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/raid1/www/Hosts/bankrupt/TCR_Public/061004.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 4, 2006, Vol. 10, No. 236 Headlines ABERCO INC: Voluntary Chapter 11 Case Summary ADELPHIA COMMS: ACC Noteholders Object to CEO Pay Pact Amendments ADELPHIA COMMS: ACC Noteholders Want to Terminate Exclusivity ADELPHIA COMMS: Court Okays Travelers Casualty 2nd Indemnity Pact ADVANCED MICRO: Intel Antitrust Trial Scheduled on April 2009 ADVENTURE PARKS: Taps Fowler Holley to Provide Tax Services ADVENTURE PARKS: Wants Summerford to Provide Forensic Accounting AFFILIATED COMPUTER: Stock Option Probe Delays Form 10-K Filing AFFILIATED COMPUTER: Form 10-K Filing Delay Cues S&P's Downgrade AGILENT TECHNOLOGIES: Earns $227 Million in Third Quarter AMARANTH ADVISORS: Losses Prompt SEC to Probe Hedge Funds AMARANTH ADVISORS: Retains Fortress Investment as Sub-Advisor AMERICAN HOMEPATIENT: U.S. Supreme Ct. Denies Writ of Certiorari AMH HOLDINGS: Moody's Assigns Loss-Given-Default Rating ANCHOR GLASS: Wants 12 Officers & Directors' Claims Disallowed AQUILA INC: Improved Credit Profile Cues Fitch to Upgrade Ratings AT HOLDINGS: Moody's Assigns Loss-Given-Default Ratings ATLANTIC MARINE: Moody's Assigns Loss-Given-Default Ratings ATLANTIS PLASTICS: Moody's Assigns Loss-Given-Default Ratings AUSTIN COMPANY: Files Amended Disclosure Statement in Ohio AXIA INC: Moody's Assigns Loss-Given-Default Rating BALL CORPORATION: Moody's Assigns Loss-Given-Default Ratings BP METALS: S&P Puts Low-B Ratings on Proposed $145 Million Debts CALPINE CORP: Wants to Expand Scope of Miller Buckfire's Duties CALPINE CORP: Bankruptcy Court Approves TIC Settlement Agreement CALPINE CORP: Court OKs Watson Wyatt as Human Resource Consultant CANWEST MEDIAWORKS: Selling Two Radio Stations for $15 Million CAROL CAPOCCIA: Case Summary & 7 Largest Unsecured Creditors CEP HOLDINGS: U.S. Trustee Names Five-Member Creditors Committee CEP HOLDINGS: Trade Vendors Want Cases Converted to Chapter 7 CHEMDESIGN CORP: Court OKs Continued Use of SPC's Cash Collateral COLLINS & AIKMAN: Taps Hilco to Appraise Williamston Equipment COLLINS & AIKMAN: Inks Pact Regarding GM's Lift-Stay Request COMPLETE RETREATS: Intagio Withdraws Credit Reservations Motion COMPLETE RETREATS: Court OKs D.G. Capital's Rule 2004 Exam Request CONTINENTAL MIDWEST: Files for Chapter 11 Protection in Ohio CONTINENTAL MIDWEST: Case Summary & 18 Largest Unsecured Creditors COPELANDS' ENT: Court Okays Clear Thinking as Business Advisor CORUS ENTERTAINMENT: Buying CanWest Radio Stations for $15 Million COUDERT BROTHERS: Wants Wilson Elser to Continue Representation COUDERT BROTHERS: Wants Dunn Koes to Appeal Lyman Suit Verdict CYOP SYSTEMS: June 30 Balance Sheet Upside-Down by $1.2 Million DANA CORP: Wants Court to Bifurcate Reclamation Claim Issues DANA CORP: Wants to Assume & Assign Liberty Property Lease DANA CORP: Court Moves State Court Action Removal Period to May 28 DOWNEAST HERITAGE: Case Summary & 8 Largest Unsecured Creditors EASTMAN KODAK: Names Frank S. Sklarsky as Chief Financial Officer ECHOSTAR DBS: Fitch Assigns BB- Rating to $500 Million Sr. Notes ENCORE MEDICAL: S&P Rates Proposed $215 Million Sr. Notes at CCC+ ENRON CORP: Distributes $3.4 Billion to Creditors ENTERGY NEW: BNY & FGIC Want Interest Payments on Sec. Bonds Now FALCON AIR: Ch. 11 Trustee Has Until Dec. 6 to Decide on Leases FAREPORT CAPITAL: Outlines Financing and Debt Restructuring Deals FORD MOTOR: Improvement to Show in 2007 Second Half, Says CFO GENCORP CORP: Moody's Assigns Loss-Given-Default Ratings GENERAL MOTORS: Nissan COO Says Talks will End in Mid-October GENERAL MOTORS: Amends Bylaws & Corporate Governance Policies GENOA HEALTHCARE: Moody's Assigns Loss-Given-Default Ratings GEORGIA STORAGE: Case Summary & Largest Unsecured Creditor GGNSC HOLDINGS: Moody's Assigns Loss-Given-Default Ratings GREAT ATLANTIC: Moody's Confirms B3 Corporate Family Rating GROWTH GROUP: Case Summary & Two Largest Unsecured Creditors HEALTHESSENTIALS SOLUTIONS: Court Confirms Plan of Liquidation HEALTHSOUTH CORP: Moody's Assigns Loss-Given-Default Rating HENRY EPPS: Voluntary Chapter 11 Case Summary HINES NURSERIES: Moody's Assigns Loss-Given-Default Ratings HRP MYRTLE: Moody's Assigns Loss-Given-Default Ratings to 2 Notes IASIS HEALTHCARE: Moody's Assigns Loss-Given-Default Rating IMC INVESTMENT: Taps Powell Goldstein as General Counsel INGLES MARKETS: Moody's Assigns LGD5 Loss-Given-Default Rating INSIGHT COMMS: Fitch Rates Proposed $2.575 Billion Facility at BB+ INSIGHT HEALTH: S&P Lowers Corporate Credit Rating to B- INTEREP NATIONAL: Moody's Assigns Loss-Given-Default Rating INTERSTATE BAKERIES: Commences Preferential Avoidance Actions INTERSTATE BAKERIES: ABA Trustees, et al. Seek to Remove Reference INTERSTATE BAKERIES: Wants Hilco as Business Asset Appraiser ISLE OF CAPRI: Moody's Assigns Loss-Given-Default Ratings JACOBS ENTERTAINMENT: Moody's Assigns Loss-Given-Default Ratings JAFRA WORLDWIDE: Moody's Assigns Loss-Given-Default Rating JEFF PHILLIPS: Voluntary Chapter 11 Case Summary JMNM COMPANY: Voluntary Chapter 11 Case Summary K&F INDUSTRIES: Moody's Assigns Loss-Given-Default Ratings KAISER ALUMINUM: Agrium Companies React to Claim Objections KAISER ALUMINUM: Cuts 20 Jobs in Ontario, Canada Plant KELLWOOD CO: Earns $7.1 Million in Quarter Ended July 29 KIDS WORLD: Has Viable Cause of Action Against State of Georgia KMART CORP: Wants Summary Judgment on Ashland's $1,303,004 Claim KMART CORP: Court Disallows Seven Real Property Lease Claims KMART CORP: Wants Settled Critical Vendor Claims Disallowed LA REINA: Gets Final Court OK on $9.7MM DIP Pact with Westernbank LAMAR MEDIA: Moody's Assigns Loss-Given-Default Ratings LANCE WELLER: Voluntary Chapter 11 Case Summary LAS VEGAS SANDS: Moody's Assigns Loss-Given-Default Ratings LBI Media: Moody's Assigns Loss-Given-Default Ratings LE GOURMET: Creditors Panel Retains Lowenstein Sandler as Counsel LE GOURMET: Brings In FTI Consulting as Financial Advisor LEGENDS GAMING: Moody's Assigns Loss-Given-Default Ratings LENOX HEALTHCARE: Charles Golden Named as Chapter 7 Trustee LENOX HEALTHCARE: Ch. 7 Trustee Taps Obermayer Rebmann as Counsel LIFECARE HOLDINGS: Moody's Assigns Loss-Given-Default Rating LIN TELEVISION: Moody's Assigns Loss-Given-Default Ratings MARQUEE HOLDINGS: Moody's Assigns Loss-Given-Default Ratings MARSH SUPERMARKETS: Moody's Assigns Caa1 Corporate Family Rating MECACHROME INT'L: Moody's Assigns Loss-Given-Default Ratings MEDIACOM BROADBAND: Fitch Assigns B- Rating to $300 Million Notes MESABA AVIATION: Employees Propose Plan to Save Airline & Jobs METROMEDIA INT'L: Filing Ch. 11 Plan to Consummate Asset Sale METROMEDIA INT'L: Magticom Earns $63.4 Million in Fiscal 2005 MISSION ENERGY: S&P Upgrades Ratings to B With Positive Outlook MONTECITO BROADCAST: Moody's Assigns Loss-Given-Default Ratings MOOG INC: Moody's Assigns Loss-Given-Default Ratings MTR GAMING: Moody's Assigns Loss-Given-Default Ratings NEPTUNE PROPERTIES: Keen Auctioning Lake Tyler Development NORTEL NETWORKS: Partners with Golden West in Wireline Deal NORTH AMERICAN: Confirmation Hearing Set on October 26 NORTH ATLANTIC: Moody's Assigns Loss-Given-Default Ratings NORTHWEST AIRLINES: Provides Earnings Outlook for 2006 OLD WORLD: Case Summary & 18 Largest Unsecured Creditors ONETRAVEL INC: Sells Substantially All Assets to OTV Acquisition OPBIZ LLC: Moody's Assigns Loss-Given-Default Ratings OVERWATCH SYSTEMS: Moody's Assigns Loss-Given-Default Ratings PACER HEALTH: June 30 Stockholders' Deficit Tops $3.4 Million PAXSON COMMS: Moody's Assigns Loss-Given-Default Ratings PENINSULA GAMING: Moody's Places LGD4 Rating to 8-3/4% Sr. Notes PENN TRAFFIC: Chief Executive Officer Robert Chapman Resigns PINNACLE ENTERTAINMENT: Moody's Assigns Loss-Given-Default Ratings PINNACLE ENTERTAINMENT: S&P Affirms BB- Rating With Stable Outlook PLAYTEX PRODUCTS: Moody's Assigns Loss-Given-Default Ratings POKAGON GAMING: Moody's Assigns LGD3 Rating to Senior Unsec. Notes PRESERVE AT WOODLAND: Involuntary Chapter 11 Case Summary RADNOR HOLDINGS: Gets Court Nod to Hire Skadden Arps as Counsel RADNOR HOLDINGS: Committee Retains Greenberg Traurig as Counsel RAPID PAYROLL: Has Until February 28 to File Chapter 11 Plan REAL ESTATE: Court Okays Barr and Barr as Bankruptcy Counsel REAL ESTATE: Wants Chapter 11 Case Dismissed REGAL ENTERTAINMENT: Moody's Assigns Loss-Given-Default Ratings REVLON CONSUMER: Moody's Assigns Loss-Given-Default Ratings REYNOLDS AMERICAN: Moody's Assigns Loss-Given-Default Ratings ROUNDY'S SUPERMARKETS: Moody's Assigns B3 Corporate Family Rating SCOTTISH RE: Ends and Cuts Syndicated Credit Facilities SELECT MEDICAL: Moody's Assigns Loss-Given-Default Rating SEQUA CORPORATION: Moody's Assigns Loss-Given-Default Ratings SINCLAIR TELEVISION: Moody's Assigns Loss-Given-Default Ratings SKILLED HEALTHCARE: Moody's Assigns Loss-Given-Default Rating SOLUTIA INC: Extends Pharmacia and Monsanto Bar Date to Feb. 2007 SOLUTIA INC: Can Implement 2006 Annual Incentive Program SPARTA COMMERCIAL: Recurring Losses Cue Going Concern Doubt STANDARD AERO: Moody's Assigns Loss-Given-Default Ratings STATE STREET: Judge Gerling Dismisses Chapter 11 Case STATER BROS: Moody's Assigns LGD4 Loss-Given-Default Rating STECKLERS TRANSPORT: Case Summary & 20 Largest Unsecured Creditors TEKCONNECT CORP: Case Summary & 20 Largest Unsecured Creditors TENET HEALTHCARE: Inks Five-Year Corporate Integrity Agreement TFS ELECTRONIC: Judge Baum Confirms Amended Liquidating Plan TRIAD HOSPITALS: Moody's Assigns Loss-Given-Default Rating TRIMOL GROUP: Posts $431,000 Net Loss in Second Quarter of 2006 TRIUMPH HEALTHCARE: Moody's Assigns Loss-Given-Default Rating UNITED CUTLERY: Case Summary & 44 Largest Unsecured Creditors VANGUARD HEALTH: Moody's Assigns Loss-Given-Default Rating WARD PRODUCTS: Court Okays McGuireWoods as Bankruptcy Counsel WARD PRODUCTS: Ct. OKs Halperin Battaglia as Panel's Lead Counsel WARD PRODUCTS: Ct. OKs Sommers & Schwartz as Panel's Local Counsel WERNER LADDER: Wants Ct. to Deny Complainant's Stay Relief Demand WESTERN MEDICAL: Hires Polese Pietzsch as Special Counsel WESTERN MEDICAL: Hires Snell & Wilmer as Special Counsel WG PROPERTY: Voluntary Chapter 11 Case Summary WHITE RIVER: Ct. OKs Realization Advisors as Restructuring Officer WHITE RIVER: Taps Buchanan Ingersoll as Special Counsel WINN-DIXIE: Wants to Reject Seven Negotiated Contracts WINN-DIXIE: Court Okays Rejection of 267 Contracts & Leases WINN-DIXIE: Judge Funk Okays Assumption of 12 Store Leases WINN-DIXIE: Leesburg Asset Sold to FL DOT & Edgewood Asset to AJDC W.R. GRACE: Wants Court to Bar 43 Proofs of Claim W.R. GRACE: Wants Anderson Memorial's Lift Stay Request Denied YI INVESTMENT: Case Summary & 11 Largest Unsecured Creditors * Cooley Godward Completes Merger With Kronish Lieb * Robert Caruso Joins A&M as Managing Director in Chicago * Senate OKs Legislation Shielding Tithing from Bankruptcy * Upcoming Meetings, Conferences and Seminars ********* ABERCO INC: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: ABERCO, Inc. 2785 Engle Road Northwest Atlanta, GA 30318 Bankruptcy Case No.: 06-72450 Chapter 11 Petition Date: October 2, 2006 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Diana McDonald, Esq. Suite C George Towne Creek 2800 Peachtree Industrial Boulevard Duluth, GA 30097 Tel: (678) 542-2255 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor does not have any creditors who are not insiders. ADELPHIA COMMS: ACC Noteholders Object to CEO Pay Pact Amendments ----------------------------------------------------------------- Martin J. Bienenstock, Esq., at Weil, Gotshal & Manges LLP, in New York, argued that an expedited consideration and a shortened objection period are unwarranted and inappropriate for the ACOM Debtors and the Official Committee of Unsecured Creditors' request to, among others, amend the existing employment and compensation agreement with William Schleyer, the Debtor's chief executive officer and chairman of the board of directors. Mr. Bienenstock represents Aurelius Capital Management, LP; Catalyst Investment Management Co., LLC; Drawbridge Global Macro Advisors LLC; Drawbridge Special Opportunities Advisors LLC; Elliott Associates, LP; Farallon Capital Management LLC; Noonday Asset Management LP; and Perry Capital LLC, collectively known as the ACC Senior Noteholders. As reported in the Troubled Company Reporter on Sept. 18, 2006 The Debtor and the Official Committee of Unsecured Creditors sought authority from the U.S. Bankruptcy Court for the Southern District of New York to: (a) amend the existing employment and compensation agreement with William Schleyer, the Debtor's chief executive officer and chairman of the board of directors, (b) implement an extended post-closing incentive program for the Debtors' two Executive Vice Presidents, and (c) implement an extended post-closing incentive program for certain key employees at the level of Senior Vice President and below. Mr. Bienenstock states that given the significant economic impact of the proposed amendments to the Schleyer Employment Agreement, the parties-in-interest should be afforded full due process and allowed opportunity to consider the proposed amendments. Mr. Bienenstock notes that under the existing Schleyer Employment Agreement, Mr. Schleyer is entitled to: (a) an award of $10,200,000 in stock of reorganized Adelphia Communications Corporation on a successful stand-alone emergence of the ACOM Debtors, to vest over a two-year period commencing on the first anniversary of the effective date of the plan of reorganization; and (b) a discretionary bonus of up to $5,100,000 in stock of reorganized ACOM. Mr. Bienenstock complains that notwithstanding that the Debtor has not reorganized as a going concern, the ACOM Debtors and the Creditors Committee proposed to convert those equity awards into cash obligations, with the $10,200,000 payable immediately. Mr. Bienenstock argues that converting the $15,300,000 in equity awards into cash payments is wholly inconsistent with the economic benefit of the initial bargain and fails to satisfy the business judgment standard under Section 363(b) of the Bankruptcy Code. Mr. Bienenstock contends that the proposed immediate payment of approximately $5,000,000 in severance to Mr. Schleyer and the bonus of 100% of his $1,275,000 base salary to continue his role through March 2007 also cannot satisfy the business judgment standards under Section 363(b). "At a minimum, [Mr.] Schleyer's compensation should be outcome- neutral and remain linked to ultimate distributions to creditors under a confirmed and consummated chapter 11 plan," Mr. Bienenstock maintains. ACOM Debtors Respond Myron Trepper, Esq., at Willkie Farr & Gallagher LLP, in New York, contends that the ACC Senior Noteholders' objection is not only an attack on Mr. Schleyer and his management team, but an attack on the Creditors' Committee and its advisors. Mr. Trepper relates that the Creditors' Committee did its due diligence and concluded that Mr. Schleyer and his team are important to a successful outcome of the ACOM Debtors' Chapter 11 cases for the creditors. The Creditors' Committee came to understand that the officers included in the Extended Post-Closing Incentive Program are not merely "names on a list," but important elements of an organization, Mr. Trepper informs the Court. "As a comprehensive group, they are uniquely qualified to assist the creditors' representatives in the transition to the post-closing environment." Mr. Trepper contends that since the proposed payment to Mr. Schleyer would have virtually no impact to the ACC Senior Noteholders' recoveries, it would appear that their objection is simply a personal attack on Mr. Schleyer. "The decision as to who should shepherd the estates through their wind-down is no the prerogative of the [ACC Senior Noteholders]. It is a judgment to be made by the [ACOM] Debtors and the Creditors' Committee," Mr. Trepper asserts. According to Mr. Trepper, it is the Creditors' Committee's business judgment that the cost to the estates of Mr. Schleyer's compensation and the Extended Post-Closing Incentive Programs is far exceeded by the value to be delivered to the unsecured creditors through the continued efforts of the management team under Mr. Schleyer's leadership. Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06- 10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue Nos. 149; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADELPHIA COMMS: ACC Noteholders Want to Terminate Exclusivity ------------------------------------------------------------- The ACC Noteholders tell the U.S. Bankruptcy Court for the Southern District of New York that the ad hoc committee of ACC Senior Notes supports their request to terminate the ACOM Debtors' exclusive periods. Aurelius Capital Management, LP; Catalyst Investment Management Co., LLC; Drawbridge Global Macro Advisors, LLC; Drawbridge Special Opportunities Advisors, LLC; Elliott Associates, LP; Farallon Capital Management, LLC; Noonday Asset Management, LP; and Perry Capital, LLC, are holders or investment advisors to certain holders of notes and debentures issued by the Debtor and collectively known as the ACC Senior Noteholders. Calyon New York Branch and the Official Committee of Equity Security Holders also support the ACC Senior Noteholders' request. Calyon joins the ACC Senior Noteholders' request in the event the Court denies Calyon's and certain Banks' requests to terminate the ACOM Debtors' exclusivity periods. Representing the Equity Committee, Gregory A. Blue, Esq., at Morgenstern Jacobs & Blue, LLC, in New York, argued that cause exist to terminate exclusivity: (a) The ACOM Debtors have made no real progress toward negotiating a confirmable consensual plan of reorganization; (b) The ACOM Debtors have violated the Court order dated April 6, 2006, directing them to offer creditors options between a "holdback" plan or a "settlement" plan of reorganization, by entering into the Amended Term Sheet and filing the Fifth Amended Plan of Reorganization; (c) The ACOM Debtors are again improperly using their exclusivity, which has now endured for over four years, as a sword to force a nonconsensual settlement on the ACOM Debtors' estate rather than a shield; and (d) The Debtors have effectively waived exclusivity by proposing the Fifth Amended Plan jointly with the Official Committee of Unsecured Creditors, and ceding exclusivity to the Creditors' Committee entirely with respect to those portions of the Plan that deal with distributions to the Banks. Objections to the Motion Representing the ACOM Debtors, Marc Abrams, Esq., at Willkie Farr & Gallagher LLP, in New York, asserts that the Court should preserve the ACOM Debtors' exclusivity at this critical juncture of their Chapter 11 cases. Representing the ACC II Committee, an ad hoc committee comprised of holders of ACC Notes and Arahova Notes, Jeremy V. Richards, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in Los Angeles, California, contends that the termination of the ACOM Debtors' exclusivity will result in a multiplicity of competing plans of reorganization and lead to the resumption of the Motion In Aid Process. "That will, in turn, likely lead to another settlement, but only after further depletion of the [ACOM] Debtors' assets and possibly years and years of delay," he says. Mr. Richards proposes that the exclusivity should be maintained at least for the limited purpose of allowing the Plan Proponents -- ACOM Debtors and the Official Committee of Unsecured Creditors -- to seek confirmation of the ACOM Debtors' Fifth Amended Plan of Reorganization by October 31, 2006. Accordingly, the Court and all parties-in-interest will know whether there is creditor support for the compromises embodied in the Fifth Amended Plan. The ACC II Committee comprises Murray Capital Management, Inc.; Stark & Roth; Franklin Mutual Advisors, LLC; Citadel Limited Partnership; Avenue Capital Management; Citigroup Financial Products, Inc.; HBK Investments, L.P.; Varde Partners, Inc.; and Lionhart Investments, Ltd. Representing the Official Committee of Unsecured Creditors, David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, argues that notwithstanding that the ACC Senior Noteholders raised disputed factual issues about the loyalties of holders of ACC Notes who support the Fifth Amended Plan, the ACC Senior Noteholders have failed to comply with their own disclosure obligations under Rule 2019 of the Federal Rule of Bankruptcy Procedure. The Rule 2019 Statement of the ACC Senior Noteholders' counsel does not identify the amounts of the ACC Senior Noteholders' claims or interests, or the time of their acquisition. "[the ACC Senior Noteholders] may have only a relatively de minimis amount of ACC Bonds which they are abusing to wreak havoc upon the [Fifth Amended Plan] confirmation process," he contends. Mr. Friedman asserts that the Court should prohibit the ACC Senior Noteholders from participating further in the ACOM Debtors' Chapter 11 cases pursuant to Rule 2019(b). Mr. Friedman argues that the Court should not terminate exclusivity because: (1) the ACC Senior Noteholders do not satisfy any of the factors for terminating exclusivity; (2) the ACOM Debtors did not "waive" exclusivity, and Section 1121(d) of the Bankruptcy Court provides for termination of unexpired exclusivity periods by the court for cause, not on the basis of an alleged waiver by a debtor; (3) the ACC Senior Noteholders cannot propose a plan because: (a) they lack standing to move to terminate exclusivity or to propose a plan for the ACOM Subsidiary Debtors because they are not creditors of any ACOM Subsidiary Debtors according to their Rule 2019 Statement; and (b) the ACC Senior Noteholders cannot propose any plan in good faith as long as they are represented by Weil, Gotshal & Manges LLP, in New York, which has its own actual and direct conflicts of interest in connection with the ACOM Debtors' estates; and (4) termination of exclusivity will be an expensive and litigious exercise in futility. The Ad Hoc Adelphia Trade Claims Committee supports the Creditors Committee's statements. Highfields Capital Management and Tudor Investment Corporation, and W.R. Huff Asset Management Co., L.L.C., also believe that terminating the ACOM Debtors' exclusivity will only cause further expense and delay, and jeopardizes the consummation of the Fifth Amended Plan. JPMorgan Chase Bank, N.A., administrative agent under the Second Amended And Restated Credit Agreement dated December 19, 1997, states that any chapter 11 plan proposed and confirmed in the ACOM Debtors' Chapter 11 cases must reflect the salient terms of the FrontierVision Stipulation dated July 27, 2006, which, among other things, addresses the FrontierVision Lenders' rights to post- effective date indemnification. The Ad Hoc Committee of Arahova Noteholders asks Judge Gerber that if he determines that the ACOM Debtors' exclusivity should be terminated or modified, any Court order permitting the ACC Senior Noteholders, or any other party, to propose and solicit a separate plan of reorganization should be limited to the proposal of a chapter 11 plan for Arahova Communications, Inc., that either: (i) satisfies the claims of Arahova Noteholders in full plus interest through the date of payment; or (ii) distributes all of the equity to the Arahova Noteholders in full satisfaction of their claims. Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, asserts that: -- maintaining the ACOM Debtors' exclusivity to permit solicitation of the Fifth Amended Plan without the confusion of competing plans presents the best path to a solution of the ACOM Debtors' cases; -- the ACC Senior Noteholders must prove that: * the ACOM Debtors are using extensions of exclusivity as a tactical device to force other parties to accede to a plan; * the ACOM Debtors are delaying the filing of a plan; * the ACOM Debtors' operations are grossly mismanaged; or * there is acrimonious feuding among the ACOM Debtors' principals; -- purported exclusion of the ACOM Debtors' prepetition lenders from settlement negotiations does not warrant a termination of exclusivity; and -- the ACOM Debtors did not violate Court orders regarding the MIA Process or neutrality by proposing a plan embodying a settlement negotiated by the real parties-in- interest in the Intercreditor Dispute after months of extensive, arm's-length negotiations. Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06- 10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue Nos. 149; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADELPHIA COMMS: Court Okays Travelers Casualty 2nd Indemnity Pact ----------------------------------------------------------------- The Honorable Robert E. Gerber, U.S. Bankruptcy Judge for the Southern District of New York, approved the Second Indemnity Contract between the ACOM Debtors and Travelers Casualty and Surety Company of America. As reported in the Troubled Company Reporter on Aug. 29, 2006, the Debtor and its debtor-affiliates sought permission from the Court to: (i) enter into a second secured postpetition surety credit agreement with Travelers Casualty and Surety Company of America and approving its terms; and (ii) provide collateral to Travelers to secure obligations pursuant to the Second Indemnity Contract. Pursuant to the First Indemnity Contract approved by the Court on April 8, 2004, Travelers issued bonds covering certain obligations of the ACOM Debtors. Under the terms of the First Indemnity Contract, the Debtors are required to provide collateral, consisting primarily of letters of credit, to Travelers for all bonds issued by Travelers, in an amount equal to between 75% to 100% of the penal amount of the outstanding bonds. Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, LLP, in New York, discloses that as of August 18, 2006, and in accordance with the terms of the First Indemnity Contract, the ACOM Debtors have issued letters of credit with an aggregate face amount of approximately $59,800,000 in favor of Travelers and, in addition, have posted approximately $1,500,000 of cash collateral. In connection with the closing of the ACOM Debtors' sale of substantially all of their assets, Time Warner NY Cable, LLC, and Comcast Corporation have issued bonds to replace substantially all of the bonds issued by Travelers under the terms of the First Indemnity Contract, thus, significantly reducing the likelihood that any of the Existing Bonds will be drawn upon. As a result, Travelers has agreed to reduce significantly the amount of collateral that the ACOM Debtors are required to maintain in respect of the Existing Bonds. Under the terms of the Second Indemnity Contract, the ACOM Debtors are required to deliver to Travelers $12,500,000 in cash, which will serve as collateral for the ACOM Debtors' obligations in respect of the Existing Bonds. After the delivery of the Cash Collateral to Travelers, Travelers will release any and all other collateral that it currently held in respect of the Existing Bonds, consisting of letters of credit and cash collateral with an aggregate face amount of approximately $61,300,000. In addition, under the terms of the Second Indemnity Contract, and subject to limited exceptions, all of the Cash Collateral will be returned to the ACOM Debtors on the third anniversary of the effective date of the Second Indemnity Contract. Other principal provisions of the Second Indemnity Contract include: Term: The Second Indemnity Contract and any other Surety Documents will remain in full force and effect until terminated. The ACOM Debtors may terminate participation in the Second Indemnity Contract by providing 30 days advance written notice to Travelers. In addition, Travelers has certain termination rights based upon, among other things, the occurrence and continuation of certain Events of Default. Security Interest: The ACOM Debtors' obligations to Travelers will be secured by a first priority perfected security interest in favor of Travelers in all of the Collateral, which will remain perfected without taking further action, including without limitation, any recordation of any instrument of mortgage or assignment. Collateral: On the Effective Date, the ACOM Debtors will deposit $12,500,000 into a control account, which will secure the payment and performance obligations of the ACOM Debtors in respect of the Existing Bonds. Additionally, the ACOM Debtors will provide collateral to Travelers for all new bonds issued by Travelers after the Effective Date in an amount equal to 100% of the penal amount of those New Bonds. Payment of Obligations: The ACOM Debtors will continue to make payments authorized by the Court for all obligations covered by any bond issued by Travelers and: * will make payments on all claims received to date, which, to the extent not otherwise paid by the ACOM Debtors, will be satisfied with Collateral held by Travelers; and * will otherwise satisfactorily cure any defaults under prepetition obligations which are covered by any Bonds only to the extent authorized, as applicable, by the Court. Defaults: Various events relating to any Indemnitor, Bond or a contract in respect of which a Bond is issued constitute Events of Default under the Second Indemnity Contract and would allow Travelers to, among other things, terminate the issuance of Bonds, cancel any Bonds and declare all or any portion of the Indemnitors' obligations under the Second Indemnity Contract and the Bonds immediately due and payable. Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06- 10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue Nos. 149; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADVANCED MICRO: Intel Antitrust Trial Scheduled on April 2009 ------------------------------------------------------------- The U.S. District Court for the District of Delaware is set to begin trial on Advanced Micro Devices Inc.'s antitrust case against Intel Corp. on April 2009, Don Clark at The Wall Street Journal reports. According to The Journal, the Honorable Joseph Farnan had earlier dismissed a substantial portion of AMD's complaint saying they were not covered by U.S. law. The rival chipmakers are embroiled in a dispute over Intel's alleged monopolistic practices. Reuters reports that AMD has accused Intel of gaining market share by forcing major customers not to buy AMD products and offering rebates. Intel countered by asking the Court to dismiss AMD's case. According to Reuters, Judge Farnan ruled that AMD failed to show proof that Intel's practices had a direct effect on AMD's operations, in order to permit a U.S. antitrust claim. Mr. Clark writes that AMD and Intel continue to disagree over the meaning of the Court's ruling. The Court has directed the two companies to work with a court-appointed special master on discovery-related matters. About AMD Based in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- is a global provider of microprocessor solutions for computing, communications and consumer electronics markets. * * * As reported in the Troubled Company Reporter on July 25, 2006, Moody's Investors Service placed the ratings of Advanced Micro Devices, Inc. under review for possible downgrade following an agreement to acquire ATI Technologies for approximately $5.4 billion. Financing is expected to consist of approximately $4.2 billion of cash and $1.2 billion of AMD's common stock. ATI, with approximately $2.2 billion of latest twelve month revenues, is a leading vendor or graphics processors that enhance the display of PC's, portable devices, and other consumer electronics devices and is based in Toronto Canada. The acquisition, which has been approved by both boards of directors, is expected to close by the fourth quarter of 2006 and is subject to customary approvals and consents. Ratings under review for downgrade include the Company's Ba3 Corporate Family Rating; B1 rating of its Senior unsecured note $390 million due 2012; (P)Ba3 rating of its Senior secured shelf registration; (P)B1 rating of its Senior unsecured shelf registration; (P)B2 rating of its Subordinated shelf registration; and (P)B3 rating of its Preferred stock shelf registration. ADVENTURE PARKS: Taps Fowler Holley to Provide Tax Services ----------------------------------------------------------- Adventure Parks Group, LLC, and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Middle District of Georgia to employ Fowler, Holley, Rambo, Haynes & Stavley, P.C., as accountants. As accountants, Fowler Holley will be required to undertake accounting, auditing and tax services that include: * monthly financial reports; * quarterly statement of disbursements; * monthly bank account reconciliation report; * monthly check register report; * monthly tax report; * year-end audited financial statements; * federal, state and local tax returns; and * monthly summary of office or owner compensation and personnel and insurance coverage. Carlton W. Holley, a shareholder of Fowler Holley, tells the Court that the firm's professionals bill: Professional Hourly Rate ------------ ----------- Curtis G. Fowler, CPA, PFS, CFP $260 Carlton W. Holley, CPA $250 Richard A. Stalvey, CPA $250 C. Wayne Rambo, CPA, CVA $250 James E. Folsom, CPA $215 R. Arden DeLoach, Jr., CPA $190 G. Michael Walker, CPA $180 Josie Miller, CPA $180 Robert D. Elliott, CPA $135 Tally M. Wisenbaker, III $135 Emily A. Browning $135 Judith A. Sims $100 Melissa Rhodes $95 Whitney H. Jacobs $95 Mr. Holley assures the Court that his firm does not hold or represent any interest adverse to the Debtors or their estates. Headquartered in Valdosta, Georgia, Adventure Parks Group, LLC, is the holding company of Wild Adventures and Cypress Gardens. Wild Adventures operates an amusement park in Valdosta, Georgia while Cypress operates an amusement park in Winter Haven, Florida. The Company, along with Wild Adventures and Cypress Gardens, filed for chapter 11 protection on Sept. 11, 2006 (Bankr. M.D. Ga. Case Nos. 06-70659 through 06-70661). George H. McCallum, Esq., James P. Smith, Esq., and Ward Stone, Jr., Esq., at Stone & Baxter, LLP, represent the Debtors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $50 million and $100 million. ADVENTURE PARKS: Wants Summerford to Provide Forensic Accounting ---------------------------------------------------------------- Adventure Parks Group, LLC, and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Middle District of Georgia to employ Summerford Accountancy, P.C., to perform accounting and forensic services. Summerford will assist the Debtors in investigating the acts and conduct of management as related to the property, liabilities and financial condition of the Debtors, or any matter, which may affect the administration of the Debtors' estates or their right to a discharge. Summerford's investigation will also relate to the operations of the Debtors' businesses and desirability of their continuance, the source of any money or property acquired or to be acquired by the Debtors for the purposes of consummating aplan and the consideration given or offered, the formulation and prosecution of claims for business interruption, and any other matter relevant to the cases of formulation of a plan. Ralph Q. Summerford, a shareholder at Summerford Accountancy, tells the Court that the firm's professionals bill: Professional Hourly Rate ------------ ----------- Donald H. Minyard, Ph.D., CPA/ABV, $325 BVAL, CDFA, CFE Ralph Q. Summerford, CPA/ABV, $315 CFE, CIRA, CVA Alton Sizemore, CPA, CFE $265 Kelly J. Todd, CPA/ABV, CVA $265 Wade Morgan, CEECS $215 Lisa Robbins, CFE $150 Lindsay Gill, CFE $150 Alicia Misso, Forensic Analyst $150 Dana Steely, Forensic Analyst $115 Administrative $65 - $105 Mr. Summerford assures the Court that his firm does not hold or represent any interest adverse to the Debtors or their estates. Headquartered in Valdosta, Georgia, Adventure Parks Group, LLC, is the holding company of Wild Adventures and Cypress Gardens. Wild Adventures operates an amusement park in Valdosta, Georgia while Cypress operates an amusement park in Winter Haven, Florida. The Company, along with Wild Adventures and Cypress Gardens, filed for chapter 11 protection on Sept. 11, 2006 (Bankr. M.D. Ga. Case Nos. 06-70659 through 06-70661). George H. McCallum, Esq., James P. Smith, Esq., and Ward Stone, Jr., Esq., at Stone & Baxter, LLP, represent the Debtors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $50 million and $100 million. AFFILIATED COMPUTER: Stock Option Probe Delays Form 10-K Filing --------------------------------------------------------------- Affiliated Computer Services, disclosed that it is not in a position to file its annual report on Form 10-K for its fiscal year ended June 30, 2006 by Sept. 28, 2006, which was the additional time period permitted under the SEC rules for an issuer to be deemed to have filed in a timely manner. ACS is conducting an internal investigation into its historical stock option practices during the period 1994 to date and related disclosure in its Form 10-Q, filed May 15, 2006, in response to a pending informal investigation by the Securities and Exchange Commission and a grand jury subpoena issued by the United States Attorney for the Southern District of New York. The internal investigation is ongoing, and is expected to be completed in the Company's second fiscal quarter. The Company will not be in a position to determine the timing for the filing of its Form 10-K until the investigation is complete and the Company's independent auditors have had the opportunity to review the investigation's findings. The Company has notified the New York Stock Exchange, Inc., that the Company failed to file its Form 10-K in a timely manner, and, as a result, the Company is subject to the procedures specified in the NYSE's listed company manual. As a result, among other things, the NYSE will monitor the Company and the filing status of the Form 10-K. If the Company has not filed its Form 10-K within six months of its filing due date, the NYSE will determine whether the Company should be given up to an additional six months to file its Form 10-K or may instead commence suspension and delisting procedures. The Company expects to receive a letter from the NYSE regarding these procedures. In addition, the Company has received an amendment, consent, and waiver from the lenders under its March 2006 Credit Facility with respect to, among other provisions, certain of the covenants of the Company under the credit facility, including the requirement that the Company deliver audited financial statements within 90 days of the end of its fiscal year. Approximately $2 billion in borrowings are outstanding under the credit facility and the amendment, consent, and waiver requires that audited financial statements be obtained by Dec. 31, 2006. Headquartered in Dallas, Texas, Affiliated Computer Services, Inc., (NYSE: ACS) -- http://www.acs-inc.com/-- provides business process outsourcing and information technology solutions to commercial and government clients. AFFILIATED COMPUTER: Form 10-K Filing Delay Cues S&P's Downgrade ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating and senior secured ratings on Dallas, Texas-based Affiliated Computer Services, Inc. to 'B+' from 'BB'. The ratings remain on CreditWatch with negative implications where they were placed on Jan. 27, 2006. "The ratings downgrade and CreditWatch follows the company's announcement that it is not in a position to file its annual report on Form 10-K for its fiscal year ended June 30, 2006, by Sept. 28, 2006, which was the additional time period permitted under the SEC rules for an issuer to be deemed to have filed in a timely manner," said Standard & Poor's credit analyst Philip Schrank. The company said that it would not be in a position to determine the timing for the filing of its Form 10-K until its internal investigation is complete and the company's independent auditors have had the opportunity to review the investigation's findings. The company has received an amendment, consent, and waiver from the lenders under its March 2006 credit facility with respect to, among other provisions, certain of the covenants of the company under the credit facility, including the requirement that the company deliver audited financial statements within 90 days of the end of its fiscal year. Approximately $2 billion in borrowings are outstanding under the credit facility and the amendment, consent, and waiver requires that audited financial statements be obtained by Dec. 31, 2006. Additionally, the company has filed a lawsuit after receiving a letter from persons claiming to hold certain of its senior notes advising the company that it was purportedly in default of its covenants under a June 6, 2005, bond offering. Standard & Poor's will monitor the progress being made with regard to the filing of audited financial statements and reassess the rating as the December 31 deadline approaches. Standard & Poor's will also monitor the company's available sources of liquidity, as well as negotiations with lenders and other triggering events that might cause a payment acceleration of ACS' debentures. AGILENT TECHNOLOGIES: Earns $227 Million in Third Quarter --------------------------------------------------------- Agilent Technologies, Inc., has filed its financial statements for the three months ended July 31, 2006, with the Securities and Exchange Commission. The Company reported $227 million of net income on $1.4 billion of net revenues for the three months ended June 30, 2006, compared to $104 million of net income on $1 billion of revenues for the same period in 2005. