in the lawn and garden segment in 2004, as compared to 2003, was positively affected by the heavy rains experienced during the third and fourth quarters of 2004. The lawn and garden segment also reflected an increase in sales during the fourth quarter of 2004 related to certain sales promotions with large chain stores conducted during the Christmas season. State Line's net sales in 2005 were $2,497,000, which represents 26% of the Company's total consolidated sales. Gross profit for this segment was 23%. This segment's results during 2005 were affected by certain non-recurring items like a loss on impairment of intangible asset of $213,000 and legal, moving and other expenses related to transferred employees, as well as by certain increases in raw material costs. Margo Caribe posts these results on the combined sales of all segments to active major chain stores: -- $4,656,000 in 2003, -- $4,888,000 IN 2004, and -- $4,079,000 in 2005. Consolidated net sales in 2003 were $8,433,000, about $11,000 over the sales recorded in 2004. Sales composition was also similar to year 2004. Consolidated gross profits as a percentage of net sales were: -- 28% in 2003 -- 30% in 2004, and -- 29% in 2005. The decrease in gross profit in 2005, when compared to 2004, was principally the result of increases in raw materials and freight- in costs. This was partially offset by the increase in gross profits in the nursery segment primarily driven by strategies implemented during the year. Margo Caribe's consolidated gross profit in 2004 increased by 7% or two basis points to 30%, compared to 28% in 2003, primarily due to an increase in the gross profit margin of the landscaping segment, which increased to 28% 2004 from 15% in 2003. The landscaping segment sales during 2004 increased by $426,000 when compared to 2003, representing 22% of consolidated sales for 2004, compared to 17% of consolidated net sales in 2003. This contributed to a higher combined gross profit margin in 2004. Equity in earnings of unconsolidated subsidiary in 2005 and 2004 amounted to $84,000 and $111,000, respectively. This represents the Company's 33.33% equity interest in Salinas' net income in 2005 and 2004. Equity in earnings of unconsolidated subsidiary in 2003 amounted to $76,000. As of 2005 the Company had cash of about $278,000, compared with cash of $235,000 in 2004. Margo Caribe's management has taken certain steps and continues to implement changes designed to improve the Company's financial results and operating cash flows. The management has developed and implemented cost-saving initiatives and growing strategies including: (a) reductions in headcount and general office expenditures; (b) partnership programs with major clients; (c) pricing strategies; (d) investments in manufacturing technology to reduce overhead and increase production in State Line; (e) discontinuation of the landscaping operation to direct additional resources towards the Company's core business; (f) development of special plant products to improve the Company's competitive position; (g) controls over expenditures in production supplies; (h) implementation of a strict plant production program; (i) obtaining permits for land held for development by the Company's real estate development subsidiary; and (j) expansion into the US market through State Line by leveraging the Company's existing relations with certain major national chain stores. The Company's major stockholder has been financing the Company's operations and has expressed his willingness to continue the support as needed. The Company is also exploring other alternatives to increase its liquidity, including increases in its short-term credit facilities and sales of preferred stock to a limited number of investors in a private placement transaction. A full-text copy of the Company's annual report is available for free at http://researcharchives.com/t/s?11f6 Headquartered in Vega Alta, Puerto Rico, Margo Caribe, Inc. -- http://www.MargoCaribe.com-- and its subsidiaries primarily engage in the production, distribution, and sale of various tropical plants to the interior and exterior landscapers, wholesalers, and retailers in Puerto Rico and the Caribbean. The company also manufactures and distributes a line of planting media and aggregates; distributes lawn and garden products, including plastic and terracotta pottery, planting media, and mulch; and provides landscaping design and installation services. In addition, Margo Caribe distributes fertilizers, pesticides, and various outdoor products. The company manufactures potting soils, professional growing mixes, river rock, gravel, and related aggregates. MED GEN: June 30 Balance Sheet Upside-Down by $10.8 Million ----------------------------------------------------------- Med Gen Inc.'s balance sheet at June 30, 2006 reported total assets of $1,147,074 and total liabilities of $12,037,981 resulting to total stockholders' deficit of $10,890,907. The Company's balance sheet at June 30, 2006 also showed negative working capital with $763,596 in total current assets and $1,054,266 in total current liabilities. For the three months ended June 30, 2006, the Company incurred a $955,076 net loss from net sales of $32,729 compared to net loss of $3,877,364 from a $181,034 net sales in the same period last year. Full text copies of the Company's financial statements for the quarter ended June 30, 2006 are available for free at: http://researcharchives.com/t/s?11ed Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 26, 2006, Stark Winter Schenkein & Co. LLP expressed substantial doubt about Med Gen's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Sept. 30, 2005 and 2004. The auditing firm pointed to the Company's significant losses from operations as well as working capital and stockholder deficiencies. About Med Gen Med Gen Inc. -- http://www.medgen.com/-- manufactures and markets liquid spray snoring relief formulas, Snorenz(R) and Good Night's Sleep(R). MIAD SYSTEMS: Has CDN$420,384 Stockholders' Deficit at June 30 -------------------------------------------------------------- In its interim balance sheet as of June 30, 2006, Miad Systems Ltd. reported CDN$1,886,059 in total assets and CDN$2,306,443 in total liabilities resulting to a total stockholders' deficit of $CDN420,384. For the three months ended June 30, 2006, the Company's net loss rose to $CDN99,982 compared to net loss of $CDN48,677 in the three months ended June 30, 2005. The Company's sales for the quarter ended June 30, 2006 also increased to CDN$2,060,154 from sales of CDN$1,606,559 in the same period last year. Full text copies of the Company's financial statements for the quarter ended June 30, 2006 are available for free at: http://researcharchives.com/t/s?11ef Headquartered in Markham, Ontario, MIAD Systems Ltd. -- http://www.miad.com/-- supplies business computer systems and provides computer maintenance, installation and networking services to major clients primarily engaged in the corporate, institutional, municipal, utilities and education fields. MIRANT CORP: To Settle Erisa Litigation for $9.7 Million -------------------------------------------------------- In 2003, James Brown and Greg Waller, Sr., each filed putative class action lawsuits alleging violations of the Employee Retirement Income Security Act against Mirant Corporation, certain of its officers and directors, and The Southern Company before the U.S. District Court for the Northern District of Georgia. The lawsuits were consolidated in a case styled as In re: Mirant Corp. ERISA Litigation, Civil Action No. 03-CV-1027. Messrs. Brown and Waller, who represent a putative class of participants and beneficiaries of the Mirant Services Employee Savings Plan and the Mirant Services Bargaining Unit Employee Savings Plan, allege that Mirant and other defendants breached their duties under ERISA by, among other things: (a) concealing information from the 401(k) Plans' participants and beneficiaries; (b) failing to ensure that the 401(k) Plans' assets were invested prudently; (c) failing to monitor the 401(k) Plans' fiduciaries; and (d) failing to engage independent fiduciaries to make judgments about the 401(k) Plans' investments. The Other Defendants include: (1) A. William Dahlberg (2) Alston D. Correll (3) Carlos Ghosn (4) David J. Lesar (5) Dianne W. Davenport (6) Elmer Harris (7) James A. Ward (8) James F. McDonald (9) Michael L. Smith (10) Ray M. Robinson (11) Raymond D. Hill (12) Richard Pershing (13) S. Marce Fuller (14) Stuart Eizenstat (15) T. Rowe Price Trust Company (16) the Americas Benefit Committee (17) the Qualified Investment Review Committee (18) Vance Booker (19) W.L. Westbrook (20) William M. Hjerpe (21) Unknown Fiduciary Defendants The Plaintiffs seek unspecified damages, injunctive relief, attorneys' fees and costs. When the Debtors filed for bankruptcy on July 14, 2003, the District Court stayed the Mirant ERISA Litigation. District Court Judge Richard Story directed the Clerk of Court to administratively close the Mirant ERISA Litigation pending the lifting of the stay by the Bankruptcy Court. As a result, the Plaintiffs were unable to proceed with discovery in the Mirant ERISA Litigation. Although the Mirant ERISA Litigation was administratively closed, the parties engaged in extensive settlement discussions. The parties reached a Class Action settlement agreement in May 2006. To adequately and properly effectuate the settlement and resolution of the Mirant ERISA Litigation, Messrs. Brown and Waller, Sr., asked the District Court to reopen the Mirant ERISA case. The Plaintiffs also asked the District Court to: (a) preliminarily approve the Class Action Settlement pursuant to the terms of a Stipulation of Settlement; (b) approve the preliminary certification of the Class and a proposed form of notice; and (c) set a Fairness Hearing for determination as to whether to approve the Stipulation of Settlement. The salient terms of the Stipulation of Settlement are: (a) The parties agree to settle the claims asserted in the Class Action for $9.7 million, which amount will be paid by the Mirant Defendants' applicable fiduciary liability insurers. The Settlement Amount, together with any interest earned, will constitute as the "Qualified Settlement Fund"; (b) For settlement purposes, the Class Action will proceed as a non-opt out class action; (c) The "Complete Settlement Approval" will occur when all of these events have taken place: (1) Entry of a final order approving the Settlement; and (2) Expiration of: * all periods of appeal of the Final Approval Order without any appeal having been filed, or if an appeal is taken, on entry of an order affirming the Final Approval Order; and * the expiration of any applicable period for the reconsideration, rehearing or appeal of the affirmance without any motion for reconsideration or rehearing or further appeal having been filed; (d) The Plaintiffs, members of the Settlement Class, and the Plans will release any and all of their claims against: (1) all of the defendants; (2) the applicable Fiduciary and Employee Benefit Liability Insurance Policy No. F0280AIA02, but the release will not extend to claims asserted against any person in In re Southern Company ERISA Litig. Civ. No. 1:04-CV-1912; (3) the independent fiduciary engaged by the Plan's fiduciaries to analyze the Settlement; and (4) current or past Plan fiduciaries in connection with the calculation and allocation of the Qualified Settlement Fund; (e) The Qualified Settlement Fund will be structured and managed to qualify as a tax-qualified settlement fund under Section 468B of the Internal Revenue Code and Treasury Regulations; (f) Each named Plaintiff will receive a "Case Contribution Award" in recognition of each of the Plaintiff's assistance provided in the prosecution of the Class Action, payable from the Qualified Settlement Fund; and (g) The Class counsel will prepare a plan of allocation for the District Court's approval. Mirant will have no responsibility for structuring the contents of the Plan of Allocation. A full-text copy of the Stipulation of Settlement in the ERISA Litigation is available for free at: http://ResearchArchives.com/t/s?11f0 On behalf of the Plaintiffs, Joshua A. Millican, Esq., in Atlanta, Georgia, tells the District Court that the Settlement Agreement represents an excellent recovery for Class members, and is clearly adequate under the governing standards for evaluating class action settlements in the Second Circuit. Moreover, certification of the Settlement Class is appropriate pursuant to Rule 23 of the Federal Rules of Civil Procedure and the proposed Notice program, which has been approved in numerous similar cases, satisfies the requirements of due process. All prerequisites for preliminary approval of the Settlement and conditional class certification have been met, Mr. Millican assures the District Court. According to Bloomberg News, Judge Story will conduct a hearing in October 2006 at Mirant's headquarters in Atlanta to finalize the Settlement Agreement. About Mirant Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is an energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03- 46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. (Mirant Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on July 17, 2006, Moody's Investors Service downgraded the ratings of Mirant Corporation and its subsidiaries Mirant North America, LLC and Mirant Americas Generation, LLC. The Ba2 rating for Mirant Mid- Atlantic, LLC's secured pass through trust certificates was affirmed. The rating outlook is stable for Mirant, MNA, MAG, and MIRMA. Moody's downgraded Mirant Americas Generation, LLC's Senior Unsecured Regular Bond/Debenture, to B3 from B2. Moody's also downgraded Mirant Corporation's Corporate Family Rating, to B2 from B1, and Speculative Grade Liquidity Rating, to SGL-2 from SGL-1. Mirant North America, LLC's Senior Secured Bank Credit Facility, was also downgraded to B1 from Ba3 and its Senior Unsecured Regular Bond/Debenture, to B2 from B1. As reported in the Troubled Company Reporter on July 13, 2006, Fitch Ratings placed the ratings of Mirant Corp., including the Issuer Default Rating of 'B+', and its subsidiaries on Rating Watch Negative following its announced plans to buy back stock and sell its Philippine and Caribbean assets. Ratings affected are Mirant Corp.'s 'B+' Issuer Default Rating and Mirant Mid-Atlantic LLC's 'B+' Issuer Default Rating and the Pass- through certificates' 'BB+/Recovery Rating RR1'. Fitch also placed Mirant North America, Inc.'s Issuer Default Rating of 'B+', Senior secured bank debt's 'BB/RR1' rating, Senior secured term loan's 'BB/RR1' rating, and Senior unsecured notes' 'BB-/RR1' rating on Rating Watch Negative. Mirant Americas Generation, LLC's Issuer Default