/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/061003.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, October 3, 2006, Vol. 10, No. 235 Headlines AAR CORP: Moody's Assigns Loss-Given-Default Ratings ABBFS MORTGAGE: Moody's Downgrades Class B Notes to B2 from Ba1 ABRAXAS PETROLEUM: Selling Texas Non-Core Assets for $12 Million ACIH INC: Moody's Assigns Loss-Given-Default Ratings ADVANCED VENDING: To Submit Agreed Order on Cash Collateral Access ADVANCED VENDING: Can Get $40,000 Interim Financing from Pioneer AEP INDUSTRIES: Moody's Assigns Loss-Given-Default Rating ALLIANT TECHSYSTEMS: Moody's Assigns Loss-Given-Default Ratings ALTEON INC: $3.1MM Grant Awarded to UT Southwestern Medical Center ALTIUS III: Moody's Assigns Ba1 Rating to $6 Million Class E Notes AMERIQUAL GROUP: Moody's Assigns Loss-Given-Default Ratings AMERIVEST PROPERTIES: Sells Hackberry and Scottsdale Offices ANCHOR GLASS: Wants to Pursue Civil Action with Mark Anthony ANVIL KNITWEAR: Voluntary Chapter 11 Case Summary ARINC INCORPORATED: Moody's Assigns Loss-Given-Default Ratings ARMOR HOLDINGS: Moody's Assigns Loss-Given-Default Ratings ARMSTRONG WORLD: Emerges From Chapter 11 Protection ARMSTRONG WORLD: Parent Loses Ownership Upon Chapter 11 Emergence ATARI INC: Sells Shiny Entertainment to Foundation 9 BALLYROCK CLO: $14MM Class E Notes Gets Moody's Ba2 Rating B/E AEROSPACE: Moody's Assigns Loss-Given-Default Ratings BERTUCCI'S CORP: Moody's Withdraws Caa1 Rating on Senior Notes BIRDS EYE: Moody's Assigns LGD5 Rating to $50MM Sr. Subor. Notes BOMBARDIER INC: Moody's Assigns Loss-Given-Default Ratings CALPINE CORP: Sells Thomassen to Ansaldo Energia for $23.5 Million CALPINE CORP: Can Give Greenfield Energy $45MM with Panel's OK CARRAWAY METHODIST: Files Schedules of Assets and Liabilities CARRAWAY METHODIST: Taps Cabaniss Johnston as Special Counsel CEP HOLDINGS: Taps Baker & Hostetler as Bankruptcy Counsel CEP HOLDINGS: Wants Until October 20 to File Schedules & Statement CHEMDESIGN CORP: Court Approves Consolidation with SpecialtyChem CHEMDESIGN CORP: Withdraws Request for Godfrey & Kahn as Counsel CHIQUITA BRANDS: Moody's Affirms Caa1 Rating on $250MM Sr. Notes COLLINS & AIKMAN: Defends Move to Conduct Probe on Major Customers COLLINS & AIKMAN: Issues Rejection Notice for Various GECC Leases COMPLETE RETREATS: Court OKs Panel's Information Sharing Protocol CORPORATE AND LEISURE: Receivership Didn't Bar Bankruptcy Filing COUDERT BROTHERS: Taps Klestadt & Winters as Bankruptcy Counsel COUDERT BROTHERS: Taps Ehlers Ehlers as Special German Counsel CRYOPAK INDUSTRIES: Creditors Name Deloitte & Touche as Receiver CS AVISERS: Moody's Rates $14 Mil. Class D Secured Notes at Ba2 CTI FOODS: Moody's Confirms B2 Corporate Family Rating DANA CORP: Wants Court to Reconsider Order Denying M. Burns' Fees DANA CORP: Plans to File Nissan Settlement Agreement Under Seal DANNY WHITLEY: Case Summary & Nine Largest Unsecured Creditors DECRANE AIRCRAFT: Moody's Assigns Loss-Given-Default Ratings DELPHI CORP: Equity Panel Wants Houlihan as Financial Advisor DELTA AIR: Comair's Pending Union Talks May Halt Jet Service Bid DELTA AIR: Wants Claims Objection Procedures Established DELTA AIR: Proposes Process for Litigating Leveraged Lease Deals DENNY'S CORP: Closes $62 Million Property Sale to National Retail DICUT INC: Strikes Deal With Creditors on $1.8MM Obligations DIGITAL DESCRIPTOR: Reports $12.4 Mil. Equity Deficit at June 30 DRS TECHNOLOGIES: Moody's Assigns Loss-Given-Default Ratings EAGLE FAMILY: Moody's Assigns B3 Corporate Family Rating EASY GARDENER: U.S. Trustee Amends Creditors Committee Membership ECHOSTAR COMMS: Unit Prices $500 Million Notes Issue ENTRAVISION COMMS: Moody's Assigns Loss-Given-Default Ratings ESTERLINE TECH: Moody's Assigns Loss-Given-Default Ratings EVERGREEN INT'L: Extends 12% Senior Notes Offering to October 6 EXABYTE CORP: Wells Fargo Increases Borrowing Base by $2 Million EXTENDICARE HEALTH: Moody's Assigns Loss-Given-Default Ratings FISHER COMMS: Moody's Assigns Loss-Given-Default Rating FRIENDLY ICE: John Cutter Resigns as President and CEO GALAXY VII: Moody's Assigns Ba2 Rating to $13.5MM Class E Notes GATX CORP: Selling Majority of Aircraft Leasing Business GE CAPITAL: Moody's Lowers Rating on Class B-1 Notes to Caa2 GENESIS HEALTHCARE: Moody's Assigns Loss-Given-Default Ratings GOLD KIST: Moody's Reviews for Upgrade B3 Rated $130MM Sr. Notes GOODYEAR TIRE: USW to End Contract Extension on Thursday GRANITE BROADCASTING: Moody's Assigns Loss-Given-Default Rating GRAY TELEVISION: Moody's Assigns Loss-Given-Default Ratings GS ENERGY: Reports $10,747 of Net Income in Second Quarter HARRAH'S ENT: Gets $15 Billion Buyout Offer From Two Equity Firms HARRAH'S ENTERTAINMENT: Moody's Revises Outlook to Negative HARRAH'S ENTERTAINMENT: Purchase Proposal Cues S&P to Cut Ratings HARRAH'S ENTERTAINMENT: Fitch Lowers Issuer Default Rating to BB+ HEALTHSOUTH CORP: Court Approves $445 Mil. Settlement Agreement HCA INC: Moody's Assigns Loss-Given-Default Ratings HEXCEL CORP: Moody's Assigns Loss-Given-Default Ratings HOLLINGER INC: Court Orders Continuing Asset Freeze on Lord Black HOLLYWOOD THEATERS: Moody's Assigns Loss-Given-Default Ratings HONOR SERVICES: Voluntary Chapter 11 Case Summary IMAX CORP: Moody's Assigns LGD4 Rating to 9-5/8% Senior Notes IMMEDIATEK INC: Reports 2nd Quarter Results Under New Accounting INN OF THE MOUNTAIN: Moody's Assigns LGD4 Rating to 12% Sr. Notes INTERPUBLIC GROUP: Moody's Assigns Loss-Given-Default Ratings INTERSTATE BAKERIES: 3V Capital Appointed in Six-Member Committee INTERSTATE BAKERIES: Ct. OKs CONSOR Intellectual as IP Consultant INTERTAPE POLYMER: Explores Strategic & Financial Alternatives INTRAWEST CORP: Moody's Assigns Loss-Given-Default Ratings ISLE OF CAPRI: Moody's Assigns Loss-Given-Default Ratings KAISER ALUMINUM: VEBA Trust Mulls Public Offering of 2.5MM Shares KAISER ALUMINUM: Witmer Parties Disclose 1,071,216 Equity Stake KERASOTES SHOWPLACE: Moody's Assigns Loss-Given-Default Ratings KLEROS PREFERRED: Moody's Puts Ba1 Ratings on $6MM Class E Notes KMC TELECOM: Dissolves Company, Accepting Claims Until November 22 KNOLL INC: Moody's Assigns B1 Probability-of-Default Rating L-3 COMMS: Moody's Assigns Loss-Given-Default Ratings LAMAR ADVERTISING: Moody's Assigns Loss-Given-Default Rating LENOX GROUP: Moody's Assigns B2 Corporate Family Rating LEVITZ HOME: Wants to Reject Three Store Leases in Calif. & N.J. LIBBEY GLASS: Moody's Confirms B2 Corporate Family Rating LUBBOCK HOUSING: Moody's Cuts Rating on Series 2002C Bonds to Ba2 LUTHER MARCENA: Voluntary Chapter 11 Case Summary LUX DIGITAL: Case Summary & Three Largest Unsecured Creditors MAJESTIC HOLDCO: Moody's Assigns Loss-Given-Default Ratings MARGO CARIBE: Receives Letter of Reprimand from Nasdaq MEDIACOM BROADBAND: Selling $300MM of Senior Notes Due 2015 MEDIACOM BROADBAND: Moody's Assigns B3 Ratings to Senior Notes MEDICAL CONNECTIONS: Reports $500,939 Net Loss in 2006 2nd Quarter MGM MIRAGE: Moody's Assigns Loss-Given-Default Ratings MICHAELS STORES: Updates Sales Forecast for 2006 Third Quarter MILLENNIUM NEW JERSEY: Moody's Assigns Loss-Given-Default Ratings MILLS CORP: Laurence Siegel Steps Down as Chief Executive Officer MODERN TECHNOLOGY: Retires $1 Mil. Conv. Debt to Increase Equity MOHEGAN TRIBAL: Moody's Assigns Loss-Given-Default Ratings MOONEY AEROSPACE: Posts $2.7 Million Net Loss in Second Quarter MULLIGAN'S AUBURN: Case Summary & 21 Largest Unsecured Creditors NATIONAL BEDDING: Moody's Assigns B1 Corporate Family Rating NEP SUPERSHOOTERS: Moody's Assigns Loss-Given-Default Rating NEW RIVER: Woodland Resources Wants Case Dismissed NEW RIVER: Taps Jennings & Valancy to Handle Marina Litigation NORD RESOURCES: Nedbank Extends Maturity of $4.9 Mil. Secured Loan NORTHLAKE DEVELOPMENT: Voluntary Chapter 11 Case Summary NVE INC: Has Until Oct. 15 to File Chapter 11 Reorganization Plan NVE INC: Court Approves Holzhauer & Holenstein as Appraiser ORBITAL SCIENCES: Moody's Assigns Loss-Given-Default Ratings OTIS SPUNKMEYER: Moody's Affirms B1 Corporate Family Rating PELTS & SKINS: Court Sets October 25 DIP Financing Hearing PIER 1: Chairman & CEO Marvin Girouard to Retire in February 2007 PILGRIM'S PRIDE: Offers to Buy all of Gold Kist's 10.25% Notes PILGRIM'S PRIDE: Moody's Puts Ba2 Corp. Family Rating on Watch PROFESSIONAL INVESTORS: Hires John Lewis as Bankruptcy Counsel PROFESSIONAL INVESTORS: Files Schedules of Assets and Liabilities RAINIER CBO: Moody's Lifts Rating on $8MM Notes to B2 from Caa2 RENATA RESORT: Disclosure Statement Hearing Set for October 27 RESIDENTIAL ASSET: Moody's Puts B1 Rated Class M Notes on Watch RETTIG ENTERPRISES: Case Summary & 17 Largest Unsecured Creditors REYNOLDS & REYNOLDS: Moody's Rates Planned $925 Mil. Loan at B3 RICHMOND REDEVELOPMENT: Moody's Holds Ba3 Rating on $5.6MM Bonds RICKY MYERS: Case Summary & Seven Largest Unsecured Creditors ROCKVILLE ORTHOPEDIC: Case Summary & 20 Largest Unsec. Creditors ROTECH HEALTHCARE: Moody's Affirms Caa3 Rating on $300 Mil. Notes ROWE COMPANIES: Has Until October 18 to File Schedules & Statement ROWE COMPANIES: Taps PENTA Advisory as Financial Advisor SACO I: Moody's Reviews Ba2 Rated Notes for Possible Downgrade SAINT VINCENTS: Buys Fresh Meadows Property for $4.2 Million SAINT VINCENTS: Court OKs Set Off Deal with New York Dialysis SEALY MATTRESS: Moody's Affirms Ba3 Corporate Family Rating SIMMONS COMPANY: Moody's Confirms B2 Corporate Family Rating SOLSTICE INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors SOLUTIA INC: Wants to Extend Plan-Filing Period to April 10, 2007 SOPHIE NG: Case Summary & Nine Largest Unsecured Creditors SOUTH COAST: Poor Credit Quality Cues Moodys to Downgrade Ratings SPANISH BROADCASTING: Moody's Assigns Loss-Given-Default Rating SPECIALTYCHEM PRODUCTS: Court Okays Consolidation with ChemDesign SPIRIT AEROSYSTEMS: Moody's Assigns Loss-Given-Default Ratings STEELCASE INC: Moody's Confirms Ba1 Corporate Family Rating STEINWAY MUSICAL: Moody's Downgrades Rating on Senior Notes to B1 STRUCTURED ASSET: Moody's Eyes Downgrade of BI Rated Certificates TARGA RESOURCES: Moody's Cuts Corp. Family Rating to B1 from Ba3 TEMPUR-PEDIC: Moody's Confirms Ba3 Corporate Family Rating TORRES ESPINO: Case Summary & 20 Largest Unsecured Creditors TRANSDIGM INC: Moody's Assigns Loss-Given-Default Ratings TRAVIS COUNTY: Defaults Prompt Moody's to Lower Rating on Notes TRIGEM COMPUTER: Receives Lone Bid from Human & Technology TRIGEM COMPUTER: Disposes Stake in Korea ePlatform TRIGEM COMPUTER: Inks Pact with Gateway on Stay Modification TRI-UNION: Plains Mktg. Prevails in Defense of Alleged Preference TYSON FOODS: Resolves Government Hiring Concerns in Six Locations UNITY WIRELESS: Provides Update on Business Strategy for Growth UNIVERSAL PROPERTY: Accumulated Deficit Tops $32.8 Mil. at June 30 US LEC: June 30 Balance Sheet Upside-Down by $272.9 Million UTILITY CRAFT: Hires Hale Resources as Bankruptcy Consultant VISIPHOR CORP: Board Appoints Michael Hilton as President and COO VOUGHT AIRCRAFT: Moody's Assigns Loss-Given-Default Ratings WERNER LADDER: Panel Wants to Retain Neil Minihane as Consultant WERNER LADDER: Wants to Hire Mercer as Human Resources Consultant WESTERN APARTMENT: Files Disclosure Statement in Hawaii WESTERN APARTMENT: Disclosure Statement Hearing Set on October 16 WHITE RIVER: Court Okays McGuireWoods LLP as Bankruptcy Counsel WHITE RIVER: Bankruptcy Court Okays Keat Bumb as Local Counsel WIDEOPENWEST: Moody's Affirms Caa1 Second Lien Rating WINN-DIXIE: Wants to Assume Modified Cardtronics Agreement WINN-DIXIE: Wants to Assume Six Negotiated Contracts WORNICK CO: Moody's Assigns Loss-Given-Default Ratings YOUNG BROADCASTING: Moody's Assigns Loss-Given-Default Rating * Large Companies with Insolvent Balance Sheets ********* AAR CORP: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its B1 Corporate Family Rating for AAR Corp. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 6.875% Notes Payable due 2007 B2 B1 LGD4 55% 2.875% Conv. Notes Payable due 2024 B2 B1 LGD4 55% Sr. Unsecured Notes Shelf (P)B2 (P)B1 LGD4 55% Sr. Subordinated Notes Shelf (P)Caa1 (P)B3 LGD6 97% Preferred Stock Shelf (P)Caa3 (P)B3 LGD6 97% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). AAR CORP -- http://www.aarcorp.com/-- a Chicago suburb near O'Hare International Airport, employs approximately 3,500 people at more than 40 locations around the world. ABBFS MORTGAGE: Moody's Downgrades Class B Notes to B2 from Ba1 --------------------------------------------------------------- Moody's Investors Service downgraded a certificate from a transaction, issued by ABFS Mortgage Loan Trust. The transaction is backed by sub-prime mortgage loans. The 2002-2 Class B certificate is being downgraded based on the deals performing below Moody's original expectations. Since the bankruptcy of the initial servicer delinquencies and losses have remained higher than the rating agency's initial expectations. Issuer: ABFS Mortgage Loan Trust Downgrade: * Series 2002-2; Class B, downgraded from Ba1 to B2 ABRAXAS PETROLEUM: Selling Texas Non-Core Assets for $12 Million ---------------------------------------------------------------- Abraxas Petroleum Corporation has closed on the sale of certain non-core assets located in South Texas for a total consideration of $12 million, subject to closing adjustments. The effective date of the sale was Aug. 1, 2006. "This asset sale will provide us the financial liquidity and flexibility to continue our 2006 capital development plan; however, due to the recent downturn in natural gas prices, we may delay certain drilling activities until rig rates come into balance with commodity prices" commented Bob Watson, Abraxas' President and CEO. Since the valuation paid exceeds our historical finding and development costs, we feel confident in our ability to replace these reserves and associated production prior to year-end." The non-core assets are located in the Three Rivers Field of Live Oak County, Texas and represented less than 2% of the Company's net proved reserves as of Dec. 31, 2005 and approximately 3% of the Company's current daily net production. The net proceeds will be used to repay outstanding indebtedness under the Company's revolving credit facility, to continue the development of its core assets in Texas, and for general corporate purposes. Headquartered in San Antonio, Texas, Abraxas Petroleum Corp -- http://www.abraxaspetroleum.com/-- is an independent natural gas and crude oil exploitation and production company with operations concentrated in Texas and Wyoming. Abraxas was founded in 1977 and is publicly traded on the American Stock Exchange under the ticker symbol "ABP". * * * At March 31, 2006, Abraxas Petroleum Corporation's balance sheet showed total stockholders' deficit of $21,842,000 out of $124,852,000 in total assets and $146,694,000 in total liabilities. ACIH INC: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. building products sector, the rating agency confirmed its B2 Corporate Family Rating for ACIH, Inc., as well as its Caa1 rating on the company's $174 million Senior Discount Notes Due 2012. The debentures were assigned an LGD6 rating suggesting noteholders will experience a 90% loss in the event of default. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company's subsidiary Atrium Companies, Inc: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $378.5m Gtd. Sr. Sec. Term Loan B B2 B1 LGD3 37% $46.5m Gtd. Sr. Sec. Delayed Draw Term Loan B2 B1 LGD3 37% $50m Gtd. Sr. Sec. Revolving Credit Facility B2 B1 LGD3 37% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Dallas, Texas, ACIH, Inc., through its subsidiary Atrium Companies, Inc., is engaged in the manufacture and sale of windows, patio doors and various building materials throughout North America. ADVANCED VENDING: To Submit Agreed Order on Cash Collateral Access ------------------------------------------------------------------ Advanced Vending Systems Inc. and its lenders, Merrill Lynch, Northwest Georgia Bank and AmSouth Bank, will be submitting to the the U.S. Bankruptcy Court for the Eastern District of Tennessee a stipulation regarding the Debtor's use of the cash collateral securing repayment of its obligations to the lenders. On Aug. 11, 2006, the Court gave the Debtor authority, on an interim basis, to use the cash collateral pursuant to a three- month budget. The Debtor's cash collateral budget is available for free at http://researcharchives.com/t/s?12b6 The Court noted that the Debtor's cash collateral use may not exceed 10% of any one item without the lenders' consent. The Court also directed the Debtor to maintain insurance covering all personal property collateral and provide a copy of the policy to its lenders showing the lenders as mortgagees. As adequate protection, the Debtor granted replacement liens in its postpetition accounts receivable and inventory to the individual secured creditors with the same extent and in the same priority as these creditors held in prepetition accounts and other assets. The Debtors also granted the lenders a superpriority administrative expense claim, but only to the extent and in the amount of the Debtor's actual use of the cash collateral. Headquartered in Ringgold, Georgia, Advanced Vending Systems, Inc. -- http://www.avsvend.com/-- operates snack food vending machines. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. E.D. Tenn. Case No. 06-12523). Richard C Kennedy, Esq., at Kennedy, Koontz & Farinash, and Thomas L. N. Knight, Esq., at Grisham, Knight and Hooper, represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case to date. When the Debtor filed for protection from its creditors, it estimated less than $50,000 in assets and estimated debts between $10 million and $50 million. ADVANCED VENDING: Can Get $40,000 Interim Financing from Pioneer ---------------------------------------------------------------- On an interim basis, the U.S. Bankruptcy Court for the Eastern District of Tennessee authorized Advanced Vending Systems Inc. to obtain up to $40,000 in postpetition financing from Pioneer Financial Services Inc., N.A. The Court previously authorized the Debtor to borrow $142,500 from Pioneer Financial to fund additional inventory purchases as well as payroll and insurance payments. As adequate protection, the Court directed the Debtor to furnish Pioneer Financial with certificates of title for its vehicles, for sale and leaseback to the Debtor pursuant to the equipment lease agreement the parties had entered into. A final hearing toconsider the Debtor's postpetition financing request will be held on Oct. 12, 2006, 10:00 a.m., at Courtroom A, United States Bankruptcy Court, 31 E. Eleventh Street, in Chattanooga, Tennessee. Objections must be filed with the Court by 4:30 p.m., on Oct. 11, 2006. Copies of the objection must be sent to: Richard C. Kennedy, Esq. Kennedy, Koontz & Farinash 320 North Holtzclaw Avenue Chattanooga, TN 37404 Tel:(423) 622-4535 Fax:(423) 622-4583 Headquartered in Ringgold, Georgia, Advanced Vending Systems, Inc. -- http://www.avsvend.com/-- operates snack food vending machines. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. E.D. Tenn. Case No. 06-12523). Richard C Kennedy, Esq., at Kennedy, Koontz & Farinash, and Thomas L. N. Knight, Esq., at Grisham, Knight and Hooper, represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case to date. When the Debtor filed for protection from its creditors, it estimated less than $50,000 in assets and estimated debts between $10 million and $50 million. AEP INDUSTRIES: Moody's Assigns Loss-Given-Default Rating --------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for U.S. non-paper packaging sector, the rating agency confirmed its Ba3 Corporate Family Rating for AEP Industries and its B1 rating on the company's $175 million 7.875% Senior Notes Due 2015. Moody's assigned the debentures an LGD4 rating suggesting noteholders will experience a 69% loss in the event of a default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). AEP Industries Inc. manufactures and markets plastic packaging films, including polyethylene, polyvinyl chloride and polypropylene flexible packaging products for the industrial and agricultural applications. AEP operates in eight countries in North America, Europe and Asia Pacific. On Feb. 10, 2005, the company disposed off AEP Industries Packaging France SAS and on March 25, 2005, the Group disposed off Termofilm SpA. On Feb. 23, 2006, the company acquired Mercury Plastics Inc. ALLIANT TECHSYSTEMS: Moody's Assigns Loss-Given-Default Ratings --------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its Ba3 Corporate Family Rating for Alliant Techsystems Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Secured Revolving Credit Facility due 2009 Ba2 Baa3 LGD2 10% Sr. Secured Term A Loan due 2009 Ba2 Baa3 LGD2 10% 6.75% Sr. Subordinate Notes due 2016 B2 B1 LGD4 64% 2.75% Convertible Sr. Subordinate Notes due 2011 B2 B1 LGD4 64% 2.75% Convertible Sr. Subordinate Notes due 2024 B2 B1 LGD4 64% 3% Convertible Sr. Subordinate Notes due 2024 B2 B1 LGD4 64% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Edina, Minnesota, Alliant Techsystems Inc. is a leading supplier of propulsion, composite structures, munitions, precision capabilities, and civil and sporting ammunition. ALTEON INC: $3.1MM Grant Awarded to UT Southwestern Medical Center ------------------------------------------------------------------ A Phase 2 clinical study of Alteon Inc.'s alagebrium will be conducted at the University of Texas Southwestern Medical Center at Dallas as part of a five-year $3.1 million National Institutes of Health grant. Alagebrium will be studied as an intervention when combined with exercise training with the goal of significantly improving cardiac compliance and diastolic function in aged individuals. Demonstrating an ability of alagebrium to reverse deficits attributable to aging and sedentary lifestyle would be supportive of Alteon's development efforts for alagebrium in diastolic heart failure. The study is expected to be initiated during the first half of 2007, and is expected to enroll approximately 60 patients. Benjamin D. Levine, M.D., the Principal Investigator, is Director of the Institute for Exercise and Environmental Medicine at Presbyterian Hospital, Professor of Internal Medicine at UT Southwestern. About Alteon Inc. Headquartered in Parsippany, New Jersey, Alteon Inc. (AMEX: ALT) --- http://www.alteon.com/-- is a product-based biopharmaceutical company engaged in the development of small molecule drugs to treat and prevent cardiovascular diseases and other diseases associated with aging and diabetes. Going Concern Doubt As reported in the Troubled Company Reporter on Sept. 19, 2006, J.H. Cohn LLP expressed substantial doubt about Alteon's ability to continue as a going concern after auditing the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's $13 million net loss and using approximately $14 million of cash in operating activities during the year ended Dec. 31, 2005. ALTIUS III: Moody's Assigns Ba1 Rating to $6 Million Class E Notes ------------------------------------------------------------------ Moody's Investors Service reported it assigned ratings to notes issued by Altius III Funding, Ltd. These are the ratings assigned: * Aaa to $ 17,500,000 Class S Floating Rate Notes Due 2012; * Aaa to $ 220,000,000 Class A-1a Floating Rate Notes Due 2041; * Aaa to $ 499,950,000 Class A-1b-1F Floating Rate Notes Due 2041; * Aaa to $ 499,950,000 Class A-1b-1B Floating Rate Notes Due 2041; * Aaa to $ 300,000,000 Class A-1b-2 Floating Rate Notes Due 2041; * Aaa to $ 250,000,000 Class A-1b-3 Floating Rate Notes Due 2041; * Aaa to $ 100,000 Class A-1b-v Floating Rate Notes Due 2041; * Aaa to $ 90,000,000 Class A-2 Floating Rate Notes Due 2041; * Aa2 to $ 88,000,000 Class B Floating Rate Notes Due 2041; * A2 to $ 23,000,000 Class C Floating Rate Deferrable Notes Due 2041; * Baa2 to $ 19,000,000 Class D Floating Rate Deferrable Notes Due 2041 and * Ba1 to Up to $ 6,000,000 Class E Floating Rate Deferrable Notes Due 2041. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Note's governing documents, and are based on the expected loss posed to the Noteholders relative to receiving the present value of such payments. The ratings of the Notes reflect the credit quality of the underlying assets as well as the credit enhancement for the Notes inherent in the capital structure and the transaction's legal structure. This transaction is a high grade ABS deal that is managed by Aladdin Capital Management LLC. AMERIQUAL GROUP: Moody's Assigns Loss-Given-Default Ratings ----------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its B1 Corporate Family Rating for Ameriqual Group, LLC. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 9% Sr. Secured Global Notes due 2012 B1 B2 LGD4 62% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Evansville, Indiana-based AmeriQual provides Meals-Ready to Eat, salads and sandwiches; operators of commercial and industrial buildings; investment holding company. AMERIVEST PROPERTIES: Sells Hackberry and Scottsdale Offices ------------------------------------------------------------ AmeriVest Properties Inc. has completed the sale of its Hackberry View office building in Dallas, Texas. Hackberry View, a 114,598 square-foot office property, was sold for $17.5 million or approximately $153 per square foot, to Koll/PER, LLC (Koll/PER), a limited liability company owned by The Koll Company of Newport Beach, California, and the Public Employee Retirement System of Idaho. The estimated cash proceeds of approximately $5.5 million, after assignment of the first and second mortgage, closing costs and adjustments, will be accumulated with other proceeds and made available, subject to the expenses and other costs of the Company, for distribution to shareholders under the plan of liquidation approved by AmeriVest shareholders. This is the third closing under the July 17, 2006, purchase and sale agreement with Koll/PER. Additional closings will be scheduled as loan assumption approvals are received from AmeriVest's mortgage lenders and other traditional closing activities are completed. On Sept. 27, 2006, AmeriVest received a written notice of Koll/PER's intention, pursuant to the terms of the purchase and sale agreement, to extend the loan assumption period through November 14, 2006. Scottsdale Norte Sale AmeriVest has also completed the sale of its Scottsdale Norte office building in Scottsdale, Arizona. Scottsdale Norte, a 79,689-square-foot office property, was sold for $18,000,000, or approximately $225 per square foot, to Koll/PER. The estimated cash proceeds of approximately $11.0 million, after payoff of the first mortgage, closing costs and adjustments, will be accumulated with other proceeds and available, subject to the expenses and other costs of the Company, for distribution to shareholders under the plan of liquidation approved by AmeriVest shareholders. "We are pleased to complete the second of what we expect will be eight scheduled closings for the portfolio," said Charles Knight, CEO of AmeriVest. "Since execution of the purchase and sale agreement in July, AmeriVest and the purchaser have been working diligently with all of our lenders to complete the loan assumptions required for the remaining properties as quickly as possible. Although we have made significant progress, the approval and documentation process for certain loans is taking longer than we initially expected, especially for the conduit and securitized loans. "In addition, we were recently notified by Teachers Insurance and Annuity Association of America, the lender on our Arrowhead, Kellogg and Sheridan Center properties, that on August 31, 2006 they sold their interest in that loan to Morgan Stanley Mortgage Capital Inc., which may affect the timing and conditions of the assumption of that loan. At present, we still expect to complete all sales prior to Dec. 31, 2006. By late October, we anticipate that we will have more clarity on the timing of closings of the remaining properties and the estimated costs of completing the liquidation and winding up process. The Board plans to update its estimates of the range and timing of liquidating cash distributions in a similar time frame." The Board of Directors of AmeriVest has not yet established any dates for the payment of liquidating distributions. There can be no assurance with respect to the timing or amount of any distribution or distributions to be made by AmeriVest, or that any other closings will occur under the purchase and sale agreement or otherwise. About AmeriVest Properties Headquartered in Denver, Colorado, AmeriVest Properties Inc. (AMEX: AMV) -- http://www.amvproperties.com/-- provides Smart Space for Small Business(TM) in Denver, Phoenix, and Dallas through the acquisition, repositioning and operation of multi- tenant office buildings in those markets. * * * As reported in the Troubled Company Reporter on June 5, 2006, AmeriVest Properties Inc.'s stockholders approved a Plan of Liquidation at its annual meeting. Under the Plan, the Company's remaining 12 office properties will be sold on an orderly basis and proceeds distributed to stockholders. All 12 properties are listed with Trammell Crow Company and the sales process is being managed through Trammell Crow's Denver office. Detailed information regarding the properties was released to over 4,000 prospective purchasers on May 1, 2006. ANCHOR GLASS: Wants to Pursue Civil Action with Mark Anthony ------------------------------------------------------------ Mark Anthony Group Companies and Anchor Glass Container Corporation are co-defendants in a negligence lawsuit in Burlington County, New Jersey. The Civil Action proceedings were stayed when Anchor Glass filed for bankruptcy. Mark Anthony asks the U.S. Bankruptcy Court for the Middle District of Florida to modify the automatic stay to permit it and the Debtor to proceed with the Civil Action to its final resolution. Philip Fairman, Esq., in Tampa, Florida, notes that the Debtor was insured under a commercial general liability policy during all times relevant to Mark Anthony's cross claims for indemnity and contribution in the Civil Action. Permitting Mark Anthony to pursue its cross-claims in the Civil Action to their final resolution would be the most efficient manner to liquidate Mark Anthony's claims against the Debtor, Mr. Fairman contends. In any recovery against the Debtor, Mark Anthony agrees to be bound by the policy limit of any and all applicable insurance policies and other available statutory insurance that is deemed to owe coverage to the Debtor for the Civil Action Claims. Accordingly, there will be no adverse impact on the Debtor's estate if the automatic stay is modified, Mr. Fairman asserts. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents Anchor Glass in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When Anchor Glass filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. The Court confirmed Anchor Glass' second Amended Plan of Reorganization on April 18, 2006. Anchor Glass emerged from Chapter 11 protection on May 3, 2006. (Anchor Glass Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ANVIL KNITWEAR: Voluntary Chapter 11 Case Summary ------------------------------------------------- Lead Debtor: Anvil Knitwear, Inc. 228 East 45th Street New York, NY 10017 Bankruptcy Case No.: 06-12345 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Anvil Holdings, Inc. 06-12346 Spectratex, Inc. 06-12347 Type of Business: The Debtors design, manufacture, and market activewear for men, women, and children. Anvil Holdings owns all of the outstanding common stock of Anvil Knitwear, which is the Debtors' primary operating company. Chapter 11 Petition Date: October 2, 2006 Court: Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Richard A. Stieglitz, Jr., Esq. Dechert, LLP 30 Rockefeller Plaza New York, NY 10112 Tel: (212) 698-3571 Fax: (212) 698-3599 Consolidated Financial Data as of July 29, 2006: Total Assets: $110,682,000 Total Debts: $244,586,000 The Debtor did not file a list of its 20 Largest Unsecured Creditors. ARINC INCORPORATED: Moody's Assigns Loss-Given-Default Ratings -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its Ba3 Corporate Family Rating for Arinc Incorporated. Additionally, Moody's revised its probability-of-default ratings and assigned loss- given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Secured Revolving Credit Facility due 2009 Ba3 Ba3 LGD3 48% Sr. Secured Term Loan B due 2011 Ba3 Ba3 LGD3 48% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Annapolis, Maryland-based, ARINC Inc. -- http//www.arinc.com/ -- provides communications and IT services to the global aviation industry and the U.S. military and other government agencies. ARMOR HOLDINGS: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its Ba3 Corporate Family Rating for Armor Holdings Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss- given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 2% Convertible Sr. Subordinated Notes due 2024 B1 B1 LGD5 77% 8.25% Sr. Subor. Notes due 2013 B1 B1 LGD5 77% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Jacksonville, Florida, Armor Holdings, Inc. manufactures and distributes security products and vehicle armor systems for the law enforcement, military, homeland security, and commercial markets. ARMSTRONG WORLD: Emerges From Chapter 11 Protection --------------------------------------------------- The "Fourth Amended Plan of Reorganization, as Modified," of Armstrong World Industries, Inc., dated Feb. 21, 2006, has become effective and AWI has emerged from Chapter 11 on Oct. 2, 2006. As reported in the Troubled Company Reporter on Sept. 8, 2006, the Plan, which was confirmed by the Honorable Eduardo C. Robreno of the U.S. District Court for the Eastern District of Pennsylvania, includes a comprehensive settlement resolving AWI's asbestos liability by establishing and funding a trust to compensate all current and future asbestos personal injury claimants. "This is an exciting day for Armstrong and its employees," said Michael D. Lockhart, AWI's Chairman and Chief Executive Officer. "Today we emerged from Chapter 11 having made significant operational improvements that provide the opportunity to grow and strengthen our business. "In addition to resolving AWI's asbestos liability, we used the time in Chapter 11 to restructure our flooring business to make it more competitive," Mr. Lockhart said. "We made substantial improvements in our cost structure by closing several plants and streamlining our workforce in the U.S. We have also expanded capacity to manufacture wood flooring, broadened our product lines and improved product quality and customer service." AWI has had several consecutive quarters of improved financial performance. In the second quarter of 2006 AWI nearly doubled its operating income (from $36.6 million to $72.5 million) from a year ago. This increase was primarily due to increased manufacturing productivity and a 3% sales increase. For the first six months of 2006, AWI's operating income increased to $120.7 million (compared to $44.3 million for the first six months of 2005). The improvement in operating income was primarily due to higher sales, improved manufacturing productivity, and reduced SG&A expenses. "I would like to thank the nearly 15,000 Armstrong employees around the world for their hard work, dedication and loyalty during the past six years," said Mr. Lockhart. "Armstrong has gone through a lengthy and challenging Chapter 11 reorganization. We could not have overcome the many obstacles we encountered without the outstanding effort and commitment of our employees." Exit Financing AWI expects to receive commitments for a total of $1.1 billion in a senior credit facility, including: (i) a $300 million revolving credit facility; (ii) a $300 million term loan with a five year maturity; and (iii) a $500 million term loan with a seven year maturity. The Revolving Credit Facility is immediately available to support AWI's ongoing liquidity needs. Both term loans are expected to be funded on or about Oct. 16, 2006, and will be utilized to satisfy distributions under the Plan. "We are emerging from Chapter 11 with less debt and a stronger balance sheet than six years ago," said Mr. Lockhart. "Our solid capital structure, combined with our recent financial performance, means that our employees, customers, distributors, suppliers and other business partners can be assured that the company is on strong financial footing with good prospects for continued growth and profitability going forward." Plan Provisions Pursuant to the Plan, AWI has established a trust in accordance with the provisions of section 524(g) of the U.S. Bankruptcy Code to resolve all current and future asbestos personal injury claims. AWI is funding the Trust by making a one-time contribution of cash, insurance assets and common stock of the reorganized AWI. Those assets will be administered by the Trust's trustees and used to pay asbestos claims in accordance with the provisions of the Plan and the related Trust documents. The reorganized AWI will have no role or responsibility in the administration of the Trust. Pursuant to the Plan, all present and future asbestos personal injury claims must be asserted against the Trust, and all asbestos claimants will be permanently enjoined from pursuing their claims against the reorganized AWI. The Plan provides for general unsecured creditors to receive a combination of cash and common stock of the reorganized AWI on account of their allowed claims. Distributions to unsecured creditors are expected to begin on October 17, 2006. Plans for listing and trading of AWI's new common stock are expected to be announced next week. Pursuant to the Plan, the ownership of AWI by its former parent, Armstrong Holdings, Inc., ended upon AWI's emergence from Chapter 11. All AWI stock owned by AHI has been cancelled. Board of Directors AWI has a new, nine member Board of Directors. Mr. Lockhart will continue to serve as Chairman and CEO of AWI, and no senior management changes are expected. In addition to Mr. Lockhart, Judith R. Haberkorn and John J. Roberts, both of whom had served on the Board of AHI, will serve on the new AWI Board. The six additional members of the new AWI Board are: * James J. Gaffney -- Chairman of Imperial Sugar Company; former Chairman and CEO of General Aquatics, Inc; * Robert C. Garland -- CEO of AFR Holdco, Inc., American Fiber Resources and Great Lakes Pulp Company; * Scott D. Miller -- President and CEO of the Six Sigma Academy; former Vice Chairman and President of Hyatt Hotels Corporation; * Russell F. Peppet -- Special Advisor to Park Avenue Equity Partners, a private equity firm; formerly Vice Chairman of Peat, Marwick, Mitchell & Co., now KPMG; * Arthur J. Pergament -- Founder and CEO of Pergament Advisors, LLC, a New York based asset manager serving the institutional and high net worth communities; and * Hon. Alexander M. Sanders, Jr. -- former President of Charleston College and Chief Judge on the South Carolina Court of Appeals. Fresh Start Accounting AWI will adopt fresh-start financial reporting as of its emergence from Chapter 11. Fresh start accounting requires the Company to mark-to-market its entire balance sheet, similar to purchase accounting. This includes revaluing assets and liabilities to current estimated fair value, setting shareholders' equity at an amount to be determined by a third party valuation, and recording any portion of the equity value that cannot be attributed to specific tangible or intangible assets as goodwill. The adoption of fresh start accounting will have a material effect on AWI's financial statements, primarily due to additional non-cash expenses related to higher asset values. As a result of the application of fresh start reporting as of Oct. 2, 2006, AWI's financial statements in future periods will not be comparable with prior financial statements. A full-text copy of the Fourth Amended Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?fb4 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 WORLD: Parent Loses Ownership Upon Chapter 11 Emergence ----------------------------------------------------------------- Pursuant to Armstrong World Industries, Inc.'s "Fourth Amended Plan of Reorganization, as Modified," dated Feb. 21, 2006, ownership of AWI by Armstrong Holdings, Inc. ended upon AWI's emergence from Chapter 11 on Oct. 2, 2006. All AWI stock owned by AHI has been cancelled. As reported in the Troubled Company Reporter on Aug. 30, 2006, AHI has a pending claim in AWI's Chapter 11 case. The AHI Claim relates to intercompany charges and credits between the companies. If and to the extent the AHI Claim or any part of it is allowed in AWI's Chapter 11 case, AHI would recover on such claim on the same basis as other creditors of AWI will recover under the AWI Plan. AHI also disclosed that the Armstrong group of companies, including AHI and AWI, may be entitled to receive a tax refund based upon a carry back of a portion of the group's tax losses to prior years, which may include a substantial ordinary income loss by AHI as a result of cancellation of AHI's ownership in AWI. A study is underway to determine the amount of that loss. Depending on the size of the loss, AHI may also be entitled to additional benefits from carrying forward any balance of its tax loss and the use of its tax loss to recover estimated taxes paid by the Armstrong group of companies in 2006. The Armstrong group's tax losses may be utilized in different ways, which may benefit AHI and AWI differently, and AHI's and AWI's respective preferences for utilization of the group's tax losses may conflict. In order to address these issues with AWI, the Board of Directors of AHI appointed a special committee of the Board. The committee will determine how AHI should deal with the AHI Claim and AHI's interest in utilizing the Armstrong group's tax losses, as well as any other issues that may arise between AHI and AWI. The committee intends to pursue a joint resolution of these issues with AWI. The special committee is comprised of AHI Board members Jerre Stead and Edward Sellers. Neither of these directors is a current or prospective director or officer of AWI. The special committee appointed the law firm of McDermott, Will & Emery to advise them in connection with these matters. In addition, on Oct. 2, 2006, Judith Haberkorn, Ruth Owades, Jesse Arnelle, James Marley and John Roberts resigned from the AHI Board. Messrs. Stead, Sellers and Michael D. Lockhart, as Chairman, remain as Directors. A full-text copy of the Fourth Amended Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?fb4 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. ATARI INC: Sells Shiny Entertainment to Foundation 9 ---------------------------------------------------- Atari, Inc., reported the completion of the Company's strategic internal studio divesture through the sale of Shiny Entertainment to Foundation 9 Entertainment. Atari disclosed the operational streamlining and portfolio refocus in early 2006. "The sale of Shiny Entertainment completes the final phase of our strategic restructuring," David Pierce, president and chief executive officer of Atari, said. "We now have a centralized organization that can utilize external studio execution while maintaining internal focus on creative development and production." Atari will retain its current project planning formerly developed by Shiny, including Earthworm Jim. The parties did not disclose financial terms of the agreement. About Foundation 9 Entertainment Foundation 9 Entertainment -- http://www.F9E.com/-- develops interactive entertainment products and properties, and is the largest independent games developer in North America. The Company has studios in the San Francisco Bay Area, Vancouver, Boston, Los Angeles, Newport Beach, Eugene, and Charlottetown. Through its studios and core brands, Backbone Entertainment, The Collective, Shiny, Pipeworks, ImaginEngine, and Digital Eclipse, Foundation 9 Entertainment has worked with the largest names in the game publishing world, including Electronic Arts, Konami, Sega, Capcom and Take-Two Interactive. About Atari Inc. New York-based Atari, Inc. (Nasdaq: ATAR) -- http://www.atari.com/ -- develops interactive games for all platforms and is one of the largest third-party publishers of interactive entertainment software in the U.S. The Company's 1,000+ titles include franchises such as The Matrix(TM) (Enter The Matrix and The Matrix: Path of Neo), and Test Drive(R); and mass-market and children's franchises such as Nickelodeon's Blue's Clues(TM) and Dora the Explorer(TM), and Dragon Ball Z(R). Atari, Inc. is a majority-owned subsidiary of France-based Infogrames Entertainment SA (Euronext - ISIN: FR-0000052573), an interactive games publisher in Europe. Going Concern Doubt As reported in the Troubled Company Reporter on July 3, 2006, Deloitte & Touche LLP expressed substantial doubt about Atari, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the for the fiscal years ended March 31, 2006 and 2005. The auditing firm pointed to Atari's significant operating losses and the expiration of its line of credit facility. BALLYROCK CLO: $14MM Class E Notes Gets Moody's Ba2 Rating ---------------------------------------------------------- Moody's Investors Service reported it assigned ratings to notes issued by Ballyrock CLO 2006-1 Ltd.: * Aaa to U.S. $288,000,000 Class A Floating Rate Notes, Due 2019; * Aa2 to U.S. $24,000,000 Class B Floating Rate Notes, Due 2019; * A2 to U.S. $18,000,000 Class C Deferrable Floating Rate Notes, Due 2019; * Baa2 to U.S. $27,000,000 Class D Deferrable Floating Rate Notes, Due 2019 and * Ba2 to U.S. $14,000,000 Class E Deferrable Floating Rate Notes, Due 2019. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Note's governing documents, and are based on the expected loss posed to the Noteholders relative to receiving the present value of such payments. The ratings of the Notes reflect the credit quality of the underlying assets--which consist primarily of senior secured loans-- as well as the credit enhancement for the Notes inherent in the capital structure and the transaction's legal structure. This cash-flow CLO is managed by Ballyrock Investment Advisors LLC and brought to market by Goldman, Sachs and Co. B/E AEROSPACE: Moody's Assigns Loss-Given-Default Ratings --------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its B1 Corporate Family Rating for B/E Aerospace, Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss- given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Secured Revolving Credit Facility due 2011 Ba3 Ba3 LGD2 29% Sr. Secured Term Loan due 2012 Ba3 Ba3 LGD2 29% 8.5% Sr. Notes due 2010 B1 B2 LGD4 64% 8-7/8% Sr. Subor. Notes due 2011 B3 B3 LGD5 83% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Wellington, Florida, B/E Aerospace, Inc. (Nasdaq:BEAV) -- http://www.beaerospace.com/-- manufactures aircraft cabin interior products, and is an aftermarket distributor of aerospace fasteners. B/E designs, develops and manufactures a broad range of products for both commercial aircraft and business jets. B/E manufactured products include aircraft cabin seating, lighting, oxygen, and food and beverage preparation and storage equipment. The company also provides cabin interior design, reconfiguration and passenger-to-freighter conversion services. B/E sells and supports its products through its own global direct sales and product support organization. BERTUCCI'S CORP: Moody's Withdraws Caa1 Rating on Senior Notes -------------------------------------------------------------- Moody's Investors Service affirmed the Caa1, LGD4, 67% rating of Bertucci's Corp.'s 10.75% guaranteed senior unsecured notes, due July 15, 2008. Moody's also affirmed the company's Caa1 corporate family and B3 loss given default ratings. In addition, Moody's changed the outlook to stable from negative. Subsequently, Moody's will withdraw all ratings of Bertucci's for business reasons. Affirmation of the Caa1 ratings and stable outlook recognizes the company's improved financial performance and operating margins that have resulted in stronger credit metrics for the LTM period ending June 30, 2006, with leverage on a debt to EBITDA basis of about 6.0x, EBIT coverage of interest of approximately 1.0x, and positive free cash flow. However, the ratings also take into consideration Bertucci's modest scale, limited scope, and geographic concentration. Moody's also recognizes the challenging environment throughout the entire casual dining segment due to the negative impact of higher energy prices and interest rates on consumer disposable incomes that will likely persist over the intermediate term. In addition, although Bertucci's cash balance was approximately $23 million as of June 30, 2006, the company does not have a revolving credit facility that could provide an alternate source of liquidity. Bertucci's Corporation, headquartered in Northborough, Massachusetts, operates 92 Bertucci's casual dining pizza restaurants principally located in New England. Revenue for the twelve months ending June 30, 2006, was approximately $210 million. BIRDS EYE: Moody's Assigns LGD5 Rating to $50MM Sr. Subor. Notes ---------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. consumer products sector, the rating agency confirmed its B1 Corporate Family Rating for Birds Eye Foods, Inc. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $200 million Senior Secured Revolver due on Aug. 2007 B1 Ba3 LGD3 41% $270M Senior Secured Term Loan due on Aug. 2008 B1 Ba3 LGD3 41% $50M 11 7/8% Senior Subordinated Notes B3 B3 LGD5 89% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). With principal executive office at Rochester, New York, Birds Eye Foods, Inc., produces branded frozen and dry vegetable. Familiar Birds Eye Foods brands in the frozen aisle include Birds Eye, Birds Eye Steamfresh, Birds Eye Voila!, C&W, Freshlike and McKenzie's. Other processed foods marketed by Birds Eye Foods include fillings and toppings (Comstock and Wilderness); chili and chili ingredients (Nalley and Brooks); salad dressings (Bernstein's and Nalley); snacks (Tim's and Snyder of Berlin) and Birds Eye Fresh, a premium line of fresh vegetables. BOMBARDIER INC: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its Ba2 Corporate Family Rating for Bombardier Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Unsecured Notes Ba2 Ba2 LGD4 54% Industrial Revenue Bonds Ba2 Ba2 LGD4 54% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Valcourt, Quebec, Bombardier Inc. (TSX: BBD) -- http://www.bombardier.com/-- manufactures innovative transportation solutions, from regional aircraft and business jets to rail transportation equipment. CALPINE CORP: Sells Thomassen to Ansaldo Energia for $23.5 Million ------------------------------------------------------------------ Calpine Corporation has completed the sale of its Netherlands- based gas turbine manufacturing affiliate Thomassen Turbine Systems, B.V. to Ansaldo Energia, S.p.A., for EUR18.5 million, or approximately $23.5 million. Robert P. May, chief executive officer, stated, "The sale of TTS further strengthens Calpine's renewed commitment to the North American power business. As we advance our restructuring program, Calpine will continue to pursue opportunities to enhance liquidity and our core power generation and trading business through the sale of non-strategic assets." The Company disclosed that it continues to maintain and service its gas turbine parts and components through its in-house Turbine Maintenance Group, based in Pasadena, Texas. TMG supports the Company's Power Operations group by providing technical support and maintenance parts inventory to help engineer high reliability into the company's fleet of natural gas-fired turbines, steam turbines and generators. About Thomassen Turbine Thomassen Turbine Systems, B.V., designs, manufactures and services gas turbine systems and operates in The Netherlands, Abu Dhabi and the United Arab Emirates, with field offices in Australia and India. Calpine acquired TTS in 2003. About Ansaldo Energia Ansaldo Energia, S.p.A. is a company in the Finmeccanica group based in Genova, Italy, and a leader in the supply of gas turbines, steam turbines, generators and global services for power generation plants. About Calpine Corporation 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 CORP: Can Give Greenfield Energy $45MM with Panel's OK -------------------------------------------------------------- The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York authorized Calpine Corp. and its debtor-affiliates to contribute $45,000,000 to Greenfield Energy Centre, LP, $15,000,000 of which will be subject to the consent of the Official Committee of Equity Security Holders. If the Equity Committee does not consent, the Debtors are not allowed to proceed with the contribution without further Court approval. The Debtors sought the Court's authority to contribute capital to Greenfield Energy Centre, LP, a non-debtor affiliate, to continue construction of a 1,005 MW combined cycle plant in Ontario, Canada. The Greenfield Partnership is a limited partnership formed for the purpose of constructing and operating the Greenfield Project in Canada. The general partner of the Greenfield Partnership is owned by Calpine Corporation's subsidiary that is a debtor in a Canadian bankruptcy proceeding and a subsidiary of Mitsui & Co., Ltd. The limited partners of the Greenfield Partnership consist of a non-debtor subsidiary of Calpine Corp. and a subsidiary of Mitsui. David R. Seligman, Esq., at Kirkland & Ellis LLP, in New York, relates that construction of the Greenfield Project began in late 2005, with the commercial operation expected to commence in early 2008. The Greenfield Partnership is party to a 20-year power purchase agreement dated April 12, 2005, with the Ontario Power Authority. Under the PPA, the Greenfield Project will sell all of its output to the Ontario Power Authority. The PPA utilizes a "contract for differences" structure that guarantees payment to the Greenfield Partnership of the "net revenue requirement" bid by the Greenfield Partnership in the bid package submitted in response to the Ontario Power Authority's request for proposal. Currently, the Greenfield Partnership is in financing discussions with prospective lenders to raise non-recourse project debt to finance the remaining $528,000,000 development costs of the Greenfield Project. The Greenfield Partnership anticipates that project financing will be in place in December 2006, Mr. Seligman says. Calpine does not have a firm requirement to fund the additional capital contributions. However, Mr. Seligman notes, if Mitsui funds the capital contributions on Calpine's behalf, Calpine's ownership interest will be diluted. Thus, Calpine must make capital contributions of up to $45,000,000 to the Greenfield Project during the remainder of 2006 or else risk the dilution of its 50% ownership interest, Mr. Seligman contends. The Debtors have been in regular consultation with the Official Committee of Unsecured Creditors, the Ad Hoc Committee of Second Lien Debtholders, their advisors and their postpetition lenders, regarding the Greenfield Project and Calpine's capital funding requirements. The Debtors propose to contribute up to $30,000,000 in November 2006, and $15,000,000 in December 2006. The Debtors have informed the Creditors Committee and the Second Lien Committee that they will only make the latter $15,000,000 of contributions after consulting with the Committees. If the Committees do not consent to the additional contributions, then Calpine will not proceed without the Court's further approval. Mr. Seligman asserts that the development of potentially profitable plants, like the Greenfield Project, is critical to the Debtors' restructuring efforts. 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. 27; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CARRAWAY METHODIST: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Carraway Methodist Health Systems, delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Northern District of Alabama, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $49,331,819 B. Personal Property $19,191,713 C. Property Claimed as Exempt D. Creditors Holding $131,751,033 Secured Claims E. Creditors Holding $16,126 Unsecured Priority Claims F. Creditors Holding $10,874,887 Unsecured Nonpriority Claims ----------- ------------ Total $68,523,532 $142,642,046 Based in Birmingham, Alabama, Carraway Methodist Health Systems, dba Carraway Methodist Medical Center -- http://www.carraway.org/ -- is a major teaching hospital, referral center and acute care hospital that serves Birmingham and north central Alabama. The Company and its affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bankr. N.D. Ala. Case No. 06-03501). Christopher L. Hawkins, Esq., Helen D. Ball, Esq., and Patrick Darby, Esq., at Bradley Arant Rose & White LLP, represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets between $10 million and $50 million and estimated debts of more that $100 million. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 16, 2007. CARRAWAY METHODIST: Taps Cabaniss Johnston as Special Counsel ------------------------------------------------------------- Carraway Methodist Health Systems and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Alabama for permission to employ Cabaniss, Johnston, Gardner, Dumas & O'Neal LLP, as their special corporate counsel. Cabaniss Johnston will: a. represent the Debtors in general corporate matters, including the closing of the Proposed Sale, and to prepare necessary resolutions, minutes, contracts, reports, pleadings and other legal documents relating to the foregoing, including the Asset Purchase Agreement and related documents; b. represent the Debtors in all other matters arising out of the Debtors' operations, including, without limitation, healthcare, litigation, ERISA, tax, labor and employment, real estate and environmental matters Roy J. Crawford, Esq., a partner at Cabaniss Johnston, tells the Court that the firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $230 - $400 Associates $120 - $220 Legal Assistants $70 - $100 Mr. Crawford assures the Court that his firm does not represent or hold any interest adverse to the Debtors or their estates. Mr. Crawford can be reached at: Roy J. Crawford, Esq. Cabaniss, Johnston, Gardner, Dumas & O'Neal LLP 2001 Park Place North, Suite 700 Birmingham, Alabama 35203 Tel: (205) 716-5200 Fax: (205) 716-5389 http://www.cabaniss.com/ Based in Birmingham, Alabama, Carraway Methodist Health Systems, dba Carraway Methodist Medical Center -- http://www.carraway.org/ -- is a major teaching hospital, referral center and acute care hospital that serves Birmingham and north central Alabama. The Company and its affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bankr. N.D. Ala. Case No. 06-03501). Christopher L. Hawkins, Esq., Helen D. Ball, Esq., and Patrick Darby, Esq., at Bradley Arant Rose & White LLP, represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets between $10 million and $50 million and estimated debts of more that $100 million. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 16, 2007. CEP HOLDINGS: Taps Baker & Hostetler as Bankruptcy Counsel ---------------------------------------------------------- CEP Holdings, LLC, and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Ohio for permission to employ Baker & Hostetler, LLP, as their bankruptcy counsel. Baker & Hostetler will: (a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued operation of their businesses; (b) advise the Debtors with respect to all general bankruptcy matters; (c) prepare on behalf of the Debtors all necessary motions, applications, answers, orders, reports, and papers in connection with the administration of their estates; (d) represent the Debtors at all critical hearings on matters relating to their affairs and interests as debtors in possession before the Court, any appellate courts, the U.S. Supreme Court, and protecting the interests of the Debtors; (e) prosecute and defending litigated matters that may arise during the Debtors' chapter 11 cases, including matters as may be necessary for the protection of the Debtors' rights, the preservation of estate assets, or the Debtors' successful reorganization; (f) prepare and file the disclosure statement and negotiate, present and implement a plan of reorganization; (g) negotiate and seek approval of a sale of some or all of the Debtors' assets should such be in the best interests of the Debtors' estates; (h) negotiate appropriate transactions and preparing any necessary documentation related thereto; (i) represent the Debtors on matters relating to the assumption or rejection of executory contracts and unexpired leases; (j) advise the Debtors with respect to corporate, securities, real estate, litigation, labor, tax-exempt finance, environmental, regulatory, tax, healthcare and other legal matters which may arise during the pendency of the Debtors' chapter 11 cases; and (k) perform all other legal services that are necessary for the efficient and economic administration of the Debtor's chapter 11 cases. The Debtors tell the Court that the firm's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Joseph F. Hutchinson, Jr., Esq. Partner $450 Jeffrey Baddeley, Esq. Partner $440 Michael A. VanNiel, Esq. Associate $250 Thomas M. Wearsch, Esq. Associate $235 Eric R. Goodman, Esq. Associate $225 Timothy J. Richards, Esq. Associate $190 Sarah Maxwell $130 The Debtors disclose that pursuant to an Engagement Agreement, the firm received a $75,000 "evergreen" retainer prior to the Debtors' bankruptcy filing. The Debtors further disclose that the retainer was increased to $125,000 on Aug. 24, 2006. Mr. Hutchinson assures the Court that his firm is disinterested as such term is defined in Section 101(14) of the Bankruptcy Code. Mr. Hutchinson can be reached at: Joseph F. Hutchinson, Jr., Esq. Baker & Hostetler, LLP 3200 National City Center 1900 East 9th Street Cleveland, Ohio 44114-3485 Tel: (216) 621-0200 Fax: (216) 696-0740 http://www.bakerlaw.com/ Based in Akron, Ohio, CEP Holdings, LLC, manufactured hard, molded rubber products and extruded plastic materials for companies in the automotive, construction, and the medical industries. The Company and two of its subsidiaries filed for chapter 11 protection on Sept. 20, 2006 (Bankr. N.D. Ohio Case No. 06-61796). When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 18, 2007. CEP HOLDINGS: Wants Until October 20 to File Schedules & Statement ------------------------------------------------------------------ CEP Holdings, LLC, and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Ohio to extend until Oct. 20, 2006, the deadline to file their schedules of assets and debts and statement of financial affairs. The Debtors cite four reason why the extension is warranted: (1) the substantial size and complexity of their organizations; (2) the tremendous volume of materials that must be assembled and compiled; (3) the multiple locations of the information; and (4) the limited staff available to review the information in the early stage of their bankruptcy proceedings. Based in Akron, Ohio, CEP Holdings, LLC, manufactured hard, molded rubber products and extruded plastic materials for companies in the automotive, construction, and the medical industries. The Company and two of its subsidiaries filed for chapter 11 protection on Sept. 20, 2006 (Bankr. N.D. Ohio Case No. 06-61796). When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 18, 2007. CHEMDESIGN CORP: Court Approves Consolidation with SpecialtyChem ---------------------------------------------------------------- The Hon. Pamela Pepper of the U.S. Bankruptcy Court for the Eastern District of Wisconsin granted ChemDesign Corporation's request to consolidate its chapter 11 case with that of its wholly owned subsidiary, SpecialtyChem Products, Corp. ChemDesign relates that it and SpecialtyChem collectively did business under the name "ChemDesign." ChemDesign reminds the Court that it filed for bankruptcy so that its wind down can be properly coordinated with the reorganization efforts of SpecialtyChem. ChemDesign anticipates selling the real property, machinery and equipment at its Fitchburg, Massachusetts, facility in order to reduce the cross-collateralized, secured debt of both debtors. The Debtors contend that their cases should be substantively consolidated because they share a substantial identity, and consolidation will yield significant benefits in their cases. According to the Debtors, the true test of substantial identity is not whether corporate formalities have been maintained, but rather the way they have conducted their business and held themselves out to the public. The Debtors cite four reasons why their cases should be consolidated: (1) unity of interests, ownership and management; (2) shared liability on loans; (3) entangled assets and business functions; and (4) identity of marketing and creditor reliance on a single entity. About SpecialtyChem Products Headquartered in Marinette, Wisconsin, SpecialtyChem Products, Corp., manufactures various organic chemicals for paper products, electronics, agricultural products and other materials. The company filed for chapter 11 protection on June 12, 2006 (Bankr. E.D. Wis. Case No. 06-23131). Christopher J. Stroebel, Esq., Timothy F. Nixon and Marie L. Nienhuis, Esq., at Godfrey & Kahn, S.C., represent the Debtor in its restructuring efforts. Fort Dearborn Partners, Inc., is the Debtor's turnaround consultant, and gives financial advice to the Debtor. Matthew M. Beier, Esq., and Eliza M. Reyes, Esq., at Brennan, Steil and Basting, S.C., and Matthew T. Gensburg, Esq., and Nancy A. Peterman, Esq., at Greenberg Traurig, L.L.P., represent the Official Committee of Unsecured Creditors of the Debtor. In its schedule of assets and liabilities, the Debtor disclosed $11,394,224 in total assets and $12,323,425 in total debts. About ChemDesign Corporation Headquartered in Fitchburg, Massachusetts, ChemDesign Corporation -- http://www.chemdesigncorp.com/-- is a custom manufacturer of various fine organic chemicals for paper products, electronics, agricultural products and other materials. The Debtor filed for chapter 11 protection on Aug. 27, 2006 (Bankr. E.D. Wis. Case No. 06-24729. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. CHEMDESIGN CORP: Withdraws Request for Godfrey & Kahn as Counsel ---------------------------------------------------------------- ChemDesign Corporation informs the U.S. Bankruptcy Court for the Eastern District of Wisconsin that it is withdrawing its application to employ Godfrey & Kahn, S.C., as its bankruptcy counsel in light of the order granting the substantive consolidation of its chapter 11 case with that of its wholly owned subsidiary, SpecialtyChem Products, Corp. As reported in the Troubled Company Reporter on Sept. 7, 2006, the Debtor asked the Court for permission to employ Godfrey & Kahn, as its bankruptcy counsel. Headquartered in Fitchburg, Massachusetts, ChemDesign Corporation -- http://www.chemdesigncorp.com/-- is a custom manufacturer of various fine organic chemicals for paper products, electronics, agricultural products and other materials. The Debtor filed for chapter 11 protection on Aug. 27, 2006 (Bankr. E.D. Wis. Case No. 06-24729. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. CHIQUITA BRANDS: Moody's Affirms Caa1 Rating on $250MM Sr. Notes ---------------------------------------------------------------- Moody's Investors Service affirmed all ratings for Chiquita Brands L.L.C. (senior secured at Ba3), as well as for its parent Chiquita Brands International, Inc. (corporate family rating at B2), but changed the outlook to negative from stable. This action follows the company's announcement that its operating performance continues to be negatively impacted by lower pricing in key European and trading markets, as well as excess fruit supply. Operations are also suffering from the impact of recent e. coli discoveries in US fresh spinach products, which have resulted in an FDA advisory and industry-wide withdrawals of fresh spinach product by most processors, and lower consumption of some salad products. Moody's notes that to date, there have been no confirmed cases of chiquita products being traced to the e. coli issue. Continuing high fuel and other industry costs, as well as unusually high costs to source fruit during shortages in late 2005/early 2006, have also pressured earnings and cash flow. Chiquita also announced its intention to eliminate its $17 million annual cash dividends and to explore the sale of its owned shipping assets, as well as the management of its logistics needs, with asset-sale proceeds being used primarily to reduce debt. There also continues to be the uncertainty concerning the longer- term impact on Chiquita's operations and market position due to the structural changes occurring in key European banana markets under the tariff-only system established in January 2006. Moody's believes that the net impact of these challenges will result in weaker-than-expected debt protection measures and financial flexibility. Should Chiquita be successful in selling its shipping fleet (consisting of 12 ocean-going vessels), it expects to lease back those same vessels in order to meet its shipping needs. Moody's notes that as one of our standard analytic adjustments, we capitalize lease payment streams and add them back as debt in our leverage calculations. For this reason, we would not expect the sale of Chiquita's shipping fleet to result in any net reduction in effective debt or leverage, and in fact could increase effective debt and leverage depending upon the specific terms of any ultimate transaction and other debt repayments that occur with sale proceeds. Chiquita's existing ratings reflect a company with a good qualitative profile, but with credit metrics which have been weakening due to a combination of leveraged acquisitions and weaker than expected operating performance, resulting in an overall B2 rating. The key rating factors currently influencing Chiquita's ratings and negative outlook are as follows: The company is one of the largest global producers and marketers of fresh fruit and vegetables, with good geographic and product market diversity. Its franchise strength and growth potential are considered moderate, with good market share and volume growth in some segments, partially offset by the low margin commodity nature of much of its business which, at times, can lead to earnings and cash flow volatility. Liquidity under stress has been weak over the past year, as evidenced by the occasional need to seek financial covenant relief. Overall credit metrics had been relatively strong for its rating category, but have been weakening due to a combination of higher debt from leveraged acquisitions and weak operating performance. Chiquita's ratings could be downgraded if its earnings and cash flow remain weak - conceivably due to the impact of the new EU banana regulations being more negative than anticipated, litigation costs increasing more than expected, or the company's inability to successfully pass along higher energy costs. Specifically, Chiquita's ratings could be downgraded if three-year average Debt/EBITDA (incorporating Moody's standard analytic adjustments) rose above 5.5 times and was likely to rise above 7 times on a lagging 12-month basis in a downturn, and/or three year average EBIT/Interest fell below 1.5 times and were likely to fall below 1 time on a lagging 12-month basis in a downturn. Given the negative outlook, a rating upgrade in the near term is unlikely. The rating outlook could stabilize if the company successfully adapts to the new EU banana import regulations, its litigation risk reduced, and it successfully completes the integration of Fresh Express. A stable outlook would also require Chiquita to be able to sustain three-year average Debt/EBITDA below 5 times and lagging 12-month Debt/EBITDA below 6.5 times in a downturn, and to maintain three-year average EBIT/Interest above 1.7 times, with lagging 12-month EBIT/Interest above 1.25 times in a downturn. These are the rating affirmed with a negative outlook: * Chiquita Brands LLC (operating subsidiary) -- $200 million senior secured revolving credit at Ba3 (LGD2, 26%) -- $24.5 million senior secured term loan B at Ba3 (LGD2, 26%) -- $372.2 million senior secured term loan C at Ba3 (LGD2, 26%) -- Chiquita Brands International, Inc. (holding company parent) -- $250 million 7.50% senior unsecured notes due 2014 at Caa1 (LGD 5, 89%) -- $225 million 8.875% senior unsecured notes due 2015 at (LGD 5, 89%) -- Corporate family rating at B2 --Probability of default rating at B2 With 2005 sales of $3.9 billion, Cincinnati-based Chiquita is one of the largest global producers and marketers of fresh fruit and vegetables. COLLINS & AIKMAN: Defends Move to Conduct Probe on Major Customers ------------------------------------------------------------------ The Official Committee of Unsecured Creditors of Collins & Aikman Corporation and its debtor-affiliates tells the U.S. Bankruptcy Court for the Eastern District of Michigan that it is not using its request to conduct examinations and obtain documents from Ford Motor Corporation, General Motors Corporation, and DaimlerChrysler Corporation, to harass the Debtors' major customers or gain leverage to improve the recovery for its constituency. The Committee response came in the wake of objections filed by the Debtors, GM, Ford and DaimlerChrysler. As reported in the Troubled Company Reporter on Aug. 18, 2006, the Committee wished to obtain additional evidence relating to potential causes of action that may be asserted against these principal customers under applicable fraudulent transfer and antitrust laws. According to the Committee, it only wants to investigate the extent and value of potential claims against the Customers to whom the Debtors have proposed to grant sweeping releases in their filed plan of reorganization, Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, explains. While the Debtors assert that they are in the process of investigating the Customers' claims, the Committee doubts the Debtors' ability to make a credible investigation. The Committee stands by its determination that colorable fraudulent conveyance claims against the Customers continue to exist. Mr. Stamer asserts that an examination under Rule 2004 of the Federal Rules of Bankruptcy Procedure is required to explore fully the facts relating to the transactions at issue and to quantify the claims that may be asserted against the Customers. According to Mr. Stamer, the Committee is not required to plead facts in support of an antitrust claim because a Rule 2004 request assumes that it cannot yet establish that claim. The purpose of a Rule 2004 examination is to investigate fully the factual basis for that claim, Mr. Stamer says, citing In re Metiom, Inc., 318 B.R. 263, 268 (S.D.N.Y. 2004) (good cause under Rule 2004 is established by showing that examination is necessary to establish claim of party seeking examination). Moreover, Mr. Stamer points out that contrary to the objectors' arguments, coordination by the Customers in renegotiating the terms of their contracts with the Debtors -- whether tacit or pursuant to explicit agreement -- would unquestionably constitute collusion actionable under the Sherman Antitrust Act. Certain of the objections assert that the requested discovery is overbroad and burdensome. Although the Committee believes its discovery requests are narrowly tailored, it intends to approach each of the objectors in an attempt to narrow further the scope of discovery sought, Mr. Stamer relates. "The Committee only seeks to acquit its fiduciary obligations to the Debtors' unsecured creditors and ensure that appropriate value is obtained for any and all claims that may be either asserted against the Customers or otherwise satisfied," Mr. Stamer says. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) COLLINS & AIKMAN: Issues Rejection Notice for Various GECC Leases ----------------------------------------------------------------- Collins & Aikman Corporation and its debtor-affiliates propose to reject these lease schedules under their Master Lease Agreement dated May 7, 1993, with General Electric Capital Corporation: (1) Schedule No. 5, Serial Nos. 96386 to 96390; (2) Schedule No. 16, Serial No. 299; (3) Schedule No. 7, Serial Nos. 96407, 96354, and 96353; and (4) Schedule No. 19, Serial No. 96381. The rejection is retroactive to Sept. 22, 2006. Parties wanting to object to the proposed rejection must file and serve a written objection without further delay with the U.S. Bankruptcy Court for the Eastern District of Michigan. The U.S. District Court for the Eastern District of Michigan, Southern Division, recently denied GECC's appeal with regard to the Bankruptcy Court's ruling concerning the Master Lease Agreement. GECC had informed the Bankruptcy Court that it will take an appeal to the District Court from the order denying its request to compel payments under its master lease agreements with the Debtors. GECC wanted the District Court to determine whether: a. the Bankruptcy Court erred in denying GECC's request to compel payments first due at least 60 days after the Petition Date under certain master lease agreements; and b. the Bankruptcy Court erred by, over GECC's objection, instituting a procedure to rule on the relief requested in the Request when: (1) the procedure resulted in the denial of the Motion and the continued use by the Debtors of the equipment leased under the Products Leases without any evidence or suggestion that the Debtors will have the financial wherewithal to pay the accrued and accruing obligations under the Products Leases by which the Debtors remain bound; (2) the procedure is not contemplated by the Bankruptcy Code or the Federal Rules of Bankruptcy Procedure; and (3) the procedure denied GECC due process of law in violation of Article V of the Constitution in that it did not (a) afford GECC the opportunity to submit a brief, (b) allow GECC to conduct discovery, (c) allow GECC to depose the Debtors' witnesses, or (d) allow GECC to cross examine the Debtors' witnesses at the hearing. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) COMPLETE RETREATS: Court OKs Panel's Information Sharing Protocol ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Connecticut approved uniform information procedures proposed by the Official Committee of Unsecured Creditors in Complete Retreats LLC and its debtor- affiliates' chapter 11 cases. The Court ruled that the Committee will not be required to share the Debtors' confidential information with its constituents, and directed the Debtors to assist the Committee in identifying any confidential information provided to the Committee, its agent, and the Debtors' professionals and agents. The Court further ruled that the Committee is authorized, but not required, to enter into ad hoc confidentiality agreements from time to time with other constituencies for the purpose of sharing certain confidential information with those constituencies on terms mutually acceptable to the Debtors and the Committee. The Committee tells the Court that the information procedures were designed to protect the Debtors' Confidential Information and prevent its dissemination to the general public. To properly perform its duties, the Committee must have access to the Debtors' proprietary documents and information, William F. Govier, Esq., at Bingham McCutchen LLP, in Hartford, Connecticut, relates. The Committee believes that the sharing of all information without limitations would be detrimental to the Debtors' businesses and ability to maximize value. Furthermore, providing creditors unlimited access to the Debtors' confidential information will allow competitors to use that Information, including business plans, trade secrets, or other proprietary information, to the disadvantage of the Debtors. The Committee and the Debtors have already engaged in discussions regarding the status of the bankruptcy cases and a plan to reorganize the Debtors' businesses, according to Mr. Govier. Subsequently, the Debtors have provided certain confidential information to the Committee. Over the course of future discussions with the Debtors, the Committee anticipates that it will receive additional Confidential Information of a highly sensitive nature. Information Procedures To facilitate communication and assist in the transfer of information, the Debtors and the Committee will enter into a confidentiality agreement, which, with certain limited exceptions, prohibit the Committee members from disseminating the Debtors' proprietary information -- Confidential Information. The Committee will also enter into separate confidentiality agreements with other creditors in its discretion from time to time on terms mutually acceptable to the Debtors. To insure the highest permitted degree of transparency and disclosure, the Committee has instructed its counsel to establish a Web site to make certain non-Confidential Information available to general unsecured creditors. The Web site may be accessed at http://wwww.bingham.com/tannerhaley The Web site contains a compendium of information to assist and educate general unsecured creditors by providing, among other things: (a) the Petition Dates; (b) the case numbers; (c) the Debtors' contact information; (d) the names of the Debtors' counsel and restructuring advisor, as well as the names of the Committee members and the Committee's counsel and financial advisor; (e) the last date and time by which creditors must submit proofs of claim; (f) the voting deadline with respect to any Chapter 11 plan filed in the bankruptcy cases; (g) access to the claims docket as and when established by the Debtors and any claims and noticing agent retained in the bankruptcy cases; (h) a general overview of the Chapter 11 process; (i) proof of claim forms; (j) various pleadings and orders; (k) the Debtors' Schedules of Assets and Liabilities, Statements of Financial Affairs, and monthly operating reports; (l) frequently asked questions materials, press releases, announcements and reports; and (m) any other information that the Committee, in its sole discretion, deems appropriate, subject to certain restrictions and limitations. The Committee has also established an e-mail address to allow unsecured creditors to submit questions and comments in connection with the bankruptcy cases. The e-mail address is tannerhaley@bingham.com The Committee said it will respond to any inquiries from general unsecured creditors as promptly as practicable. However, the Committee clarifies that it is not obligated to provide individualized legal advice to general unsecured creditors. Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor- affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed $308,000,000 in total debts. (Complete Retreats Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). CORPORATE AND LEISURE: Receivership Didn't Bar Bankruptcy Filing ---------------------------------------------------------------- As reported in the Troubled Company Reporter on July 26, 2006, the Honorable Randolph J. Haines of the U.S. Bankruptcy Court for the District of Arizona entered a minute order denying Peter S. Davis' request to dismiss the chapter 11 case filed by Corporate and Leisure Event Productions, Inc. In a decision published at 2006 WL 2559816, Judge Haines explains the Court's reasoning. The issue, Judge Haines relates, is who, if anyone, may file a Chapter 11 petition for a Debtor after a state court has appointed a Receiver for a debtor, enjoined the Debtor from filing a bankruptcy petition, and removed the Debtor's corporate officers and directors. Judge Haines concludes that federal bankruptcy law preempts state law and remains available to an eligible debtor and its constituents notwithstanding creditors' use of state law remedies in an attempt to bar the bankruptcy courthouse door. Much of the history of bankruptcy law deals with efforts by creditors to escape bankruptcy court jurisdiction or to enforce remedies provided by state law that are unavailable under bankruptcy law, Judge Haines observes. Before the United States had a federal bankruptcy law, a debtor who had been discharged by one state's insolvency law remained at risk that creditors could send him to debtor's prison in another state, if he ventured there. It was to put an end to this practice that the Constitution conferred on Congress the unique uniform bankruptcy power. U.S. Const. art. I, 8, cl. 4; Cent. Va. Cmty. Coll. v. Katz, 126 S.Ct. 990, 997-1000, 163 L.Ed.2d 945 (2006). The power is unique (except perhaps for the Naturalization Power contained in the same clause) because it is apparently the only Article I power that may override the States' reserved sovereign immunity, as Katz held. Once Congress exercises that power it preempts and supersedes all state bankruptcy and insolvency laws and other state law remedies that might interfere with the uniform federal bankruptcy system. See Sturges v. Crowninshield, 17 U.S. (4 Wheat.) 122, 4 L.Ed. 529 (1819). See, also, Sherwood Partners, Inc. v. Lycos, Inc., 394 F.3d 1198 (9th Cir. 2005)(Bankruptcy Code preempts state statute giving preference avoidance powers to an assignee for benefit of creditors); In re Miles, 430 F.3d 1083, 1089 (9th Cir. 2005)(bankruptcy law preempts state remedies for bad faith filing because the "complex, detailed, and comprehensive provisions of the lengthy Bankruptcy Code" "create a whole system under federal control which is designed to bring together and adjust all of the rights and duties of creditors and embarrassed debtors alike," and which needs to be "jealously guard[ed] . . . from even slight incursions and disruptions" from state law remedies), quoting MSR Exploration, Ltd., v. Meridian Oil, Inc., 74 F.3d 910, 915 (9th Cir. 2005). The paramount and exclusive federal jurisdiction in this regard was noted early on by the great equity jurist, Justice Story. Construing a bankruptcy statute that contained no automatic stay, Justice Story concluded in Ex parte Christy, 44 U.S. (3 How.) 292, 11 L.Ed. 603 (1845), that Congress intended to vest bankruptcy courts with jurisdiction to "suspend or control all proceedings in the state courts": It is farther objected that, if the jurisdiction of the District Court is as broad and comprehensive as the terms of the [Bankruptcy Act of 1841] justify according to the interpretation here insisted on, it operates or may operate to suspend or control all proceedings in the state courts either then pending or thereafter to be brought by any creditor or person having any adverse interest to enforce his rights or obtain remedial redress against the bankrupt or his assets after the bankruptcy. We entertain no doubt that, under the provisions of the 6th section of the act, the District Court does possess full jurisdiction to suspend or control such proceedings in the state courts, not by acting on the courts, over which it possesses no authority; but by acting on the parties through the instrumentality of an injunction or other remedial proceedings in equity upon due application made by the assignee and a proper case being laid before the court requiring such interference. . . . Similar proceedings have been instituted in England in cases of bankruptcy; and they were without doubt in the contemplation of Congress as indispensable to the practical working of the bankrupt system. * * * Congress did not intend to trust the working of the bankrupt system solely to the state courts of twenty-six states, which were independent of any control by the general government, and were under no obligations to carry the system into effect. The judicial power of the United States is, by the Constitution, competent to all such purposes; and Congress, by the act, intended to secure the complete administration of the whole system in its own courts, as it constitutionally might do. Id. at 318-20. As Justice Story there noted, the Bankruptcy Act of 1841 did not specifically authorize bankruptcy courts to enjoin state courts, and in fact the Judiciary Act of 1793 expressly prohibited federal courts from enjoining state courts. Consequently if a state court first acquired jurisdiction over a debtor's assets such as through a receivership, a subsequent bankruptcy court arguably could not reach them. Peck v. Jenness, 48 U.S. (7 How.) 612, 625-26, 12 L.Ed. 841 (1849). That is virtually identical to the kind of race to the courthouse that Corporate and Leisure's creditors claim to have won, Judge Haines observes. But Congress closed this loophole in the Bankruptcy Act of 1867, in which Congress for the first time amended the Judiciary Act of 1793 to expressly permit federal district courts sitting in bankruptcy to stay proceedings in state courts. Act of 1867, 14 Stat. 526, 21; see Toucey v. N.Y. Life Ins. Co., 314 U.S. 118, 131-32, 62 S.Ct. 139, 86 L.Ed. 100 (1941). Of course the current Bankruptcy Code goes even further, Judge Haines says, not only by making the stay automatic, statutory and specifically applicable to government entities, but also by specifically requiring receivers to turn over receivership property to bankruptcy trustees and debtors in possession. Given this background, it is not surprising that all courts to have addressed the precise issue after 1867 -- a creditor's argument that a receivership order removes authority for a debtor or its corporate constituents to file a bankruptcy case -- have concluded that state court receivership orders cannot bar debtors from resorting to the exclusive bankruptcy court jurisdiction. Even prior to the Chandler Act (which contained the first corporate reorganization provisions), the Sixth Circuit so concluded even though the corporate debtor had consented to the receivership that had been pending for over two years and even though the state court "has issued the usual injunction against inference." "[T]he pendency of a receivership does not ordinarily prevent the filing of a voluntary petition." Struthers Furnace Co. v. Grant, 30 F.2d 576, 577 (6th Cir. 1929). That concise conclusion appears to be good law today and, in the absence of any statutory language or controlling case law to the contrary, is dispositive here. Ten years later, the Sixth Circuit reached the same conclusion when the receivership order specifically enjoined the debtor's directors, officers and stockholders "from preparing or in any way aiding the institution of reorganization proceedings on behalf of the debtor corporation in the District Court without the consent of such state court." Merritt v. Mt. Forest Fur Farms of Am., Inc., 103 F.2d 69, 71 (6th Cir. 1939). That court concluded that such a state court restraining order erroneously "denied to the appellee, its directors, stockholders and attorneys, access to the federal courts, thus depriving them of their constitutional right to relief under Sec. 77B of the Bankruptcy Act," citing the Uniform Bankruptcy Power of the Constitution. Although the Supreme Court subsequently made clear that there is no constitutional right to bankruptcy relief, United States v. Kras, 409 U.S. 434, 93 S.Ct. 631, 34 L.Ed.2d 626 (1973), the privileges provided by the Bankruptcy Code may be among the "privileges and immunities" that the Fourteenth Amendment forbids states to abridge. See Randolph J. Haines, Getting to Abrogation, 75 Am. Bankr.L.J. 447 (2001). Shortly thereafter, the District Court for the Southern District of New York reached the same conclusion: "The appointment by a state court of a permanent receiver with full power to act for the corporation does not affect the right of directors to act on behalf of a corporation in federal bankruptcy proceedings." In re Klein's Outlet, Inc., 50 F.Supp. 557, 559 (S.D.N.Y. 1942). Other courts have reached the same conclusion under the current Bankruptcy Code. Cash Currency Exchange, Inc. v. Shine (In re Cash Currency Exchange, Inc.), 762 F.2d 542, 552 (7th Cir. 1985)("[T]the exclusivity of an administrative receiver's title to all assets under state law is irrelevant to the determination whether a particular entity may file for bankruptcy relief."); Larson v. Kreisers, Inc., 112 B.R. 996, 998 & 1000 (Bankr. D. S.D. 1990) ("The court . . . has not unearthed any statutory or decisional law to support the contention that a state court receivership generally bars bankruptcy filing. Perhaps this is so because the argument runs so blatantly against the statutory right of a debtor to the privileges of the national statute on bankruptcies and the inherent prohibition against any bar by any other authority to the exercise of that right. . . . [The debtor's] officers and directors could pass a resolution to file bankruptcy despite state court orders not to do so."(citations omitted)); In re S & S Liquor Mart, Inc., 52 B.R. 226, 227 (Bankr. D. R.I. 1985) ( "[I]t is fundamental that a state court receivership proceeding may not operate to deny a corporate debtor access to the federal bankruptcy courts [citations omitted] and it has been held that an order in a state court receivership specifically restraining the debtor corporation, its stockholders, officers, and directors from instituting federal reorganization proceedings is an unconstitutional deprivation of the right to bankruptcy relief."); In re Donaldson Ford, Inc., 19 B.R. 425 (Bankr. N.D. Ohio 1982). The only cases to the contrary appear to arise when there is a purely intracorporate dispute (rather than a dispute with creditors) as to who has the authority to file, or where the debtor is "ineligible for debtor status" under the Bankruptcy Code. See Price v. Gurney, 324 U.S. 100, 65 S.Ct. 513, 89 L.Ed. 776 (1945) (owner of 7% of stock may not file petition for corporation when directors oppose it); In re Gen-Air Plumbing & Remodeling, Inc., 208 B.R. 426 (Bankr. N.D. Ill. 1997). And even if there is such an intracorporate dispute over management authority, creditors may not be able to rely on it to obtain dismissal of a bankruptcy petition. Royal Indem. Co. v. Am. Bond & Mort. Co., 289 U.S. 165, 171, 53 S.Ct. 551, 77 L.Ed. 1100 (1933)("The question is purely one of the internal management of the corporation. Creditors have no standing to plead statutory requirements not intended for their protection."); In re Guanacevi Tunnel Co., 201 F. 316, 318 (2d Cir. 1912)(creditor's argument that Arizona law requires a majority of shareholders to authorize a voluntary petition "is one which a creditor has no standing to make in the case of a voluntary petition"). See, also, Oil & Gas Co. v. Duryee, 9 F.3d 771, 773 (9th Cir. 1993). Judge Haines says that it is, of course, true that bankruptcy courts generally look to state law to determine who is authorized to file a voluntary petition for a corporation, partnership or other kind of organizational entity. This rule, however, derives not from the language of the Bankruptcy Code (or its predecessor Bankruptcy Act), but rather from federal common law in the absence of statutory directive. The Bankruptcy Code neither specifies who has authority to file a corporate petition nor requires that state law be the exclusive source of any such authority. Just as obviously, however, Judge Haines continues, there is a federal common law exception to this reliance on state law when the state law is in the form of a receivership order that attempts to preclude any of the original constituents of the organizational entity from filing a petition on its behalf, in order to maintain the state court remedy that has been obtained by creditors. It makes no difference whether the corporate officers and directors were actually removed by the receiver or the receivership order merely enjoins their interference or filing of a petition. In either case, state law withdraws their authority to file for bankruptcy relief and yet in both cases the unanimous federal common law holds that they are nevertheless entitled to do so. Much of this common law predates the drafting and adoption of the Bankruptcy Code, so Congress must be assumed to have incorporated it when it drafted the Code. Indeed, Judge Haines says, Congress did expressly incorporate this common law when the Chandler Act of 1938 made explicit that a bankruptcy case would ordinarily supersede a state receivership and that a state receiver would ordinarily be required to turn over the estate assets to a debtor in possession or trustee. Bankruptcy Act Sec. 2a(21) is the predecessor to Sec. 543 of the Bankruptcy Code. As explained by the then-leading authority, "its provisions enact what was already established by prior case law," and this "codification of the bankruptcy court's powers as to superseded receiverships, general assignments and similar proceedings is a desirable change, removing possible controversies and conflicts as to jurisdiction." 1 James Wm. Moore, Et Al., Collier On Bankruptcy par. 2.77, at 390.8 & (1) (14th ed. 1974). The legislative history expressly recognized that there was nothing in the Bankruptcy Act of 1898 that required receivers to be divested of property when the debtor is thrown into bankruptcy, but "the courts have supplied the gap and the bill codifies that result." H.R. 6439, 75th Cong., 1st Sess 12 (1937), quoted in Collier, supra, at 390.8(2), n. 4; Emil v. Hanley (In re Russell), 318 U.S. 515, 517-18, 63 S.Ct. 687, 87 L.Ed. 954 (1943)("These provisions [ 2a(21) and 69d] of the Bankruptcy Act are new. There were added in 1938 by the Chandler Act. . . . These sections are in part declaratory of the law as it existed prior to the Chandler Act."). The fact that Congress granted such express relief notwithstanding that receivership orders generally included the "usual injunction against inference," Struthers at 577, necessarily implies that Congress intended such state law not to control who may petition for bankruptcy relief. Nor, Judge Haines reasons, is it any answer to say that analysis should not apply here because this Receiver did have authority to file for the receivership entities. Congress obviously intended bankruptcy relief to be available for the benefit of many of the constituents of a business entity, including not only the creditor interests but also the equity interests and perhaps those of employees and customers as well. While bankruptcy case law generally refers to state law to determine who has eligibility to file the petition, it unanimously refuses to do so (in the absence of an intracorporate dispute) when state law has provided a creditor's remedy to vest that authority in a receiver. Finally, Judge Haines opines, it is clear that Congress did not intend a bright-line rule to govern these issues either way. Even though the ordinary rule is that receivers must turn over estate property to a debtor in possession or trustee, Code Sec. 543(b), the bankruptcy courts have discretion to waive that requirement if the interests of creditors would be better served by continuing the receiver in possession. Code Sec. 543(d)(1). And although the existence of bankruptcy jurisdiction may be undeniable, bankruptcy courts nevertheless have discretion to abstain or suspend proceedings if "the interests of creditors and the debtor would be better served." Code Sec. 305(a)(1). As the Supreme Court held in resolving a somewhat similar conflict between two federal statutes, "[t]he bankruptcy court is a court of equity and, in making this determination it is in a very real sense balancing the equities." NLRB v. Bildisco and Bildisco, 465 U.S. 525, 527 (1984). The express powers to excuse turnover or abstain provide ample authority to balance the equities based on the facts of each individual case, and provide a more sensible and fact- based resolution than any bright-line test of corporate authority or race to the courthouse could provide. That is obviously the remedy Congress preferred and dictated, rather than the simple race to the courthouse on which the Receiver and creditors rely. Headquartered in Tucson, Arizona, Corporate and Leisure Event Productions, Inc., and four of its affiliates filed for chapter 11 protection on June 16, 2006 (Bankr. D. Ariz. Case No. 06-01797). Michael W. Carmel, Esq., at Michael W. Carmel, Ltd., represents the Debtors. When the Debtors filed for protection from their creditors, they estimated consolidated assets and liabilities between $10 million and $50 million. COUDERT BROTHERS: Taps Klestadt & Winters as Bankruptcy Counsel --------------------------------------------------------------- Coudert Brothers LLP asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Klestadt & Winters, LLP, as its bankruptcy counsel, nunc pro tunc to Sept. 22, 2006. Klestadt & Winters will: (a) perform all appropriate services as the Debtor's counsel, including, without limitation, advising the Debtor, representing the Debtor, and preparing all necessary documents on behalf of the Debtor; (b) take all necessary actions to protect and preserve the Debtor's estate during the chapter 11 case, including the prosecution of actions by the Debtor, the defense of any actions commenced against the Debtor in the context of the chapter 11 case, negotiations concerning all litigation in which the Debtor is involved, and objecting to claims filed against the estate; (c) prepare on behalf of the Debtor, as debtor-in-possession, all necessary motions, applications, answers, orders, reports, and papers in connection with the administration of its chapter 11 case; (d) provide counsel to the Debtor with regard to its rights and obligations as a debtor-in-possession; and (e) perform all other necessary legal services. Tracy L. Klestadt, a partner at Klestadt & Winters, tells the Court that she will bill $475 per hour for this engagement. Ms. Klestadt discloses that the firm's other professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Jon Yard Arnason, Esq. Of Counsel $450 Donald E. Watnick, Esq. Of counsel $425 Ian R. Winters, Esq. Partner $395 John Jureller, Esq. Partner $375 Sean Southard, Esq. Partner $325 Stacy Bush, Esq. Associate $300 Brendan Scott, Esq. Associate $225 Sarah E. Megna, Esq. Associate $175 Suzanne C. Furst, Esq. Associate $150 Mr. Klestadt further discloses that paralegals of the firm bill $125 per hour. Mr. Klestadt assures the Court that her firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Klestadt can be reached at: Tracy L. Klestadt, Esq. Klestadt & Winters, LLP 292 Madison Avenue, 17th Floor New York, NY 10017 Tel: (212) 972-3000 Fax: (212) 972-2245 http://www.klestadt.com/ Coudert Brothers LLP -- was an international law firm specializing in complex cross border transactions and dispute resolution. The Debtor filed for Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No. 06-12226). In its schedules of assets and debts, Coudert listed total assets of $29,968,033 and total debts of $18,261,380. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 20, 2007. COUDERT BROTHERS: Taps Ehlers Ehlers as Special German Counsel -------------------------------------------------------------- Coudert Brothers LLP asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Ehlers, Ehlers & Partners as its special counsel, nunc pro tunc to Sept. 22, 2006. The Debtor seeks to retain Ehlers Ehlers as special counsel with respect to its continued representation of the Debtor in matters pending in Germany. In addition to the general wind-down of the Debtor's affairs in Germany, the Debtor relates that Ehlers Ehlers has been representing the Debtor in these matters: (a) Bernd Christian Haager v. Coudert Brothers LLP; (b) Reinhard G. Regner v. Coudert Brothers LLP; and (c) Bundesagentur fur Arbeit v. Peter Schaal and Hubert Hesse. The Haager and Regner cases are pending in the Frankfurt Landgericht (Frankfurt Court) while Arbeit case is pending in the Arbeitsgericht Munchen (Munich Labor Relations Court). Dr. P. Nikolai Ehlers, Esq., a partner at Ehlers Ehlers, tells the Court that the firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $360 Associates $260 Paralegal $180 Mr. Ehlers discloses that the firm is a prepetition creditor of the Debtor in that the Debtor owes Ehlers Ehlers $30,000 based upon services rendered to the Debtor prior to the bankruptcy filing. Mr. Ehlers assures the Court that his firm does not have an interest materially adverse to the interest of the Debtor or its estate. Mr. Ehlers can be reached at: Dr. P. Nikolai Ehlers, Esq. Ehlers, Ehlers & Partners Widenmayerstra�e 29 D-80538 M�nchen Germany Tel: +49(0)89 210-969-0 Fax: +49(0)89 210 969-99 http://www.eep-law.de/ Coudert Brothers LLP -- was an international law firm specializing in complex cross border transactions and dispute resolution. The Debtor filed for Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No. 06-12226). In its schedules of assets and debts, Coudert listed total assets of $29,968,033 and total debts of $18,261,380. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 20, 2007. CRYOPAK INDUSTRIES: Creditors Name Deloitte & Touche as Receiver ---------------------------------------------------------------- Cryopak Industries Inc.'s secured creditors have advised the Company that they are going to appoint a receiver over the assets of the Company. "While we have been working quite hard to find solutions to our continuing financial difficulty and lack of liquidity, time has run out and our creditors are exercising their rights to recover the amounts owing to them," commented Mr. Martin Carsky, President and Chief Executive Officer. Deloitte & Touche LLP will be appointed as receiver of the Company. The subsidiary of the Company, Cryopak Corporation Ltd., will assign itself into bankruptcy and PricewaterhouseCoopers Inc. will be appointed as the trustee in bankruptcy. TCP Reliable Inc. of Edison, New Jersey has made an offer to acquire substantially all of the assets of the Company and the Subsidiary for approximately $4.5 million and to take over the operation of the Company's business. The Company understands that the receiver intends to complete that transaction as soon as possible. The proceeds of the sale will be first applied to the payment of the Company secured bank debt and other priority payments. On completion of the sale of the assets, there will be a small amount payable to the unsecured and trade creditors of the Subsidiary, who will also benefit on a going forward basis from the deferred amount payable by TCP, payable in 6 and 12 month installments. Holders of the Company's secured convertible notes will also receive an initial small payment and some payments from the deferred amount payable. Because of the shortfall in paying its creditors, no amount will remain for distribution to shareholders upon the completion of the disposition of the assets of the Company by the receiver. The Company has determined not to proceed to incur the costs to complete the preparation or filing of financial statements for the financial year ended March 31, 2006. Consequently, it is anticipated that the shares of the Company will be suspended from trading on the TSX Venture Exchange and delisted. In light of the foregoing, the directors of the Company plan to tender their resignations. About Cryopak Headquartered in British Columbia, Canada, Cryopak Industries Inc. (TSX Venture Exchange: CYK) -- http://www.cryopak.com/-- provides temperature-controlling products and solutions serving global pharmaceutical companies, as well as North American retailers and consumer goods companies. In its pharmaceutical business, the Company engineers solutions and supplies products that help customers safely transport temperature sensitive vaccines. In its retail business, the Company develops, manufactures and sells reusable ice substitutes, flexible hot and cold compresses, reusable gel ice and instant hot and cold packs. CS AVISERS: Moody's Rates $14 Mil. Class D Secured Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service reported that it assigned ratings of * Aaa to $231,000,000 Class A-1 Senior Secured Floating Rate Notes due 2020, Aa2 to the U.S. $7,750,000 Class A-2A Senior Secured Floating Rate Notes due 2020, * Aa2 to $3,250,000 Class A-2B Senior Secured Fixed Rate Notes due 2020, * A2 to $21,000,000 Class B Senior Secured Deferrable Floating Rate Notes due 2020, * Baa2 to $17,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2020, and * Ba2 to $14,000,000 Class D Secured Deferrable Floating Rate Notes due 2020 issued by CS Advisors CLO I Ltd. (the "Issuer"). Moody's Investors Service also assigned ratings of: * Aa2 to $5,000,000 Type I Composite Notes due 2020, * Baa3 to $2,000,000 Type II Composite Notes due 2020, and, * Aaa to $7,625,000 Type III Composite Notes due 2020 (together the "Composite Notes"), issued by the Issuer. The Issuer also issued the $31,000,000 Subordinated Notes due 2020 which Moody's has not rated. Moody's rating reflects the ultimate return to an investor of principal and interest, as provided by such note's governing documents, and is based primarily on the expected loss posed to investors relative to the promise of receiving the present value of such payments. Moody's also analyzed the risk of diminishment of cash flows from the underlying collateral portfolio -- which consists primarily of speculative-grade senior secured loans - due to defaults, the characteristics of these assets, and the safety of the transaction's structure. In the particular case of the ratings on the Composite Notes, the ratings generally reflect the ultimate return to an investor of the Composite Note "rated balance", and are based primarily on the expected loss posed to note holders relative to the promise of receiving the present value of such rated balance. Additionally, however, the rating on the Type III Composite Notes is based solely on Moody's assessment of the credit risk on the United States Treasury strip security maturing on August 15, 2016 (CUSIP 912833KJ8). This cash flow CLO is managed by CapitalSource Advisors, LLC. CTI FOODS: Moody's Confirms B2 Corporate Family Rating ------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products sector, the rating agency confirmed its B2 Corporate Family Rating for CTI Foods Holding Co, LLC and downgraded to B3 its B2 rating on the company's $120 million secured term loan due 2012. Additionally, Moody's assigned an LGD4 rating to the loan, suggesting creditors will experience a 67% loss in the event of a default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Wilder, Idaho, CTI Foods Holding Co., LLC, is a food products company primarily catering to the quick-serve restaurant industry. DANA CORP: Wants Court to Reconsider Order Denying M. Burns' Fees ----------------------------------------------------------------- Dana Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to reconsider and clarify certain provisions of its Order denying the proposed compensation for Michael Burns, Dana's president and chief executive officer, and five key executives of his core management team. The Debtors complain that the Order did not directly address the supplement they filed on Sept. 4, 2006. Corinne Ball, Esq., at Jones Day, in New York, relates that in the Second Supplement, the Debtors proposed an incentive compensation program based entirely on the Senior Executives' achievement of certain performance benchmarks and added provisions to the proposed assumption of the Senior Executives' retirement benefits that maintained parity with the treatment of non-executive pensions in their Chapter 11 cases. According to Ms. Ball, since the entry of the Order, the Debtors have continued to engage in dialogue with the Objectors regarding the appropriate structure of an incentive compensation program for the Senior Executives and a process to achieve consensus. In furtherance of the discussions, Ms. Ball asserts, it may assist the parties for the Court, at the appropriate time, to reconsider and clarify certain provisions of the Order, including: (1) the particular components, if any, of the incentive bonus program proposed in the Debtors' Second Supplement that violate Section 503(c) of the Bankruptcy Code; (2) whether payments in exchange for restrictive covenants constitute severance, subject to Section 503(c); (3) whether the payment of bonuses earned under the annual short-term incentive program by Mr. Burns violate Section 503(c); and (4) whether the Debtors' assumption of Senior Executives Retention Program benefits for all or certain of the Senior Executives violates Section 503(c), and whether the Bankruptcy Code imposes any limits on SERP claims. As reported in the Troubled Company Reporter on Sept. 7, 2006, the Honorable Burton R. Lifland denied the Debtors' proposed compensation for Mr. Burns and five key executives of his core management team. Judge Lifland found that the proposed Compensation included both the elements of a "Pay to Stay" compensation plan subject to the limitations of Section 503(c) of the Bankruptcy Code and, a "Produce Value for Pay" plan to be scrutinized through the business judgment lens of Section 363. Judge Lifland also found that the initial Compensation Motion did not analyze the requirements under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Rather, the Debtors proposed to rely solely on Sections 105, 363(b), 365 and 101(31) of the Bankruptcy Code as the basis for their request. Under the BAPCA, Section 503(c) establishes specific evidentiary standards that must be met before the Court may authorize payments made to an insider for purposes of inducing that person to remain with a debtor's business, or payments made on account of severance. Judge Lifland stated that the recent amendment to the Bankruptcy Code makes it clear that, to the extent a proposed transfer falls within Sections 503(c)(1)1 or (c)(2)2, then the business judgment rule does not apply, irrespective of whether a sound business purpose may actually exist. Judge Lifland said he cannot categorize the Debtors' proposed Completion Bonus as an incentive bonus. Rather, the Court finds that the Completion Bonus is a retention bonus. In addition, the Court noted that the Debtors try to circumvent the requirements of Section 503(c)(2) by characterizing the amounts being paid to the Executives on involuntary dismissal or resigning for good reason as "payments in exchange for non-compete agreements." Furthermore, Judge Lifland pointed out that the Debtors have failed to meet their burden of demonstrating that the payments in exchange for signing a non-compete agreement and other payments do not constitute "severance", or that the evidentiary requirements under Section 503(c)(2) have been satisfied. Pursuant to Section 503(c)(2), an insider's severance payment may not be approved unless the Debtors have established that the payment is part of a program generally applicable to all full time employees, and the amount of the payment is not more than ten times the amount of mean severance given to non-management employees in that calendar year. Subject to a factual determination regarding the extent to which an individual was in control of a debtor, Judge Lifland said the term "insider" could include other employees of the Debtors. Thus, the Court ruled that the request is improper and without basis. The Court said that it is prepared to find that the Executives are insiders, but has no basis to make a finding that no other insiders are employed by Dana absent a showing of proof. While it may be possible to formulate a compensation package that passes muster under the Section 363 business judgment rule or Section 503(c) limitations, or both, the Court found that the Debtors' proposed Compensation does neither. As reported in the Troubled Company Reporter on Aug. 22, 2006, the Debtors sought Court's approval on their employment agreements with Mr. Burns and five key executives, as modified. The Debtors previously asked the Court to approve the original terms of the employment agreements of Mr. Burns and five key executives. Based on discussions with, among others, the Official Committee of Unsecured Creditors regarding concerns relating to terms in the Original Employment Agreements, the Debtors have made these modifications: Item Modified Agreements ---- ------------------- Performance Metric Consummation of a plan of reorganization. Total Enterprise Value is six months after the Effective Date of a plan. Threshold Completion Bonus 66% of Target Completion Bonus if employed on pay-out date and TEV on the Valuation Date is equal to $2,000,000,000. Minimum Completion Bonus 50% of Target Completion Bonus if employed on pay-out date. Variable Pay-out Above Minimum Completion Bonus, pay-out varies depending on TEV, without a cap. Form of Payment Minimum Completion Bonus is payable in cash. Amounts in excess of Minimum Completion Bonus payable in common stock of reorganized Dana, provided that the common stock is (i) listed and readily tradable, or (ii) subject to repurchase by reorganized Dana if the Senior Executive is not employed by reorganized Dana after the Effective Date, otherwise payable in cash. Timing Pay-out Minimum Completion Bonus will be paid on Effective Date with the remainder payable six months after Effective Date. Impact of Death, Disability Prior to completion of or Involuntary Termination business plan: None. Without Cause or Voluntary Termination for Good Reason Prior to Effective Date: (with respect to Mr. Burns) Pro rata. on Completion Bonus After Effective Date: Full pay-out. Impact of Voluntary Prior to Effective Date: Termination Without No pay-out. Good Reason (with respect to Mr. Burns) After Effective Date: Full pay-out. The Original Agreements were further modified to reflect that: (a) The term of the Employment Agreements of Mr. Burns and the Executives is until the Effective Date of a plan of reorganization; (b) If Mr. Burns and the Executives are (i) involuntarily terminated without cause, (ii) are voluntarily terminated for good reason, or (iii) failed to complete a replacement employment agreement upon expiration of the Agreement prior to the Plan Effective Date, they are to enter into an 18-month non-compete agreement in exchange for compensation equal to 12 months salary, plus annual bonus; (c) Prior to the Plan Effective Date, if Mr. Burns and the Executives are involuntarily terminated for cause or are voluntarily terminated without good reason, they are to enter into an 18-month non-compete agreement; (d) Issues regarding termination after the Plan Effective Date and a change of control after the Plan Effective Date are deferred; and (e) The Senior Executive Retention Program will be assumed on earlier of termination without cause, with good reason with respect to Mr. Burns, confirmation of a plan, death or disability. According to the Debtors, the Modified Employment Agreements will permit the Senior Executives to make the difficult choices that must be made in any restructuring while incentivizing them to maximize the enterprise value of the reorganized Debtors for the benefit of all stakeholders. 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. 22; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANA CORP: Plans to File Nissan Settlement Agreement Under Seal --------------------------------------------------------------- Richard H. Engman, Esq., at Jones Day, in New York, relates that Dana Corporation and its debtor-affiliates and Nissan North America, Inc., have a longstanding business relationship, where Nissan orders component parts to be incorporated into their vehicles from the Debtors. The terms of their relationship requires: (a) certain charge-back procedures where Nissan debits outstanding payables for certain of the Debtors' ongoing obligations, like warranty claims; and (b) the Debtors to pay amounts to Nissan under a variety of facts and circumstances. In certain specified circumstances, if amounts owed by the Debtors to Nissan are unpaid, Nissan may withhold other amounts payable to the Debtors and apply those amounts as offsets against the amounts owed to Nissan. Before their bankruptcy filing, the Debtors shipped a variety of parts and other goods to Nissan in the ordinary course of business. As of their bankruptcy filing, Nissan owed at least $14,943,043 to the Debtors, Mr. Engman says. Mr. Engman adds that Nissan also asserts that: -- as of Sept. 21, 2006, the Debtors owed $1,979,861 for a variety of prepetition commercial claims, including, but not limited to, warranty claims; and -- additional prepetition claims, particularly warranty claims, will continue to arise, accrue and be discovered by Nissan in upcoming years. Nissan has also advised the Debtors that, pursuant to its rights under their relationship and applicable law, it believes that it has the right to withhold some or all of the Nissan Receivable as a potential offset against the Unliquidated Nissan Claims. As of Sept. 21, 2006, the Nissan Receivable remains unpaid and certain potential prepetition setoffs have not been taken, Mr. Engman informs the Court. Pursuant to the Customer Obligations Order, the Debtors presently have the authority to honor and pay their obligations to Nissan, including the Nissan Payable and the Unliquidated Nissan Claims, in the ordinary course of their businesses, notwithstanding that these amounts constitute prepetition claims. Since the Debtors' bankruptcy filing, the parties have been involved in negotiations with an aim of resolving their issues. By these negotiations, the Debtors sought to have Nissan pay the Nissan Receivable, while Nissan sought assurances that the Debtors would continue to honor certain of their obligations under their relationship, consistent with the discretionary authority granted in the Customer Obligations Order. Mr. Engman relates that during these negotiations, to help mitigate the adverse cash flow impact caused by Nissan's withholding of the Nissan Receivable, Nissan voluntarily accelerated payments to the Debtors for postpetition purchases of parts. The parties eventually reached a consensus and entered into a Commercial Settlement Agreement dated Sept. 20, 2006. Accordingly, the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to approve the Settlement Agreement, which provides, among other things, that: (a) Nissan will pay $12,963,173 of the Nissan Receivable to the Debtors; (b) the Nissan Payable will be set off in whole or in part against the remainder of the Nissan Receivable, subject to the Debtors and Nissan reaching agreement as to the proper amounts of these obligations, which will be established in the ordinary course of business and the parties' relationship; (c) Nissan will have the right to setoff any Claim against the Debtors, without regard to whether the Claim arises prepetition or postpetition and without regard to the Debtor entity that owes the amount to Nissan, to the extent consistent with the terms of their relationship; and (d) to the extent that Nissan or the Debtors desire to assert rights of setoff with respect to mutual postpetition obligations, the parties' rights are unaffected by the Settlement Agreement. The Debtors' businesses are dependent on the loyalty and confidence of their customers, particularly their OEM customers like Nissan, Mr. Engman contends. The continued support of customers like Nissan is absolutely essential to the Debtors' ability to preserve and maximize the value of their businesses for the benefit of their stakeholders. Any delay in honoring or paying various obligations to Nissan will severely and irreparably impair the Debtors' customer relations with Nissan at a time when the loyalty and support of their customers are extremely critical, Mr. Engman adds. By permitting Nissan to setoff its Unliquidated Claims at a later date against postpetition amounts payable by Nissan to the Debtors, it is provided with greater assurances that those obligations will be satisfied, Mr. Engman asserts. In turn, Nissan agrees to release the majority of the Nissan Receivable to the Debtors as required by the Settlement Agreement and for the Debtors' benefit. Without the settlement, Mr. Engman avers that the Debtors would be required to either: (i) allow Nissan to hold the Nissan Receivable for a potentially extended period of time as the Unliquidated Nissan Claim became liquidated; or (ii) commence litigation against one of its most important customers to collect those amounts. "Neither of these alternatives is appealing to the Debtors, and neither would guarantee an outcome any different than the one reached by the Settlement Agreement," Mr. Engman says. Because the Settlement Agreement will result in a substantial payment to the Debtors, delays in the consummation of the Settlement Agreement would be potentially detrimental to the Debtors' estates, Mr. Engman adds. Nissan has raised confidentiality concerns regarding the public filing of the Settlement Agreement. In particular, Nissan has advised the Debtors that the Settlement Agreement contains or refers to commercial information regarding the business relationship between Nissan and certain of the Dana Companies that is confidential to Nissan or that could adversely impact Nissan and its business relationships. Accordingly, as a condition to entry into the Settlement Agreement, Nissan has asked and the Debtors have agreed to seek authority to file the Settlement Agreement under seal. Pursuant to Section 107 of the Bankruptcy Code and Rule 9018 of the Federal Rules of Bankruptcy Procedure, the Debtors sought and obtained the Court's approval to file the Settlement Agreement under seal. 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. 22; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANNY WHITLEY: Case Summary & Nine Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Danny Alexander Whitley Linda Mullis Whitley fdba Vine Ripe Tomato & Produce, LLC fdba D&T Farms, Inc. P.O. Box 514 Locust, NC 28097 Bankruptcy Case No.: 06-40561 Chapter 11 Petition Date: October 1, 2006 Court: Western District of North Carolina (Shelby) Judge: George R. Hodges Debtors' Counsel: O. Max Gardner, III, Esq. O. Max Gardner, III, P.C. P.O. Box 1000 Shelby, NC 28151-1000 Tel: (704) 487-0616 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtors' Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Brother's Carolina, LLC Bank Loan $517,670 c/o Korn Law Firm P.O. Box 11264 Columbia, SC 29211-1264 FPC Financial F.S.B. $340,649 P.O. Box 6630 Johnston, IA 50131 Dion Oil Company, LLC $25,000 412 South Flagler Avenue Homestead, FL 33030 Lovett Irrigation, Inc. $23,004 P.O. Box 924868 Princeton, FL 33092 Farm Plan $18,704 P.O. Box 5328 Madison, WI 53705 Southern States $18,598 Cooperative, Inc. Speedling Inc. Trade Debt $15,433 Clarendon County Tax Collector $13,773 John Deere Credit $12,211 DECRANE AIRCRAFT: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its B3 Corporate Family Rating for DeCrane Aircraft Holdings Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Secured Revolving Credit Facility due 2008 B3 Ba3 LGD2 17% Sr. Secured Term Loan B due 2008 B3 Ba3 LGD2 17% 12% Sr. Subor. Notes due 2008 Caa3 Caa2 LGD6 94% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). DeCrane Aircraft Holdings, Inc., headquartered in Columbus, Ohio, is a leading provider of aircraft cabin interior systems and components for business, VIP and head-of-state aircraft, and a provider of aircraft retrofit, interior completion and refurbishment services. DELPHI CORP: Equity Panel Wants Houlihan as Financial Advisor ------------------------------------------------------------- The Official Committee of Equity Security Holders appointed in Delphi Corporation and its debtor-affiliates' bankruptcy cases seek authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Houlihan Lokey Howard & Zukin Capital, Inc., as its financial advisor, nunc pro tunc to July 31, 2006. As financial advisor, Houlihan Lokey will: (a) assist the Equity Committee in analyzing matters relating to Delphi Corp.'s transformation of its workforce and the impact on Delphi on a pro forma basis including: (1) the Debtors' efforts to modify or reject collective bargaining agreements and retiree benefits under Sections 1113 and 1114 of the Bankruptcy Code; (2) the Debtors' attrition programs, including any future attrition or buydown programs; and (3) the resulting costs and claims of the labor transformation efforts and programs, including assistance in evaluating the company's financial models; (b) assist the Equity Committee in analyzing matters relating to the relationship and business arrangements between Delphi and General Motors Corporation; and (c) assist the Equity Committee in analyzing matters relating to Delphi's efforts to divest material property or business and the impact on Delphi on a pro forma basis, including the proposed transaction and cash flow impacts. Eric Siegert, senior manager of Houlihan Lokey, assures the Court that the firm is a "disinterested person" as defined by Section 101(14) of the Bankruptcy and used in Section 328(c) of the Bankruptcy Code. Mr. Siegert, however, discloses that certain of the subsidiaries of Houlihan Lokey's indirect corporate parent currently hold $10,365,165 of the Debtors' prepetition revolver due June 18, 2009. ORIX Finance will sell the ORIX Delphi Debt within five days of the Court's approval of the Application. Houlihan Lokey will be paid a $175,000 monthly cash advisory fee and reimbursement of expenses incurred in connection with its employment. 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. 42; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: Comair's Pending Union Talks May Halt Jet Service Bid ---------------------------------------------------------------- Comair Holdings, a Delta Air Lines Inc. subsidiary, is looking forward to a reaching a deal with its pilot union to avoid derailment of its bid to win a contract for jet service from Delta, the Associated Press reports. Comair however is nearing an agreement with the International Association of Machinists and Aerospace Workers representing Comair's 550 mechanics and has made progress in talks with the International Brotherhood of Teamsters representing its 970 flight attendants, the source said. According to the report, the regional carrier would likely not be able to submit a winning bid for operating up to 143 of Delta's regional jets without concessions from all three unions. The bid will reflect the restructuring Comair has completed in nonunion areas and the savings it is forecasting for concessions from the unions for the flight attendants and mechanics, Comair spokeswoman Tressie Long told the Associated Press. In July 2006, the Honorable Adlai S. Hardin of the U.S. Bankruptcy Court for the Southern District of New York has given Comair the authority to impose concessions on its flight attendants. Comair will have no choice but to implement those changes if an agreement is not reached with flight attendants, Ms. Long said in the report. Atlanta, GA-based 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: Wants Claims Objection Procedures Established -------------------------------------------------------- Delta Air Lines, Inc., and its debtor-affiliates ask the United States Bankruptcy Court for the Southern District of New York to establish uniform procedures for filing, prosecuting and resolving objections to proofs of claim filed in their Chapter 11 cases, pursuant to Section 105 of the Bankruptcy Code. Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, relates that more than 7,500 proofs of claim have been filed against one or more of the Debtors. Based on the large number of claims, the Debtors expect to file a substantial number of claim objections. The Debtors believe that the Objection Procedures will facilitate an expeditious and efficient claims resolution process, and will help facilitate settlement of a substantial number of otherwise disputed claims. Mr. Huebner asserts that the Objection Procedures are consistent with the protections granted to claimants under the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure. Proposed Objection Procedures Among others, the Debtors propose that: (a) they will periodically file omnibus objections to proofs of claim; (b) they will provide notice of an objection to the persons identified on the first page of each relevant proof of claim; (c) for claims that have been transferred, they will serve a notice only to the person or persons listed as the owner of those claims on the Debtors' claims register as of the date the objection is filed; (d) if they object to a claim relating to an aircraft, and the claimant included the tail number of the aircraft in the proof of claim form, the tail number will be identified in the objection; (e) the deadline for filing any response to an objection will be the 20th calendar day from the date the objection is filed. A response will be considered timely only if it is properly and timely filed with the Court and actually received by the attorneys of the: * Debtors, and * Official Committee of Unsecured Creditors; (f) as soon as practicable after the Response Deadline, they will ask the Court to sustain the objections to each claim for which a written response was not timely filed and served; and (g) each contested claim as to which the claimant timely and properly responds to an objection will constitute a separate contested matter, as provided by Bankruptcy Rule 9014. The Debtors may, in their discretion, seek to settle the priority, amount and validity of the contested claims. They may also, in their discretion and in consultation with the Court, schedule the claims for hearing. 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. 44; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: Proposes Process for Litigating Leveraged Lease Deals ---------------------------------------------------------------- Delta Air Lines, Inc., and its debtor-affiliates and the Official Committee of Unsecured Creditors ask the U.S. Bankruptcy Court for the Southern District of New York to approve their proposed procedures governing the manner in which they may assert and litigate certain objections to claims in connection with leveraged lease transactions. On behalf of the Debtors, Michael E. Wiles, Esq., at Debevoise & Plimpton LLP, in New York, relates that more than 270 of the Debtors' aircraft are subject to leveraged lease financing transactions. A typical leveraged lease structures include a liquidated damage provision providing for the payment of "stipulated loss value" or "termination value" in the event of a default by the lessor. Leveraged lease structures often also include Tax Indemnity Agreements with owner participants, which agreements relate to certain tax attributes of the transactions and to the potential tax consequences of a default. The filing of claims to collect amounts under Tax Indemnity Agreements by Owner Participants and claims for the stipulated loss value specified in the Leases that have been assigned to them by the Indenture Trustees raises numerous potential issues. The disputes over these issues are likely to affect a large number of claims and to involve large dollar amounts, Mr. Wiles contends. The issues include the extent to which: (a) claims based on stipulated loss value and payments required under Tax Indemnity Agreements cover the same losses and thus, are duplicative of each other; (b) certain aspects of the calculations of stipulated loss value or of tax indemnity payments do not fairly reflect actual loss and amount to contractual "penalties" that are not enforceable; and (c) stipulated loss value claims and tax indemnity claims should be administrative expense claims. The Debtors and the Creditors Committee maintain that their request to establish procedures does not attempt to resolve the merits of the issues that may arise in connection with leveraged leases. Instead, their proposal will permit a coordinated and efficient litigation of those complicated issues. Given the substantial number of leveraged leases in which the Debtors participated, and given the number of other parties who participated in those transactions, a careful set of coordinated procedures is appropriate so that the issues may be resolved in a timely way and without undue expense, the Debtors and the Creditors Committee state. The Debtors and the Creditors Committee add that if standard claims resolution procedures were to be followed, the Debtors and they will be forced to file separate objections to each claim, each would be subject to its own discovery and litigation process. The Debtors and the Creditors Committee inform the Court that some SLV Claims may not have been filed at this time. SLV Claims arise under Leases, and the Debtors have neither assumed nor rejected most of those Leases. Although TIA Claims may have been filed, the SLV Claims for the same transactions may not yet be on file. The Debtors and the Committee therefore wish to include, in their proposed procedures, mechanisms that will enable all of the relevant issues and parties to be brought before the Court. Proposed Procedures The Debtors and the Creditors Committee propose that their request to establish the leveraged lease claims objections procedures be deemed to constitute their objection to the SLV Claims and TIA Claims to the extent that: (a) they arise under prepetition agreements and the holders of those claims contend that the claims are entitled to administrative expenses treatment under Sections 503 and 507; (b) they arise out of the same or related transactions and to the extent that they each include amounts that reflect compensation for the same matters; (c) they include compensation for tax losses or tax liabilities that are attributable to a default, or other event, without also taking into account all tax benefits that are attributable to the same default or event, including without limitation: (i) reductions in tax payments; or (ii) grants of credits that would have been required if the default or event had not occurred; (d) they include amounts that represent sums or values that the claimant expected to realize in the future and to the extent that those future sums are not discounted to present value at an appropriate discount rate; and (e) they include "gross-up" calculations to reflect the fact that the holder may pay taxes on the amount the holder receives and to the extent that those "gross-up" calculations are based on the amount of the claim, rather than the amount that the Debtors actually distribute with respect to that claim. Under the Procedures, The Debtors and the Creditors Committee will determine the order in which the Deemed Objections are raised and litigated and whether some of the Deemed Objections should be litigated together. This provision will permit the Debtors and the Committee to "group" issues together and to put them in a logical sequence that disposes of the more significant issues at an earlier time, Mr. Wiles maintains. In addition, the Debtors and the Creditors Committee will be permitted to commence declaratory judgment actions against holders of SLV Claims and TIA Claims who have not yet filed proofs of claim, seeking a declaration as to the matters in one or more Deemed Objections. This provision will enable the Debtors and the Creditors Committee to ensure that relevant issues can effectively be litigated, even if the holders of particular relevant claims have not yet been required to file proofs of claim, Mr. Wiles states. Moreover, the Debtors and the Creditors Committee may select a group of relevant Claims for purposes of litigating one or more Deemed Objections. In that event, the Procedures provide a mechanism through which other parties who might be interested in the same issue may participate in the litigation of that issue, Mr. Wiles relates. The Procedures call for the filing of "joint" submissions by similarly situated parties, wherever practical, and permit separate filings only in the event that similarly situated parties disagree over particular arguments or seek to raise different arguments. According to Mr. Wiles, the provision will avoid the problems that have been experienced in which hosts of interested parties and "amicus curiae" filed separate briefs raising the same points. The Debtors and the Committee may serve and file a notice indicating their intention not to pursue particular Deemed Objections with respect to particular relevant Claims. Each Notice of Waiver of Deemed Objection will be served on the holders of the relevant Claims, and on all other parties known to the Debtors to be participants in leveraged lease transactions and who may have SLV Claims or TIA Claims. 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. 44; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DENNY'S CORP: Closes $62 Million Property Sale to National Retail ----------------------------------------------------------------- Denny's Corporation has completed and closed the transaction to sell to National Retail Properties, Inc., certain of its franchisee-operated Denny's restaurant properties. As reported in the Troubled Company Reporter on Sept. 15, 2006, the Company entered into an agreement to sell 66 franchisee operated restaurant properties to National Retail Properties, Inc., a real estate investment trust, for gross proceeds of approximately $67 million. The Company disclosed that a total of 60 properties were included in the closing, for a cash purchase price of approximately $62 million. The sale of up to an additional 6 properties may close, subject to certain conditions, under the terms of the master purchase agreement for the transaction. The net cash proceeds of the asset sales have been applied to reduce the outstanding balance on the Company's first lien term loan. During the third quarter, the Company prepaid approximately $80 million on the loan, bringing its total long-term debt balance down to approximately $470 million as of Sept. 27, 2006. Nelson J. Marchioli, president and chief executive officer, said, "The completion of this transaction and the resulting debt reduction are significant milestones in Denny's continuing efforts to strengthen its balance sheet. Denny's has endured a heavy debt burden for many years, which restricted its ability to grow. Over the last five years we have successfully reduced our outstanding debt balances by approximately $160 million. While pleased with this progress, we will continue to pursue further debt reduction as an effective way to enhance value for our shareholders. These actions will ensure greater financial flexibility to invest in and expand the Denny's brand." The Company also disclosed that it has 13 franchisee-operated properties remaining for sale. It expects that it will take up to twelve months to complete the sales. Headquartered in Spartanburg, South Carolina, Denny's Corporation -- http://www.dennys.com/-- is America's largest full-service family restaurant chain, consisting of 543 company-owned units and 1,035 franchised and licensed units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. * * * As reported in the Troubled Company Reporter on Aug. 11, 2006 Denny's Corporation's balance sheet at June 28, 2006 showed $500.3 million in total assets and $758.2 million in total liabilities, resulting in a $257.9 million stockholders' deficit. DICUT INC: Strikes Deal With Creditors on $1.8MM Obligations ------------------------------------------------------------ The management of Dicut, Inc., continues to work with a number of creditors in paying off its obligations totaling approximately $1,892,391. The Company sent out 68 letters with an offer to these creditors, and approximately $900,000 have been negotiated or settled to date. The Company also believes that a number of creditors have written off approximately $175,000 of the total debt. Once the Company and the creditors come to terms on a negotiated price on the debt, the Company will issue 1000 restricted shares (rule 144) for every dollar owed. Management believes an estimated 1.5 billion shares might be issued upon completed settlement of all debts. "We are working diligently with all creditors and we feel that this settlement offer is fair," Mr. Pierre Quilliam, President, states. "Upon final settlements, the Company will be debt free, have a clean bill of health, and be ready to resume revenue producing activities." Management continues to move forward with a number of business projects that they believe will bring forward growth and shareholder value. Bradenton, Florida-based Dicut Inc. -- http://www.dicutinc.com/-- provides security solutions through innovative technologies to both the public and private sectors. DIGITAL DESCRIPTOR: Reports $12.4 Mil. Equity Deficit at June 30 ---------------------------------------------------------------- Digital Descriptor Systems, Inc., reported a $2,024,062 net loss for the three months ended June 30, 2006, a 12% increase from the $1,808,120 loss reported for the three months ended June 30, 2005. Management attributes the loss primarily to the change in accounting procedures in which convertible debentures are treated as derivatives according to the guidance of SFAS133 and EITF00-19. Revenues for the three months ended June 30, 2006 were $1,233,729 compared to $875,513 for the three months ended June 30, 2005, an increase of $358,216 or 409%. The company generates its revenues through software licenses, hardware, post customer support arrangements and other services. The increase in Digital Descriptor revenue is attributed to the purchase of CGM Applied Security Technology, Inc in March, 2005. CGM Applied manufactures and distributes various Homeland Security products. At June 30, 2006, the Company's balance sheet showed total assets of $6,065,603 and total liabilities of $18,482,020, resulting in a $12,416,417 shareholders' deficit. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?12bf "We are pleased with the results of our plan to date," says Anthony Shupin, CEO of Digital Descriptor. "Our earnings before interest, taxes, depreciation and amortization are $221,785 versus a negative $214,124 in Q2 '05. Our immediate focus has been to achieve increased revenue along with positive cash-flow results. This will enable us to sustain the company as we grow the use of our security products and services to more companies and agencies throughout the world." DDSI CFO Michael Pellegrino adds: "Overall, we have a healthier company today than one year ago. Total six month revenues, compared '06 to '05 are up 277205% to $1,476,8132,104,693 from $532,2271,024,388, while gross profit is up 277% increasing $944,586 over the prior year. Operating income increased from a loss in '05 of $373,902 to a profit of $109,184 for the same period. It must be noted that due to a change in accounting methods, the reported cost of the company debt has also increased by 132%. However, the actual impact on our operational cashflow has remained the same. Net loss for the period and year-to-date increased $215,942 and $516,938 respectively mainly due to an increase in expenses related to our debt." About Digital Descriptor Based in Sea Girt, New Jersey, Digital Descriptor Systems -- http://www.ddsi-cpc.com/-- develops and markets integrated enterprise-wide image applications specifically designed for criminal justice organizations. Customers include states, cities, counties, corrections, justice and public safety agencies. Its subsidiary, CGM Applied Security Technologies, Inc. -- http://www.cgmsecuritysolutions.com/-- based in Somerset, New Jersey, manufactures and distributes Homeland Security products including indicative and barrier security seals, security tapes and related packaging security systems, protective security products for palletized cargo, physical security systems for tractors, trailers and containers, as well as a number of highly specialized authentication products. DRS TECHNOLOGIES: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its B1 Corporate Family Rating for DRS Technologies Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss- given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Secured Revolving Credit Facility due 2012 Ba3 Ba1 LGD2 12% Sr. Secured Term Loan due 2012 Ba3 Ba1 LGD2 12% 6-5/8% Sr. Notes due 2016 B2 B1 LGD3 47% 2% Sr. Convertible Notes due 2026 B2 B1 LGD3 47% 6-7/8% Sr. Subor. Notes due 2013 B3 B3 LGD5 84% 7-5/8% Sr. Subor. Notes due 2018 B3 B3 LGD5 84% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Parsippany, New Jersey, DRS Technologies -- http://www.drs.com/-- provides leading edge products and services to defense, government intelligence and commercial customers. Focused on defense technology, the Company develops and manufactures a broad range of mission critical systems. The company employs 6,000 people worldwide. EAGLE FAMILY: Moody's Assigns B3 Corporate Family Rating -------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products sector, the rating agency assigned its B3 Corporate Family Rating for Eagle Family Foods, Inc., and upgraded to Caa2 its Caa3 rating on the company's $115 million senior subordinated notes due 2008. Additionally, Moody's assigned an LGD5 rating to the note, suggesting noteholders will experience an 87% loss in the event of a default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Eagle Family Foods Holdings, Inc., and its wholly owned subsidiary, Eagle Family Foods, Inc., and Eagle's subsidiary, Milnot Company manufactures and markets branded and private label sweetened condensed canned milk and evaporated canned milk to the retail grocery and foodservice channel. Eagle Brand sweetened condensed milk is the Company's established brand. In addition, the Company markets other brands: Borden eggnog, Kava acid neutralized coffee, Eagle Brand Premium Dessert Kits, Magnolia sweetened condensed milk, Milnot evaporated milk and None Such mincemeat pie filling. EASY GARDENER: U.S. Trustee Amends Creditors Committee Membership ----------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, amends the membership of the Official Committee of Unsecured Creditors in the chapter 11 cases of Easy Gardener Products, Ltd., and its debtor- affiliates. The Committee is now composed of: 1. Wilmington Trust Company Attn: Mike Diaz 520 Madison Ave. New York, NY 10022 Phone: 212-415-0509 Fax: 212-415-0513 2. Great American Leasing Corporation Attn: Peggy Upton 625 1st Street SE, Ste. 800 Cedar Rapids, IA 52401 Phone: (319) 261-4248 3. Hanes Industries Attn: Martin Leary Middlesex, NC 23225 Phone: 1-800-239-3224 Fax: (252) 235-4425 William K. Harrington, Esq., is the attorney assigned to monitor and represent the U.S. Trustee's interests in the Debtors' Chapter 11 cases. 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. Easy Gardener Products, Ltd. -- http://www.easygardener.com/-- manufactures and markets a broad range of consumer lawn and garden products, including weed preventative landscape fabrics, fertilizer spikes, decorative landscape edging, shade cloth and root feeders, which are sold under various recognized brand names including Easy Gardener, Weedblock, Jobe's, Emerald Edge, and Ross. The Company and four of its affiliates filed for bankruptcy on April 19, 2006 (Bankr. D. Del. Case Nos. 06-10393 to 06-10397). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they reported assets amounting to $103,454,000 and debts totaling $107,516,000. ECHOSTAR COMMS: Unit Prices $500 Million Notes Issue ---------------------------------------------------- EchoStar Communications Corporation's subsidiary, EchoStar DBS Corporation, has priced an offering of $500 million aggregate principal amount of senior debt securities. The debt securities will be issued as 7% Senior Notes due 2013. The net proceeds of the offering are intended to be used to replace cash on hand that will be used to redeem outstanding Floating Rate Senior Notes due 2008 on Oct. 1, 2006 pursuant to the previously announced redemption of such notes. The sale of the Notes is expected to close on Oct. 18, 2006, subject to customary conditions. EchoStar DBS Corporation placed the Notes in a private transaction under Rule 144A under the Securities Act. The Notes have not been registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. EchoStar Communications Corporation serves more than 12.46 million satellite TV customers through its DISH NetworkTM, and is a leading U.S. provider of advanced digital television services. DISH Network's services include hundreds of video and audio channels, Interactive TV, HDTV, sports and international programming, together with professional installation and 24-hour customer service. * * * As reported in the Troubled Company Reporter on Oct. 2, 2006, Moody's Investors Service affirmed all ratings including the Ba3 corporate family and SGL-1 liquidity rating for EchoStar Communications Corporation and its subsidiary EchoStar DBS Corporation following the company's announcement of a proposed $500 million of EDBS notes. At the same time, Standard & Poor's Ratings Services assigned a 'BB-' rating to Echostar DBS Corp.'s aggregate $500 million senior notes with maturities of 2013 and 2016. ENTRAVISION COMMS: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US advertising and broadcasting sector, the rating agency confirmed its Ba3 Corporate Family Rating for Entravision Communications Corporation. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Secured Revolver Ba3 Ba3 LGD3 32% Secured Term Loan Ba3 Ba3 LGD3 32% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Santa Monica, California, Entravision Communications -- http://www.entravision.com/-- is a diversified Spanish-language media company utilizing a combination of television, radio and outdoor operations to reach approximately 75% of Hispanic consumers across the United States, as well as the border markets of Mexico. Entravision is the largest affiliate group of both Univision television network and Univision's TeleFutura network, with television stations in 20 of the nation's top 50 Hispanic markets in the United States. Entravision owns and operates one of the nation's largest groups of primarily Spanish-language radio stations, consisting of 54 owned and operated radio stations in 21 U.S. markets. Entravision's outdoor advertising operations consist of approximately 11,100 advertising faces located primarily in Los Angeles and New York. ESTERLINE TECH: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its Ba2 Corporate Family Rating for Esterline Technologies Corp. and its Ba3 rating on the company's 7.75% Senior Subordinated Notes due 2013. Moody's assigned those debentures an LGD5 rating suggesting noteholders will experience a 75% loss in case of default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Esterline Technologies Corporation, headquartered in Bellevue Washington, serves aerospace and defense customers with products for avionics, propulsion and guidance systems. The company operates in three business segments: Avionics and Controls, Sensors and Systems and Advanced Materials. Esterline had LTM April 2006 revenue of $887 million. EVERGREEN INT'L: Extends 12% Senior Notes Offering to October 6 --------------------------------------------------------------- Evergreen International Aviation, Inc.'s pending offer to purchase any and all of its outstanding 12% Senior Second Secured Notes Due 2010 (CUSIP No. 30024DAF7), previously scheduled to expire at 5:00 p.m., New York City time, on Sept. 25, 2006, has been extended until 5:00 p.m., New York City time, on Oct. 6, 2006, unless otherwise extended or earlier terminated. Except for the change, all terms and conditions of the tender offer are unchanged and remain in full force and effect. Holders of approximately 97.94% of the outstanding principal amount of the Notes have tendered and consented to the proposed amendments to the indenture governing the Notes. Subject to the satisfaction or waiver of the remaining conditions (including the consummation of a new Senior Secured Credit Facility by Evergreen) set forth in the Offer to Purchase and Consent Solicitation Statement dated July 20, 2006, Evergreen currently intends to accept the entire amount of Notes tendered pursuant to the tender offer and consent solicitation. Credit Suisse Securities (USA) LLC is serving as the exclusive Dealer Manager and Solicitation Agent for the tender offer and consent solicitation. Questions regarding the terms of the tender offer or consent solicitation should be directed to: Credit Suisse Securities (USA) LLC Attn: Liability Management Group at Telephone (212) 325-7596 or (800) 820-1653. The Tender Agent and Information Agent is D.F. King & Co., Inc. Any questions or requests for assistance or additional copies of documents may be directed to the Information Agent toll free at (800) 290-6426 (bankers and brokers call collect at (212) 269- 5550). Based in McMinnville, Oregon, Evergreen International Aviation, Inc. -- http://www.evergreenaviation.com/-- is a privately held global aviation services company that is active through several subsidiary companies. * * * As reported in the Troubled Company Reporter on Aug. 11, 2006, Standard & Poor's Ratings Services raised its rating on Evergreen International Aviation Inc.'s first-lien bank loan rating to 'B+' from 'B' and changed the recovery rating to '1' from '2'. The rating action reflects a change in the structure of the proposed credit facility. EXABYTE CORP: Wells Fargo Increases Borrowing Base by $2 Million ---------------------------------------------------------------- Exabyte Corporation entered into a Sixth Amendment to its Credit and Security Agreement with Wells Fargo Business Credit, Inc., dated March 9, 2005. Under the Sixth Amendment, the Company's Borrowing Base was increased by up to $2 million, which is equal to 100% of the principal amount of the borrowings under the Credit Agreement that may be purchased by Tandberg Data ASA pursuant to a Participation Agreement between Tandberg and Wells Fargo Bank, National Association dated Sept. 22, 2006. The Company disclosed that pursuant to the Asset Purchase Agreement with Tandberg, under certain circumstances Tandberg is obligated to provide WFBC with an irrevocable letter of credit in an amount up to $2 million to support a further extension of credit by WFBC to the Company. In accordance with a Letter Agreement dated Sept. 22, 2006 between Tandberg and the Company, Tandberg has elected to satisfy the obligation to provide the Company with additional borrowing capacity through the purchase of a participation interest in the Credit Agreement, pursuant to the Participation Agreement. Full text-copies of the Sixth Amendment, the Letter Agreement and the Fifth Amendment may be viewed at no charge at: Sixth Amendment to the Credit and Security Agreement by and between Exabyte Corporation and Wells Fargo Business Credit, Inc., dated Sept. 22, 2006: http://ResearchArchives.com/t/s?12c1 Fifth Amendment to the Credit and Security Agreement by and between Exabyte Corporation and Wells Fargo Business Credit, Inc., dated July 31, 2006: http://ResearchArchives.com/t/s?12c2 Letter Agreement between Exabyte Corporation and Tandberg Data Corp., dated Sept. 22, 2006: http://ResearchArchives.com/t/s?12c3 Exabyte Corporation -- http://www.exabyte.com/-- manufactures tape storage products. The Company's products back up and restore critical business information. Going Concern Doubt Ehrhardt Keefe Steiner & Hottman PC expressed substantial doubt about Exabyte Corporation and its subsidiaries' ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's recurring losses and accumulated deficit of $123,869,000. EXTENDICARE HEALTH: Moody's Assigns Loss-Given-Default Ratings -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Hospital and Long-term Care sectors, the rating agency confirmed its Ba3 Corporate Family Rating for Extendicare Health Services, Inc. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $114 Million Senior Secured Revolving Credit Facility due 2010 Ba2 Ba1 LGD2 18% $86 Million Senior Secured Term Loan due 2010 Ba2 Ba1 LGD2 18% $150 Million Issue of 9.5% Senior Unsecured Notes due 2010 B1 Ba3 LGD4 59% $125 Million Issue of 6.875% Senior Subordinated Notes due 2014 B2 B2 LGD6 91% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Extendicare Health Services, Inc., headquartered in Milwaukee, Wisconsin, is a wholly owned subsidiary of Extendicare, Inc., a Canadian publicly traded company. The company is a provider of nursing care, assisted living, and related medical specialty services such as rehabilitation therapy. FISHER COMMS: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US advertising and broadcasting sector, the rating agency affirmed its B2 rating on Fisher Communications, Inc.'s 8.625% senior notes due 2014. Additionally, Moody's assigned an LGD4 rating to the notes suggesting noteholders will experience a 56% loss in the event of a default. Fisher carries Moody's B2 PDR rating. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Fisher Communications, Inc. (NASDAQ:FSCI) -- http://www.fsci.com/ -- is a Seattle-based integrated media company. The Company's nine network-affiliated television stations, and a tenth station 50% owned by Fisher Communications, are located in Washington, Oregon, and Idaho, and its 27 radio stations broadcast in Washington and Montana. The Company also owns and operates Fisher Plaza, a facility located near downtown Seattle. FRIENDLY ICE: John Cutter Resigns as President and CEO ------------------------------------------------------ Friendly Ice Cream Corporation disclosed that John L. Cutter, president and chief executive officer, has resigned to pursue other interests. Donald N. Smith, who has served as chairman since 2003, is assuming oversight responsibilities on a temporary basis as a search for a replacement is conducted. Mr. Cutter has been chief executive officer and president of The Company since February 2003. He served as the president and chief operating officer from Dec. 1998 to Feb. 2003. Prior to joining the company, Mr. Cutter served as the chief operating officer of Boston Chicken, Inc. "The Board and I appreciate John's many contributions to the company and wish him well," Mr. Smith said. Mr. Smith has been chairman of the Company's Board since Sept. 1988. He served as chief executive officer of the Company from Sept. 1988 to Feb. 2003, and as president from Sept. 1988 to Dec. 1998. From 1986 to 2005, Mr. Smith served as chairman of the Board and chief executive officer of The Restaurant Company, which owns and franchises a chain of mid-scale restaurants under the name Perkins Restaurant and Bakery. He also served as TRC's chief operating officer from 1998 to March 2004. "I accepted the Board's request to take an oversight role over Friendly's operations temporarily while a search for a new President and Chief Executive Officer is carried out," Mr. Smith said. "We all recognize the importance of moving quickly to fill those roles." Friendly Ice Cream Corporation (AMEX: FRN) -- http://www.friendlys.com/-- is a vertically integrated restaurant company serving signature sandwiches, entrees and ice cream desserts in a friendly, family environment in 525 company and franchised restaurants throughout the Northeast. The company also manufactures ice cream, which is distributed through more than 4,500 supermarkets and other retail locations. With a 70- year operating history, Friendly's enjoys strong brand recognition and is currently remodeling its restaurants and introducing new products to grow its customer base. * * * As reported in the Troubled Company Reporter on Aug. 14, 2006 Friendly Ice Cream Corporation's balance sheet at July 2, 2006, showed total assets of $223 million and total liabilities of $362 million resulting in a stockholders' deficit $139 million. At Jan. 1, 2006, the Company's balance sheet showed a stockholders' deficit $142 million. GALAXY VII: Moody's Assigns Ba2 Rating to $13.5MM Class E Notes --------------------------------------------------------------- Moody's Investors Service reported it assigned ratings to six classes of notes issued by Galaxy VII CLO, Ltd. These ratings were assigned: * Aaa to $270,500,000 Class A-1 Senior Term Notes Due 2018; * Aaa to $60,000,000 Class A-2 Senior Delayed Draw Notes Due 2018; * Aa2 to $29,500,000 Class B Senior Floating Rate Notes Due 2018; * A2 to $26,000,000 Class C Deferrable Mezzanine Floating Rate Notes Due 2018; * Baa2 to $19,000,000 Class D Deferrable Mezzanine Floating Rate Notes Due 2018; * Ba2 to $13,500,000 Class E Deferrable Junior Floating Rate Notes Due 2018; Moody's also assigned ratings to two classes of Combination Notes issued by the Issuer: * A1 to the Class X Combination Notes, and, * Baa2 to the Class Y Combination Notes. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio due to defaults, the transaction's legal structure and the characteristics of the underlying assets, consisting primarily of senior secured loans. Moody's rating on the Class X Combination Notes only addresses the ultimate receipt of the principal of the Class X Combination Notes, and rating on the Class Y Combination Notes addresses the ultimate receipt of interest and principal payment, relative to the promise of receiving the present value of such payment. Ratings of the Combination Notes do not address any other payments or additional amounts that a holder of Class X Combination Notes or Class Y Combination Notes may receive pursuant to the underlying documents. AIG Global Investment Corp. will manage the selection, acquisition and disposition of collateral, consisting primarily of senior secured loans, on behalf of the Issuer. The transaction was brought to market by Morgan Stanley. GATX CORP: Selling Majority of Aircraft Leasing Business -------------------------------------------------------- GATX Corporation has signed a definitive agreement to sell the majority of its aircraft leasing business to a consortium of investors including Macquarie Bank and affiliated investment funds of Och Ziff Capital Management Group. The transaction is expected to close by yearend. The consortium, Macquarie Aircraft Leasing Limited, will acquire GATX's wholly owned aircraft and will seek to acquire assets within the aircraft leasing joint ventures managed by GATX. GATX anticipates that the majority of the employees at its aircraft leasing business will accompany the assets to MALL. The air assets subject to the agreement with MALL, including GATX's joint venture investments, total approximately $1.5 billion in net book value, or 21% of GATX's total assets. The sale will result in an after-tax charge in the range of $50 - 70 million to be taken by GATX in the third quarter. After the required prepayment of air-specific debt and taxes, GATX expects cash proceeds from the sale, assuming all assets contemplated in the transaction are sold, to be approximately $500 million. GATX will determine the use of those proceeds upon completion of the transaction. Brian A. Kenney, president and CEO of GATX Corporation, stated, "GATX has been in the commercial aircraft leasing business since 1968, building a valuable operating lease platform and portfolio of aircraft. We believe that the sale of this platform to MALL will enable GATX to realize greater value for our shareholders than we could realize from continuing to own the business, and will position GATX to pursue opportunities in our higher return rail and specialty businesses." The sale is subject to customary closing conditions, third-party consents and regulatory approvals. Based in Chicago, Illinois, GATX Corporation -- http://www.gatx.com/--provides lease financing and related services to customers operating rail, marine and other targeted assets. GATX is a leader in leasing transportation assets and controls one of the largest railcar fleets in the world. Applying over a century of operating experience and strong market and asset expertise, GATX provides quality assets and services to customers worldwide. GATX Corp. is the principal operating subsidiary GATX Financial Corporation. At June 30, 2006, GATX Financial reported total assets of $6.1 billion. * * * As reported in the Troubled Company Reporter on Oct. 2, 2006, Moody's Investors Service placed the ratings of GATX Financial Corp. (senior Baa3, short-term Prime-3) and affiliates on review for possible upgrade following the firm's announcement that it has agreed to sell a majority of its commercial aircraft leasing business to a consortium of investors, including Macquarie Bank and affiliated investment funds of Och Ziff Capital Management Group. GE CAPITAL: Moody's Lowers Rating on Class B-1 Notes to Caa2 ------------------------------------------------------------ Moody's Investors Service downgraded one class issued by GE Capital 1998-HE1. The underlying collateral consists of closed- end, fixed-rate, first-lien residential mortgage loans. This subordinate class was downgraded based on the low credit enhancement levels compared to the current loss projections. The most subordinate tranche is defaulting due to the credit losses while receiving its pro-rata portion of the principal payments. The realized losses have caused the subordination and credit enhancement levels to significantly decline. This is the rating action taken: * GE Capital 1998-HE1, Class B-1, Downgraded from B2 to Caa2. GENESIS HEALTHCARE: Moody's Assigns Loss-Given-Default Ratings -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Hospital and Long-term Care sectors, the rating agency confirmed its Ba3 Corporate Family Rating for Genesis HealthCare Corporation. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $125 Million Senior Secured Revolving Credit Facility due 2010 Ba2 Baa3 LGD1 9% $154.15 Million Senior Subordinated Notes due 2013 B2 B1 LGD4 63% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Genesis HealthCare Corporation provides long term care through a network of 213 eldercare centers, including 178 skilled nursing centers, 22 assisted living residences and 13 transitional care units in 12 eastern states. Genesis also provides contract rehabilitation services. GOLD KIST: Moody's Reviews for Upgrade B3 Rated $130MM Sr. Notes ---------------------------------------------------------------- Moody's Investors Service reported it placed the B3 senior unsecured rating as well as the B1 corporate family rating for Gold Kist, Inc. under review for possible upgrade. Moody's also affirmed the company's SGL-2 speculative grade liquidity rating. These actions follow the announcement that Pilgrim's Pride Corporation intends to commence a cash tender offer to purchase all of the outstanding shares of Gold Kist for approximately $1 billion, as well as offer to acquire Gold Kist's $130 million in 10.25% senior notes. The review for upgrade reflects the possibility that Gold Kist could be acquired and its debt assumed by a financially-stronger company (Pilgrim's Pride's corporate family rating is Ba2), hence improving the credit profile of outstanding Gold Kist debt securities. The affirmation of Gold Kist's speculative grade liquidity rating of SGL-2 reflects the company's good liquidity and the expectation that internal cash flow, cash balances, and committed bank credit availability are sufficient to cover all of the company's cash needs over the coming year. Moody's review will focus on * whether or not an acquisition will in fact occur, and if so; * the strategic fit of Gold Kist into Pilgrim's Pride's existing business portfolio; * the integration challenges Pilgrim's Pride may face in integrating Gold Kist's operations; * changes that may occur to the terms and structure of existing Gold Kist debt securities, and, * the capital structure, financial flexibility, leverage, and overall credit profile that a combined Pilgrim's/Gold Kist would exhibit should a transaction ultimately be consummated. Ratings affirmed are: * Speculative grade liquidity rating of SGL-2 These are the ratings placed on review for possible upgrade: * $130 million 10.25% senior unsecured notes at B3 (LGD5, 78%) * Corporate family rating at B1 * Probability of default rating at B1 Headquartered in Atlanta, Georgia, Gold Kist is a major US chicken processor and producer of value-added chicken products. GOODYEAR TIRE: USW to End Contract Extension on Thursday -------------------------------------------------------- The United Steelworkers of America delivered the required notice to the Goodyear Tire and Rubber Company and that unless a tentative agreement is reached; the contract will terminate on Oct. 5, 2006, at 1:00 p.m. As a three-year master contract approached its July 22, 2006 termination date, both sides entered into a day-to-day extension agreement that provided both the company and the USW the option of terminating the agreement upon delivering a 72-hour notice. "We've been telling the company that we would stay at the bargaining table as long as progress was being made," said USW executive vice president Ron Hoover. "There's no sense continuing these talks if Goodyear is intent on gutting our contract and closing our plants." "It's a sad situation and a poor reflection on this company that we are forced to take this action after all we have done for them," Mr. Hoover added. In 2003, the union agreed to a contract that provided the company with much needed financial flexibility by agreeing to wage, pension and health care concessions. In addition, each local union worked closely with local plant management to increase productivity and enhance efficiencies. The master contract between the USW and Goodyear covers 14,000 workers at 12 U.S. plants in Akron, Ohio; Gadsden, Ala.; Buffalo, N.Y., St. Marys, Ohio; Lincoln, Neb.; Topeka, Kan.; Tyler, Texas; Danville, Va.; Marysville, Ohio; Union City, Tenn.; Sun Prairie, Wis.; and Fayetteville, N.C. The USW represents more than 850,000 workers in the U.S. and Canada. Some 70,000 are employed in the tire and rubber industry. About Goodyear Tire Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. It has marketing operations in almost every country around the world. Goodyear employs more than 80,000 people worldwide. * * * As reported in the Troubled Company Reporter on June 8, 2006, Fitch affirmed The Goodyear Tire & Rubber Company's Issuer Default Rating at 'B'; $1.5 billion first lien credit facility at 'BB/RR1'; $1.2 billion second lien term loan at 'BB/RR1'; $300 million third lien term loan at 'B/RR4'; $650 million third lien senior secured notes at 'B/RR4'; and Senior Unsecured Debt at 'CCC+/RR6'. As reported in the Troubled Company Reporter on June 23, 2005, Moody's Investors Service assigned a B3 rating to Goodyear Tire & Rubber Company's $400 million ten-year senior unsecured notes. As reported in the Troubled Company Reporter on June 22, 2005, Standard & Poor's Ratings Services assigned its 'B-' rating to Goodyear Tire & Rubber Co.'s $400 million senior notes due 2015 and affirmed its 'B+' corporate credit rating. GRANITE BROADCASTING: Moody's Assigns Loss-Given-Default Rating --------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US advertising and broadcasting sector, the rating agency lowered its Caa1 rating on Granite Broadcasting Corporation's 9 3/4% senior secured notes due 2010 to Caa2 and assigned an LGD3 rating, suggesting noteholders will experience a 48% loss in the event of a default. Moody's also raised its C rating on the Company's 12 3/4% PIK exch. preferred stock to Ca and attached an LGD6 rating, suggesting noteholders will experience a 99% loss in the event of a default. Granite Broadcasting carries Moody's Caa2 PDR rating. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Granite Broadcasting Corporation (OTCBB: GBTVK) -- http://www.granitetv.com/-- owns and operates, or provides programming, sales and other services to 23 channels in the following 11 markets: San Francisco, California; Detroit, Michigan; Buffalo, New York; Fresno, California; Syracuse, New York; Fort Wayne, Indiana; Peoria, Illinois; Duluth, Minnesota- Superior, Wisconsin; Binghamton, New York; Utica, New York and Elmira, New York. The Company's channel group includes affiliates of NBC, CBS, ABC, CW and My Network TV, and reaches approximately 6% of all U.S. television households. GRAY TELEVISION: Moody's Assigns Loss-Given-Default Ratings ----------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US advertising and broadcasting sector, the rating agency affirmed its Ba2 corporate family rating on Gray Television, Inc. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Secured revolver Ba2 Ba1 LGD3 34% Secured term loan A facility Ba2 Ba1 LGD3 34% Secured term loan B facility Ba2 Ba1 LGD3 34% 9 1/4% Sr. Subor. Notes due 2011 Ba3 B1 LGD5 87% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). About Gray Television Headquartered in Atlanta, Georgia, Gray Television, Inc. is a television broadcast company. Gray operates 36 television stations serving 30 markets. Each of the stations are affiliated with either CBS (17 stations), NBC (10 stations), ABC (8 stations), or Fox (1 station). In addition, Gray currently operates seven digital multi-cast television channels in seven of its existing markets, which are affiliated with either UPN or Fox. GS ENERGY: Reports $10,747 of Net Income in Second Quarter ---------------------------------------------------------- GS Energy Corporation, fka Inseq Corporation, has filed its third quarter financial statements for the three months ended June 30, 2006, with the Securities and Exchange Commission. The Company earned $10,747 of net income on $1.1 million of net revenues for the three months ended June 30, 2006, compared with a $767,870 net loss on $313,744 of net revenues in 2005. As of June 30, 2006, the Company had an accumulated deficit of $6.2 million. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?12cd Going Concern Doubt Rosenberg Rich Baker Berman & Company, P.A., in Bridgewater, New Jersey, raised substantial doubt about GS Energy's ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's operating losses and working capital deficits. About GS Energy Headquartered in Mount Arlington, New Jersey, GS Energy Corporation fka INSEQ Corporation (OTCBB:INSQ) -- http://www.gs- energy.com/ -- manufactures and sells products that facilitate the efficient use of virgin and partially consumed natural resources, including metals, chemicals, fuels, and plastics. HARRAH'S ENT: Gets $15 Billion Buyout Offer From Two Equity Firms ----------------------------------------------------------------- Harrah's Entertainment, Inc., confirmed that its Board of Directors has received a proposal from Apollo Management and Texas Pacific Group to acquire all of the Company's outstanding common stock for $81 per share in cash. According to Ryan Nakashima of the Associated Press, the two private equity firms are offering $15.05 billion to buyout the casino operator. Harrah's Board of Directors has established a Special Committee consisting of all non-management directors to review the proposal. The Special Committee has retained UBS Securities LLC as its financial advisor and Kaye Scholer LLP as its legal advisor to assist the Special Committee. The Special Committee has not determined that a transaction is in the best interests of Harrah's and its stockholders or that Harrah's should not continue as an independent public company pursuing its business plan as a provider branded casino entertainment. Accordingly, there is no assurance that Harrah's will enter into this or any other transaction. Headquartered in Las Vegas, Nevada, Harrah's Entertainment, Inc. (NYSE:HET) -- http://www.harrahs.com/-- is a gaming corporation that owns and operates casinos, hotels, and five golf courses under several brands. HARRAH'S ENTERTAINMENT: Moody's Revises Outlook to Negative ----------------------------------------------------------- Moody's Investors Service changed Harrah's rating outlook to negative from stable in response to the company's confirmation that it received a proposal from private equity firms to buy the company for $81 a share in cash or about $15 billion, excluding existing debt of $10.8 billion at June 30, 2006. Harrah's has established a special committee consisting of non-management directors to review the proposal. Harrah's ratings would be placed under review for possible downgrade: 1. if the company agrees to be taken private in leveraged buy-out, or 2. if the company does not agree to be taken private, but alters its financial policy and pursues other debt financed measures to increase returns to shareholders such as higher dividends or share repurchases. If a transaction is consummated on the current offer price, Moody's estimates a potential downgrade to the single B rating category. If a transaction is not consummated, any potential downgrade would depend on the magnitude of any program to increase shareholder returns. Headquartered in Las Vegas, Nevada, Harrah's Entertainment, Inc., through its wholly-owned subsidiary, Harrah's Operating Company, Inc., operates 37 casinos, primarily under the Harrah's, Caesar's, and Horseshoe brand names. Revenues for the twelve-month period ended June 30, 2006 were approximately $9 billion. HARRAH'S ENTERTAINMENT: Purchase Proposal Cues S&P to Cut Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Harrah's Entertainment Inc. and its subsidiary Harrah's Operating Co. Inc., including its long- and short-term corporate credit ratings to 'BB+' from 'BBB-' and to 'B' from 'A-3', respectively. In addition, these ratings were placed on CreditWatch with negative implications. This Las Vegas-headquartered company had about $10.8 billion of reported debt outstanding as of June 30, 2006. The lower ratings and CreditWatch listing reflect Harrah's announcement that it had received a proposal from Apollo Management and Texas Pacific Group to acquire all of Harrah's outstanding common stock for $81 per share in cash, or about $15 billion. A special committee of Harrah's board of directors has been established to review the proposal. If a transaction were ultimately agreed upon, Standard & Poor's would expect a marked increase in leverage, which is likely to result in even further ratings downside potential. If an acquisition is not consummated, Standard & Poor's believes the company will be faced with increasing shareholder pressures for some form of leveraging transaction over the near term, given the company's stock-price appreciation since the public confirmation by Harrah's of the acquisition proposal. There is no room for even a relatively modest share repurchase program at the former rating. The acquisition proposal, and likely increased shareholder pressures, comes at a time when Harrah's already had limited flexibility in its leverage profile at its former rating. Moreover, Harrah's is in the midst of a relatively aggressive capital spending and growth program. In conjunction with maintenance-capital spending and its ongoing dividend, no debt reduction is expected during the intermediate term. Rather, the maintenance and/or improvement in credit measures will be dependent upon continued good earnings growth during a period of moderating industry performance. The new rating provides Harrah's with additional flexibility to accomplish both its near- and intermediate-term growth objectives or to repurchase shares of its stock than existed in the previous rating. Standard & Poor's will review its ratings on Harrah's when, and if, a definitive acquisition or other leveraging transaction is announced and the company's operating and financial objectives are evaluated. HARRAH'S ENTERTAINMENT: Fitch Lowers Issuer Default Rating to BB+ ----------------------------------------------------------------- Fitch Ratings downgraded the debt ratings of Harrah's Entertainment Inc. (NYSE: HET) and its principal operating subsidiary Harrah's Operating Co.: Harrah's Entertainment, Inc.: -- Issuer Default Rating to 'BB+' from 'BBB-' Harrah's Operating Co.: --Issuer Default Rating to 'BB+' from 'BBB-' --Bank Credit Facility to 'BB+' from 'BBB-' --Senior Unsecured Notes to 'BB+' from 'BBB-' --Subordinated notes to 'BB-' from 'BB+' In addition, Fitch placed all of Harrah's ratings on Rating Watch Negative. The company had roughly $10.8 billion in debt outstanding as of June 30, 2006. The ratings reflect the announced proposal to purchase the company by private equity firms Apollo Management and Texas Pacific Group for $81 per share in cash, or a 22% premium to Friday's closing stock price. Harrah's has established a committee to review the proposal and the committee has not determined if it is in Harrah's best interests to continue as a public company or be taken private. Although terms of the transaction and the prospective capital structure are unknown at this time Fitch believes that the proposal would result in a substantial increase in leverage that is inconsistent with an investment grade credit profile. The assigned Rating Watch Negative indicates that the completion of the transaction could result in further downgrades of Harrah's ratings. An absence of change of control protection for Harrah's bondholders will likely lead to a further erosion of unsecured bondholders' positions in the event that a highly leverage transaction of the type proposed today is completed. Even if the transaction is not closed, Fitch believes that management will come under increasing near-term pressure to engage in shareholder-friendly activity since a public offer has been placed on the company's shares. In addition, Harrah's has been unsuccessful in previous attempts to enter attractive, high-growth markets such as Macau and Singapore, so shareholders may push for other means to increase value, particularly now that a public offer exists. Furthermore, Harrah's credit profile had already come under significant pressure, particularly in light of the increased leverage and reduced cash flow protection associated with the Caesar's Entertainment acquisition in 2005. Above and beyond the announced buyout transaction these developments related to capital allocation are likely to influence the company's credit profile. -- Harrah's recently announced the acquisition of London Clubs, a UK gaming operator. -- The company has large-scale redevelopment plans for its Las Vegas and Atlantic City properties for which it has yet to announce size and scope. Based on competing projects in those markets, those plans could impact the company's credit metrics. -- Harrah's is bidding on the second available license in Singapore (Sentosa), after it was unsuccessful in the Marina Bay bidding, which went to Las Vegas Sands. -- Harrah's is supporting a referendum for a tribal casino in Rhode Island, which is on the November ballot. -- Plans for a permanent facility in the Biloxi market. -- International expansion plans in Spain, the Bahamas, and Slovenia. While some of these projects may not come to fruition, and the company could potentially finance them conservatively (through non-recourse JV debt and/or additional equity capital from partners), there is a risk that increases in debt-financed capital spending could lead to higher leverage and an erosion of free cash flow generation -- even if a leveraged acquisition of the company is not completed successfully. HEALTHSOUTH CORP: Court Approves $445 Mil. Settlement Agreement --------------------------------------------------------------- The U.S. District Court for the Northern District of Alabama has granted preliminary approval of the landmark $445 million settlement agreement in the federal securities class action lawsuit to settle litigation filed against HealthSouth Corp., certain of its former directors and officers and certain other parties relating to allegations of massive securities fraud and related activity that occurred at the company during periods ended in March 2003. The District Court has scheduled a Final Settlement Hearing on Jan. 8, 2007, at 1:30 p.m. The case contained allegations of an immense and pervasive fraudulent scheme undertaken by defendants over more than a decade, to inflate and manipulate HealthSouth's financial statements by creating false revenue and income, capitalizing normal operating expenses, failing to write off impaired assets and defrauding Medicare and various private insurers. The facts of the fraud include the testimony of several members of management, including several CFOs, that former CEO, Richard M. Scrushy, held meetings with HealthSouth employees, who were directed to "fill the holes," that is, fabricate portions of the financials in order to meet Wall Street's earnings expectations. Subsequently, HealthSouth withdrew its financial statements reported during the class period and admitted that its earnings during that time were overstated by approximately $2.8 billion. "When news of the totality of the fraud was disclosed, the market price of the common stock, which traded as high as $31 per share during the class period, collapsed to the range of $0.09 to $0.11 per share" Patrick Coughlin, the attorney representing Co-Lead Plaintiff for the Central States stated. "This settlement permits HealthSouth to put some of its problems behind it while at the same time compensating investors for fraud. We will continue to fight vigorously against HealthSouth auditors and underwriters who were central to HealthSouth's fraudulent behavior." "We are extremely pleased with both the strong prosecution of this litigation and the aggressive settlement strategy" Attorney General Patricia Madrid of New Mexico, representing Co-Lead Plaintiff the New Mexico State Funds in the case remarked. "As I have previously stated, no shareholder should be forced to bear this burden and my office will always fight to protect all shareholders." General Madrid added, "As long-term institutional investors, we hope the settlement will serve as a catalyst for HealthSouth's turnaround." Under the proposed settlement, federal securities and fraud claims brought in the class action against HealthSouth and certain of its former directors and officers will be settled for consideration consisting of HealthSouth common stock and warrants valued at $215 million and cash payments by HealthSouth's insurance carriers of $230 million for aggregate consideration of $445 million. In addition, the federal securities class action plaintiffs will receive 25% of any net recoveries from future judgments obtained by or on behalf of HealthSouth with respect to claims against Richard Scrushy, the company's former chief executive officer, Ernst & Young, the company's former auditors, and UBS, the company's former primary investment bank, each of which remains a defendant in the derivative actions as well as the federal securities class actions. About HealthSouth Headquartered in Birmingham, Alabama, HealthSouth Corporation (OTC Pink Sheets: HLSH) -- http://www.healthsouth.com/-- provides outpatient surgery, diagnostic imaging and rehabilitative healthcare services, operating facilities nationwide. * * * As reported in the Troubled Company Reporter on May 30, 2006, Standard & Poor's Ratings Services assigned its 'CCC+' rating to HealthSouth Corp.'s $1 billion of floating-rate senior unsecured notes due 2014 and fixed-rate senior unsecured notes due 2016. At the same time, existing ratings on HealthSouth, including the 'B' corporate credit rating, were affirmed. The rating outlook is stable. Moody's placed HealthSouth's debt and corporate family ratings at B2 and B3 respectively. The ratings were placed on April 18, 2006, with a stable outlook. HCA INC: Moody's Assigns Loss-Given-Default Ratings --------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Hospital and Long-term Care sectors, the rating agency confirmed its Ba2 Corporate Family Rating for HCA Inc. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Senior Unsecured Revolving Credit Facility due 2009 Ba2 Ba2 LGD4 60% 8.850% Senior Unsecured Notes due 2010 Ba2 Ba2 LGD4 60% 7.250% Senior Unsecured Notes due 2008 Ba2 Ba2 LGD4 60% 7.0% Senior Unsecured Notes due 2007 Ba2 Ba2 LGD4 60% 5.5% Senior Unsecured Notes due 2007 Ba2 Ba2 LGD4 60% 8.7% Medium Term Notes due 2010 Ba2 Ba2 LGD4 60% 8.75% Senior Unsecured Notes due 2010 Ba2 Ba2 LGD4 60% 7.875% Senior Unsecured Notes due 2011 Ba2 Ba2 LGD4 60% 6.950% Senior Unsecured Notes due 2012 Ba2 Ba2 LGD4 60% 6.3% Senior Unsecured Notes due 2012 Ba2 Ba2 LGD4 60% 6.25% Senior Unsecured Notes due 2013 Ba2 Ba2 LGD4 60% 6.75% Senior Unsecured Notes due 2013 Ba2 Ba2 LGD4 60% 5.75% Senior Unsecured Notes due 2014 Ba2 Ba2 LGD4 60% 9.0% Medium Term Notes due 2014 Ba2 Ba2 LGD4 60% 6.375% Senior Unsecured Notes due 2015 Ba2 Ba2 LGD4 60% 7.19% Unsecured Debentures due 2015 Ba2 Ba2 LGD4 60% 6.5% Senior Unsecured Notes due 2016 Ba2 Ba2 LGD4 60% 7.5% Senior Debentures due 2023 Ba2 Ba2 LGD4 60% 8.36% Senior Debentures due 2024 Ba2 Ba2 LGD4 60% 7.69% Senior Unsecured Notes due 2025 Ba2 Ba2 LGD4 60% 7.58% Senior Unsecured Notes due 2025 Ba2 Ba2 LGD4 60% 7.05% Unsecured Debentures due 2027 Ba2 Ba2 LGD4 60% 7.5% Senior Unsecured Notes due 2033 Ba2 Ba2 LGD4 60% 7.75% Unsecured Debentures due 2036 Ba2 Ba2 LGD4 60% 7.5% Unsecured Debentures due 2095 Ba2 Ba2 LGD4 60% Other Medium Term Notes Ba2 Ba2 LGD4 60% Unsecured Senior Shelf (P)Ba2 (P)Ba2 LGD4 60% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). HCA Inc. is a holding company that owns and operates hospitals and related health care entities through various affiliates. At June 30, 2006, HCA owned and operated 176 hospitals, 92 freestanding surgery centers and facilities that provide extensive outpatient and ancillary services. HEXCEL CORP: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its B1 Corporate Family Rating for Hexcel Corporation. Additionally, Moody's revised its probability-of-default ratings and assigned loss- given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Secured Term Loan B due 2012 Ba3 Ba2 LGD2 26% Sr. Secured Revolver due 2010 Ba3 Ba2 LGD2 26% 6.75% Sr. Subor. Notes due 2015 B3 B3 LGD5 78% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Stamford, Connecticut, Hexcel Corporation (NYSE/PCX: HXL) develops, manufactures and markets lightweight, high-performance reinforcement products, composite materials and composite structures for use in commercial aerospace, space and defense, electronics, and industrial applications. HOLLINGER INC: Court Orders Continuing Asset Freeze on Lord Black ----------------------------------------------------------------- The Ontario Court of Justice has issued a Consent Order that continues to freeze the assets of Conrad Black and Barbara Amiel- Black subject to the terms of a confidential settlement agreement. The Consent Order issued on Sept. 29, 2006, is designed to preserve the assets of Conrad Black, Barbara Amiel-Black and entities controlled by them pending resolution of claims, which have been filed against them by Hollinger Inc. It replaces the Orders related to this matter previously granted by the Ontario Court. Hollinger notes that some initial media reports regarding the Order are incorrect and that, in fact, a "Mareva" injunction remains in place, except as provided by the confidential settlement agreement. "The Consent Order maintains Hollinger's right to protect itself against the potential dissipation of the defendants' assets while the claims against them are pending," Stanley Beck, the Chairman of the Board of Hollinger Inc., said. "We believe that Hollinger's shareholders will benefit from the Consent Order." About Hollinger Inc. Toronto, Ontario-based Hollinger Inc.'s (TSX: HLG.C)(TSX: HLG.PR.B) -- http://www.hollingerinc.com/-- principal asset is its 66.8% voting and 17.4% equity interest in Hollinger International, a newspaper publisher with assets, which include the Chicago Sun-Times and a large number of community newspapers in the Chicago area. Hollinger also owns a portfolio of commercial real estate in Canada. Litigation Risks Hollinger, Inc., faces various court cases and investigations: (1) a consolidated class action complaint filed in Chicago, Illinois; (2) a class action lawsuit that was filed in the Saskatchewan Court of Queen's Bench on Sept. 7, 2004; (3) a $425,000,000 fraud and damage suit filed in the State of Illinois by Hollinger International; (4) a lawsuit seeking enforcement of a Nov. 15, 2003, restructuring proposal to uphold a Shareholders' Rights Plan, a declaration that corporate by-laws were invalid and to prevent the closing of a certain transaction; (5) a lawsuit filed by Hollinger International seeking injunctive relief for the return of documents of which it claims ownership; (6) a $5,000,000 damage action commenced by a lessor of an aircraft lease, in which Hollinger was the guarantor; (7) an action commenced by the United States Securities and Exchange Commission on Nov. 15, 2004, seeking injunctive, monetary and other equitable relief; and (8) investigation by the enforcement division of the OSC. Hollinger Inc. has also been unable to file its annual financial statements, Management's Discussion & Analysis and Annual Information Form for the years ended Dec. 31, 2003, 2004 and 2005 on a timely basis as required by Canadian securities legislation. Hollinger has not filed its interim financial statements for the fiscal quarters ended March 31, June 30 and Sept. 30 in each of its 2004 and 2005 fiscal years. Also, Hollinger has not filed its financial statements for the period ended March 31, 2006. HOLLYWOOD THEATERS: Moody's Assigns Loss-Given-Default Ratings -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Gaming, Lodging & Leisure sector, the rating agency confirmed Hollywood Theaters, Inc.'s B2 Corporate Family Rating. Additionally, Moody's downgraded its probability-of-default ratings and assigned loss-given-default ratings on these loans facilities: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Sec. Revolving Credit Due 2009 B2 B1 LGD3 41% Se. Sec. Term Loan Due 2009 B2 B1 LGD3 41% Second Lien Term Loan Due 2010 B3 Caa1 LGD5 50% 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as its 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. They 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%). Hollywood Theaters Inc. operates 50 theaters with 484 screens in small to midsize markets, primarily in 13 states in the South Central, Midwestern, and Western U.S. HONOR SERVICES: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Honor Services, Inc. dba Tumbleweed Care Center 3606 28th Street Lubbock, TX 79410 Bankruptcy Case No.: 06-50223 Type of Business: The Debtor operates a nursing home. Chapter 11 Petition Date: September 6, 2006 Court: Northern District of Texas (Lubbock) Judge: Robert L. Jones Debtor's Counsel: Todd Jeffrey Johnston, Esq. McWhorter Cobb & Johnson, LLP 1722 Broadway Lubbock, TX 79401 Tel: (806)762-0214 Fax: (806)762-8014 Financial Condition as of Sept. 6, 2006: Total Assets: $1.5 Million Total Debts: $1.2 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. IMAX CORP: Moody's Assigns LGD4 Rating to 9-5/8% Senior Notes ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Gaming, Lodging & Leisure sector, the rating agency confirmed IMAX Corporation's B3 Corporate Family Rating. Moody's also downgraded the Company's probability-of-default rating on its 9-5/8% Senior Notes due 2010 to Caa1 from B3. Additionally, Moody's assigned an LGD4 rating to these notes, suggesting noteholders will experience a 58% loss in the event of a default. 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as its 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. They 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%). IMAX Corporation -- http://www.imax.com/-- founded in 1967 and headquartered jointly in New York City and Toronto, Canada, is an entertainment technology company, with particular emphasis on film and digital imaging technologies including 3D, post-production, and digital projection. IMAX also designs and manufactures cameras, projectors and consistently commits significant funding to ongoing research and development. IMMEDIATEK INC: Reports 2nd Quarter Results Under New Accounting ---------------------------------------------------------------- Immediatek, Inc., entered into a Securities Purchase Agreement with Radical Holdings LP in January this year. On June 8, 2006, pursuant to the Purchase Agreement, Radical purchased 4,392,286 shares of the Series A Convertible Preferred Stock for an aggregate purchase price of $3,000,000. As a result of the change in control by virtue of the purchase of the Series A Convertible Preferred Stock by Radical, the Company has "pushed down" its basis to a proportionate amount of its underlying assets and liabilities acquired, based on the estimated fair market values of the assets and liabilities. Due to the impact of the changes resulting from the "push down," the Company's statements of operations separate results into two periods: a) the period ending on June 7, 2006, which was the day prior to the consummation of the sale of the Series A Convertible Preferred Stock, and b) the period beginning on June 8, 2006 utilizing the new basis of accounting. Quarterly Results Revenues for the post-push down period primarily relate to sales of compact discs of a music festival recorded in June 2006. For the pre-push down period during the three months ended June 30, 2006, the Company generated $2,425 of revenues consisting of sales of compact discs related to live events recorded in prior periods, as there were no recordings made of live events during that period that were revenue generating. For the three months ended June 30, 2005, under the new basis of accounting revenues were $19,740 related primarily to the sale of recordings made of three live events during that period. For the period ending on June 7, 2006, or the day prior to the consummation Series A stock sale, the Company reported a $247,479 net loss. Under the new basis of accounting, the Company reported a net income of $21,378. At June 30, 2006, the Company's balance sheet showed total assets of $4,878,032 and total liabilities of $919,783. The primary changes to the balance sheet under the new basis of accounting reflect: -- adjustments to the Company's fixed assets to reflect a step-up in basis of those assets; -- the recording of a value for the Company's trade names, trade marks and covenants not to compete; -- adjustments to historical goodwill to reflect goodwill arising from the push down accounting adjustments; -- the recording of a value for assets held for sale; -- the recording of a value for deferred tax asset and liability; and -- an increase in additional paid-in capital from these adjustments. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?12bd Going Concern Doubt Beckstead And Watts, LLP, expressed substantial doubt about Immediatek, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's limited operations. About Immediatek Immediatek, Inc., through its wholly-owned, operating subsidiary, DiscLive, Inc. -- http://www.disclive.com/-- records live content, such as concerts and conferences, and makes the recorded content available for delivery to attendees within fifteen minutes after the conclusion of the live event. The recorded content is made available for pre-sale and sale at the venue and on DiscLive's website. The content is delivered primarily via compact disc. INN OF THE MOUNTAIN: Moody's Assigns LGD4 Rating to 12% Sr. Notes ----------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Gaming, Lodging & Leisure sector, the rating agency confirmed Inn of the Mountain Gods Resort and Casino's B3 Corporate Family Rating. Moody's confirmed the Company's B3 probability-of-default rating on its 12% Senior Notes due 2010. Additionally, Moody's assigned an LGD4 rating to these notes, suggesting noteholders will experience a 54% loss in the event of a default. 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as its 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. They 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%). Mescalero, New Mexico-based Inn of the Mountain Gods Resort and Casino is an entity formed to own and operate the casino and resort operations for the Mescalero Apache Tribe. INTERPUBLIC GROUP: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US advertising and broadcasting sector, the rating agency affirmed its Ba3 corporate family rating on Interpublic Group of Companies, Inc. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 7.25% Sr. Unsec. Notes due 2011 Ba3 Ba3 LGD4 66% 5.40% Sr. Unsec. Notes due 2009 Ba3 Ba3 LGD4 66% 4.50% Convertible Sr. Unsec. Notes due 2023 Ba3 Ba3 LGD4 66% 6.25% Sr. Unsec. Notes due 2014 Ba3 Ba3 LGD4 66% Sr. Unsec. Shelf (P)Ba3 (P)Ba3 Subor. Shelf (P)B1 (P)B1 Pref. Stock Shelf (P)B2 (P)B1 Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). About Interpublic Interpublic Group of Companies Inc. (NYSE:IPG) -- http://www.interpublic.com/-- is one of the world's leading organizations of advertising agencies and marketing services companies. Major global brands include Draft FCB Group, FutureBrand, GolinHarris International, Initiative, Jack Morton Worldwide, Lowe Worldwide, MAGNA Global, McCann Erickson, Momentum, MRM, Octagon, Universal McCann and Weber Shandwick. Leading domestic brands include Campbell-Ewald, Carmichael Lynch, Deutsch, Hill Holliday, Mullen, The Martin Agency and R/GA. INTERSTATE BAKERIES: 3V Capital Appointed in Six-Member Committee ----------------------------------------------------------------- Charles E. Rendlen, III, the U.S. Trustee for Region 13, appoints 3V Capital Management, LLC, as member of the Official Committee of Unsecured Creditors of Interstate Bakeries Corporation and its debtor-affiliates' Chapter 11 cases. Cargill, Inc./Horizon Milling, Campbell Mithun, Archer Daniels Midland Company and Bartlett Milling Company have resigned from the Committee. The Committee is now composed of: (1) U.S. Bank National Association, Indenture Trustee One Federal Street Boston, MA 02110-2027 Telephone: 617-603-6429 Telecopier: 617-603-6640 e-mail: laura.moran@usbank.com Contact: Laura L. Moran, Co-Chairperson (2) International Brotherhood Of Teamsters 6 Tuxedo Avenue Hyde Park, NY 11040 Telephone: 516-747-0696 Telecopier: 516-747-0676 e-mail: teamplayer2@verizon.net Contact: Richard Volpe (3) ConAgra Foods, Inc. 7350 World Communications Drive Mail Stop 7350-317 Omaha, NE 68122 Telephone: 402-998-3202 Telecopier: 402-930-3309 e-mail: Bob.Ellis@conagrafoods.com Daniel.Boehle@conagrafoods.com Contact: Robert Ellis and Daniel Boehle (4) Bakery, Confectionery, Tobacco Workers & Grain Miller's International Union 10401 Connecticut Avenue Kensington, MD 20895-3961 Telephone: 301-933-8600 Telecopier: 301-933-7618 e-mail: mfreer@bctgm.org Contact: Frank Hurt (5) C P Management, LLC 1829 Reisterstown Road, Suite 420 Baltimore, MD 21208 Telephone: 410-602-0195 Telecopier: 410-602-0391 e-mail: research@chespartners.com Contact: Bryan Long (6) 3V Capital Management, LLC One Greenwich Office Park, S. 51 East Weaver St. Greenwich, CT 06831 Telephone: 203-629-9522 Telecopier: 203-422-0762 e-mail: joe@3vcm.com Contact: Joseph Zalewski Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014 on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Ct. OKs CONSOR Intellectual as IP Consultant ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri authorized Interstate Bakeries Corporation and its debtor- affiliates to employ CONSOR Intellectual Asset Management to provide intellectual property consulting services. As reported in the Troubled Company Reporter on Sept. 12, 2006, CONSOR's IP consulting services is needed to aid the Debtors in evaluating their reorganization options, Ronald B. Hutchison, chief financial officer of Interstate Bakeries Corporation, said. Pursuant to an Engagement Letter between the parties, CONSOR agreed to value the intellectual property owned and operated by the Debtors. The valuation analysis will focus on the portfolio of trademarks and other brand assets. CONSOR will provide a calculation of "Fair Value" under: -- the liquidation value for the IP Assets, as defined under Chapter 7 of the Bankruptcy Code; and -- an orderly disposal value based on a liquidation of the IP Assets over a six to twelve month marketing period. To accomplish the Fair Value determinations, CONSOR will: (a) explain the basic elements of value for trademarks and trade names and brand names in general; (b) review the history of the IP Assets, including use, development and awareness; (c) identify all specific components of value for the IP Assets; (d) review the current use of the IP Assets by various business segments in key geographies; (e) review the current licensing situation, including existing license agreements; (f) understand current market research as to brand awareness and share of market in various geographies; (g) review revenues, projections, profitability, and other available financial information related to the IP Assets; (h) research internal and external sources of data, as well as averages and ranges of data from licensing industry research, to identify marketplace royalty rates and transaction information; (i) assemble exhibits of comparable transactions based on marketplace data for consumer product-based trademarks; and (j) provide professional opinions as to Fair Value for the IP Assets under each valuation scenario. According to Mr. Hutchison, the Debtors may also seek to utilize CONSOR's extensive experience in areas like brand extension, trademark licensing strategies and tactics, and trademark portfolio management. The Debtors will pay CONSOR $425 per hour for the IP Valuation Services, with a cap of $200,000 on professional fees. CONSOR will receive a $25,000 retainer before the commencement of its work. CONSOR will also be reimbursed for the necessary expenses it incurs while providing services to the Debtors. After CONSOR delivers its final report to Debtors, any additional work will be paid in accordance with CONSOR's standard hourly rates: Professional Hourly Rates ------------ ------------ Chairman, Chief Executive Officer $695 Officers and Directors $550 Senior Staff $425 Junior Staff $275 Administrative Staff $125 Daryl Martin, vice president of Domain Assets, LLC, doing business as CONSOR Intellectual Asset Management, assured the Court that his firm does not represent any interest adverse to the Debtors or their estates, and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014 on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERTAPE POLYMER: Explores Strategic & Financial Alternatives -------------------------------------------------------------- Intertape Polymer Group Inc.'s Board of Directors will initiate a process to explore and evaluate various strategic and financial alternatives available to enhance shareholder value. "Having completed an in-depth operational and financial review, the Board of Directors has authorized the Company to evaluate the strategic and financial options that may be available to it and to initiate a process to explore ways of enhancing shareholder value," Michael L. Richards, chairman of the board, stated. Mr. Richards further said, "The Board will consider a full range of alternatives with the best interests of the Company and its shareholders in mind." The Company has now engaged TD Securities Inc. as its financial advisor to assist with the process. The Company had retained TD Securities to assist with its operational and financial review. "Intertape has strong relationships with its customers, and as we go through this process, service to our customers will remain paramount," H. Dale McSween, interim chief executive officer, said. As part of Intertape's continuing commitment to its customers and core markets, the Company recently announced new initiatives, including the market launch of the protective packaging air pillows product line, the installation of a new seven-layer cast film line scheduled for start up in late October and the commissioning of a new co-extrusion blown film line. The Company also announced that it anticipates its revenue for the third quarter will be approximately $195 million as compared with $222 million in the second quarter of 2006. The decline in revenue reflects a softening of demand in the Company's markets, particularly those relating to the North American housing markets. To adjust to current market conditions, the Company has continued to implement various cost reduction measures designed to align its cost base with anticipated lower volumes. The Company expects to begin to realize the benefit of its previously disclosed cost cutting measures, including the Brighton plant closure which has been accelerated to Nov. 1, 2006. In addition, the Company continues to make improvements in its working capital utilization. The Company anticipates that when it reports its third quarter results it may not be in compliance with certain financial covenants under its term credit agreement and will be endeavoring to seek any required amendment of its covenants under such agreement. Mr. McSween added, "We have a good relationship with our lenders developed over a number of years and look forward to their support through the process being announced...." As part of its continuing process of identifying a new Chief Executive Officer, Intertape has interviewed a number of highly qualified candidates, among whom a short list has been selected. Mr. McSween concluded, "This process is designed to try and deliver enhanced value to shareholders while at the same time positioning the Company to take advantage of other opportunities. During this time, we will seek to strengthen our business for the benefit of our customers, employees, suppliers and lenders." About Intertape Polymer Group Based in Montreal, Quebec and Sarasota/Bradenton, Florida, Intertape Polymer Group Inc. (TSX: ITP) (NYSE: ITP) -- http://www.intertapepolymer.com/-- develops and manufactures specialized polyolefin plastic and paper based packaging products and complementary packaging systems for industrial and retail use. The Company employs 2,450 employees with operations in 18 locations, including 13 manufacturing facilities in North America and one in Europe. * * * Standard & Poor's Ratings Services assigned its 'B+' long-term foreign & local issuer credit rating to Intertape Polymer Group Inc. in July 2004. INTRAWEST CORP: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Gaming, Lodging & Leisure sector, the rating agency confirmed Intrawest Corp.'s Ba3 Corporate Family Rating. Additionally, Moody's confirmed its probability-of-default ratings and assigned loss-given-default ratings on these notes: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $350 Million 7.5% Sr. Unsec. Notes Due 2013 B1 B1 LGD5 76% $225 Million 7.5% Sr. Unsec. Notes Due 2013 B1 B1 LGD5 76% CDN$125 Million 6.875% Sr. Unsec. Notes Due 2009 B1 B1 LGD5 76% 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as its 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. They 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%). Based in Vancouver, British Columbia, Intrawest Corporation (IDR: NYSE; ITW: TSX) -- http://www.intrawest.com/-- operates destination resorts and adventure travel. The company has interests in 10 resorts at North America's most popular mountain destinations, including Whistler Blackcomb, a host venue for the 2010 Winter Olympic and Paralympic Games. Intrawest owns Canadian Mountain Holidays, the largest heli-skiing operation in the world, and an interest in Abercrombie & Kent, the world leader in luxury adventure travel. The Intrawest network also includes Sandestin Golf and Beach Resort in Florida and Club Intrawest -- a private resort club with nine locations throughout North America. Intrawest develops real estate at its resorts and at other locations across North America and in Europe. ISLE OF CAPRI: Moody's Assigns Loss-Given-Default Ratings --------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Gaming, Lodging & Leisure sector, the rating agency confirmed Isle of Capri Casinos, Inc.'s Ba3 Corporate Family Rating. Additionally, Moody's upgraded its probability-of-default ratings and assigned loss-given-default ratings on these debts: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Secured Revolver Ba2 Ba1 LGD2 18% Sr. Secured Term Loan Ba2 Ba1 LGD2 18% 7% Sr. Sub. Notes B2 B1 LGD5 76% 9% Sr. Sub. Notes B2 B1 LGD5 76% 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as its 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. They 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%). Based in Biloxi, Miss., Isle of Capri Casinos, Inc. (Nasdaq: ISLE) -- http://www.islecorp.com/-- a developer and owner of gaming and entertainment facilities, operates 16 casinos in 14 locations. The Company owns and operates riverboat and dockside casinos in Biloxi, Vicksburg, Lula and Natchez, Miss.; Bossier City and Lake Charles (two riverboats), La.; Bettendorf, Davenport and Marquette, Iowa; and Kansas City and Boonville, Mo. The Company also owns a 57% interest in and operates land-based casinos in Black Hawk (two casinos) and Cripple Creek, Colorado. Isle of Capri's international gaming interests include a casino that it operates in Freeport, Grand Bahama, and a 2/3 ownership interest in casinos in Dudley, Walsal and Wolverhampton, England. The company also owns and operates Pompano Park Harness Racing Track in Pompano Beach, Florida. KAISER ALUMINUM: VEBA Trust Mulls Public Offering of 2.5MM Shares ----------------------------------------------------------------- Kaiser Aluminum Corporation has filed a registration statement with the Securities and Exchange Commission relating to a proposed secondary public offering of 2,517,955 shares of common stock to be sold by the Union VEBA Trust, a voluntary employees' beneficiary association trust that provides benefits to eligible retirees represented by certain unions. The proposed maximum offering price is $38.50 per share for a maximum aggregate offering price of $111,482,448. UBS Investment Bank and Bear, Stearns & Co., Inc., are acting as joint book- running managers. The Union VEBA Trust intends to grant underwriters a 30-day option to purchase up to an additional 377,693 shares of common stock at the public offering price to cover any over-allotments. Kaiser will not receive any proceeds from the offering. On the July 6, 2006 effective date of its 2nd Amended Plan of Reorganization, Kaiser issued 20,000,000 new shares of common stock, including 8,809,900 shares to the Union VEBA Trust, in accordance with the terms of the Plan. As of September 15, 2006, Kaiser has also issued 525,660 shares of stock to its employees and directors under its equity incentive plan. The Union VEBA Trust currently owns 42.9% of the outstanding Kaiser common stock. After completion of this offering, the Union VEBA Trust will hold 30.7% of Kaiser common stock, or 28.8% if the underwriters exercise their over-allotment option in full. Kaiser's common stock is traded on the Nasdaq Global Market under the symbol "KALU." On September 26, 2006, the last reported sales price of its common stock on the Nasdaq was $39.30 per share. As of September 15, 2006, there were about 225 common stockholders of record. The company's common stock is subject to certain transfer restrictions that potentially prohibit or void transfers by any person or group that is, or as a result of the transfer would become, a 5% stockholder. Jack A. Hockema, Kaiser's chief executive officer, notes that the Form S-1 filed by Kaiser with the SEC in connection with the offering has not yet become effective. The securities may not be sold and offers to buy may not be accepted before the time the registration statement becomes effective. A full-text copy of Kaiser's preliminary prospectus is available free of charge at http://researcharchives.com/t/s?12ce Copies of the prospectus for the offering may also be obtained from: * UBS Investment Bank Prospectus Department 299 Park Avenue New York, NY 10171 * Bear, Stearns & Co., Inc. Prospectus Department 383 Madison Avenue New York, NY 10179 Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. Lazard Freres & Co. serves as the Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July 6, 2006. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 106; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 609/392-0900) KAISER ALUMINUM: Witmer Parties Disclose 1,071,216 Equity Stake --------------------------------------------------------------- Witmer Asset Management reports in a regulatory filing with the Securities and Exchange Commission dated Sept. 29, 2006, that it beneficially owns 1,071,216 shares of Kaiser Aluminum Corporation's common stock. Witmer has shared dispositive and voting power over the shares, which accounts to 5.2% of Kaiser's outstanding common stock. Charles H. Witmer also reported that he is deemed to be the beneficial owner of 5.4% of outstanding Kaiser common stock. Mr. Witmer has shared voting and dispositive power over 1,090,216 shares of common stock, and sole voting and dispositive power over 10,000 shares. In addition, Meryl B. Witmer reported that she beneficially owns 1,090,216 shares of Kaiser common stock. Ms. Witmer has shared voting and dispositive power over the shares. Ms. Witmer's shares represent 5.3% of Kaiser's total outstanding common stock. Kaiser's outstanding shares total 20,516,803 as of July 31, 2006. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. Lazard Freres & Co. serves as the Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July 6, 2006. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 106; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 609/392-0900) KERASOTES SHOWPLACE: Moody's Assigns Loss-Given-Default Ratings --------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Gaming, Lodging & Leisure sector, the rating agency revised Kerasotes Showplace Theatres, LLC's Corporate Family Rating to B3 from B2. Additionally, Moody's confirmed its probability-of-default ratings and assigned loss-given-default ratings on these loans facilities: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Senior Secured Revolver Due 2010 B1 B1 LGD2 30% Senior Secured Term Loan B Due 2011 B1 B1 LGD2 30% 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as its 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. They 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%). Kerasotes Showplace Theatres, LLC -- http://www.kerasotes.com/-- operates motion picture theaters in the Midwestern and upper Midwestern regions of the United States, including Illinois, Indiana, Iowa, Ohio, Missouri, and Minnesota. The company currently operates 613 screens in 77 locations. KLEROS PREFERRED: Moody's Puts Ba1 Ratings on $6MM Class E Notes ---------------------------------------------------------------- Moody's Investors Service reported it assigned ratings to notes issued by Kleros Preferred Funding III, Ltd. These are the ratings assigned: * Aaa to $1,800,000,000 Class A-1 First Priority Senior Secured Delayed Draw Floating Rate Notes Due 2050; * Aaa to $90,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2050; * Aa2 to $54,000,000 Class B Third Priority Senior Secured Floating Rate Notes Due 2050; * A2 to $9,800,000 Class C Fourth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2050; * Baa2 to $25,800,000 Class D Fifth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2050; * Ba1 to $6,000,000 Class E Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2050 Moody's ratings of these notes address the ultimate cash receipt of all interest and principal payments required by the notes' governing documents, and are based on the expected loss posed to holders of the notes relative to the promise of receiving the present value of such payments. Moody's also announced that it had assigned a rating to the Combination Notes: * A2 to $8,000,000 Combination Notes Due 2050. Moody's noted that this rating addresses the ultimate receipt fo the Combination Note Rated Balance. This transaction is managed by Strategos Capital Management, LLC. KMC TELECOM: Dissolves Company, Accepting Claims Until November 22 ------------------------------------------------------------------ Following its dissolution, KMC Telecom Holdings Inc. is giving all persons who may have claims against the company until until Nov. 22, 2006, to file their proofs of claim. Proofs of claim must be sent to Robert F. Hagan, the company's chief financial officer, at this address: KMC Telecom Holdings Inc. Suite 2000 1200 Route 22 East Bridgewater, NJ 08807 Those claims, KMC said, do not include claims relating to any pending action, suit or proceeding to which the company is a party. Headquartered in Bedminster, New Jersey, KMC Telecom Holdings Inc. -- http://www.kmctelecom.com/-- provides telecommunications infrastructure and services. In 2005, the company sold its business operations to TelCove. KNOLL INC: Moody's Assigns B1 Probability-of-Default Rating ----------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the for the U.S. Consumer Products sector, the rating agency assigned its B1 Corporate Family Rating for Knoll Inc., and upgraded its Ba3 rating on the company's $200 million senior secured revolver and $250 million senior secured term loan to Ba2. Additionally, Moody's assigned an LGD2 rating to both loans, suggesting noteholders will experience a 27% loss in the event of a default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in East Greenville, Pennsylvania, Knoll Inc., (NYSE:KNL) designs and manufactures branded office furniture products and textiles, serves clients worldwide. It distributes its products through a network of more than 300 dealerships and 100 showrooms and regional offices. The Company operates four manufacturing sites in North America: East Greenville, Pennsylvania; Grand Rapids and Muskegon, Michigan; and Toronto, Ontario. In addition, it has plants in Foligno and Graffignana, Italy. L-3 COMMS: Moody's Assigns Loss-Given-Default Ratings ----------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its Ba2 Corporate Family Rating for L-3 Communications Holdings Inc. and its Ba3 rating on the company's 3% Convertible Subordinated Notes due 2035. Moody's assigned those debentures an LGD4 rating suggesting noteholders will experience a 68% loss in case of default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Esterline Technologies Corporation, headquartered in Bellevue Washington, serves aerospace and defense customers with products for avionics, propulsion and guidance systems. Headquartered in New York City, L-3 Communications Corporation (NYSE: LLL) -- http://www.L-3com.com/-- is a leading provider of Intelligence, Surveillance and Reconnaissance systems, secure communications systems, aircraft modernization, training and government services. The company is a leading merchant supplier of a broad array of high technology products, including guidance and navigation, sensors, scanners, fuzes, data links, propulsion systems, simulators, avionics, electro optics, satellite communications, electrical power equipment, encryption, signal intelligence, antennas and microwave components. L-3 also supports a variety of Homeland Security initiatives with products and services. Its customers include the Department of Defense, Department of Homeland Security, selected U.S. Government intelligence agencies and aerospace prime contractors. LAMAR ADVERTISING: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US advertising and broadcasting sector, the rating agency raised its B2 rating on Lamar Advertising Company's 2 7/8% convertible notes due 2010 and assigned an LGD6 rating to the notes, suggesting noteholders will experience a 94% loss in the event of a default. Lamar Advertising carries Moody's Ba2 PDR rating. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Founded in 1902, Lamar Advertising Company -- http://www.lamar.com/-- currently operates more than 150 outdoor advertising companies in more than 40 states and Puerto Rico. Lamar operates more than 149,000 billboards and has more than 75 transit franchises that reach driving audiences in 18 states and two provinces through displays on bus shelters, benches and buses. With 97,500 logo sign displays, Lamar is also the nation's leader in the highway logo sign business, with operations in 19 of the 25 states that have privatized their logo programs as well as in the province of Ontario, Canada. LENOX GROUP: Moody's Assigns B2 Corporate Family Rating ------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products sector, the rating agency assigned its B3 Corporate Family Rating for Lenox Group, Inc., upgraded to Ba2 its Ba3 rating on the company's $175 million guaranteed senior secured RCF due 2010 and affirmed its B1 rating on the company's $100 million guaranteed senior secured term loan due 2011. Additionally, Moody's assigned an LGD2 rating to the $175 million guaranteed senior secured RCF, suggesting noteholders will experience an 18% loss in the event of a default; and an LGD3 rating to the $100 million guaranteed senior secured term loan, suggesting creditors will experience an 30% loss in the event of a default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Eden Prarie, Minnesota, Lenox Group Inc (NYSE: LNX) designs, manufactures and markets of fine china, dinnerware, silverware, crystal and giftware products. The Company sells its products through wholesale customers who operate gift, specialty and department store locations in the United States and Canada, Company-operated retail stores, and direct-to-the-consumer through catalogs, direct mail, and the Internet. LEVITZ HOME: Wants to Reject Three Store Leases in Calif. & N.J. ---------------------------------------------------------------- Nicholas M. Miller, Esq., at Jones Day, in New York, notifies the U.S. Bankruptcy Court for the Southern District of New York that Levitz Home Furnishings, Inc., and its debtor-affiliates will reject three Store Leases, effective as of the rejection date, and will abandon their interest in any personal property located at these Premises: Rejection Store No. Location Landlord Date --------- -------- -------- --------- 20301 Cherry Hill, Cherry Hill Self 12/31/06 New Jersey Storage, LLC 40301 Fremont, Imperial Property 09/08/06 California Management, LLC 40203 San Carlos, Brittan Corners 10/31/06 California Shopping Center, LLC Brittan Corners Objects Brittan Corners Shopping Center, LLC, asks the Court to require the Debtors to comply with: (a) Section 365 of the Bankruptcy Code, Rule 9014 of the Federal Rules of Bankruptcy Procedure, and Rule 6006-1 of the Local Rules for the U.S. Bankruptcy Court for the Southern District of New York by filing and serving a motion to reject and schedule a preliminary hearing; and (b) Section 365(d)(3) and perform its postpetition obligations under Store No. 40203, including the payment of rent and operating expenses, maintenance and insurance of the premises, and the correction of the safety code violations as required by the June 1, 2006, order by the Fire Marshal. David Duperrault, Esq., at Silicon Valley Law Group, in San Jose, California, stresses that Brittan does not necessarily object to the rejection of Store No. 40203 per se, but it does object to the form and manner of the purported rejection because the Debtors disregarded the procedural and due process requirements of the Bankruptcy Code and Rules. Mr. Duperrault relates that Brittan is the successor landlord under a lease dated November 2, 1983, with Levitz Furniture Corporation of the Pacific, Inc., as the original tenant for Store No. 40203. In March 2002, Levitz Pacific was merged into debtor Levitz Furniture Corporation. PLVTZ, LLC, and The Pride Capital Group, as purchasers of substantially all of the Debtors' assets, gave the Debtors a lease assumption notice designating Store No. 40203 for assumption and assignment. The Debtors subsequently filed a motion to assume and assign store leases including Store No. 40203. "Then Levitz made an about-face," Mr. Duperrault tells Judge Lifland. On August 31, 2006, the Debtors filed a notice of rejection and a notice of withdrawal of their assumption request, solely with respect to Store No. 40203. Mr. Duperrault says the Fire Inspector for the South County Fire Authority has identified, during a property inspection, several hazardous conditions in Store No. 40203 -- a violation and breach to the lease for Store No. 40203. According to Mr. Duperrault, Bankruptcy Rule 9014 provides that a proceeding to assume or reject an unexpired lease will be requested by motion, and reasonable notice and an opportunity for hearing will be afforded to the party against whom the request is sought, while Local Rule 6006-1 requires at least 10 days' notice. Mr. Duperrault asserts that the five-day notice for Store No. 40203 is not reasonable. Mr. Duperrault notes that the Debtors and the Purchasers had been assuring Brittan for many months that they will assume and assign Store No. 40203, and will extend the lease. "The sudden, 180-degree reversal took Brittan Corners by surprise," Mr. Duperrault says. Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- is a leading specialty retailer of furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. The Company and its 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq., at Jones Day, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman LLP represents the Official Committee of Unsecured Creditors. Levitz sold substantially all of its assets to Prentice Capital on Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) LIBBEY GLASS: Moody's Confirms B2 Corporate Family Rating --------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products sector, the rating agency confirmed its B2 Corporate Family Rating for Libbey Glass Inc., and its B2 rating on the company's $306 million senior secured notes due 2011. Additionally, Moody's assigned an LGD3 rating to the notes, suggesting noteholders will experience a 49% loss in the event of a default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Toledo, Ohio, Libbey Glass Inc., (NYSE: LBY) is the largest manufacturer of glass tableware in North America, and one of the largest manufacturers of glass tableware in the world. The Company serves foodservice, retail, industrial and business- to-business customers in over 90 countries. LUBBOCK HOUSING: Moody's Cuts Rating on Series 2002C Bonds to Ba2 ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings for the Lubbock Housing Finance Corporation Multi-family Revenue Refunding Bonds (Las Colinas, Quail Creek and Parkridge Place Apartment projects), Series 2002 A&B to Ba1 from Baa1 and has downgraded the rating to Ba2 from Baa3 on the Subordinate Series 2002C bonds. The outlook remains negative. The rating actions are based on Moody's review of occupancy reports, audited 2005 financial statements and unaudited financial statements for eight months of 2006. The downgrades and negative outlook reflect a history of declining debt service coverage and continued weakness in 2006. All of the properties were built in 1983 and are located approximately six miles southwest of the Lubbock central business district. The neighborhood is largely residential, with development along the South Loop 289 thoroughfare. Texas Tech University is located within one to two miles of the submarket. Legal security The bonds are limited obligations payable solely from the revenues, receipts and security pledged in the Trust Indenture. Credit strengths * Favorable location * Occupancy improved in 2005 and 2006 Credit challenges * Debt service coverage has declined since 2003 and appears to be declining further in 2006 * Multi-family construction has created competition and pricing pressures Recent developments: Occupancy levels decreased at all three properties in 2004, but rebounded in 2005 and 2006. The weighted average occupancy levels decreased to 82% in December 2004 but rebounded to 91% in November 2005 and 97% in September 2006. Increased competition has lead to deep concessions in order to attract renters. According to Moody's Economy.com, multi-family building permits increased by 203% in 2003 and by another 50% in 2004. As these new projects came on-line, they provided strong competition because they are a newer product. On the upside, multi-family permits decreased by 79% in 2005 and another 30% in 2006, which was below the 2002 level. Due to the increased competition, improved occupancy has not translated into improved financial performance. Debt service coverage decreased from 1.72x for seniors and 1.64x for subordinate debt in 2003 to 1.26x and 1.21x in 2005. Interim statements for 2006 indicate coverage is decreasing; Moody's approximates that coverage will be 1.16x and 1.11x. Decreasing coverage levels are the primary reason for the downgrades. Outlook The outlook for senior and subordinate debt is negative. The outlook is based upon interim financial statements that indicate debt service coverage will weaken further in 2006 and because the project will continue to face strong competition. Analysts LUTHER MARCENA: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Luther Marcena dba MHER, International 4233 Park Hill Drive El Paso, TX 79902 Bankruptcy Case No.: 06-31062 Chapter 11 Petition Date: September 29, 2006 Court: Western District of Texas (El Paso) Judge: Larry E. Kelly Debtor's Counsel: E. P. Bud Kirk, Esq. Coronado Tower 6006 North Mesa, Suite 806 El Paso, TX 79912 Tel: (915) 584-3773 Fax: (915) 581-3452 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. LUX DIGITAL: Case Summary & Three Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Lux Digital, LLC aka Lux Communications, LLC 50 Division Street Millington, NJ 07946 Bankruptcy Case No.: 06-18371 Type of Business: The Debtor provides creative services in marketing and design and in large format imaging and reproduction. See http://www.luxcommunications.net/ Chapter 11 Petition Date: September 6, 2006 Court: District of New Jersey (Newark) Debtor's Counsel: Steven R. Lehr, Esq. 33 Clinton Road, Suite 100 West Caldwell, NJ 07006 Tel: (973) 575-8002 Fax: (973) 575-8340 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Fuji Photo Film USA, Inc. Misc. business Unknown 200 Summit Lake Drive supplies 3rd Floor Valhalla, NY 10595 Law Offices of William R. Legal representation Unknown Connelly, LLC 7 West Main Street Mendham, NJ 07945 Observer Corporation Lease on business Unknown 2400 Morris Avenue property Suite 104 Union, NJ 07083 MAJESTIC HOLDCO: Moody's Assigns Loss-Given-Default Ratings ----------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Gaming, Lodging & Leisure sector, the rating agency confirmed Majestic Holdco, LLC's B2 Corporate Family Rating. Additionally, Moody's revised or confirmed its probability-of- default ratings and assigned loss-given-default ratings on these notes: Issuer: Majestic Holdco, LLC Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Discount Notes Caa2 Caa1 LGD6 95% Issuer: The Majestic Star Casino, L.L.C. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 9-1/2% Senior Secured Notes B2 B1 LGD3 33% Issuer: The Majestic Star Casino, L.L.C. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 9-3/4% Sr. Notes B3 Caa1 LGD5 80% 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as its 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. They 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%). Majestic Holdco, LLC, and its subsidiaries operate two adjacent dockside gaming facilities located in Gary, Ind. (Majestic Star and Majestic Star II), and two Fitzgeralds brand casinos located in Tunica, Miss. (Fitzgeralds Tunica), and Black Hawk, Colo. (Fitzgeralds Black Hawk). MARGO CARIBE: Receives Letter of Reprimand from Nasdaq ------------------------------------------------------ Margo Caribe, Inc., disclosed it has received a letter of reprimand from a Nasdaq Listing Qualifications Panel of the Nasdaq Stock Market, Inc., regarding its failure to comply with Nasdaq Marketplace Rule 4350(h). The letter of reprimand relates to certain payroll payments and other miscellaneous expenses paid by the company on behalf one of its executive officers. As previously announced, while these payments were billed by and reimbursed to the company, those payments were not pre-approved by the company's Audit Committee. The company subsequently sought and obtained the ratification of these transactions from the company's Audit Committee and took remedial action to avoid recurrence. These matters were a part of the previously announced independent investigation, conducted on behalf of the Company's Audit Committee and the independent directors. In accordance with Nasdaq Marketplace Rule 4801(k)(2), the Panel has closed these matters by issuing the letter of reprimand. 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. * * * As reported in the Troubled Company Reporter on Sept. 21, 2006, 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. MEDIACOM BROADBAND: Selling $300MM of Senior Notes Due 2015 ----------------------------------------------------------- Mediacom Broadband LLC and Mediacom Broadband Corporation, wholly owned subsidiaries of Mediacom Communications Corporation, have agreed to sell $300 million principal amount of 8-1/2% senior notes due 2015. Mediacom Broadband LLC and Mediacom Broadband Corporation initially announced that they intended to offer $200 million principal amount of Senior Notes but increased the size of the offering in order to meet excess demand. Mediacom Broadband LLC will use the net proceeds of the offering to reduce borrowings (but not commitments) outstanding under the revolving credit portion of its subsidiary credit facility. The Senior Notes will be offered to qualified institutional buyers under Rule 144A and to persons outside the United States under Regulation S. The Senior Notes will not be registered under the Securities Act of 1933, as amended, and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Mediacom Communications -- http://www.mediacomcc.com/-- is the nation's 8th largest cable television company and the leading cable operator focused on serving the smaller cities and towns in the United States. Mediacom offers a wide array of broadband products and services, including traditional video services, digital television, video-on-demand, digital video recorders, high-definition television, high-speed Internet access and phone service * * * As reported in the Troubled Company Reporter on Oct. 2, 2006, Standard & Poor's Ratings Services assigned a 'B' rating to $200 million 8.5% senior notes due 2015 to be issued by Mediacom Broadband LLC (BB-/Negative/--) and Mediacom Broadband Corp. MEDIACOM BROADBAND: Moody's Assigns B3 Ratings to Senior Notes -------------------------------------------------------------- Moody's Investors Service affirmed the B1 corporate family, B1 probability of default, SGL-2 liquidity ratings and the stable outlook for Mediacom Communication Corporation, following the announcement of Mediacom Broadband, LLC's add-on $300 million 8.5% Senior Notes. Proceeds will be used to repay outstanding amounts under the Broadband Senior Secured Revolving Facility. Moody's assigned a B3 rating to the new Broadband senior notes, and affirmed all other ratings. In light of the transaction, Moody's assigned an LGD5 loss given default assessment (from LGD6) to the senior notes of Broadband and Mediacom LLC, and affirmed the LGD3 loss given default assessments for the senior secured credit facilities of Broadband and LLC. Mediacom's corporate family rating reflects high financial risk (7.2 times debt-to-EBITDA based on last twelve month to June 30, 2006 pro forma transaction results), as well as Mediacom's slower rollout of new products and weaker operating performance relative to its peers. However the ratings are supported by the high loan- to-value coverage inherent in Mediacom's incumbent cable assets, its strong liquidity and management's commitment to improving the credit profile. In addition, sthe potential for incremental revenue and cash flow growth over the long term as penetration of advanced services increases should strengthen Mediacom competitively. Moreover, the company's recent improved performance (revenues and EBITDA) has better positioned the company within its rating category. Affirmed: * Mediacom Communications Corporation -- PDR: B1 -- SGL-2 * Mediacom LLC -- $400 million senior secured revolving credit facility at Ba3, LGD3, 34%; -- $200 million senior secured term loan A at Ba3, LGD3, 34%; -- $650 million senior secured term loan B at Ba3, LGD3, 34%; -- $125 million 7-7/8% senior notes at B3, LGD5, 88%; -- $500 million 9-1/2% senior notes at B3, LGD5, 88%. * Mediacom Broadband LLC -- $650 million senior secured revolving credit facility at Ba3, LGD3, 34%; -- $300 million senior secured term loan A at Ba3, LGD3, 34%; -- $800 million senior secured term loan D at Ba3, LGD3, 34%; -- $200 million 8.5% senior notes at B3, LGD5, 88%. Assigned: * Mediacom Broadband LLC -- $300 million senior notes at B3, LGD5, 88%. Mediacom Communications Corporation is a domestic multiple system cable operator serving approximately 1.4 million subscribers in a wide variety of small markets. Mediacom's annual revenue is approximately $1.1 billion. LLC and Broadband are wholly owned subsidiaries of Mediacom Communications. The company maintains its headquarters in Middletown, New York. The company's corporate family rating is B1 and the rating outlook is stable. MEDICAL CONNECTIONS: Reports $500,939 Net Loss in 2006 2nd Quarter ------------------------------------------------------------------ Medical Connections, Inc., incurred a $500,939 net loss for the three months ended June 30, 2006, an increase of approximately 16% as compared to a net loss of $433,178 during the three months ended June 30, 2005. For the three months ended June 30, 2006 as compared to the three months ended June 30, 2005, the Company generated revenue of $452,087 as compared to $127,750, an increase of approximately 253%. Total operating expenses were $914,879 as compared to $560,928, an increase of approximately 63%. The Company says the most significant increase in its operating costs was the result of an increase in payroll from $71,551 to $469,667 and an increase in payroll taxes from $7,265 to $80,666. The significant increase in payroll is attributable to growing staffing needs and a reduction on the Company 's reliance on outside service providers. At June 30, 2006, the Company's balance sheet showed $1,239,002 in total assets and $2,314,527 in total liabilities, resulting in a stockholders' deficit of $1,075,525. The Company had a $1,414,733 working capital deficit at June 30. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?12bc Going Concern Doubt Bagell, Josephs, Levine & Company LLC expressed substantial doubt about Medical Connections's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's operating losses and little recurring operating revenue. About Medical Connections Headquartered in Boca Raton, Florida, Medical Connections, Inc. -- http://www.medicalconnections.com/--is a pioneering medical recruitment and staffing company, created in 2002 to satisfy the increasing demands for qualified personnel in the healthcare industry. The company identifies, trains, and places medical professionals from allied health, nurses and physicians to pharmacists and medical scientists. Medical Connections applies established and innovative methods to meet the needs of its clientele, capitalizing on the more than 20 years experience of its key personnel. MGM MIRAGE: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Gaming, Lodging & Leisure sector, the rating agency confirmed MGM MIRAGE's Ba2 Corporate Family Rating. Additionally, Moody's revised or confirmed its probability-of- default ratings and assigned loss-given-default ratings on these notes: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 6.75% - 7.25% Sr. Notes Due 2017 Ba2 Ba2 LGD3 43% 6.70% - 9.50% Sr. Notes Due 2096 Ba2 Ba2 LGD3 43% 5.875% - 8.50% Sr. Notes Due 2016 Ba2 Ba2 LGD3 43% 8.375% - 9.75% Sr. Subordinated Notes Due 2011 Ba3 B1 LGD6 93% 6.325% - 10.25% Sr. Subordinated Notes Due 2013 Ba3 B1 LGD6 93% 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as its 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. They 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%). Las Vegas, Nev.-based, MGM Mirage -- http://www.mgmmirage.com/-- owns and operates 12 casino resorts located in Nevada, Mississippi, Michigan, and Australia, and has investments in three other casino resorts in Nevada, New Jersey, and Macau. MICHAELS STORES: Updates Sales Forecast for 2006 Third Quarter -------------------------------------------------------------- Michaels Stores, Inc., has updated its sales forecast for the third quarter of fiscal 2006 and has issued guidance for the second half of fiscal 2006. The Company currently expects the increase in same-store sales for the third quarter to be at the high end of its previous guidance of 1% to 3%, primarily due to better than anticipated same-store sales trends it is experiencing quarter-to-date, including a 3.5% increase in August same-store sales. In addition to better than anticipated sales performance, the Company expects improved gross margin rates for the third quarter compared to our previous forecast . For the second half of fiscal 2006, the Company currently expects same-store sales to increase in the range of 2% to 4%, and total net sales to increase in the range of 8% to 10%. Second half gross margins are currently expected to increase approximately 100 basis points, and operating income is expected to increase approximately 20%, from $237.5 million in the second half of fiscal 2005. As disclosed in its fiscal 2005 annual report on Form 10-K, the Company recorded a charge of $15 million (net of income taxes of $8.9 million) in the fourth quarter of fiscal 2005. This charge was recorded to reflect changes in estimate related to deferred costs associated with preparing inventories for sale and vendor allowance recognition. Michaels Stores, Inc. -- http://www.michaels.com/-- is a specialty retailer of arts, crafts, framing, floral, home decor, and seasonal merchandise for the hobbyist and do-it-yourself home decorator. As of Sept. 27, 2006, the Company owns and operates 911 Michaels stores in 48 states and Canada, 165 Aaron Brothers stores, 11 Recollections stores, and four Star Wholesale operations. * * * As reported in the Troubled Company Reporter on Oct. 2, 2006, Moody's Investors Service rated Michael's Stores, Inc.'s proposed $2.4 billion secured term loan of, at B2'; proposed $700 million senior note issue at B2; proposed $700 million senior subordinated note issue at Caa1. Moody's also assigned a B2 corporate family rating and attached a loss given default rating of LGD3 for the secured term loan, LGD4 for the senior notes, and LGD6 for the subordinated notes. MILLENNIUM NEW JERSEY: Moody's Assigns Loss-Given-Default Ratings ----------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US advertising and broadcasting sector, the rating agency affirmed its B2 rating on Millennium New Jersey Holdco, LLC. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Secured First Lien Revolver B1 B1 LGD3 38% Secured First Lien Term Loan B1 B1 LGD3 38% Secured Second Lien Term Loan Caa1 Caa1 LGD5 89% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Millennium Radio Group, LLC, headquartered in Lawrenceville, New Jersey, is a radio broadcaster with twelve stations located throughout New Jersey. MILLS CORP: Laurence Siegel Steps Down as Chief Executive Officer ----------------------------------------------------------------- Laurence C. Siegel has retired as Chief Executive Officer of The Mills Corporation and has been appointed non-executive Chairman of the Board. Mills continues to work with Kan Am USA Management XXII and Colony Capital Acquisitions, LLC to resolve the complex issues necessary to close the Meadowlands Xanadu transaction. If and when this transaction is concluded, Mr. Siegel may join the new joint venture and would then remain on Mills' Board but resign as non-executive Chairman. Mark S. Ordan, who has served as the Company's Chief Operating Officer since March 2006, has been appointed as the Company's Chief Executive Officer and President, effective immediately. Mr. Ordan joined The Mills after a career as a specialty retail CEO and as a long time Board member and past chairman of Federal Realty Investment Trust. Mr. Ordan will resign from the Federal Realty Investment Trust as he assumes his new position at The Mills. "Mark has helped strengthen our operations since March and the Company will continue to benefit from his leadership as it pursues the previously announced strategic alternatives process," said Mr. Siegel. "Larry's vision and energy have helped Mills build a unique portfolio of assets, and everyone at the Company is pleased that we will benefit from his continued involvement on the Board of Directors. I look forward to leading Mills as we pursue the sale of part or all of the Company," said Mr. Ordan. In connection with his retirement, Mr. Siegel will be entitled to severance and other payments. Mr. Ordan will also be eligible to receive certain additional compensation as Chief Executive Officer and President. NYSE Trading Extension In a letter dated Sept. 28, 2006, the New York Stock Exchange informed the Company that the NYSE had granted the Company an additional three-month trading period through Jan. 2, 2007. In granting that extension, the NYSE recommended that the Company disclose to the market certain 2006 operating metrics and noted that it would reevaluate the three-month extension at the end of October 2006 in light of that disclosure recommendation. The letter further stated that the NYSE would closely monitor the Company's progress toward filing its 2005 Form 10-K and that failure to do so could result in suspension of the Company's listing privileges prior to Jan. 2, 2007. In addition, the NYSE informed the Company that, in the event that the Company does not complete the filing of its 2005 Form 10-K with the SEC by April 2, 2007, the NYSE will move forward with the initiation of suspension and delisting procedures. About The Mills Corporation Headquartered in Chevy Chase, Maryland, The Mills Corporation (NYSE:MLS) -- http://www.themills.com/-- develops, owns, manages retail destinations including regional shopping malls, market dominant retail and entertainment centers, and international retail and leisure destinations. The Company owns 42 properties in the U.S., Canada and Europe, totaling 51 million square feet. In addition, The Mills has various projects in development, redevelopment or under construction around the world. * * * As reported in the Troubled Company Reporter on March 24, 2006, The Mills Corporation disclosed that the Securities and Exchange Commission has commenced a formal investigation. The SEC initiated an informal inquiry in January after the Company reported the restatement of its prior period financials. Mills is restating its financial results from 2000 through 2004 and its unaudited quarterly results for 2005 to correct accounting errors related primarily to certain investments by a wholly-owned taxable REIT subsidiary, Mills Enterprises, Inc., and changes in the accrual of the compensation expense related to its Long-Term Incentive Plan. MODERN TECHNOLOGY: Retires $1 Mil. Conv. Debt to Increase Equity ---------------------------------------------------------------- As part of its 2006 plan to achieve operational profitability and to increase stockholder equity, Modern Technology Corp. has exchanged its interest in its subsidiary Sound City for the elimination of $800,000 of Convertible Debentures and associated late charges, interest payments and registration requirements. Also eliminated from MODC's liabilities was $177,000 of recurring payables and the elimination of $177,000 of Callable Convertible Debentures. This transaction eliminates over $1,000,000 in current and contingent liabilities and eliminates any future dilution to Common Stock associated with these convertible debentures. All negative cashflow -- estimated to be $100,000 per month -- from this business unit and the need for additional borrowings from investors to sustain its operations has been eliminated. "Our 2006 profitability and equity building plan continue with this new step forward in eliminating or restructuring all unprofitable business units," Anthony Welch, Chairman, said. "As promised, we are focused on positive earnings and building equity for 2006 and we are making great strides as evidenced by this transaction. We have removed a sizeable amount of liability from our Balance Sheet and thereby eliminated any future dilution to Common Stock resulting from these liabilities. We have also eliminated a significant recurring source of negative cashflow. "The company has new acquisitions under consideration and anticipates announcing one or more new additions to our portfolio soon. Due to an unavoidable delay arising from negotiations with one of our subsidiaries, acquisition opportunities were previously set aside. The company will now work to complete these prospective acquisitions and announce the results in the near future. Shareholders should expect further updates on the new acquisitions, revenues, and our targets for profitability and sales from these new acquisitions." Stockholders can expect updates on: -- Bioscience acquisitions with profound technology and implications -- Positive changes to operations and financial reporting personnel -- Continuing updates on, or announcement of, significant new acquisitions This guidance is the company's best, good faith estimate based on current conditions and numerous assumptions about the company's industry, its access to financing, the competitive and regulatory landscape and its ability to successfully consummate the acquisitions under consideration. About Modern Technology Headquartered in Oxford, Massachusetts, Modern Technology Corp. (OTCBB:MODC) -- http://www.moderntechnologycorp.com/-- is a diversified technology development and acquisition company that builds revenues through continuous growth, strategic acquisitions, and commercialization of nascent technology. MODC improves operating efficiencies through the elimination of cost redundancies and realized synergy between subsidiaries. Going Concern Doubt As reported in the Troubled Company Reporter on Nov. 25, 2005, Greenberg & Company LLC expressed substantial doubt about Modern Technology Corp.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended June 30, 2005. The auditing firm pointed to the Company's losses and negative cash flows from operations in recent years through June 30, 2005. MOHEGAN TRIBAL: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Gaming, Lodging & Leisure sector, the rating agency confirmed Mohegan Tribal Gaming Authority's Ba1 Corporate Family Rating. Additionally, Moody's revised or confirmed its probability-of- default ratings and assigned loss-given-default ratings on these notes: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Revolver Ba1 Baa1 LGD2 12% 6-1/8% Sr. Notes Ba2 Baa2 LGD2 15% 8-3/8% Sr. Subor. Notes Ba3 Ba2 LGD4 69% 8% Sr. Subor. Notes Ba3 Ba2 LGD4 69% 6-3/8% Sr. Subor. Notes Ba3 Ba2 LGD4 69% 7-1/8% Sr. Subor. Notes Ba3 Ba2 LGD4 69% 6-7/8 Sr. Subor. Notes Ba3 Ba2 LGD4 69% 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as its 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. They 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 Mohegan Tribal Gaming Authority -- http://www.mtga.com/-- is an instrumentality of the Mohegan Tribe of Indians of Connecticut a federally recognized Indian tribe with an approximately 405-acre reservation situated in southeastern Connecticut. The Authority has been granted the exclusive power to conduct and regulate gaming activities on the existing reservation of the Tribe, and the non-exclusive authority to conduct such activities elsewhere, including the operation of Mohegan Sun, a gaming and entertainment complex that is situated on a 240-acre site on the Tribe's reservation. The Tribe's gaming operation is one of only two legally authorized gaming operations in New England offering traditional slot machines and table games. MOONEY AEROSPACE: Posts $2.7 Million Net Loss in Second Quarter --------------------------------------------------------------- Mooney Aerospace Group, Ltd., incurred a $2.7 million net loss on $11.1 million of net revenues for the three months ended June 30, 2006, compared to a $5 million net loss on $11.1 million of net revenues reported in 2005. At June 30, 2006, the Company's balance sheet showed $22.9 million in total assets and $64.9 million in total liabilities, resulting in a $42 million stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $16.3 million in total current assets available to pay $57.1 million in total current liabilities coming due within the next 12 months. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?12cc Going Concern Doubt As reported in the Troubled Company Reporter on May 12, 2006, Bernstein & Pinchuk LLP in New York raised substantial doubt about Mooney Aerospace Group, Ltd.'s ability to continue as a going concern after auditing the Company's financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's significant losses from operations since its inception and working capital deficiency. Headquartered in Kerrville, Texas, Mooney Aerospace Group, Ltd. -- http://www.mooney.com/-- is a general aviation holding company that owns Mooney Airplane Co., that designs and manufactures four- place, single-engine, retractable gear aircraft, sells spare parts, manufactures aircraft components for other aerospace companies, and repairs aircraft. The Company filed for chapter 11 protection on June 10, 2004 (Bankr. Del. Case No. 04-11733). Mark A. Frankel, Esq., at Backenroth Frankel & Krinsky LLP, represented the Debtor. When the Company filed for protection from its creditors, it listed $16,757,000 in total assets and $69,802,000 in total debts. Judge Walrath confirmed Mooney's Plan of Reorganization on Dec. 15, 2004, and formally closed Mooney's bankruptcy cases on May 5, 2005. MULLIGAN'S AUBURN: Case Summary & 21 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Mulligan's Auburn Hills, LLC aka Mulligan's Golf Center of Auburn 3951 Joslyn Road Auburn Hills, MI 48326 Bankruptcy Case No.: 06-53870 Debtor-affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Mulligan's Option, LLC 06-53881 Type of Business: The Debtors operate a golf course. Chapter 11 Petition Date: September 29, 2006 Court: Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtors' Counsel: Ryan D. Heilman, Esq. Schafer and Weiner, PLLC 40950 Woodward Avenue, Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 Fax: (248) 642-2127 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million A. Mulligan's Auburn Hills, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cadillac Asphalt Judgment $54,474 c/o Freman, Cotton & Nollis 33 Bloomfield Hills Parkway Suite 100 Bloomfield Hills, MI 48304 Consumers Energy $28,503 Lansing, MI 48937-0001 DTE Energy $25,105 2000 Second Avenue Detroit, MI 48226-1279 City of Auburn Hills $16,746 Department of Public Works 1500 Brown Road Auburn Hills, MI 48326 Howard Zoller $9,672 25800 Northwestern Highway Suite 950 Southfield, MI 48075 National City Credit Card $9,565 Mepco Insurance Premium Insurance $9,030 Financing, Inc. Plante and Moran $7,470 R3 Advertising $6,852 Warren Bank $4,563 Mies & Gold, P.C. $4,148 Everest National Insurance Co. $2,443 SBC Yellow Pages $1,820 Val Pak $1,800 Range Servant $1,570 Blue Cross & Blue Shield $1,000 Irrigation Services Judgment $980 Birmingham Door $918 Master Green $750 Avon Electric $685 B. Mulligan's Option, LLC's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Howard Zoller, P.C. $9,672 25800 Northwestern Highway Suite 950 Southfield, MI 48075 NATIONAL BEDDING: Moody's Assigns B1 Corporate Family Rating ------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products sector, the rating agency assigned its B1 Corporate Family Rating for National Bedding Company. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $50 million First lien senior secured revolver B1 Ba3 LGD3 36% $360 million First lien senior secured term loan B1 Ba1 LGD3 36% $160 million second lien senior secured term loan B3 Ba3 LGD5 86% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). National Bedding Company, based in Hoffman Estates, Illinois, is a major manufacturer of mattresses under the Serta brand name. NEP SUPERSHOOTERS: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US advertising and broadcasting sector, the rating agency affirmed its B1 corporate family rating on NEP Supershooters, LP. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Secured Revolver B1 Ba3 LGD3 40% Secured First lien term loan B B1 Ba3 LGD3 40% Secured first lien term loan C B1 Ba3 LGD3 40% Secured second lien term loan B3 B3 LGD5 88% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). NEP Supershooters, LP, a subsidiary of NEP Broadcasting, LLC, headquartered in Pittsburgh, Pa., is a national provider of outsourced media services, supporting the delivery of live and broadcast sports and entertainment events. NEW RIVER: Woodland Resources Wants Case Dismissed -------------------------------------------------- Woodland Resources, Inc., asks the Honorable Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida in Fort Lauderdale to dismiss New River Dry Dock, Inc.'s chapter 11 case as a bad faith filing. In the alternative, Woodland Resources moves for the designation of the Debtor's case as a single-asset real estate case and relief from the automatic stay pursuant to Section 362(d)(3) of the Bankruptcy Court. Woodland Resources holds secured claims against the Debtor's real property amounting to $11,335,640. Woodland Resources says the Debtor owns only a single real estate asset and has virtually no income and no employees. The Debtor's Chapter 11 case is a classic bad faith filing, Joel L. Tabas, Esq., at Tabas, Freedman, Soloff & Miller, P.A., representing Woodland Resources, Inc., says. Mr. Tabas further says that this case was not filed to effectuate a rehabilitation of the Debtor and to pay creditors. Rather, Mr. Tabas claims, the sole purpose of the Debtor's bankruptcy filing was to frustrate the next day's foreclosure sale of the property on which Woodland has a lien. If dismissal is not warranted, Woodland Resources requests that the Debtor's case be declared as a single asset real estate case and wants the Debtor to: (a) file a plan of reorganization that has a reasonable chance of being confirmed within a reasonable time; or (b) commence monthly payments to Woodland as prescribed by Section 362(d)(3)(B)(iii) of the Bankruptcy Code, within the later of: i. 90 days of the bankruptcy filing, or ii. 30 days of from the date the Court finds that the Debtor is a single asset real estate case. New River Dry Dock, Inc., filed for chapter 11 protection on July 18, 2006 (Bankr. S.D. Fla. Case No. 06-13274). James H. Fierberg, Esq., at Berger Singerman, P.A., represents the Debtor in its restructuring efforts. Mindy A. Mora, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and its debts between $1 million to $10 million. NEW RIVER: Taps Jennings & Valancy to Handle Marina Litigation -------------------------------------------------------------- New River Dry Dock, Inc., asks the Honorable Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida in Fort Lauderdale for authority to employ Jennings & Valancy, P.A., as its special counsel to provide legal services in connection with the continuation of the Marina litigation. The Debtor owns a parcel of real estate located at 3100 State Road 84, Fort Lauderdale, Florida. The property consists of 5.6 acres of New River of which 3.08 acres are upland and 2.6 acres are submerged basin. The property was formerly operated as a shipyard and dry dock facility. The only land access to property is via a recorded perpetual easement over property owned by the estate of The Falls at Marina Bay, L.P., and The Marina at Marina Bay, Inc. Since 2000, the Debtor and the Marina estate have been locked in litigation over the breach of the easement by the Marina estate and the damages that the Debtor has sustained. To this day, access to the easement is restricted by the activities of the Marina estate, the Debtor says. Robert L. Jennings, Esq., a partner at Jennings & Valancy, P.A., disclosed that the Debtor owes $12,069 prepetition fees and expenses in connection with the Marina litigation. The Debtor also owed $31,613 in three other litigation matters. The Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $250 Associates $150 Paralegals $60 Mr. Jennings assures the Court that his Firm does not represent any interest adverse to the Debtors with respect to the matters upon which the Firm is to be employed. Mr. Jennings can be contacted at: Robert L. Jennings, Esq. Jennings & Valancy, P.A. 311 S.E. 13th Street Fort Lauderdale, FL 33316 Tel: (954) 463-1600 Fax: (954) 463-1222 New River Dry Dock, Inc., filed for chapter 11 protection on July 18, 2006 (Bankr. S.D. Fla. Case No. 06-13274). James H. Fierberg, Esq., at Berger Singerman, P.A., represents the Debtor in its restructuring efforts. Mindy A. Mora, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and its debts between $1 million to $10 million. NORD RESOURCES: Nedbank Extends Maturity of $4.9 Mil. Secured Loan ------------------------------------------------------------------ Nord Resources Corporation has entered into a Modification Agreement with Nedbank Limited, effective Sept. 30, 2006, to extend the maturity date of the existing $4.9 million secured loan to the earlier of Dec. 22, 2006, and the closing of a registered equity offering. The Corporation disclosed that the registered equity offering is expected to raise not less than $20 million. The Corporation also disclosed that after the Effective Date, it will continue be obligated to make interest-only payments to Nedbank, at an interest rate of 11% per annum, payable monthly. The interest rate would increase to 14% in the event of a default by the Corporation. Auramet Trading, LLC, acting through Nedbank, advanced $2 million of the principal amount of the loan. In consideration of the extension of the maturity date, the Corporation further disclosed that it will issue to Nedbank warrants for the purchase of 88,770 shares of its common stock and to Auramet warrants for the purchase of 61,230 shares of its common stock, exercisable for a period of two years from the Effective Date at an exercise price equal to the average closing price of the Corporation's common stock for the 20 trading days prior to the Effective Date. A full text copy of the Modification Agreement may be viewed at no charge at http://ResearchArchives.com/t/s?12c4 Headquartered in Dragoon, Arizona, Nord Resources Corporation (Pink Sheets: NRDS) -- http://www.nordresources.com/-- is a natural resource company focused on near-term copper production from its Johnson Camp Mine and the exploration for copper, gold and silver at its properties in Arizona and New Mexico. The Company also owns approximately 4.4 million shares of Allied Gold Limited, an Australian company. In addition, the Company maintains a small net profits interest in Sierra Rutile Limited, a Sierra Leone, West African company that controls the world's highest-grade natural rutile deposit. * * * As reported in the Troubled Company Reporter on Sept. 8, 2006 Nord Resources Corporation's balance sheet at June 30, 2006, showed $4,214,657 in total assets and $8,430,713 in total liabilities, resulting in a $4,216,056 stockholders' deficit. The Company had a $3,120,573 deficit at March 31, 2006. NORTHLAKE DEVELOPMENT: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Northlake Development LLC 403 Towne Center Boulevard, Suite D-2 Ridgeland, MS 39157 Bankruptcy Case No.: 06-01934 Type of Business: The Debtor previously filed for chapter 11 protection on Aug. 18, 2005. (Bankr. S.D. Miss. Case No. 05-04348)(Ellington, J.) A case summary of that filing appeared in the Troubled Company Reporter on Aug. 19, 2006. Chapter 11 Petition Date: September 14, 2006 Court: Southern District of Mississippi (Jackson) Judge: Neil P. Olack Debtor's Counsel: Robert B. Childers, Esq. 403 Towne Center Boulevard, Suite D-2 Ridgeland, MS 39157 Tel: (601) 898-0808 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million The Debtor does not have any unsecured creditors who are not insiders. NVE INC: Has Until Oct. 15 to File Chapter 11 Reorganization Plan ----------------------------------------------------------------- The Hon. Novalyn L. Winfield of the U.S. Bankruptcy Court for the District of New Jersey extended, until Oct. 15, 2006, the period within which NVE Inc. has the exclusive right to file a chapter 11 plan of reorganization. Judge Winfield also extended until Dec. 15, 2006, the Debtor's exclusive period to solicit acceptances of that plan. As reported in the Troubled Company Reporter on June 16, 2006, the Court had previously extended the Debtor's exclusive period to file a plan to Aug. 15, 2006, and its exclusive right to solicit acceptances of that plan to Oct. 15, 2006. The Debtor relates that since the latest extension, it has made substantial progress towards the formulation of the Plan of Reorganization. The Debtor hopes to formulate a plan by October 15 and assures the Court that though it may seek short additional extensions, it will be in a position to file a plan before the end of 2006. Headquartered in Andover, New Jersey, NVE Inc., dba NVE Pharmaceuticals, Inc., manufactures dietary supplements. The Debtor is facing lawsuits about its weight-loss products which contain the now-banned herbal stimulant, Ephedra. The Company filed for chapter 11 protection on August 10, 2005 (Bankr. D. N.J. Case No. 05-35692). Daniel Stolz, Esq., Leonard C. Walczyk, Esq., Michael McLaughlin, Esq., and Steven Z Jurista, Esq., at Wasserman, Jurista & Stolz, represent the Debtor in its restructuring efforts. Derek John Craig, Esq., at Brown Raysman Millstein Felder & Steiner LLP, and David J. Molton, Esq., at Brown Rudnick Berlack Israels LLP, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $10,966,522 in total assets and $14,745,605 in total debts. NVE INC: Court Approves Holzhauer & Holenstein as Appraiser ----------------------------------------------------------- NVE Inc. obtained authority from the U.S. Bankruptcy Court for the District of New Jersey to employ Holzhauer & Holenstein as its appraiser. The Debtor tells the Court that Holzhauer & Holenstein will prepare a Complete Appraisal in Summary Report Format (USPAP 2-2b) to estimate: (1) the market value; (2) the "value in use" in contemplation of specialized facilities and fitup attendant to use by the Debtor; and (3) the fair market rent attributable to the premises under both valuation scenarios. The Debtor discloses that Holzhauer & Holenstein will be paid a $6,500 flat fee for the preparation of the appraisal report. The Debtor further discloses that in the event additional pre-trial or general consulting services are required, Michael Holenstein will bill at $250 per hour. The firm's staff bills at $125 per hour while administrative bills at $65 per hour. To the best of the Debtor's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Andover, New Jersey, NVE Inc., dba NVE Pharmaceuticals, Inc., manufactures dietary supplements. The Debtor is facing lawsuits about its weight-loss products which contain the now-banned herbal stimulant, Ephedra. The Company filed for chapter 11 protection on August 10, 2005 (Bankr. D. N.J. Case No. 05-35692). Daniel Stolz, Esq., Leonard C. Walczyk, Esq., Michael McLaughlin, Esq., and Steven Z Jurista, Esq., at Wasserman, Jurista & Stolz, represent the Debtor in its restructuring efforts. Derek John Craig, Esq., at Brown Raysman Millstein Felder & Steiner LLP, and David J. Molton, Esq., at Brown Rudnick Berlack Israels LLP, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $10,966,522 in total assets and $14,745,605 in total debts. ORBITAL SCIENCES: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its Ba2 Corporate Family Rating for Orbital Sciences Corporation and its Ba3 rating on the company's 9% Senior Notes due 2011. Moody's assigned those debentures an LGD4 rating suggesting noteholders will experience a 61% loss in case of default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Orbital Sciences Corporation (NYSE: ORB) develops and manufactures small space and rocket systems for commercial, military and civil government customers. The company's primary products are satellites and launch vehicles, including low-orbit, geosynchronous and planetary spacecraft for communications, remote sensing, scientific and defense missions; ground- and air-launched rockets that deliver satellites into orbit; and missile defense systems that are used as interceptor and target vehicles. Orbital also offers space-related technical services to government agencies and develops and builds satellite-based transportation management systems for public transit agencies and private vehicle fleet operators. OTIS SPUNKMEYER: Moody's Affirms B1 Corporate Family Rating ----------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products sector, the rating agency assigned its B1 Corporate Family Rating for Otis Spunkmeyer, Inc., upgraded to Ba3 its B1 ratings on the company's $22.5 million senior secured revolver and $170 million senior term loan. Additionally, Moody's assigned LGD3 ratings to the loans, suggesting creditors will experience a 40% loss in the event of a default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Otis Spunkmeyer, Inc., is a California-based manufacturer and distributor of frozen cookie dough and other frozen sweet baked goods. PELTS & SKINS: Court Sets October 25 DIP Financing Hearing ---------------------------------------------------------- The Honorable Jerry A. Brown of the U.S. Bankruptcy Court for the Easter District of Louisiana will convene a hearing on Oct. 25, 2006, at 2:00 p.m., to consider Pelts & Skins LLC and its debtor-affiliate PS Chez Sidney LLC's request to obtain postpetition financing from BGKP Properties Inc. In August 2006, the Debtors asked the Court for permission to obtain up to $3,000,000 in postpetition financing from BGKP -- an affiliate of the owners of the Debtors. The Debtors also asked for permission to use the cash collateral securing payment of its obligation to BGKP based on a 13-week budget, which can be accessed for free at: http://researcharchives.com/t/s?12d2 As adequate protection, the Debtors grant BGKP Properties a valid and perfected first priority security interest in, and lien upon, all of their assets. Headquartered in Covington, Louisiana, Pelts & Skins, L.L.C. -- http://www.pelts.com/-- produces, processes, and sells alligator skins to tanneries throughout the United States. The Company's subsidiary, PS Chez Sidney, LLC, distributes alligator meat packaged as Chef Penny's brand. The Company and its subsidiary filed for chapter 11 protection on Aug. 1, 2006 (Bankr. E.D. La. Case No. 06-10742). Douglas S. Draper, Esq., at Heller, Draper, Hayden, Patrick & Horn, L.L.C., represents the Debtor. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. PIER 1: Chairman & CEO Marvin Girouard to Retire in February 2007 ----------------------------------------------------------------- Chairman and Chief Executive Officer of Pier 1 Imports, Inc., Marvin J. Girouard, has decided that he will retire from the Company and the Board on Feb. 28, 2007. "I am grateful to the Board for their support," Mr. Girouard said. "I feel that it is time for me to leave in the course of a normal retirement and allow new leadership to emerge and flourish. I have enjoyed my 32 years of service, including being President and Chief Operating Officer for 10 years, Chief Executive Officer for over 8 years and Chairman of the Board for 7 years. During that time I have been part of building the business to $2 billion in revenues, with over 1200 stores and 17,000 employees to become North America's largest specialty retailer of imported decorative home furnishings and gifts. I am extremely proud of all Pier 1 associates throughout our chain, and appreciate their support and hard work over the years." The Board's independent directors have hired a New York-based retail executive search firm, Herbert Mines Associates, to assist it in selecting a new Chief Executive Officer. "Pier 1 has built an exceptional brand," said Harold D. "Hal" Reiter, Chairman and Chief Executive Officer for Herbert Mines Associates. "Marvin leaves a rich legacy, and I expect there to be strong interest in this position among qualified candidates." In thanking Mr. Girouard for his contributions to the Company, the Board of Directors expressed its commitment to a thoughtful succession strategy. "Our goal is for a smooth transition that can allow our associates to keep their focus on serving our customers and building shareholder value," said Executive Committee members Jim Hoak and Tom Thomas. "We understand the Company's place in the community -- locally, nationally and internationally -- and will consider each candidate's ability to build on Pier 1's successful record for outstanding corporate citizenship." Based in Fort Worth, Texas, Pier 1 Imports, Inc. (NYSE:PIR) -- http://www.pier1.com/-- is a specialty retailer of imported decorative home furnishings and gifts with Pier 1 Imports(R) stores in 49 states, Puerto Rico, Canada, and Mexico and Pier 1 kids(R) stores in the United States. * * * As reported in the Troubled Company Reporter on Sept. 26, 2006, Moody's Investors Service downgraded Pier 1's corporate family rating to B3 from B1 following continued degradation in same store sales, which have resulted in modest operating results and negative free cash flow. The rating outlook is stable. PILGRIM'S PRIDE: Offers to Buy all of Gold Kist's 10.25% Notes -------------------------------------------------------------- Pilgrim's Pride Corporation disclosed that it intends to commence a cash tender offer to purchase all of Gold Kist Inc.'s outstanding 10.25% Senior Notes due March 15, 2014. The tender offer will be on the terms and subject to the conditions in its Offer to Purchase and Consent Solicitation Statement, to be dated Sept. 29, 2006, and the related Consent and Letter of Transmittal. The Company also disclosed that the tender offer will be conducted in connection with its equity tender offer to purchase all of the outstanding common shares of Gold Kist for $20 per share. In conjunction with the tender offer, the Company will also seek consents to certain proposed amendments to certain provisions of the indenture that governs the Notes to eliminate substantially all restrictive covenants, eliminate or modify certain events of default and eliminate or modify certain other provisions of the indenture. The tender offer is conditioned upon, among other things, the receipt of consents from the holders of a majority in aggregate outstanding principal amount of the Notes and satisfaction of the conditions to the equity tender offer. The early consent period will expire at 5:00 p.m., Eastern Daylight Time, on Oct. 13, 2006 and the tender offer will expire at midnight, Eastern Daylight Time, Oct. 27, 2006. Holders who validly tender and do not withdraw Notes and deliver consents on the Consent Date are eligible to receive the total consideration, which includes a consent payment of $30 per $1,000 principal amount of Notes. Holders who validly tender Notes after 5:00 p.m. on the Consent Date, but on or prior to the Expiration Date, will receive the total consideration less the consent payment. In addition, holders who tender and do not withdraw their Notes in the tender offer will receive accrued and unpaid interest from the last interest payment date up to, but excluding, the date of payment for the Notes. Lehman Brothers Inc. is acting as dealer manager for the tender offer and as solicitation agent for the consent solicitation. Questions about the tender offer or the consent solicitation may be directed to Lehman Brothers Inc. at Tel. Nos. 1-800-438-3242 (toll free) or 1-212-528-7581 (collect). Requests for copies of the related documents may be directed to Innisfree M&A Incorporated, appointed information agent for the tender offer and consent solicitation, at Tel. Nos. 1-877-687-1874 (toll free). About Gold Kist Based in Atlanta, Georgia, Gold Kist Incorporated (NASDAQ: GKIS) -- http://www.goldkist.com/-- operates a fully integrated chicken production, processing and marketing business. Gold Kist's production operations include nine divisions located in Alabama, Florida, Georgia, North Carolina and South Carolina. About Pilgrim's Pride Headquartered in Pittsburg, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the United States, Mexico and in Puerto Rico. Pilgrim's Pride employs approximately 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. PILGRIM'S PRIDE: Moody's Puts Ba2 Corp. Family Rating on Watch -------------------------------------------------------------- Moody's Investors Service placed the Ba3 senior unsecured, the B1 senior subordinated, and the Ba2 corporate family ratings of Pilgrim's Pride Corporation under review for possible downgrade. The review follows Pilgrim's announcement that it intends to commence a cash tender offer to purchase all of the outstanding shares of Gold Kist, Inc. for approximately $1 billion, as well as offer to acquire Gold Kist's $130 million in 10.25% senior notes. The review for downgrade reflects the risk that Pilgrim's Pride could take on a significant amount of debt in order to fund the Gold Kist acquisition, significantly increasing its leverage and weakening its debt protection measures. Moody's review will focus on * whether or not a transaction will in fact occur; * the strategic fit of Gold Kist into Pilgrim's Pride's existing business portfolio; * the integration challenges Pilgrim's Pride may face in integrating Gold Kist's operations; and, * the capital structure, financial flexibility, leverage, and overall credit profile that Pilgrim's would exhibit should a transaction ultimately be consummated. These are the ratings placed on review for possible downgrade: * Corporate family rating of Ba2 * Probability of default rating of Ba2 * Senior unsecured notes at Ba3 (LGD5, 82%) * Senior subordinated notes at B1 (LGD6, 95%) Headquartered in Pittsburgh, Texas, Pilgrim's Pride is a major US chicken processor and producer of value-added chicken products. PROFESSIONAL INVESTORS: Hires John Lewis as Bankruptcy Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas allowed Professional Investors Insurance Group, Inc., to employ John P. Lewis, Jr., Esq., as its bankruptcy counsel. As reported in the Troubled Company Reporter on Aug. 28, 2006, Mr. Lewis is expected to: a) help in the preparation of schedules and statement of affairs and any amendments; b) participate with the Debtor in its Section 341 meeting; c) direct the Debtor concerning administrative and reorganization issues; and d) perform all other necessary legal services in connection with these proceedings. Mr. Lewis will bill at $250 per hour for this engagement. Mr. Lewis assured the Court that he does not hold any interest adverse to the Debtor, its creditors or the estate. Headquartered in Plano, Texas, Professional Investors Insurance Group, Inc., filed for chapter 11 protection on Aug. 9, 2006 (Bankr. N.D. Tex. Case No. 06-33278). John P. Lewis, Jr., Esq., represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy proceedings. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and debts between $1 million and $10 million. PROFESSIONAL INVESTORS: Files Schedules of Assets and Liabilities ----------------------------------------------------------------- Professional Investors Insurance Group, Inc., delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Northern District of Texas, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property $19,523,564 C. Property Claimed as Exempt D. Creditors Holding Secured Claims E. Creditors Holding $26,683 Unsecured Priority Claims F. Creditors Holding $1,473,600 Unsecured Nonpriority Claims ------------ ------------ Total $19,523,546 $1,500,283 Headquartered in Plano, Texas, Professional Investors Insurance Group, Inc., filed for chapter 11 protection on Aug. 9, 2006 (Bankr. N.D. Tex. Case No. 06-33278). John P. Lewis, Jr., Esq., represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy proceedings. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and debts between $1 million and $10 million. RAINIER CBO: Moody's Lifts Rating on $8MM Notes to B2 from Caa2 --------------------------------------------------------------- Moody's Investors Service reported it upgraded $8,000,000 Class B-2 Notes due July 2012 issued by Rainier CBO I Ltd from Caa2 (on watch for possible upgrade) to B2. Moody's stated that the rating action is a result of delevering of senior notes and improved overcollateralization tests. Rating action: upgrade * Issuer: Rainier CBO I Ltd. -- $8,000,000 Class B-2 Notes due July 2012 -- Previous Rating: Caa2, on watch for possible upgrade -- New Rating: B2 RENATA RESORT: Disclosure Statement Hearing Set for October 27 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Florida will consider the adequacy of the Amended Disclosure Statement explaining Renata Resort LLC's Amended Chapter 11 Plan of Reorganization at a hearing schedduled on Oct. 27, 2006, at 9:00 a.m. Objections to the disclosure statement, if any, must be submitted by Oct. 23, 2006. Overview of the Amended Plan As reported in the Troubled Company Reporter on Aug. 24, 2006, the Debtor told the Court that it intends to liquidate its assets, wind up its affairs, and pay the allowed claims of legitimate holders to the extent possible. The Debtor amended its Plan after Partners Property Corporation cancelled its purchase of two parcels of the Debtor's real property in Bay County, Florida. In the alternative, the Debtor proposes to sell the two parcels of the Florida property and some of its other assets to Renata KT, L.P. Treatment of Claims Under the Amended Plan, holders of General Unsecured Claims, Unsecured Claims Arising from Rejected Executory Contracts or Unexpired Leases, and Capital Contribution Claims by the Debtor's members, will receive the full amount of their allowed claim. Treatment of Sylvia Harrison's $6,360,000 claim will be determined by the Bankruptcy Court and state court. Equity Interest Holders will retain their existing equity interests in the Debtor, but will receive no distributions under the Plan on account of their interests until all Plan payments are paid. A full-text copy of the disclosure statement explaining the Debtor's first amended plan of reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=060823213227 Headquartered in Panama City, Florida, Renata Resort, LLC, fdba Sunset Pier Resort, LLC, operates a hotel and resort. The company filed for chapter 11 protection on May 31, 2006 (Bankr. N.D. Fla. Case No. 06-50114). John E. Venn, Jr., Esq., at John E. Venn, Jr., P.A., represents the Debtor in its restrucutring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtor filed for protection from its creditors, it listed total assets of $19,947,271 and total debts of $8,524,196. RESIDENTIAL ASSET: Moody's Puts B1 Rated Class M Notes on Watch --------------------------------------------------------------- Moody's Investors Service downgraded one certificate, placed on review for downgrade five certificates, and confirmed the rating on one certificate from two Residential Asset Mortgage Products, Inc. Trust asset-backed securitization deals issued in 2002. Moody's has also downgraded one certificate and confirmed the rating on one certificate from one Residential Asset Securities Corporation subprime deal issued in 2001. The transactions each consist of a fixed-rate pool and an adjustable-rate pool. The mortgage loans were originated by a variety of different sellers and are serviced by Homecomings Financial Network, Inc., a wholly owned subsidiary of Residential Funding Corporation. RFC is the transaction's master servicer. The subordinate fixed-rate and adjustable-rate certificates are being downgraded or reviewed for downgrade based on the weaker than anticipated performance of the mortgage pools and the resulting erosion of credit support. Specifically, the overcollateralization in the 2002-RS1 adjustable-rate pool has been fully exhausted and the Class M-I-3 and M-II-3 certificates have both realized losses. The Class M-II-2 certificates from this deal are being placed on review for downgrade based on their potential deterioration of credit enhancement if the deal passes performance triggers in the future. In addition, the overcollateralization amounts in the 2002-RS3 adjustable-rate pool and in the 2001-KS2 fixed-rate pool are significantly below their targets and pipeline losses could put pressure on the most subordinate tranches from these pools. Furthermore, existing credit enhancement levels are low given the current projected losses on the underlying pools. Finally, Moody's confirmed the current ratings on the Class M-I-1 certificates from the 2002-RS3 deal and on the Class M-II-2 certificates from the 2001-KS2 deal as credit support is sufficient to support the current ratings on these certificates. These are the complete rating actions: Issuer: Residential Asset Mortgage Products, Inc. Downgrade: * Series 2002-RS3, Class M-I-2, downgraded from Aa2 to A2 Review for Downgrade: * Series 2002-RS1, Class M-I-1, current rating A3, under review for possible downgrade * Series 2002-RS1, Class M-I-2, current rating Ba1, under review for possible downgrade * Series 2002-RS1, Class M-II-2, current rating A2, under review for possible downgrade * Series 2002-RS3, Class M-II-1, current rating Aa2, under review for possible downgrade * Series 2002-RS3, Class M-II-3, current rating B1, under review for possible downgrade Confirm: * Series 2002-RS3, Class M-I-1, confirmed at Aaa Issuer: Residential Asset Securities Corporation Downgrade: * Series 2001-KS2, Class M-II-1, downgraded from Aa2 to A1 Confirm: * Series 2001-KS2, Class M-II-2, confirmed at Baa3 RETTIG ENTERPRISES: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Rettig Enterprises, Inc. 1331 Broad Avenue Findlay, OH 45840 Bankruptcy Case No.: 06-32473 Chapter 11 Petition Date: September 12, 2006 Court: Northern District of Ohio (Toledo) Judge: Mary Ann Whipple Debtor's Counsel: Matthew Gilmartin, Esq. Matthew Gilmartin, Attorney at Law, LLC 25300 Lorain Road, Suite 1C North Olmsted, OH 44070 Tel: (440) 716-0107 Fax: (440) 716-0349 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ RF Banking Company, Inc. Loan $1,740,000 Gemini, Tower One Suite 204 1991 Crooker Rd. Westlake, OH 44145 Rettig Properties $125,000 P.O. Box 908 Findlay, OH 45839 Dawn Rettig $97,578 P.O. Box 908 Findlay, OH 45839 Dawn Rettig Wages $19,200 Columbia Gas $7,000 US Bank $5,644 MBNA Platnium Plus $4,890 MBNA Platnium Plus $4,452 at&t Phone Bill $119 AEP Ohio Utilities - Electric $79 or Gas City of Findlay Utilities - Water $30 Water & Wastewater Dept. & Sewer Pitney Bowes Postage Machine $20 Rental BullsEye Telecom Phone Bill $18 Internal Revenue Service Unknown J. Steve Welton County 820 North Main Street Unknown Treasurer Findlay, Ohio 45840 Hancock County Ohio Bureau Of Employment Unknown Services Ohio Bureau of Workers Unknown Compensation REYNOLDS & REYNOLDS: Moody's Rates Planned $925 Mil. Loan at B3 --------------------------------------------------------------- Moody's Investors Service assigned to The Reynolds & Reynolds Company a: * Ba2 rating to its: -- proposed $1.485 billion first lien term loan; and -- $70 million first lien revolving credit facility; and * B3 rating to its: -- proposed $520 million second lien loan; and -- $405 million third lien term loan. Moody's has also assigned the company a B1 Corporate Family Rating. A stockholder meeting of The Reynolds & Reynolds Company has been scheduled for Oct. 23, 2006, to vote on the company's proposed merger with Universal Computer Services, Inc. The merger is expected to close on Oct. 26, 2006. Subsequent to closing of the planned merger, the former Reynolds' Ba1 corporate family rating and Ba1 medium term note program rating will be withdrawn, given the likelihood that following the potential merger, the former Reynolds will have no more debt. The ratings reflect both the overall probability of default of the company at a 50% LGD rate, to which Moody's assigns a PDR of B1, and a loss-given-default of LGD-2 for the first lien facilities, LGD-5 for second lien term loan, and LGD-6 for the third lien term loan. The net proceeds of the current offering along with $331 million balance sheet cash, $250 million preferred equity, and $102 million of Brockman trust (Spanish Steps) common equity will be applied to the $2.7 billion purchase of The Reynolds & Reynolds Company (Reynolds) common equity, $379 million repayment of combined Reynolds and UCS bank debt, $50 million Reynolds cash balance, and $85 million transaction fees and expenses. The ratings outlook is stable. The B1 corporate family rating reflects The Reynolds & Reynolds Company's high financial leverage and modest interest coverage associated with the company's proposed merger with UCS. In isolation, these factors would suggest a B2 corporate family rating. However, the company's market leading position as a provider of dealership management software and significant recurring maintenance revenue stream support the overall B1 corporate family rating level. Moody's considered I/T services and software rating factors, which are competitive position, financial leverage, returns, and cash flow, to arrive at the B1 corporate family rating. For further information, please refer to Moody's Credit Opinion for The Reynolds & Reynolds Company. These are the ratings assigned: * $1.485 billion 6-year First Lien Term Loan Ba2, LGD-2, 29% * $70 million 6-year First Lien Revolving Credit Facility Ba2, LGD-2, 29% * $520 million 7-year Second Lien Term Loan B3, LGD-5, 77% * $405 million 7.5-year Third Lien Term Loan B3 LGD-6, 91% * Corporate Family Rating B1 The Reynolds and Reynolds Company, headquartered in Dayton, Ohio, is an automotive dealership computer services and forms management company. RICHMOND REDEVELOPMENT: Moody's Holds Ba3 Rating on $5.6MM Bonds ---------------------------------------------------------------- Moody's Investors Service affirmed the Ba3 rating on Richmond Redevelopment and Housing Authority's $5.6 million of outstanding Multi-Family Housing Revenue Bonds (Berkeley Place/Warwick Place Apartments) Series 1995A. The rating affirmation is based upon Moody's review of financial statements for 2005, interim financial statements through July 31, 2006 and occupancy reports from management. The stable outlook has also been affirmed based upon stable occupancy and debt service coverage consistent with this rating category. Legal Security The bonds are limited obligations payable solely from the revenues, receipts and security pledged in the Trust Indenture. Credit strengths * Stable occupancy history * Market forecasts for Richmond that indicate multi-family occupancy near 95% for the next three years and average annual rent growth of over 2.5% for the same time period Credit challenges * Thin debt service coverage that appears to be weakening in 2006 because of increases in utility costs * The building is older as it was constructed in 1963 * Absence of a lock box payment system * Absence of a reserve and replacement fund * Debt service reserve sized to 1/2 maximum annual debt service Recent developments Debt service coverage for the full year 2005 improved slightly to 1.17x from the 1.14x experienced in 2004. The improvement in 2005 resulted from slight rent increases and a decrease in concessions and vacancy losses. Interim statements for 2006 indicate debt service coverage will likely decline even though rent income has increased. Utility costs have increased sharply, which has driven down NOI resulting in a 2006 forecasted debt service coverage of 1.06x. Occupancy continues to be credit strength for the properties as they have a weighted average of 95.5% in September 2006. Market data provided by Torto Wheaton Research indicate that multi-family occupancy in Richmond for 2006 is 94.6%. TWR forecasts that occupancy in the Richmond market will stay at or above 94.5% through 2009 and rent inflation will average 2.6% through 2008. Moody's believes that the debt service coverage in 2005 and the forecast for 2006 are appropriate for the Ba3 rating category when considering a stable occupancy history and a stable market. Outlook The outlook for the bonds is stable base upon a stable occupancy history and a stable market. RICKY MYERS: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Ricky Lee Myers 16218 Haddam Lane Noblesville, IN 46062 Bankruptcy Case No.: 06-05965 Chapter 11 Petition Date: September 29, 2006 Court: Southern District of Indiana (Indianapolis) Judge: Anthony J. Metz III Debtor's Counsel: Eric C. Redman, Esq. Bator Redman Bruner Shive & Ludwig 151 North Delaware Street, Suite 1106 Indianapolis, IN 46204 Tel: (317) 685-2426 Fax: (317) 636-8686 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Fargo Financial 2002 Lexus 430 SC $22,092 Acceptance 1 International Plaza Suite 300 Philadelphia, PA 19113-1510 2005 GMC $15,058 Conversion Van 2004 Lexus 470GX $10,356 MBNA Credit Card $30,463 P.O. Box 17054 Purchases Wilmington, DE 19884 Household Finance Corporation Personal Loan $22,089 P.O. Box 1547 Chesapeake, VA 23327 Wells Financial Bank Credit Card $5,904 1200 North West Avenue Purchases Sioux Falls, SD 57104-1314 Kohl/Chase Credit Card $615 56 Northwest 17000 Purchases Ridgewood Drive Menomonee Falls, WI 53051 Target Credit Card $591 Purchases Pier 1/Nb Credit Card $275 Purchases ROCKVILLE ORTHOPEDIC: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Rockville Orthopedic Associates, P.C. dba Connecticut Orthopaedic & Sports Medicine Center 428 Hartford Turnpike Vernon, CT 06066 Tel: (860) 871-2508 Bankruptcy Case No.: 06-20916 Type of Business: The Debtor is engaged in orthopedic healthcare and physical therapy. Chapter 11 Petition Date: September 29, 2006 Court: District of Connecticut (Hartford) Judge: Robert L. Krechevsky Debtor's Counsel: Irve J. Goldman, Esq. Pullman & Comley LLC 850 Main Street P.O. Box 7006 Bridgeport, CT 06601 Tel: (203) 330-2000 Fax: (203) 330-2213 Total Assets: $1,156,417 Total Debts: $655,332 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ James S. Kort, M.D. $290,000 c/o David A. Reif, Esq. McCarter & English, LLP 185 Asylum Street Hartford, CT 06103-3495 Eastern Rehabilitation Network $153,121 181 Patricia M. Genova Drive Newington, CT 06111 Robert Cook, M.D. $50,000 4109 Central Avenue Ocean City, NJ 08226-1631 Richard Fischer, M.D. $50,000 428 Hartford Turnpike Vernon, CT 06066 AT&T Yellow Pages $20,074 P.O. Box 5078 Saginaw, MI 48605-5078 BTH II Cleaning Services $15,264 The Hartford Insurance Group $11,944 IBM Credit LLC $9,628 Anthem Blue Cross and $7,145 Blue Shield of Connecticut 428 Hartford Turnpike Associates $6,802 R.C. Knox & Company $5,602 Genzyme Blosurgery $4,712 Connecticut Light & Power Co. $2,830 Medical Talk Transcription $2,721 Town of Vernon $2,313 IDX Systems Corporation $1,854 St. John Companies $1,789 Provident Life & Accident $1,638 Principal Life Group, Grand Island $1,412 CitiBusiness Card $1,171 ROTECH HEALTHCARE: Moody's Affirms Caa3 Rating on $300 Mil. Notes ----------------------------------------------------------------- Moody's Investors Service withdrew the existing ratings on the senior secured credit facility of Rotech Healthcare, Inc., reflecting the repayment of the existing facility with proceeds from a $120 million facility (not rated). Moody's affirmed the corporate family rating of Caa2 and the negative outlook. These ratings were withdrawn: * $75 million revolving credit facility, due 2007, B2 * $42 million senior term loan, due 2008, B2 These ratings were affirmed with a negative outlook * $300 million face amount senior subordinated notes, due 2012, Caa3 * Corporate Family Rating, Caa2 ROWE COMPANIES: Has Until October 18 to File Schedules & Statement ------------------------------------------------------------------ The Hon. Stephen S. Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia gave The Rowe Companies and its debtor-affiliates until Oct. 18, 2006, to file their Schedules of Assets and Liabilities and Statement of Financial Affairs. The Debtors tell the Court that due to the size and complexity of their operations, they will need additional time to compile the information for and complete the Lists, Schedules, and Statements. The Debtors contend that they have thousands of creditors and other parties in interest. Headquartered in McLean, Virginia, The Rowe Companies -- http://www.therowecompanies.com/-- manufactures upholstered retail home and office furniture, interior decorations, tableware, lighting fixtures, and other interior design accessories. The Company owns 100% of stock of manufacturing and retail subsidiaries, Rowe Furniture -- http://www.rowefurniture.com/-- and Storehouse, Inc. -- http://www.storehousefurniture.com/ The Company and its two of its debtor-affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bank. E.D. Va. Case Nos. 06-11142 to 06-11144). Dylan G. Trache, Esq., H. Jason Gold, Esq., and Valerie P. Morrison, Esq., at Wiley Rein & Fielding LLP, represent the Debtors. When the Debtors filed for protection from their creditors, The Rowe Companies listed total assets of $130,779,655 and total debts of $93,262,974; Rowe Furniture estimated assets between $50 million and $100 million and debts between $10 million and $50 million; and Storehouse, Inc. estimated assets and debts between $10 million and $50 million. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 16, 2006. ROWE COMPANIES: Taps PENTA Advisory as Financial Advisor -------------------------------------------------------- The Rowe Companies and its debtor-affiliates ask the United States Bankruptcy Court for the Eastern District of Virginia for permission to employ PENTA Advisory Services LLC, as their financial advisors and consultants. PENTA Advisory will: * prepare cash flow and other financial projections; * model the strategic alternatives for Storehouse, Inc.; * assist with exit financing solicitations; * assist with reporting and other covenant compliance and with the Debtors' DIP financing agreement; * prepare the Debtors' Bankruptcy Schedules and Statement of Financial Affairs; * coordinate information flow to Creditors' Committees; * assist with the preparation of Monthly Operating Reports; * develop the Debtor's Plan of Reorganization; and * provide other financial, claims resolution, administrative and compliance assistance to the Debtors as needed. The Debtors tell the Court that before they filed for bankruptcy, they provided PENTA a $150,000 retainer. On Sept. 18, 2006, the Debtors increased the retainer by $50,000. To the best of the Debtors' knowledge, PENTA neither holds nor represents any interest adverse to the Debtors or their respective estates and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Headquartered in McLean, Virginia, The Rowe Companies -- http://www.therowecompanies.com/-- manufactures upholstered retail home and office furniture, interior decorations, tableware, lighting fixtures, and other interior design accessories. The Company owns 100% of stock of manufacturing and retail subsidiaries, Rowe Furniture -- http://www.rowefurniture.com/-- and Storehouse, Inc. -- http://www.storehousefurniture.com/ The Company and its two of its debtor-affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bank. E.D. Va. Case Nos. 06-11142 to 06-11144). Dylan G. Trache, Esq., H. Jason Gold, Esq., and Valerie P. Morrison, Esq., at Wiley Rein & Fielding LLP, represent the Debtors. When the Debtors filed for protection from their creditors, The Rowe Companies listed total assets of $130,779,655 and total debts of $93,262,974; Rowe Furniture estimated assets between $50 million and $100 million and debts between $10 million and $50 million; and Storehouse, Inc. estimated assets and debts between $10 million and $50 million. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 16, 2006. SACO I: Moody's Reviews Ba2 Rated Notes for Possible Downgrade -------------------------------------------------------------- Moody's Investors Service puts on watch for possible downgrade two certificates from two transactions issued by SACO I Trust. These transactions are backed by closed end seconds, and have seen recent losses that have exceeded the excess spread available thereby depleting the overcollateralization. These are the rating actions: Review for Downgrade: * Issuer: SACO I Trust 2004-3 -- Class B-3, current rating Ba2, under review for possible downgrade, * Issuer: SACO I Trust 2005-2 -- Class B-4, current rating Ba2, under review for possible downgrade. SAINT VINCENTS: Buys Fresh Meadows Property for $4.2 Million ------------------------------------------------------------ To resolve their dispute, Saint Vincent Catholic Medical Center of New York and Turnpike Gardens, Inc., agree that pursuant to the terms of a contract for sale between the parties: -- Turnpike Gardens will sell, and SVCMC will purchase, the property at 175-05 Horace Harding Expressway, Fresh Meadows, in New York, for $4,200,000; -- the closing will take place no later than December 29, 2006, but may occur earlier upon appropriate written notice from SVCMC; -- upon Closing, the adversary proceeding will be dismissed with prejudice with each party bearing its own litigation cost, which dismissal will be effectuated by the execution of a stipulation of dismissal by the parties; and -- the parties will be deemed to release each other of any claims arising under or related to the lease or the Property. A full-text copy of the Contract for Sale between Turnpike Gardens and SVCMC is available for free at: http://researcharchives.com/t/s?12cf As reported in the Troubled Company Reporter on June 13, 2006, SVMC sought a judgment and order from the U.S. Bankruptcy Court for the Southern District of New York: (a) granting it specific performance of the terms of Agreement of Lease and ordering Turnpike Gardens, Inc., to convey fee simple title the Fresh Meadows property in exchange for $4,200,000; (b) awarding it damages due to Turnpike Gardens' delay in conveyance of the Property; and (c) awarding its costs and attorney's fees. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 35 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SAINT VINCENTS: Court OKs Set Off Deal with New York Dialysis ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has approved a stipulation between Saint Vincents Catholic Medical Centers of New York, its debtor-affiliates and New York Dialysis Services, Inc., allowing NYDS to effectuate a set-off of certain of its receivables. The Debtors and NYDS are parties to two agreements dated as of January 2003: (a) an acute nephrology services agreement, and (b) an employee leasing agreement. Under the Services Agreement, NYDS provides acute and chronic dialysis treatments to the Debtors' patients on an inpatient basis at designated locations at the hospital, and provides and maintains the dialysis and water treatment equipment and supplies necessary to perform the Service. Under the Employee Agreement, NYDS leases from the Debtors certain of the Debtors' employees to facilitate NYDS' providing of the Service for a fee per employee. As of the Petition Date, the Debtors owe to NYDS $2,078,905 under the Services Agreement and NYDS owes the Debtors $1,752,196 under the Employee Agreement, which when netted and set off against one another, obligate the Debtor to pay to NYDS $326,709. The parties agreed that: * the automatic stay is modified solely to allow NYDS to effectuate the Set-off. Following the Set-off, the Debtors will owe to NYDS $326,709 -- the Prepetition Net Amount; * NYDS is granted an allowed general unsecured claim against the Debtor for $326,709; and * for the period from the Petition Date through and including December 31, 2005, the Debtor owes to NYDS $566,244 under the Service Agreement and NYDS owes the Debtor $409,088 under the Employee Agreement, which when netted and set off against one another, obligate the Debtor to pay to NYDS $157,156 that the Debtor will remit to NYDS immediately after the stipulation is approved. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 35 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEALY MATTRESS: Moody's Affirms Ba3 Corporate Family Rating ----------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products sector, the rating agency confirmed its Ba3 Corporate Family Rating for Sealy Mattress Company. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $565 million senior secured term loan Ba3 Ba1 LGD2 25% $125 million senior secured revolver Ba3 Ba1 LGD2 25% $390 million senior subordinated notes B2 B2 LGD5 81% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Trinity, North Carolina, Sealy Mattress Company, a wholly owned subsidiary of Sealy Corporation, is the world's largest bedding manufacturer which sells mattresses and box springs under the Sealy, Sealy Posturepedic, Stearns & Foster and Bassett brand names. SIMMONS COMPANY: Moody's Confirms B2 Corporate Family Rating ------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. consumer products sector, the rating agency confirmed its B2 Corporate Family Rating for Simmons Company. Additionally, Moody's revised or held its probability- of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $492 million secured term loan B2 Ba3 LGD2 27% $75 million secured revolver B2 Ba3 LGD2 27% $200 million subordinated notes Caa1 B3 LGD5 73% $269 million discount notes Caa2 Caa1 LGD6 91% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Atlanta, Georgia, Simmons Company is one of the largest manufacturers of premium mattresses, foundations and related accessories. The company has the second largest market share, behind Sealy, in the U.S. mattress industry. SOLSTICE INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Solstice Industries, Inc. 815 Wildt Street Ann Arbor, MI 48103 Bankruptcy Case No.: 06-52613 Type of Business: The Debtor is a food manufacturer & processor. Chapter 11 Petition Date: September 11, 2006 Court: Eastern District of Michigan (Detroit) Judge: Marci B. McIvor Debtor's Counsel: Sandra A. Hazlett, Esq. Hazlett & Associates, P.C. 3830 Packard, Suite 180 Ann Arbor, MI 48108 Tel: (734) 973-0905 Fax: (734) 973-0950 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ California & Hawaiian Sugar Trade debt $183,735 aka C & H Sugar Judgment 12154 Collection Center Drive Chicago, IL 60693 Kraft Canada, Inc. Trade debt $92,949 c/o Carl Otis 8600 Devonshire Road Mont Royal, Quebec H4P 2K9 CANADA Total Logistics Control Trade debt $83,168 110 Nordic Avenue Pointe Claire, Quebec H9R 3Y2 CANADA United Sugars Trade Debt $74,924 Judgment Nectar Transport, Inc. Trade debt $54,112 Internal Revenue Service 2005/2006 $49,416 Ecology Revolution Trade debt $48,486 Cereal ByProducts Company Trade debt $25,560 Judgment US Sugar Co. Trade Debt $23,824 Norit $22,733 ABH/CH Robinson Trade debt $21,450 Worldwide, Inc. Judgment Sachnoff and Weaver Legal services $18,353 Illini State Trucking Trade debt $17,252 Judgment McAlear Associates, Inc. $15,412 Dicalite Minerals Corp. Trade debt $14,547 Celite Corporation Trade debt $14,327 Judgment FGDI, LLC Trade debt $13,967 Panalpina Inc. $11,455 RF Cunningham and Company $11,139 Sugar Foods Corp Trade debt $10,670 SOLUTIA INC: Wants to Extend Plan-Filing Period to April 10, 2007 ----------------------------------------------------------------- Solutia Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to extend the period during which they have the exclusive right to: (1) file a plan of reorganization through and including April 10, 2007; and (2) solicit and obtain acceptances of the Plan through and including June 11, 2007. Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York, says the Debtors have made significant progress toward their reorganization since filing their last exclusivity request but the JPMorgan Chase Bank and the Equity Committee Adversary Proceedings continue to hinder the Debtors' progress. According to Mr. Henes, the Debtors need more time to resolve various outstanding issues before they can continue the Plan process. Mr. Henes assures that Court that the Debtors are not seeking an extension of their Exclusive Periods to pressure their creditors to accede to their reorganization demands. The Debtors reserve their right to seek additional extensions of their Exclusive Periods. Headquartered in St. Louis, Missouri, Solutia, Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 70; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SOPHIE NG: Case Summary & Nine Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Sophie H. Ng aka Soo Ha Ng 232 21st Avenue, Suite 6 San Francisco, CA 94121 Tel: (415) 368-6973 Bankruptcy Case No.: 06-30904 Chapter 11 Petition Date: September 30, 2006 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Lewis Phon, Esq. 350 Sansome Street, Suite 230 San Francisco, CA 94104-1315 Tel: (415) 421-1234 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Office of the Treasurer and Property Tax $40,161 Tax Collector City Hall, Room 140 San Francisco, CA 94102 Chase Credit Card $10,282 P.O. Box 94014 Palatine, IL 60094 Citibank Credit Card $3,646 P.O. Box 142319 Irving, TX 75014-2319 SFPUC-Water Department Water Bill $2,824 P.O. Box 7369 San Francisco, CA 94120 Golden Gate Disposal and Garbage Disposal $380 Recycling Co. 900 Seventh Street San Francisco, CA 94107 Macy's Credit Card $234 Palisades Credit Card $195 American Express Credit Card $107 Thomas W. Madland, M.D. Service Charge $34 SOUTH COAST: Poor Credit Quality Cues Moodys to Downgrade Ratings ----------------------------------------------------------------- Moody's Investors Service reported it downgraded $26,000,000 Class B Floating Rate Senior Subordinate Notes due 2036 issued by South Coast Funding I, Ltd. Moody's noted that the rating action is primarily due to the continuing deterioration in the credit quality of the portfolio, as well as the further decline in the deal's Weighted Average Coupon. Rating action: downgrade * Issuer: South Coast Funding I, Ltd. * Class Description: The U.S. $26,000,000 Class B Floating Rate Senior Subordinate Notes due 2036 * Prior Rating: Baa3, on watch for possible downgrade * Current Rating: Ba3 SPANISH BROADCASTING: Moody's Assigns Loss-Given-Default Rating --------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US advertising and broadcasting sector, the rating agency affirmed its B3 corporate family rating on Spanish Broadcasting System, Inc. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Secured Revolver B1 B1 LGD3 47% Secured Term Loan B1 B1 LGD3 47% 10 3/4% Series B cum. exch. pref. stk. Caa1 B3 LGD6 99% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Spanish Broadcasting System, Inc. --- http://www.spanishbroadcasting.com/-- is the largest Hispanic- controlled radio broadcasting company in the United States. SBS owns and operates 20 radio stations located in the top Hispanic markets of New York, Los Angeles, Miami, Chicago, San Francisco and Puerto Rico, including the #1 Spanish-language radio station in America, WSKQ-FM in New York City, as well as 3 of the Top 4 rated radio stations airing the Tropical, Regional Mexican, Spanish Adult Contemporary and Hurban format genres and the highest billing Latino-formatted stations in each of the three largest U.S. Hispanic markets. The Company also produces live entertainment concerts and events throughout the U.S. and Puerto Rico. SPECIALTYCHEM PRODUCTS: Court Okays Consolidation with ChemDesign ----------------------------------------------------------------- The Hon. Pamela Pepper of the U.S. Bankruptcy Court for the Eastern District of Wisconsin granted ChemDesign Corporation's request to consolidate its chapter 11 case with its wholly-owned subsidiary, SpecialtyChem Products, Corp.'s bankruptcy proceeding. ChemDesign relates that it and SpecialtyChem collectively did business under the name "ChemDesign." ChemDesign reminds the Court that it filed its voluntary petition so that its wind down can be properly coordinated with the reorganization efforts of SpecialtyChem. ChemDesign anticipates selling the real property, machinery and equipment at its Fitchburg, Massachusetts, facility in order to reduce the cross-collateralized, secured debt of both debtors. The Debtors contend that their cases should be substantively consolidated because they share a substantial identity, and consolidation will yield significant benefits in these cases. According to the Debtor, the true test of substantial identity is not whether corporate formalities have been maintained, but rather the way that they conducted their business and held themselves out to the public. The Debtors cite four reasons why their cases should be consolidated: (1) unity of interests, ownership and management; (2) shared liability on loans; (3) entangled assets and business functions; and (4) identity of marketing and creditor reliance on a single entity. About ChemDesign Corporation Headquartered in Fitchburg, Massachusetts, ChemDesign Corporation -- http://www.chemdesigncorp.com/-- is a custom manufacturer of various fine organic chemicals for paper products, electronics, agricultural products and other materials. The Debtor filed for chapter 11 protection on Aug. 27, 2006 (Bankr. E.D. Wis. Case No. 06-24729. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. About SpecialtyChem Products Headquartered in Marinette, Wisconsin, SpecialtyChem Products, Corp., manufactures various organic chemicals for paper products, electronics, agricultural products and other materials. The company filed for chapter 11 protection on June 12, 2006 (Bankr. E.D. Wis. Case No. 06-23131). Christopher J. Stroebel, Esq., Timothy F. Nixon and Marie L. Nienhuis, Esq., at Godfrey & Kahn, S.C., represent the Debtor in its restructuring efforts. Fort Dearborn Partners, Inc., is the Debtor's turnaround consultant, and gives financial advice to the Debtor. Matthew M. Beier, Esq., and Eliza M. Reyes, Esq., at Brennan, Steil and Basting, S.C., and Matthew T. Gensburg, Esq., and Nancy A. Peterman, Esq., at Greenberg Traurig, L.L.P., represent the Official Committee of Unsecured Creditors of the Debtor. In its schedule of assets and liabilities, the Debtor disclosed $11,394,224 in total assets and $12,323,425 in total debts. SPIRIT AEROSYSTEMS: Moody's Assigns Loss-Given-Default Ratings -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency revised its Ba3 Corporate Family Rating for Spirit Aerosystems Inc. to B1. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Secured Revolving Credit Facility due 2010 Ba3 Ba3 LGD3 31% Sr. Secured Term Loan B due 2011 Ba3 Ba3 LGD3 31% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Wichita, Kansas, Spirit AeroSystems, Inc. -- http://www.spiritaero.com/-- with facilities in Wichita, Tulsa and McAlester Oklahoma, and Prestwick, Scotland, is a designer and manufacturer of fuselages, struts, nacelles, thrust reversers and other complex components for Boeing and Airbus. STEELCASE INC: Moody's Confirms Ba1 Corporate Family Rating ----------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products sector, the rating agency confirmed its Ba1 Corporate Family Rating for Steelcase, Inc. and its Ba1 rating on the company's $250 million senior unsecured notes. Additionally, Moody's assigned an LGD4 rating to those bonds, suggesting noteholders will experience a 59% loss in the event of a default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Grand Rapids, Michigan, Steelcase, Inc., (NYSE: SCS) -- http://www.steelcase.com/-- designs and manufactures architecture, furniture and technology products. Founded in 1912, Steelcase serves customers through a network of more than 800 independent dealers and approximately 13,000 employees worldwide. STEINWAY MUSICAL: Moody's Downgrades Rating on Senior Notes to B1 ----------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. consumer products sector, the rating agency confirmed its Ba3 Corporate Family Rating for Steinway Musical Instruments, and downgraded its Ba3 rating to B1 on the company's $175 million senior unsecured notes. Additionally, Moody's assigned an LGD4 rating to those bonds, suggesting noteholders will experience a 64% loss in the event of a default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Steinway Musical Instruments -- http://www.steinwaymusical.com/-- through its operating subsidiaries, designs, manufactures and markets high quality musical instruments. The Company has one of the most valuable collections of brands in the music industry. Through a worldwide network of dealers, Steinway Musical Instruments' products are sold to professional, amateur and student musicians, as well as orchestras and educational institutions. The company employs a workforce of over 2,300 and operates 14 manufacturing facilities in the United States and Europe. STRUCTURED ASSET: Moody's Eyes Downgrade of BI Rated Certificates ----------------------------------------------------------------- Moody's Investors Service puts on review for possible downgrade two certificates from one transaction issued by Structured Asset Securities Corporation in 2002. The transaction is backed primarily by first lien adjustable- and fixed-rate subprime mortgage loans. The two most subordinate classes of Structured Asset Securities Corp 2002-BC1 transaction have been placed on review for possible downgrade because existing credit enhancement levels are low given the current projected losses on the underlying pools. The transaction has $727,471 in overcollateralization, which is below the 50 bp floor as of the 9/25/06 reporting date. These are Moody's complete rating actions: Review for Downgrade: * Issuer: Structured Asset Securities Corporation -- Series 2002-BC1; Class M3, current rating Ba1 under review for possible downgrade; -- Series 2002-BC1; Class B, current rating B1, under review for possible downgrade. TARGA RESOURCES: Moody's Cuts Corp. Family Rating to B1 from Ba3 ---------------------------------------------------------------- Moody's Investors Service downgraded Targa Resources' ratings, including its Corporate Family Rating to B1 from Ba3, its bank credit facilities to B1 from Ba3, and its senior unsecured notes to B3 from B2. This action concludes the ratings review initiated on April 10, 2006 that was prompted by the possibility that the company's proposed sale of its North Texas assets might not occur in a timely manner. The asset sale has not occurred and Moody's believes that a sale in the near term is no longer likely. Targa continues to review other monetization strategies for the assets; however, these strategies will likely require a significant amount of time to execute and would not be as potentially credit accretive as a straight sale. As a result, Moody's has downgraded Targa's ratings to a level more consistent with its high leverage. The rating outlook is negative, reflecting the possibility of a further downgrade should the company not follow through with plans to reduce leverage to more manageable levels. Targa's financial performance during the first quarter of 2006 was weaker than expected; however, more recent performance reflects an improvement in processing margins and increased volumes due to resumed operations at facilities damaged during the hurricanes last year. These facilities include Targa's Pelican offshore pipeline and the Barracuda, Stingray, and Yscloskey (25.6% ownership interest) straddle plants. Targa's Venice facility (22.9% ownership interest) is not expected to resume full operations until next year. Targa's EBITDA, adjusted for non-cash derivative gains, was $69 million during the first quarter of 2006 and increased to $102 million during the second quarter. Moody's expects that Targa will report EBITDA of $370-$390 million for the full year 2006, at current commodity prices. Relative to balance sheet debt of $2.2 billion, Targa's debt/EBITDA is expected to end the year in the 5.6x-6.0x, which is elevated relative to similarly rated peers. Targa's annualized cash interest expense is $165 million, which puts EBITDA/interest in the 2.1x-2.4x range. As of June 30, 2006, Targa's debt/book capitalization remains elevated at over 80%. In order to return to a stable rating outlook, Targa would need to reduce debt/EBITDA to less than 5.0x. At a more normalized EBITDA run-rate of $350 million assuming no asset sales, debt would need to be reduced to less than $1.75 billion (a reduction of about $450 million from current levels), which will require more than a sweep of cash flow in order to accomplish. The ratings continue to reflect Targa's substantial asset base which consists of over 12,000 miles of natural gas and NGL pipelines, natural gas gathering systems covering 14,400 square miles, and 21 natural gas processing plants. In addition, Targa has an NGL logistics and marketing business with 12 terminals, net NGL fractionation capacity of approximately 299,000 barrels/day, and storage capacity of 105 million barrels. In Moody's view, Targa's size, scale, and degree of integration affords it the ability to withstand somewhat, but not significantly, higher leverage than its smaller midstream peers. Also, because it is not an MLP and burdened with a distribution, the nature of Targa's assets enable it to generate free cash flow that can be used to reduce debt or fund growth projects. Ratings downgraded: * Corporate Family Rating, to B1 from Ba3 * Probability-of-default rating, to B1 from Ba3 * Sr. Secured Term Loan due 2012, to B1, LGD 3, 49% from Ba3, LGD 3, 49% * Sr. Secured Asset Sale Bridge Loan due 2007, to B1, LGD 3, 49% from Ba3, LGD 3, 49% * Sr. Secured Revolving Credit Facility due 2011, to B1, LGD 3, 49% from Ba3, LGD 3, 49% * Sr. Secured Letter of Credit Facility due 2011, to B1, LGD 3, 49% from Ba3, LGD 3, 49% * 8.5% Sr. Unsecured Notes due 2013, to B3, LGD 6, 93% from B2, LGD 6, 93% Targa Resources, Inc. is headquartered in Houston, Texas. TEMPUR-PEDIC: Moody's Confirms Ba3 Corporate Family Rating ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products sector, the rating agency confirmed its Ba3 Corporate Family Rating for Tempur-Pedic International Inc., and its B2 rating on the company's $98 million senior subordinated notes. Additionally, Moody's assigned an LGD5 rating to those bonds, suggesting noteholders will experience a 73% loss in the event of a default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Tempur-Pedic International Inc., is a vertically-integrated manufacturer, marketer and distributor of premium visco-elastic foam mattresses and pillows that it sells in 54 countries primarily under the Tempur(R) and Tempur-Pedic(R) brands. The Company sells its products through four distribution channels: retail (furniture and specialty stores, as well as department stores internationally); direct (direct response and internet); healthcare (chiropractors, medical retailers, hospitals and other healthcare channels); and third party distributors. In the U.S. a majority of its mattresses and pillows are sold through furniture and specialty retailers. TORRES ESPINO: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Torres Espino Cabinets, Inc. P.O. Box 8323 Weslaco, TX 78599 Tel: (956) 968-7362 Bankruptcy Case No.: 06-10632 Type of Business: The Debtor manufactures cabinets and other wooden furniture. Chapter 11 Petition Date: September 29, 2006 Court: Southern District of Texas (Brownsville) Judge: Richard S. Schmidt Debtor's Counsel: Ellen C. Stone, Esq. John Ventura, P.C. 62 East Price Road Brownsville, TX 78521 Tel: (956) 546-9398 Fax: (956) 542-1478 Total Assets: $648,210 Total Debts: $4,602,822 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Plains Capital Leasing Lease $3,222,384 Attn: Documentation Group 17304 Preston Road, Suite 925 Dallas, TX 75252 Internal Revenue Service 940 & 941s $500,000 300 East 8th Street, Stop 8026 Austin, TX 78701 First National Bank - Mercedes Non-Purchase Money $139,100 P.O. Box 810 Edinburg, TX 78540 Wells Fargo Equipment Deficiency on $120,990 Finance Inc. Repossessed Equipment 733 Marquette Avenue, Suite 700 MAC N9306-070 Minneapolis, MN 55402 Penske Trucking Company Lease Agreement $66,735 Route 10, Green Hills P.O. Box 563 Reading, PA 19603-0563 National Machine Tool Lease on Equipment $63,586 Financial Corp. Texas State Bank Promissory Note $52,099 The Economic Development Lease $50,597 Corporation of Weslaco Economic Development Corp. Lease Agreement $50,597 GE Capital Lease on Equipment $48,321 GMAC Auto Payment $44,764 Wells Fargo Equipment Deficiency for $44,339 Finance, Inc. Repossessed Equipment Marlin Leasing Lease on Equipment $38,402 Texas State Comptroller Quarterly Taxes $30,000 Texas State Bank Promissory Note $25,000 Leave Funding Lease on Equipment $20,000 General Hardwood NSF $19,174 Dell Lease on Computers $17,302 and Equipment Lone Star National Bank Promissory Note $7,792 Chase Mastercard NSF $4,000 TRANSDIGM INC: Moody's Assigns Loss-Given-Default Ratings --------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its B2 Corporate Family Rating for Standard Aero Holdings Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Secured Revolving Credit Facility due 2010 B2 Ba3 LGD2 29% Sr. Secured Term Loan B due 2012 B2 Ba3 LGD2 29% 8.25% Sr. Subor. Notes due 2014 Caa1 Caa1 LGD5 81% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). TransDigm Group Incorporated, through its wholly-owned subsidiaries, including TransDigm Inc., designs, manufactures and supplies highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include ignition systems and components, gear pumps, mechanical/electro- mechanical actuators and controls, NiCad batteries/chargers, power conditioning devices, hold-open rods and locking devices, engineered connectors, engineered latches and cockpit security devices, lavatory hardware and components, specialized AC/DC electric motors and specialized valving. TRAVIS COUNTY: Defaults Prompt Moody's to Lower Rating on Notes --------------------------------------------------------------- Moody's Investors Services downgraded the rating on Travis CountyHousing Finance Corporation Multifamily Housing Revenue Bonds (Park at Wells Branch Apartments Project) Subordinate Series C bonds to Ca from Caa1. Moody's has affirmed the Ba3 rating on the Senior Series A bonds. The outlook is changed to stable from negative. The Junior Subordinate Series D bonds are not rated. The rating downgrade on the Series C bonds reflects recent defaults on debt service payments to bondholders. The Senior bonds continue to be insured by MBIA and therefore carry MBIA's financial strength rating of Aaa; the Subordinate and Junior Subordinate bonds are not insured. Park at Wells Branch is a 304 unit apartment complex built in 1987. It is composed of 18 apartment buildings with 1BR and 2BR apartments. Park at Wells Branch is located in Travis County, TX, in the northern section of the Austin metropolitan area. The complex houses low to moderate income tenants, with 20% of the units to be rented to tenants earning at or below 50% of the area median income. In addition, 90% of the units must be rented to tenants whose adjusted gross income is less than 120% of AMI. Legal security The bonds, together with interest and premium, are limited obligations payable solely from the revenues, receipts and security pledged in the Trust Indenture. Funds are pledged first to the payment of the principal and interest due on the Series A and B bonds (Series B matured June 2005), then to the principal and interest due on the Series C bonds, and last, to the principal and interest due on the Series D bonds. Interest rate derivatives None. Credit strengths Fully funded debt service reserve fund for Senior Series A bonds. The Series A debt service reserve fund is fully funded as of September 2006, according to the trustee. The trustee and property manager expect the borrower to continue to make debt service payments on the Series A bonds. Commitment from CHC, the owner of the property, and Shelter Corporation, the management company. CHC has most recently demonstrated its commitment to the property by funding $135,000 of capital improvements. In the past, CHC has provided capital to maintain the debt service reserve fund for the senior bonds and to fund portions of debt service payments on the Series C bonds. Shelter Corporation has also shown a strong commitment to Park at Wells Branch by forgoing its management fee from mid-2003 through the end of 2005. Improving financial position Based on FY 2005 audited financial statements, Moody's has calculated net operating income (NOI) for Park at Wells Branch of $967,000, bringing debt service coverage (without R&R) for the Series A bonds to 1.06 times. Debt service coverage on the Series C bonds, after the MBIA fee and the senior bond debt service was (1.06) times in 2005. Annualized unaudited interim financials for 2006 tell a more optimistic story, with debt service coverage reaching 1.2 times for Series A and 0.01 times for the Series C bonds (after MBIA fee and senior bond debt service). Moody's attributes the improvement in debt service coverage in part to rising rental income and controlled expenses. We believe that rental revenues will continue to improve somewhat as the Austin, TX real estate market recovers. Credit challenges Under-funded balance in the debt service reserve funds for the Series C and D bonds. The property manager does not expect the project to generate sufficient revenues to fully cover debt service for at least 2-3 years. Austin, Tex., real estate market has been challenging over the past few years. The Austin market experienced an over-supply of net units in the early 2000's, with completions outpacing net absorption from 2000-2003. During this time period, older projects, such as Park at Wells Branch, struggled with high vacancy rates and concessions. In 2003, Park at Wells Branch reported occupancy rates as low as 88%. Recent developments On July 19, 2005, the trustee issued a notice indicating that the borrower, CHC Park at Wells Branch, LLC, failed to make the debt service payment on the Series C and D bonds. This was followed by a notice on August 10, 2005, stating that the borrower instructed the trustee to make the missed debt service payment on the Series C and D bonds on August 12, 2005. The trustee made this payment in part by tapping the debt service reserve funds for the subordinate and junior subordinate bonds. Subsequently, on Dec. 4, 2005, the trustee issued another notice indicating that the borrower failed to make the debt service payment on the two subordinate series of bonds on Dec. 1, 2005. There have been no further notices of default since December 2005. However, the property manager and the trustee both indicated that no debt service payment was made in June 2006, and they do not expect payment to be made in December 2006 for the Series C and D bonds. According to the Trust Indenture, as long as the Series A bonds are outstanding, a missed payment on the subordinate bonds does not constitute an even of default. As such, there is no remedy available to subordinate bondholders. Outlook The outlook for the bonds has been changed to stable from negative. The stable outlook reflects Moody's expectation that the rating on the subordinate bonds is unlikely to move below Ca and that debt service on the senior bonds will continue to be paid to bondholders. What could change the rating-up Substantial increase in NOI, consistent payment of debt service on the Series C bonds, and a replenishment of the debt service reserve fund for the Series C bonds What could change the rating-down Tapping the debt service reserve fund for the Series A bonds; reduction in commitment from owner and property manager. TRIGEM COMPUTER: Receives Lone Bid from Human & Technology ---------------------------------------------------------- Human & Technology Co. is the only bidder for TriGem Computer, Inc.'s assets, Bloomberg News reports citing the South Korean Maeil Business Newspaper. The newspaper, in turn, cited an unidentified official at Samjong KPMG, the accounting firm arranging the sale, as its source. Other potential bidders, including Lenovo Group, Ltd., and MBK Partners, dropped out, Bloomberg adds. As reported in the Troubled Company Reporter on Sept. 11, 2006, TriGem received letters of interest from Lenovo Group, Ltd., and nine other interested parties. Yeon Jong Hyun, finance officer of Human & Technology, said he expects his company to get exclusive negotiating rights with TriGem as early as, Bloomberg relates. Mr. Yeon declined to disclose the amount of Human & Technology's offer. Based in Cheongju, South Korea, Human & Technology makes hard- disk drives. It seeks to acquire TriGem to expand its product line-up, according to Bloomberg. In August 2006, TriGem received letters of interest from 10 interested parties, including Lenovo, MBK and Japanese PC maker MCJ Co., Ltd. Lenovo had denied it submitted a bid. William Amelio, Lenovo's chief executive officer, admitted that TriGem representatives approached the Chinese PC maker, according to Reuters. Mr. Amelio told Reuters that a deal with TriGem is not forthcoming. MBK Partners is a private equity fund established in 2005 by former members of the Carlyle Fund, according to The Dong-A Ilbo newspaper. Headquartered in Ansan City, Kyunggi-Do, Korea, TriGem Computer Inc. -- http://www.trigem.com/-- manufactures desktop PCs, notebook PCs, LCD monitors, printers, scanners, other computer peripherals, and PIDs and supplies over four million PCs a year to clients all over the world. Il-Hwan Park, the Foreign Representative, filed a chapter 15 petition on Nov. 3, 2005 (Bankr. C.D. Calif. Case No. 05-50052). Charles D. Axelrod, Esq., at Stutman Treister & Glatt, P.C., represents the Foreign Representative in the United States. TriGem America Corporation, an affiliate of the Debtor, filed for chapter 11 protection on June 3, 2005 (Bankr. C.D. Calif. Case No. 05-13972). TriGem Texas, Inc., another affiliate of the Debtor, also filed for chapter 11 protection on June 8, 2005 (Bankr. C.D. Calif. Case No. 05-14047). (TriGem Bankruptcy News, Issue No. 7 Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000) TRIGEM COMPUTER: Disposes Stake in Korea ePlatform -------------------------------------------------- TriGem Computer, Inc., has sold all of its interests in Korea ePlatform, according to Reuters Key Development. TriGem held 104,166 common shares of Korea ePlatform, totaling KRW4,999,968,000. Korea ePlatform provides e-marketplace services. Headquartered in Ansan City, Kyunggi-Do, Korea, TriGem Computer Inc. -- http://www.trigem.com/-- manufactures desktop PCs, notebook PCs, LCD monitors, printers, scanners, other computer peripherals, and PIDs and supplies over four million PCs a year to clients all over the world. Il-Hwan Park, the Foreign Representative, filed a chapter 15 petition on Nov. 3, 2005 (Bankr. C.D. Calif. Case No. 05-50052). Charles D. Axelrod, Esq., at Stutman Treister & Glatt, P.C., represents the Foreign Representative in the United States. TriGem America Corporation, an affiliate of the Debtor, filed for chapter 11 protection on June 3, 2005 (Bankr. C.D. Calif. Case No. 05-13972). TriGem Texas, Inc., another affiliate of the Debtor, also filed for chapter 11 protection on June 8, 2005 (Bankr. C.D. Calif. Case No. 05-14047). (TriGem Bankruptcy News, Issue No. 7 Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000) TRIGEM COMPUTER: Inks Pact with Gateway on Stay Modification ------------------------------------------------------------ In a stipulation approved by the Hon. Thomas Donovan of the U.S. Bankruptcy Court for the Central District of California, Il-Hwan Park, the foreign representative of TriGem Computer, Inc., and Gateway, Inc., and its affiliates agree to a limited modification of the automatic stay imposed in TriGem's Chapter 15 case. The parties agree that the Gateway Entities may proceed with their interpleader and request for a judicial determination binding on TriGem and the Foreign Representative, as to whom the Gateway Entities owe obligations pursuant to the Original Design and Manufacture Agreement. The Gateway Entities, however, are stayed from asserting affirmative recoveries or other claims against TriGem or the Foreign Representative. TriGem assembles and delivers computers to be sold under Gateway's eMachines label pursuant to the ODM Agreement. As reported in the Troubled Company Reporter on Sept. 11, 2006, Gateway and its affiliates asked the Court to lift the automatic stay imposed in TriGem's Chapter 15 case so they may include TriGem in a lawsuit filed by TriGem America Corporation. TGA sued Gateway, Gateway Companies, Inc., and eMachines, Inc., in April 2006 to recover $14,954,560 plus interest for unpaid invoices on account of computers sold by TriGem. The complaint alleged that beginning in October 2004, the Gateway Entities ceased making payments on deliveries, despite TGA's repeated demands. TGA is a wholly owned U.S. subsidiary of TriGem. TriGem has not taken any action to: (i) collect any amounts allegedly owed under the ODM Agreement for delivered computers; (ii) redesignate any other party to collect payments; or (iii) assert rights in the Adversary Proceeding. Notwithstanding repeated requests by TGA and the Gateway Entities, TriGem has refused to disclaim any interest it may have in the funds owed under the ODM Agreement. TGA filed a separate Chapter 11 case in June 2005 before the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division. TGA's lawsuit is pending before that court. TriGem and the Foreign Representative clarify that, by entering into the Stipulation, they neither consent to nor submit to the personal jurisdiction of the Santa Ana Bankruptcy Court or any other U.S. courts. Headquartered in Ansan City, Kyunggi-Do, Korea, TriGem Computer Inc. -- http://www.trigem.com/-- manufactures desktop PCs, notebook PCs, LCD monitors, printers, scanners, other computer peripherals, and PIDs and supplies over four million PCs a year to clients all over the world. Il-Hwan Park, the Foreign Representative, filed a chapter 15 petition on Nov. 3, 2005 (Bankr. C.D. Calif. Case No. 05-50052). Charles D. Axelrod, Esq., at Stutman Treister & Glatt, P.C., represents the Foreign Representative in the United States. TriGem America Corporation, an affiliate of the Debtor, filed for chapter 11 protection on June 3, 2005 (Bankr. C.D. Calif. Case No. 05-13972). TriGem Texas, Inc., another affiliate of the Debtor, also filed for chapter 11 protection on June 8, 2005 (Bankr. C.D. Calif. Case No. 05-14047). (TriGem Bankruptcy News, Issue No. 7 Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000) TRI-UNION: Plains Mktg. Prevails in Defense of Alleged Preference ----------------------------------------------------------------- Jeffrey Compton, the Trustee of the Tri-Union Class 4A Creditors' Trust created under the terms of the Fourth Amended Plan of Reorganization confirmed in Tri-Union Development Corporation and its debtor-affiliate's on Sept. 30, 2004, sued Plains Marketing L.P. to recover a preferential payment pursuant to 11 U.S.C. Sec. 547(b) (Bankr. S.D. Tex. Adv. Pro. No. 05-3758). Plains asserts the affirmative defense of Sec. 547(c), namely, that the transfer was made in the ordinary course of business and may not be avoided. Plains also asserts the affirmative defense of constructive trust. On July 20, 2006, the Honorable Marvin Isgur held a trial. The Trustee's case in chief, asserting that a Sec. 547(b) transfer was made, was stipulated to by Plains. Consequently, the only issues to be resolved are Plains' defenses. At the conclusion of the evidence, the Court requested briefing on whether a first-time event can qualify as within the ordinary course of business for the purposes of Sec. 547(c). Both parties timely submitted briefs. In a decision published at 2006 WL 2587621, Judge Isgur concludes that the transfer qualifies as a transfer in the ordinary course of business. Consequently, the Trustee is not entitled to recover the transferred funds as a preference from Plains. The Debtor and Plains had a relationship spanning over two years. Beginning in May 2001, Plains would buy oil from Tri-Union's Eugene Island Block 277 Lease. On a monthly basis, Tri-Union would nominate [an industry term; in short, an estimate of the quantity of oil a producer expects to ship to a buyer] the number of barrels it expected to deliver to Plains. Delivery was typically made via a third party gathering system. On the 10th working day of each month, Plains would close the books on the prior month's oil production. Usually, before the books were closed, the third party would deliver "run tickets" detailing the number of barrels delivered by Tri-Union and sold to Plains. Books would usually be closed based on these run tickets. Adjustments to the quantities specified in the run tickets, as well as adjustments to estimates of quality were often made after the books were closed. Payment was always made on the 20th calendar day of each month. Often times, the estimates of quantity and quality were still not resolved by the payment date. This led to a system of constant reconciliations between the two parties as estimates were eventually resolved. In some cases, run tickets were not timely received, and Plains would close its books based on nominations. Later, when run tickets were received, the parties would reconcile the difference against future months. Overpayments and underpayments were a routine part of a monthly "true up" that matched actual deliveries to estimated deliveries. What is at issue in this case is the method in which the "true up" of the overpayment by Plains for the July 2003 Oil was resolved. Was the true-up transfer made "in the ordinary course of business or financial affairs of the debtor and the transferee"? For July 2003 Oil, Plains booked its barrels bought from the EI 277 lease based on a nomination. The number of barrels was booked on August 13, 2003. That night -- four days prior to Tri-Union filing for bankruptcy -- a direct deposit of $94,348.50 was scheduled. This deposit, like Plains' other direct deposits, could not be reversed once it was scheduled. On August 18, 2003, Plains received notice from Tri-Union that the EI 277 lease was shut in and would not be producing oil until further notice. Consequently, Plains zeroed out its books by recording a negative barrel production equal to the nomination. At this point, Plains had overpaid Tri-Union for July production by $94,348.50. On Sept. 16, 2003, Grace Munn, a Plains employee in the Revenue Accounting Department, noticed that Tri-Union was in credit suspense for approximately $95,000. She also noticed that EI 277 had not been producing. Ms. Munn inquired with Plains as to the status of the EI 277 lease and was told "Since July 1, 2003 this lease has been shut in and will not be active again until further notice. I think they are going to dismantle this line; so I wouldn't hold my breathe [sic] for it to start again." The next day, Patricia Banzhof emailed Tri-Union and asked "Do you know if this block will be coming back on anytime or shut down permanently? How do you want to handle this credit suspense?" Tri-Union answered "I don't know when EI 277 is be [sic] coming back on line, but I don't think it is any time soon. I think the best way to handle the credit is to send an invoice." An invoice was sent to Tri-Union stating that the sum of $94,384.50 was paid for 3,100 barrels that were never delivered. Therefore, $94,348.50 was due to Plains. The invoice included wiring instructions. Tri-Union wired the amount to Plains on October 16, 2003. Tri-Union declared bankruptcy on October 20, 2003. In evaluating the transfer in question, and comparing it to past transfers between the parties, the Court finds that the circumstances surrounding this transfer are unique. In the case of past overpayments, future production was always expected, and overpayments were held pending eventual offset. However, in this situation, no future production was expected, hence there could be no future offsets. The transfer under review was the result of a new event in the relationship of the parties-the permanent shut-in of well EI 277, with an overpayment not yet resolved. Sui Generis & Ordinary Course of Business Judge Isgur observes that courts are split on whether a one time event can qualify as within the ordinary course of business between two parties. A minority of courts have articulated a per se rule that a one time transfer cannot qualify as a transfer in the ordinary course of business for the purposes of Sec. 547(c)(2)(B). In re Winters, 182 B.R. 26, 29 (Bankr. E.D. Ky. 1995)("[547(c)(2)] does not apply to single, isolated transactions. . . ."); In re Brown Transport Truckload, Inc., 152 B.R. 690, 692 ("If there is no