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?12d7 Agilent Technologies Inc. (NYSE: A) -- http://www.agilent.com/-- is the world's premier measurement company and a technology leader in communications, electronics, life sciences and chemical analysis. The company's 20,000 employees serve customers in more than 110 countries. Agilent had net revenue of $5.1 billion in fiscal 2005. * * * Standard & Poor's assigned on April 13, 2005, BB+ credit ratings, with a positive outlook, to Agilent Technologies. S&P raised its rating outlook on Agilent on Aug. 15, 2005, to positive, but left the company's corporate credit and senior unsecured debt ratings unchanged. In December 2005, Moody's Investors Service affirmed their credit ratings of Agilent, leaving unchanged the senior implied debt rating of Ba2 and outlook rating of stable. Moody's also affirmed the speculative grade liquidity rating of SGL-1 in June 2006. AMARANTH ADVISORS: Losses Prompt SEC to Probe Hedge Funds --------------------------------------------------------- The Securities and Exchange Commission is investigating the reason behind Amaranth Advisors' big losses, Hartford Courant reports, citing a top SEC official. The probe centers on whether Amaranth, whose losses resulted from bad bets on natural gas prices, misled its investors, the report says. The DailyFX relates that Amaranth's investors saw the value of their investment decline by 35% after being up as much as 20% this year -- an overall draw down of 50% all in a remarkably short period of time. Some institutional clients like San Diego County Employees Retirement Association were badly hurt. SDCERA, which oversees more than $7 billion for its retirees and employees, invested $175 million in Amaranth last year. But with Amaranth down about 35% so far in 2006, SDCERA may have lost more than $50 million on its investment this year alone, DailyFX reveals. SEC Commissioner, Annette L. Nazareth said, "From an enforcement perspective, it's really whether investors received misleading information." Ms. Nazareth, added that SEC is not focused on the roles of big United States banks that did business with Amaranth in the months leading up to its disclosure last week of about $6 billion in losses. "The banks and broker-dealers don't seem to have been exposed to those losses and have done a good job managing their risk. SEC is interested in further oversight of hedge funds because of concerns that major implosions could pose systemic risks. In the Amaranth case, however, any such risks appear to have been contained," Ms. Nazareth said. Amaranth faces multiple regulatory probes and possible lawsuits in the wake of its losses. Connecticut Attorney General Richard Blumenthal had previously disclosed that he is collecting evidence and reviewing facts concerning the large losses at Amaranth. Amaranth Advisors, based in Greenwich, Connecticut with offices in Toronto, Canada, London, England and Singapore, is an investment management firm. Amaranth specializes in a broad spectrum of alternative investments and trading strategies, through a multi- strategy investment fund and fund dedicated to long-short equities. AMARANTH ADVISORS: Retains Fortress Investment as Sub-Advisor ------------------------------------------------------------- Amaranth Advisors has retained Fortress Investment Group LLC, a New York based $24 billion alternative asset manager, as a sub- advisor to the Amaranth multi-strategy funds. Fortress will assist the Amaranth team in facilitating the orderly disposition of the funds' investment assets. Amaranth announced on Friday that its multi-strategy funds had suspended redemptions to allow for the sale of their investment assets in an orderly fashion so as to generate liquidity for investors. Terms of the sub-advisory agreement were not disclosed, but Amaranth indicated that the economic burden of the fees associated with this arrangement will be borne by Amaranth and not the Amaranth funds. "We look forward to bringing together talented professionals from both Amaranth and Fortress with the goal of maximizing value for our investors. Fortress is highly regarded in the investor community and will provide the Amaranth team with an independent perspective, as well as potential strategic support," said Nick Maounis, Amaranth's Chief Executive Officer. Peter L. Briger, Jr., principal of Fortress added, "Fortress expects to provide strategic and tactical advice to Amaranth with the objective of maximizing value for investors, and will work with Nick and the Amaranth team to preserve the value of the platform that they have created." Amaranth Advisors, based in Greenwich, Connecticut with offices in Toronto, Canada, London, England and Singapore, is an investment management firm. Amaranth specializes in a broad spectrum of alternative investments and trading strategies, through a multi- strategy investment fund and fund dedicated to long-short equities. * * * Amaranth faces multiple regulatory probes and possible lawsuits after disclosing in September that it had lost 35%, or approximately $6 billion, of the value of its natural gas bets due to a dramatic move in gas prices. Amaranth transferred its energy portfolio to Citadel Investment Group and J.P. Morgan Chase & Co. following the loss announcement. AMERICAN HOMEPATIENT: U.S. Supreme Ct. Denies Writ of Certiorari ---------------------------------------------------------------- The U.S. Supreme Court has denied the petition for writ of certiorari filed by the holders of American HomePatient, Inc.'s senior debt. The Supreme Court's denial of the petition for writ of certiorari effectively concludes the debt holders' efforts to overturn the orders confirming the Company's plan of reorganization, which was originally confirmed by the Bankruptcy Court in 2003. About American HomePatient American HomePatient, Inc., is one of the United States' largest home health care providers with 274 centers in 35 states. Its product and service offerings include respiratory services, infusion therapy, parenteral and enteral nutrition, and medical equipment for patients in their home. American HomePatient and its debtor-affiliates filed for chapter 11 protection on Aug. 5, 2002 (Bankr. M.D. Tenn. Case No. 02-08915). Glenn B. Rose, Esq., at Harwell Howard Hyne Gabbert & Manner, PC, represents the Debtors. Houlihan Lokey Howard & Zukin Capital served as the Company's Financial Advisors. American HomePatient sought and obtained confirmation of a chapter 11 plan in May 2003 that forced a restructuring its long-term debt obligations to its secured lenders, promised to full payment to unsecured creditors with interest, and left shareholders unimpaired. The plan took effect in July 2003. At June 30, 2006, the Company's balance sheet showed total assets of $279.97 million and total liabilities of $293.69 million, resulting in a $14.38 million shareholders' deficit. AMH HOLDINGS: 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 U.S. building products sector this week, the rating agency confirmed its B3 Corporate Family Rating for AMH Holdings, Inc. Moody's also revised its rating on the company's $446 million Senior Discount Global Notes Due 2014 to Caa2 from Caa3, and assigned those debentures an LGD5 rating suggesting noteholders will experience a 79% loss in the event of a default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company's subsidiary Associated Materials Holdings Inc.'s subsidiary Associated Materials Incorporated: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $90m Gtd. Sr. Sec. Revolving Credit Facility Due 2009 B3 Ba3 LGD2 11% $165m 9.75% Gtd. Sr. Sub. Global Notes Due 2012 Caa2 B3 LGD4 51% $175m Gtd. Sr. Sec. Term Loan B Due 2010 B3 Ba3 LGD2 11% 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%). AMH Holdings, Inc., through its wholly owned subsidiary, Associated Materials Holdings Inc., and through that subsidiary's wholly owned subsidiary, Associated Materials Incorporated, manufactures and distributes exterior residential building products. ANCHOR GLASS: Wants 12 Officers & Directors' Claims Disallowed -------------------------------------------------------------- Anchor Glass Container Corporation asks the U.S. Bankruptcy Court for the Middle District of Florida to disallow 12 claims filed by its former officers and directors: Claimant Claim No. Type of Claim -------- --------- ------------- Harold Greathouse 1222 unsecured Mark J. Karrenbauer 1421.2 unsecured Darrin Campbell 1459 undefined Richard M. Deneau 1460 undefined Peter T. Reno 1461 undefined Joel A. Asen 1462 undefined James Chapman 1463 undefined Jonathan Gallen 1464 undefined Jonathan Gallen 1464.1 undefined George Hamilton 1465 undefined Timothy F. Price 1466 undefined Lenard B. Tessler 1467 undefined Before the Debtor filed for bankruptcy, the former officers and directors were defendants in two lawsuits pending in the United States District Court for the Middle District of Florida, Tampa Division: (1) A consolidated amended class action entitled Davidco Investors, LLC, individually and on behalf of all others similarly situated v. Anchor Glass Container Corporation, et al.; and (2) A shareholder derivative action entitled Christopher Carmona, derivatively on behalf of Anchor Glass Container Corporation v. Richard M. Deneau, et al. The Claims are Subordinated Claims as described in Anchor Glass' Second Amended Plan of Reorganization, Robert A. Soriano, Esq., at Shutts & Bowen LLP, in Tampa, Florida, relates. Pursuant to the Amended Plan, the Claims were cancelled and extinguished, together with Class 6 Interests. 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. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) AQUILA INC: Improved Credit Profile Cues Fitch to Upgrade Ratings ----------------------------------------------------------------- Fitch upgraded Aquila, Inc.'s ratings: -- Issuer Default Rating to 'B' from 'B-' -- Senior Secured to 'BB/RR1' from 'BB-/RR1' -- Senior Unsecured to 'B+/RR3' from 'B-/RR4' Approximately $1.1 billion of debt is affected. The Outlook is Stable. The upgrade reflects the utility's improved credit profile and improved recovery prospects as a result of ILA's debt reduction and restructuring efforts during the past year. Using proceeds from utility and non-utility asset sales, ILA has reduced debt and debt equivalents by approximately $720 million. Fitch's recovery methodology uses a distressed multiple to determine enterprise valuation. This methodology also considers debt equivalents, like tolling agreements, on a net present value basis. The Stable Rating Outlook reflects Fitch's expectation that ILA's credit metrics will remain within parameters for the 'B' rating category over the next year. Cash flow from operations should benefit from lower working capital needs due to lower commodity prices, lower interest expense due to the retired debt, and lower extraordinary tax payments from the gain on sale of assets. Further debt reductions are possible using proceeds from the sale of ILA's Kansas electric utility, offset by higher capital spending for the Iatan facility funded by a secured bank line. The Kansas utility sale is expected to close for approximately $255 million, exclusive of any working capital adjustments. ILA recently filed in Missouri for an increase in base rates and the implementation of a fuel cost recovery mechanism. The filing also includes a request for recovery of a generation facility like the Aries power project that ILA recently announced it would purchase from Calpine for $158.5 million. Further debt reductions or a favorable outcome in the rate case would improve credit metrics and could result in a ratings upgrade. ILA is a regulated electric and gas utility serving more than 460,000 electric and 900,000 natural gas customers in five Midwestern states. AT 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 B2 Corporate Family Rating for AT Holdings Corporation and its Caa1 rating on the company's 11.75% Senior Discount Global Notes due 2012 Due 2014. Moody's assigned those debentures an LGD5 rating, suggesting noteholders will experience a 92% 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%). AT Holdings Corporation, based in Cleveland, Ohio, through its wholly-owned subsidiaries Argo-Tech Corporation, designs, manufactures and services high performance fuel flow devices primarily for the aerospace industry. ATLANTIC MARINE: 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 B1 Corporate Family Rating for Atlantic Marine Holding Company 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 2012 B1 B1 LGD3 36% Sr. Secured Term Loan due 2013 B1 B1 LGD3 36% 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%). Atlantic Marine provides maintenance, repair, overhaul, and conversion services for military and commercial vessels, as well as manufacturing ship modules and subsections for other shipyards. ATLANTIS PLASTICS: 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 U.S. non-paper packaging sector, the rating agency confirmed its B2 Corporate Family Rating for Atlantis Plastics, 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 ---------- ------- ------- ------ ---------- $25 million revolving credit facility due 2011 B2 B1 LGD3 35% $120 million senior term loan due 2011 B2 B1 LGD3 35% $75 million junior term loan due 2012 Caa1 Caa1 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 Atlanta, Georgia, Atlantis Plastics Inc. -- http://www.atlantisplastics.com/-- manufactures specialty plastic films, and custom molded and extruded plastic products in the United States. AUSTIN COMPANY: Files Amended Disclosure Statement in Ohio ---------------------------------------------------------- The Austin Company and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the Northern District of Ohio an amended disclosure statement explaining their Amended Chapter 11 Plan of Reorganization. Overview of the Plan The Debtors tell the Court that on the effective date, all of their estates will be substantively consolidated for the purposes of distribution and all assets will be transferred to, and will vest in, the Liquidating Trust, principally for the benefit of Creditors. A Liquidating Trustee will be appointed under the Plan and will continue to liquidate all assets, reconcile claims and make Distributions to the Creditors holding Allowed Claims. The Official Committee of Unsecured Creditors will appoint an Administrator to oversee the Liquidating Trustee. Treatment of Claims Under the Amended Plan, Administrative Claims, estimated at $3.8 million, and Priority Tax Claims, estimated at $350,000, will be paid in full. The Debtors say that St. Paul's secured claim of up to $14 million is currently being challenged in an adversary proceeding and the final outcome will determine the extent, amount and character of the claim. In the event that St. Paul is successful in the adversary proceeding, St. Paul's secured claim will paid in full on the later of: (a) the Initial Distribution Date; or (b) as soon as practicable after the claim is allowed by Final Order. Priority Unsecured Claims, estimated between $20,000 to $50,000, will be paid in full, without interest. St. Paul has asserted a security interest in certain of their assets and claimed that certain of the assets are being held in trust for the sole benefit of St. Paul, and thus are unavailable to the Estates for distribution. The Debtors dispute each of St. Paul's theories and have objected or will object to its Claim. However, if St. Paul is successful on one or more of those theories, both the Estimated Amount of General Unsecured Debt and the Estimated Recovery for General Unsecured Claims will be reduced. The Debtors tell the Court that assuming that either St. Paul's Claim is a Secured Claim at the maximum estimated collateral asset value or that those assets are held in trust for the benefit of St. Paul, the estimated amount for General Unsecured Claims will be $49 million with a 15% recovery for unsecured creditors. If St. Paul's entire claim is ruled as a General Unsecured Claim, then the estimated amount will be $56 million with a 25% recovery. The Debtors dispute the entire Contingent, Unliquidated Asbestos Demand Claims and do not believe that they have liability on any of the Demand Claims or that the holders of such Demand Claims are Creditors of their estates. In complete satisfaction of these Demand Claims, holders of Allowed Demand Claims will receive the right to pursue the Asbestos Insurance Proceeds, if any, Demand Claims shall not receive any Distribution under the Plan. Upon the effective date, the holders of Demand Claims will be released from the permanent injunction and may pursue their Demand Claims against Asbestos Insurance Proceeds in a state or federal court of appropriate jurisdiction. On the effective date, equity interests will be cancelled and holders of these interests will receive nothing under the Plan. A full-text copy of the Debtors' Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=061003204555 About Austin Company Headquartered in Cleveland, Ohio, The Austin Company is an international firm offering a comprehensive portfolio of in-house architectural, engineering, design-build, construction management and consulting services. The Company also offers value-added strategic planning services including site location, transportation and distribution consulting, and facility and process audits. The Company and two affiliates filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ohio Lead Case No. 05-93363). Christine M. Pierpont, Esq., at Squire, Sanders & Dempsey, LLP, represents the Debtors in their restructuring efforts. M. Colette Gibbons, Esq., and Victoria E. Powers, Esq., at Schottenstein Zox & Dunn Co., LPA, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. AXIA INC: 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 U.S. building products sector this week, the rating agency revised its Corporate Family Rating for Axia, Inc. to B3 from B2. Additionally, Moody's held its B2 ratings on the company's $25 million Senior Secured Revolver Due 2010, and $150 million Senior Secured Term Loan Due 2012. Moody's assigned those debentures an LGD3 rating suggesting lenders will experience a 31% 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 Houston, Texas, Axia Incorporated, manufactures, markets and distributes productivity enhancing construction tools, formed wire products, industrial bag closing equipment and flexible conveyors through three business units namely Ames, Nestaway and Fischbein. BALL CORPORATION: 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 U.S. non-paper packaging sector this week, the rating agency confirmed its Ba1 Corporate Family Rating for Ball Corporation. Additionally, Moody's 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 ---------- ------- ------- ------ ---------- $715 million sr. secured multi-currency revolver due 2011 Ba1 Ba1 LGD4 52% $35 million sr. secured revolver due 2011 Ba1 Ba1 LGD4 52% $157.2 million sr. secured term loan A due 2011 Ba1 Ba1 LGD4 52% $447.7 million sr. secured term loan B due 2011 Ba1 Ba1 LGD4 52% $133.5 million sr. secured term loan C due 2011 Ba1 Ba1 LGD4 52% $500 million sr. secured term loan D due 2011 Ba1 Ba1 LGD4 52% $550 million sr. unsecured 6.875% notes due Dec 2012 Ba2 Ba1 LGD4 52% $450 million sr. unsecured notes due Mar 2018 Ba2 Ba1 LGD4 52% 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 Broomfield, Colorado, Ball Corporation -- http://www.ball.com/-- offers metal and plastic packaging to the beverage and food industries worldwide. It offers aluminum and steel beverage cans for carbonated soft drinks, beer, energy drinks, and other beverages. BP METALS: S&P Puts Low-B Ratings on Proposed $145 Million Debts ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Cleveland-based custom components manufacturer BP Metals LLC. At the same time, Standard & Poor's assigned its 'BB-' bank loan rating and '1' recovery rating to BP Metals' proposed $120 million first-lien senior secured facilities, reflecting a full expectation of recovery (100%) in the event of a payment default. In addition, Standard & Poor's assigned its 'B-' bank loan rating and '5' recovery rating to the company's proposed $25 million second lien facilities, reflecting a negligible expectation of recovery (0-25%) in a default scenario. The outlook is stable. Proceeds from the issuance will be used to fund a dividend distribution to equity shareholders, as well as to refinance existing debt obligations. BP Metals is a portfolio company of Blue Point Capital Partners, L.P., a middle-market focused private equity sponsor. "The speculative-grade ratings on BP Metals reflect the company's leveraged capital structure and exposure to cyclical end markets," said Standard & Poor's credit analyst James Siahaan. BP Metals was assembled in July 2006 from a group of portfolio companies of Blue Point Capital. The newly integrated company derives its revenues from four distinct operating divisions: * castings (37% of trailing twelve months' revenue); * metal componentry (33%); * metal forgings (20%); and * aluminum and plastic casings (10%). CALPINE CORP: Wants to Expand Scope of Miller Buckfire's Duties --------------------------------------------------------------- Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for authority to expand Miller Buckfire & Co., LLC's responsibilities to include: (a) identifying potential purchasers for certain assets, companies or businesses; (b) assisting with due diligence for potential purchasers, including setting up and managing online data rooms, and facilitating management meetings; (c) evaluating indications of interest and analyzing economic and other provisions of bids received from potential purchasers; (d) negotiating definitive asset purchase agreements; (e) assisting the Debtors and their counsel in executing auctions, as necessary, pursuant to Section 363 of the Bankruptcy Code; and (f) assisting with raising, structuring and negotiating stapled financing products, as needed. If at any time during the Fee Period, a Sale of any Specified Asset is consummated, or an agreement to effect a Sale of any Specified Asset is entered into, and concurrently the Sale is consummated, Miller Buckfire will be entitled to receive a transaction fee, contingent on the consummation of the Sale and payable at its closing, provided that: (a) the minimum Specified Asset Sale Fee for each Sale will equal $750,000; (b) if any Specified Assets are sold as a group, then the percentage used to calculate the Specified Asset Sale Fee will be determined based on the Aggregate Consideration of all Specified Assets included in the grouping; (c) 50% of the first $10,000,000 of Specified Asset Sale Fees paid to Miller Buckfire will be credited against the Completion Fee; and (d) 75% of all Specified Asset Sale Fees paid to Miller Buckfire in excess of $10,000,000 will be credited against the Completion Fee. The Debtors will reimburse Miller Buckfire for any necessary out- of-pocket expenses and other reasonable fees and expenses, including expenses of counsel retained with the Debtors' consent. The Debtors agree to indemnify Miller Buckfire. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, relates that before the entry of the Original Retention Order, the Debtors have contemplated that the scope of Miller Buckfire's employment would include the Additional Services. However, in an effort to efficiently manage professional fees, the Debtors decided to manage their asset divesture program without the assistance of an experienced investment banker. Despite the Debtors' intimate knowledge of their assets, Mr. Cieri contends that the Debtors do not have the same level of knowledge of the ever-changing market for those assets and have found the asset divestiture process to be difficult without the guidance of an experienced investment bank. The Debtors also have had to devote inordinate internal resources to the asset divestiture process, which is a distraction from the primary focus of operating the business. As a result of these difficulties, the Debtors sought Miller Buckfire's assistance in connection with the sale of the Dighton Power Plant and the marketing of the Aries Power Plant. The Debtors found that Miller Buckfire's services in connection with those asset sales were essential to the success of their initiatives. After witnessing Miller Buckfire's important contributions in connection with the sales of the Dighton Power Plant and the marketing of the Aries Power Plant, the Debtors, in consultation with the Official Committee of Unsecured Creditors, determined that it is in the best interests of their assets for the Debtors to expand the scope of Miller Buckfire's services to include the Additional Services or to retain another experienced investment bank to perform the Additional Services. Mr. Cieri tells the Court that the Debtors interviewed a number of well-respected financial advisors before deciding to expand Miller Buckfire's scope of work. Through those interviews, the Debtors found Miller Buckfire's fee arrangement to be favorable in comparison to the proposals received by other investment banks. In addition, Mr. Cieri states, the Debtors found that unlike Miller Buckfire, many of the investment banks with experience in the sale of energy-related assets did not satisfy the requirement of disinterestedness under the Bankruptcy Code, and thus are unable to provide the Additional Services. Mr. Cieri assured the Court that Miller Buckfire is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not hold or represent any interest adverse to the Debtors' estates. 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) CALPINE CORP: Bankruptcy Court Approves TIC Settlement Agreement ---------------------------------------------------------------- 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 enter into and consummate the Settlement Agreement with The Industrial Company Wyoming, Inc. In the event that the Debtors elect not to enter into the Settlement Agreement, the Court permits the Debtors to post a bond or other adequate security, including cash, if TIC places a lien on the Mankanto property. As reported in the Troubled Company Reporter on Sept. 21, 2006, Debtor Calpine Construction Management Company, Inc., was created to serve as general contractor for the Debtors' energy projects, including the Mankato Energy Center project. Mankato Energy Center, LLC, a non-debtor subsidiary, owns a 750-megawatt combined cycle gas turbine electrical power plant. Mankato and CCMCI's contract requires CCMCI to post a bond for any lien that may be asserted against the Project due to any alleged default. The Project is now completed, and is providing electricity under a long-term "off-take" agreement. CCMI hired The Industrial Company Wyoming, Inc., a subcontractor, to assist in building the Mankato property pursuant to a subcontract dated April 2005. TIC Wyoming began work in May 2005 and substantially completed its part of the Project in March 2006. David R. Seligman, Esq., at Kirkland & Ellis LLP, in New York, relates that since the inception of the Mankato Project, there have been disagreements between CCMCI and TIC pursuant to their Subcontract regarding the proper allocation of responsibilities between the parties. TIC alleged that CCMCI caused various delays and defaults under the Subcontract. Accordingly, TIC filed a proof of claim for $7,984,777 against the Debtors. CCMCI also filed claims against TIC regarding its performance, liquidated damages, and certain adjustments and credits to the contract price under the Subcontract. As Mankato Energy is not a debtor and, therefore does not have the protection of the automatic stay, the Debtors anticipate that TIC might attempt to file a mechanics lien with respect to the Mankato property regarding the parties' disputes under the Subcontract. While Mankato Energy and CCMCI certainly would challenge any lien, litigating the validity of TIC's mechanics lien and Claim and estate would be costly and uncertain, Mr. Seligman contends. Moreover, if TIC successfully asserts a mechanics lien on the Mankato property, it is possible that the Mankato project lenders could declare a default under various financing agreements, thereby raising the risk of foreclosure, Mr. Seligman says. Consequently, the Debtors have decided to explore the possibility of a settlement with CCMCI. The Debtors then engaged in arm's- length negotiations and the parties ultimately reached an agreement to resolve their dispute. The Settlement Agreement provides, among other things, that: (a) the Subcontract will be amended to increase the Agreement Amount as defined in the Subcontract by $5,077,000 for a total Agreement Amount of $14,746,949; (b) CCMCI will release $435,000 to TIC; and (c) the parties will mutually release all claims in connection with the Subcontract, the Agreement Amount Dispute, the Performance Dispute or the TIC Claims, including any rights to any proof of claim filed by TIC, provided that the Released Claims will not include any of Calpine Construction's claims against TIC for breach of any warranty or default under the Subcontract occurring after the date of the Settlement. To the extent, however, that the Settlement is not consummated and CCMCI asserts a mechanics lien on the Mankato Project, the Debtors believe that posting a bond or other adequate security, including cash, under the Mankato Contract to avoid a default under the various financing agreements is nonetheless in the sound exercise of their business judgment. Mr. Seligman points out that if TIC asserted a lien on the Mankato property and the Debtors did not post a bond, Mankato Energy would be in default under its project lending agreements, which could result in Mankato Energy being unable to draw on the funds necessary to finish this and other non-debtor projects. Mr. Seligman asserts that the Debtors have the ability to post a bond under their DIP financing facility. Posting a bond would preserve their rights to litigate CCMCI claims in the absence of a settlement. A full-text copy of the TIC Settlement Agreement is available for free at http://ResearchArchives.com/t/s?12d4 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) CALPINE CORP: Court OKs Watson Wyatt as Human Resource Consultant ----------------------------------------------------------------- Calpine Corp. and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Watson Wyatt as their human resource consultant pursuant to Sections 327(a) and 328(a) of the Bankruptcy Code. As reported in the Troubled Company Reporter on Aug. 15, 2006, the Debtors engaged Watson Wyatt & Company as their human resource consultant since Dec. 6, 2005. Watson Wyatt was employed as an ordinary course professional. Watson Wyatt has assisted the Debtors in the review, design and communication of important employee messages and human resources risks. The Debtors originally contemplated that Watson Wyatt would primarily provide executive compensation services for which the total fees were estimated to range from $175,000 through $275,000. David R. Seligman, Esq., at Kirkland & Ellis LLP, in New York, relates that beginning March 2006, at the Debtors' request, Watson Wyatt provided additional compensation assistance and established benchmarks for all positions in Calpine Corp. These requests, as well as other matters concerning the executive compensation portions of the project, caused Watson Wyatt's fees to go beyond the $500,000 limit set in the Court's Ordinary Course Professional Order. Moreover, Mr. Seligman said, the Debtors anticipated that they will continue to use Watson Wyatt's services throughout the course of their Chapter 11 cases. Watson Wyatt is expected to: (a) review and analyze the current compensation and benefits programs at Calpine and identify the risks each program may contain in light of the Chapter 11 cases; (b) assist in the development of an employee communication strategy and drafting of employee communications as needed; (c) review the current compensation and benefits programs and assess the need for new or revised programs for certain key employees designated by the company and, if needed, assist in the design and modification of the programs. Key elements of those programs might consist of a new annual incentive program, a revised cash retention program, and a severance program; (d) compare the terms, conditions and cost of any proposed program to competitive practice; (e) review and determine whether to enhance existing severance programs in light of the changed circumstances; (f) prepare reports summarizing the new programs; (g) assist in negotiations with creditors' groups to obtain their support for the company's assumption of any bonus or other compensation program; (h) provide expert witness testimony with respect to the company's compensation programs; (i) provide compensation benchmarking data and advice as needed; and (j) develop and implement other compensation or compensation administration programs as needed. The Debtors will pay Watson Wyatt based on its customary hourly rates: Professional Hourly Rate ------------ ----------- Analysts $200 to $350 Consultants $375 to $500 Senior Consultants $550 to $700 The Debtors will also reimburse Watson Wyatt for any necessary out-of-pocket expenses incurred. Mr. Seligman informed the Court that Watson Wyatt has received a $75,000 retainer on Dec. 12, 2005. The Debtors have also paid $300,000 to Watson Wyatt for its services since Dec. 6, 2005. Ann Costolloe, a senior consultant at Watson Wyatt & Company, in San Francisco, California, assured the Court that her firm does not hold any interest adverse to the Debtors and their estates, and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Judge's Decree Judge Lifland rules that Watson Wyatt & Company's fees and expenses will remain subject to the "ordinary course professional" monthly cap of $50,000, provided that the setting of the cap does not constitute a judicial determination that the fees or expenses are reasonable under the Bankruptcy Code. 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) CANWEST MEDIAWORKS: Selling Two Radio Stations for $15 Million -------------------------------------------------------------- CanWest MediaWorks Inc has entered into an agreement with Corus Entertainment Inc. for the sale of its two existing radio stations in Canada -- 99.1 Cool FM in Winnipeg, Manitoba and 91.5 The Beat FM in Kitchener, Ontario -- for an aggregate cash price of approximately $15 million, subject to certain customary price adjustments based upon the stations' financial position at the completion date. Completion of the transaction is conditional upon the purchaser obtaining CRTC and any other necessary regulatory approvals. Peter Viner, President and Chief Executive Officer of the Company's Canadian operations, noted, "Despite considerable efforts, the Company has not established, either through the award of additional radio licences by the CRTC or by acquisition, a sufficient presence in the Canadian radio market to achieve the economies of scale necessary for success in this highly competitive business. In light of that, the Company determined that its capital would be better deployed in higher growth opportunities and in supporting its core business requirements." CanWest MediaWorks Inc. -- http://www.canwestmediaworks.com/-- is a wholly owned subsidiary of CanWest Global Communications Corp, Canada's largest media company. In addition to owning the Global Television Network, CanWest is Canada's largest publisher of daily newspapers, and also owns, operates and/or holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, Web sites and radio networks in Canada, New Zealand, Australia, Singapore, Indonesia, Malaysia, Turkey, the United States and the United Kingdom. * * * As reported in the Troubled Company Reporter on July 13, 2006, Dominion Bond Rating Service placed the ratings of CanWest MediaWorks Inc. under review with negative implications due to weakness in more of the Company's operating segments, which may lead to a breach in the Company's financial covenants under its senior secured bank facilities in the upcoming quarter and year- end. Ratings places under review include the Negative BB Issuer Rating and the Negative B (high) rating on the Company's Senior Subordinated Notes. As reported in the Troubled Company Reporter on July 11, 2006, Moody's Investors Service placed Canwest MediaWorks Inc.'s Ba3 corporate family and B2 senior subordinate ratings under review for possible downgrade. At the same time, Moody's lowered CanWest's speculative grade liquidity rating to SGL-3 from SGL-2. CAROL CAPOCCIA: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Carol Capoccia, LLC 56 Bentwood Court East Albany, NY 12203 Bankruptcy Case No.: 06-12567 Chapter 11 Petition Date: October 2, 2006 Court: Northern District of New York (Albany) Judge: Robert E. Littlefield Jr. Debtor's Counsel: Richard Croak, Esq. 314 Great Oaks Blvd. Albany, NY 12203 Tel: (518) 690-4410 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 7 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Sanford Rosenbloum $100,000 100 Great Oaks Blvd. Albany, NY 12203 Eugene Bizzarro $60,000 1411 Kings Rd. Schenectady, NY 12303 William Mueb & Assoc. $50,000 Steven Kessler $50,000 Elizabeth DeChiro $40,000 2329 Third Ave. Watervliet, NY 12189 Mary Beth & Emloi D'Alessandro $25,000 909 13th. St. Watervliet, NY 12189 Deana & Michael Karam $20,000 12 Glenburnie Dr. Wilton, NY 12831 CEP HOLDINGS: U.S. Trustee Names Five-Member Creditors Committee ---------------------------------------------------------------- The U.S. Trustee for Region 9 appointed five creditors to serve on an Official Committee of Unsecured Creditors in CEP Holdings, LLC, and its debtor-affiliates chapter 11 cases: 1. Dupont c/o Bruce D. Tobiansky Barley Mill Plaza, BMP26-2174 4417 Lancaster Pike Wilmington, DE 19805 Tel: (302) 992-4589 Fax: (302) 892-0767 2. Lanxess Corp. c/o Alan P. Rugh 111 RIDC Park West Drive Pittsburgh, PA 15275-1112 Tel: (412) 809-1576 Fax: (412) 809-1561 3. Excel Polymers LLC c/o Kathy McDonald 6521 Davis Industrial Parkway Solon, OH 44139 Tel: (440) 715-7121 Fax: (440) 715-7040 4. The Brown Corporation of Greenville c/o Mark Ferderber 1927 North Theobald Street Greenville, MS 38703 Tel: (616) 527-4050 Fax: (616) 527-3385 5. Rhodia c/o Doreen Wilson-Bailey 8 Cedar Brook Drive Cranbury, NJ 08512 Tel: (609) 860-3185 Fax: (609) 860-2244 Documents filed with the Court do not show who the Committee has selected as counsel in this chapter 11 proceeding. 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. 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). Joseph F. Hutchinson, Jr., Esq., at Baker & Hostetler, LLP, represents the Debtor. 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: Trade Vendors Want Cases Converted to Chapter 7 ------------------------------------------------------------- The Unofficial Committee of Pre-Petition Trade Vendors asks the U.S. Bankruptcy Court for the Northern District of Ohio to convert CEP Holdings, LLC and its debtor-affiliates' chapter 11 cases to chapter 7 liquidation proceedings. The Trade Committee seeks immediate conversion of the cases citing: (i) the Debtors operate to benefit only their customers, namely General Motors Corporation, Visteon Corporation and Delphi Corporation by a costly scheme intended to maximize the inventory build for these customers regardless of the impact upon other parties-in-interest; and (ii) the losses resulting from the Debtors' express plan to augment their customers' inventory, which plan is evidenced in the Debtors' first day pleadings, coupled with the Debtors' express intent not to attempt a rehabilitation of the Debtors' operations. The Trade Committee discloses that through information obtained in its investigation of the Debtors and their operation and the Debtors' first day pleadings, it has ascertained that: (a) the Debtors failed to operate profitably or at "break- even" in any month since the acquisition of the Debtors' facilities by The Reserve Group in August 2005 and December 2005, respectively; (b) the Debtors have already obtained concessions from their customers in the form of "immediate pay" of accounts receivable due from these companies, resulting in a significant paydown of obligations to Wachovia capital Finance Corp. - yet the Debtors still had and continue to have insufficient liquidity to operate in the ordinary course of business in the absence of incurring additional secured debt; (c) as a result of the Debtors' "cash burn" and the inability to generate sufficient cash flow to permit operations in the ordinary course, their customers were required to fund approximately $2.9 million in pre-bankruptcy loans on a junior participating basis in the Wachovia revolving credit facilities to provide the Debtors sufficient availability to sustain even the most basic operations; (d) based upon the Trade Committee's analysis of documentation provided to it by the Debtors and other independent sources, the Trade Committee forecasts that the Debtors will lose no less than $1 million on a monthly basis from operations through the foreseeable future; (e) the operating losses of the Debtors in chapter 11 will continue to be funded either through cash infusions or junior secured and superiority loans from their customers, or some combination of the two, if so permitted by the Court, with all such loans resulting in immediate and substantial harm to the interests of general unsecured creditors; (f) the Proposed Interim DIP Order is a mechanism for which the Customers can cause the Debtors to build their customers' inventory, regardless of the impact on the Debtors' estates and then effectuate the closings of the Debtors' facilities if the customers have no further use for those facilities; (g) the Proposed Interim DIP Order provides their customers, non-fiduciaries to these bankruptcy estates, with the sole discretion to elect which of the Debtors' facilities will be promptly liquidated and which will be sold on any orderly basis; (h) throughout the Proposed Interim DIP Order, in many instances the unsecured creditors will bear the brunt of the costs associated with the build of parts banks at various facilities for the benefit of the Debtors' customers as a result of further post-petition participation in the Wachovia facilities; (i) the Proposed Interim DIP Order proposes to have a Chapter 11 Trustee appointed in the event the Debtors fail to maintain production for bank builds requested by their customers; and (j) the Proposed Interim DIP Order provides that in the Debtors customers' pursuit to augment their inventory at the cost of the bankruptcy estates, their professional fees, amounting to $450,000, will be paid from estate proceeds. Mark E. Freedlander, Esq., Sally E. Edison, Esq., and Michael J. Roeschenthaler, Esq., at McGuireWoods LLP, represent the Trade Committee. 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). Joseph F. Hutchinson, Jr., Esq., at Baker & Hostetler, LLP, represents the Debtor. 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 OKs Continued Use of SPC's Cash Collateral ----------------------------------------------------------------- ChemDesign Corporation obtained authority from the U.S. Bankruptcy Court for the Eastern District of Wisconsin to continue using the cash collateral funds provided by SpecialtyChem Products Corporation, its wholly owned subsidiary. The Debtor tells the Court it has not generated cash proceeds since it is winding down operations. To protect its assets while the wind down continues, it needs access to the cash collateral of SPC. SPC filed for chapter 11 protection on June 12, 2006. The Debtor commenced its separate chapter 11 case on Aug. 27, 2006. Both Debtors continue to manage and operate their businesses as debtors-in-possession. The Debtor is in the process of selling its field plant in Fitchburg, Massachusetts. A handful of individuals are still employed at Fitchburg as part of the winding down. The Fitchburg property consists of a parcel of property of approximately 27.9 acres with nine major buildings and multiple smaller buildings. The Machinery and equipment at the Fitchburg facility was recently appraised at a fair market value of $2.4 million and is still well maintained. The Debtor and SPC share liability on approximately $3 million revolving note and two term notes totaling approximately $2.5 million with Wachovia Bank, National Association. The obligations to Wachovia are cross-collateralized by the assets of both Debtors. Cambridge Chemicals, Inc., also has a blanket lien on all of the assets of the Debtor to secure its obligations. The Cambridge lien is junior to the security interests of Wachovia. SPC's cash proceeds, generated from receivables, and all other cash equivalents held by the Debtors are cash collateral that also secures the Wachovia debt. SPC has obtained from the Court authority to use the cash collateral and provides funds to the Debtor from the cash collateral. 