Rating of 'B+' and Senior unsecured notes' 'B/RR5' rating was included as well. Standard & Poor's Ratings Services also placed the 'B+' corporate credit ratings on Mirant Corp. and its subsidiaries, Mirant North American LLC, Mirant Americas Generating LLC, and Mirant Mid- Atlantic LLC, on CreditWatch with negative implications. MUSICLAND HOLDING: Hires Walker Truesdell as Winddown Officer ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorize Musicland Holding Corp. and its debtor-affiliates to employ Walker, Truesdell & Associates, Inc., as its winddown officer, nunc pro tunc to Aug. 21, 2006, pursuant to Section 363 of the Bankruptcy Code. As reported in the Troubled Company Reporter on Sept. 14, 2006, WTA, as winddown officer, has, and will continue, to: (a) ensure the timely issuance and filing of 2006 W-2, 1099s and payroll tax returns; (b) help devise and execute an inexpensive and expeditious claims objection and resolution process; (c) prepare and file monthly operating reports and quarterly U.S. Trustee reports; (d) collect outstanding receivables, deposits, tenant allowances, tax refunds and other refunds; (e) effect the release of cash collateral held on Letters of Credit; (f) resolve and collect amounts due from Trans World Entertainment Corporation as a result of the sale of the Debtors' assets; (g) investigate, then resolve and settle all federal, state, local and sales tax claims, administrative claims, lien payments and transfer tax payments; (h) analyze and pursue avoidance actions; (i) maintain the Debtors' books and records, and finally arrange for their storage and destruction; (j) provide a Final Report and Accounting; and (k) perform all other actions necessary to wind-down the Debtors' business affairs. The Debtors will pay WTA at these hourly rates: Principal, Hobie Truesdell $300 Associates $275 Junior Associate $250 Paraprofessionals $75 Hobart G. Truesdell, Esq., a senior member at WTA, assures the Court that the firm does not hold nor represent any interest adverse to the Debtors or their estates. About Musicland Holding Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen 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. (Musicland Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NELSON BOND: Case Summary & 14 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Nelson Keith Bond 698 Vinings Estates Drive Mableton, GA 30126 Bankruptcy Case No.: 06-71458 Type of Business: The Debtor is a stockholder of International Management Associates, LLC and its affiliates, which filed for chapter 11 protection on March 16, 2006 (Bankr. N.D. Ga. Case Nos. 06-62966 through 06-62976). Chapter 11 Petition Date: September 18, 2006 Court: Northern District of Georgia (Atlanta) Judge: Paul W. Bonapfel Debtor's Counsel: Theodore N. Stapleton, Esq. Theodore N. Stapleton, P.C. Suite 1740, Two Paces West 2727 Pace Ferry Road Atlanta, GA 30339 Tel: (770) 436-3334 Fax: (770) 436-5398 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Estate of IMA Loans $2,100,000 c/o John Mills 1100 Peachtree Street, Suite 2800 Atlanta, GA 30309-4530 Department of Education Student Loan $91,130 P.O. Box 530260 Atlanta, GA 30353-0260 Georgia Department of Revenue Income Taxes $42,128 351 Thorton Road, Suite 101 Lithia Springs, GA 30122-1596 Annette Bond Personal Loan $25,900 340 Keymar Court Atlanta, GA 30350 Wachovia Bank Account $24,378 P.O. Box 15289 Wilmington, DE 19886-5290 Internal Revenue Service Federal Income Taxes $22,000 Jerry Gentry Personal Loan $18,000 Wayne & Gina Warren Personal Loan $15,000 Sallie Mae Student Loan $13,600 Abbey & Joy Gathe MD Personal Loan $10,000 MBNA Account $8,900 Bank of America Visa Business Account $4,563 Ninetta Bostick Personal Loan $4,000 Bank of America Visa Business Account $3,443 NEXTMEDIA OPERATING: Increasing Leverage Cues S&P's Neg. Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on NextMedia Operating Inc. to negative from stable. At the same time, Standard & Poor's affirmed its ratings on the company, including the 'B' corporate credit rating. Englewood, Colorado-based NextMedia had nearly $381 million total debt outstanding as of June 30, 2006. "The outlook revision reflects the company's increasing leverage and narrowing margin of financial covenant compliance," said Standard & Poor's credit analyst Heather M. Goodchild. "The company has used proceeds from sales of nonstrategic radio assets to pay down debt, but these have proven insufficient to offset the increase in acquisition-related debt associated with the outdoor business." The rating on NextMedia reflects: * high financial risk from debt-financed expansion; * the potential for additional acquisitions that could limit financial profile improvement; * the presence of larger competitors in most markets; and * the company's vulnerability to advertising downturns. These factors are only partially offset by: * the company's portfolio of radio and expanding outdoor assets; * broadcasting's good margin and discretionary cash flow potential; and * sustainable asset values. The negative outlook recognizes that debt-financed acquisitions have raised the level of financial risk and left NextMedia more vulnerable to reversals in operating momentum. Because recent acquisitions have shifted NextMedia's asset mix toward its outdoor segment, Standard & Poor's would not be surprised to see additional transactions in the intermediate term. Standard & Poor's will continue to monitor the company's acquisition and debt reduction strategies. NORTHWEST AIRLINES: Bankruptcy Cues Moody's to Withdraw Ratings --------------------------------------------------------------- Moody's Investors Service withdraws ratings assigned to the debt issued by Northwest Airlines, Inc., its parent Northwest Airlines Corporation and subsidiaries, as well as the ratings assigned to Northwest's Enhanced Equipment Trust Certificates. The EETCs supported by monoline insurance company policies are not affected by this action and are rated Aaa with a stable outlook. Moody's withdraws the unsupported ratings, including the senior unsecured rating at C, because of the ongoing bankruptcy proceedings of the airline. In the case of the EETC transactions, Moody's withdrew its ratings due to the lack of sufficient information about the status of these securities to maintain a current opinion. Northwest filed for protection under the Chapter 11 of the U.S. Bankruptcy Code in September 2005 and has defaulted on its debt obligations. The company's reorganization efforts are likely to generate little recovery for unsecured debt holders, in Moody's view. Some recovery for holders of EETC's is anticipated but will be highly dependent on the value of the aircraft collateral, the structure of the individual transactions and the outcome of negotiations between Northwest and the certificate holders and among the certificate holders themselves for certain transactions. Without reliable and consistently available information, Moody's is unable to maintain current ratings for these EETC transactions. Northwest Airlines, Inc. and its parent company, Northwest Airlines Corporation, are headquartered in Eagan, Minnesota. Outlook Actions: * Issuer: NWA Trust No. 2 -- Outlook, Changed To Rating Withdrawn From Negative * Issuer: Northwest Airlines Corporation -- Outlook, Changed To Rating Withdrawn From Negative * Issuer: Northwest Airlines, Inc. -- Outlook, Changed To Stable From Negative Withdrawals: * Issuer: NWA Trust No. 2 -- Senior Secured Enhanced Equipment Trust, Withdrawn, previously rated Ca * Issuer: New York City Industrial Development Agcy, NY -- Senior Unsecured Revenue Bonds, Withdrawn, previously rated C * Issuer: Northwest Airlines Corporation -- Corporate Family Rating, Withdrawn, previously rated Caa2 -- Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-4 -- Senior Unsecured Conv./Exch. Bond/Debenture, Withdrawn, previously rated C * Issuer: Northwest Airlines, Inc. -- Senior Secured Bank Credit Facility, Withdrawn, previously rated Caa1 -- Senior Secured Enhanced Equipment Trust, Withdrawn, previously rated C -- Senior Secured Pass-Through, Withdrawn, previously rated C -- Senior Subordinated Shelf, Withdrawn, previously rated (P)C -- Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated C -- Senior Unsecured Shelf, Withdrawn, previously rated (P)C PACHINKO WORLD: McKennon Wilson Raises Going Concern Doubt ---------------------------------------------------------- McKennon, Wilson & Morgan LLP expressed substantial doubt about Pachinko World, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended May 31, 2006. The auditing firm pointed to the Company's working capital deficiency at May 31, 2006. Pachinko World, Inc., incurred a $109,000 net loss for the fiscal ear ended May 31, 2006, versus a net loss of $2.7 million in 2005. Gaming revenues for the fiscal year ended May 31, 2006, which consist of patron wagers less payouts, increased by approximately $3.6 million, or 14.4%, to approximately $28.4 million, from $24.8 million in fiscal 2005. In each of fiscal years 2005 and 2006, gaming revenues were negatively impacted by the higher patron payouts that the Company incurs in building the customer base for each newly opened pachinko store. Gaming revenues as a percentage of total patron wagers increased by 110 basis points year over year, from 11.3% in fiscal 2005 to 12.4% in fiscal 2006. Gross wagers increased by approximately $9.3 million, or 4.2%, from approximately $219.4 million in the 2005 fiscal year to $228.7 million in fiscal 2006. The Company's newest store, which opened in December 2005, contributed $32.9 million of the year- over-year increase in gross wagers. Same-store wagers were down at all the Company's other stores in fiscal 2006 versus fiscal 2005. While payouts increased by $5.7 million, or 3%, from $194.6 million in fiscal 2005 to $200.3 million in fiscal 2006, payouts as a percentage of wagers decreased from 88.7% to 87.6% year over year. Fourth-Quarter Results Pachinko World's gaming revenues for the three months ended May 31, 2006, which consist of patron wagers less payouts, increased by approximately $1.1 million, or 14.7%, to approximately $8.4 million, from $7.3 million in the fourth quarter of fiscal 2005. The Company's net income for the fiscal 2006 fourth quarter ended May 31 totaled approximately $595,000, versus a net loss of approximately $1.6 million in the fiscal 2005 fourth quarter. "Pachinko World's revenue base has grown consistently in the past three years. Our fiscal 2006 results reflect cost savings achieved through operational streamlining, as well as adopting new marketing strategies, which have enabled us to achieve profitability in the fiscal 2006 fourth quarter," commented Henry Miyano, Pachinko World's Corporate Secretary. "Our overall improved performance is largely attributable to the larger, up-to-date design of our newer locations. One of these locations, Oyama, suffered higher-than-expected losses in the first twelve months after opening, due to competition with a store run by a larger pachinko chain. But we have reversed this trend and Oyama is now profitable. We believe that the enhanced profitability of our larger new-store format is proven, once a new store has established its customer base, and plan to replicate it for stores we open in the future. We have three older stores, which have been posting declining wagers and revenues, and we are exploring remodeling, closing or putting these stores to alternative uses to further improve our overall profitability." Mr. Miyano concluded, "We were pleased to recognize net income in the fourth quarter of fiscal 2006 totaling approximately $595,000, or $0.03 per share. We are seeing the continuation of positive operating trends during the first quarter of fiscal 2007 and continue to look forward to an additional store opening late in the 2007 fiscal year." A full-text copy of the Company's annual report is available for free at http://researcharchives.com/t/s?11f7 About Pachinko World Pachinko World, fka Exam USA, Inc., through its subsidiaries, engages in the ownership and operation of stores in Japan offering pachinko gaming entertainment. As of May 31, 2006, the Company operated seven stores, comprising 3,392 pachinko and pachislo machines. Its stores are located in the Aichi prefecture and Tochigi prefecture in the north of Japan's greater Kanto area. The Company is also involved in the sale of cigarettes, non- alcoholic beverages, and sundry items, as well as in the operation of two small restaurants. Founded by Yoneji Hirabayashi in 1956, the Company is headquartered in Huntington Beach, California. PACIFIC MAGTRON: Completes Merger with Bio-Herbaceutical Company ---------------------------------------------------------------- Pacific Magtron International Corp. completed the merger of Herborium, Inc. with and into LiveWarehouse, Inc., Pacific Magtron International's wholly owned subsidiary. Herborium was the surviving entity and is now a wholly owned subsidiary of Pacific Magtron International. Herborium is a bio-herbaceutical company that develops and distributes proprietary natural healthcare related products comprised of unique herbal formulations. Herborium's customer base is a growing number of consumers and healthcare professionals seeking alternative answers to the management of healthcare issues currently not addressed satisfactorily by standard Western medicine. In connection with the merger, Pacific Magtron International is changing its name to Herborium Group, Inc. The merger was completed pursuant to the plans of reorganization for Pacific Magtron International and LiveWarehouse, which were confirmed by the U.S. Bankruptcy Court for the District of Nevada on Aug. 11, 2006. The plans of reorganization became effective upon the completion of the merger. In accordance with the plans of reorganization, as of the merger date, all previously outstanding shares of common and preferred shares of Pacific Magtron International not owned by Advanced Communications were canceled and converted into the right to receive one newly issued share of common stock of Herborium Group for each share of common stock of Pacific Magtron International held as of Aug. 11, 2006. Advanced Communications' interest in Pacific Magtron International was also canceled. A special stock distribution of shares of common stock of Herborium Group on the basis of a 0.001652911 share of Herborium Group common stock for each share of Advanced Communications common stock will be made directly to the shareholders of Advanced Communications as of the record date of Aug. 11, 2006. In addition, Advanced Communications has placed in escrow 1,750,000 shares of common stock of Herborium Group for two former Pacific Magtron International executives pursuant to the terms