prior course of dealings between the parties, the transferee cannot satisfy [ 547(c)(2)(B)], and the transfer may be avoided."). However, the focus of courts applying such a rule is that there were no past dealings between the parties, and thus no ordinary course of business. That is not the case in the present action. The Debtor and Plains had many dealings over the course of the years. However, the permanent shut-in of production presented a new problem that had to be addressed within that historic relationship. In its post-trial brief on this issue, the Trustee states that "If the Court finds this was a one-of-a-kind event, there is no legal basis for finding it was in the ordinary course." Judge Isgur disagrees. "Obviously every borrower who does something in the ordinary course of her affairs must, at some point, have done it for the first time. We hold that . . . a transaction can be in the ordinary course of financial affairs even if it is the first such transaction undertaken by the customer." In re Finn, 909 F.2d 903, 908 (6th Cir. 1990). Accord Kleven v. Household Bank, F.S.B., 334 F.3d 638 (7th Cir. 2003). Judge Isgur agrees that "an appropriate ordinary course analysis requires a recognition that a variety of events in the course of the parties' business history may be found ordinary, even though these events never occurred in the parties' history." In re Roberds, Inc., 315 B.R. 443, 461 (Bankr. S.D. Ohio 2004). "[T]he particulars of the transaction that the Trustee seeks to avoid were not unusual," Judge Isgur says. "New events arise within a business relationship. Such events are not excluded from the ordinary course of business exception simply because they have not arisen before. In a situation when such an event occurs, a fact intensive evaluation of the event must occur. In this case, the well from which Plains was buying oil was permanently shut-in for the first time in the relationship of the parties. There was an overpayment due to Plains, which typically would have been credited against future balances. Since there would be no future balances, Tri-Union returned the overpayment via a direct deposit, thereby equalizing the account. The action was ordinary for the sake of Sec. 547(c)(2)(B)." Headquartered in Houston, Texas, Tri-Union Development Corporation is an independent oil and natural gas company engaged in the acquisition, development, exploration and production of oil and natural gas properties. The Company filed for chapter 11 protection on October 20, 2003 (Bankr. S.D. Tex. Case No. 03-44908). Charles A Beckham, Jr., Esq., Eric B. Terry, Esq., JoAnn Lippman, Esq., and Patrick Lamont Hughes, Esq., at Haynes & Boone represent the Debtors in their restructuring efforts, which culminated in confirmation of the Company's Fourth Amended Plan of Reorganization on Sept. 30, 2004. As of March 31, 2003, the Debtors listed $117,620,142 in total assets and $167,519,109 in total debts. TYSON FOODS: Resolves Government Hiring Concerns in Six Locations ----------------------------------------------------------------- Tyson Foods, Inc., has resolved a disagreement with the Office of Federal Contract Compliance Programs over employment practices involving five locations in Arkansas and one in Oklahoma. The OFCCP conducted compliance evaluations of Tyson hiring activity from 2002 to 2004 at poultry plants in Grannis, Clarksville, Berryville and Van Buren, Arkansas, and Broken Bow, Oklahoma, as well as a Springdale, Arkansas, trucking operation. Based on statistical analyses, the federal agency subsequently alleged the company discriminated against certain female and minority job applicants for entry-level production jobs and some trucking positions. Tyson officials denied the claim, stating there were legitimate non-discriminatory reasons for not hiring the applicants. However, the company acknowledged that its defense of this position was hampered by the passage of time since the reviews began and incomplete documentation of its selection processes at these locations. Tyson Foods has since implemented new procedures to ensure the company retains all relevant documentation of its selection processes and is also conducting more frequent audits of its employment practices. In addition, in an effort to avoid costly and protracted litigation, Tyson has agreed to pay $1.5 million to approximately 2,500 women and minorities who were not hired during the period involved and to make employment offers to some of those individuals who are still interested in working for the company. "We have a history of working cooperatively with the OFCCP and remain committed to treating all job applicants fairly," said Ken Kimbro, senior vice president of Human Resources for Tyson Foods. "Tyson has a very diverse workforce and strict policies prohibiting discrimination in the workplace. We also communicate our position against discrimination through our Core Values and Team Member Bill of Rights." During the time period covered by the OFCCP reviews, Tyson's representation of minorities at the named processing plants averaged 59% while the number of females was 49%. It is Tyson Foods' policy to provide a work environment free of unlawful harassment and discrimination. This position is also reinforced by the company's Code of Conduct, which all Team Members are required to follow. Tyson supports diversity and inclusion in the workplace, through the company's Office of Diversity Business Practices and its Executive Diversity Business Council, led by Chairman John Tyson. Last year the Council initiated the creation of a new program designed to identify and develop promising workers for upward movement within the company. This effort includes specific attention to the development and advancement of women and minorities. The OFCCP is part of the U.S. Department of Labor's Employment Standards Administration. The agency is responsible for ensuring that employers doing business with the federal government comply with the laws and regulations requiring nondiscrimination and affirmative action. Based in Springdale, Arkansas, Tyson Foods, Inc. (NYSE:TSN) -- http://www.tysonfoods.com/-- is a processor and marketer of chicken, beef, and pork. The company produces a wide variety of protein-based and prepared food products, which are marketed under the "Powered by Tyson(TM)" strategy. * * * As reported in the Troubled Company Reporter on Sept. 26, 2006, Standard & Poor's Ratings Services assigned its 'BBB-' rating to Springdale, Arkansas-based meat processor Tyson Foods Inc.'s $1 billion unsecured revolving credit facility maturing Sept. 10, 2010, guaranteed by wholly owned subsidiary Tyson Fresh Meats Inc. (formerly IBP Inc.). At the same time, Standard & Poor's lowered its rating on $2.1 billion of the company's outstanding senior unsecured debt to 'BB+' from 'BBB-' because these debt issues do not have the benefit of the Tyson Fresh Meats guarantee, which was recently provided to the holders of Tyson's 6.6% notes due 2016. As reported in the Troubled Company Reporter on Sept. 21, 2006, 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. UNITY WIRELESS: Provides Update on Business Strategy for Growth --------------------------------------------------------------- Unity Wireless Corporation provides an update to its stockholders and the investment community on the Company's business strategy for growth in the highly competitive wireless infrastructure market. "As we were coming to the end of 2005, we realized that in order to position Unity Wireless as a strong competitor in this market we needed to grow both internally and by identifying strategic, revenue generating, acquisition targets to quickly gain critical mass," Ilan Kenig, President and CEO of Unity Wireless, commented. "By combining synergistic companies, we achieved the critical mass we desired while also re-positioning Unity Wireless with a greater breadth of product offerings and the larger size and capability required to win increasingly larger orders and opportunities. We see this strategy as actually walking in the footsteps of such companies as Powerwave and Andrew, the two largest competitors in our industry." These timeline describes the acquisition of three complementary Israeli-based wireless technology companies, together having attracted over $100 million of investment capital, and the resulting combination of operations: -- On Feb. 10, Unity Wireless signed a definitive agreement to acquire Avantry Ltd., bringing to Unity Wireless a complete point-to-point microwave radio product line used to transport (backhaul) voice and data traffic in wireless and wireline communications networks. This acquisition closed on June 8, 2006. -- On May 16, Unity Wireless signed a definitive agreement to acquire coverage solutions developer Celerica, Inc., and that it was in negotiations to acquire a third company, later to be identified as Celletra Ltd. -- On July 6, Unity Wireless closed on the acquisition of Celerica Inc. a developer of coverage enhancement solutions for 2G and 3G wireless networks, effective July 4, 2006. -- On Aug. 18, Unity Wireless closed on the acquisition of Celletra Ltd., a supplier of coverage enhancement solutions for 2G and 3G wireless networks, effective Aug. 17, 2006. -- On Aug. 23, three new Directors would join the Board of Directors of Unity Wireless: David Goldschmidt, Ran Shahor and Amir Gal-Or, each of them Managing Directors of leading Israeli venture capital funds and very familiar with the wireless industry having previously served on the board of recently acquired Celletra Ltd. -- On Sept. 6, Unity Wireless completed the consolidation of the operations of the three recently acquired Israel-based companies, Celletra, Avantry and Celerica, into one facility, harmonized its sales and marketing initiatives under the Unity Wireless brand. With the combining of workforces and consolidating of the facilities of the three acquired companies into one location, Unity was able to reduce employee headcount in Israel from approximately 135 to 80 people. The recently closed acquisitions will contribute to the Company's rapid growth rate for the remainder of FY2006 and beyond. Consolidated revenue for the full financial year 2006, which includes revenue from continuing operations of Unity Wireless, plus proforma revenue of the acquired companies for the same period, is expected to exceed $15 million, an increase of three- fold over Unity Wireless Corporation's FY2005 revenue. Management also expects consolidated revenue in FY2007 will double FY2006 to more than $30 million. Based on preliminary analysis and notwithstanding expected and/or unexpected restructuring costs, it is believed that the Company is likely to achieve profitable operations at a point in the fourth quarter of FY2006 with profitable performance expected in FY2007. Mr. Kenig said, "We are now positioned with an impressive array of product offerings for wireless network operators and OEMs (Original Equipment Manufacturers), and are quickly becoming accepted as a serious 'bidder' for increasingly large wireless systems requirements. Our focus is solely set on Unity Wireless consistently being recognized as the clear '3rd' major provider of infrastructure components and systems, behind such companies as Powerwave and Andrew. "Thanks to the support of our stockholders, board of directors, and the confidence vested in Unity Wireless by the leadership and investors in Celletra, Celerica and Avantry, we look to a very bright future for our new combined company." About Unity Wireless Based in Bellingham, Washington, Unity Wireless Corporation (OTCBB: UTYW) -- http://www.unitywireless.com/-- is a developer of wireless subsystems and coverage-enhancement solutions for wireless communications networks. At June 30, the Company's Balance sheet showed a stockholders' deficit of $2,370,166, compared to a deficit of $760,000 at Dec. 31, 2005. Going Concern Doubt KPMG LLP expressed doubt about Unity Wireless' ability to continue as a going concern after auditing the Company's 2005 financial statements. The auditing firm pointed to the Company's recurring losses from operations. UNIVERSAL PROPERTY: Accumulated Deficit Tops $32.8 Mil. at June 30 ------------------------------------------------------------------ Universal Property Development & Acquisition Corp. filed its third quarter financial statements for the three months ended June 30, 2006, with the Securities and Exchange Commission. The Company reported a $343,518 net loss on $1.1 million of net revenues for the three months ended June 30, 2006, compared with a $384,154 net loss on zero revenues in the prior year. As of June 30, 2006, the Company's accumulated deficit widened to $32.8 million from $28.3 million of deficit at June 30, 2005. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?12c9 Going Concern Doubt KBL, LLP expressed substantial doubt about Universal Property's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2005, and Dec. 31, 2004. The auditing firm pointed to the Company's recurring losses from operations, and is dependent upon the sale of equity securities to provide sufficient working capital to maintain continuity. Headquartered in Juno Beach, Florida, Universal Property Development & Acquisition Corp. is a holding company that operates through the formation of joint ventures with other entities in the oil and natural gas acquisition, development and production industry. Its current operating joint ventues are Canyon Creek Oil & Gas, Inc., West Oil & Gas, Inc., Winrock Energy, Inc., Texas Energy, Inc. and UPDA Petro Trading, Inc. US LEC: June 30 Balance Sheet Upside-Down by $272.9 Million ----------------------------------------------------------- US LEC Corp. reported a $3.1 million net loss on $106.6 million of net revenues for the three months ended June 30, 2006, compared with a $4.7 million net loss on $95.3 million of net revenues in 2005. At June 30, 2006, the Company's balance sheet showed $240.6 million in total assets and $513.5 million in total liabilities, resulting in a $272.9 million stockholders' deficit. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?12ca About US LEC Headquartered in Charlotte, North Carolina, US LEC Corp. -- http://www.uslec.com/-- is a full service provider of IP, data and voice solutions to medium and large businesses and enterprise organizations throughout 16 eastern states and the District of Columbia. US LEC offers advanced, IP-based, data and voice services such as MPLS VPN and Ethernet, as well as comprehensive Dynamic T(SM) VoIP-enabled services and features. The company also offers local and long distance services and data services such as frame relay, Multi-Link Frame Relay and ATM. US LEC provides a broad array of complementary services, including conferencing, data backup and recovery, data center services and Web hosting, as well as managed firewall and router services for advanced data networking. US LEC also offers selected voice services in 27 additional states and provides enhanced data services, selected Internet services and MegaPOP(R) nationwide. * * * US LEC Corp.'s $150 million 12.71625% 2nd priority senior secured floating rate notes due 2009 carry Moody's B3 and Standard & Poor's B- ratings. Moody's also junked US LEC's long term corporate family rating to Caa1. All ratings were placed in September 2004. UTILITY CRAFT: Hires Hale Resources as Bankruptcy Consultant ------------------------------------------------------------ Utility Craft, Inc., dba Wood Armfield Furniture, obtained permission from the U.S. Bankruptcy Court for the Middle District of North Carolina to employ Hale Resources, Inc., as its bankruptcy consultant, nunc pro tunc to July 20, 2006. As reported in the Troubled Company Reporter on Sept. 22, 2006, Hale Resources will: a) prepare the Debtor's schedules of assets and liabilities; b) prepare the Debtor's statement of financial affairs; c) prepare the Debtor's cash collateral budget; d) prepare the Debtor's monthly reports; and e) attend to other matters related to the financial condition and financial reporting requirements of the Debtor during its bankruptcy proceeding. The firm will bill $1,730.99 per week on a bi-weekly basis for this engagement. In addition, the firm will receive a 5% bonus in the event the holding company holds an income of zero or more for the period April 1, 2006, to March 31, 2007, and a 15% bonus if the North Carolina and the Virginia companies hold an income of zero or more for the period April 1, 2006, to March 31, 2007. Robert A. Hale assured the Court that the firm does not hold any interest adverse to the Debtor's estate. Headquartered in High Point, North Carolina, Utility Craft, Inc., dba Wood Armfield Furniture, specializes in manufacturing high quality furniture and accessories. The Company filed for chapter 11 protection on July 20, 2006 (Bankr. M.D. N.C. Case No. 06- 10816). Christine L. Myatt, Esq., Benjamin A. Kahn, Esq., J. David Yarbrough, Jr., Esq., at Nexsen Pruet Adams Kleemeier, PLLC, represents the Debtor in its restructuring efforts. Judy D. Thompson, Esq., Deborah M. Tyson, Esq., Diane Furr, Esq., at Poyner & Spruill, LLP, serves the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debts between $10 million and $50 million. VISIPHOR CORP: Board Appoints Michael Hilton as President and COO ----------------------------------------------------------------- Visiphor Corporation entered into a consulting agreement with MIVA Holdings, Inc., whereby MIVA agreed to provide consulting services and to cause Michael J. Hilton to perform the responsibilities and duties of president and chief operating officer for and on behalf of the Company. The compensation for the services of Mr. Hilton to be paid to MIVA includes a monthly fee of CDN$15,000. The Company disclosed that its Board of Directors appointed Mr. Hilton, effective Sept 21, 2006, as president and chief operating officer. Wayne Smith, chief financial officer, had been serving as chief operating officer prior to Mr. Hilton's appointment. Mr. Hilton joined the Company in Nov. 2005 as senior vice president following the acquisition of Sunaptic Solutions Incorporated by the Company. Mr. Hilton had served as president of Sunaptic from Nov. 2002 until Nov. 2005. Prior to his position with Sunaptic, Mr. Hilton was vice president, Sales, for Global eBiz from May 2002 until Oct. 2002. Mr. Hilton was also vice president, Network Services, of BMS Communications from March 1999 until Nov. Mr. Hilton holds a Bachelor of Science Degree in Computer Science from Simon Fraser University and has extensive experience in technology-based businesses, including software development, enterprise information systems and business process consulting. The Company further disclosed that Mr. Hilton has not had any interest in any transaction within the last two years, or in any proposed transaction to which the Company was or is to be a party. A full-text copy of the Consulting Agreement between Visiphor Corporation and MIVA Holdings Inc., dated Sept. 16, 2006, may be viewed at no charge at http://ResearchArchives.com/t/s?12c5 Based in Burnaby, British Columbia, Visiphor Corporation (OTCBB: VISRF; TSX-V: VIS; DE: IGYA) -- http://www.imagistechnologies.com/-- fka Imagis Technologies Inc, specializes in developing and marketing software products that enable integrated access to applications and databases. The company also develops solutions that automate law enforcement procedures and evidence handling. These solutions often incorporate Visiphor's proprietary facial recognition algorithms and tools. Using industry standard "Web Services", Visiphor delivers a secure and economical approach to true, real-time application interoperability. The corresponding product suite is referred to as the Briyante Integration Environment. Going Concern Doubt As reported in the Troubled Company Reporter on Nov. 24, 2005, KPMG LLP expressed substantial doubt about Visiphor's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2004 and 2003. The auditing firm pointed to the Company's recurring losses from operations, deficiency in operating cash flow and deficiency in working capital. VOUGHT AIRCRAFT: Moody's Assigns Loss-Given-Default Ratings ----------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its B2 Corporate Family Rating for Vought Aircraft Industries Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Secured Revolving Credit Facility due 2010 B1 Ba2 LGD2 17% Sr. Secured Term Loan due 2011 B1 Ba2 LGD2 17% 8% Sr. Unsecured Notes due 2011 B3 B3 LGD5 72% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Dallas, Texas, Vought Aircraft Industries, Inc, is a privately held company controlled by The Carlyle Group. The company is the largest independent developer and producer of structural assemblies, which include complete fuselages, wing assemblies, empennages, aircraft doors, nacelles, and control surfaces for commercial, military, and business aircraft. Vought had LTM March 2006 revenues of $1.35 billion. WERNER LADDER: Panel Wants to Retain Neil Minihane as Consultant ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the bankruptcy cases of Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor-affiliates, asks approval from the U.S. Bankruptcy Court for the District of Delaware to retain Neil J. Minihane as its consultant, nunc pro tunc to Aug. 24, 2006. Werner Holding Co. endeavors to shift their operations to a lower cost environment in Mexico to remain competitive. The transition of operations from Chicago, Illinois, to Juarez, Mexico, is integral to the Debtors' business plan. On Aug. 24, 2006, Committee representatives and Mr. Minihane traveled to Juarez. As a result of the trip, the need to retain a consultant became apparent. The Committee says that it must be able to assess the costs and benefits, and the appropriate timing of the transition. A consultant would assist the Committee in its evaluation of the complex business, financial and economic issues raised by the Debtors' transition of operations to Mexico. Mr. Minihane is an operations consultant with significant expertise in transitions from the United States to Mexico, as well as in restructurings and distressed situations. The Committee believes the consultant's retention is reasonable, appropriate, and is in the estate's best interest. Pursuant to an Engagement Letter dated Sept. 7, 2006 with the Committee, Mr. Minihane agrees to: (a) review and analyze the Debtors' historical financial and operations data relating to their operations in Chicago, Illinois and Juarez, Mexico, including, profits and loss information and cash usage analyses relating to these facilities; (b) assess and periodically advise the Committee regarding the status and progress of the transition of the Debtors' operations from Chicago to Juarez, and provide suggestions or recommendations as may be appropriate or necessary; (c) advise and attend meetings of the Committee and its professionals, as appropriate; (d) advise and attend meetings with third parties, including the Debtors, as may be requested by the Committee, or otherwise necessary or appropriate to perform the services; (e) prepare and deliver to the Committee a written report on the status and progress of the transition of the Debtors' operations from Chicago to Juarez, and containing suggestions, recommendations and concerns relating to the transition; (f) be reasonably available for follow-up questions by the Committee concerning the report; Mr. Minihane will be: (i) paid $15,000 per week, for a period of four weeks, or as extended by Court order, commencing upon Court approval of the Application; and (ii) reimbursed for reasonable and necessary expenses relating to the services provided. The Committee seeks the Court's permission to pay Mr. Minihane a $15,000 advance retainer upon Court approval of the Application, and to pay 85% of the subsequent weekly payments, on an interim basis, at the beginning of each week thereafter. The Committee believes it is reasonable to allow Mr. Minihane to receive interim compensation as services are performed because he is just finishing up a current assignment and is not employed by a large company. Pursuant to the Engagement Letter, the parties agree that the Debtors' estates will indemnify, hold harmless and defend Mr. Minihane from and against any and all claims and liabilities that he may become obligated for, unless the liability is judicially determined to have arisen primarily from his gross negligence or willful misconduct. Mr. Minahe assures the Court that he does not hold or represent an interest adverse to the Committee or the bankruptcy estates. He is a "disinterested person" as that term is defined in Section 101 (14) of the Bankruptcy Code. 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. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WERNER LADDER: Wants to Hire Mercer as Human Resources Consultant ----------------------------------------------------------------- Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor-affiliates, ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Mercer Human Resources Consulting, Inc., in connection with the review of their compensation and benefits program in their Chapter 11 cases, nunc pro tunc to Aug. 10, 2006. Specifically, Mercer will: (a) conduct a review of the Debtors' existing compensation and benefits programs and assist the Debtors in developing revised programs; (b) provide expert testimony, to the extent necessary, with regard to compensation benefits matters; (c) provide other services as agreed upon by the Debtors and Mercer. Mercer will be paid on an hourly basis. The rates charged by Mercer's personnel range from $150 to $700 per hour. Mercer will also seek reimbursement for reasonable travel and out-of-pocket expenses that originate with outside vendors and legal counsel retained by Mercer. The Debtors will indemnify Mercer from any litigation costs associated with actual or threatened actions, proceedings or investigations relating to or arising out of its services provided to the Debtors, except for the firm's gross negligence, bad faith or willful misconduct. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, asserts that one of the most critical elements of the Debtors' ability to successfully reorganize is a proper incentive program for their employees. With Mercer's assistance, the Debtors will be able to conform their compensation programs to current market trends and thereby develop an appropriate program at a reasonable cost, Mr. Brady maintains. He notes that the Debtors have filed two motions to continue their employee compensation programs. After extensive discovery and two hearings, the Debtors only were able to obtain partial relief on their request to make payments under their Business Optimization Bonus plan. The Debtors believe that it is important to hire Mercer in order to: (a) evaluate, develop, and revise compensation and benefits programs designed to meet market standards and the Debtors' important goal of adequately compensating employees; (b) enable them to inform parties-in-interest, including the Creditors Committee, of market comparables; and (c) provide evidence to the Court, if necessary, as to the reasonableness of any program. John Dempsey, a principal with Mercer, assures the Court that the firm is a "disinterested person" pursuant to Sections 101(14) and 1107(b) of the Bankruptcy Code. 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. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WESTERN APARTMENT: Files Disclosure Statement in Hawaii ------------------------------------------------------- Western Apartment Supply & Maintenance Company unveiled to the U.S. Bankruptcy Court for the District of Hawaii a Disclosure Statement explaining its Chapter 11 Plan of reorganization. Under the plan, Administrative Expense Claims, estimated at $300,000, will be paid in full. Likewise, Priority claims, estimated at $266,708, will also be paid in full. The Debtor tells the Court that La Jolla Loans, Inc.'s $11.9 million secured claim is currently subject to ongoing litigation that could significantly reduced the allowed portion of the claim. The Debtor says that the allowed claim, as determined after the litigation, will be paid in full with interest at the earlier of: (a) the sale of the Maui Oceanfront Inn; (b) the refinance of a loan on the Maui Inn; or (c) a foreclosure following the 48th month after the effective date of the plan. The Debtor discloses that the principal balance of the Santero Claim is $482,000 and is secured by a second mortgage lien of the Maui Inn. Santero's allowed claim will be paid in full with interest at the earlier of: (a) the sale of the Maui Inn; (b) the refinance of a loan on the Maui Inn sufficient to pay the claim in full; or (c) a foreclosure following the 48th month after the effective date of the plan. Santero's claim will be automatically subordinated to any new financing in an amount not to exceed the payoff balance of La Jolla. Phoenix Asset Advisors, which holds a $1.5 million secured claim against the Maui Inn in a third position, has agreed to subordinate its claim and will receive no payment under the Plan unless all classes, including unsecured claims, are paid in full. The Debtor tells the Court that the principal balance of the Marc Hotels Secured Claim is $311,000. The Debtor says that since Marc Hotels' claim is behind Phoenix Asset's, the Debtor will reserve the right to object to the claim as a secured claim. If the claim is allowed as an unsecured claim, it will be treated as such. Otherwise, the allowed claim will be paid in full at the earlier of: (a) the sale of the Maui Inn; (b) the refinance of a loan on the Maui Inn sufficient to pay the claim in full; or (c) a foreclosure following the 48th month after the effective date of the plan. Holders of Allowed General Unsecured Claims will be paid in full, without interest, from their pro rata portion of any available proceeds from the sale of the Maui Inn. If Maui Inn is not sold, the claims will be paid in full at 7% interest per annum, in quarterly installments of an amount necessary to amortize the claims over a 16-quarter period. Carroll Davis holds shareholder loans against the Debtor. Mr. Davis' shareholder loans will be subordinated to the payment of all other classes and will only be entitled to retain his equity to the extent that all claims are paid in full with interest except any claim of Phoenix Asset. Grand pacific Financing Corporation will receive nothing under the Plan. About Western Apartment Based in San Diego, California, Western Apartment Supply & Maintenance owns a 73-room hotel in Maui, Hawaii known as the Best Western Maui Oceanfront Inn. The Company filed for chapter 11 protection on Jan. 12, 2004 (Bankr. D. Hawaii Case NO. 04-00072). That case was dismissed on May 16, 2006. The Debtor filed its second chapter 11 petition on Apr. 18, 2006 (Bankr. S.D. Calif. Case No. 06-00821). Gustavo E. Bravo, Esq., and John L. Smaha, Esq., at Smaha and Daley, represent the Debtor. When the Debtor filed for chapter 22, it listed total assets of $18,045,054 and total debts of $18,131,069. On June 30, 2006, at the request La Jolla Loans Inc., a secured creditor, the U.S. Bankruptcy Court for the Southern District of California transferred the Debtor's case to the U.S. Bankruptcy Court for the District of Hawaii on July 1, 2006 (Bankr. D. Hawaii Case No. 06-00459). No Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy proceedings. WESTERN APARTMENT: Disclosure Statement Hearing Set on October 16 ----------------------------------------------------------------- The Hon. Robert B. Faris of the U.S. Bankruptcy Court for the District of Hawaii set a hearing at 10:30 a.m., on Oct. 16, 2006, to consider the adequacy of the Disclosure Statement explaining Western Apartment Supply & Maintenance Company's Chapter 11 Plan of Reorganization. Based in San Diego, California, Western Apartment Supply & Maintenance owns a 73-room hotel in Maui, Hawaii known as the Best Western Maui Oceanfront Inn. The Company filed for chapter 11 protection on Jan. 12, 2004 (Bankr. D. Hawaii Case NO. 04-00072). That case was dismissed on May 16, 2006. The Debtor filed its second chapter 11 petition on Apr. 18, 2006 (Bankr. S.D. Calif. Case No. 06-00821). Gustavo E. Bravo, Esq., and John L. Smaha, Esq., at Smaha and Daley, represent the Debtor. When the Debtor filed for chapter 22, it listed total assets of $18,045,054 and total debts of $18,131,069. On June 30, 2006, at the request La Jolla Loans Inc., a secured creditor, the U.S. Bankruptcy Court for the Southern District of California transferred the Debtor's case to the U.S. Bankruptcy Court for the District of Hawaii on July 1, 2006 (Bankr. D. Hawaii Case No. 06-00459). No Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy proceedings. WHITE RIVER: Court Okays McGuireWoods LLP as Bankruptcy Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana allowed the Official Committee of Unsecured Creditors appointed in White River Coal, Inc. and its debtor-affiliates' chapter 11 cases to employ McGuireWoods LLP, as its bankruptcy counsel, nunc pro tunc to May 22, 2006. As reported on the Troubled Company Reporter on June 20, 2006, McGuireWoods will: (a) advise the Committee with respect to its powers and duties under section 1103 of the Bankruptcy Code; (b) take all necessary action to preserve, protect and maximize the value of the Debtors' estates for the benefit of the Debtors' unsecured creditors, including but not limited to, investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' businesses and the desirability of the continuance of such business, and any other matter relevant to the case or to the formulation of a plan; (c) prepare on behalf of the Committee motions, applications, answers, orders, reports and papers that may be necessary to the Committee's interests in these chapter 11 cases; (d) participate in the formulation of a plan as may be in the best interests of the Committee and the unsecured creditors of the Debtors' estates; (e) represent the Committee's interests with respect to the Debtors' efforts to obtain post petition secured financing; (f) advise the Committee in connection with any potential sale of assets; (g) appear before the Court, any appellate courts, and protect the interests of the Committee and the value of the Debtors' estates before the courts; (h) consult with the Debtors' counsel on behalf of the Committee regarding tax, intellectual property, labor and employment, real estate, corporate, litigation matters, and general business operational issues; and (i) perform all other necessary legal services and provide all other necessary legal advice to the Committee in connection with the Debtors' chapter 11 cases. Mark E. Freedlander, Esq., a partner at McGuireWoods, told the Court that the Firm's attorneys bill between $190 and $525 per hour while paralegals bill $145 per hour. Mr. Freedlander assured the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Based in Hazleton, Indiana, White River Coal, Inc., operates a mining company. The Company and its affiliates filed for chapter 11 protection on May 22, 2006 (Bankr. S.D. Ind. Case Nos. 06-70375 through 06-70379). C.R. Bowles, Jr., Esq., at Greenbaum Doll & McDonald PLLC, represents the Debtors in their restructuring efforts. When the Debtor filed for protection from their creditors, they listed assets totaling $2 million and debts totaling $35 million. WHITE RIVER: Bankruptcy Court Okays Keat Bumb as Local Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana gave Whiter River Coal, Inc., and its debtor-affiliates permission to employ Keat, Bumb, Vowels & LaPlante, PC, as their local counsel, nunc pro tunc to May 22, 2006. Keat Bumb is expected to: a) serve as attorneys of record in all aspects of these cases, except for any matters for which a special counsel for conflicts is employed, and in any adversary proceedings commenced in connection with these cases, except for any matters for which a special counsel of conflicts is employed, and to provide representation and legal advice to the Debtors throughout these cases; b) consult wit the U.S. Trustee, any statutory committee and its counsel, any unofficial committee and its counsel, and all other creditors and parties in interest concerning the administration of these cases; c) take all necessary steps to protect and preserve the Debtors' estates; d) assist in the disclosure and confirmation processes contemplated in these cases; e) assist with and providing counsel regarding coal, energy, mining and environmental matters; and f) provide all other legal services required by the Debtors and assist the Debtors in discharging their duties as debtor-in-possession in connection with these cases. The firm received a retainer of $5,000 from the Debtor on May 18, 2006. The customary billing rates for the firm's professionals are: Designations Hourly Rates ------------ ------------ Members $195 Paraprofessionals $65 R. Stephen LaPlante, Esq., a member at Keat Bumb, assures the court that his firm does not hold any interest adverse to the Debtors' estates. Mr. LaPante can be reached at; R. Stephen LaPlante Keat, Bumb, Vowels & LaPlante, PC 915 Main Street, Suite 100 P.O. Box 3326 Evansville, IN 47732-3326 Tel: (812) 421-1911 Fax: (812) 421-1912 Based in Hazleton, Indiana, White River Coal, Inc., operates a mining company. The Company and its affiliates filed for chapter 11 protection on May 22, 2006 (Bankr. S.D. Ind. Case Nos. 06-70375 through 06-70379). C.R. Bowles, Jr., Esq., at Greenbaum Doll & McDonald PLLC, represents the Debtors in their restructuring efforts. When the Debtor filed for protection from their creditors, they listed assets totaling $2 million and debts totaling $35 million. WIDEOPENWEST: Moody's Affirms Caa1 Second Lien Rating ----------------------------------------------------- Moody's affirmed WideOpenWest Finance, LLC's B2 corporate family rating, following the announcement of the Sigecom acquisition (purchase price $114 million) and details of its financing. Moody's also affirmed the company's stable outlook and B2 probability of default rating as well as the B1 first lien rating (LGD3) and the Caa1 second lien rating (LGD6 from LGD5). WOW's B2 corporate family rating reflects high financial risk and Moody's view that WOW's position as an overbuilder magnifies the challenges of an increasingly competitive environment. WOW's upgraded, efficient network, expectations for a fairly rapid decline in leverage, management's strong track record, and the meaningful equity contribution at the time of leveraged buyout, however, support the ratings. Moody's affirmed WOW's corporate family rating given the relatively small size of the Sigecom acquisition and its marginal impact on the company's leverage, despite being completely debt- financed. In Moody's opinion, the integration risk associated with the transaction including the servicing of commercial customers which historically has not been an area of focus for WOW is balanced by the continued strong operating performance of the core operations leading to modest de-leveraging over the near term. Affirmed: * B2 Corporate Family Rating * B2 PDR Stable Outlook * 1st Lien Revolving Credit Facility -- B1, LGD3, 41% * 1st Lien Term Loan -- B1, LGD 3, 41% * 2nd Lien Term Loan -- Caa1, LGD 6, 91% WideOpenWest Finance, LLC, is a competitive broadband provider offering cable TV, high speed Internet services and telephony in competition with incumbent wireline providers of the same services in portions of Illinois, Michigan, and Ohio. The company will also provide these services in Indiana, following the completion of Sigecom acquisition. WOW's annual revenue is more than $300 million and it maintains headquarters in Englewood, Colorado. WINN-DIXIE: Wants to Assume Modified Cardtronics Agreement ---------------------------------------------------------- Pursuant to Sections 105, 363 and 365 of the Bankruptcy Code and Rules 6006 and 9019 of the Federal Rules of Bankruptcy Procedure, Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida to allow them to assume their Modified Agreement with Cardtronics. As part of their store operations, the Debtors provide automatic teller machines on store premises for use by their customers. The ATMs are provided to the Debtors under the terms of an agreement dated Jan. 10, 2001, between Winn-Dixie Stores, Inc., and Cardtronics, assignee of XtraCash ATM, Inc. Under the Prepetition Agreement, Cardtronics is compensated for providing the ATMs through transaction or surcharge fees that are charged to, and paid by, the users of the machines. The Debtors are paid for allowing Cardtronics to place the machines on store premises. The Debtors' payment rights have included an initial up-front license fee of $24,000,000, and through the term a portion of the transaction fees plus monthly maintenance fees and advertising fees. As a result of prepetition store closures, the Debtors were obligated as of their bankruptcy filing to rebate to Cardtronics nearly $2,500,000 of the license fee. Cardtronics filed Claim No. 11170 alleging license rebate fees of $2,493,379, less a set-off of $500,116 for maintenance fees owed to the Debtors. Since their bankruptcy filing, the Debtors have become obligated to rebate to Cardtronics an additional amount of about $5,500,000. D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that due to the significant license rebate obligation owed to Cardtronics, the Debtors carefully considered the option of rejecting the Prepetition Agreement under Section 365(a) of the Bankruptcy Code. After investigating the possibility of obtaining ATM services from alternative providers, Mr. Baker says, the Debtors concluded that they would be best served by negotiating with Cardtronics for assumption of the Prepetition Agreement on agreed terms that would include contractual modifications and license rebate concessions. Negotiations between the parties resulted in the fourth amendment of the Prepetition Agreement. In general terms, the amendment provides: -- exclusive rights for Cardtronics to provide ATMs at the Debtors' stores; -- an extended contract term, continuing through January 31, 2016; -- increased transaction fees intended to reflect market, but not exceeding $1.75 per transaction without mutual consent; -- payment to the Debtors of 50% of the incremental transaction fee increase over $1.00, in lieu of previous transaction fee payment rights; -- elimination of maintenance fee payments; -- implementation of service level standards to be followed by the Debtors, with penalties for non-compliance; -- a new liquidated damages formula that will apply to future store closures, replacing the current license fee rebate formula; -- conversion of the ATM communication protocol from the current dial up platform to the Debtors' frame network; and -- the right for Cardtronics to remove 25 of the 50 lowest performing ATMs. The Postpetition Amendment also requires the Debtors to move to assume the modified Prepetition Agreement with the assumption to be effective as of the effective date of the Debtors' Joint Plan of Reorganization. In conjunction with the assumption of the Modified Agreement, the parties have agreed that: (a) the Debtors will pay a $1,000,000 cure as an administrative expense claim; and (b) the balance of the Debtors' obligation to Cardtronics will be added to the amount of Claim No. 11170, resulting in an aggregate claim of $6,700,000, to be treated as a non- priority unsecured claim and classified as Class 14- Vendor/Supplier Claim under the Plan. Mr. Baker says that the terms of the Postpetition Amendment resolve all other claims by and between the parties under the Prepetition Agreement. 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. 54; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WINN-DIXIE: Wants to Assume Six Negotiated Contracts ---------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Middle District of Florida to assume six contracts. The Debtors also ask the Court to fix the cure amounts for each of the Contracts. As part of their restructuring, the Debtors have reviewed certain contracts and analyzed the consequences and costs of assumption or rejection. The Contracts are: -- a product purchase agreement with Nature's Finest Candles, also known as RD Candle Company, dated October 2, 2003; -- a service agreement with T. K. Keith Company, dated June 1, 2001; -- an agency agreement with Western Union North America, effective as of May 1, 2003; -- product purchase agreements dated May 6, 2004 and February 18, 1998, with Rug Doctor LP; -- sales agreement with Boise Office Supply, now known as Office Max, dated August 26, 2003; and -- an IT-hardware lease with Xerox Special Information Systems, a business unit of Xerox Corp. Having determined that the Contracts are necessary in their business operations, the Debtors negotiated with counterparties as to the terms of the assumption of the Contracts, Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida, relates. According to Ms. Jackson, the Counterparties have agreed to these terms: Counterparty Negotiated Terms ------------ ---------------- Nature's Finest waives right to payment of cure; Claim No. 31458 asserting $56,062 will be disallowed in its entirety T.K. Keith waives right to payment of cure; Claim No. 519 asserting $7,544 and Claim No. 6233 asserting $5,708 will be disallowed in their entirety Western Union agrees that all defaults under the contract have been cured or waived Rug Doctor waives right to cure payment; Claim No. 34105 asserting $146,343 will be disallowed and expunged in its entirety; Claim No. 6451 asserting $509,790 will be allowed as prepetition non-priority unsecured claim for $446,000 Office Max Claim No. 35197 asserting $131,977 will be allowed in the reduced amount of $71,977, which will be paid as cure on the effective date of the Debtor's Joint Plan of Reorganization Xerox SIS Claim No. 8096 asserting $188,478 will be allowed as prepetition non-priority unsecured claim in the reduced amount of $112,800 and paid as cure upon assumption of the contract; waives right to payment of any additional cure. 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. 54; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WORNICK CO: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its B2 Corporate Family Rating for Wornick Company and its B2 rating on the company's 10-7/8% Senior Secured Notes due 2011. Moody's assigned those debentures an LGD3 rating suggesting noteholders will experience a 49% loss in case of default. Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Cincinnati, Ohio, Wornick Co. specializes in the production, packaging, and distribution of shelf-life, shelf- stable, and frozen foods in flexible pouches and semirigid products. YOUNG BROADCASTING: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US advertising and broadcasting sector, the rating agency affirmed its B3 corporate family rating on Young Broadcasting, Inc. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Secured Revolver B2 Ba3 LGD2 17% Secured Term Loan & Secured Incremental Facility B2 Ba3 LGD2 17% 8 3/4% Senior Subor. Notes Due 2014 Caa2 Caa1 LGD5 74% 10% Senior Subor. Notes Due 2011 Caa2 Caa1 LGD5 74% Moody's explains that 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 will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's 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. They 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% to 9%) to LGD6 (loss anticipated to be 90% to 100%). With the addition of KRON-TV in San Francisco, Young Broadcasting Inc. -- http://www.youngbroadcasting.com/-- owns and operates ten television stations in geographically diverse markets, and the national television representation firm, Adam Young Inc., with a total U.S. television household coverage of 6.02%. The company is the fifteenth largest television group based on coverage (excluding network, religious, home shopping and foreign language station groups). Concerning its station acquisition and management policies, the Company has achieved an industry reputation for purchasing stations at below market multiples and operating stations at profit levels superior to those achieved by the prior station owners. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- AFC Enterprises AFCE (46) 172 5 Alaska Comm Sys ALSK (17) 565 24 Alliance Imaging AIQ (23) 682 26 AMR Corp. AMR (508) 30,752 (1,392) Atherogenics Inc. AGIX (124) 211 165 Biomarin Pharmac BMRN 49 469 307 Blount International BLT (123) 465 126 CableVision System CVC (5,362) 9,715 (395) Centennial Comm CYCL (1,062) 1,436 23 Cenveo Inc CVO 24 941 128 Choice Hotels CHH (118) 280 (58) Cincinnati Bell CBB (705) 1,893 18 Clorox Co. CLX (156) 3,616 (123) Cogdell Spencer CSA 126 370 N.A. Columbia Laborat CBRX 10 29 23 Compass Minerals CMP (63) 664 161 Crown Holdings I CCK 144 7,287 174 Crown Media HL CRWN (393) 1,018 133 Deluxe Corp DLX (90) 1,330 (235) Denny's Corporation DENN (258) 500 (68) Domino's Pizza DPZ (609) 395 (4) Echostar Comm DISH (512) 9,105 1,589 Emeritus Corp. ESC (111) 721 (29) Emisphere Tech EMIS 2 43 19 Empire Resorts I NYNY (26) 62 (3) Encysive Pharm ENCY (64) 93 56 Foster Wheeler FWLT (38) 2,224 (93) Gencorp Inc. GY (88) 990 (28) Graftech International GTI (166) 900 250 H&E Equipment HEES 226 707 22 I2 Technologies ITWO (55) 211 (9) ICOS Corp ICOS (36) 266 116 IMAX Corp IMAX (21) 244 33 Immersion Corp. IMMR (20) 47 32 Incyte Corp. INCY (55) 375 155 Indevus Pharma IDEV (147) 79 35 J Crew Group Inc. JCG (83) 362 102 Koppers Holdings KOP (95) 625 140 Kulicke & Soffa KLIC 65 398 230 Labopharm Inc. DDS (92) 143 105 Level 3 Comm. Inc. LVLT (33) 9,751 1,333 Ligand Pharm LGND (238) 286 (155) Lodgenet Entertainment LNET (66) 262 15 McDermott Int'l MDR 125 3,181 64 McMoran Exploration MMR (21) 434 (38) NPS Pharm Inc. NPSP (164) 248 168 New River Pharma NRPH 0 93 68 Omnova Solutions OMN (2) 366 72 ON Semiconductor ONNN (75) 1,423 279 Qwest Communication Q (2,826) 21,292 (2,542) Riviera Holdings RIV (29) 214 7 Rural/Metro Corp. RURL (91) 299 45 Sepracor Inc. SEPR (109) 1,277 363 St. John Knits Inc. SJKI (52) 213 80 Sulphco Inc. SUF 25 34 12 Sun Healthcare SUNH 10 523 (34) Sun-Times Media SVN (261) 965 (324) Tivo Inc. TIVO (33) 132 10 USG Corp. USG (313) 5,657 (1,763) Vertrue Inc. VTRU (16) 443 (72) Weight Watchers WTW (110) 857 (72) WR Grace & Co. GRA (515) 3,612 929 ********* 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 ***