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. COLLINS & AIKMAN: Taps Hilco to Appraise Williamston Equipment -------------------------------------------------------------- Collins & Aikman Corporation and its debtor-affiliates notify the U.S. Bankruptcy Court for the Eastern District of Michigan and parties-in-interest that they have further expanded Hilco Appraisal Services, LLC's scope of services. The Court has previously approved the Debtors' request to retain Hilco as their personal property appraiser. At the Debtors' request, Hilco will physically appraise the machinery and equipment of Collins & Aikman Corporation, at 845 Progress Court and 1560 Noble Road, in Williamston, Michigan. Hilco will provide the Debtors with a detailed Orderly Liquidation Value and Forced Liquidation Value appraisal for the assets. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) COLLINS & AIKMAN: Inks Pact Regarding GM's Lift-Stay Request ------------------------------------------------------------ General Motors Corporation, Collins & Aikman Corporation and its debtor-affiliates have agreed to certain discovery procedures in connection with GM's amended request to recover certain tooling. The Honorable Steven W. Rhodes of the U.S. Bankruptcy Court for the Eastern District of Michigan has approved these discovery procedures. GM is seeking to lift the automatic stay to take possession of certain tooling in which it asserts an ownership interest. The Official Committee of Unsecured Creditors appointed in the Debtors' cases has filed an objection to that request and the Debtors have sought to take discovery of GM. Parties Stipulate In a Court-approved stipulation, the Debtors and General Motors Corporation agree that the automatic stay will continue in full forced and effect through the earlier of: (1) the conclusion of an October 12, 2006, hearing on GM's amended tooling request and the Court's entry of a final order regarding that request; and (2) any emergency hearing on the Amended GM Request and the Court's entry of a final order regarding that request. 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: Intagio Withdraws Credit Reservations Motion --------------------------------------------------------------- Intagio Corp. withdrew its request asking the U.S. Bankruptcy Court for the District of Connecticut to: (a) direct Complete Retreats LLC and its debtor-affiliates to honor all THR Credit Reservations made, or to be made, under the 2005 Contract and any of the Prior Contracts; and (b) exempt the THR Credit Reservations, if necessary, from the provisions of the Reservations Order to the extent any of them apply to the THR Credit Reservations. Intagio's withdrawal relates to the Court's order, reported in the Troubled Company Reporter on Sept. 11, 2006, vacating its previous order denying Intagio's request, the previous order having been entered in error. The Court denied Intagio's request, holding that Intagio failed to comply with the contested matter procedure guidelines effective Oct. 3, 2005. In October 2005, Debtor Preferred Retreats LLC dba Tanner & Haley Destination Clubs, and Intagio entered into a Media Purchase Agreement, whereby Intagio agreed to place an advertising campaign on behalf of Preferred Retreats. In return, Preferred Retreats agreed to provide Intagio: -- a $647,045 cash payment for advertising; and -- credits, totaling $327,975, redeemable for occupancy rights at all THR Private Retreats, THR Distinctive Retreats, THR Distinctive Retreats II and THR Legendary Retreats properties. Intagio and Preferred Retreats were also parties to prior agreements of a similar nature, Louis J. Testa, Esq., at Neubert, Pepe & Monteith, P.C., in New Haven, Connecticut, said. Prior to the Debtors' bankruptcy filing, Intagio booked certain reservations on behalf of its clients and resold some of the THR Credits to third parties under the 2005 Contract and the Prior Contracts, Mr. Testa disclosed. As of July 23, 2006, these THR Credit Reservations were outstanding: (1) Reservations already booked through Intagio's travel department, on behalf of Intagio's clients; (2) THR Credits resold by Intagio to third parties for which reservations have been, or may be made, by the parties; and (3) THR Credits owned by Intagio but not yet sold to third parties or redeemed for Client Reservations. On July 27, 2006, the Court authorized the Debtors to honor existing reservations, accept new reservations and provide services to members under certain terms and conditions. Subsequent to July 23, 2006, Intagio received formal notification from the Debtors that they will not honor the THR Credit Reservations. Mr. Testa noted that Intagio is particularly concerned with a client reservation made by Michael Cunningham in February 2006 for the Debtors' location at Palm Beach County, in Florida, for occupancy commencing on Aug. 16, 2006, and ending on Aug. 21, 2006. The remaining Client Reservations will commence on Oct. 2, Oct. 19 and Dec. 8, 2006, Mr. Testa added. If the Debtors fail to honor the Client Reservations and the Third Party Reservations, Intagio will be required and compelled to reimburse at least US$456,282 to the reservation holders in cash or business credits, Mr. Testa informed the Judge Shiff. It is unlikely that Intagio will recover the amount of the Reservation Obligations in the bankruptcy cases, Mr. Testa said. Unlike Intagio, however, the Debtors will not suffer significant hardship or irreparable injury by being compelled to honor the THR Credit Reservations pending confirmation of a plan of reorganization, Mr. Testa continued. According to Mr. Testa, a review of the Reservations Motion and Reservations Order appears to indicate that the relief requested is limited to reservations made by members only, and not third party creditors like Intagio. Nor does the order appear to apply to the holders of Client Reservations and Third Party Reservations. The Reservations Order allows the Debtors to provide preferential treatment for a group of unsecured creditors, namely members, to the detriment of other unsecured creditors, like Intagio, and differentiate their treatment with respect to honoring of reservations, Mr. Testa asserted. Moreover, Intagio was not placed upon prior notice of the Reservations Motion in order to protect its interests with respect to the THR Credit Reservations. "[Thus,] the balance of the equities weighs in favor of Intagio," Mr. Testa maintained. Mr. Cunningham will need to be informed as soon as practically possible prior to Aug. 16, 2006, of the need to make alternate vacation plans, if necessary, Mr. Testa told the Court. In addition, the holders of the remaining Client Reservations will need as much time as possible to make alternative plans, if necessary. 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). COMPLETE RETREATS: Court OKs D.G. Capital's Rule 2004 Exam Request ------------------------------------------------------------------ At D.G. Capital LLC's behest, the U.S. Bankruptcy Court for the District of Connecticut directed Robert L. McGrath, former president of Debtor Distinctive Retreats, and James H. Mitchell, vice president of Distinctive, to appear for an examination regarding certain matters, within the scope of Rule 2004 of the Federal Rules of Bankruptcy Procedure, including: (1) the capital structure of Distinctive; (2) the number of series within the LLC structure; (3) the membership interests in each series; (4) the assets and liabilities of each series; and (5) the circumstances and details of the adoption of a resolution to file the case by its governing board. As reported in the Troubled Company Reporter on Sept. 14, 2006, Distinctive borrowed $2,850,000 from D.G. Capital in May 2006, to finance the purchase of a condominium in Maui. The loan was secured by a first mortgage on the condominium and by a pledge of membership interests in Distinctive Retreats. Michael R. Enright, Esq., at Robinson & Cole LLP, in Hartford, Connecticut, told the Court that the loan has matured and remains unpaid while interest and other charges continue to accrue. Distinctive is a Delaware limited liability company and its Certificate of Formation and Limited Liability Company Agreement contain: (i) special limitations as a series LLC under Delaware law, including provisions pursuant to Section 18-215 of the Delaware Limited Liability Company Act; and (ii) special purpose entity restrictions which require written unanimity among directors and the Class A Member regarding filing authority. In connection with the joint administration of Complete Retreats LLC and its debtor-affiliates' Chapter 11 cases, relief accorded to the Debtors may unjustifiably favor the creditors or equity holders of one or more Debtors over other Debtors if the applicable distinctions among the creditor bodies are not observed, Mr. Enright asserted. "This concern may be exacerbated within Distinctive [Retreats] because of its status as a series LLC pursuant to the Delaware Limited Liability Company Act. Distinctive itself may need to be viewed and treated as a number of discrete Debtors, given the nature of a series LLC." In essence, Delaware law permits each series of the LLC to be a unit unto itself, with assets and liabilities of each series considered separately for purposes of creditors' rights, Mr. Enright pointed out. According to Mr. Enright, the rights of Distinctive Retreats' creditors may vary depending on: -- whether the formalities required by the Delaware statute were satisfied prepetition; and -- how Distinctive designated the assets and liabilities which were to be included in each series. "Nothing in the filings made by Distinctive to date sheds any light on these details, [the] consideration of [which] is essential to an understanding of the rights of [Distinctive's creditors]," Mr. Enright argued. Accordingly, a full exploration through the Rule 2004 process of the capital structure of Distinctive Retreats, its multiple series and the assets and liabilities of each series, to consider, among other things, the implications of this structure in Distinctive Retreats' Chapter 11 case, is necessary, Mr. Enright contended. The only filing as of Aug. 29, 2006, in this regard was appended to the petition of Distinctive and is a certificate from Mr. McGrath certifying that the form of resolution attached to the certificate was adopted by the boards of each of the related entities prior to filing of their petitions, Mr. Enright noted. Mr. Enright argued that Mr. McGrath's certification is insufficient to evidence Distinctive' authority to file and does not address whether the special purpose entity provisions in Distinctive Retreats' governance documents were satisfied. To evidence authority to file, a copy of the written unanimous consent of the Class A Member and the Board of Managers is required because that is the prerequisite to filing established by the governance documents, Mr. Enright maintained. If the Court grants its request, D.G Capital will seek Mr. McGrath's and Mr. Mitchell's attendance and production of relevant documents by subpoena. D.G. Capital proposed to hold the examinations at the offices of Robinson & Cole, LLP, at 280 Trumbull Street, in Hartford, Connecticut on Sept. 22, 2006. 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). CONTINENTAL MIDWEST: Files for Chapter 11 Protection in Ohio ------------------------------------------------------------ Continental Midwest Financial and its affiliate, Scioto National, Inc., filed for chapter 11 protection on Sept. 18, 2006, in the U.S. Bankruptcy Court for the Southern District of Ohio. The companies, along with Bankstock Investment Partners and Bancshareholders of America, Inc., are controlled by Ohio investor Bradley T. Smith. The bankruptcy petitions were filed after the U.S. Securities and Exchange Commission imposed its order on April 19, 2006, instituting administrative proceedings against Mr. Smith. The SEC order was based on a final judgment given by the Honorable Gregory L. Frost of the U.S. District Court for the Southern District of Ohio on Dec. 6, 2005, imposing monetary and injunctive relief against Mr. Smith for raising approximately $2.1 million in fraudulent securities offerings for Continental Midwest and Scioto National. Judge Frost permanently enjoined Mr. Smith from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, and held Mr. Smith jointly and severally liable with Continental for $1,409,149, and with Scioto for $885,048, both in disgorgement and pre-judgment interest. Judge Frost also ordered Smith to pay a civil penalty in the amount of $120,000. The final judgment followed the Court's Sept. 27, 2005, order granting summary judgment in favor of the SEC and against Mr. Smith on the fraud claims, and also on the SEC's claims that Mr. Smith was liable for violations of the Exchange Act by Continental and Scioto as a control person under Section 20(a) of the Exchange Act. The SEC's complaint alleged that between 2002 and the present, Mr. Smith and his affiliated companies, through the private offer and sale of securities, raised approximately $3.3 million from investors in Ohio and six other states. In each of those offerings, Mr. Smith and the respective entity represented that the funds raised would be used primarily for investments in small banks. Instead, the SEC alleged, Mr. Smith diverted a significant amount of the proceeds to his own use and to keep his other companies afloat. According to the complaint, Mr. Smith misused approximately $1.5 million in investor funds, using the money to pay expenditures such as rent, unrelated business expenses, clothing, skin care products, and a dating service. The case is captioned "the U.S. Securities and Exchange Commission vs. Bradley T. Smith, et al., Civil Action No. C2-04-0739 (S.D. Ohio)." Scioto National, Continental Midwest, and Bancshare Investors Brokerage also filed for chapter 11 protection on Jan. 10, 2006 (Bankr. S.D. Ohio Case Nos. 06-50075 through 06-50077). About Continental Midwest Based in Dublin, Ohio, Continental Midwest Financial offers financial and investment services. The company filed for chapter 11 protection on Sept. 18, 2006 (Bankr. S.D. Ohio Case No. 06-55178). Michael T. Gunner, Esq., represents the Debtor. When the Debtor filed for protection from its creditors, it listed total assets of $652,176, and total debts of $1,633,543. Headquartered in Dublin, Ohio, Scioto National Inc. offers financial services to investors. The company filed for chapter 11 protection on Sept. 18, 2006 (Bankr. S.D. Ohio Case No. 06-55170). Michael T. Gunner, Esq. represents the Debtor. When the Debtor filed for protection from its creditors, it listed total assets of $566,187, and total debts of $1,085,322. CONTINENTAL MIDWEST: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Continental Midwest Financial 6457 Reflections Drive, Suite 200 Dublin, OH 43017 Bankruptcy Case No.: 06-55178 Debtor-affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Scioto National, Inc. 06-55170 Type of Business: The Debtors, together with Bancshare Investors Brokerage, also filed for chapter 11 protection on Jan. 10, 2006 (Bankr. S.D. Ohio Case Nos. 06- 50075 through 06-50077). Chapter 11 Petition Date: September 18, 2006 Court: Southern District of Ohio (Columbus) Judge: John E. Hoffman Debtor's Counsel: Michael T. Gunner, Esq. 3535 Fishinger Boulevard, Suite 220 Hilliard, OH 43026 Tel: (614) 777-1203 Fax: (614) 777-4640 Total Assets Total Debts ------------ ----------- Continental Midwest $652,176 $1,633,543 Financial Scioto National $566,187 $1,085,322 Incorporated A. Continental Midwest Financial's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Securities In re: Case $1,409,149 and Exchange Commission #04CV00739 U.S. 175 West Jackson Boulevard S.E.C. vs. Bradley Suite 900 Smith, et. al., Chicago, IL 60604 S.D. Ohio Humphrey Cowden Attorney Fees $147,410 Nagorney & Lovett Terminal Tower, Suite 1414 50 Public Square Cleveland, OH 44113 Harry Reinhart Attorney Fees $32,486 400 South Fifth Street, Suite 202 Columbus, OH 43215 Yolanda Circosta Loan Money - Payroll $20,000 619 Rothmoore Drive Galloway, OH 43119 Paychex Advanced Payroll $12,170 911 Panorama Trail South Rochester, NY 14625 U.S. Treasurer Payroll Taxes $7,304 Rogers and Co. Accounting Expense $2,270 DHL Express Postal Service $1,500 Conexio Computer Services $742 Cleaned to Your Expectations Cleaning Expense $342 Magnetic Springs Water Services $122 Qwest Telephone Expense $47 B. Scioto National, Inc.'s 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Securities In re: Case $885,048 and Exchange Commission #04CV00739 U.S. 175 West Jackson Boulevard S.E.C. vs. Bradley Suite 900 Smith, et. al., Chicago, IL 60604 S.D. Ohio Cowden Humphrey, Nagorney, Attorney Fees $145,398 Lovett Terminal Tower, Suite 1414 50 Public Square Cleveland, OH 44113 Harry Reinhart Attorney Fees $45,986 400 South Fifth Street Suite 202 Columbus, OH 43215 James D. Pohlman Director Fees $5,000 11330 Bloomlock Road Delphos, OH 45833 Richard Napierala Director Fees $3,750 2239 U.S. Route 20 Swanton, OH 43558 Rogers and Co. Accounting Expense $140 6827 North High Street Suite 234 Columbus, OH 43085 COPELANDS' ENT: Court Okays Clear Thinking as Business Advisor -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Copelands' Enterprises, Inc., to employ Clear Thinking Group, LLC, as its business advisor. As reported in the Troubled Company Reporter on Sept. 7, 2006, the Debtor disclosed that it originally retained Clear Thinking in July 2006 to provide certain business advisory services. The Debtor said it wishes to continue Clear Thinking's engagement during its chapter 11 case. Clear Thinking will: a. lead and manage the bankruptcy process on a full-time basis; b. assist the Debtor in connection with its Chapter 11 bankruptcy filing, including the preparation of the necessary schedules and budgets; c. assist in the process of seeking to obtain debtor-in- possession financing, if required, and d. assist the Debtor in every step of the bankruptcy reorganization process, with the goal of obtaining Court approval of a plan of reorganization that will be in the best interest of all stakeholders, including creditors, equity holders, customers, and employees. The Debtor tells the Court that Clear Thinking's professionals bill: Professional Hourly Rate ------------ ----------- Principals $400 Managers $325 Consultants $250 Analysts $150 Administrative Support Staff $75 To the best of the Debtor's knowledge, Clear Thinking is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Based in San Luis Obispo, California, Copelands' Enterprises, Inc., dba Copelands' Sports -- http://www.copelandsports.com/-- operates specialty sporting goods stores. The Company filed for chapter 11 protection on Aug. 14, 2006 (Bankr. D. Del. Case No. 06-10853). Laura Davis Jones, Esq., Marc A. Berlinson, Esq., and Ira A. Kharasch, Esq., at Pachulski, Stang, Ziehl, Young, Jones, & Weintraub LLP, in Los Angeles, California, represent the Debtor. Clear Thinking Group serves as the Debtor's financial advisor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $50 million and $100 million. CORUS ENTERTAINMENT: Buying CanWest Radio Stations for $15 Million ------------------------------------------------------------------ Corus Entertainment Inc. has entered into an agreement with CanWest MediaWorks Inc. for the purchase of CanWest's two existing radio stations in Canada - 99.1 Cool FM in Winnipeg, Manitoba and 91.5 The Beat FM in Kitchener, Ontario - for an aggregate cash price of approximately $15 million. Completion of the transaction is conditional upon the purchaser obtaining CRTC and any other necessary regulatory approvals. About CanWest CanWest MediaWorks Inc. -- http://www.canwestmediaworks.com/-- is a wholly owned subsidiary of CanWest Global Communications Corp, Canada's largest media company. In addition to owning the Global Television Network, CanWest is Canada's largest publisher of daily newspapers, and also owns, operates and/or holds substantial interests in conventional television, out-of-home advertising, specialty cable channels, Web sites and radio networks in Canada, New Zealand, Australia, Singapore, Indonesia, Malaysia, Turkey, the United States and the United Kingdom. About Corus Entertainment Corus Entertainment Inc. (TSX: CJR.B; NYSE: CJR) -- http://www.corusent.com/-- is a Canadian-based media and entertainment company. Corus is a market leader in specialty television and radio with additional assets in pay television, advertising and digital audio services, television broadcasting, children's book publishing and children's animation. The company's multimedia entertainment brands include YTV, Treehouse, W Network, Movie Central, Nelvana, Kids Can Press and radio stations including CKNW, CKOI and Q107. Corus creates engaging branded entertainment experiences for its audiences across multiple platforms. A publicly traded company, Corus is listed on the Toronto (CJR.B) and New York (CJR) exchanges. * * * As reported in the Troubled Company Reporter on June 16, 2005, Standard & Poor's Ratings Services revised its outlook on Corus Entertainment Inc. to stable from negative and affirmed its 'BB' long-term corporate credit rating on the company. Dominion Bond Rating Service confirmed Corus Entertainment Inc.'s issuer rating at BBp on Aug. 5, 2005. On this date, DBRS said the trend was stable. COUDERT BROTHERS: Wants Wilson Elser to Continue Representation --------------------------------------------------------------- Coudert Brothers LLP asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Wilson Elser Moskowitz Edelman & Dicker LLP as its special counsel, nunc pro tunc to Sept. 22, 2006. Wilson Elser will continue representation of the Debtor in two separate pending actions: (i) Statek Corporation et al. v. Coudert Brothers LLP, and (ii) SenoRx, Inc. v. Coudert Brothers LLP. Statek Action On or about Oct. 28, 2005, Statek Corporation and Technicorp International II, Inc., commenced an action in the Superior Court of Connecticut, Judicial District of Stamford-Norwalk (Case No. CV-05-50000425S) against, amongst other defendants, the Debtor, Dean Poster, a former associate of Debtor, and Steven Beharrell, a former partner of Debtor. The suit alleges certain causes of action for fraud, breach of fiduciary duty, legal malpractice, fraudulent concealment, and negligence arising from their alleged participation in, assistance in and concealment of an international defalcation scheme of Frederick Johnston and Sandra Spillane, the principals of the Statek Plaintiffs. The Statek Plaintiffs have alleged damages in a sum in excess of $30 million. The Statek Plaintiffs claimed that the Debtor, by Messrs. Beharrell and Poster, participated in, assisted in or concealed Mr. Johnston's and Ms. Spillane's diversion of up to $30 million in corporate funds from Statek Corporation, and its other principal Miklos Vendel, for their own personal use, all while the Statek Plaintiffs were clients of the Debtor. Wilson Elser has filed a pending motion to dismiss the Statek Action based upon, among other things, lack of jurisdiction over the Debtor and Mr. Poster, in that all of the alleged legal activities occurred in Great Britain, and forum non conveniens. To date, the court has ordered that the parties exchange discovery on the issue of jurisdiction prior to any decision on the pending motion. The parties are in the process of exchanging discovery and taking depositions with respect to the jurisdiction issues. SenoRx Action On or about October 27, 2005, SenoRx, Inc. filed a complaint with the Superior Court of the State of California for the County of San Francisco, Case No. CGC04435849, alleging certain causes of action against the Debtor for professional negligence, breach of contract and breach of fiduciary duty, and asserting unspecified damages. SenoRx has alleged that Debtor negligently failed to properly provide legal services related to the filing of Japanese, European and Canadian PCT applications. Thereafter, SenoRx filed numerous "doe amendments" to amend its complaint to identify and name 99 partners of the Debtor as additional party defendants in the SenoRx Action, Wilson Elser Retention David L. Tillem, Esq. a partner at Wilson Elser, tells the Court that the firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $400 Associates $125 - $275 Paralegals $100 Mr. Tillem assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Tillem can be reached at: David L. Tillem, Esq. Wilson Elser Moskowitz Edelman & Dicker LLP 3 Gannett Drive White Plains, NY 10604-3407 Tel: (914) 323-7000 Fax: (914) 323-7001 http://www.wilsonelser.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: Wants Dunn Koes to Appeal Lyman Suit Verdict -------------------------------------------------------------- Coudert Brothers LLP asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Dunn Koes LLP as its special counsel, nunc pro tunc to Sept. 22, 2006. Dunn Koes will continue representation of the Debtor in an appeal to the malpractice jury verdict and judgment entered in the matter of Lyman Gardens Apartments, LLC, et al., v. Coudert Brothers LLP, et al. Lyman Gardens Apartments, LLC and Darryl Wong commenced an action in the Superior Court of California for the County of Los Angeles, Case No. BC299990, against Debtor and Ralph Navarro, a partner of the Debtor, asserting certain causes of action for professional negligence/attorney malpractice fraud, breach of fiduciary duty, legal malpractice, fraudulent concealment, and negligence arising from a real estate transaction for which the Lyman Gardens Plaintiffs engaged the services of the Debtor. In or about June 2006, after a trial on the merits, a jury awarded the Lyman Gardens Plaintiffs compensatory and punitive damages against the Debtor in the sum of $2.5 Million. The Debtor has appealed the Lyman Gardens Judgment, which appeal is presently pending and has not yet been perfected. Pamela Dunn, Esq., a partner at Dunn Koes, tells the Court that the firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $275 - $350 Associates $250 Paralegal $110 Ms. Dunn assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Ms. Dunn can be reached at: David L. Tillem, Esq. Dunn Koes LLP 336 South Euclid Avenue Pasadena, California 91101 Tel: (626) 685-9500/9502 Fax: (626) 685-2010 http://www.dunnkoes.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. CYOP SYSTEMS: June 30 Balance Sheet Upside-Down by $1.2 Million --------------------------------------------------------------- CYOP Systems International Incorporated reported a $201,184 net loss on zero revenues for the three months ended June 30, 2006, compared to a $231,469 net loss on $2,363 of net revenues in 2005. At June 30, 2006, the Company's balance sheet showed $2.2 million in total assets and $3.5 million in total liabilities, resulting in a $1.2 million stockholders' deficit. The Company had cash and cash equivalents of $1,608 at June 30, 2006 and a working capital deficit of $2,927,974 with the deficiency arising primarily from $1,315,112 in loans from directors and a $1,474,557 convertible debenture with Cornell Capital Partners LP. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?12d3 Going Concern Doubt De Leon & Company, P.A., in Pembroke Pines, Florida, raised substantial doubt about CYOP Systems' ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the Company's recurring losses from operations and capital deficiency. Headquartered in Beverly Hills, California, CYOP Systems International Incorporated and its subsidiaries provide multimedia transactional technology solutions and services for the entertainment industry. The Company's range of products and services include financial transaction platforms for on-line video games, licensed online gaming software and integrated e-commerce transaction technology for on-line merchants. DANA CORP: Wants Court to Bifurcate Reclamation Claim Issues ------------------------------------------------------------ On or before June 30, 2006, more than 450 parties sent letters to Dana Corporation and its debtor-affiliates demanding the return of certain previously shipped goods and asserting reclamation claims against the Debtors in an aggregate amount of more than $297,000,000, pursuant to Section 546(c) of the Bankruptcy Code. Pursuant to the Reclamation Procedures duly approved by the U.S. Bankruptcy Court for the Southern District of New York, the Debtors filed a notice listing the Reclamation Claims and their reconciliation of each Reclamation Claim. The Debtors asserted that various fact-intensive defenses to the Reclamation Claims reduced the aggregate amount of Reclamation Claims they acknowledged as valid from the approximately $300,000,000 worth of goods initially sought to be reclaimed to approximately $3,000,000. The Debtors also asserted that certain legal defenses to the Reclamation Claims based on the existence of prior liens on the goods to be reclaimed rendered all of the Reclamation Claims valueless. As of Sept. 20, 2006, approximately 132 Reclamation Claimants have filed objections to the Reclamation Notice. About 320 Reclamation Claimants did not object to the Debtors' reconciliation of their Reclamation Claims and each of their claims is deemed finally allowed for $0. Pursuant to Section 105(a) of the Bankruptcy Code and Rules 7042 and 9014(c) of the Federal Rules of Bankruptcy Procedure, the Debtors ask the Court to: (a) bifurcate its consideration of: (i) the Prior Lien Defense, and (ii) the other aspects of the Remaining Reclamation Claims, including each claimant's prima facie case in support of its Remaining Reclamation Claim, the application of other Fact-Intensive Defenses and any other issues raised in the Reclamation Objections; (b) establish a briefing schedule governing the consolidated litigation of the Prior Lien Defense with respect to all of the Remaining Reclamation Claims; and (c) only if necessary after the Court's determination of the Prior Lien Defense -- i.e., if the Debtors do not prevail in whole on the Prior Lien Defense and the applicable claims are not otherwise resolved consensually -- set a date or dates for one or more conferences regarding the litigation of the Remaining Reclamation Claims, including establishing discovery guidelines, pretrial hearing dates, necessary briefing schedules and the scheduling of evidentiary hearings on each of the Remaining Reclamation Claims. Corinne Ball, Esq., at Jones Day, in New York, argues that the Prior Lien Defense should be determined by the Court before any litigation of the Fact-Intensive Defenses or any other issues relating to the Remaining Reclamation Claims. According to Ms. Ball, the Debtors believe that the Prior Lien Defense presents a generally applicable, threshold defense to the validity of each Reclamation Claim. "Specifically, the Debtors have determined that approximately $377,000,000 of their outstanding prepetition indebtedness was secured by liens on substantially all of their assets, including liens on the Reclaimed Goods. This prepetition indebtedness was satisfied by the proceeds of a debtor-in-possession financing facility, which itself was secured by substantially identical liens," Ms. Ball says. If the Court determines that the Prior Lien Defense is applicable, Ms. Ball asserts that further litigation of the Fact- Intensive Defenses and any other issues relating to the Remaining Reclamation Claims would be rendered unnecessary since a ruling in favor of the Debtors would render all of the Remaining Reclamation Claims valueless. Moreover, Ms. Ball continues, the Prior Lien Defense does not depend on facts specific to each Objecting Claimant, but instead depends on a set of common facts relating to the Debtors' prepetition and postpetition financing arrangements. Thus, Ms. Ball says, litigation of the generally applicable Prior Lien Defense prior to any litigation of the Fact-Intensive Defenses or other issues would preserve the resources of the Debtors, the Objecting Claimants and the Court, while potentially obviating the need for the piecemeal and heavily fact-intensive litigation of the more than 130 individual Remaining Reclamation Claims. The Debtors also ask the Court to stay and postpone any and all litigation related to the Fact-Intensive Defenses until after the Court: (a) has ruled on the applicability of the Debtors' Prior Lien Defense to the Remaining Reclamation Claims; and (b) has conducted Scheduling Conferences. The Debtors also ask the Honorable Burton R. Lifland to establish a Briefing Schedule for the litigation of the Prior Lien Defense: (1) The Debtors' initial brief in support of the Prior Lien Defense to the Remaining Reclamation Claims will be filed with the Court and served on all necessary parties no later than Monday, Oct. 23, 2006, at 4:00 p.m., Eastern Time. (2) All briefs in response to the Initial Brief must be filed with the Court by Objecting Claimants that wish to file further papers in response to the Initial Brief and served on all necessary parties no later than Tuesday, Nov. 7, 2006, at 4:00 p.m., Eastern Time. (3) The Debtors' reply to the Responsive Briefs must be filed with the Court and served on all necessary parties no later than Wednesday, Nov. 22, 2006, at 4:00 p.m., Eastern Time. The Debtors further ask the Court to convene a hearing with respect to their asserted Prior Lien Defense on Nov. 29, 2006, at 10:00 a.m., Eastern Time. If and to the extent that the Debtors do not prevail with respect to the Prior Lien Defense, the Debtors and the Objecting Claimants likely will have to litigate the merits of the Remaining Reclamation Claims, including the prima facie case for each claim and the other relevant Fact-Intensive Defenses. If and when that litigation becomes necessary, the Debtors further ask the Court to establish one or more scheduling conferences. 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). DANA CORP: Wants to Assume & Assign Liberty Property Lease ---------------------------------------------------------- Dana Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for authority to: (a) assume a Deed of Lease, dated Aug. 11, 2005, with Liberty Property, L.P., for a property located at 6950 Harbour View Boulevard, in Suffolk, Virginia; (b) assign the Warehouse Lease to Walker International Transportation, LLC, effective as of Nov. 1, 2006; and (c) establish $2,250 as cure amount for the Warehouse Lease to be paid to Liberty. The Debtors entered into the Warehouse Lease to secure a location for some of their warehousing functions relating to, among other things, the importing and exporting of parts, Corinne Ball, Esq., at Jones Day, in New York, relates. The Warehouse Lease is set to expire on Oct. 31, 2011, and calls for annual rent beginning at approximately $28,000 per month, which increases periodically over the term of the lease. According to Ms. Ball, the Debtors have determined that outsourcing their Warehousing Functions would assist them in focusing on strategic decision-making, increasing efficiency and potentially generating long term cost savings. As a part of their outsourcing efforts, the Debtors seek to assign the Warehouse Lease to Walker. The Debtors entered into an operating service agreement with Walker under which Walker agreed to perform the Warehousing Functions for the Debtors. Under the outsourcing arrangement in the Walker Contract, the Debtors will pay $105,000 to Walker in the first year. The amount is approximately equal to or less than what the Debtors are currently paying for similar services, Ms. Ball informs the Court. The Walker Contract will also: (a) permit Walker to utilize portions of the Warehouse Facility to serve other customers, reducing utilization for the Debtors totaling $84,000 per year; (b) provide the Debtors with 62-day payment terms; and (c) require Walker to pass along 50% of any related productivity gains to the Debtors. Ms. Ball adds that the Debtors' relationship with Walker could provide other benefits and efficiencies because Walker performs warehousing functions for the Debtors in other cities. The breadth of their relationship ultimately could result in synergies between the two operations to the benefit of both the Debtors and Walker, Ms. Ball avers. 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: Court Moves State Court Action Removal Period to May 28 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York extended the period by which Dana Corporation and its debtor- affiliates may file notices of removal with respect to any actions to federal court under Section 1452 of the Judicial Procedure Code and Rule 9027 of the Federal Rules of Bankruptcy Procedure until the later of: (a) May 28, 2007; or (b) 30 days after the entry of an order terminating the automatic stay with respect to the particular Action sought to be removed. As reported in the Troubled Company Reporter on Sept. 6, 2006, in light of the myriad of critical issues in their Chapter 11 cases, the Debtors believe that additional time is needed to complete an analysis of, and make final decisions with respect to, the possible removal of the Actions in the context of their overall restructuring. Corinne Ball, Esq., at Jones Day, in New York, told the Court that the Debtors are continuing to address the numerous tasks necessary to the day-to-day administration of their large and complex Chapter 11 cases and their business operations. The Debtors are actively engaged in developing and refining a strategic business plan and participating in discussions with their various constituencies regarding the reorganization process, according to Ms. Ball. The business plan continues to evolve to take into consideration ongoing business and financial analyses, developments in the Debtors' chapter 11 cases, the rapidly changing market conditions in the automotive industry, discussions with key constituencies and other factors. The Debtors have not had the information necessary to complete a final analysis relating to the potential removal of the Actions, Ms. Ball said. The Debtors anticipate that by the end of the extension period, they will have made substantial progress on the completion and validation of their business plan and will have begun the development of a plan of reorganization. Thus, the Debtors will be in a better position to evaluate potential removal issues in the context of their overall restructuring efforts, Ms. Ball pointed out. Absent the requested extension of the Removal Deadline, Ms. Ball asserted that the Debtors risk making premature removal decisions or waiving those rights before they have had an opportunity to complete an appropriate evaluation of the issues. 