of a settlement agreement approved by the Bankruptcy Court. Such escrow shares will be subject to a 150-day lockup period. Further, Advanced Communications has placed in escrow 500,000 shares of common stock of Herborium Group for certain unexpired stock option and stock warrant grants. "We are pleased to report that with this merger we have reached a successful conclusion to the plans of reorganization for Pacific Magtron International and LiveWarehouse," Wayne Danson, Chief Executive Officer of Advanced Communications, said. The shareholders of Pacific Magtron International now have an investment opportunity to benefit from their Herborium Group stock ownership, as will all Advanced Communications shareholders as of the aforementioned record date as a result of receiving shares of Herborium Group stock as a special share distribution. We expect the Herborium Group stock distribution to both Advanced Communication and Pacific Magtron International shareholders to occur in approximately 15 days hereafter." A full-text copy of the Fourth Amended Plan of Reorganization for Pacific Magtron and Livewarehouse is available for free at: http://ResearchArchives.com/t/s?fd1 Based in Milpitas, California, Pacific Magtron International Corp. (OTCBB: PMICQ) -- http://www.pacificmagtron.com/-- distributes some 1,800 computer hardware, software, peripheral, and accessory items that it buys directly from 30 manufacturers like Creative Labs, Logitech, and Yamaha. The Company, along with its subsidiaries, filed for chapter 11 protection on May 11, 2005 (Bankr. D. Nev. Case No. 05-14326). As of Dec. 31, 2004, the Company reported $11,740,700 in total assets and $11,105,200 in total debts. A subsidiary of Pacific Magtron International Corp., Pacific Magtron (GA) Inc., together with another subsidiary Pacific Magtron Inc., imports and distributes in wholesale electronics products computer components, and computer peripheral equipment across the US. PARMALAT GROUP: Board Approves 2006 Semi-Annual Report ------------------------------------------------------ Parmalat S.p.A.'s Board of Directors has approved Parmalat Group's Semiannual Report at June 30, 2006, which confirms a further improvement in the Group's operating performance. 1. Semiannual Report at June 30, 2006 The Group In the first half of 2006, the Group's revenues from continuing operations totaled EUR1,967.2 million, or 6.5% more than the EUR1,847.8 million booked in the first six months of 2005. EBITDA increased by 21.3% to EUR159.8 million (EUR131.7 million in the first half of 2005). The return on sales also improved, rising from 7.1% in 2005 to 8.1% this year, owing in part to a reduction of about EUR7 million in the allowance for doubtful accounts and other provisions compared with 2005. [A] breakdown of the operating data by country (geographic region): First half 2005 (EUR in millions) Net As % of revenues EBITDA revenues -------- ------ -------- Italy 598.0 37.4 6.3 Canada 603.4 43.9 7.3 Australia 192.2 16.4 8.5 Africa (consolidated data) 149.1 15.4 10.3 Spain 109.1 8.3 7.6 Portugal 32.9 3.4 10.3 Russia 19.1 2.4 12.7 Romania 5.0 1.5 29.7 Nicaragua 12.6 1.6 12.7 Cuba 0.5 (0.3) (66.4) Venezuela 70.4 5.2 7.3 Ecuador 0.0 (0.4) n.m. Colombia 45.9 4.7 10.3 Other (Italcheese, holding cos., eliminations) 9.5 (7.9) n.m. -------- ------ -------- Group total 1,847.8 131.7 7.1 ======== ====== ======== First half 2006 (EUR in millions) Net As % of revenues EBITDA revenues -------- ------ -------- Italy 580.9 48.1 8.3 Canada 648.1 54.1 8.4 Australia 218.4 15.0 6.9 Africa (consolidated data) 178.2 19.5 10.9 Spain 99.7 2.2 2.2 Portugal 39.0 4.1 10.5 Russia 26.5 3.8 14.4 Romania 5.5 1.1 20.9 Nicaragua 13.2 2.0 14.9 Cuba 3.6 1.0 28.8 Venezuela 91.1 14.5 15.9 Ecuador 1.0 (0.3) (27.7) Colombia 55.5 5.5 9.9 Other (Italcheese, holding cos., eliminations) 6.7 (10.8) n.m. -------- ------ -------- Group total 1,967.2 159.8 8.1 ======== ====== ======== [Parmalat's unit in Ecuador] resumed its operating activity in 2006. In Italy, consolidated revenues were slightly lower (-2.9%) than in the first half of 2005, totaling EUR580.9 million (EUR598.0 million for the first six months of 2005). Parmalat said the main reason for the difference is a decrease in revenues from sales of materials that are not part of the Group's standard product line and are resold at no profit (-EUR19.6 million, from EUR35.3 million to EUR15.7 million). Net of the sales, cumulative six-month revenues amount to EUR562.7 million at June 30, 2005 and EUR565.2 million at June 30, 2006, for a gain of EUR2.5 million (+0.4%). A better sales mix with a greater preponderance of products with greater value added, an effective cost-cutting policy and a reduction of working capital writedowns and other writedowns helped boost EBITDA from EUR37.4 million to EUR48.1 million. As a result, the return on sales improved from 6.3% in 2005 to 8.3% this year. In Canada, revenues for the first half of 2006 totaled EUR648.1 million, or 7.4% more than in the same period last year (EUR603.4 million), benefiting also of the positive exchange rate. EBITDA increased by EUR10.3 million (+23.2%), rising from EUR43.9 million in the first six months of 2005 to EUR54.1 million in the same period this year, with the return on sales improving to 8.4% (7.3% in 2005). The improvements in revenues and EBITDA were achieved even though 2006 had fewer days available for deliveries and billing (one week less). The reasons for the improvements were a better product mix, successful marketing programs and cost reductions, Parmalat said. In Australia, first-half revenues grew to EUR218.4 million in 2006, or 13.6% more than the EUR192.2 million earned in the same period last year. Despite a 5.5% gain in unit sales, EBITDA decreased by EUR1.4 million, falling from EUR16.4 million in the first six months of 2005 to EUR15.0 million in the same period this year. However, this shortfall should be made up entirely in the second half of the year, when the Business Unit is expected to benefit from a decrease in the cost of raw milk and an increase in unit sales generated by advertising campaigns launched earlier this year. In Africa, revenues were up sharply in the first half of 2006, rising to EUR178.2 million (19.5% more than the EUR149.1 million booked in the same period last year), boosting EBITDA to EUR19.5 million (EUR15.4 million in the first six months of 2005), or 10.9% of revenues (10.3% in 2005). Higher unit sales made possible by a rapidly expanding local economy and a better product mix are the main reasons for these gratifying results. With the exception of the Spanish operations, which are continuing to struggle under difficult circumstances, the Business Units in all of the other countries reported significantly better results than they did in the first half of 2005, particularly in South America (Colombia and Venezuela). On June 30, 2006, the Group's net indebtedness was EUR311.5 million, down from the EUR369.3 million it owed at the end of 2005. The net indebtedness of the Venezuelan operations (about EUR150 million) accounts for a significant portion of the Group's total borrowings of EUR311.5 million. EBIT totaled 76.8 million euros. The 2005 result (EUR104.9 million) is not comparable because it refers to the Extraordinary Administration, which benefited of extraordinary positions typical to the accrual of funds for contested bankruptcy debts. The Group's interest in the net profit amounted to EUR17.0 million at June 30, 2006, compared with EUR39.6 million in the first half of 2005. Parmalat S.p.A. The Group's Parent Company reported net revenues of EUR504.5 million, about 4% less than the EUR525.7 million booked in the first six months of 2005. The impact of lower sales of materials that are not part of the Group's standard product line, offset in part by increased shipments of functional products with a high value added, accounts for this decrease. EBITDA totaled EUR32 million, or EUR8.7 million more than the EUR23.3 million reported at June 30, 2005. The return on sales also improved, rising to 6.3% compared with 4.4% in the first half of 2005. According to Parmalat, the improvement reflects a greater preponderance of functional products in the sales mix and the fact that the losses incurred by Company-owned licensees, which in 2005 had been reflected in the Company's operating data, are now being attributed to Parmalat Distribuzione Alimenti, a company included in the Italian SBU that is currently implementing an efficiency- boosting reorganization plan. The net profit earned by the Group's Parent Company in the first half of 2006 amounted to EUR2.0 million. The 2005 result (EUR19.1 million) is not comparable because it refers to the Extraordinary Administration, which benefited of extraordinary positions typical to the accrual of funds for contested bankruptcy debts. As a result of the approval of the Proposal of Composition with Creditors, the Group's Parent Company is virtually debt free. During the first half of 2006, net financial assets decreased from EUR324.5 million at Dec. 31, 2005, to EUR291.6 million at June 30, 2006, despite positive cash flow from operations. Payments made to satisfy preferential and pre-deduction claims and cover legal and restructuring costs account for this decrease. Outlook for the Balance of 2006 In the months ahead, the industrial actions undertaken in the various countries and the seasonal factors that characterize the second half of the year seem to justify expectations of a significant increase in EBITDA. The considerations and the nonrecurring gains booked after June 30, 2006, such as the settlement with Banca Popolare Italiana and the sale of equity investments, offset in part by the cost of legal actions, should result in higher profits both for Parmalat S.p.A. and the Group. Barring any significant changes in interest rates or the Group's scope of consolidation, the same variables should also produce a significant reduction in net indebtedness. 2. Code of Conduct The Board of Directors also agreed to update the Company's Code of Conduct in preparation for the adoption later this year of the Organization and Control Model required by Legislative Decree No 231/2001. An updated Code of Conduct is will be available at http://www.parmalat.com/ 3. Extension of Section 304 temporary Injunction The Board of Directors was informed that the judge of the District Court of the Southern District of New York has extended the temporary injunction deadline to Oct. 17, 2006. Parmalat S.p.A. Reclassified Balance Sheet June 30, 2006 NON-CURRENT ASSETS EUR1,686,000,000 Intangibles 572,900,000 Property, plant and equipment 131,100,000 Non-current financial assets 966,100,000 Deferred-tax assets 15,900,000 AVAILABLE-FOR-SALE ASSETS, NET OF CORRESPONDING LIABILITIES 5,200,000 NET WORKING CAPITAL 133,700,000 Inventories 38,500,000 Trade receivables 228,400,000 Other current assets 186,200,000 Trade payables (223,800,000) Other current liabilities (95,700,000) ---------------- INVESTED CAPITAL NET OF OPERATING LIABILITIES 1,825,000,000 PROVISIONS FOR EMPLOYEE BENEFITS (41,000,000) PROVISIONS FOR RISKS AND CHARGES (225,200,000) PROVISION FOR LIABILITIES ON CONTESTED PREFERENTIAL AND PRE-DEDUCTION CLAIMS (23,700,000) ---------------- NET INVESTED CAPITAL EUR1,535,000,000 ================ Covered by: SHAREHOLDERS' EQUITY EUR1,826,600,000 Share capital 1,640,100,000 Reserve for contested liabilities and claims of late-filing creditors convertible exclusively into share capital 225,600,000 Other reserves (11,700,000) Retained earnings (Loss carryforward) (29,300,000) Profit (Loss) for the period 2,000,000 NET BORROWINGS (291,600,000) Loans payable to banks and other lenders 14,500,000 Other financial assets 5,100,000 Cash and cash equivalents (311,200,000) ---------------- TOTAL COVERAGE SOURCES EUR1,535,000,000 ================ Parmalat S.p.A. Reclassified Income Statement First half 2006 TOTAL NET REVENUES EUR519,500,000 Revenues from operations 504,500,000 Other revenues 15,000,000 OPERATING EXPENSES (487,000,000) Purchases, services and misc. costs (432,800,000) Labor costs (54,300,000) ---------------- Subtotal 32,500,000 Writedowns of receivables and other provisions (500,000) ---------------- EBITDA 32,000,000 Depreciation, amortization and writedowns of non-current assets (9,400,000) Other revenues and expenses: Legal fees for actions to void and actions for damages (25,300,000) Addition to provision for losses of investee companies (5,300,000) Miscellaneous revenues & expenses 900,000 ---------------- EBIT (7,200,000) Financial income 13,300,000 Financial expense (3,000,000) ---------------- PROFIT (LOSS) BEFORE TAXES AND THE RESULT FROM DISCONTINUING OPERATIONS 3,100,000 Income taxes (1,800,000) ---------------- NET PROFIT (LOSS) FROM CONTINUING OPERATIONS 1,300,000 Net profit (loss) from discontinuing operations 600,000 ---------------- NET PROFIT (LOSS) FOR THE PERIOD EUR2,000,000 ================ Parmalat S.p.A. Statement of Changes in Net Financial Position First half 2006 Net borrowings at beginning of period EUR324,500,000 Changes during the period: Cash flow from operating activities (53,700,000) Cash flow from investing activities 9,400,000 Cash flow from financing activities 13,600,000 Cash flow from discontinuing operations 2,800,000 Miscellaneous items (5,000,000) ---------------- Total changes during the period (32,900,000) ---------------- Net borrowings at end of period EUR291,600,000 ================ Parmalat Group Reclassified Consolidated Balance Sheet June 30, 2006 NON-CURRENT ASSETS EUR2,206,900,000 Intangibles 1,451,500,000 Property, plant and equipment 652,300,000 Non-current financial assets 70,200,000 Deferred-tax assets 32,900,000 AVAILABLE-FOR-SALE ASSETS, NET OF CORRESPONDING LIABILITIES 11,600,000 NET WORKING CAPITAL 492,200,000 Inventories 372,600,000 Trade receivables 509,100,000 Other current assets 337,900,000 Trade payables (494,300,000) Other current liabilities (233,100,000) ---------------- INVESTED CAPITAL NET OF OPERATING LIABILITIES 2,710,700,000 PROVISIONS FOR EMPLOYEE BENEFITS (111,300,000) PROVISIONS FOR RISKS AND CHARGES (398,200,000) PROVISION FOR LIABILITIES ON CONTESTED PREFERENTIAL AND PRE-DEDUCTION CLAIMS (23,700,000) ---------------- NET INVESTED CAPITAL EUR2,177,500,000 ================ Covered by: SHAREHOLDERS' EQUITY EUR1,866,000,000 Share capital 1,640,100,000 Reserve for contested liabilities and claims of late-filing creditors convertible exclusively into share capital 225,600,000 Other reserves (46,300,000) Retained earnings (Loss carryforward) (300,000) Profit (Loss) for the period 14,100,000 Minority interest 32,800,000 in shareholders' equity NET BORROWINGS 311,500,000 Loans payable to banks and other lenders 757,000,000 Loans payable to investee companies