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). DOWNEAST HERITAGE: Case Summary & 8 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: The Downeast Heritage Museum 39 Union Street Calais, ME 04619 Bankruptcy Case No.: 06-10360 Type of Business: The Debtor is a nonprofit organization. See http://www.downeastheritage.org/ Chapter 11 Petition Date: September 12, 2006 Court: District of Maine (Bangor) Debtor's Counsel: Stephen G. Morrell, Esq. Eaton Peabody 167 Park Row P.O. Box 9 Brunswick, ME 04011 Tel: (207) 729-1144 Fax: (207) 729-1140 Total Assets: $768,082 Total Debts: $3,272,891 Debtor's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ USDA Rural Development Loan $2,080,952 735 Main Street, Suite 1 Value of security: Presque Isle, ME 04769 $500,000 USDA Rural Development Loan $600,000 735 Main Street, Suite 1 Presque Isle, ME 04769 Calais Federal Savings Loan $147,817 344 Main Street Calais, ME 04619 Bangor Savings Bank Loan $146,990 1 Center Street Machias, ME 04654 First National Bank Loan $146,647 P.O. Box 258 Bar Harbor, ME 04609 Machias Savings Bank Loan $146,334 210 North Street Calais, ME 04619 James Thompson Vacation Pay $3,076 Calais, ME 04619 (4 Weeks) Tammy Davis Vacation Pay $1,072 39 Union Street (2 Weeks) Calais, ME 04619 EASTMAN KODAK: Names Frank S. Sklarsky as Chief Financial Officer ----------------------------------------------------------------- Eastman Kodak Company has named Frank S. Sklarsky to succeed Robert H. Brust as the company's Chief Financial Officer. Sklarsky, 49, is Executive Vice President and CFO of ConAgra Foods Inc. He will join Kodak on Oct. 30 as Executive Vice President, and will become the CFO effective Nov. 13, subsequent to the company's filing of its Third-Quarter Form 10-Q with the Securities and Exchange Commission. Sklarsky will report to Kodak Chairman and Chief Executive Officer Antonio M. Perez. Brust, 63, announced in January his intention to retire on Feb. 1, 2007. During this interim, he will remain with the company as an Executive Vice President, and will assist Sklarsky in his transition. At ConAgra, one of North America's leading packaged food companies, Sklarsky implemented a new financial organization, significantly strengthened the balance sheet, and played a major role in building credibility with the investment community. He also helped expand profit margins at the $14 billion company. Prior to ConAgra, which he joined as CFO in 2004, Sklarsky was a senior financial executive at DaimlerChrysler and Dell Inc. In his 26-year career, he has developed a reputation for improving the financial operations, as well as the overall financial performance, of the companies he has served. At Kodak, as with ConAgra, Sklarsky will be responsible for worldwide financial operations, including Financial Reporting and Analysis, Treasury, Audit, Controllership, Tax, and Investor Relations. Sklarsky also will have responsibility for Information Technology functions, Purchasing and Global Shared Services. "Frank is exactly the right CFO at this moment in Kodak's historic transformation," Perez said. "Frank was a key player in the financial and operational improvements achieved by ConAgra, as he was at DaimlerChrysler and Dell. He understands the challenges of large, complex companies that are going through great change, and he also understands the speed and urgency demanded by digital markets. I am confident that Frank will build on the significant contributions of Bob Brust as we work together to extend Kodak's leadership in digital markets." Sklarsky, a native of Buffalo, New York, is a 1978 graduate of the Rochester Institute of Technology. He received an MBA from Harvard Business School in 1983. "I am thrilled to be joining the company at this exciting time in its transformation," Sklarsky said. "I was attracted to Kodak's innovative portfolio of commercial and consumer imaging products, all of which contribute to making life richer and more enjoyable for our customers. The combination of a global iconic brand and powerful intellectual property further positions Kodak to achieve sustained success in digital markets. The company has significant opportunities to achieve margin expansion in those markets, and I consider it a privilege to be given the responsibility to help pursue those opportunities with Antonio and the world-class team he has assembled." Sklarsky was recruited by ConAgra in late 2004 from DaimlerChrysler, where he was Vice President, Product Finance, a position he held between 2001 and 2004. Prior to that, he spent more than one year as Vice President, Corporate Finance, and Vice President of Dell's $5 billion consumer business. Sklarsky left Dell when DaimlerChrysler recruited him back to assist with the company's turnaround efforts. Sklarsky first joined DaimlerChrysler in 1983, and held a series of increasingly responsible finance positions before leaving for Dell in 2000. At the time of his departure for Dell, he was DaimlerChrysler's Vice President, Corporate Financial Activities. He also had financial responsibility for procurement, product quality, cost management and worldwide manufacturing during his tenure. Prior to DaimlerChrysler, Sklarsky, a certified public accountant, served as a Senior Accountant at Ernst & Young International from 1978 to 1981. About Eastman Kodak Co. Headquartered in Rochester, New York, Eastman Kodak Co. -- http://www.kodak.com/-- engages in the development, manufacturing, and marketing of digital and traditional imaging products, services, and solutions to consumers, businesses, the graphic communications market, the entertainment industry, professionals, healthcare providers, and other customers. * * * As reported in the Troubled Company Reporter on Aug. 11, 2006, Moody's Investors Service placed Eastman Kodak Company on review for possible downgrade. Ratings under review include the Company's B1 Corporate Family Rating; B2 Senior Unsecured Rating; and Ba3 rating on the Senior Secured Credit Facilities. Moody's review continues to focus on the company's potential sale of the Kodak Health Group as well as the fundamental operating performance of the company. As reported in the Troubled Company Reporter on Aug. 7, 2006, Standard & Poor's Ratings Services placed its ratings on Eastman Kodak Co. (B+/Watch Neg/--) on CreditWatch with negative implications. The Rochester, New York-based imaging company had $3.5 billion in debt as of June 30, 2006. ECHOSTAR DBS: Fitch Assigns BB- Rating to $500 Million Sr. Notes ---------------------------------------------------------------- Fitch Ratings assigned a 'BB-' rating to Echostar DBS Corporation's $500 million offering of 7% senior notes due 2013. The notes will rank equally with the other debt outstanding at Echostar DBS Corporation. Proceeds from the note offering will be used to fund the early redemption of the company's floating rate senior notes due 2008 on Oct. 1, 2006. Echostar DBS Corporation is a wholly owned subsidiary of Echostar Communications Corporation. The Issuer Default Rating for Echostar and Echostar DBS Corporation is 'BB-'. The Rating Outlook is Stable. Fitch's ratings incorporate Echostar's lack of revenue and service diversity as well as the increasing business risks connected to Echostar's credit profile stemming from the intense competition for subscriber market share with cable multiple systems operators. Fitch anticipates that the competitive environment will only intensify as the cable MSOs' voice over Internet protocol telephony service gains scale and the telephone companies continue with the introduction of video service. From Fitch's perspective, the lack of revenue and service diversity, primarily stemming from the limitations inherent with Echostar's satellite infrastructure, weakens the company's competitive position and ability to respond to the changing and riskier operating environment. Fitch's ratings also reflect: * the operating leverage derived from Echostar's size and scale as the fourth largest multichannel video programming distributor in the United States; * the company's solid liquidity position, and * expectation for continued free cash flow generation. Fitch's Stable Rating Outlook reflects the consistent subscriber economic trends as well as the positive EBITDA and free cash flow prospects expected over the near term balanced with the very competitive operating environment. Outside of the announced share repurchase authorization; Fitch views the use of cash for shareholder friendly actions as an erosion of financial flexibility that could result in pressure on the ratings or an Outlook revision. Additionally, Fitch has concerns related to the uncertainty surrounding the company's broadband strategy and the potential cash requirements to launch a wireless broadband service. ENCORE MEDICAL: S&P Rates Proposed $215 Million Sr. Notes at CCC+ ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its secured loan and recovery ratings to Encore Medical Finance LLC's proposed $50 million revolving credit facility maturing in 2012 and $325 million term loan B maturing in 2013. The loan was rated 'B' (at the same level as the 'B' corporate credit rating on parent company Encore Medical Corp.) with a recovery rating of '2', indicating the expectation for substantial (80%-100%) recovery of principal in the event of a payment default. Standard & Poor's also assigned its 'CCC+' subordinated debt rating to Encore Medical Finance LLC and Encore Medical Finance Corp.'s proposed $215 million senior subordinated notes maturing in 2014. The Blackstone Group intends to use the debt proceeds and approximately $350 million of equity to: * purchase Encore Medical Corp.; * refinance Encore's existing debt; and * fund related transaction costs. The 'B' corporate credit rating on Austin, Texas-based Encore Medical Corp. was affirmed and removed from CreditWatch, where it was placed with negative implications July 7, 2006, due to concerns about the company's post-transaction debt leverage. The rating outlook is stable. "The low-speculative-grade rating on Encore reflects the company's significant reliance on electrotherapy products, its acquisition- based growth strategy, and its highly leveraged capital structure," said Standard & Poor's credit analyst Jesse Juliano. "These negative rating factors are only partially offset by the company's strong positions in the niche physical therapy and orthopedic rehabilitation equipment markets, and its liquidity, which is consistent with the 'B' rating category." ENRON CORP: Distributes $3.4 Billion to Creditors ------------------------------------------------- Enron Corp. disclosed its twelfth distribution to creditors of Enron Corp. and its affiliated debtor companies on Oct. 3, 2006. The distribution to holders of allowed general unsecured claims and allowed guaranty claims totals $3,371,700,000, consisting of $3,337,300,000 in cash and shares of Portland General Electric Company stock valued at $34,400,000. Since November 2004, Enron has returned $9,396,900,000 to Creditors in twice-yearly distributions, in April and October, as well as in "catch-up" distributions paid on an interim basis every two months. "[The] distribution is another very significant amount delivered to Creditors and represents a tremendous financial outcome for the Enron estate," said John Ray, President and Chairman of the Board. "The total amounts distributed with respect to Enron Corp. and Enron North America Corp. represent a return to Creditors to date of 26.0% and 29.0%, respectively, as compared to Disclosure Statement total return estimates of 17.4% and 20.1%. Our mission going forward is to bring to settlement or trial the remaining litigation with those institutions which assisted in the downfall of Enron, to liquidate the remaining assets held for sale, and to continue to pursue a course which maximizes distributable value to Creditors and improve upon the returns to date." The distribution included 1,639,046 shares of PGE, which, when added to prior distributions of 27,957,266 shares (and 53,037 of PGE shares returned and held for further distribution), cumulatively represents approximately 47% of PGE's 62,500,000 issued and outstanding shares. Pursuant to Sections 21.3 and 32.1 of the Plan, the number of shares of PGE Common Stock distributed in October 2006 is less than the distribution in April 2006, reflecting the necessity to reserve significant shares of PGE Common Stock to maintain a balanced mix of Plan Currency by Plan Class and provide for potential additional cash inflows to the estates from litigation, asset sales and other resources. Accordingly, certain creditors are receiving no additional shares of PGE Common Stock in the October 2006 distribution. The remaining 32,850,651 PGE shares will be held by the Disputed Claims Reserve, which is not affiliated with Enron, for future distribution to creditors of Enron by the Bankruptcy Court in accordance with Enron's Chapter 11 Plan. The Disputed Claims Reserve currently consists of approximately $6,067,900,000 in cash and $690,100,000 PGE share value. A full-text-copy of the Notice of Distribution for October is available for free at http://ResearchArchives.com/t/s?12e2 Headquartered in Houston, Texas, Enron Corporation filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP represent the Debtor. Jeffrey K. Milton, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. ENTERGY NEW: BNY & FGIC Want Interest Payments on Sec. Bonds Now ---------------------------------------------------------------- The Bank of New York, as indenture trustee, and the Financial Guaranty Insurance Company reiterate their request that Entergy New Orleans, Inc., be directed to make interest payments beginning as of Sept. 23, 2006 on the ENOI-issued secured bonds as "adequate protection" of the bondholders' interest pursuant to Sections 363(e) and 361(1) of the Bankruptcy Code. In the alternative, BNY and FGIC ask the U.S. Bankruptcy Court for the Eastern District of Louisiana, pursuant to Section 105(a) of the Bankruptcy Code, to authorize and direct the Debtor to make the interest payments on the basis that the payments are in the best interest of its estate, its creditors and all parties-in- interest. Tristan Manthey, Esq., at Heller, Draper, Hayden, Patrick and Horn, L.L.C., in New Orleans, Louisiana, citing, among others, In re Revco D.S., Inc., 901 F.2d 1359, 1362 (6th Cir. 1990), notes that courts have held that payment of interest to a holder of prepetition secured debt is an appropriate form of adequate protection. The bondholders have a security interest in all of the Debtor's assets as a result of a settlement stipulation among the Debtor, the Trustee and FGIC. Payment of interest to the Bonds would compensate the bondholders for the significant risk to their collateral, Mr. Manthey asserts. He avers that, in light of various uncertainties associated with the future of the Debtor's business, it is possible that the bondholders' collateral could decline in value. Mr. Manthey notes that ENOI is seeking an extension of its exclusive period to file a reorganization plan through December 19, 2006. However, he points out, it is not clear whether ENOI would be prepared to file a plan by December 19 or whether it intends to seek further extensions from the Court. Mr. Manthey adds that each day that elapses until a plan is confirmed for ENOI and the bondholders are paid the interest to which they are entitled, the estate will continue to accrue liability for interest on the unpaid Bond interest. Interest on the unpaid interest will further increase the estate's costs and potentially reduce distributions to unsecured creditors. The Debtor's failure to make interest payments to the Bondholders and allow interest on interest to accrue, to the detriment of its creditors, is tantamount to a breach of fiduciary duty, Mr. Manthey contends. Even if the Court finds that the payment of interest to the bondholders is not warranted under adequate protection standards, the Court may authorize the payments by an exercise of its broad equitable powers under Section 105(a), Mr. Manthey maintains. In light of the circumstances, it is clear that the Court is authorized to and should grant the interest payments to protect the best interests of the estate and prevent the Debtor from abusing the bankruptcy process, Mr. Manthey asserts. About Entergy New Orleans Inc. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FALCON AIR: Ch. 11 Trustee Has Until Dec. 6 to Decide on Leases --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida gave Kenneth A. Welt, the Chapter 11 Trustee appointed in Falcon Air Express, Inc.'s chapter 11 case, until Dec. 6, 2006, to assume, assume and assign or reject unexpired nonresidential real property leases. As reported in the Troubled Company Reporter on Sept. 13, 2006, Mr. Welt informed the Court that on June 29, 1999, the Debtor and 9500 Building, Ltd., entered into a lease for certain real property located at 9500 Northwest 41st Street in Miami, Florida. The original lease term expired July 31, 2004. According to Mr. Welt, the lease was extended through May 31, 2006, and the Debtor has remained in possession of the premises since that period, as a month-to-month tenant at will, on an agreed basis with the landlord pursuant to the terms of the lease and the parties' Court-approved stipulation entered July 7, 2006. Mr. Welt and the Debtor intend to relocate to another building located at 9000 Northwest 15th Street in Miami, Florida, pursuant to a commercial property lease entered between the Debtor and Lakes Edge Commercial Properties, LLC, on or about March 14, 2005. The new lease had a five-year term. Mr. Welt said the Debtors' interests in the leases and rights are valuable property leases, and that the new lease has a valuable purchase option that is attractive to prospective buyers of the Debtor's business. The extension, Mr. Welt explained, will allow him to decide on leases in connection with a Section 363 sale or Chapter 11 Plan, and to avoid substantial administrative expenses to the estate by preventing assumption of the new lease prior to sale of the business or Plan confirmation. Headquartered in Miami, Florida, Falcon Air Express, Inc. -- http://www.falconairexpress.net/-- is a small and low-cost airline company that provides charter service and renders foreign and U.S. carriers sub-services on schedules routes. The Debtor and its affiliate, MAJEL Aircraft Leasing Corp., filed for chapter 11 protection on May 10, 2006 (Bankr. S.D. Fla. Case Nos. 06-11877 & 06-11878). Brian G. Rich, Esq., at Berger Singerman, P.A., represents the Debtors in their restructuring efforts. Peter D. Russin, Esq., and Michael S. Budwick, Esq., at Meland Russin & Budwick, P.A., represent the Official Committee of Unsecured Creditors. On June 26, 2006, Kenneth A. Welt was appointed as the Debtor's Chapter 11 Trustee. Ariel Rodriguez, Esq., and Frank P. Terzo, Esq., at Katz Barron Squitero Faust represents the Chapter 11 Trustee. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. FAREPORT CAPITAL: Outlines Financing and Debt Restructuring Deals ----------------------------------------------------------------- Fareport Capital Inc. will restructure its affairs, settle outstanding litigation, complete a conversion of substantially all of its current debt obligations, consolidate its issued and outstanding common shares and pursue a private placement financing of its common shares. These are all subject to shareholder and regulatory approval. Fareport proposes to enter into a financing transaction with an investor. The investor will make a $2,800,000 commitment to acquire certain existing debt and new common shares of Fareport. Specifically, the investor will first advance the company $200,000 by way of an unsecured subordinated loan bearing interest at 12% per annum, evidenced by a convertible promissory note, to be used as working capital. Next, the investor will acquire prior loans from current holders, which are certain pre-existing debentures, promissory notes and other indebtedness of the company having a face value of approximately $3,076,084. The company then proposes to complete a 100:1 share consolidation, following which the prior loans will be converted into its common shares. The investor will then purchase approximately $1,130,838 worth of common shares of Fareport issued from treasury at the Conversion Price. It is anticipated that the investor will instruct the company to register the shares issuable upon the conversion of the prior loans in the names of certain shareholders of the investor. Finally, the company proposes to create and issue to the investor $100,000 worth of first convertible preferred shares such that the investor will, after those preferred shares are converted into common shares, own for its own account 60% of the issued and outstanding common shares of Fareport. As a result of these transactions, the investor would become the controlling shareholder of the company. The terms of the transaction have been set out in a binding commitment letter and term sheet. It is anticipated that the commitment letter will be superceded by definitive detailed documentation. Pursuant to the commitment letter, Fareport will seek the agreement of the creditors under the prior loans to settle, in full and final satisfaction, the prior loans in exchange for the sale of such prior loans to the investor for cash. This settlement is also expected to include a settlement of all outstanding litigation involving Fareport. The "Conversion Price" will be $2.50 on a post-consolidation basis, being the price per share equal to 80% percent of $0.025, the closing price of the common shares on September 21, 2006, the last trading day preceding the execution of the commitment letter, adjusted to reflect the share consolidation. In order to complete these transactions, the outstanding litigation must be settled and prior shareholder approval of: (a) the consolidation of Fareport's common shares on a one hundred "old" common shares for one "new" common share basis; (b) the terms of conversion of the prior debt; (c) the issuance of Common Shares from treasury; and (d) the creation of a new class of preferred shares of Fareport must be obtained. A prior TSX Venture Exchange approval is also required to complete the transactions. The company covenants to hold a special meeting of its shareholders to approve these matters within 75 days of the advance closing. These transactions are also subject to the investor being satisfied with its due diligence investigations of Fareport, acting reasonably, such condition to be satisfied or waived by the investor by Oct. 23, 2006. Also, Fareport will provide an update with regards to its compliance with Ontario Securities Commission Policy 57-603. In addition to the foregoing, and further to the press release of September 22, 2006, the company is up-to-date with respect to its financial statements and management reporting. The temporary management and insider cease trade order imposed pursuant to OSC Policy 57-603 continues to be in effect. The MCTO prohibits present and certain past directors, officers and insiders of the company from trading in its securities of. Fareport will continue to provide updates on these and related matters in accordance with OSC Policy 57-603. About Fareport Capital Fareport Capital Inc. (TSX-V: CAB) -- http://www.fareport.com/-- operates the Crown Taxi and Olympic Taxi brokerages and dispatch operations in the city of Toronto. The Crown Taxi division dispatches over 300 vehicles. In addition, through its Crown Transportation and Trax Shuttle Services divisions, the Company also offers charter transportation services. * * * Fareport Capital Inc.'s balance sheet at April 30, 2006 showed total assets of CDN$1.7 million and total liabilities of CDN$3.8 million, resulting in a shareholders' deficit of CDN$2.1 million. Shareholders' deficit at July 31, 2005 stood at CDN$1.5 million. FORD MOTOR: Improvement to Show in 2007 Second Half, Says CFO ------------------------------------------------------------- Ford Motor Company expects to show improvement when its cost cutting measures take effect and production ramps up in the second half of 2007, The Wall Street Journal reports. The Journal article quoted Don Leclair, Ford's chief financial officer as saying that the effect of the cost cuts will not be immediately visible because of lower production in the first half of 2007 and declining market share that is seen to continue until 2008. In early September, Ford unveiled a revised version of its "Way Forward" turnaround plan that is seen to further reduce its capacity and work force and accelerate new product introductions. Ford expects ongoing annual operating cost reductions of approximately $5 billion from its restructuring efforts. Ford's actions include buyout offers for all 75,000 of its U.S. hourly workers, a 30% reduction in salaried staff, and the suspension of quarterly dividends. As reported in the Troubled Company Reporter on Aug. 21, 2006, the revised plan will also cut fourth-quarter production by 21% -- or 168,000 units -- compared with the fourth quarter a year ago, and reduce third-quarter production by approximately 20,000 units. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive- related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Aug. 22, 2006, Dominion Bond Rating Service placed long-term debt rating of Ford Motor Company Under Review with Negative Implications following announcement that Ford will sharply reduce its North American vehicle production in 2006. DBRS lowered on July 21, 2006, Ford Motor Company's long-term debt rating to B from BB, and lowered its short-term debt rating to R-3 middle from R-3 high. DBRS also lowered Ford Motor Credit Company's long-term debt rating to BB(low) from BB, and confirmed Ford Credit's short-term debt rating at R-3(high). Fitch Ratings also downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'B' from 'B+'. Fitch also lowered the Ford's senior unsecured rating to 'B+/RR3' from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB- /RR2' from 'BB/RR2'. The Rating Outlook remains Negative. Standard & Poor's Ratings Services also placed its 'B+' long- term and 'B-2' short-term ratings on Ford Motor Co., Ford Motor Credit Co., and related entities on CreditWatch with negative implications. As reported in the Troubled Company Reporter on July 24, 2006, Moody's Investors Service lowered the Corporate Family and senior unsecured ratings of Ford Motor Company to B2 from Ba3 and the senior unsecured rating of Ford Motor Credit Company to Ba3 from Ba2. The Speculative Grade Liquidity rating of Ford has been confirmed at SGL-1, indicating very good liquidity over the coming 12-month period. The outlook for the ratings is negative. GENCORP 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 B2 Corporate Family Rating for GenCorp 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 ---------- ------- ------- ------ ---------- Revolving Credit Facility due 2009 B1 Ba2 LGD1 9% Term Loan due 2010 B1 Ba2 LGD1 9% 9.5% Sr. Subor. Notes due 2013 Caa1 B1 LGD3 32% 5.75% Convertible Subordinated Notes due 2007 Caa2 Caa1 LGD5 78% 4% Contingent Convertible Subor. Notes due 2024 Caa2 Caa1 LGD5 78% 2.25% Convertible Subor. Debentures due 2024 Caa2 Caa1 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%). GenCorp Inc. manufactures technology-based aerospace and defense products in the United States. Based in Rancho Cordova, Calif., the Company operates through two segments, Aerospace and Defense and Real Estate. GENERAL MOTORS: Nissan COO Says Talks will End in Mid-October ------------------------------------------------------------- Possible tie-up talks among General Motors Corp., Renault SA, and Nissan Motor Co. will end by mid-October, Toshiyuki Shiga, Nissan's chief operating officer, said. Chris Gallagher at MarketWatch reported that Mr. Shiga did not comment on the possibility that the talks will extend beyond the Oct. 15 deadline. Reports say that GM chairman and chief executive officer Rick Wagoner is willing to consider the alliance beyond the deadline. Renault has a 44% stake in Nissan, which in turn owns a 15% stake in the French automaker. The billionaire Kirk Kerkorian who owns Tracinda Corp is pressuring Mr. Wagoner to consider the 3-way alliance. Mr. Kerkorian said that Tracinda may buy 12 million shares of GM, increasing its stake from 9.9% to 12%. About General Motors General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. * * * As reported in the Troubled Company Reporter on July 28, 2006, Standard & Poor's Ratings Services held all of its ratings on General Motors Corp. -- including the 'B' corporate credit rating, but excluding the '1' recovery rating -- on CreditWatch with negative implications, where they were placed March 29, 2006. As reported in the Troubled Company Reporter on July 27, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of General Motors Corporation and General Motors of Canada Limited to B. The commercial paper ratings of both companies are also downgraded to R-3 (low) from R-3. As reported in the Troubled Company Reporter on June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new $4.48 billion senior secured bank facility. The 'RR1' is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to $4.5 billion being proposed by General Motors Corporation, affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. The rating outlook is negative. GENERAL MOTORS: Amends Bylaws & Corporate Governance Policies ------------------------------------------------------------- General Motors Corp.'s Board of Directors voted to amend the Company's Bylaws and corporate governance policies to address stockholder views raised at this year's Annual Meeting. The changes include adoption of the majority-voting standard for the election of directors and a stronger policy to recover unearned incentive compensation from executive officers in cases of fraud, misconduct, or negligence. The amendments are effective immediately. "Earlier this year, our stockholders expressed a desire for change surrounding the election of directors and a more defined policy of accountability for senior officers," GM chairman and chief executive officer Rick Wagoner said. "We listened to their views, and after careful consideration, the Board voted to make changes to certain Bylaws and corporate governance policies that are in line with stockholders' input." The Board agreed to adopt a majority-voting standard in uncontested elections of directors, when the number of nominees does not exceed the number of directors to be elected. Majority voting requires that nominees to the Board receive more than 50% of the votes cast to be elected. Abstentions will not be included towards counting a majority. Directors were previously elected by plurality in uncontested elections. In accordance with the majority-voting Bylaw, the Board will require director nominees to submit irrevocable resignations as a condition to being nominated. The Board could accept these resignations if a director do not receive a majority of the votes cast. Under a related governance policy, the Board will accept the resignation of an unsuccessful incumbent absent a compelling reason to reject the resignation, in accordance with criteria set out in the policy. The Bylaws were also amended to fix the number of directors at the current level of 12, subject to future change by the Board. The majority-voting standard received 59% of the affirmative vote at GM's Annual Meeting in June. Shortly after the meeting, the Delaware Legislature amended the state's corporation law to better facilitate majority voting. The Board chose not to adopt cumulative voting, which was the subject of a stockholder proposal that was supported by 54% of votes cast. The Board believes that a director has the fiduciary duty to represent all stockholders and is concerned that cumulative voting could lead to the election of constituency directors who feel a duty to the electorate forming their constituency. Also, in a company with majority voting, the addition of cumulative voting would raise the possibility of accumulating "withhold" or "against" votes. This could create the potential for small groups of stockholders to overcome the interests of the majority. The Board also adopted a corporate policy under which the company may require reimbursement of bonus or incentive compensation that may have been paid to executive officers in the event it is later determined that fraud, misconduct, or negligence significantly contributed to a restatement of financial results that led to the awarding of unearned incentive compensation. A stockholder proposal on this issue was supported by 42% of the shares voted at the Annual Meeting. Although this proposal did not receive majority support, the Board voted to respond to the stockholders desire to see a policy that reflects the robust manner in which GM has and would deal with such circumstances. In addition to these governance actions, the Board has amended the Bylaws to specify the procedures applicable to consent solicitations initiated by stockholders, which complements the existing procedures for stockholder initiatives at meetings. These changes also provide a framework for the conduct of solicitations in accordance with Delaware law. The amended Bylaws and corporate governance policies will be filed with the U.S. Securities and Exchange Commission. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. * * * As reported in the Troubled Company Reporter on July 28, 2006, Standard & Poor's Ratings Services held all of its ratings on General Motors Corp. -- including the 'B' corporate credit rating, but excluding the '1' recovery rating -- on CreditWatch with negative implications, where they were placed March 29, 2006. As reported in the Troubled Company Reporter on July 27, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of General Motors Corporation and General Motors of Canada Limited to B. The commercial paper ratings of both companies are also downgraded to R-3 (low) from R-3. As reported in the Troubled Company Reporter on June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new $4.48 billion senior secured bank facility. The 'RR1' is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to $4.5 billion being proposed by General Motors Corporation, affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. The rating outlook is negative. GENOA 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 B2 Corporate Family Rating for Genoa Healthcare Group, 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 ---------- ------- ------- ------ ---------- $20 Million Senior Secured Revolving Credit Facility due 2010 B2 Ba3 LGD2 27% $90 Million Senior Secured First Lien Term Loan due 2012 B2 Ba3 LGD2 27% $50 Million Senior Secured Second Lien Term Loan due 2013 Caa1 Caa1 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 Tampa, FL, Genoa Healthcare Group, LLC, through its subsidiaries, provides skilled nursing, medically complex and specialty healthcare services in 61 skilled nursing facilities throughout the state of Florida comprising approximately 7,500 beds. The company also provides consulting and administrative services to an additional 66 facilities in 16 states and the District of Columbia through contractual arrangements. GEORGIA STORAGE: Case Summary & Largest Unsecured Creditor ---------------------------------------------------------- Debtor: Georgia Storage, LLC dba Mike's U Storall 225 Bernside Court Alpharetta, GA 30022-5197 Bankruptcy Case No.: 06-72530 Type of Business: The Debtor operates a climate-controlled storage facility. See http://www.mikesustorall.com/ Chapter 11 Petition Date: October 3, 2006 Court: Northern District of Georgia (Atlanta) Judge: Joyce Bihary Debtor's Counsel: Robert D. Schwartz, Esq. Charlton & Glover, P.C. 87 Vickery Street Roswell, GA 30075 Tel: (770) 993-1005 Fax: (770) 993-9672 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hamilton Title Co. Loans $550,000 Profit Sharing Plan c/o Merrill Lynch 333 North Point Center E Alpharetta, GA 30022-8297 GGNSC 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 for the U.S. Hospital and Long-term Care sectors this week, the rating agency confirmed its B2 Corporate Family Rating for GGNSC Holdings, LLC. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings of the Company's subsidiary, Golden Gate National Senior Care, LLC, on loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Senior Secured Revolving Credit Facility due 2011 B1 Ba3 LGD2 26% Senior Secured First Lien Term Loan due 2011 B1 Ba3 LGD2 26% Senior Secured Second Lien Term Loan due 2011 Caa1 B3 LGD4 68% 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%). GREAT ATLANTIC: Moody's Confirms 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. and Canadian Retail sector, the rating agency confirmed its B3 Corporate Family Rating for The Great Atlantic & Pacific Tea Company, 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 Notes Caa1 Caa1 LGD5 73% Multi-Seniority Shelf Senior Unsecured Caa1 Caa1 LGD5 73% Multi-Seniority Shelf Senior Subordinated Caa2 Caa2 LGD6 96% Multi-Seniority Shelf Junior Subordinated Caa2 Caa2 LGD6 97% Multi-Seniority Shelf Preferred Stock Caa3 Caa2 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%). Founded in 1859, The Great Atlantic & Pacific Tea Company, Inc., -- http://www.aptea.com/-- is one of the nation's first supermarket chains. The Company operates 405 stores in 9 states and the District of Columbia under the following trade names: A&P, Waldbaum's, The Food Emporium, Super Foodmart, Super Fresh, Farmer Jack, Sav-A-Center and Food Basics. GROWTH GROUP: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Growth Group, Inc. 103 North Kaufman Street, Suite 5B Seagoville, TX 75153 Bankruptcy Case No.: 06-34301 Chapter 11 Petition Date: October 3, 2006 Court: Northern District of Texas (Dallas) Debtor's Counsel: Mark A. Castillo, Esq. The Curtis Law Firm, P.C. 901 Main Street, Suite 6515 Dallas, TX 75202 Tel: (214) 752-2222 Fax: (214) 752-0709 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million Debtor's Two Largest Unsecured Creditors: Entity Claim Amount ------ ------------ City of Seagoville $2,246 702 North Highway 175 Seagoville, TX 75159 TXU Energy $358 P.O. Box 227097 Dallas, TX 75222-7097 HEALTHESSENTIALS SOLUTIONS: Court Confirms Plan of Liquidation -------------------------------------------------------------- The Hon. Joan Cooper of the U.S. Bankruptcy Court for the Western District of Kentucky has confirmed HealthEssentials Solutions, Inc. and its debtor-affiliates' Amended Plan of Liquidation. The Court determined that the Plan satisfies the 13 requirements for confirmation stated in Section 1129(a) of the Bankruptcy Code. Business First of Louisville reports that the bulk of the liquidation proceeds, composed primarily of $16 million from the September 2005 sale of the Debtor's home-health business, will be paid to its largest creditor and primary lender CIT Healthcare LLC. The Debtor owes CIT approximately $11.5 million. Other creditors will receive a portion of their claims under the liquidation plan. Pursuant to the Plan, Martin Fletcher will serve as a plan administrator to carry out the liquidation plan and Steven Sass, as creditors trustee, to distribute the remaining assets and pursue lawsuits on behalf of the creditors. A full-text copy of the Company's Amended Chapter 11 Plan of Liquidation is available for a fee at: http://www.researcharchives.com/bin/download?id=061003224749 Headquartered in Louisville, Kentucky, HealthEssentials Solutions, Inc. -- http://www.healthessentialsinc.com/-- provides primary care services to elderly patients. The Company, along with eight subsidiaries, filed for chapter 11 protection on March 1, 2005 (Bankr. W.D. Ky. Case No. 05-31218 through 05-31226). Douglas L. Lutz, Esq., and Ronald E. Gold, Esq., at Frost Brown Todd LLC, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $35,384,953 in total assets and $40,785,376 in total debts. HEALTHSOUTH CORP: 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 U.S. Hospital and Long-term Care sectors this week, the rating agency confirmed its B3 Corporate Family Rating for HealthSouth 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 ---------- ------- ------- ------ ---------- Senior Secured Revolving Credit Facility due 2012 B2 B2 LGD3 36% Senior Secured Term Loan due 2013 B2 B2 LGD3 36% 10.75% Senior Unsecured Notes due 2013 B3 Caa1 LGD5 72% Senior Unsecured Floating Rate Notes B3 Caa1 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 Birmingham, Alabama, HealthSouth provides outpatient surgery, diagnostic imaging and rehabilitative healthcare services. HENRY EPPS: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Henry Epps, Jr. P.O. Box 186 Dudley, GA 31022 Bankruptcy Case No.: 06-30467 Chapter 11 Petition Date: October 2, 2006 Court: Southern District of Georgia (Dublin) Judge: Susan D. Barrett Debtor's Counsel: Calvin Jackson, Esq. Calvin Jackson, P.C. 1259 Russell Parkway, Suite T P.O. Box 7221 Warner Robins, GA 31095-7221 Tel: (478) 923-9611 Fax: (478) 923-1795 Estimated Assets: Unknown Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. HINES NURSERIES: 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 Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its B3 Corporate Family Rating for Hines Nurseries, 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 ---------- ------- ------- ------ ---------- $100 million Senior Secured Revolver B2 Ba3 LGD2 12% $175 million Sr. Unsecured Bonds Caa2 Caa1 LGD4 68% 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 Irvine, California, Hines Nurseries, Inc. is a commercial nursery operator in the United States. The company's 13 strategically located nurseries produce approximately 5,500 plan varieties and serve 8,000 retail and commercial customer locations. Hines is a wholly owned subsidiary of Hines Horticulture, Inc, which in turn is 53.4% owned by affiliates of Madison Dearborn Partners. HRP MYRTLE: Moody's Assigns Loss-Given-Default Ratings to 2 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 raised HRP Myrtle Beach Operations, LLC's Caa1 Corporate Family Rating to B3. Additionally, Moody's downgraded 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 ---------- ------- ------- ------ ---------- Sr. Secured Floating Notes Due 2012 B3 B2 LGD3 41% Jr. Secured Notes Due 2013 Caa2 Caa2 LGD5 85% 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%). HRP Myrtle Beach Operations, LLC, a Delaware limited liability company, is designing, developing, constructing, financing and equipping and will own and operate Hard Rock Park, an approximately 140-acre rock and roll themed park in Myrtle Beach, South Carolina, under a license agreement with Hard Rock International. Hard Rock International, Inc., owned by The Rank Group Plc, operates 122 Hard Rock Cafes and 13 Hard Rock Hotels and Casinos in more than 42 countries. IASIS HEALTHCARE: 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 U.S. Hospital and Long-term Care sectors this week, the rating agency confirmed its B1 Corporate Family Rating for IASIS Healthcare 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 ---------- ------- ------- ------ ---------- $250 Million Senior Secured Revolving Credit Facility due 2010 B1 Ba2 LGD2 23% $425 Million Senior Secured Term Loan due 2011 B1 Ba2 LGD2 23% 8.75% Senior Subordinated Notes due 2014 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- umeric 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%). IASIS Healthcare, located in Franklin, Tennessee, is an owner operator of medium sized acute care hospitals in high growth urban and suburban markets. IASIS operates 14 acute care hospitals and one behavioral health hospital with a total of 2,228 beds in service. IASIS also operates a Medicaid managed health plan in Phoenix that serves over 113,000 members. IMC INVESTMENT: Taps Powell Goldstein as General Counsel -------------------------------------------------------- IMC Investment Properties, Inc., asks the U.S. Bankruptcy Court for the Northern District of Texas for permission to employ Powell Goldstein LLP as its general counsel. Powell Goldstein will: (a) take all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on its behalf, the defense of any actions commenced against it, negotiations concerning all litigation in which it is involved, and objecting to claims; (b) prepare on behalf of the Debtor all necessary motions, applications, answers, orders, reports, and papers in connection with the administration of the Debtor's estate; (c) formulate, negotiate, and propose a plan of reorganization; (d) perform all other necessary legal services in connection with the Debtor's bankruptcy proceedings. The Debtor tells the Court that Keith Miles Aurzada, Esq., a partner at Powell Goldstein, will bill at $350 per hour in this engagement. Guadalupe M. Rojas, a paraprofessional, will also render his services and will bill at $85 per hour. Mr. Auzarda assures the Court that his firm does not hold or represent any interest adverse to the Debtor or its estate. Mr. Auzarda can be reached at: Keith Miles Aurzada, Esq. Powell Goldstein LLP JP Morgan Chase Tower - Suite 3200 2200 Ross Avenue Dallas, TX 75201 Tel: (214) 721-8000 Fax: (214) 721-8100 http://www.pogolaw.com/ Headquartered Dallas, Texas, IMC Investment Properties, Inc., filed for chapter 11 protection on July 3, 2006 (Bankr. N.D. Tex. Case No. 06-32754). Edwin Paul Keiffer, Esq., at Hance Scarborough Wright Ginsberg and Brusilow, LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. INGLES MARKETS: Moody's Assigns LGD5 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 U.S. and Canadian Retail sector, the rating agency confirmed its B1 Corporate Family Rating for Ingles Markets, Incorporated, and its B3 rating on the company's Senior Subordinated Global Notes. Additionally, Moody's assigned an LGD5 rating to the Notes, suggesting noteholders will experience an 80% 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 Asheville, North Carolina, Ingles Markets, Incorporated, operates 197 supermarkets principally in Georgia, North Carolina, South Carolina, and Tennessee. INSIGHT COMMS: Fitch Rates Proposed $2.575 Billion Facility at BB+ ------------------------------------------------------------------ Fitch Ratings affirmed the 'B+' Issuer Default Rating assigned to Insight Communications Company, Inc., Insight Midwest, LP, and Insight Midwest Holdings, LLC. In addition Fitch assigned a 'BB+' rating and 'RR1' recovery rating to Insight Midwest Holdings, LLC's proposed $2.575 billion senior secured credit facility. Fitch also affirmed specific issue ratings and recovery ratings to debt issued by Insight Midwest, LP and Insight. The Rating Outlook for all of Insight's ratings is Stable. Approximately $2.7 billion of debt as of June 30, 2006, is affected by Fitch's actions. Insight Midwest Holdings, LLC is a wholly owned subsidiary of Insight Midwest, LP. Insight owns a 50% interest in Insight Midwest, LP while subsidiaries of Comcast Corporation own the remaining 50% interest. Fitch expects that proceeds from the $2.575 billion credit facility, which includes a $350 million revolver, a seven-year $500 million term loan A and a 7.5-year $1.725 billion term loan B, will be used to: * refinance the existing credit facility at Insight Midwest Holdings, LLC; * redeem in full the 10.5% senior unsecured notes due 2010; and * redeem $185 million of the 9.75% senior unsecured notes due 2009 issued by Insight Midwest, LP. The refinancing will materially increase the proportion of senior secured debt within Insight's debt structure while nominally increasing overall indebtedness. From Fitch's prospective, however, the new credit facility is positive for Insight's overall credit profile as the new credit facility increases the borrowing capacity under the revolver, extends final maturities from 2009 to 2012 and 2013, and reduces scheduled mandatory amortization through 2008 by approximately $230 million. Overall, Fitch's ratings for Insight reflect the operating advantages and cost synergies derived from the company's technologically upgraded network and its tightly clustered cable systems, which primarily operate in the states of Kentucky, Indiana, Illinois, and Ohio. Fitch's ratings are also indicative of Insight's high leverage relative to its cable peer group, and the increasing business risk attributable to Insight's credit profile stemming from the persistent competitive threat from DBS operators and the increasing likelihood that incumbent telephone companies will enter the video business, further elevating competitive pressures. These competitive factors heighten the importance of Insight's planned voice over Internet protocol telephony service launch that is expected to take place during the remainder of 2006 and early into 2007. From Fitch's perspective the complete introduction (Insight provides circuit switched telephony service to approximately 871,000 homes as of June 30, 2006) of telephony service is critical for Insight to maintain the positive subscriber metric momentum and to enhance its competitive position relative to the DBS operators and incumbent telephone companies. The uncertainty surrounding the long-term existence of Insight's partnership with Comcast presents event, business, and refinancing risk to investors. At any time after Dec. 31, 2005, either partner can elect to terminate the Insight Midwest, LP partnership. Insight would emerge from the dissolution of the Insight Midwest partnership as a much smaller MSO operating with approximately 1.2 million RGUs and without the operating cost advantages afforded to Insight through its partnership with Comcast. While the new bank agreement contains provisions to survive the dissolution of the Insight Midwest partnership, bondholders can be exposed to refinancing risks depending on the structure of the exit event. Post the dissolution of the partnership, Fitch expects that Insight's credit profile will be more leveraged than the current capital structure. After generating approximately $116 million of free cash flow during 2004 and $76 million during 2005 (after adjusting for privatization costs), Fitch does not expect Insight to generate free cash flow during 2006. The lack of free cash flow generation is attributable to higher capital expenditures related to the positive subscriber growth the company has experienced over the last four quarters, infrastructure investments to prepare the cable plant for telephone service launch, and higher interest expense costs. Fitch expects Insight to generate a nominal amount of free cash flow in 2007. However, to position the company to generate free cash flow in 2007, Fitch believes that Insight will need to continue to grow advanced digital video products and its high- margin high speed data product as well as gain scale within its telephony business and temper the increase in capital expenditures. From Fitch's perspective, Insight's liquidity position is adequate when considering the increased amount of borrowing capacity under the company's new $350 million revolver and the lack of scheduled amortization under the term loan facilities through the third quarter of 2008. No other debt is scheduled to mature until 2009. The Stable Outlook reflects Insight's solid liquidity position as well as Fitch's expectation that the company is well positioned to generate EBITDA growth and sustainable free cash flow. Growth in the company's core video products and high-margin, high-speed data products is expected to drive EBITDA growth over the near term. Fitch anticipates that EBITDA growth will be tempered somewhat due to the launch of VoIP service throughout the company's service territory. However, the telephony launch and the related triple play offering across Insight's service area can provide it with the foundation for further EBITDA and free cash flow growth and subscriber base stabilization. Fitch would view negatively a worsening of basic subscriber trends, slower than expected rollout of the company's VoIP cable telephony service, or a material slowdown to the pace of high- speed data subscribers. Fitch affirmed these: Insight Communications Company, Inc. -- Issuer Default Rating 'B+' -- Senior Unsecured Notes 'CCC+/RR6' Insight Midwest, LP: -- IDR 'B+' -- Senior unsecured notes 'B+/RR4' Fitch rated this: Insight Midwest Holdings, LLC.: -- Senior secured credit facility 'BB+/RR1' INSIGHT HEALTH: S&P Lowers Corporate Credit Rating to B- -------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on Insight Health Services Corp.; the corporate credit rating was lowered to 'B-' from 'B'. The rating outlook is negative. "The rating downgrade reflects continuing deterioration in the company's financial performance," noted Standard & Poor's credit analyst Cheryl Richer. Adjusted EBITDA for fiscal 2006 has declined 24% from 2004 levels. Although InSight currently has adequate liquidity ($28 million of cash, almost full availability on its $30 million revolving credit facility, and positive free cash flow for 2006), it will need to conserve cash prospectively and will be escalating its use of equipment lease financing, which will increase leverage. The company has indicated (per its SEC Form 10-K) that it might have difficulty in funding future capital projects depending on the severity of the anticipated negative EBITDA trend. New management, now at the helm for a little over a year, has had little success thus far in stemming either revenue erosion or rising costs. Medicare reimbursement reductions, scheduled to become effective in January 2007 per the Deficit Reduction Act, will challenge the company to improve cash flow generating ability. The rating on InSight reflects the highly fragmented and competitive nature of the medical imaging industry, the limited barriers to competitor entry, and reimbursement risk. As a result of the negative financial trend over the past eight fiscal quarters, with no immediate prospects for a reversal, the company is taking a $191 million impairment charge in fiscal 2006 (ended June 30, 2006). Notwithstanding the write-off, the company's balance sheet is weak: Debt to EBITDA is currently about 6.5x. These risks overshadow the favorable effect on the industry as the population ages, the ability of imaging to limit overall health costs, and the expanded approval of imaging for additional disease states. INTEREP NATIONAL: 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 Ca rating on Interep National Sales Radio, Inc.'s 10.0% senior subordinated notes due 2008. Additionally, Moody's assigned an LGD4 rating to the notes suggesting noteholders will experience a 56% 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%). Interep National Sales Radio, Inc. -- http://http://www.interep.com/-- is an independent advertising sales and marketing company specializing in radio, the Internet, television and complementary media, with offices in 17 cities. Interep is the parent company to the following radio representation firms: ABC Radio Sales, D&R Radio, CBS Radio Sales, Cumulus Major Market Sales, McGavren Guild Radio and SBS/Interep. Interep is also parent to Azteca America Spot Television Sales and Interep Interactive, including Winstar Interactive. INTERSTATE BAKERIES: Commences Preferential Avoidance Actions ------------------------------------------------------------- Interstate Bakeries Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Western District of Missouri to avoid about 370 transfers made to certain vendors as preferential transfers and direct the vendors to immediately return the Transfers, plus interest and costs. The Debtors also ask the Court to award them costs in commencing the Complaint. According to Paul M. Hoffmann, in Stinson Morrison Hecker LLP, in Kansas City Missouri, the Debtors made certain payments and transfers to the vendors during the 90-day period before they filed for bankruptcy. The Transfers were made from the property of the Debtors for or on the account of an antecedent debt allegedly owed by the Debtors to the Vendors, Mr. Hoffmann relates. Moreover, the Transfers were made while the Debtors were insolvent. The Transfers enabled the Vendors to receive more than they would have received if the Transfers had not been made, Mr. Hoffmann contends. The Debtors assert that the Transfers were preferential in nature and are thus, avoidable pursuant to Section 547 of the Bankruptcy Code. A nine-page list of the Defendants is available for free at http://ResearchArchives.com/t/s?12d1 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: ABA Trustees, et al. Seek to Remove Reference ------------------------------------------------------------------ The Board of Trustees of the American Bakers Association Retirement Plan and Trust, Sara Lee Corporation, and Chicago Baking Company ask the U.S. District Court for the Western District of Missouri to withdraw the reference of the Debtors' Adversary Complaint from the Bankruptcy Court to the extent: -- it seeks an enforcement of the 2006 Pension Benefit Guaranty Corporation Letter; or -- it seeks a determination by the Bankruptcy Court as to the status of the ABA Plan or the rights of non-debtor parties under the ABA Plan documents. Mark T. Benedict, Esq., at Husch & Eppenberger, LLC, in Kansas City, Missouri, counsel to the ABA Plan Trustees, asserts that the mandatory provisions of Section 157(d) of the Judiciary and Judicial Procedures Code require the District Court to withdraw the reference of the Adversary Complaint because the Action requires consideration of the Employee Retirement Income Security Act laws. Mr. Benedict contends that cause exists for a permissive withdrawal of the reference of the Adversary Complaint: 1. The Debtors' request for injunctive relief that would require the ABA Plan Trustees to administer the Plan in accordance with the 2006 PBGC Letter is a non-core matter; 2. The Adversary Complaint seeks an injunction, which is wholly an equitable remedy, not a legal remedy. The Debtors seek the remedy not only against the ABA Plan but also on other Participating Employers who are strangers to the Debtors' bankruptcy case; 3. The Bankruptcy Court may not enter final orders in the Adversary Complaint since the ERISA issues are non-core proceedings; 4. The ERISA venue statute would ordinarily require action against the ABA Plan to be brought in Washington, D.C., where the ABA Plan is administered, as noted by the PBGC at the August 9, 2006, Hearing; and 5. The Debtors' request for injunctive relief does not concern the application of bankruptcy laws. Instead, it concerns the applications of ERISA laws. "In addition to non-core jurisdiction," John W. McClelland, Esq., at Armstrong Teasdale, LLP, in Kansas City, Missouri, relates that "courts consider the goals of promoting uniformity in bankruptcy administration, reducing forum shopping and confusion, fostering the economical use of the debtors' and creditors' resources, and expediting the bankruptcy process in evaluating whether there is cause to withdraw the reference." Mr. McClelland notes that the Debtors' Adversary Complaint essentially raises the same legal issues as the action Sara Lee commenced in the U.S. District Court for the District of Columbia. The Debtors' decision to initiate their Adversary Complaint while the D.C. Action is pending is clearly an attempt to forum shop, particularly after their failed attempt to stay the D.C. Action before the Bankruptcy Court, Mr. McClelland says. If the reference is not withdrawn, Mr. McClelland avers, the parties will suffer an additional and unnecessary layer of judicial review and a duplication of efforts before the District Court. The parties may suffer inconsistent results if the issues are addressed preliminarily by the Bankruptcy Court and later reversed by the District Court, Mr. McClelland continues. Because withdrawal of the reference would eliminate that duplication, it fosters the economic use of bankruptcy estate resources. Abstain Judgment on ABA Plan, ABA Trustees Urge Bankruptcy Court By commencing the Adversary Complaint in the Bankruptcy Court, the Debtors sought another forum to make a determination of the ABA Plan's status, Mr. Benedict points out. As a result, the Debtors waived the protection of the automatic stay with respect to the ERISA disputes. Thus, the Debtors cannot use the automatic stay now both a shield and a sword to prevent the ABA Plan Trustees from seeking review of the PBGC determination in a court of competent jurisdiction, Mr. Benedict argues. Mr. Benedict maintains that the proper jurisdiction with respect to ERISA disputes is the D.C. District Court since that is where the ABA Plan is administered. Accordingly, ABA Plan Trustees ask the Bankruptcy Court to: (a) abstain from determining the allocation of the ABA Plan's assets and liabilities among the participating employers, through the enforcement of the PBGC letter to allow them to pursue, in a court of competent jurisdiction, the ERISA disputes; (b) declare that they are not stayed from obtaining, in a court of competent jurisdiction, a final determination of the nature of the ABA Plan and the rights of the parties under the ABA Plan document; or (c) lift the automatic stay to allow them to obtain, in a court of competent jurisdiction, a final determination of the nature of the ABA Plan and the rights of the parties under the ABA Plan document. ABA Trustees, et al. Seek to Stay Proceedings The ABA Plan Trustees and Sara Lee ask the Bankruptcy Court to stay all proceedings related to the Adversary Complaint and the Objection to the ABA Plan's proof of claim pending rulings on their Motion to Withdraw Reference, Motion to Abstain and Lift Stay Motion. "It is of primary importance to first determine the appropriate forum for the dispute before forcing all of the parties to spend their time and resources prosecuting, defending and otherwise litigating these issues," Mr. Benedict emphasizes. Moreover, the ABA Plan Trustees believe that either the Bankruptcy Court or the District Court will decide very quickly whether the ERISA Dispute will continue in the Bankruptcy Court. Thus, the proposed stay is likely of short duration, Mr. Benedict says. In the alternative, the ABA Plan Trustees ask the Bankruptcy Court to extend the deadlines for the Defendants to file substantive responses to the Adversary Proceeding and Claim Objection. Five Defendants Seek to Dismiss Complaint Five entities ask the Bankruptcy Court to dismiss the Debtors' Adversary Complaint: * Ozark Empire Distributors, Inc., dba Harris Baking Company, * Eagle Snacks, Inc., * Flowers Food Bakeries Group, LLC, aka Flowers Bakeries, * Flowers Baking Co. of Houston, aka Schotts Bakery, Inc., and * Flowers Baking Co. of Pine Bluff, LLC, aka Holsum Baking Co. The Entities have been named defendants in the Adversary Complaint. The Entities assert that the Adversary Complaint did not contain sufficient information for them to affirm or deny the Debtors' allegations. On behalf of the Flowers Entities, Kurt D. Williams, Esq., at Berkowitz, Oliver, Williams, Shaw & Eisenbrandt, LLP, in Kansas City, Missouri, argues that the Debtors' allegations may be barred by the applicable statute of limitations, waiver, estoppel, ratification, acquiescence and doctrine of laches. Flowers Bakeries maintains that it is not a proper defendant in the Lawsuit because it is not and was not, at any time, a participant in the ABA Plan. Eagle Snacks asks the Bankruptcy Court to extend the time for it to respond to the Adversary Complaint until Oct. 16, 2006. The Entities further ask the Bankruptcy Court to award them with attorneys' fees and costs incurred in defending the Adversary Complaint. They reserve their right to amend their responses based on discovery they can obtain in the future. 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: Wants Hilco as Business Asset Appraiser ------------------------------------------------------------ Pursuant to Sections 327 and 328 of the Bankruptcy Code, Interstate Bakeries Corporation and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Western District of Missouri to employ Hilco Appraisal Services, LLC, as their business asset appraisal consultants. The Debtors have determined that the size of their operations requires them to employ experienced business asset appraisers to render professional services in connection with their Chapter 11 cases. The Debtors believe that Hilco possesses the requisite resources and is well qualified to provide the services that will be required. The Debtors note that Hilco has extensive and diverse experience, knowledge and reputation in the appraisal field, as well as an understanding of the issues involved in the Debtors' cases. To assist the Debtors in evaluating their exit financing options, Hilco will perform an appraisal of: -- the Debtors' machinery & equipment, including on-site inspection at several of the Debtors' facilities, to provide an opinion of forced liquidation value, net forced liquidation value, orderly liquidation value and net orderly liquidation value; -- the Debtors' titled vehicle fleet, to provide an opinion of forced liquidation value, net forced liquidation value, orderly liquidation value and net orderly liquidation value; and -- the Debtors' inventory to provide an opinion of gross and net orderly liquidation value, which will include modeling the build-out of applicable work-in-process inventory to a finished good state. In consideration for the contemplated services to be rendered, the Debtors will pay Hilco $380,000, plus normal and customary travel expenses. The payment is due upon completion of the services. Arn Dratt, chief executive officer of Hilco, assures the Court that his firm does not hold or represent any interest materially adverse to the Debtors or to their estates, and is a "disinterested person" as that term is defined under 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) 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 downgraded Isle of Capri Black Hawk L.L.C.'s Corporate Family Rating to B2 from B1. Additionally, Moody's confirmed 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 B1 B1 LGD3 34% Sr. Secured Term Loan B1 B1 LGD3 34% 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%). Isle of Capri Black Hawk, L.L.C., is a 57% wholly owned, unrestricted subsidiary of Isle of Capri Casinos, Inc. (Ba3/On review for possible downgrade) Nevada Gold & Casinos, Inc., owns the remaining 43% ownership interest in ICBH. JACOBS ENTERTAINMENT: 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 Jacobs Entertainment, Inc.'s B2 Corporate Family Rating. Additionally, Moody's revised or 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 ---------- ------- ------- ------ ---------- 5-Year Senior Secured Revolver B1 Ba2 LGD2 13% 6-Year Senior Secured Term Loan B B1 Ba2 LGD2 13% 6-Year Senior Secured Delayed Draw Term Loan B1 Ba2 LGD2 13% Guaranteed Senior Unsecured Notes B3 B3 LGD2 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%). Headquartered in Golden, Colorado, Jacobs Entertainment Inc. -- http://www.jacobsentertainment.com/-- is a developer, owner, and operator of gaming and pari-mutuel wagering facilities throughout the United States, with properties located in Colorado, Louisiana, Nevada, and Virginia. Jacobs Entertainment owns and operates three land-based casinos, 11 truck plaza video gaming facilities (two of which are leased) and a horseracing track with nine off- track wagering facilities (five of which are leased). In addition, Jacobs Entertainment is party to an agreement that entitles it to a portion of the gaming revenue from an additional truck plaza video gaming facility. JAFRA WORLDWIDE: 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 Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its Ba3 Corporate Family Rating for Jafra Worldwide Holdings and upgraded its B2 rating on Jafra Cosmetics International, Inc.'s $130 million senior subordinated notes to B1. Additionally, Moody's assigned an LGD4 rating to the notes, suggesting noteholders will experience a 60% 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 Westlake Village, California, Jafra Worldwide Holdings, Inc. sells fragrances, color cosmetics, skin and body care products, and other personal care items through a network of over 470,000 self-employed consultants. Jafra's parent company, Vorwerk & Co. KG, is a family-owned direct seller of household appliances, carpets, industrial and financial services, based in Wuppertal, Germany. JEFF PHILLIPS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Jeff Felix Phillips 345 Wilma Court Southwest Atlanta, GA 30331 Bankruptcy Case No.: 06-72439 Chapter 11 Petition Date: October 2, 2006 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Dorna Jenkins Taylor, Esq. Taylor & Tew P.C. Suite 500 1401 Peachtree Street Atlanta, GA 30309 Tel: (404) 870-3560 Fax: (404) 745-0136 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million The Debtor did not file a list of its 20 largest unsecured creditors. JMNM COMPANY: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: The JMNM Company Inc. c/o John Madden 8560 Greenwood Avenue North Seattle, WA 98103 Bankruptcy Case No.: 06-13119 Chapter 11 Petition Date: September 13, 2006 Court: Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Michael P. Harris, Esq. 1218 3rd Avenue, Suite 1809 Seattle, WA 98101 Tel: (206) 622-7434 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. K&F INDUSTRIES: 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 K&F Industries 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 ---------- ------- ------- ------ ---------- Revolving Credit Facility due 2010 B2 Ba3 LGD2 26% Term Loan B due 2012 B2 Ba3 LGD2 26% 7.75% Sr. Subor. Notes due 2014 Caa1 Caa1 LGD5 81% 9-5/8% Sr. Subor. Notes due 2010 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%). K&F Industries Inc., through its Aircraft Braking Systems Corporation subsidiary, manufactures wheels, brakes and brake control systems for commercial transport, general aviation and military aircraft. K & F Industries Inc.'s other subsidiary, Engineered Fabrics Corporation, is a major producer of aircraft fuel tanks, de-icing equipment and specialty coated fabrics used for storage, shipping, environmental and rescue applications for commercial and military use. KAISER ALUMINUM: Agrium Companies React to Claim Objections ----------------------------------------------------------- William E. Chipman, Jr., Esq., at Edwards Angell Palmer & Dodge LLP, in Wilmington, Delaware, refutes the contention of Kaiser Aluminum & Chemical Corporation and Kaiser Aluminum Properties, Inc., that Agrium, Inc., and Agrium U.S., Inc., cannot meet the standards for entitlement to an administrative claim. Citing In re Frenville Co., Inc., 744 F.2d 332 (3rd Cir. 1985), Mr. Chipman asserts that the Agrium Companies' claim is a postpetition claim because their "right to payment" did not accrue under Illinois law until after Kaiser's bankruptcy filing when they were sued by Lance Olson and Daniel Freeman. Mr. Chipman notes that Kaiser has not disputed that the Agrium Companies' claim accrued after its Petition Date. In a supplement to its Objection, Kaiser asserted that because there was an agreement with the Agrium Companies that has an indemnity provision, the Agrium Companies' claim for contribution does not arise postpetition but rather accrued when the prepetition agreement was executed by the parties. In response, Mr. Chipman says that this is not true because the indemnity provisions contained in the agreement identified by Kaiser have expired on Feb. 28, 2001, almost one year before Kaiser sought bankruptcy protection. Kaiser has also asserted that there is no benefit to the estate and that the exception to the "benefit to the estate" prong does not apply because the Kaiser estate did not cause the harm suffered by the Plaintiffs for which the Agrium Companies seek to assert an administrative claim. Mr. Chipman says that there will be a benefit to the Kaiser estate, if the Agrium Companies are forced to pay the administrative claims of the Plaintiffs on a joint and several basis. The Agrium Companies will be defending this suit with vigor and if the liabilities are assigned to them, the Kaiser estate will benefit from the Agrium Companies' payment of that liability. Moreover, the Court should dispense with the "benefit to the estate" prong for allowance of an administrative claim when a claim accrues while a debtors' estate is operating its business, Mr. Chipman says. Mr. Chipman requests that if the Agrium Companies' postpetition claim is not granted administrative status, the claim should not be discharged, and that allowance or disallowance of the claim should be deferred until the time Kaiser as co-defendant is found liable and judgment is recovered from the non-debtor defendants. The Agrium Companies believe that their due process rights are in jeopardy if their claim is not permitted administrative status or if their claim does not survive Kaiser's Chapter 11 cases. They tell the Court that contrary to Kaiser's statement, they were not ignorant of their existing claim; they simply did not have any claim until after confirmation of Kaiser's 2nd Amended Plan of Reorganization when they were sued by the Plaintiffs. Accordingly, the Agrium Companies ask the Court to overrule Kaiser's objection. Kaiser Further Supplements Objection Kaiser tells the Court that it has located more documents to support its claim that it has indemnified the Agrium Companies for environmental liabilities relating to its former operations of the facility in Cantrall, Illinois. Kimberly D. Newmarch, Esq., at Richards, Layton & Finger in Wilmington, Delaware, relates that Kaiser found its 1988 settlement agreement with Vigoro Industries, the Agrium Companies' corporate predecessor. Pursuant to the 1988 Settlement Agreement, Kaiser agreed to indemnify Vigoro for all liabilities relating to claims "arising from or relating to past, present, or future conditions at the farmarket located in Cantrall, Illinois," the same site and operations that the Plaintiffs assert caused the injuries that form the basis of their claims. Other Insurers Respond Republic Indemnity Company, certain underwriters at Lloyd's, London, certain London Market Companies, and certain Castlewood Companies join in the objections of Century Indemnity Company, ACE Property & Casualty Company, Industrial Indemnity Company, Industrial Underwriters Insurance Company, Pacific Employers Insurance Company, and Central National Insurance Company of Omaha. The Insurers were released from all further insurance coverage obligations pursuant to separate Court-approved agreements with Kaiser. The Insurers assert that the Agrium Companies are not entitled to pursue insurance coverage against them. Thus, the Insurers ask the Court to deny the Agrium Companies' request. 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: Cuts 20 Jobs in Ontario, Canada Plant ------------------------------------------------------ Kaiser Aluminum Corporation has recently cut 20% of its workforce in Ontario, Canada, The London Free Press reports. The Company, according to the London Free Press, laid off 20 workers in its plant in Ontario, Canada, in late September. It has already cut 22 jobs in the plant earlier in the month from its workforce of 220. 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) KELLWOOD CO: Earns $7.1 Million in Quarter Ended July 29 -------------------------------------------------------- Kellwood Company has filed its third quarter financial statements for the three months ended July 29, 2006, with the Securities and Exchange Commission. The Company reported $7.1 million of net income on $474.4 million of net revenues for the three months ended July 29, 2006, compared to a $78.9 million net loss on $488.1 million of revenues in 2005. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?12d8 Headquartered in St. Louis, Missouri, Kellwood Company -- http://www.kellwood.com/-- markets apparel and consumer soft goods. * * * As reported in the Troubled Company Reporter on July 12, 2006, Standard & Poor's Ratings Services revised its outlook on Kellwood Co. to negative from stable and affirmed the company's corporate credit rating to BB. Total debt outstanding at April 29, 2006, was about $509 million. As reported in the Troubled Company Reporter on May 12, 2006, Moody's Investors Service affirmed the Ba2 corporate family rating for Kellwood Company and downgraded the senior unsecured debt rating to Ba3 from Ba2 following the completion of a secured asset based credit facility that replaced an unsecured revolving credit facility. The downgrade of the senior unsecured debt rating reflected the effective subordination of the remaining unsecured creditors to the new secured credit facility and the release of the subsidiary guarantees since they were linked to the terminated credit facility. The outlook is negative. KIDS WORLD: Has Viable Cause of Action Against State of Georgia --------------------------------------------------------------- Kids World of America, Inc., sued the State of Georgia Department of Early Care and Learning demanding the turnover of funds (Bankr. W.D. Ky. Adv. Pro. No. 05-03217). The State moved to dismiss the lawsuit. The Honorable Thomas H. Fulton held a hearing on June 7, 2006. At that time the Court took the Motion to Dismiss and the Debtor's Response under submission and took proof on the Complaint for Turnover of Funds. The Debtor was represented by counsel and offered the testimony of Jeffrey Owen, its principal; Ruth Coon, the Debtor's Area Manager for the State of Georgia; and Don Mitchell, an outside consultant. The State was also represented by counsel and offered the testimony of Kay Hellwig, the Division Director for Childcare Services of Bright from the Start, Georgia Department of Early Care and Learning; Tanya R. Astin, Audit Coordinator of Bright from the Start; and Daphne Haley, Pre-Kindergarten Division Director of Bright from the Start. At the evidentiary hearing, the Court informed the parties that it would be considering three distinct yet interrelated issues: (1) whether the dispute is a core proceeding; (2) whether the State may successfully assert the defense of sovereign immunity in light of the Supreme Court's decision in Central Virginia Community College v. Katz, 126 S.Ct. 990, 163 L.Ed.2d 945 (2006); and (3) whether the Plaintiff can sustain a claim for turnover predicated under a quantum meruit theory of liability. Based on the evidence presented, the statements of counsel, the testimony of the various witnesses, and the entire record in this case, Judge Fulton finds that the dispute is a core proceedings under 28 U.S.C. Sec. 157(b)(2)(A), that the State cannot successfully assert the defense of sovereign immunity, and that the Debtor can sustain a limited claim for turnover based upon a quantum meruit theory of liability. The agency, Judge Fulton explains in a decision published at 2006 WL 2585521, benefited from valuable services rendered by the debtor to the state's children, and knowingly accepted the services under circumstances making its failure to compensate the debtor unjust. The agency was informed by the debtor that the debtor was running classes for which it expected reimbursement under an anticipated contract. The debtor anticipated compensation when rendering the services, moreover, for at least a portion of the program period. The debtor's recovery, however, will be limited to the period preceding the agency's filing of an answer in which the agency denied the existence of a debt in response to the debtor's turnover claim in its bankruptcy case. After that, the debtor could not reasonably expect compensation for any additional services rendered. Kids World of America Inc. filed for chapter 11 protection on August 17, 2004 (Bankr. W.D. Ky. Case No. 04-35242), and is represented by David M. Cantor, Esq., at Seiller & Handmaker, LLP. KMART CORP: Wants Summary Judgment on Ashland's $1,303,004 Claim ---------------------------------------------------------------- In 2002, Kmart Corporation filed its schedules of assets and liabilities, which list included unsecured claims from: (1) Valvoline Co. -- Claim No. 10582442 for $536,678; and (2) Eagle One Industries -- Claim No. 10581448 for $32,721. Valvoline is a division of Ashland Inc., and Eagle One Industries is an operating unit of Valvoline. On April 30, 2002, Ashland filed Claim No. 14688 for $1,303,004 consisting of: -- $1,211,440 for Valvoline; and -- $91,563 for Eagle One. The Scheduled Claims were allowed for $569,399. Ashland commenced receiving distributions on the Scheduled Claims on or about June 30, 2003. In February 2004, Kmart objected to claims in excess of the Scheduled Claims. The Excess Claims allegedly comprised of missing invoices and Kmart deductions that Ashland wanted repaid, Kimberly J. Robinson, Esq., at Barack Ferrazzano Kirschbaum, Perlman & Nagelberg LLP, in Chicago, Illinois, discloses. Ms. Robinson relates that based on Kmart's books and records, and affidavits submitted before the U.S. Bankruptcy Court for the Northern District of Illinois, Ashland has no Excess Claim. Kmart repeatedly requested that Ashland provide documents to substantiate the Excess Claim but Ashland failed to do so. Specifically, Ms. Robinson says, Kmart sought admissions as to the matters for which Ashland bases its Claim, that: (a) no written contract or agreement for goods between Ashland and Kmart existed; (b) no invoices to Kmart for the goods for which Ashland bases its Claim exist; (c) there are no proofs of receipt that establish Kmart received the goods; (d) $35,037 of the Claim has been satisfied through settlement of Eagle One's Claim No. 10581448; (e) $638,710 of the Claim has been satisfied through settlement of Valvoline's Claim No. 10581448; and (f) Kmart is not liable for the payment of the Claim. Kmart also sought and obtained a Court order compelling Ashland to respond to discovery requests. To date, Ashland has not responded to the requests. Ms. Robinson asserts that Ashland has failed to establish a prima facie claim for the balance of its Claim. Ashland has failed in its pleadings to substantiate the Excess Claim, and thus, has not, and cannot, create an issue of fact to preclude summary judgment in Kmart's favor. Even if the Court were to accord Ashland a prima facie claim, Ms. Robinson avers that Kmart's prior requests and the supporting papers sufficiently rebut the remaining portion of the Claim. Specifically, because of Ashland's failure to object or otherwise answer Kmart's request for admissions, Ashland has effectively admitted, among others, that there is no written contract or agreement substantiating the Excess Claim. Accordingly, Kmart asks the Court: * for summary judgment in its favor with respect to its objection to Claim No. 14688; and * to disallow the Excess Claim. Headquartered in Troy, Michigan, Kmart Corporation nka KMART Holding Corporation -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 117; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000) KMART CORP: Court Disallows Seven Real Property Lease Claims ------------------------------------------------------------ Kmart Corporation asked the U.S. Bankruptcy Court for the Northern District of Illinois to enter judgment in its favor with respect to seven claims related to leases for real property, specifically: (1) Founder, Inc.'s Claim No. 30775; (2) HSBC Bank, Inc.'s Claim No. 50849; (3) State Street Bank and Trust's Claim Nos. 39857 and 40899; (4) BMKM Properties' Claim No. 42165; and (5) Office Depot's Claim Nos. 38555 and 38556. Kimberly J. Robinson, Esq., at Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP, in Chicago, Illinois, discloses that Founder, HSBC Bank, and State Street Bank have authorized Kmart to include them in the judgment request, as they agree that there is no remaining liability on Kmart's part related to their claims. Despite numerous attempts to contact BMKM and Office Depot, Kmart has been unable to receive responses from them. Ms. Robinson asserts that summary judgment is appropriate for each of the Claims as none of the Claims are valid. Kmart further believes that none of the Claimants will submit sworn evidence establishing a claim for any amount. Accordingly, the Court disallowed in their entirety: -- Founder's Claim No. 30775; -- State Street Bank's Claim Nos. 39857 and 40899; and -- BMKM's Claim No. 42165. The hearing to consider Office Depot's Claim Nos. 38555 and 38556 is continued to a later date. Kmart subsequently withdrew its objection to HSBC Bank's Claim No. 50849 because the Claim was previously disallowed in an order sustaining the Debtors' twentieth omnibus objection dated May 12, 2004. Headquartered in Troy, Michigan, Kmart Corporation nka KMART Holding Corporation -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 117; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000) KMART CORP: Wants Settled Critical Vendor Claims Disallowed ----------------------------------------------------------- The Seventh Circuit Court of Appeals previously held that certain critical vendor payments made by Kmart Corporation shortly after its bankruptcy filing were not authorized by the Bankruptcy Code. William J. Barrett, Esq., at Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP, in Chicago, Illinois, relates that as a result, Kmart brought actions against 1,100 recipients of critical vendor payments seeking to avoid the payments. Kmart has settled about 950 of the critical vendor cases. As part of the settlement, 25 defendants agreed that they would have no claim in Kmart's Chapter 11 case. However, Kmart's claims register still show that the 25 parties are holding claims against the estate. Accordingly, Kmart asks the U.S. Bankruptcy Court for the Northern District of Illinois to disallow the 25 claimants' claims related to settled critical vendor cases. The Claims include: Creditor Claim Creditor Claim No. Amount -------- --------- ------ Beckley Newspapers, Inc. 10578651 $125,046 California Independent Hospital 10566837 774,818 Des Moines Register and Tribune 10578780 303,798 El Paso Times, Inc. 10567577 250,639 Guam Publication Pacific Daily 10571081 109,560 Hawaii Newspaper Agency, Inc. 10561390 1,034,770 Post and Courier 10578416 297,441 Reno Gazette Journal 10579422 251,523 Tribune Star 13559 142,343 Visalia Times Delta 10579417 140,706 Kmart has previously objected to the claims in February 2004. Mr. Barrett adds that several parties filed claims relating to critical vendor payments that Kmart did not seek to avoid, or relating to critical vendor avoidance actions that Kmart has elected not to pursue. Hence, Kmart also asks the Court to disallow eight claims as their claimants have retained the critical vendor payments they received. The eight claims are: Creditor Claim Creditor Claim No. Amount -------- --------- ------ County Press 2961 $2,138 Indiana Herald 4407 1,323 Johnson Bros. of Hawaii 10579349 34,902 Observer News Enterprise 3927 1,918 Seminole Herald 9454 2,107 South Carolina Black Media Group 3883 4,200 Times 31372 6,988 Voice Newspaper 10562492 54,086 Headquartered in Troy, Michigan, Kmart Corporation nka KMART Holding Corporation -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 117; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000) LA REINA: Gets Final Court OK on $9.7MM DIP Pact with Westernbank ----------------------------------------------------------------- The Honorable Gerardo Carlo of the U.S. Bankruptcy Court for the District of Puerto Rico gave La Reina Management Inc. and its debtor-affiliates authority, on a final basis, to obtain postpetition financing from Westernbank Puerto Rico pursuant to a July 2006 loan and security agreement. Under the Loan Agreement, Westernbank agreed to lend $9,750,000 to the Debtor, secured by substantially all of the Debtors' assets. The Loan is guaranteed by San Luis Investment, S.E. The Loan is subject to a $75,000 carve out for payment of fees to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee. Headquartered in Caguas, Puerto Rico, La Reina Management, Inc., is engaged in the administration of its affiliated companies' funds through the performance of functions such as merchandise purchases, payment to suppliers and employees, record keeping of expenses allocation, and other miscellaneous management services. La Reina Management's revenues consist of fees charged to the affiliates for these services. The Company and 12 of its affiliates filed for chapter 11 protection on July 26, 2006 (Bankr. D. P.R. Case No. 06-02477). Jose Raul Cancio Bigas, Esq., in Hato Rey, Puerto Rico, represents the Debtors. No Official Committee of Unsecured Creditors has been appointed in this case to date. When La Reina Management filed for protection from its creditors, it reported total assets of $14,166,830 and total debts of $13,810,411. LAMAR MEDIA: 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, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations issued by Lamar Media Corporation: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Secured revolver Ba1 Baa3 LGD2 20% Secured term loan Ba1 Baa3 LGD2 20% 7 1/4% Sr. Sub notes due 2013 Ba3 Ba3 LGD5 71% 6 5/8% Sr. Sub notes due 2015 Ba3 Ba3 LGD5 71% Sr. Unsecured Shelf (P)Ba2 (P)Baa3 LGD2 20% Sr. Subor. Shelf (P)Ba3 (P)Ba3 LGD5 71% Preferred Shelf (P)B1 (P)B1 LGD6 90% 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 Baton Rouge, Louisiana Lamar Media Corp -- http://www.lamar.com/-- is one of the largest owners and operators of outdoor advertising structures in the United States. LANCE WELLER: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Lance Cornell Weller 4700 Jett Road Atlanta, GA 30327 Bankruptcy Case No.: 06-72558 Chapter 11 Petition Date: October 3, 2006 Court: Northern District of Georgia (Atlanta) Judge: Margaret Murphy Debtor's Counsel: Stephen J. Sasine, Esq. Suite 275, Lenox Plaza 3384 Peachtree Road, Northeast Atlanta, GA 30326-1106 Tel: (404) 869-8929 Fax: (678) 623-0785 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. LAS VEGAS SANDS: 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 Las Vegas Sands Corp.'s Ba3 Corporate Family Rating. Additionally, Moody's revised 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. Secured Revolver Ba3 Ba2 LGD3 39% Sr. Secured Term Loan Ba3 Ba2 LGD3 39% Sr. Secured Delayed Draw Term Loan Ba3 Ba2 LGD3 39% 6.375% Sr. Notes B1 B2 LGD6 90% 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%). Headquartered in Las Vegas, Nev., Las Vegas Sands Corp. -- http://www.lasvegassands.com/-- is a hotel, gaming, and resort development company. The Company owns The Venetian Resort Hotel Casino, the Sands Expo and Convention Center, and Venetian Macao Limited, a developer of multiple casino hotel resort properties in The People's Republic of China's Special Administrative Region of Macao. LBI Media: 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 B1 corporate family rating on LBI Media, 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 Ba2 LGD2 21% Secured term loan B1 Ba2 LGD2 21% 10.125% Sr. Subor. notes due 2012 B3 B2 LGD4 69% 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%). LBI Media, Inc. is one of the largest owners and operators of Spanish-language radio and television stations in the United States, based on revenues and number of stations. The Company owns sixteen radio stations and four television stations serving the Los Angeles, CA, Houston, TX, Dallas-Ft. Worth, TX and San Diego, CA markets. The Company also owns a television production facility in Burbank, California. LE GOURMET: Creditors Panel Retains Lowenstein Sandler as Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey gave the Official Committee of Unsecured Creditors in Le Gourmet Chef, Inc.'s chapter 11 case authority to retain Lowenstein Sandler, PC, as its counsel, effective Aug. 16, 2006. As reported in the Troubled Company Reporter on Sept. 5, 2006, Lowenstein Sandler will: (a) provide legal advice with respect to the Creditors Committee's powers and duties as an official committee appointed under 11 U.S.C. 1102; (b) assist the Creditors Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's business, potential claims, and any other matters relevant to the case or to the formulation of a plan of reorganization; (c) participate in the formulation of a plan; (d) provide legal advice with respect to any disclosure statement and plan filed relative to the case and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a plan; (e) prepare on behalf of the Creditors Committee applications, motions, complaints, answers, orders, agreements and other legal papers; (f) appear in Court to present necessary motions, applications, and pleadings, and otherwise protect the interests of those represented by the Creditors Committee; (g) assist the Creditors Committee in requesting the appointment of a trustee or examiner, should such action be necessary; and (h) perform such other legal services as may be required and be in the interest of the Creditors Committee and creditors. John k. Sherwood, Esq., a member at Lowenstein Sandler, told the Court that the hourly rates for the firm's professionals are: Classification/Experience Hourly Rate ------------------------- ------------ Members (principals) of the Firm $335 to $645 Senior Counsel (generally 10 or $315 to $425 more years experience) Counsel $265 to $375 Associates (generally less than $185 to $310 6 years experience) Legal Assistants $75 to $175 Mr. Sherwood assured the Court that the Firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Shrewsbury, New Jersey, Le Gourmet Chef, Inc., -- http://www.legourmetchef.com/-- is a retailer specializing in solutions for entertaining and gift giving. The Company filed for bankruptcy on Aug. 8, 2006 (Bankr. D. N.J. Case No. 06-17364). John DiIorio, Esq., at Shapiro & Croland, and Wendy G. Marcari, Esq., at Dreier LLP represent the Debtor. When the Debtor filed for bankruptcy, the Debtor estimated its assets and debts at $10 million to $50 million. LE GOURMET: Brings In FTI Consulting as Financial Advisor --------------------------------------------------------- Le Gourmet Chef, Inc., obtained permission from the U.S. Bankruptcy Court for the District of New Jersey to employ FTI Consulting, Inc., as its financial advisors. As reported in the Troubled Company Reporter on Aug. 24, 2006, FTI Consulting is expected to: a. assist the Debtor in complying with the financial reporting requirement under the guidelines issued by the U.S. Trustee; b. prepare and review cash or other projections, reports and analyses, and statement of receipts, disbursement and indebtedness; c. consult with the Debtor's management in connection with the financial matters relating to the ongoing activities of the Debtor; d. provide assistance with the analysis and reconciliation of claims; e. assist the Debtor in preparing its schedules and statement of financial affairs, and any required federal, state or local tax returns; f. assist in the development and negotiation of a plan of reorganization or liquidation; and g. assist with other matters as management or counsel to the Debtor may request from time to time. Kevin Regan, Senior Managing Director at FTI Consulting, told the Court that the firm's professionals bill: Professional Hourly Rate ------------ ----------- Senior Managing Director $595 - $655 Director/Managing Director $465 - $585 Associates/Senior Associates $245 - $400 Administrative/Paraprofessional $95 - $175 Mr. Regan assured the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Shrewsbury, New Jersey, Le Gourmet Chef, Inc., -- http://www.legourmetchef.com/-- is a retailer specializing in solutions for entertaining and gift giving. The Company filed for bankruptcy on Aug. 8, 2006 (Bankr. D. N.J. Case No. 06-17364). John DiIorio, Esq., at Shapiro & Croland, and Wendy G. Marcari, Esq., at Dreier LLP represent the Debtor. John K. Sherwood, Esq., and Kenneth Rosen, Esq., at Lowenstein Sandler, represents the Official Committee of Unsecured Creditors. When the Debtor filed for bankruptcy, the Debtor estimated its assets and debts at $10 million to $50 million. LEGENDS GAMING: 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 Legends Gaming, 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 loans facilities: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Sec. Revolver B2 B1 LGD3 35% Sr. Secured Term Loan B B2 B1 LGD3 35% Sr. Sec. Second Lien Term Loan Caa1 Caa1 LGD5 88% 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%). Legends Gaming, LLC, headquartered in Frankfort, Illinois, was formed to purchase two casino properties from Isle of Capri. LENOX HEALTHCARE: Charles Golden Named as Chapter 7 Trustee ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware named Charles M. Golden, Esq., as the chapter 7 trustee in Lenox Healthcare, Inc., and its debtor-affiliates' liquidation proceedings. The Court converted the Debtors' cases to chapter 7 at the behest of Kelly Beaudin Stapleton, the U.S. Trustee for Region 3. The U.S. Trustee asked for the conversion citing: * the failure of the Chapter 11 Trustee to comply with Section 1106(a)(5) of 11 U.S.C. by not filing a plan; and * the inability to effectuate a plan. Lenox Healthcare, Inc., then one of the leading health care providers in the United States, filed for chapter 11 protection on July 10, 2001 (Bankr. D. Del. Case No. 01-2288). The company's operations have ceased. On July 27, 2001, the Court appointed Charles M. Golden as Chapter 11 Trustee to oversee the transition of the Debtors' businesses to their secured creditors and lessors and wind up their estates. LENOX HEALTHCARE: Ch. 7 Trustee Taps Obermayer Rebmann as Counsel ----------------------------------------------------------------- Charles M. Golden, Esq., the Chapter 7 Trustee appointed in Lenox Healthcare, Inc., and its debtor-affiliates cases, asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Obermayer Rebmann Maxwell & Hippel LLP as its counsel. Edmond M. George, Esq., a partner at Obermayer Rebmann, tells the Court that although the chapter 7 trustee is a member of the firm, Mr. Golden will not be providing legal services pursuant to this engagement. Obermayer Rebmann will: a) provide the Chapter 7 Trustee with legal advice with respect to his powers and duties; b) review proofs of claims and filing appropriate objections if necessary; c) perform all other legal services for the Chapter 7 Trustee which may be necessary; and d) other and further services as the Chapter 7 Trustee may from time to time request in the exercise of his business judgment. The Chapter 7 Trustee tells the Court that the hourly rate of the firm's attorneys ranges from $250 to $500. Paralegals at the firm bill at $110 per hour. To the best of the Chapter 7 Trustee's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. George can be reached at: Edmond M. George, Esq. Obermayer Rebmann Maxwell & Hippel LLP One Penn Center - 19th Floor 1617 John F. Kennedy Boulevard Philadelphia, PA 19103-1895 Tel: (215) 665-3140 Fax: (215) 665-3165 http://www.obermayer.com/ Lenox Healthcare, Inc., then one of the leading health care providers in the United States, filed for chapter 11 protection on July 10, 2001 (Bankr. D. Del. Case No. 01-2288). The company's operations have ceased. On July 27, 2001, the Court appointed Charles M. Golden as Chapter 11 Trustee to oversee the transition of the Debtors' businesses to their secured creditors and lessors and wind up their estates. LIFECARE HOLDINGS: 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 U.S. Hospital and Long-term Care sectors this week, the rating agency confirmed its B2 Corporate Family Rating for LifeCare Holdings, 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 Secured Revolving Credit Facility due 2010 B2 Ba3 LGD3 31% Senior Secured Term Loan due 2012 B2 Ba3 LGD3 31% 9.25% Senior Subordinated Notes due 2013 Caa1 Caa1 LGD5 85% 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- umeric 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 Plano, Texas, LifeCare operates 21 long-term acute care hospitals in 12 markets throughout nine states with 1,021 licensed beds. The company's facilities include 15 HIH and six free-standing facilities. LIN 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 LIN Television 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 ---------- ------- ------- ------ ---------- Secured Revolver Ba1 Baa3 LGD2 14% Secured Term Loan Ba1 Baa3 LGD2 14% 6 1/2% Sr. Subor. notes due 2013 B1 Ba3 LGD4 69% 6 1/2% Sr. Subor. notes-cl B due 2013 B1 Ba3 LGD4 69% 2.50% Exch. Sr. Subor. notes due 2033 B1 Ba3 LGD4 69% 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%). LIN TV Corp., headquartered in Providence, Rhode Island owns and operates 30 television stations in 18 mid-sized markets, covering approximately 11% of U.S. television households. MARQUEE 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 for the Gaming, Lodging & Leisure sector, the rating agency confirmed Marquee Holdings, Inc.'s B1 Corporate Family Rating. Additionally, Moody's revised or confirmed its probability-of- default ratings and assigned loss-given-default ratings on these debts: Issuer: Marquee Holdings, Inc. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 12% Sr. Discount Notes Due 2014 Caa1 B3 LGD6 95% Issuer: AMC Entertainment, Inc. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Sec. Revolving Credit Facility Ba3 Ba1 LGD2 11% Sr. Secured Term Loan Ba3 Ba1 LGD2 11% Sr. Floating Rate Notes Due 2010 B2 Ba3 LGD3 35% 8-5/8% Sr. Notes Due 2012 B2 Ba3 LGD3 35% 9-7/8% Sr. Sub. Notes Due 2012 B3 B3 LGD5 81% 11% Sr. Sub. Notes Due 2016 B3 B3 LGD5 81% 9-1/2% Sr. Sub. Notes Due 2011 B3 B3 LGD5 81% 8% Sr. Sub. Notes Due 2014 B3 B3 LGD5 81% 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%). About Marquee Holdings Inc. Based in Kansas City, Mo., Marquee Holdings Inc. is organized as an intermediate holding company with no operations of its own. The Company's principal directly owned subsidiaries are American Multi-Cinema, Inc., Grupo Cinemex, S.A. de C.V., and AMC Entertainment International, Inc. About AMC Entertainment Inc. Headquartered in Kansas City, Missouri, AMC Entertainment Inc. -- http://www.amctheatres.com/-- is a worldwide leader in the theatrical exhibition industry. The company serves more than 250 million guests annually through interests in 415 theatres and 5,672 screens in 12 countries including the United States. MARSH SUPERMARKETS: Moody's Assigns Caa1 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. and Canadian Retail sector, the rating agency assigned its Caa1 Corporate Family Rating for Marsh Supermarkets, Inc., and confirmed its Caa2 rating on the Company's guaranteed senior subordinated notes. Additionally, Moody's assigned an LGD5 rating to those bonds, suggesting noteholders will experience a 72% 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 Indianapolis, Indiana, Marsh Supermarkets, Inc. (Nasdaq: MARSA & MARSB) -- http://www.marsh.net/-- is a regional supermarket chain with stores primarily in Indiana and western Ohio, operating 69 Marsh(R) supermarkets, 38 LoBill(R) Food stores, eight O'Malias(R) Food Markets, 154 Village Pantry(R) convenience stores, and two Arthur's Fresh Market(R) stores. The Company also operates Crystal Food Services(SM) which provides upscale catering, cafeteria management, office coffee, coffee roasting, vending and concessions, and Primo Banquet Catering and Conference Centers; Floral Fashions(R), McNamara(R) Florist and Enflora(R) -- Flowers for Business. MECACHROME INT'L: 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 Mecachrome International 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 B1 Ba2 LGD2 13% Sr. Secured Term Loan B due 2013 B1 Ba2 LGD2 13% 9% Sr. Subor. Notes due 2014 Caa1 B3 LGD4 69% 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%). Mecachrome International Inc. -- http://www.mecachrome.com/-- produces precision parts for erospace, automotive, and autosport industries. MEDIACOM BROADBAND: Fitch Assigns B- Rating to $300 Million Notes ----------------------------------------------------------------- Fitch Ratings assigned a 'B-' rating and 'RR5' recovery rating to Mediacom Broadband LLC's $300 million offering of 8.5% senior unsecured notes due 2015. The proceeds from the note offering are expected to be used to repay amounts outstanding under Mediacom Broadband's subsidiary credit facility. Mediacom Broadband is a wholly owned subsidiary of Mediacom Communications Corporation. The Issuer Default Rating for Mediacom Communications Corporation and its wholly owned subsidiaries Mediacom Broadband and Mediacom LLC is 'B'. The Rating Outlook is Stable. Fitch's ratings for Mediacom Communications Corporation and its wholly owned subsidiaries Mediacom LLC and Mediacom Broadband LLC reflect MCCC's high leverage relative to its industry peer group, and in Fitch's opinion an operating profile that, while demonstrating recent improvement, continues to lag behind comparable cable multiple system operators. Fitch's ratings incorporate the company's stable liquidity position, upgraded cable plant as well as the geographical clustering of the company's subscriber base. The ratings are supported by the expectation of continued revenue and revenue generating unit diversification through the deepening penetration of digital cable, advanced digital products, and high speed data services as well as the introduction of voice over Internet protocol telephone service. Fitch believes that the launch of VoIP telephony services certainly enhances MCCC's competitive positioning and provides the company with a platform for future revenue and cash flow growth. MCCC markets the VoIP service to approximately 1.7 million of the company's 2.8 million homes. MCCC expects to introduce VoIP service to between 2.3 and 2.5 million homes by the end of 2006. On a consolidated basis debt to LTM EBITDA was 7.4x at the end of the second quarter reflecting a modest improvement from 7.6x as of year end 2005. Mediacom LLC's leverage decreased to 7.8x from 8.1x as of year end, and Mediacom Broadband LLC's leverage increased to 7x as of June 30, 2006 compared to 6.3x as of year end 2005. Fitch does not expect debt levels to decline during the short term as free cash flow generation is not expected to cover scheduled amortization from MCCC's bank facilities. Additionally, debt levels may increase modestly to fund stock repurchases. Going forward, Fitch expects leverage to remain well above 7x during 2006 and to trend down to 7x by the end of 2007. MESABA AVIATION: Employees Propose Plan to Save Airline & Jobs -------------------------------------------------------------- Labor unions representing pilots, flight attendants, and mechanics at bankrupt Mesaba Airlines presented airline management, on Oct. 3, 2006, with an unprecedented joint offer to save their airline, their jobs, and their contracts. "Mesaba has over sixty years of pride as a 'Hometown Airline,' with great people, great service, and an impeccable safety and performance record," states Capt. Tom Wychor, chairman of the Mesaba unit of the Air Line Pilots Association, International. "By attacking labor, and using the court system to impose unnecessarily severe cuts in wages and benefits, management is destroying Mesaba. The employees built this airline, and we are doing our best to save it." The Mesaba Labor Coalition has offered wage, work rule and benefit concessions that will cut labor costs by 15% for the next three years. Because airline contracts do not terminate, the savings will continue well beyond that term. If Mesaba agrees to the proposal, the unions would begin a ratification process immediately. Mesaba will not only be able to reorganize and exit successfully from bankruptcy with the level of cuts offered by the unions, but it would also achieve profit margins that substantially exceed those of previous years. Mesaba proposes to cut labor costs so that it can achieve an 8% profit margin. The coalition plan will enable Mesaba to produce at least a 6% margin. In recent years, profit margins have dwindled to just 2-3%. "We are not talking about the difference between Mesaba being in the red or the black anymore," said Nathan Winch, a mechanic and Mesaba Airline Representative for the Aircraft Mechanics Fraternal Association. "The Coalition's proposal guarantees that labor is giving enough to make Mesaba profitable. We say a 6% profit margin is sufficient, and if management is going to liquidate over another point or two on the margin, there is nothing we can do." If Mesaba elects to throw out the labor contracts, the unions intend to strike, which would end service to cities that rely on Mesaba as their only airline transportation. The unions may strike when Mesaba stops adhering to the terms of their contracts. In the wake of Mesaba's announcement that it intends to impose new terms on Oct. 15, 2006, the unions strongly urge the traveling public to take steps to avoid travel on Northwest Airlink on and after that date. "Going on strike is the last resort," said Tim Evenson, President of the Association of Flight Attendants unit at Mesaba, "because we would rather provide the same exceptional service that Mesaba is known for day in and day out. But, we will not work for wages that qualify our members for food stamps. Mesaba should not be permitted to exploit the bankruptcy process to require the government to supplement our earnings. No citizen of this country should have to bear that burden, especially while our holding company harbors millions of dollars in profits earned by Mesaba in previous years." About Mesaba Aviation Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. Craig D. Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. METROMEDIA INT'L: Filing Ch. 11 Plan to Consummate Asset Sale ------------------------------------------------------------- Metromedia International Group, Inc., has received an offer to acquire all of the Company's business interests in Georgia for a cash price of $480 million from an investment group comprised of Istithmar, an alternative investment house based in Dubai, United Arab Emirates, Salford Georgia, the Georgian office of Salford Capital Partners Inc. a private equity and investment management company which manages investments in the CIS and Central & Eastern Europe, and Emergent Telecom Ventures, a communications merchant bank focused on pursuing telecommunications opportunities in the Emerging Markets. In response to the offer, the Company entered into an agreement with the Offering Group providing for exclusivity in negotiations with the Company during a 60-day due diligence period and setting forth intended terms of a binding sale and purchase agreement to be executed within such exclusivity period and upon conclusion of the Offering Group's due diligence. The Company will be obligated to reimburse certain due diligence expenses of the Offering Group, if the Company subsequently elects not to proceed with the proposed sale. If a binding sale and purchase agreement were to be executed with the Offering Group, the Company intends to undertake the sale through a court-supervised auction conducted in accordance with Section 363 of 11 U.S.C, in a case to be filed in the U.S. Court for the District of Delaware. Given the purchase price proposed by the Offering Group, the terms of certain agreements concluded with preferred stockholders as described later herein, and present management estimates of certain costs and liability settlements, holders of the Company's common stock would likely receive approximately $1.60 per share and holders of preferred stock approximately $71.00 per share in the Wind-Up. The Company and the Offering Group presently expect that a binding sale and purchase agreement could be executed in early December 2006. At the time of its filing, the Company also intends to immediately file a chapter 11 plan. Upon the approval of the plan, all of the preferred and common equity interests in the Company will be converted into the right to receive the cash remaining after payment of all allowed claims and the costs and expenses associated with the sale and the Wind- Up. In this connection, the Company announced that it has entered into a lock-up, support and voting agreement with representatives of holders of approximately 80% of its 4.1 million outstanding shares of preferred stock committing the Preferred Representatives to support a plan in the Wind-Up providing essentially to distribute to preferred stockholders $68 for each preferred share from Net Distributable Cash up to $420 million and to distribute pro rata to each preferred share one-half of Net Distributable Cash in excess of $420 million. The remaining balance of Net Distributable Cash would be distributed pro rata to each common share. The Offer Agreement The Offering Group proposes to acquire the Company's sole ownership interest in Metromedia International Telecommunications, Inc., which indirectly owns 50.1% of the Georgian mobile telephony operator Magticom, 21% of Telecom Georgia, a provider of international long distance calling services in Georgia, and 26% of Telenet, a Georgian provider of high-speed data communication and internet access services. The Offering Group proposes to acquire all of the outstanding capital stock of MITI for $480 million cash payment due at closing. The Company has committed to exclusively negotiating binding terms for acquisition of these assets with the Offering Group for a sixty-day period, during which the Offering Group will complete its remaining due diligence work. The parties have agreed on basic terms of a binding share purchase agreement, which they presently expect to execute following the completion of the Offering Group's due diligence procedures. The parties further agreed that Magticom could distribute to its shareholders up to $30 million in dividends prior to the sale without effect on the proposed purchase price for MITI, of which MIG anticipates the receipt of approximately $13.5 million for its 50.1% economic interest in Magticom. The Offering Group has commenced discussions with Mark Hauf, the Company's Chairman and Chief Executive Officer, to explore with him the possibility of continuation of his services with the Offering Group or one of its members or their respective affiliates. Concerning the Offering Group's proposal, Mark Hauf, the Company's Chairman and CEO commented: "Although it has not been the Company's active intention to divest its remaining operating units, we have remained open to considering compelling purchase proposals. The current offer, in the opinion of the Board, represents such a proposal. It affords an opportunity to monetize for our stockholders the value developed in the Company through the preceding three years of restructuring. Seizing this opportunity to liquidate on attractive terms also acknowledges the extreme difficulties and significant costs the Company has faced and will continue to face in its efforts to meet reporting obligations as a U.S. publicly traded registrant with all of its operations conducted in foreign emerging markets. It also acknowledges the practical limits the Company faces in raising additional funds to fuel material expansion of our foreign operations without very substantially diluting the interests of our present stockholders. In all, it is the judgment of the Board that acting on the present offer represents the best opportunity readily available to maximize value for our stockholders." The Preferred Agreement The Preferred Representatives have agreed to support a chapter 11 plan in the Wind-Up pursuant to which holders of the Company's preferred stock would receive $68 per share from Net Distributable Cash of $420 million or less, and one-half of any Net Distributable Cash in excess of $420 million, allocated equally among the preferred shares. The balance of Net Distributable Cash would be allocated equally among the outstanding common shares. Since the Preferred Representatives represent holders of more than two-thirds of the presently outstanding preferred stock, if such a plan is approved by the Court, the plan would be binding on all preferred stockholders. Net Distributable Cash will consist of the cash proceeds of the intended MITI sale plus the Company's portion of dividends received from Magticom prior to the sale and all headquarters cash on hand at sale closing less: a) any taxes arising out of the sale of assets; b) payments of all allowed claims in the Wind-Up case; c) necessary reserves for the final liquidation of the Company and its subsidiaries; d) professional fees connected with the MITI sale and pursuit of the Wind-Up; and e) Board-approved bonuses or similar payments to Company directors, management and employees which in an aggregate amount are presently estimated to equal approximately 5% of the MITI sale proceeds. The Company presently estimates that Net Distributable Cash following consummation of a $480 million MITI sale in first quarter of 2007 and essential conclusion of the Wind-Up by the end of first half 2007 will range from $440-450 million. Pursuant to the plan of distribution agreed with the Preferred Representatives, this would result in distribution of $70.42 to $71.62 for each preferred share and $1.58 to $1.63 for each common share. By the end of first half 2007, the combined face value plus accumulated unpaid dividends that would otherwise be due to the preferred stockholders would be in aggregate approximately $325 million or $78.50 per preferred share outstanding. Concerning the distribution arrangements agreed between the Company and the Preferred Representatives, Mr. Hauf further commented: "There has been longstanding disagreement among holders of the Company's two classes of stock concerning the claim each might have on enterprise value generated through resolution of the Company's earlier financial difficulties. In reaching this agreement with preferred stockholders, we acknowledged the priority nature of their rapidly increasing claim in the event the Company faced liquidation of its remaining assets. Given the practical limitations imposed by the Company's present and historical condition on raising significant additional investment capital, the prospect of the eventual sale of foreign operating assets rather than their continued aggressive development has been ever present. If undertaken without some concession by the preferred stockholders, such sale would result in distributions to our common stockholders of materially less than market trading price. The opportunity presented by the Offering Group's acquisition proposal and the concessions agreed with the Preferred Representatives enable the Company to wrap up its operations while still delivering to our common stockholders an amount exceeding the Company's ninety calendar day average trading price for the common stock." Effect on Georgian Operations Concerning the Offering Group's proposed purchase of MITI, a spokesperson for the Offering Group stated: "We are very enthusiastic about this opportunity. We are confident about Georgia's investment climate and its potential for further economic growth. Magticom is a great company with an excellent track record of growth, profitability and client service. We plan to actively build on this track record." About Metromedia Based in Charlotte, North Carolina, Metromedia International Group (PINK SHEETS: MTRM-Common Stock and MTRMP-Preferred Stock) -- http://www.metromedia-group.com/-- through its subsidiary, Metromedia International Telecommunications, owns interests in telecom and cable TV operations in Russia, Georgia, and elsewhere in Eastern Europe. The Company's core businesses includes Magticom, Ltd., the leading mobile telephony operator in Tbilisi, Georgia, and Telecom Georgia, a well-positioned Georgian long distance telephony operator. * * * Moody's Investors Service has placed Metromedia's subordinated debt rating at B3 and junior subordinated debt rating at B2. METROMEDIA INT'L: Magticom Earns $63.4 Million in Fiscal 2005 ------------------------------------------------------------- Metromedia International Group, Inc., has released the preliminary unaudited financial results, for the fiscal year ended Dec. 31, 2005, for its principal Georgian business, Magticom Limited. Highlights for the full-year 2005 vs. full-year 2004 include: -- revenues of $146.1 million, an improvement of 43% compared to $102 million generated in the prior year; -- Net income of $63.4 million, as compared to $50.3 million of net income earned in 2004; and -- EBITDA of $97.8 million vs. $73.3 million in 2004 Commenting on this announcement, Ernie Pyle, the Company's Chief Financial Officer, said: "This press release contains the preliminary unaudited financial results for Magticom and as such this financial information is subject to adjustment until such time that the Company files its respective periodic reports with the United States Securities and Exchange Commission." Mr. Pyle further stated: "We anticipate that Magticom will realize the full year 2006 EBITDA of approximately $115 million projected in Magticom's 2006 Business Plan as approved by its shareholders. Such information, together with the 2004-2005 financial performance results of Magticom, included herein, should enable the Company's stakeholders to evaluate the attractiveness of the proposed sale of substantially all of the assets of MIG, as discussed in a parallel press release distributed [Mon]day." Magticom, the leading mobile telephony operator in Tbilisi, Georgia, in which the Company presently owns a 50.1% ownership interest, operates a wireless communications network and markets mobile voice communication services to private and commercial users nationwide in the country of Georgia. Magticom's network offers services using GSM standards in both the 900 MHz and 1800 MHz spectrum range and has recently launched 3rd Generation GSM mobile voice, data and video services using the 2.1 GHz radio frequency spectrum. Prior to mid-February 2005, the Company had a 34.5% ownership interest in Magticom. About Metromedia Based in Charlotte, North Carolina, Metromedia International Group (PINK SHEETS: MTRM-Common Stock and MTRMP-Preferred Stock) -- http://www.metromedia-group.com/-- through its subsidiary, Metromedia International Telecommunications, owns interests in telecom and cable TV operations in Russia, Georgia, and elsewhere in Eastern Europe. The Company's core businesses includes Magticom, Ltd., the leading mobile telephony operator in Tbilisi, Georgia, and Telecom Georgia, a well-positioned Georgian long distance telephony operator. * * * Moody's Investors Service has placed Metromedia's subordinated debt rating at B3 and junior subordinated debt rating at B2. MISSION ENERGY: S&P Upgrades Ratings to B With Positive Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Mission Energy Holding Co. to 'B' from 'B-', and those on subsidiaries Edison Mission Energy, Edison Mission Marketing and Trading Inc., and Edison Mission Energy Funding Corp. to 'BB-' from 'B+'. The outlook is positive. "The rating action reflects management's revised view of the availability of its parent, Edison International, and affiliate companies to make capital contributions to further expand the unregulated Edison Mission Group companies," said Standard & Poor's credit analyst David Bodek. Standard & Poor's also raised its senior secured debt rating and first lien term loan rating on Midwest Generation LLC to 'BB' from 'BB-'. The upgrades reflect the movement of the affected companies' credit quality toward the consolidated Edison International companies' credit quality. The rating upgrades coincide with the downgrade of Edison International to 'BBB-' from 'BBB'. The rating action on Edison International also reflects the movement toward a consolidated credit profile of the parent and its unregulated subsidiaries. The outlook on Edison International is stable. The positive outlook on the Edison Mission Group companies reflects the potential benefit that may result from the anticipated retirement of about $800 million of MEHC debt in 2008. The ratings on EME, MEHC, Edison Mission Marketing and Trading, Edison Mission Energy Funding, and Midwest Gen, continue to reflect the credit quality of the distributable cash flow from a portfolio of generating assets. The ratings also takes into account the financial risk of double and triple leverage at EME and MEHC. EME is an independent power producer and, through Edison Mission Marketing and Trading, the company is involved in power marketing and trading. MONTECITO BROADCAST: 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 corporate family rating on Montecito Broadcast Group, 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 34% Secured first lien term loan B1 B1 LGD3 34% Secured second lien term loan B3 Caa1 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%). Montecito Broadcast Group, LLC, headquartered in Montecito, California, is a television broadcaster comprised of stations located in Oregon, Kansas, and Hawaii. MOOG 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 Moog Inc. and its Ba3 rating on the company's 6.50% Sr. Subordinated Notes due 2015. Moody's assigned those debentures an LGD5 rating suggesting noteholders will experience a 73% 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%). Based in East Aurora, New York, Moog Inc. -- http://www.moog.com/ -- is a worldwide designer, manufacturer, and integrator of precision control components and systems. Moog's high-performance systems control military and commercial aircraft, satellites and space vehicles, launch vehicles, missiles, automated industrial machinery, and medical equipment. MTR GAMING: 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 MTR Gaming Group, Inc.'s B1 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 ---------- ------- ------- ------ ---------- 9.75% Senior Unsecured Notes B2 B1 LGD3 46% Senior Subordinated Notes B3 B3 LGD5 85% 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%). MTR Gaming Group, Inc. owns and operates the Mountaineer Race Track & Gaming Resort in Chester, West Virginia; Scioto Downs in Columbus, Ohio; the Ramada Inn and Speedway Casino in North Las Vegas, Nevada; Binion's Gambling Hall & Hotel in Las Vegas, Nevada; and holds a license to build Presque Isle Downs, a thoroughbred racetrack with pari-mutuel wagering in Erie, Pennsylvania. The company also owns a 50% interest in the North Metro Harness Initiative, LLC, which has a license to construct and operate a harness racetrack and card room outside Minneapolis, Minnesota and a 90% interest in Jackson Trotting Association, LLC, which operates Jackson Harness Raceway in Jackson, Michigan. NEPTUNE PROPERTIES: Keen Auctioning Lake Tyler Development ---------------------------------------------------------- Jason Searcy, Esq., the Chapter 11 Trustee appointed in Neptune Properties, L.P., and Reunion Harbor, Inc.'s bankruptcy cases, retained Keen Realty, LLC, as his agent to market and sell the Debtors' interests in an 830-acre "upscale, lakefront subdivision and community resort" located on Lake Tyler in Tyler, Texas. Keen describes the property as a "remarkable opportunity for residential developers, resort and timeshare developers and investors." Keen is accepting bids until Dec. 8, 2006, and will hold an auction on Dec. 13, 2006. The sale will be subject to final approval by Judge Parker of the United States Bankruptcy Court for the Eastern District of Texas, Tyler Division. For additional information about the property and bidding procedures, contact: KEEN REALTY, LLC 60 Cutter Mill Road, Suite 214 Great Neck, NY 11021 Telephone (516) 482-2700 http://www.keenconsultants.com/ Neptune Properties, LP, and Reunion Harbor, Inc., filed for chapter 11 protection (Bankr. E.D. Tex. Case Nos. 06-60126 and 06- 60127) on March 29, 2006. At that time, the Debtors projected assets available for distribution to unsecured creditors. NORTEL NETWORKS: Partners with Golden West in Wireline Deal ----------------------------------------------------------- Golden West Telecom and Venture Communications Cooperative, both independent telecommunications companies servicing South Dakota, will deliver new converged communications services in small towns and rural areas throughout South Dakota with Nortel Networks Corporation. By deploying Nortel's Carrier VoIP solution, the two carriers will evolve their wireline networks to packet-based infrastructure that reduce operation costs by leveraging SIP technology to deliver a wide range of advanced communication services such as VoIP, Centrex IP business services and next-generation multimedia communications. Golden West serves approximately 47,000 subscribers and has been a Nortel customer for nearly three decades. As part of this deployment Nortel is expanding its role in Golden West's network by displacing a competitor's solution. Nortel has been a key supplier to Venture Communication's network since 1980. Venture Communications provides communications services to more than 13,500 subscribers. Golden West and Venture Communications will deploy Nortel's IMS- ready Communications Server (CS 1500), which builds on Nortel's leadership position in SIP and VoIP, to allow carriers to support the traditional voice services needed today while laying the foundation for future IMS-based multimedia services tomorrow. Nortel is also providing engineering, installation, project management, security assessment, and network support services from the Nortel Global Services portfolio. About Golden West Golden West Telecom -- http://www.goldenwest.com/-- is the largest independent telecommunications company serving South Dakota. The company and its subsidiaries provide telephone, paging, and Internet services to over 60,000 customers. About Venture Communications Based in Highmore, South Dakota, Venture Communications Cooperative -- http://www.venturecomm.net/-- is an independent telecommunications provider servicing central and northeastern South Dakota. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. * * * As reported in the Troubled Company Reporter on July 10, 2006, Dominion Bond Rating Service confirmed the long-term ratings of Nortel Networks Capital Corporation, Nortel Networks Corporation, and Nortel Networks Limited at B (low) along with the preferred share ratings of Nortel Networks Limited at Pfd-5 (low). All trends are Stable. DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt; Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5 (low) Stb Class A, Non-Cumulative Redeemable Preferred Shares. As reported in the Troubled Company Reporter on June 20, 2006, Moody's Investors Service affirmed the B3 corporate family rating of Nortel; assigned a B3 rating to the proposed US$2 billion senior note issue; downgraded the US$200 million 6.875% Senior Notes due 2023 and revised the outlook to stable from negative. Standard & Poor's also affirmed its 'B-' long-term and 'B-2' short-term corporate credit ratings on the company, and assigned its 'B-' senior unsecured debt rating to the company's proposed $2 billion notes. The outlook is stable. NORTH AMERICAN: Confirmation Hearing Set on October 26 ------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Pennsylvania will convene a hearing at 9:00 a.m., on Oct. 26, 2006, to consider confirmation of North American Refractories Company's Third Amended Reorganization Plan. Headquartered in Pittsburgh, Pennsylvania, North American Refractories Company, was engaged in the manufacture and non- retail sale of refractory bricks and related products. The Company filed for chapter 11 protection on January 4, 2002 (Bankr. W.D. Pa. Case No. 02-20198). Paul M. Singer, Esq., of Pittsburgh represents the Debtor. When the Debtor filed for protection from its creditors, it listed $27,559,000,000 in assets and $18,634,000,000 in debts. NORTH ATLANTIC: 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 Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its B3 Corporate Family Rating for North Atlantic Trading Company. Additionally, Moody's revised and 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 Notes Caa1 Caa1 LGD4 58% North Atlantic Holding Company $35 million Sr. Discount Notes Ca 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%). North Atlantic Trading Company, Inc. is a holding company which owns National Tobacco Company, L.P. and North Atlantic Operating Company, Inc. National Tobacco Company is a manufacturer and marketer of loose leaf chewing tobacco, and an importer and distributor of premium cigarette papers and related products in the United States. NORTHWEST AIRLINES: Provides Earnings Outlook for 2006 ------------------------------------------------------ Northwest Airlines provided these earnings outlook for 2006: -- since September, Northwest has experienced a softening in revenue, similar to trends reported by other carriers; -- for the months of September through December, Northwest anticipates that it will realize a loss for this period, excluding reorganization items; -- for full year 2006, based on the airline's current fuel and revenue estimates, Northwest is forecasting a modest profit with an estimated pre-tax margin of approximately two percent, excluding reorganization items, on more than $12 billion in revenue. For the first six months of the year, Northwest reported a $50 million profit, excluding reorganization items, on revenues of more than $6 billion. During the seasonally strong summer months of July and August, Northwest reported a profit of $272 million, excluding reorganization items, on $2.4 billion in revenues. "This expected modest full year profit is testament to the success of our ongoing restructuring efforts and the substantial sacrifices made by our employees and other Northwest stakeholders," said Doug Steenland, Northwest president and chief executive officer. "The full year profit outlook is also partially reflective of Northwest's reduced capacity. For full year 2006, we expect that our systemwide consolidated available seat miles will be approximately eight percent lower than 2005." Mr. Steenland continued, "While a full year profit would be an important accomplishment in the restructuring efforts at Northwest and would help us continue to attract necessary capital, we still have work to do to meet our long-term pre-tax margin goal of six to seven percent, which will allow Northwest to compete successfully in the future and acquire and finance new aircraft." "Reversing $4.2 billion in losses since early 2001 is not an easy task, but one that is essential to the future of Northwest. We realize that a number of key stakeholders, especially our employees, have made difficult and painful sacrifices to help the airline reach this juncture in its restructuring process." Steenland added, "A key element of our restructuring plan that has been addressed through collaboration with our employees is the preservation of our defined benefit pension plans. By working with Northwest union leaders, employees and Congress, we were able to help bring about new pension funding rules that allow Northwest to provide the pension benefits that our employees have justly earned." "[Monday's] full-year projection is an indication that we are making progress towards our goal of achieving long-term profitability for the airline. By achieving profitability, our employees will share in Northwest's success through job and retirement security and gain sharing opportunities that we have put in place for our employees." "Because of continuing progress in addressing our restructuring goals of resizing and optimizing the Northwest fleet and level of flying; realizing competitive labor and non-labor costs; and restructuring and recapitalizing the airline's balance sheet, we remain focused on emerging from Chapter 11 protection by the middle of next year," Mr. Steenland concluded. Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. OLD WORLD: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Old World Bakery, Wholesale, Inc. dba Old World Bakery dba Champion Distributing Company fka Bagels By The Sea, Wholesale, Inc. 5509 Northeast 122nd Avenue, Suite 430 Portland, OR 97230-1134 Bankruptcy Case No.: 06-33039 Type of Business: The Debtor produces bagels, pita bread, and other baked goods. See http://www.oldworldbakery.com/ Chapter 11 Petition Date: September 2, 2006 Court: District of Oregon (Portland) Judge: Randall L. Dunn Debtor's Counsel: Robert J. Vanden Bos, Esq. Vanden Bos & Chapman, LLP Suite 520, The Spalding Building 319 Southwest Washington Street Portland, OR 97204 Tel: (503) 241-4869 Fax: (503) 241-3731 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Craig J. Liddell Investor $56,148 3950 Ridge Lane West Linn, OR 97068-2927 Sysco Food Services of Trade Debt $50,000 Portland, Inc. 26250 Southwest Parkway Center Drive Wilsonville, OR 97070-9606 BakeMark Trade Debt $47,551 6555 Southwest 111th Avenue Beaverton, OR 97008-5339 U.S. Bank Trade Debt $44,152 P.O. Box 790408 Saint Louis, MO 63179-0408 Kidder Mathews Trade Debt $19,854 P.O. Box 223197 Pittsburgh, PA 15251-2197 Donut Day Trade Debt $19,200 Teeny Foods Trade Debt $16,758 Dawn Foods Trade Debt $12,834 Seaside Bagels, LLC Trade Debt $11,050 Atlas Bakery Trade Debt $7,901 Platinum Plus for Business Trade Debt $5,709 Michael Kavanaugh Trade Debt $4,921 Chevron Trade Debt $4,290 Dell Financial Services Trade Debt $3,929 Northwest Butcher Supply Trade Debt $3,658 Wells Fargo Financial Bank Trade Debt $3,375 Stark Law Offices Legal Fees $3,105 Pacific Power Utility $2,838 ONETRAVEL INC: Sells Substantially All Assets to OTV Acquisition ---------------------------------------------------------------- OneTravel Holdings, Inc. and certain of its wholly-owned subsidiaries, OneTravel, Inc. and Farequest Holdings, Inc., executed a definitive Bill of Sale, Assignment and Assumption Agreement on Sept. 28, 2006, to sell substantially all of the assets of OneTravel and assign certain liabilities of OneTravel to OTV Acquisition Co., an affiliate of Palisades Master Fund, L.P. Previously, OneTravel filed a motion with the U.S. Bankruptcy Court for the Western District of Texas Midland Division seeking an order approving procedures to sell certain assets free and clear of liens, claims and encumbrances. The Bankruptcy Court approved the motion, and OneTravel provided notice of the sale hearing and bid procedures to interested persons, but no qualifying cash bids were received. Pursuant to a further order of the Bankruptcy Court, Palisades Master Fund, L.P., as collateral agent under the Security Agreement, dated as of Oct. 29, 2005, as amended, between the Company and the holders of the 9% Secured Convertible Debentures Due 2008 and 2009, was allowed to credit bid through Buyer, acting as agent to Palisades, the pre-petition claims arising under the Debentures toward the purchase of substantially all of the assets of OneTravel. Accordingly, OneTravel entered into the Bill of Sale with Buyer, pursuant to which Buyer will acquire the assets of OneTravel by credit bidding the Debentures based on a starting value of $10,500,000 and adjusted for: (a) cure costs of $1,333,000, (b) payments to/refinancing of senior lien holders of $750,000, and (c) assumed liabilities, including accounts payable and employee obligations but excluding cure costs, of $1,612,000, resulting in a final credit bid of $6,805,000. The amount of the secured claim on account of the Debentures is $15,625,000. Pursuant to the Bill of Sale, OneTravel consummated the sale of substantially all of their assets and the assignment of certain liabilities to OTV Acquisition Co. as of Sept. 28, 2006. The sale was conducted under Section 363 of the Bankruptcy Code, pursuant to which the assets were sold free and clear of all liens, claims and encumbrances. The Bankruptcy Court had approved the sale by an order signed on Sept. 19, 2006. Following the closing under the Bill of Sale, OneTravel and its subsidiaries intend to evaluate whether to file a liquidating plan of reorganization, convert the Chapter 11 case to a liquidating case under Chapter 7, or dismiss the case. Management is unable to predict whether any amounts will be available for distribution to stockholders. About OneTravel Inc. Headquartered in Atlanta, Georgia, OneTravel, Inc. -- http://www.onetravel.com/-- offers comprehensive travel and lodging services. The Company and its debtor-affiliates filed for chapter 11 protection on July 7, 2006 (Bankr. W.D. Tex. Case Nos. 06-70084 to 06-70088). Carol E. Jendrzey, Esq., at Cox Smith Matthews, Inc., represents the Debtors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $1 million to $10 million. OPBIZ LLC: 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 OpBiz, LLC's B3 Corporate Family Rating. Additionally, Moody's upgraded 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 ---------- ------- ------- ------ ---------- Term Loan A B3 B2 LGD3 40% Term Loan B B3 B2 LGD3 40% 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%). About OpBiz, LLC OpBiz, LLC, a subsidiary of BH/RE, LLC, acquired the Aladdin Resort and Casino (located in Las Vegas, Nevada) out of Chapter 11 bankruptcy in September 2004. OpBiz, along with its parent company, BH/RE, LLC and subsidiaries, were formed to acquire, operate and renovate the Aladdin. OpBiz has entered into an agreement with Planet Hollywood to license Planet Hollywood's trademarks. The renovation project will transform the Aladdin into the Planet Hollywood Resort and Casino. OpBiz has also entered into an agreement with Sheraton pursuant to which Sheraton will provide hotel management, marketing and reservation services for the hotel that will comprise a portion of Planet Hollywood Resort and Casino. OVERWATCH SYSTEMS: 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 B2 Corporate Family Rating for Overwatch Systems LLC to B3. 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 B2 B2 LGD3 35% Sr. Secured Term Loan B due 2011 B2 B2 LGD3 35% 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%). Overwatch Systems - http://www.overwatch.com/-- develops software tools for the U.S. military. PACER HEALTH: June 30 Stockholders' Deficit Tops $3.4 Million ------------------------------------------------------------- Pacer Health Corporation's balance sheet at June 30, 2006, showed $25,788,110 in total assets and $29,235,290 in total liabilities, resulting in a $3,447,180 stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $4,408,915 in total current assets available to pay $15,872,012 in total current liabilities coming due within the next 12 months. For the three months ended June 30, 2006, the Company reported a $3,526,994 net loss on $5,427,954 of total revenues, compared with a $846,459 net loss on $1,380,104 of total revenues for the same period in 2005. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?12d5 About Pacer Health Corporation Miami, Nev.-based Pacer Health Corporation (OTCBB: PHLH) -- http://www.pacerhealth.com/-- owns and operates medical treatment centers and acute care facilities, primarily serving the growing senior citizen population and low-to-moderate income individuals. PAXSON 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 affirmed Paxson Communications Corporation's B3 corporate credit rating. In addition, 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 ---------- ------- ------- ------ ---------- Floating Rate First Priority Sr. Secured Notes Due 2012 B2 B1 LGD2 29% Floating Rate Second Priority Sr. Secured Notes Due 2013 B3 Caa2 LGD5 82% 14.25% junior exch. preferred stk. due 2006 Caa2 Caa2 LGD6 100% 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%). Paxson Communications Corporation, nka ION Media Networks -- http://www.paxson.com/-- is a network television broadcasting company that owns and operates the largest broadcast television station group in the U.S., as measured by the number of television households in the markets its stations serve. The Company owns and operates 60 broadcast television stations (including three stations we operate under time brokerage agreements), all of which carry its flagship i network programming, including stations reaching all of the top 20 U.S. markets. PENINSULA GAMING: Moody's Places LGD4 Rating to 8-3/4% 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 Peninsula Gaming, LLC's B2 Corporate Family Rating. Moody's downgraded the Company's probability-of-default rating on its 8-3/4% Senior Secured Notes to B3 from B2. Additionally, Moody's assigned an LGD4 rating to these notes, suggesting noteholders will experience a 62% 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%). Headquartered in Dubuque, Iowa, Peninsula Gaming, LLC, owns and operates the Evangeline Downs pari-mutuel horse racetrack and casino in Opelousas, Louisiana, and the Diamond Jo riverboat casino in Dubuque, Iowa. Through a wholly-owned unrestricted subsidiary, the company is in the process of constructing a new casino property in Worth County, Iowa. PENN TRAFFIC: Chief Executive Officer Robert Chapman Resigns ------------------------------------------------------------ Robert Chapman, President and CEO, retired from The Penn Traffic Company and resigned from the Board of Directors of the Company effective Oct. 2, 2006. Gregory J. Young, Penn Traffic's Senior Vice President, Chief Marketing and Distribution Officer, and Robert Panasuk, formerly Executive Vice President at A&P, have been named Co-Chief Operating Officers. Mr. Young has been with Penn Traffic since July of this year. Before joining Penn Traffic, he headed the retail operations of C&S Wholesale Grocers. Previously he was a Group Vice President of A&P. His areas of responsibility will include merchandising, marketing, distribution, wholesale and franchise operations, bakery manufacturing, information technology and internal audit. Mr. Panasuk was most recently Executive Vice President of A&P where has was responsible for merchandising, marketing and distribution for U.S. operations. His areas of responsibility at Penn Traffic will include store operations, human resources, finance, legal, real estate, construction and maintenance. "Bob Chapman played a very important role by leading the company out of chapter 11 and did so in a very competitive environment," Mr. Kelly, Chairman of the Board of Directors of Penn Traffic, said. "He devoted a large part of his life to Penn Traffic. Bob is respected by our employees, vendors and the community and he will be missed by us all." "Greg Young has a proven track record in generating sales growth and improving the merchandising of the supermarkets he has been associated with," said Mr. Kelly and "Bob Panasuk is a veteran supermarket executive with an impressive history of implementing operations improvements and cost reduction. He will play a crucial role by bringing these skills to Penn Traffic." Headquartered in Rye, New York, The Penn Traffic Company (OTC:PTFC) operates 109 supermarkets in Pennsylvania, upstate New York, Vermont and New Hampshire under the BiLo, P&C and Quality trade names. Penn Traffic also operates a wholesale food distribution business serving 80 licensed franchises and 39 independent operators. The Company filed for chapter 11 protection on May 30, 2003 (Bankr. S.D.N.Y. Case No. 03-22945). Kelley Ann Cornish, Esq., at Paul Weiss Rifkind Wharton & Garrison, represents the Debtors in their restructuring efforts. When the grocer filed for protection from their creditors, they listed $736,532,614 in total assets and $736,532,610 in total debts. The Court confirmed the Debtor's First Amended Plan of Reorganization on March 17, 2005. The Plan took effect on Apr. 13, 2005. Annual Financials Delay As reported in the Troubled Company Reporter on Aug. 15, 2006, in light of the governmental investigations seeking information relating to The Penn Traffic Company's promotional and allowance practices and policies, Penn Traffic would be further delaying the finalization and release of its audited financial statements for its 2003, 2004, 2005 and 2006 fiscal years. Lenders' Extended Deadline At Penn Traffic's request, lenders under its $164 million revolving credit facilities have agreed to extend the Sept. 30, 2006 deadline for delivery of its audited financial statements to Dec. 31, 2006, enabling Penn Traffic to continue to access fully its working capital facility. PINNACLE ENTERTAINMENT: 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 Pinnacle Entertainment, Inc.'s B2 Corporate Family Rating. Additionally, Moody's revised or confirmed 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 ---------- ------- ------- ------ ---------- 5-Year Senior Secured Revolver B1 B1 LGD3 34% 6-Year Senior Secured Term Loan B1 B1 LGD3 34% Delayed Draw Term Loan B1 B1 LGD3 34% 8.25% Senior Subordinated Notes Caa1 Caa1 LGD5 87% 8.75% Senior Subordinated Notes Caa1 Caa1 LGD5 87% 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%). Headquartered in Las Vegas, Nevada, Pinnacle Entertainment, Inc. (NYSE: PNK) -- http://www.pnkinc.com/-- owns and operates casinos in Nevada, Louisiana, Indiana and Argentina, owns a hotel in Missouri, receives lease income from two card club casinos in the Los Angeles metropolitan area, has been licensed to operate a small casino in the Bahamas, and owns a casino site and has significant insurance claims related to a hurricane-damaged casino previously operated in Biloxi, Mississippi. Pinnacle opened a major casino resort in Lake Charles, Louisiana in May 2005 and a new replacement casino in Neuquen, Argentina, in July 2005. PINNACLE ENTERTAINMENT: S&P Affirms BB- Rating With Stable Outlook ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB-' rating and '1' recovery rating following Pinnacle Entertainment Inc.'s proposed $250 million senior secured bank facility add-on. Proceeds from the proposed add-on will be used to improve overall financing flexibility, in particular as it relates to Pinnacle's agreement to acquire the entities that own The Sands and Traymore sites in Atlantic City. The corporate credit rating on the Las Vegas-based casino owner and operator is 'B+' and the outlook is stable. Total debt outstanding at June 30, 2006, was about $637 million. Despite the expectation for continued good operating performance over the intermediate term, Pinnacle is in the midst of an aggressive expansion phase aimed at enhancing its portfolio of casino assets. As a result, cushion needs to be maintained in its overall financial profile to accommodate this growth strategy. An outlook revision to negative is possible if debt leverage, over the next several years, increases materially above 6x as a result of operating weakness or the pursuit of additional debt-financed growth opportunities. An outlook revision to positive would be considered if steady operating performance continues creating further cushion to absorb additional growth opportunities. PLAYTEX PRODUCTS: 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 Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its B2 Corporate Family Rating for Playtex Products, Inc. Additionally, Moody's revised and 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 ---------- ------- ------- ------ ---------- $100 million Senior Secured Revolver B1 Ba2 LGD2 19% $290 million Senior Secured Notes B2 Ba3 LGD2 27% $321 million Sr. Subordinated Notes Caa1 Caa1 LGD5 80% 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%). Playtex Products, Inc., with executive offices in Westport, Connecticut, is a leading marketer, manufacturer and distributor of a diversified portfolio of consumer and personal products including infant care, feminine care, and skin care items. POKAGON GAMING: Moody's Assigns LGD3 Rating to Senior Unsec. 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 Pokagon Gaming Authority's B3 Corporate Family Rating. Moody's confirmed the Company's B3 probability-of-default rating on its Senior Unsecured Notes due 2014. Additionally, Moody's assigned an LGD3 rating to these notes, suggesting noteholders will experience a 46% 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%). The Pokagon Gaming Authority is a wholly owned unincorporated instrumentality of the Pokagon Band of Potawatomi Indians, a federally-recognized Indian tribe located in New Buffalo, Michigan. The Authority was formed in May 2006 to develop and operate all gaming and related businesses of the Tribe, including the Four Winds Casino and Resort. PRESERVE AT WOODLAND: Involuntary Chapter 11 Case Summary --------------------------------------------------------- Alleged Debtors: Preserve at Woodland Harbor, LLC Woodland Harbor Holdings, LLC c/o Stage Development Company, LLC 303 W. Madison Street, Suite 1800 Chicago, IL 60606 Case Numbers: 06-12478 & 06-12479 Type of Business: The Debtor is a real estate developer. Involuntary Petition Date: October 2, 2006 Chapter: 11 Court: Northern District of Illinois (Chicago) Judge: Carol A. Doyle Petitioners' Counsel: Timothy W. Brink, Esq. Lord Bissell & Brook LLP 111 South Wacker Drive Chicago, IL 60606-4410 Tel: (312) 443-0700 Fax: (312) 896-6432 List of Petitioners of Preserve at Woodland Harbor, LLC: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Connan, Inc. Secured $1,025,976 160 W. Washington Zeeland, MI 49464 Driesenga & Associates, Inc. Secured $51,656 455 East 8th Street Suite 100 Holland, MI 49423 Stevens & Tate Marketing Unsecured $53,854 1900 South Highland Avenue Lombard, IL 60148 CRP X, L.P. Unsecured $167,556 c/o Camelot Capital, LLC 303 W. Madison Street Suite 1800 Chicago, IL 60606 List of Petitioners of Woodland Harbor Holdings, LLC: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Connan, Inc. Secured $1,025,976 160 W. Washington Zeeland, MI 49464 Driesenga & Associates, Inc. Secured $51,656 455 East 8th Street Suite 100 Holland, MI 49423 CRP X, L.P. Unsecured $36,781 c/o Camelot Capital, LLC 303 W. Madison Street Suite 1800 Chicago, IL 60606 RADNOR HOLDINGS: Gets Court Nod to Hire Skadden Arps as Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave Radnor Holdings Corporation and its debtor-affiliates permission to employ Skadden, Arps, Slate, Meagher & Flom LLP, as their bankruptcy counsel, nunc pro tunc to Aug. 21, 2006. As reported in the Troubled Company Reporter on Sept. 6, 2006, Skadden Arps will: a. advise the Debtors with respect to their powers and duties as debtors and debtors-in-possession in the continued management and operation of their business and properties; b. attend meetings and negotiate with representatives of creditors and other parties-in-interest and advise and consult on the conduct of the Debtors cases, including all of the legal and administrative requirements of operating in chapter 11; c. take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on behalf of the Debtors' estates, and the defense of any actions commenced against the estates, negotiations concerning litigation in which the Debtors may be involved and objections to claims filed against the estates; d. prepare, on behalf of the Debtors, motions, applications, answers, orders, reports, applications, answers, orders, reports and papers necessary to the administration of the estates; e. prepare and negotiate on the Debtors' behalf a plan of reorganization, disclosure statement and all related agreements or documents and take all necessary action on behalf of the Debtors to obtain confirmation of the plan; f. advise the Debtors in connection with any sale of assets; g. perform other necessary legal services and provide other necessary legal advice to the Debtors in connection with their chapter 11 cases; and h. appear before the Court, any appellate courts, and the U.S. Trustee and protect the interests of the Debtors' estates before these courts and the U.S. Trustee. The Debtors told the Court that the firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners & Of-Counsel $585 - $835 Associates & Counsel $295 - $640 Legal Assistants $90 - $230 Gregg M. Galardi, Esq., a partner at Skadden Arps, assured the Court that his firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactures and distributes a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher, represent the Debtors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. RADNOR HOLDINGS: Committee Retains Greenberg Traurig as Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Radnor Holdings Corporation and its debtor-affiliates obtained approval from the U.S. Bankruptcy Court for the District of Delaware to retain Greenberg Traurig, LLP, as its bankruptcy counsel, nunc pro tunc to Aug. 30, 2006. As reported in the Troubled Company Reporter on Sept. 22, 2006, Greenberg Traurig is expected to: (a) provide legal advice with respect to the Committee's rights, powers and duties in the Debtors' chapter 11 cases; (b) prepare all necessary applications, answers, responses, objections, orders, reports and other legal papers; (c) represent the Committee in any and all matters arising in the Debtors' bankruptcy proceedings including any dispute or issue with the Debtors, any alleged secured creditors or any other creditors or third parties; (d) assist the Committee in its investigation and analysis of the Debtors, including but not limited to, the review and analysis of all pleadings, claims or plans of reorganization that may be filed in the Debtors' chapter 11 cases and any negotiations or litigation that may arise out of or in connection with such matters, operations and financial affairs; (e) represent the Committee in all aspects of confirmation proceedings; and (f) perform all other legal services for the Committee that may be necessary or desirable in these proceedings. Victoria Watson Counihan, Esq., a shareholder at Greenberg Traurig, told the Court that she will bill $440 per hour for this engagement. Ms. Counihan disclosed that other professionals who will render services bill: Professional Hourly Rate ------------ ----------- Nancy A. Mitchell, Esq. $615 Nancy A. Peterman, Esq. $545 Donald J. Detweiler, Esq. $490 Monica L. Loftin, Esq. $470 Dennis A. Meloro, Esq. $300 Elizabeth C. Thomas $170 Designation Hourly Rate ----------- ----------- Shareholders $235 - $750 Associates $130 - $480 Legal Assistants/Paralegals $65 - $230 Ms. Counihan assured the Court that her firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactures and distributes a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher, represent the Debtors. Donald J. Detweiler, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, serves the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. RAPID PAYROLL: Has Until February 28 to File Chapter 11 Plan ------------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California extended until Feb. 28, 2007, the time within which Rapid Payroll Inc., fka Olsen Computer Systems, can file a chapter 11 plan. The Debtor also has until April 30, 2007, to solicit acceptances of that plan from its creditors. The Debtor tells the Court that it was involved in several prepetition actions. As a result, it has not had enough time to fully consider its options for reorganization and may not be able to propose a realistic and comprehensive plan at the end of the year. The Debtor believes that the extension will give it more time to complete negotiations and formulate the terms of its plan. Headquartered in Orange, California, Rapid Payroll Inc. fka Olsen Computer Systems, was in the business of licensing payroll processing software called Rapidpay and providing maintenance, support and updates for the software to its licensees. The Company was later acquired in November 1996 by Paychex, Inc. Rapid Payroll filed for chapter 11 protection on May 4, 2006 (Bankr. C.D. Calif. Case No. 06-10631). The firm of Robinson, Diamant & Wolkowitz, APC serves as the Debtor's counsel. On June 28, 2006, the Court authorized the Debtor to hire the firm of Irell & Manella LLP as its special litigation counsel through and including August 31, 2006. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and estimated debts between $10 million and $50 million. REAL ESTATE: Court Okays Barr and Barr as Bankruptcy Counsel ------------------------------------------------------------ The Hon. Mary P. Gorman of the U.S. Bankruptcy Court for the Central District of Illinois authorized Real Estate Investors of Decatur to employ Barr and Barr as its bankruptcy counsel. John Barr, Esq., and Jay Barr, Esq., are the lead attorneys. John Barr will bill at $200 per hour and Jay Barr will bill at $120 per hour. John Barr and Jay Barr assure the Court that they do no hold nor represent any interest adverse to the Debtor, and they are disinterested as required by Section 327 of the Bankruptcy Code. Headquartered in Decatur, Illinois, Real Estate Investors of Decatur, LLC, own four hotels in Illinois. The Company filed for chapter 11 protection on Aug. 9, 2006 (Bankr. C.D. Ill. Case No. 06-71033). John Barr, Esq., at Barr & Barr represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. REAL ESTATE: Wants Chapter 11 Case Dismissed -------------------------------------------- Real Estate Investors of Decatur asks the Honorable Mary P. Gorman of the U.S. Bankruptcy Court for the Central District of Illinois to dismiss its chapter 11 case. The Debtor owns or operates three properties in Decatur, Illinois, including: -- Decatur Conference Center and Hotel located at 4191 West U.S. Highway 36; -- Park 101 Industrial Park located at 2303-2499 Federal Drive and 3443-3519 Rupp Parkway; and -- The Village Mall located at 444 E. Main Street. John S. Cardwell, who also owns other real estate properties, businesses, and developments in Central Illinois, owns the Debtor. Since filing for bankruptcy, the Debtor, its secured creditors, and major unsecured creditors have met and discussed a resolution to these matters which would provide for the continuing operation of all the Debtor's properties. After extensive discussions and negotiations, the parties have agreed to allow the successful operation of these properties to continue. The parties have agreed that Decatur Hospitality Services, L.L.C., will continue to operate the Decatur Conference Center and Hotel for a defined period of time. Park 101 Industrial Park will be transferred to a new owner who will refinance the existing debt and relieve the Debtor from any further obligation. The Village Mall will be transferred to a new owner who will either obtain new financing or re-negotiate the current financing with the current secured creditor. All three businesses will remain open and continue to provide service to the Decatur, Macon County area. Since the goals of the Debtor, secured creditors, and unsecured creditors have been met by this agreement, bankruptcy protection is no longer necessary for the Debtor, the Debtor's bankruptcy counsel, John Barr, Esq., says. The parties contemplate that additional orders will be entered in Macon County Circuit Court to finalize these agreements. Mr. Barr further says that due to the automatic stay, the orders cannot be entered or the property transferred until dismissal of this bankruptcy petition is granted. In order to insure the successful operation of the three properties, the Debtor has agreed that it will not seek relief under any chapter of the Bankruptcy Code for at least 180 days. The Debtor will file reports with the U.S. Trustee regarding distributions that it has made during its bankruptcy case upon which the Trustee's fees will be based and the said fees will be promptly paid. Headquartered in Decatur, Illinois, Real Estate Investors of Decatur, LLC, own four hotels in Illinois. The Company filed for chapter 11 protection on Aug. 9, 2006 (Bankr. C.D. Ill. Case No. 06-71033). John Barr, Esq., at Barr & Barr represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. REGAL ENTERTAINMENT: 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 Regal Entertainment Group's Ba3 Corporate Family Rating. Additionally, Moody's revised or confirmed its probability-of- default ratings and assigned loss-given-default ratings on these debts: Issuer: Regal Entertainment Group Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 3-3/4% Senior Unsec. Conv. Notes due 2008 B3 B2 LGD6 95% Issuer: Regal Cinemas Corporation Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Secured Revolver due 2009 Ba2 Ba2 LGD3 40% Sr. Secured Term Loan due 2010 Ba2 Ba2 LGD3 40% 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%). Regal Entertainment Group -- http://www.REGmovies.com/-- is the largest motion picture exhibitor in the world. The Company's theatre circuit, comprising Regal Cinemas, United Artists Theatres and Edwards Theatres, operates 6,383 screens in 542 locations in 40 states and the District of Columbia. Regal operates approximately 18% of all indoor screens in the United States including theatres in 43 of the top 50 U.S. markets and growing suburban areas. REVLON CONSUMER: 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 Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its B3 Corporate Family Rating for Revlon Consumer Products 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 ---------- ------- ------- ------ ---------- $160 million Revolver B2 Ba3 LGD2 11% $800 million Term Loan B1 B2 LGD3 34% $387 million Senior Notes Caa2 Caa1 LGD4 61% $217 million Sr. Sub. Notes Caa3 Caa2 LGD6 93% 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%). Revlon, Inc. (NYSE:REV) -- http://www.revloninc.com/-- is a worldwide cosmetics, skin care, fragrance, and personal care products company. The Company's vision is to deliver the promise of beauty through creating and developing the most consumer preferred brands. The Company's brands include Revlon(R), Almay(R), Vital Radiance(R), Ultima(R), Charlie(R), Flex(R), and Mitchum(R). Revlon Consumer Products Corporation is Revlon, Inc.'s wholly-owned operating subsidiary. REYNOLDS AMERICAN: 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 Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its Ba2 Corporate Family Rating for Reynolds American, 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 ---------- ------- ------- ------ ---------- $550 million Senior Secured Revolver Ba1 Baa2 LGD2 12% $1.550 billion Senior Secured Term Loan Ba1 B2 LGD2 12% $1.641 billion Secured Notes Ba2 Ba3 LGD4 66% $1.286 billion Secured Notes Ba2 Ba3 LGD4 66% R.J. Reynolds Tobacco Holdings, Inc. $161 million GTD Unsecured Notes B1 Ba3 LGD5 73% $89 million Unsecured Notes B2 B1 LGD6 96% 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 Winston-Salem, North Carolina, Reynolds American, Inc., is the parent company of RJR Tobacco Company, the second largest cigarette company in the United States. ROUNDY'S SUPERMARKETS: 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. and Canadian Retail sector, the rating agency assigned its B3 Corporate Family Rating for Roundy's Supermarkets, Inc., and upgraded to Ba3 its B2 ratings on the Company's guaranteed 1st lien senior secured revolver and guaranteed 1st lien senior secured term loan. Additionally, Moody's assigned an LGD2 rating to both loans, suggesting creditors will experience an 18% 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%). Roundy's Supermarkets, Inc., with headquarters in Milwaukee, Wisconsin, operates 132 retail grocery stores primarily under the Pick 'n Save, Copps, and Rainbow banners. The company also distributes food and consumer products to independent supermarkets in Wisconsin and contiguous states. SCOTTISH RE: Ends and Cuts Syndicated Credit Facilities ------------------------------------------------------- Scottish Re Group Limited has permanently reduced the aggregate commitments under the Amended and Restated Credit Agreement dated July 14, 2005 among Scottish Annuity & Life Insurance Company (Cayman) Ltd., Scottish Re (Dublin) Limited, Scottish Re (U.S.), Inc. and Scottish Re Limited and a syndicate of banks to $42.8 million. The Company also announced that Scottish Annuity & Life Insurance Company (Cayman) Ltd., has terminated the Letter of Credit Agreement dated Aug. 18, 2005, among Scottish Re (Dublin) Limited, Scottish Annuity & Life Insurance Company (Cayman) Ltd., various financial institutions, and Bank of America, N.A., as administrative agent, effective Sept. 22, 2006. All letters of credit outstanding under that agreement, in an aggregate amount of $10 million, have been cancelled. "As previously stated, the availability of further borrowings under these credit facilities has been uncertain," Dean Miller, Chief Financial Officer, remarked. "Rather than continue negotiations with the banking syndicate, we elected to permanently reduce the $200 million credit facility to $42.8 million, which is the face amount of outstanding letters of credit under the agreement. Using existing available liquidity, we are currently working with our clients to provide them with alternate letters of credit or assets in trust to replace these outstanding letters of credit." "Once these alternate letters of credit or assets in trust are in place, we can terminate the $200 million credit facility which will eliminate the current restriction on the Company's ability to transfer funds to Scottish Re Group Limited in order to pay the $115 million 4.5% Convertible Notes which can be put to the Company on Dec. 6, 2006. In addition, we terminated the $30 million letter of credit facility available to our Dublin subsidiary." About Scottish Re Scottish Re Group Limited -- http://www.scottishre.com/-- offers reinsurance of life insurance, annuities and annuity-type products through its operating companies in Bermuda, Charlotte, North Carolina, Grand Cayman Dublin, Ireland, and Windsor, United Kingdom. At March 31, 2006, the reinsurer's balance sheet showed $12.2 billion assets and $10.8 billion in liabilities. * * * Moody's Investors Service changed the direction of review for Scottish Re Group Limited's ratings to uncertain from possible downgrade. The change in the direction of the ratings review impacts the company's Ba3 senior unsecured debt rating and the Baa3 insurance financial strength ratings of the company's core insurance subsidiaries, Scottish Annuity & Life Insurance Company (Cayman) Ltd. (SALIC) and Scottish Re (U.S.), Inc. Moody's Rates Scottish Re Group Limited as: -- Senior Unsecured, to Ba2 from Baa2; -- Senior Unsecured Shelf, to (P)Ba2 from (P)Baa2; -- Subordinate Shelf, to (P)Ba3 from (P)Baa3; -- Junior subordinate Shelf, to (P)B1 from (P)Ba1; -- Preferred Stock, to B1 from Ba1; -- Preferred Shelf, to (P)B1 from (P)Ba1 Fitch Ratings also initiated these rating actions: -- IDR downgraded to 'BBB-' from 'BBB'; -- 4.5% $115 million senior convertible notes downgraded to 'BB+' from 'BBB-'; -- 5.875% $142 million hybrid capital units downgraded to 'BB' from 'BB+'; -- 7.25% $125 million non-cumulative perpetual preferred stock downgraded to 'BB' from 'BB+'. A.M. Best likewise downgraded the ICR of Scottish Re to "bb+" from "bbb-". A.M. Best Co. also downgraded the financial strength rating to B++ from A- and the issuer credit ratings to "bbb+" from "a-" of the primary operating insurance subsidiaries of Scottish Re Group Limited (Scottish Re) (Cayman Islands). All FSR and debt ratings have been placed under review with negative implications. The FSR has been downgraded to B++ from A- and the ICRs have been downgraded to "bbb+" from "a-" and placed under review with negative implications for these subsidiaries of Scottish Re Group Limited: -- Scottish Annuity & Life Insurance Company (Cayman) Ltd; -- Scottish Re (U.S.), Inc.; -- Scottish Re Life Corporation; -- Scottish Re Limited; and -- Orkney Re, Inc. The ICR has been downgraded to "bb+" from "bbb-" and placed under review with negative implications for Scottish Re Group Limited. These debt ratings have been downgraded and placed under review with negative implications: Scottish Re Group Limited -- "bb+" from "bbb-" on $115 million 4.5% senior unsecured convertible notes, due 2022; -- "bb-" from "bb" on $143 million 5.875% of hybrid capital units, due 2007; and -- "bb-" from "bb" on $125 million non-cumulative preferred shares; Stingray Pass-thru Trust -- "bbb+" from "a-" on $325 million senior unsecured pass-thru certificates, due 2012 These indicative ratings for debt securities under the shelf registration have been downgraded and placed under review with negative implications: Scottish Re Group Limited -- "bb-" from "bb" on preferred stock; -- "bb" from "bb+" on subordinated debt; and -- "bb+" from "bbb-" on senior unsecured debt. Scottish Holdings Statutory Trust II and III -- "bb" from "bb+" on preferred securities. Standard & Poor's Ratings Services placed its 'BBB- counterparty credit rating on Scottish Re Group Ltd. on CreditWatch with negative implications. Standard & Poor's also said that it placed its various ratings on Scottish Re's operating subsidiaries and other related entities on CreditWatch negative. The ratings will remain on CreditWatch until the capital has been raised and the company's strategic alternatives have been clarified. As a result, the ultimate ratings will depend on the resulting capital, liquidity, and business position of the company. SELECT MEDICAL: 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 U.S. Hospital and Long-term Care sectors this week, the rating agency confirmed its B1 Corporate Family Rating for Select Medical Holdings Corporation and its B3 rating on the company's $175 million senior subordinated notes due 2015. Moody's also assigned an LGD6 rating to those bonds, suggesting noteholders will experience a 90% loss in the event of a default. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on the Company's subsidiary, Select Medical Corporation, on loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $300 Million Senior Secured Revolving Credit Facility due 2010 B1 Ba1 LGD2 19% $580 Million Senior Secured Term Loan due 2012 B1 Ba1 LGD2 19% 7.625% Senior Subordinated Notes due 2015 B3 B2 LGD4 67% 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%). Select Medical Corporation, headquartered in Mechanicsburg, Pennsylvania, operates 98 long-term acute care hospitals, four inpatient rehabilitation facilities, and over 740 outpatient rehabilitation clinics. SEQUA CORPORATION: 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 Sequa 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 ---------- ------- ------- ------ ---------- 9% Sr. Unsecured Notes due 2009 B1 B2 LGD4 60% 8.875% Sr. Unsec. Notes due 2008 B1 B2 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%). Headquartered in New York, Sequa Corporation -- http://www.sequa.com/-- is a diversified industrial company. Its operations manufacture and repair jet engine components, perform metal coating, produce automotive airbag inflators, chemical detergent additives, auxiliary printing press equipment, emissions control systems, men's formalwear, and automotive cigarette lighters and power outlets. SINCLAIR 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, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations issued by Sinclair Television Group, Inc.: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Secured Revolver Ba1 Baa3 LGD1 8% Secured Term Loan A Ba1 Baa3 LGD1 8% 8.75% Sr. Subor. notes due 2011 B2 Ba3 LGD4 56% 8.0% Sr. Subor. notes due 2012 B2 Ba3 LGD4 56% 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%). Sinclair Broadcast Group, Inc. -- http://www.sbgi.net/-- owns and operates, programs or provides sales services to 58 television stations in 36 markets. Sinclair's television group is affiliated with all major networks and reaches approximately 22% of all U.S. television households. SKILLED HEALTHCARE: 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 U.S. Hospital and Long-term Care sectors this week, the rating agency confirmed its B2 Corporate Family Rating for Skilled Healthcare Group, 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 ---------- ------- ------- ------ ---------- $75 Million Senior Secured Revolving Credit Facility due 2010 B1 Ba3 LGD2 27% Senior Secured Term Loan due 2012 B1 Ba3 LGD2 27% 11.0% Senior Subordinated Notes due 2014 Caa1 Caa1 LGD5 82% 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- umeric 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 Foothill Ranch, California, Skilled Healthcare Group, Inc. operates long-term care facilities and provides post- acute care and rehabilitation services. SOLUTIA INC: Extends Pharmacia and Monsanto Bar Date to Feb. 2007 ----------------------------------------------------------------- Solutia Inc. and its debtor-affiliates, Monsanto Company and Pharmacia Corporation agree to further extend the deadline for Monsanto and Pharmacia to amend their initial proofs of claim, or file additional claims, through and including Feb. 1, 2007. The Debtors clarify that the stipulation constitutes a compromise between the parties with respect to the procedure for filing proofs of claim in their Chapter 11 cases and is not a determination of the merits of the claims of Monsanto or Pharmacia. 