Other financial assets (7,000,000) Financial accrued income and prepaid expenses Cash and cash equivalents (443,800,000) ---------------- TOTAL COVERAGE SOURCES EUR2,177,500,000 ================ Parmalat Group Reclassified Consolidated Income Statement First half 2006 TOTAL NET REVENUES EUR1,982,000,000 Revenues from operations 1,967,200,000 Other revenues 14,800,000 OPERATING EXPENSES (1,819,200,000) Purchases, services and misc. costs (1,581,900,000) Labor costs (237,300,000) ---------------- Subtotal 162,800,000 Writedowns of receivables and other provisions (3,000,000) ---------------- EBITDA 159,800,000 Depreciation, amortization and writedowns of non-current assets (49,000,000) Other revenues and expenses: Legal fees for actions to void (25,300,000) and actions for damages Restructuring costs (7,200,000) Miscellaneous revenues & expenses (1,500,000) ---------------- EBIT 76,800,000 Financial income 16,700,000 Financial expense (54,300,000) Interest in profit (loss) of companies valued by the equity method ---------------- PROFIT (LOSS) BEFORE TAXES 40,500,000 Income taxes (24,100,000) ---------------- NET PROFIT (LOSS) FROM CONTINUING OPERATIONS 16,400,000 Net profit (loss) from discontinuing operations 600,000 ---------------- NET PROFIT (LOSS) FOR THE PERIOD EUR17,000,000 ================ Parmalat Group Statement of Changes in Net Financial Position First half 2006 Net borrowings at beginning of period EUR369,300,000 Changes during the period: Cash flow from operating activities 29,600,000) Cash flow from investing activities 83,100,000 Cash flow from discontinuing operations (139,700,000 Translation impact and miscellaneous items (30,800,000) ---------------- Total changes during the period (57,800,000) ---------------- Net borrowings at end of period EUR311,500,000 ================ Parmalat Group Breakdown of Net Financial Position June 30, 2006 Net borrowings Loans payable to banks and other lenders EUR757,000,000 Loans payable to investee companies 5,400,000 Other financial assets (7,000,000) Financial accrued income and prepaid expenses (100,000) Cash and cash equivalents (443,800,000) ---------------- Total EUR311,500,000 ================ Parmalat Group Reconciliation of Change in Net Indebtedness And Cash Flow Statement (EUR in Millions) Indebtedness Cash Net of Cash And Cash And Cash Equivalents equivalents Net amount ----------- ----------- ---------- Balance at beginning of period (502.7) 872.0 369.3 Cash flow from Operating activities 29.6 29.6 Cash flow from Investing activities 83.1 83.1 New borrowing (10.4) 10.4 Loan repayment 90.7 (90.7) Cash flow from discontinuing operations (139.7) (139.7) Translation impact and misc. items 8.4 (36.4) (30.8) Other changes (2.8) (2.8) ----------- ----------- ---------- Balance at end of period (443.8) 755.3 311.5 =========== =========== ========== About Parmalat Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. (Parmalat Bankruptcy News, Issue No. 78; Bankruptcy Creditors' Service, Inc., 215/945-7000, http://bankrupt.com/newsstand/) PARMALAT USA: Court Disallows Five Sun Co. and NYC Finance Claims ----------------------------------------------------------------- The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York disallowed Claim Nos. 1045 and 1046 filed by Sun Company, Inc. (R&M), and Claim Nos. 1047, 1048 and 1049 filed by the City of New York Department of Finance Bankruptcy & Assignment Unit as improperly. The Court's decision relates to the Troubled Company Reporter's report on Aug. 15, 2006 regarding objection of Parmalat USA Corporation, Milk Products of Alabama, LLC, and Farmland Dairies, LLC, together with the Farmland Dairies LLC Unsecured Creditors' Trust to five recently discovered proofs of claim filed with the Court's electronic claims filing system. Bankruptcy Services LLC, the Debtors' official claims agent, included the Electronically Filed Claims on the claims register and assigned the Claims with specific numbers: Assigned Claimant Claim No. Debtor Claim Amount -------- --------- ------ ------------ Sun Company, Inc. (R&M) 1045 & 1046 Farmland $6,127 City of New York 1047 Farmland 352,180 Dept. of Finance 1048 Sunnydale 1,170,121 1049 Parmalat USA 749,950 Sun Company asserted general unsecured claims for credit card debt against Farmland. The NYC Department Claims are priority tax claims against the U.S. Debtors for commercial rent tax and general corporation tax deficiencies. Since the Debtors have BSI as their claims and noticing agent, the Claimants should have not filed the Claims electronically, David M. LeMay, Esq., at Chadbourne & Parke LLP, in New York, argued. The Debtors believe that the NYC Department, as well as its related divisions, received actual notice of the bar date for filing claims. The Bar Date Notice provides specific instructions on how to file a claim against the Debtors in their Chapter 11 cases. Among others, the Court-approved Bar Date Notice provides that a proof of claim must be in writing and must be received by BSI on or before the Bar Date by overnight or hand delivery, or mailing of the original proof of claim to the U.S. Bankruptcy Court- Parmalat USA Claims Docketing Center. The Claims Docketing Center will not be required to accept proofs of claim sent by facsimile, telecopy or electronic mail transmission. Hence, the U.S. Debtors and the Farmland Trust asked the Court to disallow the Claims as being filed electronically. Mr. LeMay also argued that the U.S. Debtors did not have any potential liability in their books and records with respect to Sun Company. The Claimant was not included in the U.S. Debtors' schedules of assets and liabilities. The U.S. Debtors further contended that the Claims lack merit. With respect to the NYC Department Claims, Parmalat USA and Farmland included in their Schedules, contingent and unliquidated liabilities to the Department, Mr. LeMay said. According to Mr. LeMay, after Farmland learned of the NYC Claims, it contacted the NYC Department to gain a better understanding of the origin and basis of the Claims. The Department was, however, unable to provide any information other than that set forth in the Claims -- unsubstantiated amounts requesting priority payment for commercial rent tax and general corporation tax deficiencies. Had the U.S. Debtors and the Farmland Trust been aware of the Claims prior to the Claims Objection Deadline, they would have certainly filed objections seeking disallowance of the Claims, Mr. LeMay said. Absent an order expunging and disallowing the Claims, the Claims will be allowed and the NYC Department and Sun Company will be excepted from the Bar Date Notice and Order. The allowance of the Claims is severely prejudicial to the Debtors' entire claims process, as well as each claimant whose claims were previously expunged because of improper filing, Mr. LeMay maintained. About Parmalat Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. (Parmalat Bankruptcy News, Issue No. 78; Bankruptcy Creditors' Service, Inc., 215/945-7000, http://bankrupt.com/newsstand/) PARMALAT USA: Gets Court Okay to Object to Newly Discovered Claims ------------------------------------------------------------------ At the request of Parmalat USA Corporation, Milk Products of Alabama, LLC, and Farmland Dairies LLC, together with the Farmland Unsecured Creditors' Trust, the U.S. Bankruptcy Court for the Southern District of New York reconsidered its last order extending their Claim Objection Deadline, and, to the extent necessary, the Confirmation Order, to permit them to file objections to recently discovered claims. As reported in the Troubled Company Reporter on Aug. 15, 2006, the confirmed Plan of Reorganization of Farmland Dairies LLC, and Plans of Liquidation of Parmalat USA Corp. and Farmland Stremicks Sub, LLC -- formerly known as Milk Products of Alabama -- established the deadlines for the Debtors to object to claims: -- Aug. 11, 2005, for Farmland and MPA; and -- Sept. 23, 2005, for Parmalat USA. Through various extension requests, the Court extended the U.S. Debtors' Claim Objection Deadline to Dec. 16, 2005. Bankruptcy Services LLC, the Debtors' official claims agent, has informed the U.S. Debtors of its discovery of five proofs of claim filed electronically on the Court's electronic case filing system, David M. LeMay, Esq., at Chadbourne & Parke LLP, in New York, said. Two claims were filed by Sun Company, Inc., and the remaining three by the City of New York Department of Finance. The procedures and instructions for filing a proof of claim on ECF, which can be found at the Court's official Web site, provide very specific instructions when it is appropriate to file a claim electronically, Mr. LeMay told the Court. Pursuant to the Instructions, an attorney should not proceed with the filing of a claim on the ECF in certain situations, including on bankruptcy cases with claims agent, in which instance, the attorney should refer to the bar date notice or contact the claims agent. The U.S. Debtors believe that the Claimants of the Electronically Filed Claims received actual notice of the Bar Date. Mr. LeMay pointed out that the Bar Date Notice and the Bar Date Order unambiguously provide that all creditors must submit a proof of claim "in writing" so that any the claim is received on or before the Bar Date. "A plain reading of the Instructions and Bar Date Order clearly demonstrates that the Electronically Filed [Claims] must be disallowed and expunged," Mr. LeMay argued. Even if the Electronically Filed Claims were improperly filed and should be disallowed and expunged on that basis alone, the U.S. Debtors further contend that the Claims lack merit and assert liabilities that are absent from the Debtors' books and records. However, because no objection was filed to the Claims by the Claim Objection Deadline, the Claims are deemed allowed pursuant to Section 502(a) of the Bankruptcy Code. The U.S. Debtors believe that reconsideration is warranted under the circumstances. About Parmalat Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. (Parmalat Bankruptcy News, Issue No. 78; Bankruptcy Creditors' Service, Inc., 215/945-7000, http://bankrupt.com/newsstand/) PENN OCTANE: Has $3.4 Million Working Capital Deficit at June 30 ---------------------------------------------------------------- Penn Octane Corporation incurred a $353,817 net loss on $66.9 million of net revenues for the three months ended June 30, 2006, compared to a $2.2 million net loss on $52.2 million of revenues in 2005. At June 30, 2006, the Company's balance sheet showed $32,351,712 in total assets and $32,610,303 in total liabilities, resulting in a $78,591 stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $17.8 million in total current assets available to pay $21.2 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?11eb Going Concern Doubt As reported in the Troubled Company Reporter on May 4, 2006, Burton McCumber & Cortez, L.L.P., Brownsville, Texas, raised substantial doubt about Penn Octane's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. Burton McCumber pointed to the Company's insufficient cash flow to pay its obligations when due, inability to obtain additional financing because substantially all of the Company's assets are pledged or committed to be pledged as collateral on existing debt, existing credit facility may be insufficient to finance its liquefied petroleum gas and Fuel Sales Business, and working capital deficiency. About Penn Octane Headquartered in Palm Desert, California, Penn Octane Corporation (NASDAQ:POCC) -- http://www.pennoctane.com/-- formerly known as International Energy Development Corporation buys, transports and sells liquefied petroleum gas for distribution in northeast Mexico, and resells gasoline and diesel fuel. The Company has a long-term lease agreement for approximately 132 miles of pipeline, which connects ExxonMobil Corporation's King Ranch Gas Plant in Kleberg County, Texas and Duke Energy's La Gloria Gas Plant in Jim Wells County, Texas, to the Company's Brownsville Terminal Facility. PREDIWAVE CORP: Hires Sun & Company as Tax Accountant ----------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California gave PrediWave Corp. permission to employ Sun & Company Certified Public Accountants, Inc., as its tax accountant, nunc pro tunc to April 14, 2006. Sun & Company is expected to: a) prepare the Debtor's 2005 and 2006 federal and California income tax returns; b) compile the Debtor's financial statements and supporting ledgers; c) advise the Debtor in making necessary adjustments thereto in order to file accurate tax returns; and d) provide tax planning and consulting services to the Debtor on a variety of discrete tax matters. The firm previously billed the Debtor $10,000 for preparing the Debtor's 2004 tax returns which was paid in full. Wendy Sun, CPA, founder of the firm, will bill $190 per hour and her staff will bill between $130 $140 per hour. In addition, the firm will charge the Debtor for this engagement: i) $14,000 for work relating to the preparation of the Debtor's 2005 tax returns and the provision of tax consulting services for the 2005 tax year; and ii) $15,000 for work relating to the preparation of the Debtor's 2006 tax returns and provision of tax consulting services for the 2006 tax year. Ms. Sun assures the Court that her firm does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. Headquartered in Fremont, Calif., PrediWave Corporation -- http://www.prediwave.com/-- provides cable and satellite operators with end-to-end digital broadcast platforms, and offers products like Video On Demand, Digital Video Recording, interactive video shopping, and subscription services. The Debtor filed for chapter 11 protection on April 14, 2006 (Bankr. N.D. California Case No. 06-40547). Robert A. Klyman, Esq., at Latham & Watkins, LLP, and Jonathan S. Shenson, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP represent the Debtor in its restructuring efforts. John D. Fiero, Esq., at Pachulski, Stang, Ziehl, Young and Jones represents the Official Committee Of Unsecured Creditors. The Debtor's Schedules of Assets and Liabilities showed $145,282,246 in total assets and $773,033,371 in total liabilities. PREMIER ENTERTAINMENT: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Premier Entertainment Biloxi LLC dba Hard Rock Hotel & Casino Biloxi 777 Beach Boulevard Biloxi, MS 39530 Bankruptcy Case No.: 06-50975 Debtor-affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Premier Finance Biloxi Corporation 06-50976 Type of Business: The Debtors own and operate the Hard Rock Hotel & Casino Biloxi, a full service gaming and entertainment resort built on approximately 8.5 acres along the Mississippi Gulf Coast in Biloxi, Mississippi. See http://www.hardrockbiloxi.com/ Chapter 11 Petition Date: September 19, 2006 Court: Southern District of Mississippi (Gulfport Divisional Office) Judge: Edward Gaines Debtors' Counsel: Nicholas Van Wiser, Esq. Robert Alan Byrd, Esq. Byrd & Wiser 145 Main Street, P.O. Box 1939 Biloxi, MS 39533 Tel: (228) 432-8123 Fax: (228) 432-7029 Total Assets Total Debts ------------ ------------ Premier Entertainment $252,862,215 $226,069,921 Biloxi LLC Premier Finance Biloxi $0 $162,341,111 Corporation A. Premier Entertainment Biloxi LLC's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ International Gaming Technology Trade Debt $9,503,577 4028 Solutions Center Chicago, IL 60677-4000 c/o Linda Rocconi Tel: (775) 448-0115 Trade Debt $1,663,078 Hard Rock Caf, International Trade Debt $2,562,475 6100 Old Park Lane Orlando, FL 32835 c/o Michael Soll Tel: (407) 445-7625 BellSouth Communication Systems Trade Debt $498,647 P.O. Box 79045 Baltimore, MD 21279 c/o Bruce Cooper Tel: (251) 602-6372 Associated Food Equipment Trade Debt $355,728 10381 Express Drive P.O. Box 3344 Gulfport, MS 39505 c/o Paul Watts Tel: (228) 896-0043 Reigstad & Associates Trade Debt $339,544 1636 Popps Ferry Road, Suite 116 Biloxi, MS 39532 c/o Gordon Reigstad Tel: (228) 868-0771 AC Coin & Slot Service Co. Trade Debt $324,941 201 Decatur Avenue Pleasantville, NJ 08232 c/o Asley Jordan Tel: (228) 365-0186 Cintas Corporation Trade Debt $287,957 201 Evans Road, Suite 303 Harahan, LA 70123 c/o Andy Blair Tel: (713) 849-2990 Shuffle Master Inc. Trade Debt $274,312 1106 Palms Airport Drive Las Vegas, NV 89119 c/o Chris Harbinson Tel: (228) 388-3334 All Phase Electric Supply, Inc. Trade Debt $262,151 3420 25th Avenue Gulfport, MS 39501 c/o Sonny Watts Tel: (228) 864-7731 The People's Bank Bank Loan $247,619 Technomedia Solutions, LLC Trade Debt $228,929 Glory USA, Inc. Trade Debt $219,420 Young Electric Sign Company Trade Debt $212,595 Banc of America, N.A. Trade Debt $185,084 Duane Morris LLP Trade Debt $184,550 Rotolo Consultants, Inc. Trade Debt $182,308 Prime Technology Systems, Inc. Trade Debt $177,149 Commercial Millwork Specialists Trade Debt $166,860 Micros Systems, Inc. Trade Debt $163,198 B. Premier Finance Biloxi Corp.'s Largest Unsecured Creditor: Entity Claim Amount ------ ------------ U.S. Bank Trustee $162,341,111 60 Livingston Avenue St. Paul, MN 55107 PREMIUM PAPERS: U.S. Trustee Says Panel Composed of Six Creditors ----------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, disclosed the new composition of the Official Committee of Unsecured Creditors in Premium Papers Holdco, LLC, and its debtor- affiliates' chapter 11 cases after Danisco USA, Inc., resigned from the committee effective Aug. 18, 2006. The Committee, which had seven members, is now composed of six creditors: 1. International Paper Attn: John E. Valas 4049 Willow Lake Boulevard Memphis, TN 38118 Tel: (901) 419-1296 Fax: 901-419-1236 2. Boise White Paper LLC Attn: Steven R. Grant 1111 Jefferson Street Boise, ID 83728 Tel: (208) 384-6642 Fax: 208-395-7363 3. CenterPoint Energy Services Attn: Robert W. Claude 111 Louisiana Street Houston, TX 77002 Tel: (713) 207-5603 Fax: (412) 562-2429 4. United Steelworkers Attn: David R. Jury Five Gateway Center, Room 807 Pittsburgh, PA 15222 Tel: (412) 562-2545 Fax: (412) 562-2429 5. Northern States Power Company Attn: Peter M. Glass 800 Wicholett Mall, Suite 2900 Minneapolis, MN 55402 Tel: (800) 328-8226 Fax: (612) 215-4544 6. Johnson Timber Company Attn: William B. Johnson 9676 North Kruger Road Hayward, WI 54843 Tel: (715) 634-3065 Fax: 715-634-5755 Headquartered in Hamilton, Ohio, Premium Papers Holdco, LLC -- http://www.smartpapers.com/-- is an independent manufacturer and marketer of a wide variety of premium coated and uncoated printing papers, such as Kromekote, Knightkote, and Carnival. The Company and its debtor-affiliates, SMART Papers LLC and PF Papers LLC, filed for chapter 11 protection on March 21, 2006 (Bankr. D. Del. Case No. 06-10269). Ian S. Fredericks, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors. Mary E. Seymour, Esq., at Lowenstein Sandler PC, represents the Official Committee of Unsecured Creditors. Traxi LLC serves as the Debtors' financial advisor. When the Debtors filed for protection from their creditors, they listed unknown estimated assets and $10 million to $50 million estimated debts. The Debtors have until Nov. 16, 2006, to exclusively file a chapter 11 plan and until Jan. 15, 2007, to exclusively solicit acceptances of that plan. PROCARE AUTOMOTIVE: Hires Barnes Wendling as Auditor & Tax Advisor ------------------------------------------------------------------ The Honorable Pat E. Morgenstern-Clarren of the U.S. Bankruptcy Court Northern District of Ohio in Cleveland authorized ProCare Automotive Service Solutions LLC to employ Barnes Wendling CPAs, Inc., as its auditor and tax consultant. Since substantially all of its assets have been sold, the Debtor is now in the process of winding down its estate. Thus, the Debtor has taken steps to terminate the ProCare Automotive Service Solutions LLC 401(k) and Profit Sharing Plan. The Debtor said year-end audits for 2005 and the partial year of 2006 need to be performed in order to ensure that the 401(k) Plan has been properly administered. Aside from auditing the 401(k) Plan, Barnes Wendling will also prepare federal, state, and local income tax returns for the Debtor's multiple stores locations. Barnes Wendling will also prepare personal property, workers' compensation, and sales and use tax returns. Thomas J. Wrabel, an employee at Barnes Wendling, disclosed the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Tax Director/Senior Managers $165 Supervisors $125 Senior Consultants $85 Senior and Staff Accountants $65 - 75 Mr. Wrabel assured the Court that the Firm has not represented any interest materially adverse to the Debtor and is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Based in Independence, Ohio, ProCare Automotive Service Solutions, LLC -- http://www.procareauto.com/-- offered maintenance and repair services to all makes and models of foreign, domestic, light truck, and commercial-fleet vehicles. ProCare operated 82 retail locations in eight metropolitan areas throughout three states. The Debtor filed for chapter 11 protection on March 5, 2006 (Bankr. N.D. Ohio Case No. 06-10605). Alan R. Lepene, Esq., Jeremy M. Campana, Esq., and Sean A. Gordon, Esq., at Thompson Hine LLP, represent the Debtor. Scott N. Opincar, Esq., at McDonald Hopkins Co., LPA, represents the Official Committee of Unsecured Creditors. Joseph M. Geraghty at Conway MacKenzie & Dunleavy gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. REFCO INC: Ad Hoc Equity Panel Balks at Exclusive Period Extension ------------------------------------------------------------------ Refco Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to extend, for an additional 95 days, the periods for them to: -- exclusively file a Chapter 11 plan through and including December 5, 2006; and -- solicit acceptances of that plan until February 3, 2007, without prejudice to the Debtors' right to seek further extensions of the Exclusive Periods, the Troubled Company Reporter reported on Sept 8, 2006. Ad Hoc Equity Panel Objects The Ad Hoc Committee of Equity Security Holders of Refco, Inc., wants any request for extension of exclusivity as to Refco, Inc., and New Refco Group Ltd., LLC, denied because the Debtors have failed to meet their burden to demonstrate cause for an exclusivity extension for those two entities. Extending exclusivity will hold parent equity hostage to a process that seems geared at forcing Refco and New Refco to surrender to the global plan apparently being negotiated without any input from the Ad Hoc Equity Committee, Paul N. Silverstein, Esq., at Andrews Kurth, LLP, in New York, explains. Mr. Silverstein relates that the Debtors have refused to include the Ad Hoc Equity Committee in ongoing plan negotiations, despite the fact that the Ad Hoc Equity Committee represents legitimate stakeholders of Refco and New Refco, and constitutes the only group at those levels not hopelessly conflicted. "Rather than extending exclusivity, cause exists to reduce the exclusive periods so that parent equity may propose a Chapter 11 plan that would appoint a much-needed sole fiduciary for Refco and New Refco," Mr. Silverstein contends. The Ad Hoc Equity Committee has repeatedly asked the Debtors for their analysis of claims filed against Refco and New Refco, Mr. Silverstein tells Judge Drain. To date, the Debtors have provided only summaries of claims registers, with no analysis. The registers, Mr. Silverstein points out, demonstrate a filing frenzy by lower level creditors who have improperly filed over $5,000,000,000 worth of false and duplicative claims against Refco and New Refco, entities that each owe creditors no more than $16,000,000 according to the Debtors' amended -- and presumably studied and verified -- schedules and the master intercompany proof of claim. The Ad Hoc Equity Committee suspects that a plan is being formulated that will withdraw the disputed, duplicative claims at the lower levels, where the debt -- represented by the creditor's committee -- exists, to allow a speedy distribution at that level. "These are not fiduciaries to Refco and New Refco at work here," Mr. Silverstein says. The Ad Hoc Equity Committee consists of JMB Capital Partners, LP; Lonestar Capital Management, LLC; Mason Capital Management; Smith Management LLC; and Triage Management LLC. * * * The Court adjourns the hearing to consider the Debtors' request until October 5, 2006, at 10:00 a.m. In the interim, the Debtors' exclusive period to file a reorganization plan is extended until the Court rules on the Extension Motion. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Has Until December 12 to Remove State Court Actions -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extend, until Dec. 12, 2006, the period within which Refco Inc., and its debtor-affiliates may file notices of removal with respect to actions, pursuant to Bankruptcy Rule 9006(b). As reported in the Troubled Company Reporter on Sept. 8, 2006, the Debtors told the Court that when they filed for bankruptcy, they were plaintiffs in 37 actions and proceedings in a variety of state and federal courts throughout the country. Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, related that neither the Debtors nor Refco Capital Markets, Ltd., has reviewed all the Actions to determine whether any of those should be removed under Rule 9027(a)(2) of the Federal Rules of Bankruptcy Procedure because the Debtors have continued to focus primarily on winding down their businesses and formulating a global resolution of their cases. Ms. Henry asserted that the extension of the Removal Period will afford the Debtors sufficient opportunity to assess whether the Actions can and should be removed, hence, protecting their valuable right to adjudicate lawsuits under Section 1452 of the Judiciary and Judicial Procedure Code. Until the Debtors have had a sufficient time to develop a consensual plan of reorganization in their cases, it would be premature to allow the Removal Period to lapse, as the plan formation process may well impact the Debtors' decisions regarding the removal of the Actions, Ms. Henry insists. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) REMOTEMDX INC: Posts $11.6 Mil. Net Loss in Third Fiscal Quarter ---------------------------------------------------------------- RemoteMDx, Inc., filed its financial statements for the third fiscal quarter ended June 30, 2006, with the Securities and Exchange Commission. For the third fiscal quarter ended June 30, 2006, the Company's net loss attributable to common stockholders was $11,688,061 compared with $4,089,539 net loss for the same period in 2005. At June 30, 2006, the Company's balance sheet showed $3,384,437 in total assets, $3,792,450 in total current liabilities, and $2,990,000 in total preferred stock, resulting in a $3,398,013 stockholders' deficit. Promissory Note to Citizen's National Bank The Company signed July 5, 2006, a Promissory Note to Citizen's National Bank with a principal amount of $4 million that can be expanded up to $10 million under certain terms and conditions. The Company must pay all outstanding principal and interest on the Note in one payment on June 30, 2007. The Note: -- accrues interest at the Prime Rate as published in the Wall Street Journal (8% per annum as of the date of the Note); -- is payable on June 30, 2007, including principal and interest; -- may be prepaid in full at any time without penalty, except that Citizen's is entitled to a minimum interest charge of $100; -- will be secured by an Unconditional Irrevocable Letter of Credit to be issued to Citizen's on behalf of the Company by United States Trust Company, N.A., in the amount of $4 million. -- is secured by all of the assets of the Company. SecureAlert, Inc., a subsidiary also granted to Citizen's a security interest in all of its assets, excluding TrackerPAL products, which secures all advances made by Citizen's to the Company. Under the revolving line of credit arrangement, Citizen's has agreed to lend up to an additional $6 million, provided that, among other things, such loans are secured by additional letters of credit in the amount of such loans. As of Aug 9, 2006, the outstanding balance of the line of credit was approximately $1,900,000. Full-text copies of the third fiscal quarter financials are available for free at http://ResearchArchives.com/t/s?11fb Going Concern Doubt Hansen, Barnett & Maxwell in Salt Lake City, Utah, raised substantial doubt about RemoteMDx, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the fiscal year ended Sept. 30, 2005. The auditor pointed to the Company's recurring operating losses, negative working capital and accumulated deficiencies. About RemoteMDx RemoteMDx, Inc., sells patented wireless location technologies and related monitoring services. The Company also develops and sells personal security, senior supervision, and health monitoring devices and monitoring services. The RemoteMDx products and monitoring services feature wireless products that utilize GPS and cellular technologies in conjunction with a monitoring center. These devices include a mobile emergency response device, MobilePAL(TM), which can locate persons in distress, no matter where they may be, and dispatch the closest emergency service to their location. The Company has recently developed a tracking device, TrackerPAL, that will be used to monitor convicted offenders in the criminal justice system. RUSSELL CONINE: Case Summary & Three Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Russell Earl Conine 697 Tynsdale Drive Douglasville, GA 30134 Bankruptcy Case No.: 06-70611 Chapter 11 Petition Date: September 1, 2006 Court: Northern District of Georgia (Atlanta) Judge: Margaret Murphy Debtor's Counsel: Paul Reece Marr, Esq. Paul Reece Marr, P.C. 300 Galleria Parkway, Northwest, Suite 960 Atlanta, GA 30339 Tel: (770) 984-2255 Fax: (770) 984-0044 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hometown Bank of Villa Rica Unsecured Loan $37,545 Jamie Thomason - Lending 5875 Wendy Bagwell Hiram, GA 30141-2824 Chrysler Financial 2004 Dodge RAM $21,137 P.O. Box 9223 Secured: Farmington, MI 48333-9223 $20,000 Pawnee Leasing Corp. Personal Guaranty Unknown 700 Centre Drive Fort Collins, CO 80526 SANMINA-SCI: S&P Holds BB- Corporate Credit Rating on Neg. Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services' 'BB-' corporate credit and other ratings on San Jose, California-based Sanmina-SCI Corp. remained on CreditWatch with negative implications, where they were placed on Aug. 14, 2006, following the receipt of various consents from most of its bondholders and other creditors. Amended cure periods or waivers for filing financial statements expire between Oct. 10 and Dec. 14, 2006. "Based on the company's liquidity and overall financial profile, ratings are not affected at this time by cure periods that expire in October for some of its credit facilities," said Standard & Poor's credit analyst Lucy Patricola. The ratings could be lowered to the 'CCC' category if financial statements are not filed and credit facilities with cure periods that expire in October are not refinanced or further extended, reflecting heightened concerns of debt acceleration. Ratings could also be lowered if statements are not filed by the conclusion of the December cure period. Standard & Poor's will continue to monitor the stock option review to assess whether any potential material restatements, further investigation, or additional involvement of the SEC or other judicial authorities has an impact on the rating. SATELITES MEXICANOS: Judge Drain Approves Compensation System ------------------------------------------------------------- The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York, approved the request by Satelites Mexicanos, S.A. de C.V., to establish uniform procedures for the payment and reimbursement of various court-approved professionals' fees and expenses. Judge Drain 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 the Debtor'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. The Debtor's request was pursuant to Sections 105(a) and 331 of the Bankruptcy Code and Rule 2014 of the Federal Rules of Bankruptcy Procedure. In conformity with the standing General Order of the Bankruptcy Court for the Southern District of New York establishing procedures for monthly compensation and reimbursement of expenses of professionals: (a) Each Professional seeking compensation will serve a monthly statement, on or before the 20th day of each month following the month for which payment is sought, on: -- the Debtor and its counsel, Milbank, Tweed, Hadley & McCloy LLP; -- Wilmer Cutler Pickering Hale and Dorr LLP, counsel for the Ad Hoc Senior Secured Noteholders' Committee; -- Akin Gump Strauss Hauer & Feld LLP, counsel for the Ad Hoc Existing Bondholders' Committee; -- Weil, Gotshal & Manges LLP, counsel for the Loral entities; and -- the Office of the United States Trustee. (b) The Monthly Statement does not need to be filed with the Court and a copy does not have to be delivered to the presiding bankruptcy judge's chambers. (c) Monthly Statements must contain a list of the individuals who provided services during the statement period, their billing rates, the aggregate hours spent, a reasonably detailed breakdown of the disbursements incurred, and contemporaneously maintained time entries. (d) The parties receiving Monthly Statements -- the Notice Parties -- will have 15 days to review a statement. If a Party objects to the payment or reimbursement, it must, by no later than 35 days after the end of the month for which compensation is sought, serve a written notice of objection explaining the nature of the objection, upon: -- the Professional whose statement is objected to; and -- the Notice Parties. (e) At the expiration of the 35-day period, and in the absence of objections, the Debtor will promptly pay 80% of the fees and 100% of the expenses in each Monthly Statement. (f) If the Debtor receives an objection to a fee statement, it will withhold payment on that objected portion of the fee statement and promptly pay the remainder of the fees and disbursements. (g) If the parties to an objection are able to resolve their dispute, then the Debtor will promptly pay that portion of the fee statement, which is no longer subject to an objection. (h) All unresolved objections will be preserved and presented to the Court at the next interim or final fee application hearing. (i) An objection will not prejudice the objecting party's right to object to any fee application made to the Court in accordance with the Bankruptcy Code on any ground. (j) Every 90 days, but no less frequently than every 120 days, each of the Professionals will serve and file an application for interim or final Court approval and allowance of the fees and reimbursement of expenses requested. In the event a plan of reorganization becomes effective before the expiration of the 90-day period, the period may be shortened on notice by the Debtor to the Professionals. (k) Any Professional who fails to file an application seeking approval of fees and expenses previously paid when due: * will be ineligible to receive further monthly payments of fees until further Court order; and * may be required to disgorge any fees paid since the retention or the last fee application, whichever is later. (l) The pendency of an application or a Court order that payment of fees or reimbursement of expenses was improper as to a particular statement will not disqualify a Professional from the future payment of fees or reimbursement of expenses. (m) Neither the payment of, nor the failure to pay, monthly compensation and reimbursement will have any effect on the Court's interim or final allowance of compensation and reimbursement of any Professional. (n) The attorneys for any statutory committee appointed in the Debtor's case may collect and submit statements of expenses, with supporting vouchers, from members of the committee that the attorney represents. However, the reimbursement requests must comply with the Court's Administrative Orders dated June 24, 1991, and April 21, 1995. The procedures further establishes that: -- Professionals seek, in their first interim fee request, payment of fees 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; and -- the first 90-day fee application period conclude on Nov. 20, 2006, provided that if a Plan becomes effective prior to that date, each professional retained in the case will have the time to file a final application for compensation and reimbursement of expenses. The proposed procedures will enable the Debtor to closely monitor the costs of administration, forecast level cash flows, and implement efficient cash management procedures. Moreover, the procedures will allow the Court and key parties-in- interest to ensure the reasonableness and necessity of the compensation and reimbursement sought. 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 protection 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). SFG LP: Taps Brown McCarroll as Bankruptcy Counsel --------------------------------------------------- SFG, L.P., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Western District of Texas for permission to employ Brown McCarroll, L.L.P., as their bankruptcy counsel. The Debtors tell the Court that Brown McCarroll will represent them in their chapter 11 cases and in other matters related to the adjustment of their relationship with creditors, vendors, and other parties-in-interest. The Debtors disclose that Patricia B. Tomasco, Esq., a partner at Brown McCarroll, will be the lead attorney and bills $395 per hour. Other attorneys at the firm bill between $195 to $395 per hour while legal assistants bill $85 to $110 per hour. The Debtors further disclose that it has paid the firm a $50,000 retainer. Ms. Tomasco assures the Court that her firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Ms. Tomasco can be reached at: Patricia B. Tomasco, Esq. Brown McCarroll, L.L.P. 111 Congress Avenue, Suite 1400 Austin, Texas 78701-4093 Tel: (512) 472-5456 Fax: (512) 479-1101 http://www.brownmccarroll.com/ SFG, LP -- http://sandiafood.com/-- operates as a franchisee and operator of "Johnny Carino's" restaurants in Texas, New Mexico and Arizona. The Company filed for chapter 11 protection on Aug. 4, 2006 (Bankr. W.D. Tex. Case No. 06-11207). When the Debtor filed for protection from its creditors, it estimated its assets and debts between $10 million and $50 million. Sandia Food Group, Inc., its general partner, filed for chapter 11 protection on Aug. 7, 2006 (Bankr. W.D. Tex. Case No. 06-11212). On Aug. 8, 2006, three more affiliates filed chapter 11 petitions in the same Court. SITHE/INDEPENDENCE: Dynegy Action Prompts S&P's Developing Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' rating on Sithe/Independence Funding Corp.'s $559.5 million senior secured bonds (approximately $465 million outstanding) on CreditWatch with developing implications. The rating action follows Standard & Poor's CreditWatch listing for its ratings on Dynegy Inc. and Dynegy Holdings Inc. with developing implications on Sept. 18, 2006. The CreditWatch placement came after Dynegy's announcement that it will acquire the assets of LS Power Group, a privately held power plant investor, developer, and manager and acquire a 50% interest in a project development joint venture with LS Power. If the transaction is consummated as currently expected, Standard & Poor's expects to affirm all its ratings on Dynegy, Dynegy Holdings, and Sithe/Independence. "The rating on Sithe/Independence's bonds reflects Dynegy's credit risk due to its 100% ownership of the project and the tolling agreements it has for almost the entire output of the project," said Standard & Poor's credit analyst Elif Acar. Sithe/Independence is a 1,000 MW combined-cycle, gas-turbine plant in Scriba, New York. The project is 100% owned by Sithe Energies Inc. through direct and indirect ownership of Sithe Energies' affiliates. Dynegy, in turn, owns 100% of Sithe Energies. STATMON TECH: June 30 Balance Sheet Upside-Down by $5.1 Million --------------------------------------------------------------- Statmon Technologies Corp. filed its quarterly financial statements for the three months ended June 30, 2006, with the Securities and Exchange Commission. The Company reported a $981,194 net loss on $252,733 of revenues for the three months ended June 30, 2006. At June 30, 2006, the Company's balance sheet showed $409,737 in total assets and $5,576,073 in total liabilities resulting in a $5,166,336 stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $320,460 in total current assets available to pay $5,576,073 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?11e1 Going Concern Doubt Marcum & Kliegman LLP in Manhattan raised substantial doubt about Statmon Technologies Corp.'s ability to continue as a going- concern after auditing the financial statements for the year ended Mar. 31, 2006. Marcum & Kliegman pointed to the company's incurred net losses of $3,038,001 and $3,062,397 during the years ended March 31, 2006 and 2005, respectively. About Statmon Tech Statmon Technologies Corp. develops, markets and licenses a remote control, monitoring and facilities management platform designed for universal application across vertical markets. TAG-IT PACIFIC: Earns $654,642 in Second Quarter Ended June 30 -------------------------------------------------------------- Tag-It Pacific, Inc., filed its second quarter financial statements for the three months ended June 30, 2006, with the Securities and Exchange Commission. For the second quarter ended June 30, 2006, the Company reported net income of $654,642 on $14,246,087 of net sales compared with a $12,476,638 net loss on $15,639,646 of net sales for the same period in 2005. At June 30, 2006, the Company's balance sheet showed $29,930,927 in total assets, $28,858,231 in total liabilities, and $1,072,696 in total stockholders' equity. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?120a Going Concern Doubt As reported in the Troubled Company Reporter on June 7, 2006, Singer Lewak Greenbaum & Goldstein, LLP, in Los Angeles, Calif., raised substantial doubt about Tag-It Pacific, 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 incurred net lossesand accumulated deficiencies. About Tag-It Pacific Tag-It Pacific, Inc., distributes apparel items to fashion manufacturers United States, Asia, Mexico, the Dominican Republic, and Central and South America. Also it offers formed wire metal zippers for the jeans and sportswear industries. TAHITI RV: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Tahiti RV LLC 4730 Boulder Highway Las Vegas, NV 89121 Bankruptcy Case No.: 06-12572 Type of Business: The Debtor sells recreational vehicles. Chapter 11 Petition Date: September 19, 2006 Court: District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Ambrish S. Sidhu, Esq. Larson & Stephens 810 S. Casino Center Blvd., Suite 104 Las Vegas, NV 89101 Tel: (702) 382-1170 Fax: (702) 382-1169 Total Assets: $407,986 Total Debts: $2,012,912 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ John Mathiasen $150,000 253 Grand Olympia Henderson, NV 89012 NV Department of Taxation Business Expenses $10,177 c/o Bankruptcy Dept. Managing Agent Kurt Luthy Brokerage Agreement $10,000 Camper Dreams LLC 4730 Boulder Highway Las Vegas, NV 89121 Kurt Luthy Sublease Agreement $8,000 Camper Dreams LLC 4730 Boulder Highway Las Vegas, NV 89121 Terry Wolfe Salary/Commission $5,670 Attn: Bankruptcy Dept. Managing Agent 4730 Boulder Highway Las Vegas, NV 89121 Capital One Business Expenses $2,817 c/o Bankruptcy Dept. Managing Agent P.O. Box 60024 City Of Industry, CA 91716 Monaco Coach Corp. Business Expenses $2,293 c/o Bankruptcy Dept. Managing Agent P.O. Box 4067 Portland, OR 97208 Michale Schiltknect Salary/Commission $2,143 Attn: Bankruptcy Dept. Managing Agent 4730 Boulder Highway Las Vegas, NV 89121 Kenneth Whipple Salary/Commission $2,308 Attn: Bankruptcy Dept. Managing Agent 7849 Bermuda Dunes Ave. Las Vegas, NV 89113 Michale Johnson, Jr. Salary/Commission $1,206 Attn: Bankruptcy Dept. Managing Agent 6300 West Tropicana #260 Las Vegas, NV 89103 Clear Channel Outdoor Business Expenses $1,117 c/o Bankruptcy Dept. Managing Agent P.O. Box 60000 San Francisco, CA 94160 Cynthia G. Berger Salary/Commission $1,095 Attn: Bankruptcy Dept. Managing Agent 212 Tighe Way Las Vegas, NV 89145 Janice M. Wolfe Salary/Commission $894 Attn: Bankruptcy Dept. Managing Agent 4730 Boulder Highway Las Vegas, NV 89121 Ronald Gatlin Salary/Commission $877 Attn: Bankruptcy Dept. Managing Agent 2855 N. Walnut Las Vegas, NV 89115 Woodall's Business Expenses $776 c/o Bankruptcy Dept. Managing Agent 2575 Vista Del Mar Ventura, CA 93001 Tyrone Burt Salary/Commission $735 Attn: Bankruptcy Dept. Managing Agent 1815 Cartier North Las Vegas, NV 89032 Sid Easterling Business Expenses $598 c/o Bankruptcy Dept. Managing Agent Sid Easterling Steve Takahashi Salary/Commission $412 Attn: Bankruptcy Dept. Managing Agent 6304 Tanzanite Las Vegas, NV 89130 John R. Piper Salary/Commission $412 Attn: Bankruptcy Dept. Managing Agent 3850 S. Mountain Vista St. #212 Las Vegas, NV 89121 Phillips66-Conoco-76 Business Expenses $237 c/o Bankruptcy Dept. Managing Agent TELECONNECT INC: Has $5.7 Million Stockholders' Deficit at June 30 ------------------------------------------------------------------ At June 30, 2006, Teleconnect Inc. reported total stockholders' deficit of $5,744,000 from total assets of $1,112,000 and total liabilities of $6,856,000. The Company also reported at June 30, 2006, negative working capital with $556,000 in total current assets and $6,856,000 in total current liabilities. For three months ended June 30, 2006, the Company's net loss narrowed to $227,000 compared to net loss of $379,000 in the For three months ended June 30, 2005, while revenues for the quarter rose to $1,236,000 from revenues of $1,178,000 in the same period last year. Full text copies of the Company's financial statements for the quarter ended June 30, 2006 are available for free at: http://researcharchives.com/t/s?11ea Teleconnect Inc. fka ITS Networks Inc. provides telecommunication services for home and business use including prepaid calling cards, and postpaid and prepaid local and long distance calling. THAXTON GROUP: U.S. Trustee Amends Creditors Committee Membership ----------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, appointed a new member to the Official Committee of Unsecured Creditors in The Thaxton Group, Inc., and its debtor-affiliates' chapter 11 cases: The new member of the Creditors Committee is: 1. Gerald A. Fornes 133 Highland Hollow Drive Pataskala, OH Tel: 614-418-4689, Fax: 614-635-1317 The other members are: 2. Laverne McKenzie 510 Saddle Drive, Camden, SC 29020 Tel: 803-286-5055, Fax: 803-286-7824; 3. Voyager Life Insurance Company Attn: Adam David Lamnin, CPA 11222 Quail Roost Drive, Miami, FL 33157 Tel: 305-256-7147, Fax: 305-278-5621; 4. The Bank of New York Attn: Gerard F. Facendola, Vice President 101 Barclay Street, 8W, New York, NY 10286 Phone: 212-815-5440, Fax: 212-815-5131; 5. David Allen Osteen, Sr. 1572 Ross Road, Elgin, SC 29045 Phone: 803-338-0147, Fax: 803-408-3960; 6. Garry D. Smith 6016 Highview Rd, Matthews, NC 28104 Phone: 704-814-0402, Fax: 704-814-0208; and 7. Claudine Lowrance Pate Attn: Jack L. Pate 4100 Peggy Lane, Charlotte, NC 28227 Phone: 704-545-9554 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. About Thaxton Headquartered in Lancaster, South Carolina, The Thaxton Group, Inc., is a diversified consumer financial services company. The Company filed for Chapter 11 protection on October 17, 2003 (Bankr. Del. Case No. 03-13183). Daniel B. Butz, Esq., Michael G. Busenkell, Esq., and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors in their restructuring efforts. Alan Kolod, Esq., at Moses & Singer LLP, represents the Offical Committee of Unsecured Creditors. As of Dec. 31, 2005, the Debtors reported assets totaling $98,889,297 and debts totaling $175,693,613. TITAN FINANCIAL: U.S. Trustee Appoints Three-Member Committee ------------------------------------------------------------- The U.S. Trustee for Region 21 appointed three creditors to serve on an Official Committee of Unsecured Creditors in Titan Financial Group II, LLC, and its debtor-affiliates chapter 11 cases: 1. Brad Bylenga 9 Longview Terrace Greenville, South Carolina 29605 Tel: (864) 423-0586 Fax: (864) 672-2787 2. Life of the South Corporation 100 West Bay Street Jacksonville, Florida 32202 Attn.: W. Dale Bullard, Exec. V. P. Tel: (904) 350-9660 Fax: (904) 354-4525 3. Lyndon Financial Corporation 14755 North Outer Forty Drive, Suite 400 St. Louis, Missouri 63017 Attn.: Gregg O. Cariolano, CFO Tel: (636) 536-5689 Fax: (636) 536-5605 The Committee has selected Kilpatrick Stockton LLP to represent it in the Debtors' bankruptcy proceedings. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Headquartered in Atlanta, Georgia, Titan Financial Group II, LLC, provides standard installment loans and serves approximately 80,000 customers through its 125 retail branches across Georgia, South Carolina and Texas. The Company and 11 of its affiliates filed for chapter 11 protection on Sept. 3, 2006 (Bankr. N.D. Ga. Case No. 06-70852). Amy Edgy Ferber, Esq., Paul K. Ferdinands, Esq., and Sarah R. Borders, Esq., at King & Spalding, LLP, represent the Debtors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. TYSON FOODS: Moody's Rates $1 Billion Senior Facility at Ba1 ------------------------------------------------------------ Moody's Investors Service took a number of rating actions in relation to Tyson: -- assigned a Ba1 rating to Tyson Foods, Inc.'s $1 billion senior unsecured bank credit facility and to a $345 million senior unsecured bank term loan for Tyson's Lakeside Farms Industries Ltd. subsidiary, under a full Tyson Foods, Inc. guarantee; -- affirmed Tyson's Ba1 corporate family rating, its Not Prime short term rating and its SGL-3 speculative grade liquidity rating; and, -- applied Moody's new Probability of Default and Loss Given Default rating methodology to all of the company's long term ratings. The outlook on all long term ratings continues to be negative. These are the new ratings assigned: * Tyson Foods, Inc. -- $1 billion senior unsecured revolving credit facility at Ba1 (LGD 3, 44%) -- Probability of default rating at Ba1 * Lakeside Farms Industries Ltd. -- $345 million senior unsecured term loan (originally $353 million) at Ba1 based on full Tyson Foods, Inc. and Tyson Fresh Meats, Inc. guarantees (LGD 3, 44%) Ratings Upgraded: * Tyson Foods, Inc. -- Senior secured industrial revenue bonds to Baa2 from Ba1 based on full Tyson Foods, Inc. guarantee (LGD 2, 14%) -- Tyson Fresh Meats, Inc. -- Senior secured industrial revenue bonds to Baa2 from Ba1 based on full Tyson Fresh Meats, Inc. guarantee (LGD 2, 14%) Ratings Affirmed: * Tyson Foods, Inc. -- Corporate family rating at Ba1 -- $1 billion 6.60% senior unsecured notes due 2016 at Ba1 (LGD 3, 44%) -- Short term rating at Not Prime -- Speculative grade liquidity assessment at SGL-3 * Tyson Fresh Meats, Inc. -- Senior unsecured debt at Ba1 based on the full guarantee of Tyson Foods, Inc. (LGD 3, 44%) Ratings Downgraded * Tyson Foods, Inc. -- Senior unsecured debt with no guarantees to Ba2 from Ba1 (LGD 5, 88%) -- Senior unsecured shelf registration with no guarantees to Ba2 from Ba1 (LGD 5, 88%) The affirmation of Tyson's Ba1 corporate family rating reflects the fact that several elements of Tyson's overall business profile are very strong -- such as its size, scale and diversification -- and consistent with a mid-investment grade rating. However, these elements are more than offset by the severe volatility of the company's earnings and cash flow and its weak debt protection measures, which score well below investment grade. Moody's also continues to have concerns regarding some elements of Tyson's corporate governance, and shade its ratings as a result. Together these factors bring the corporate family rating down to the Ba1 level. Moody's has applied its new Probability-of-Default and Loss-Given- Default rating methodology to Tyson and its subsidiaries. Moody's current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology disaggregates these two key assessments in long-term ratings. The LGD rating methodology also enhances the consistency in Moody's notching practices across industries and improves the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. These ratings express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% - 9%) to LGD6 (loss anticipated to be 90% - 100%). The assignment of Ba1 ratings to Tyson's various bank facilities, as well as the rating actions taken in relation to its various debt securities, reflects -- with one exception noted below -- Moody's new methodology for assigning ratings to individual securities and bank facilities rather than a change in the characteristics of any debt security or bank facility or in the company's fundamental credit profile. Moody's notes, however, that the higher rating on Tyson's 6.60% senior unsecured bonds reflects the benefits that these bonds receive from a recently established upstream guarantee from Tyson Fresh Meats which some other Tyson Foods, Inc. debt does not have. Tyson's SGL-3 speculative grade liquidity rating (adequate liquidity) reflects concerns over the company's financial flexibility given continuing weakness in global protein markets. Tyson received covenant relief from its banks in March, April, and then again in July 2006. Tyson's ratings could come under downward pressure if earnings and cash flow remain weak -- conceivably due to a prolonged continuation of the downturn in the beef processing industry - or its liquidity becomes constrained. Tyson's ratings could be downgraded if it is unable to improve its debt protection measures such that LTM Debt/EBITDA remains higher than 4 times at 9/30/07, and LTM EBIT/Interest remains below 2 times at 9/30/07. Given the recent downgrade, we do not expect an upgrade in Tyson's ratings in the near term. Tyson's rating outlook could stabilize if operating performance and returns on invested capital improve, and it is able to generate more stable and consistent earnings and cash flow. A stabilized rating outlook would also require Tyson to be able to boost earnings and/or reduce debt such that LTM Debt/EBITDA falls below 3.5 times, and LTM EBIT/interest rises above 2.5 times. With sales over $26 billion, Tyson Foods is the world's largest protein processor with operations in beef, chicken, and pork processing, as well as branded packaged food manufacturing. VESTA INSURANCE: Court Defers Consideration on Claims Transfer -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Alabama deferred consideration of J. Gordon Gaines Inc.'s request to transfer Claims Accounts to the Texas Commissioner upon the presentation of additional information. As reported in the Troubled Company Reporter on Aug. 28, 2006, the Debtor asked the Court for authority to transfer claims accounts to the Texas Commissioner of Insurance and authorize the Texas Commissioner to continue to use the claims accounts for a reasonable period of time pending the transfer for purpose of processing the payment of insurance claims, which have been submitted and approved for payment prior to the Debtor's bankruptcy filing. Before Gaines Inc. filed for bankruptcy, as part of the administrative services the Debtor provides to Vesta Insurance Group, the Debtor maintained accounts into which funds were deposited for the payment of insurance claims approved for payment by the insurance subsidiaries of Vesta Fire Insurance Corporation. At the direction of the insurance subsidiaries, Gaines disbursed funds from the Claims Accounts to the insureds on their insurance claims: Bank Name Account Title Account Number --------- ------------- -------------- Compass Bank Control Account 00082-2945-7 Compass Bank General Fund ZBA 00001-3213-7 Wachovia/South Trust W.A.S. Claim Acct ZBA 2079900523522 AmSouth ACAP ZBA Acct. 0010023062 AmSouth SIS Refund & Comm 17982189 AmSouth SIS Claims 17982200 Compass Bank Claims Account ZBA 00001-3215-9 The Texas Commissioner continued to use the Claims Accounts for the deposit and disbursement of funds and payment of insurance claims prior to August 7, 2006. The operating guidelines established by the Bankruptcy Administrator for the Northern District of Alabama for debtors- in-possession requires the establishment of an entirely new mechanism for the payment of these insurance claims. However, Rufus T. Dorsey, IV, Esq., at Parker, Hudson, Rainer & Dobbs, LLP, in Atlanta, Georgia, complains that it will be expensive and time-consuming, and may delay payment of these insurance claims to the detriment of the insureds. None of the funds deposited in the Claims Accounts and disbursed to insurance claimants are property of the Debtor or its estate, Mr. Dorsey points out. About Vesta Insurance Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III, L.P., filed an involuntary chapter 7 petition against the Company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines, Inc., is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered the Order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. (Vesta Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). VESTA INSURANCE: Gaines Wants to Pay Expenses with Insurance Funds ------------------------------------------------------------------ J. Gordon Gaines, Inc., at the request of the Texas and Hawaii Insurance Commissioners, continues to provide management services for Vesta Fire Insurance Corporation, Vesta Insurance Corporation, Shelby Casualty Insurance Company, The Shelby Insurance Company, Texas Select Lloyds Insurance Company, and Select Insurance Services, Inc. -- Texas Receivership Entities -- and The Hawaiian Insurance & Guaranty Company, Limited. Payments under the parties' management agreement are made by the Special Deputy Receiver for and on behalf of the Texas Commissioner and the Hawaii Commissioner. On August 1, 2006, the District Court of Travis County, Texas, appointed the Texas Commissioner as liquidator for all of the Texas Receivership Entities other than Vesta Insurance Corporation, which remains in rehabilitation. The SDR later purported to terminate the Management Agreement on behalf of the Texas Commissioner. Gaines disputes the effectiveness of the termination. Notwithstanding, the SDR asked Gaines to continue to provide services of essentially the same type and nature previously provided under the Management Agreement in exchange for compensation generally consistent with the terms set forth in the Management Agreement. On August 4, 2006, Gaines was forced to terminate substantially all of its employees. About 190 employees remain to meet the needs of the Texas Commissioner and the Hawaii Commissioner. Gaines retained the 190 employees based on the SDR's representation that it would fund the payroll and infrastructure expenses for those employees pending execution of a definitive agreement. On August 21, 2006, the Circuit Court of the First Circuit, State of Hawaii, authorized and directed the liquidation of HIG. After weeks of negotiations, the SDR and the Hawaii Commissioner agree to fund amounts sufficient to pay payroll and payroll taxes for designated employees, and to fund amounts sufficient to pay certain operating expenses incurred by Gaines at the request of the SDR and the Hawaii Commissioner. In addition, the SDR and the Hawaii Commissioner have agreed to pay to Gaines 10% of those amounts as a management fee. The negotiations among Gaines, the SDR, and the Hawaii Commissioner have culminated in a preliminary draft of a Client Services Agreement, which is pending review by the SDR and the Hawaii Commissioner, and is not yet ready to be filed with the Court for approval, C. Edward Dobbs, Esq., at Parker, Hudson, Rainer & Dobbs, LLP, in Atlanta, Georgia, relates. Prior to filing for bankruptcy, Gaines incurred certain expenses associated with the provision of services to the SDR and the Hawaii Commissioner, totaling $137,833. The Court gave Gaines discretionary authority to pay the prepetition utility bills. Mr. Dobbs says the SDR and the Hawaii Commissioner are prepared to fund amounts to pay the Expenses. The funds advanced should only be used to pay the Expenses. "Because the payment of these Expenses will not deplete property of the estate in existence on the Petition Date, there is no business justification for such Expenses not to be paid with funds supplied after the Petition Date by the SDR and the Hawaii Commissioner, earmarked for that purpose or for requiring the Debtor to forego the Management Fee with respect to the funding of such Expenses," Mr. Dobbs asserts. A breakdown of the Prepetition Expenses is available for free at: http://bankrupt.com/misc/gaines_prepetitionexpenses.pdf About Vesta Insurance Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III, L.P., filed an involuntary chapter 7 petition against the Company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines, Inc., is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered the Order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. (Vesta Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WAMU MORTGAGE: Moody's Rates Class 3-B-12 Certificates at Ba1 ------------------------------------------------------------- Moody's Investors Service assigns an Aaa rating to the senior certificates issued by the WaMu Mortgage Pass-Through Certificates Series 2006-AR11 Trust and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Washington Mutual Bank-originated option arm mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination. Moody's expects collateral losses to range from 0.65% to 0.75%. Washington Mutual Bank will service the loans, and Washington Mutual Mortgage Securities Corp. will act as administrative agent to the servicer. These are the rating actions: Issuer: Washington Mutual Pass-Through Certificates Series 2006-AR11 Trust Securities: WaMu Mortgage Pass-Through Certificates, Series 2006-AR11 * Cl. 1A, Assigned Aaa * Cl. 2A, Assigned Aaa * Cl. 2A-1B, Assigned Aaa * Cl. 3A-1A, Assigned Aaa * Cl. 3A-1B, Assigned Aaa * Cl. 3A-1C, Assigned Aaa * Cl. CA-1B1, Assigned Aaa * Cl. CA-1B2, Assigned Aaa * Cl. CA-1B3, Assigned Aaa * Cl. CA-1B4, Assigned Aaa * Cl. 1X-PPP, Assigned Aaa * Cl. 2X-PPP, Assigned Aaa * Cl. 3X-PPP, Assigned Aaa * Cl. L-B-1, Assigned Aa1 * Cl. L-B-2, Assigned Aa1 * Cl. L-B-3, Assigned Aa2 * Cl. L-B-4, Assigned Aa2 * Cl. L-B-5, Assigned Aa3 * Cl. L-B-6, Assigned A1 * Cl. L-B-7, Assigned A2 * Cl. L-B-8, Assigned A3 * Cl. L-B-9, Assigned Baa1 * Cl. L-B-10, Assigned Baa2 * Cl. L-B-11, Assigned Baa3 * Cl. 3-B-1, Assigned Aa1 * Cl. 3-B-2, Assigned Aa1 * Cl. 3-B-3, Assigned Aa1 * Cl. 3-B-4, Assigned Aa2 * Cl. 3-B-5, Assigned Aa3 * Cl. 3-B-6, Assigned Aa3 * Cl. 3-B-7, Assigned A1 * Cl. 3-B-8, Assigned A2 * Cl. 3-B-9, Assigned A3 * Cl. 3-B-10, Assigned Baa1 * Cl. 3-B-11, Assigned Baa3 * Cl. 3-B-12, Assigned Ba1 * Cl. R, Assigned Aaa WERNER LADDER: Court Allows Rejection of Three Equipment Leases --------------------------------------------------------------- Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor-affiliates, obtained authority from the U.S. Bankruptcy Court for the District of Delaware to reject three equipment leases, effective as of July 13, 2006. As reported in the Troubled Company Reporter on Sept. 6, 2006, according to Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP in Wilmington, Delaware, the equipment leases, which have a lease term of 60 months, are: Non-Debtor Party Monthly Lease Lease Description ---------------- ------------- ----------------- International Vending $732 Supply Vending Agreement Management Inc. between International Vending and Werner Co. dated April 4, 2003 Citicorp Dealer $755 Master Equipment Lease Finance Sub-Agreement between Citicorp and Werner Co. dated Aug. 14, 2001 Citicorp Dealer $674 Master Equipment Lease Finance Sub-Agreement between Citicorp and Werner Co. dated Sept. 12, 2001 Mr. Brady related that the Debtors do not currently utilize the leased equipment, they have no current or future need for the equipment and they will realize no benefit from the equipment leases by delaying their rejection. Moreover, any delay in rejecting the equipment leases will cause the Debtors to continue to accrue additional and potentially administrative obligations and they believe the lease have no more market value, Mr. Brady asserted. About Werner Ladder Headquartered in Greenville, Pennsylvania, Werner Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The firm of Willkie Farr & Gallagher LLP serves as the Debtors' counsel. Kara Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S. Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors as its co-counsel. The Debtors have retained Rothschild Inc. as their financial advisor. Greenberg Traurig LLP is counsel to the Official Committee of Unsecured Creditors. Jefferies & Co serves as the Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WINN-DIXIE: Wants Stipulation with Anderson News Approved --------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates and Anderson News LLC ask the U.S. Bankruptcy Court for the Middle District of Florida to approve their stipulation. The Debtors and Anderson News LLC are parties to a supply and service contract dated July 29, 2004, under which Anderson provides the Debtors with magazines, similar merchandise, and services relating to the merchandise. After the Debtors filed for bankruptcy protection, they scheduled Claim No. 35573 to Anderson for $6,059,171. Anderson subsequently served a reclamation demand upon the Debtors for $3,803,745. Pursuant to a Court order dated Feb. 23, 2005, many of the goods delivered to the Debtors their bankruptcy filing were returned to Anderson with the returned goods applied to reduce its prepetition claim. In September 2005, Anderson signed an agreement with the Debtors indicating that it originally had a substantial claim against the Debtors but the return of certain goods postpetition resulted in a net reclamation claim and net prepetition claim of zero. Pursuant to the Agreement, Anderson opted into the Court-approved stipulation between the Debtors and certain trade vendors regarding reconciliation and treatment of trade vendors' reclamation claims. Anderson is deemed to be a participating reclamation vendor. Anderson further gave the Debtors 21 days of credit in exchange for the consideration set forth in the Participating Vendor Stipulation. In June 2006, the Debtors sought to disallow the Anderson Claim in their Omnibus Motion. To resolve their dispute, the parties agree that: (1) the Anderson Claim is disallowed in its entirety. Anderson has no other or further claim against the Debtors arising before the Petition Date due to the postpetition return of goods to Anderson for credit against Anderson's prepetition claim; (2) Anderson, as a participating reclamation vendor, is fully bound by the terms of the Participating Vendor Stipulation. Thus, any preference claims against Anderson have been waived; (3) The entry of the agreement and approval of the Court is without prejudice to: -- Anderson's entitlement to continue to receive payment in the ordinary course for the postpetition sale of goods and services to the Debtors; -- Anderson's right to seek allowance and payment of an administrative expense for any sales of goods and services arising postpetition if for any reason it is not continued to be paid in the ordinary course of business by the Debtors; and -- the Debtors' right to oppose Anderson's request for administrative expense payments; and (4) All claims between the parties are resolved other than the claims arising out of the postpetition sale of goods and services by Anderson to the Debtors. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates 527 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WINN-DIXIE: Wants to Sell Two Store Leases to Fine Foods for $1MM ----------------------------------------------------------------- According to a notice filed with the U.S. Bankruptcy Court for the Middle District of Florida, Winn-Dixie Stores, Inc., and its debtor-affiliates intend to sell the leases of Store No. 202 in West Palm Beach, Florida, and Store No. 380 in Pembroke Pines, Florida, to Fine Foods Gourmet Markets, Inc., for a combined $1,035,000. The purchase excludes the leased equipment at the stores. On Aug. 29, 2006, the parties entered into an asset purchase, pursuant to which Fine Foods will deliver to Smith, Gambrell & Russell LLP, the escrow agent, an initial earnest money deposit no later September 1, and a second deposit within one business day after Court approval of the sale: Store No. Purchase Price Initial Deposit Second Deposit --------- -------------- --------------- -------------- 202 $405,000 $40,500 $81,000 380 630,000 63,000 126,000 Fine Foods will deliver the Purchase Price, net of the Deposits within two business days prior to closing of the sale. Four Leases Rejected Judge Funk authorizes the Debtors to reject four store leases effective as of Sept. 30, 2006. Store No. City --------- -------- 124 Tallahassee 162 Jacksonville 565 Pensacola 605 Largo Judge Funk overrules the cure objections with respect to the four leases and directs the landlords to file any claim for rejection damages by Oct. 31, 2006. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates 527 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent chapter 11 cases filed with assets and liabilities below $1,000,000: In re Atwell & Sons Construction, Inc. Bankr. W.D. Wis. Case No. 06-12201 Chapter 11 Petition filed September 13, 2006 See http://bankrupt.com/misc/wib06-12201.pdf In re Benjamin Franklin Academy, Inc. Bankr. D. P.R. Case No. 06-03292 Chapter 11 Petition filed September 13, 2006 See http://bankrupt.com/misc/prb06-03292.pdf In re Diane M. Paglusch Bankr. E.D. Mo. Case No. 06-44250 Chapter 11 Petition filed September 13, 2006 See http://bankrupt.com/misc/moeb06-44250.pdf In re Seefood, LLC Bankr. N.D. Okla. Case No. 06-11243 Chapter 11 Petition filed September 13, 2006 See http://bankrupt.com/misc/oknb06-11243.pdf In re Builders Electric Corporation Bankr. M.D. Tenn. Case No. 06-05092 Chapter 11 Petition filed September 14, 2006 See http://bankrupt.com/misc/tnmb06-05092.pdf In re Caremerica, Inc. Bankr. E.D. N.C. Case No. 06-02913 Chapter 11 Petition filed September 15, 2006 See http://bankrupt.com/misc/nceb06-02913.pdf In re Caremerica Adult Care, Inc. Bankr. E.D. N.C. Case No. 06-02906 Chapter 11 Petition filed September 15, 2006 See http://bankrupt.com/misc/nceb06-02906.pdf In re Kirby T. Morlino Bankr. N.D. Miss. Case No. 06-12231 Chapter 11 Petition filed September 15, 2006 See http://bankrupt.com/misc/msnb06-12231.pdf In re The Meadows of Fayetteville, Inc. Bankr. E.D. N.C. Case No. 06-02916 Chapter 11 Petition filed September 15, 2006 See http://bankrupt.com/misc/nceb06-02916.pdf In re The Meadows of Hermitage, Inc. Bankr. E.D. N.C. Case No. 06-02917 Chapter 11 Petition filed September 15, 2006 See http://bankrupt.com/misc/nceb06-02917.pdf In re The Meadows Of Wilmington, Inc. Bankr. E.D. N.C. Case No. 06-02910 Chapter 11 Petition filed September 15, 2006 See http://bankrupt.com/misc/nceb06-02910.pdf In re WAK, Inc. Bankr. N.D. Fla. Case No. 06-30579 Chapter 11 Petition filed September 15, 2006 See http://bankrupt.com/misc/flnb06-30579.pdf In re Kruze Properties, LLC Bankr. N.D. Ohio Case No. 06-14276 Chapter 11 Petition filed September 16, 2006 See http://bankrupt.com/misc/ohnb06-14276.pdf In re Haley Mechanical LLC Bankr. E.D. Mich. Case No. 06-52991 Chapter 11 Petition filed September 17, 2006 See http://bankrupt.com/misc/mieb06-52991.pdf In re ALVA Enterprises, Inc. Bankr. D. Mass. Case No. 06-41865 Chapter 11 Petition filed September 18, 2006 See http://bankrupt.com/misc/mab06-41865.pdf In re Golden Triangle Expedited Freight & Courier Service, Inc. Bankr. E.D. Tex. Case No. 06-10389 Chapter 11 Petition filed September 18, 2006 See http://bankrupt.com/misc/txeb06-10389.pdf In re John W. Crawford Bankr. W.D. La. Case No. 06-80759 Chapter 11 Petition filed September 18, 2006 See http://bankrupt.com/misc/lawb06-80759.pdf In re Roy Biswajit Bankr. S.D. Tex. Case No. 06-34827 Chapter 11 Petition filed September 18, 2006 See http://bankrupt.com/misc/txsb06-34827.pdf In re Trawler Anna Marie, Inc. Bankr. E.D. N.C. Case No. 06-02919 Chapter 11 Petition filed September 18, 2006 See http://bankrupt.com/misc/nceb06-02919.pdf In re Business Professional Hirers, Inc. Bankr. D. P.R. Case No. 06-03394 Chapter 11 Petition filed September 19, 2006 See http://bankrupt.com/misc/prb06-03394.pdf In re Daniel G. Reljin Bankr. N.D. Ohio Case No. 06-51810 Chapter 11 Petition filed September 19, 2006 See http://bankrupt.com/misc/ohnb06-51810.pdf In re Farmhouse Restaurants Inc. Bankr. E.D. Mich. Case No. 06-32068 Chapter 11 Petition filed September 19, 2006 See http://bankrupt.com/misc/mieb06-32068.pdf In re Jazz Cafe, Inc. Bankr. N.D. Ala. Case No. 06-03531 Chapter 11 Petition filed September 19, 2006 See http://bankrupt.com/misc/alnb06-03531.pdf In re John Smith & Son Plumbing & Heating Contractors, Inc. Bankr. D. Md. Case No. 06-15737 Chapter 11 Petition filed September 19, 2006 See http://bankrupt.com/misc/mdb06-15737.pdf In re M&SW Partnership, Ltd. Bankr. S.D. Tex. Case No. 06-20581 Chapter 11 Petition filed September 19, 2006 See http://bankrupt.com/misc/txsb06-20581.pdf In re West KY Pavers, Inc. Bankr. W.D. Ky. Case No. 06-50624 Chapter 11 Petition filed September 19, 2006 See http://bankrupt.com/misc/kywb06-50624.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. 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, Melvin C. Tabao, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q. Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***