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) SOLUTIA INC: Can Implement 2006 Annual Incentive Program -------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Solutia Inc. and its debtor-affiliates to implement the 2006 Incentive Program provided that any incentive program for 2007 will include, for the chief executive officer and certain of his direct reports, a metric related to the Debtors' emergence from bankruptcy protection. Solutia said in a filing with the U.S. Securities and Exchange Commission that awards will be paid within two and one-half months following the end of the 2006 calendar year. The Executive Compensation and Development Committee of Solutia's board of directors will administer the 2006 Incentive Program. As reported in the Troubled Company Reporter on Sept. 7, 2006, Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York, relates that the annual incentive plan is the Debtors' only broad- based compensation program and is a key tool by which they drive operational and financial performance throughout the organization. If the 2006 Incentive Program is paid at target levels, Solutia projects awards will be approximately $25,200,000, excluding overhead. The 2006 Incentive Program is similar to the Court-approved annual incentive plans the Debtors implemented in 2004 and 2005, Mr. Henes says. With respect to financial measures and payout points for 2006, the Debtors' senior management team made recommendations to the Executive Compensation and Development Committee of Solutia's board of directors based on actual financial results for 2005, the 2006 budget and the key drivers and focus areas for each of business units. After the terms of the 2006 Incentive Program were approved by the ECDC, the Debtors presented it to the Official Committee of Unsecured Creditors, the Ad Hoc Trade Claims Committee, the Ad Hoc Committee of Solutia Noteholders, Monsanto Company and the Official Committee of Equity Security Holders. The Debtors tailored the 2006 Incentive Program to place emphasis on the performance of the Integrated Nylon, Saflex, CPFilms, Chemicals, and Plastic Products business units as well as the business core group that provides support services to the entire company. In designing the 2006 Incentive Program, the Debtors established specific performance targets for each business unit so they can meet or exceed the 2006 budget. The size of the incentive bonus pools available for awards to employees is based on actual performance relative to these targets. Each Business Unit has up to three financial measures depending on its key drivers and focus areas. The three measures selected are EBITDA(R), Free Cash Flow and Gross Margin. The funding of each Business Unit Incentive Pool and the Core Incentive Pool will be 90% of the aggregate target bonuses for individuals assigned to the Pool multiplied by the weighted average of pre-established funding factor for achievement of specific objective performance parameters relative to a targeted performance. Unit Measure Weight ---- ------- ------ Core Enterprise EBITDAR 45% Free Cash Flow 55% Integrated Nylon EBITDA 50% Free Cash Flow 50% Saflex EBITDA 33.3% Free Cash Flow 33.3% Gross Margin % 33.3% CPFilms EBITDA 50% Free Cash Flow 50% Chemicals Free Cash Flow 100% Plastic Products Free Cash Flow 100% In addition, an overall corporate discretionary bonus pool will be funded by the enterprise-level EBITDAR performance relative to a pre-established target performance. The funding of the Enterprise Discretionary Incentive Pool will be 10% of the aggregate target bonuses multiplied by a pre-established funding factor. Targeted performance levels and funding factors have been established by the ECDC. A full-text copy of the Debtors' 2006 Incentive Program is available for free at http://ResearchArchives.com/t/s?112d 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) SPARTA COMMERCIAL: Recurring Losses Cue Going Concern Doubt ----------------------------------------------------------- Russell Bedford Stefanou Mirchandani LLP in New York raised substantial doubt about Sparta Commercial Services, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended April 30, 2006, and 2005. The auditor pointed to the Company's recurring operating losses. For the year ended April 30, 2006, the Company reported a $7,872,772 net loss available to common stockholders on $169,106 of revenues, compared with a net loss of $4,418,727 on $65,833 of revenues for the year ended April 30, 2006. At April 30, 2006, the Company's balance sheet showed $3,055,750 in total assets, $2,516,277 in total liabilities, and $539,473 in total stockholders' equity. A full-text copy of the Company's Annual Report is available for free at http://ResearchArchives.com/t/s?12d9 New York-based Sparta Commercial Services, Inc. -- http://www.spartacommercial.com/-- is an internet-based acceptance and leasing company dedicated exclusively to the powersports industry, which includes motorcycles over 600ccs, 4-stroke all-terrain vehicles and select scooters. The Company provides a full line of financing solutions including retail installment sales contracts and leases, as well as related services including GAP coverage and vehicle service contracts. STANDARD AERO: 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%). Standard Aero Holdings, a Delaware corporation, is a leading provider of MRO services to the military, regional and business aircraft after-markets. STATE STREET: Judge Gerling Dismisses Chapter 11 Case ----------------------------------------------------- In a decision published at 2006 WL 2612024 and 46 Bankr. Ct. Dec. 244, the Honorable Stephan D. Gerling found cause existed for the sua sponte dismissal of the Chapter 11 cases involving State Street Associates, L.P., and State Street Houses, Inc. Judge Gerling rejected the U.S. Trustee's request to convert the chapter 11 cases to chapter 7 liquidation proceedings because he saw no real benefit in that course of action. The time period for commencing potential avoidance actions has expired, Judge Gerling observed. In addition, one of the debtor's largest creditors had obtained relief from the automatic stay to foreclose on the apartment complex, which was the debtors' primary asset, and is proceeding in state court. Administrative expenses that would be incurred in getting a Chapter 7 trustee up to speed could exceed the claims of creditors other than the two creditors holding approximately 90% of the unsecured claims, and dismissal will permit those creditors and the debtors to pursue their rights in other forums, without any great impact on the other unsecured creditors, who haven't participated in the proceedings for more than two years. Headquartered in Utica, New York, State Street Houses, Inc., is a New York Corporation and legal titleholder of Kennedy Plaza Apartments in Utica, New York. The Company and its affiliate, State Street Associates, L.P., filed for chapter 11 protection on May 21, 2004 (Bankr. N.D.N.Y. Case No: 04-63673). Arnold Weiss, Esq., at Raichle Banning Weiss, PLLC, represents the Debtors. When the Debtors filed for chapter 11 protection, they reported estimated assets and debts amounting between $10 million to $50 million. STATER BROS: Moody's Assigns LGD4 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 U.S. and Canadian retail companies, the rating agency confirmed its B1 Corporate Family Rating for Stater Brothers Holdings, Inc., and its B1 rating on the Company's guarantee senior unsecured Global Notes. Additionally, Moody's assigned an LGD4 rating to those bonds, suggesting noteholders will experience a 57% 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 Colton, California, Stater Brothers Holdings Inc. -- http://www.staterbros.com/-- operates more than 160 full service Stater Bros. Markets in the United States. The grocery chain also owns and operates milk and juice processor Santee Dairies aka Heartland Farms. Founded in 1936 by twin brothers Leo and Cleo Stater, Stater Bros. is owned by La Cadena Investments, a general partnership consisting of Stater Bros. chairman and chief executive officer, Jack Brown. STECKLERS TRANSPORT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Stecklers Transport, Inc. c/o Martin Steckler 10012 Southeast 187th Renton, WA 98055 Bankruptcy Case No.: 06-13093 Type of Business: The Debtor is a trucking company. Chapter 11 Petition Date: September 12, 2006 Court: Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Lawrence M. Blue, Esq. 420 Bell Street P.O. Box 5162 Edmonds, WA 98020 Tel: (425) 775-9700 Fax: (425) 645-8088 Total Assets: $301,531 Total Debts: $3,522,345 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Department of Labor & Industrial Insurance $423,000 Industry Premiums P. O. Box 44170 Olympia, WA 98504 Navistar Goods and Services $370,419 P. O. Box 96070 Chicago, IL 60693-6070 Navistar 03 International $115,290 P. O. Box 96070 Tractor 1017; now Chicago, IL 606936070 repossessed Western Peterbilt 97 Peterbuilt $110,810 No. 1005; now repossessed; $10,000 Key Bank Line of Credit $99,123 Navistar 05 International $94,200 Tractor 1009; now repossessed; $88,810 Navistar 05 International $94,200 Tractor 1003; now repossessed; $88,810 Navistar 97 Peterbuilty $94,200 Tractor 03; now repossessed; $23,886 Navistar 97 Peterbuilt $66,720 Tractor 02; now repossessed; $23,886 Navistar 96 International $66,000 Tractor 1002; now repossessed by Navistar; $66,888 Wells Fargo Line of Credit $42,000 Hanjin Shipping Goods and Services $35,335 Gold Master Card Credit card purchases $25,101 Key Bank PetroCard Goods and Services $19,000 Citi Card Credit card purchases $12,716 Associated Petroleum Goods and Services $12,446 Products Discover Credit card purchases $12,165 Pacific Power Products Goods and Services $12,137 Chase BankCard Services Credit card purchases $11,689 M&T Bank Credit card purchases $7,800 Bankcard Services TEKCONNECT CORP: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: TekConnect Corporation 1 Keystone Avenue, Suite 700 Cherry Hill, NJ 08003 Bankruptcy Case No.: 06-18759 Type of Business: The Debtor is an educational technology integration and consulting firm. TekConnect specializes in the design, integration and on- going service and support of technology in education. See http://www.tekconnect.com/ Chapter 11 Petition Date: September 15, 2006 Court: District of New Jersey (Camden) Judge: Gloria M. Burns Debtor's Counsel: Arthur Abramowitz, Esq. Cozen O'Connor Libertyview Building Suite 300 457 Haddonfield Road Cherry Hill, NJ 08002 Tel: (856) 910-5000 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Greenlight Capital $997,717 2 Grand Central Tower 140 East 45 Street, Floor 24 New York, NY 10017 Leading Learning, Inc. $934,436 3500 Sunrise Highway Suite T210C Great River, NY 11739 Ingram Micro $161,706 P.O. Box 415034 Boston, MA 022415034 Arose Incorporated $97,487 Spacely LLC $77,703 c/o CRG Management LLC Robert Half Technology $68,038 GovConnection $42,158 Snip Link $39,101 Websense $38,839 Cable Solutions $35,907 First Industrial Realty $33,206 Grant Thornton, LLP $30,786 CommVault Systems, Inc. $30,556 Vbrick Systems, Inc. $30,404 Insource, Inc. $29,068 Citrix Systems, Inc. $23,752 Tantara $23,193 Lakeland Communications, Inc. $22,950 MBI Gluckshaw $18,000 Astaro Corporation $16,679 TENET HEALTHCARE: Inks Five-Year Corporate Integrity Agreement -------------------------------------------------------------- Tenet Healthcare Corporation has entered into a corporate integrity agreement with the Office of Inspector General of the U.S. Department of Health and Human Services. The five-year agreement establishes annual training requirements and compliance reviews by independent organizations in certain specific areas. This agreement has been anticipated since late June, when Tenet reached a broad settlement of outstanding issues with the U.S. Department of Justice. "We believe the requirements of this corporate integrity agreement are consistent with standards we already live by and principles we strongly believe in," Trevor Fetter, Tenet's president and chief executive officer, said. "Because of the many changes and enhancements we have made at Tenet in the past three years, we already have in place many of the procedures and systems called for by this corporate integrity agreement." Specifically, the corporate integrity agreement requires, among other things: * That Tenet maintain its existing company-wide quality initiatives in the areas of evidence-based medicine, standards of clinical excellence and quality measurements; * That Tenet maintain its existing company-wide compliance program and code of conduct; * That Tenet formalize in writing its policies and procedures in the areas of billing and reimbursement, compliance with the federal anti-kickback and Stark laws and clinical quality, almost all of which it already has in place and the remainder will be in place very shortly; * That Tenet provide a variety of general and specialized compliance training to its employees, contractors and physicians it employs or who serve as medical directorships and/or serve on a Tenet hospital governing board; * That Tenet engage independent outside entities to provide reviews of compliance and effectiveness in five areas, including Medicare outlier payments, DRG claims, unallowable costs, physician financial arrangements and clinical quality systems. The corporate integrity agreement will run through Sept. 26, 2011. The company has posted the entire agreement on its Web site. About Tenet Tenet Healthcare Corporation -- http://www.tenethealth.com/-- through its subsidiaries, owns and operates acute care hospitals and related health care services. Tenet's hospitals aim to provide the best possible care to every patient who comes through their doors, with a clear focus on quality and service. * * * As reported in the Troubled Company Reporter on Oct. 2, 2006, Moody's Investors Service affirmed the B3 Corporate Family Rating on Tenet Healthcare after the Company announced it has accepted a commitment for an $800 million secured credit facility. Moody's also assigned a Ba3 rating to the credit facility and downgraded the ratings on the company's existing unsecured notes to Caa1 from B3, reflecting the subordination of the unsecured debt to amounts available under the new revolver. At the same time, Standard & Poor's Ratings Services revised its rating outlook on Tenet Healthcare to stable from negative. The 'B' corporate credit rating on the company was affirmed. Standard & Poor's further lowered its rating on Tenet's senior unsecured notes to 'CCC+' from 'B'. The rating on the unsecured notes is now two notches below the 'B' corporate credit rating on the company. Fitch Ratings also affirmed Tenet Healthcare Corp.'s 'B-' Issuer Default Rating and 'B-/RR4' senior unsecured debt rating, in light of the announcement of the new credit facility. Simultaneously, Fitch initiated a 'BB-/RR1' rating for Tenet's new secured $800 million revolving credit facility. The Rating Outlook remains Negative. TFS ELECTRONIC: Judge Baum Confirms Amended Liquidating Plan ------------------------------------------------------------ The Hon. Redfield T. Baum Sr., of the U.S. Bankruptcy Court for the District of Arizona has confirmed TFS Electronic Manufacturing Services, Inc.'s Amended Liquidating Chapter 11 Plan of Reorganization. Judge Baum determined that the Plan satisfies the 13 requirements for confirmation stated in Section 1129(a) of the Bankruptcy Code. Overview of the Plan As reported in the Troubled Company Reporter on Aug. 28, 2006, the Debtor contemplates an orderly liquidation of its remaining assets and distribution of certain settlement funds. The Debtors proposes to establish a liquidating trust that will be administered by a Liquidating Trustee. On the effective date of the Plan, the Debtor's remaining assets, including its available cash will be transferred to the Liquidating Trust for the benefit of creditors. After that, the Trust will be responsible for liquidating all of the remaining assets and making distributions to creditors. The Debtor currently holds $5.4 million in cash as part of the proceeds of the sale of substantially all of its assets to Applied Technical Services Corp. on Oct. 28, 2005. The Debtor also has around and $200,000 in miscellaneous accounts receivable. Classification and Treatment of Claims Holders of prepetition secured tax claims will retain their lien on some assets. The claims will earn 6% interest annually until paid in full. Holders of secured claims will have either: (a) their collateral; or (b) a five-year note in the fair market value of the collateral, earning 5% interest annually and payable in 60 equal installments of principal and interest. Holders of claims below $300 or those who elect to reduce their claims to $300 will be paid in full on the Effective Date. Holders of general unsecured claims, aggregating around $5 million, will each receive a pro rata share of a settlement fund, except for Willows. Under a global settlement among the Debtor, the Official Committee of Unsecured Creditors and the Debtor's parent, Three-Five Systems, Inc., Willows is allowed a $1,482,300 general unsecured claim but will be given a maximum of $577,000 under that claim. Under that settlement, around $3,125,000 will be used to fund distributions for unsecured creditors. Estimated recovery for each unsecured creditor is 73% Three-Five Systems holds an allowed $13,069,000 subordinated claim. Three-Five Systems will be paid out of settlement funds after deducting $3,125,000 for distribution to unsecured creditors. Three-Five Systems will also receive funds recovered from litigation against Topsearch Printed Circuits (HK), Ltd. Three-Five Systems will also get the entire Debtor's unliquidated assets and accounts receivable except avoidance actions. Holders of equity interest will get nothing under the Plan. A copy of the Amended Disclosure Statement is available for a fee at http://www.researcharchives.com/bin/download?id=060824055310 Headquartered in Redmond, Washington, TFS Electronic Manufacturing Services, Inc., was an electronics manufacturing services facility that specializes in New Product Introduction services, prototype Development and low to medium-volume manufacturing. The Company filed for chapter 11 protection on August 19, 2005 (Bankr. D. Ariz. Case No. 05-15403). John R. Clemency, Esq., Keriann M. Atencio, Esq., and Tajudeen O. Oladiran, Esq., at Greenberg Traurig LLP, represent the Debtor in its restructuring efforts. Brian N. Spector, Esq., at Jennings Strouss & Salmon, PLC, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protections from its creditors, it estimated assets between $1 million to $10 million and estimated debts between $10 million to $50 million. TRIAD HOSPITALS: 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 U.S. Hospital and Long-term Care sectors this week, the rating agency confirmed its Ba3 Corporate Family Rating for Triad Hospitals, 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 ---------- ------- ------- ------ ---------- $600 Million Senior Secured Revolving Credit Facility due 2011 Ba2 Ba1 LGD2 18% $500 Million Senior Secured Term Loan due 2011 Ba2 Ba1 LGD2 18% 7% Senior Unsecured Notes due 2012 B2 B1 LGD4 64% 7% Senior Subordinated due 2012 B3 B2 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- umeric 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%). Triad Hospitals, Inc., through its affiliates, owns and manages hospitals and ambulatory surgery centers in small cities and selected larger urban markets. Triad currently has 53 hospitals and nine ambulatory surgery centers in 15 states with approximately 8,690 licensed beds. TRIMOL GROUP: Posts $431,000 Net Loss in Second Quarter of 2006 --------------------------------------------------------------- Trimol Group, Inc., has filed its financial statements for the second quarter ended June 30, 2006, with the Securities and Exchange Commission. For the three months ended June 30, 2006, the Company reported a $431,000 net loss on $511,000 of revenues compared, with a $219,000 net loss on $2,215,000 of revenues for the same period in 2005. At June 30, 2006, the Company's balance sheet showed $1,628,000 in total assets and $1,984,000 in total current liabilities, resulting in a $356,000 stockholders' deficit. Republic of Moldova Non-renewal Notice The Company received a notice on Feb. 11, 2006, from the Government of the Republic of Moldova that it does not intend to renew the Supply Agreement, which expired by its terms on April 29, 2006. The Company does not believe that such non-renewal notice was sent timely under the applicable provisions of the Supply Agreement and has contested such non-renewal notice. The Company and Intercomsoft commenced an action on June 27, 2006, in the United States District Court for the Southern District of New York against the Ministry of Economics of the Republic of Moldova and the Government of the Republic of Moldova seeking damages of approximately $41,000,000 for breach of contract. The Company and Intercomsoft also seek an injunction prohibiting Moldova from producing further essential government documents in accordance with the terms of the Supply Agreement. As a consequence of discussions with counsel to the defendants in this action, the Company withdrew the action in August 2006, without prejudice to its rights to reinstate it in the United States courts, and intends to submit its claims against the defendants before an arbitration tribunal in Switzerland. There can be no assurance as to the outcome of such arbitration proceeding. However, inasmuch as the Company's only revenues are derived from Intercomsoft's activities under the Supply Agreement, if the Supply Agreement is not renewed or extended, the Company will have no source of revenues as a consequence of the expiration of such Agreement. Going Concern Doubt Paritz & Company, P.A., in Hackensack, New Jersey, raised substantial doubt about Trimol Group, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the second quarter ended June 30, 2006. The auditor pointed to the Company's stockholders' deficit and the expiration of the contract of its only customer. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?12dc About Trimol Group, Inc. Trimol Group, Inc., owns all of the outstanding shares of Intercomsoft Limited a company which is engaged in the operation of a computerized photo identification and database management system utilized in the production of secure essential government identification documents such as passports, drivers' licenses, national identification documents and other forms of essential personal identification. Currently Intercomsoft's only customer is the Republic of Moldova's Ministry of Economics. TRIUMPH HEALTHCARE: 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 U.S. Hospital and Long-term Care sectors this week, the rating agency confirmed its B2 Corporate Family Rating for Triumph Healthcare Second Holdings, 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 Secured Revolving Credit Facility due 2013 B2 B1 LGD3 35% Senior Secured First Lien Term Loan due 2013 B2 B1 LGD3 35% Senior Secured Second Lien Term due 2014 Caa1 Caa1 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- umeric 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 Houston, Texas, Triumph Healthcare operates five free-standing and one HIH LTACHs, all in the Houston, Texas marketplace. For the twelve months ended June 30, 2005 Triumph generated revenues of approximately $150 million. UNITED CUTLERY: Case Summary & 44 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: United Cutlery Corporation 1425 United Boulevard Sevierville, TN 37876 Bankruptcy Case No.: 06-50884 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Arrowhead Manufacturing Company, LLC 06-50885 Arrowhead Partners, L.P. 06-50886 Type of Business: The Debtors are independent manufacturers of hunting, camping, fishing, military, utility, collectible, and fantasy knives. The Debtors also market fantasy-based swords, weapons and armor under license from movie studios. See http://www.unitedcutlery.com/ Chapter 11 Petition Date: October 2, 2006 Court: Eastern District of Tennessee (Greeneville) Judge: Marcia Phillips Parsons Debtors' Counsel: Maurice K. Guinn, Esq. Gentry, Tipton & McLemore P.C. P.O. Box 1990 Knoxville, TN 37901 Tel: (865) 525-5300 Fax: (865) 523-7315 Estimated Assets Estimated Debts ---------------- --------------- United Cutlery $10 Million to $10 Million to Corporation $50 Million $50 Million Arrowhead Manufacturing $500,000 to $1 Million to Company, LLC $1 Million $10 Million Arrowhead Partners, L.P. $10 Million to $10 Million to $50 Million $50 Million A. United Cutlery Corporation's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SunTrust Bank Amended and $17,000,000 c/o Bradley MacLean Restated Mail Code NA1982 Promissory Note 221 4th Avenue North dated May 4, 2006 Nashville, TN 37219-2011 Tel: (615) 782-2200 Phillip S. Martin Note (former $1,900,000 166 Adwolfe Road shareholder) Marion, VA 24354 Tel: (276) 783-6143 New Line Cinema License Agreement $806,449 Royalty Accounting 888 Seventh Avenue New York, NY 10106 Tel: (212) 649-4900 C & E International Co., Ltd. Trade $568,662 P.O. Box 493 No. 296 Nan Ping Road 3rd Floor Taichung, Taiwan ROC 402 011-886-422-653011 Prima Products Global Ltd. Trade $333,840 15/F Unit 22 Wah Wai Industrial Building 53-61 Pak Tin Par Street Tsuen Wan Nt Hong Kong 011-85-224-081376 Cynthia Shular Note (former $300,000 922 Carson Road shareholder) Dandridge, TN 37725 Tel: (865) 397-1701 Marto Trade $237,213 Ray International Trading Co. Trade $165,797 James W. Furgal Note (former $150,000 (shareholder) The Beanstalk Group, LLC Trade $133,712 Harley-Davidson Motor Company License Agreement $120,000 Valk Industries Trade $104,272 Consorzio Trade $101,919 Glad Evergreen Industry Co. Trade $90,924 Time Inc. Brand Licensing License Agreement $80,559 Inge Stumpf Note (former $75,000 shareholder) Robert T./Karen M. Stumpf Note (former $75,000 stockholder) Robert Klaas GmbH & Co. Trade $70,486 Heinr Boker GmbH & Co. Trade $68,140 Oklahoma Leather Products, Inc. Trade $66,471 B. Arrowhead Manufacturing Company, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SunTrust Bank Amended and $17,000,000 c/o Bradley MacLean Restated Mail Code NA1982 Promissory Note 221 4th Avenue North dated May 4, 2006 Nashville, TN 37219-2011 Tel: (615) 782-2200 Source 21 Trade $54,916 P.O. Box 2100 Sound Beach, NY 11789 Staffing Solutions Trade $51,857 P.O. Box 406548 Atlanta, GA 30384-6548 Secoa Technology, LLC Trade $50,832 205 Bear Creek Road Dalton, GA 30721 Carolina Commercial Trade $35,936 Heat Treatment P.O. Box 712543 Cincinnati, OH 45271-2543 Norco Metal Finishing, Inc. Trade $19,767 Rosler Metal Finishing USA Trade $12,990 Southern Tool Steel, Inc. Trade $12,000 City of Maryville Utilities Utility $10,601 Blair Strip Steel Company Trade $10,201 Harcoating Technologies Trade $8,621 Kinetic Composites, Inc. Trade $7,478 Wurth Service Supply, Inc. Trade $6,605 Saint-Gobain Abrasives Trade $6,368 SunTrust Capital Markets, Inc. Trade $5,153 Swisstek, Inc. Trade $4,662 Central Insurance Companies Insurance $4,643 Pro Tool Trade $4,543 McWilliams & Company PLLC Accounting Services $4,287 Spectra Environmental Group Trade $4,225 C. Arrowhead Partners, L.P.'s Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SunTrust Bank Amended and $17,000,000 c/o Bradley MacLean Restated Mail Code NA1982 Promissory Note 221 4th Avenue North dated May 4, 2006 Nashville, TN 37219-2011 Tel: (615) 782-2200 Blount County Industrial Bonds Unknown Development Board c/o Brian Daniels 201 South Washington Street Maryville, TN 37804 Scott Graves Taxes Unknown Blount County Trustee Blount County Courthouse 347 Court Street Maryville, TN 37804-5906 SunTrust Bank Bank Loan Unknown 700 East Hill Knoxville, TN 37915 VANGUARD HEALTH: 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 U.S. Hospital and Long-term Care sectors this week, the rating agency confirmed its B2 Corporate Family Rating for Vanguard Health Holding Company I, LLC, and its Caa1 rating on the company's $216 million senior discount notes due 2015. Moody's also assigned an LGD6 rating to those bonds, suggesting noteholders will experience a 95% loss in the event of a default. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on Vanguard Health Holding Company II, LLC's loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $250 Million Senior Secured Revolving Credit Facility due 2010 B2 Ba3 LGD2 26% $795.7 Million Senior Secured Term Loan due 2011 B2 Ba3 LGD2 26% 9% Senior Subordinated 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%). Vanguard Health Systems, Inc. owns and operates 19 acute-care facilities in five states. Vanguard Health Holding Company I, LLC, is Vanguard Health Systems' ultimate holding company, and Vanguard Health Holding Company II, LLC, is its intermediate holding company. WARD PRODUCTS: Court Okays McGuireWoods as Bankruptcy Counsel ------------------------------------------------------------- The Honorable Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern District of Michigan in Detroit authorized Ward Products, LLC, to employ McGuireWoods, L.L.P, as its bankruptcy counsel, nunc pro tunc to Aug. 7, 2006. As reported in the Troubled Company Reporter on Sept. 7, 2006, McGuireWoods will: a) advise the Debtor with respect to its powers and duties as a debtor-in-possession in the continues management and operation of its business and properties; b) attend meetings and negotiate with representatives of creditors and other parties-in-interest; c) take all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on the Debtor's behalf, the defense of any action commenced against the Debtor, negotiations concerning all litigation in which the Debtor is involved, and objections to claims filed against the estate; d) prepare on behalf of the Debtor all motions, applications, answers, orders, reports and papers necessary to the administration of the estate; e) negotiate and prepare on the Debtor's behalf a plan of reorganization, disclosure statement, and all related agreements and documents, and take any necessary action on behalf of the Debtor to obtain confirmation of such plan; f) represent the Debtor in connection with post petition financing if obtained; g) advise the Debtor in connection with any potential sale of assets; h) appear before the Court, any appellate courts, and the U.S. Trustee and protect the interests of the Debtor's estate before the Courts and the U.S. Trustee; i) consult with the Debtor regarding tax, intellectual property, labor and employment, real estate, corporate finance, corporate and securities, and litigation matters; and k) perform all other necessary legal services and provide all other necessary legal advice to the Debtor in connection with its chapter 11 case. The Debtor told the Court that the Firm holds a general retainer of $53,000. The Debtor had agreed that the Firm will hold this retainer during the pendency of the case and will apply it against the Firm's final fee application. Mark E. Freedlander, Esq., a partner of McGuireWoods, disclosed the Firm's current customary rates: Designation Hourly Rates ----------- ------------ attorneys $525 - $255 paralegals $145 Mr. Freedlander assured the Court that the Firm does not hold any interest adverse to the Debtor and is disinterested as that term defined in Section 101(14) of the Bankruptcy Code. Headquarted in Royal Oak, Michigan, Ward Products, L.L.C., manufactures receiving antennas. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. E.D. Mich. Case No. 06-50527). Jay L. Welford, Esq., Judith Greenstone Miller, Esq., Paige E. Barr, Esq., and Richard E. Kruger, Esq., at Jaffe Franklin Heuer & Weis, P.C., and Mark E. Freedlander, Esq., at McGuireWoods, L.L.P, represent the Debtor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. WARD PRODUCTS: Ct. OKs Halperin Battaglia as Panel's Lead Counsel ----------------------------------------------------------------- The Honorable Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern District of Michigan in Detroit authorized the Official Committee of Unsecured Creditors of Ward Products, LLC, to retain Halperin Battaglia Raicht, LLP, as its bankruptcy counsel, nunc pro tunc to Aug. 23, 2006. Halperin Battaglia will: (a) advise the Committee with respect to its rights, duties, and powers in the Debtor's case; (b) assist and advise the Committee in its consultations with the Debtor relative to the administration of the Debtor's case; (c) assist the Committee in analyzing the claims of Debtor's creditors and in negotiating with them; (d) assist with the Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtor and the operation of its business; (e) assist the Committee in its analysis of and negotiations with the Debtor or any third party concerning matters related to the realization by creditors of a recovery on claims and other means of realizing value in the Debtor's case; (f) review with the Committee whether a plan of reorganization should be filed by the Committee or some other third party and, if necessary, draft a plan and disclosure statement; (g) assist the Committee with respect to consideration by the Court of any disclosure statement or plan prepared or filed pursuant to Sections 1125 or 1121 of the Bankruptcy Code; (h) assist and advise the Committee with regard to its communications to the general creditor body regarding the Committee's recommendations on any proposed plan of reorganization or other significant matters in the Debtor's case; (i) represent the Committee at all hearings and other proceedings; (j) assist the Committee in its analysis of matters relating to the legal rights and obligations of the Debtor in respect of various agreements and applicable laws; (k) review and analyze all applications, orders, statements of operations, and schedules filed with the Court and advise the Committee as to their propriety; (l) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; and (m) perform other legal services as may be required and deemed to be in the interest of the Committee in accordance with its powers and duties as set forth in the Bankruptcy Code. Christopher J. Battaglia, Esq., a principal at Halperin Battaglia, disclosed the Firm's hourly rates: Designation Hourly Rate ----------- ----------- Attorneys $175 - $395 Law Clerks $100 Paraprofessionals $95 - $75 Mr. Battaglia assured the Court that the Firm does not represent any interest adverse to the Committee upon matters, which the Firm is to be engaged. Headquarted in Royal Oak, Michigan, Ward Products, L.L.C., manufactures receiving antennas. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. E.D. Mich. Case No. 06-50527). Jay L. Welford, Esq., Judith Greenstone Miller, Esq., Paige E. Barr, Esq., and Richard E. Kruger, Esq., at Jaffe Franklin Heuer & Weis, P.C., and Mark E. Freedlander, Esq., at McGuireWoods, L.L.P, represent the Debtor. Christopher J. Battaglia, Esq., at Halperin Battaglia Raicht, LLP, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. WARD PRODUCTS: Ct. OKs Sommers & Schwartz as Panel's Local Counsel ------------------------------------------------------------------ The Honorable Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern District of Michigan in Detroit authorized the Official Committee of Unsecured Creditors of Ward Products, LLC, to retain Sommers & Schwartz, P.C., as its local bankruptcy counsel, nunc pro tunc to Aug. 25, 2006. Sommers & Schwartz will: (a) advise the Committee with respect to its rights, duties, and powers in the Debtor's case; (b) assist and advise the Committee in its consultations with the Debtor relative to the administration of its case; (c) assist the Committee in analyzing the claims of the Debtor's creditors and in negotiating with them; (d) assist with the Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtor and the operation of the Debtor's business; (e) assist the Committee in its analysis of and negotiations with the Debtor or any third party concerning matters related to the realization by creditors of a recovery on claims and other means of realizing value in the Debtor's case; (f) review with the Committee whether a plan of reorganization should be filed by the Committee or some other third party and, if necessary, draft a plan and disclosure statement; (g) assist the Committee with respect to consideration by the Court of any disclosure statement or plan prepared or filed pursuant to Sections 1125 or 1121 of the Bankruptcy Code; (h) assist and advise the Committee with regard to its communications to the general creditor body regarding the Committee's recommendations on any proposed plan of reorganization or other significant matters in the Debtor's case; (i) represent the Committee at all hearings and other proceedings; (j) assist the Committee in its analysis of matters relating to the legal rights and obligations of the Debtor in respect of various agreements and applicable laws; (k) review and analyze all applications, orders, statements of operations and schedules filed with the Court and advise the Committee as to their propriety; (l) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; and (m) perform other legal services as may be required and deemed to be in the interest of the Committee in accordance with its powers and duties as set forth in the Bankruptcy Code. Sommers & Schwartz and Halperin Battaglia Raicht, LLP, the Committee's lead counsel, will take all necessary steps to prevent duplication of efforts. Andrew Kochanowski, Esq, a principal at Sommers & Schwartz, P.C., disclosed the Firm's current hourly rates: Designation Hourly Rate ----------- ----------- Attorneys $200 - $350 Paraprofessionals $75 - $100 Law Clerks $50 Mr. Kochanowski assured the Court that the Firm does not hold nor represent any interest adverse to the Committee. Headquarted in Royal Oak, Michigan, Ward Products, L.L.C., manufactures receiving antennas. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. E.D. Mich. Case No. 06-50527). Jay L. Welford, Esq., Judith Greenstone Miller, Esq., Paige E. Barr, Esq., and Richard E. Kruger, Esq., at Jaffe Franklin Heuer & Weis, P.C., and Mark E. Freedlander, Esq., at McGuireWoods, L.L.P, represent the Debtor. Christopher J. Battaglia, Esq., at Halperin Battaglia Raicht, LLP, and Andrew Kochanowski, Esq, at Sommers & Schwartz, P.C., represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. WERNER LADDER: Wants Ct. to Deny Complainant's Stay Relief Demand ----------------------------------------------------------------- Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to deny complainant Jeffrey Lapp's request for relief from the automatic stay under Section 362(a) of the Bankruptcy Code. Background As reported in the Troubled Company Reporter on Sept. 7, 2006, Mr. Lapp sought the Court to modify the automatic stay to allow him to pursue a personal injury action in the U.S. District Court for the District of Nebraska against Werner Ladder. Mr. Lapp filed a cause of action on May 19, 2005, in the District Court of Keith County, Nebraska seeking damages for, inter alia, injuries he sustained when a brace on a ladder manufactured by Werner Co. had a rivet, which failed causing the ladder to become unsteady and him to fall. According to Mr. Lapp, he got injured while he was on the job. As a result of the accident, Mr. Lapp sustained serious physical injuries and has incurred $305,910 in past medical bills. He has been rendered unable to work and placed on Social Security Disability as a result of the accident and injuries. The Debtor removed the action to the U.S. District Court for the District of Nebraska on July 1, 2005. The Debtor, in its Rule 26 Disclosures and in discovery, stated that there is excess and umbrella coverage in the above-titled action. Mr. Lapp seeks a jury trial to assess the liability of the Debtor and its insurance carriers and to assess damages against the Debtor's insurance carriers. Substantial discovery in the Action has already been completed. The Action is set for jury trial on Oct. 30, 2006. Mr. Lapp asserts he is entitled to a jury trial in the District Court because the Bankruptcy Court has no authority to hear personal injury claims. Mr. Lapp stipulates that he is not seeking, and will not seek immediate recovery against the Debtor or its estate for any amount owing him over and above the Debtor's primary, excess or umbrella insurance. Absent relief from the automatic stay, Mr. Lapp says he would be prejudiced and harmed by a delay in liquidating his claim against the Debtor, as he has unpaid medical bills and expenses, which continue to accrue. Debtor's Argument Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, explains that if the Debtors are forced to participate in the proceedings commenced by Mr. Lapp before the District Court of Keith County, Nebraska, the Debtors would need to expend resources at a time when their attention is needed elsewhere. There are already significant and conflicting demands on management's time, including continuing to develop and finalize the Debtors' long-term strategic plan. Mr. Brady also asserts that granting Mr. Lapp relief from the stay will most assuredly present a significant and immediate financial burden on the Debtors, and the automatic stay will not prejudice Mr. Lapp given that he waited over two years to bring the suit after his alleged injury. 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 MEDICAL: Hires Polese Pietzsch as Special Counsel --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona gave Western Medical Inc. permission to employ Polese, Pietzsch, Williams & Nolan, P.A., as its special counsel, nunc pro tunc to June 15, 2006. The firm is expected to negotiate with the U.S. Internal Revenue Service regarding compromise of federal tax claims against the Debtor resulting from failure to deposit withholding taxes in prior years. The Debtor told the Court that it has paid the firm $5,000 as retainer. James F. Polese, Esq., at Polese Pietzsch, will bill $350 per hour for this engagement. The billing rate for the firm's other professionals are: Designation Hourly Rate ------------ ----------- Partners $250 Paralegals $175 Mr. Polese assured the Court that his firm does not hold any interest adverse to the Debtor's estates. Mr. Polese can be contacted at: James F. Polese, Esq. Polese, Pietzsch, Williams & Nolan, P.A. 2702 North Third Street, Suite 3000 Phoenix, Arizona 85004-4607 Tel: (602) 604-6200 Fax: (602) 279-5107 http://ppwnlaw.com/ Headquartered in Phoenix, Arizona, Western Medical, Inc. -- http://www.westernmedicalinc.net/-- sells and distributes medical and hospital equipment. The company filed for chapter 11 protection on June 15, 2006 (Bankr. D. Ariz. Case No. 06-01784). Brenda K. Martin, Esq., at Osborn Maledon, P.A., represents the Debtor. Pachulski Stang Ziehl Jones and Weintraub LLP, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $1 million to $10 million and debts between $10 million and $50 million. WESTERN MEDICAL: Hires Snell & Wilmer as Special Counsel -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona gave Western Medical Inc. permission to employ Snell & Wilmer LLP, as special counsel, nunc pro tunc to the June 15, 2006. Snell & Wilmer is expected to assist the Debtor in the transition of its accounts and customer lists, pursuant to the contemplated sale of its assets. The Debtor disclosed that the firm holds a pre-petition retainer of $17,214.50. Paulo Giancola, Esq., attorney of the firm, will bill $420 per hour for this engagement. Ethan B. Minkin will also be rendering his services at $350 per hour. Mr. Giancola assured the court that his firm does not hold any interest adverse to the Debtor's estates and is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. Headquartered in Phoenix, Arizona, Western Medical, Inc. -- http://www.westernmedicalinc.net/-- sells and distributes medical and hospital equipment. The company filed for chapter 11 protection on June 15, 2006 (Bankr. D. Ariz. Case No. 06-01784). Brenda K. Martin, Esq., at Osborn Maledon, P.A., represents the Debtor. Pachulski Stang Ziehl Jones and Weintraub LLP, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $1 million to $10 million and debts between $10 million and $50 million. WG PROPERTY: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: WG Property Investments, Inc. 450 Park Avenue, Suite 1902 New York, NY 10022 Bankruptcy Case No.: 06-12348 Chapter 11 Petition Date: October 2, 2006 Court: Southern District of New York (Manhattan) Judge: Burton R. Lifland Debtor's Counsel: Linda J. Casey, Esq. Pepper Hamilton LLP 3000 Two Logan Square Eighteenth and Arch Streets Philadelphia, PA 19103 Tel: (215) 981-4000 Fax: (215) 981-4750 Total Assets: $1 Million to $10 Million Total Debts: $1 Million to $10 Million0 The Debtor did not file a list of its 20 Largest Unsecured Creditors. WHITE RIVER: Ct. OKs Realization Advisors as Restructuring Officer ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Indiana allowed White River Coal, Inc. and its debtor-affiliates to employ Realization Advisors, Inc., as their bankruptcy restructuring officer, nunc pro tunc to May 22, 2006. Realization Advisors is expected to: a) assist in developing a short-term financial model, including projections and financial forecasts, on a cash-flow basis, to facilitate continuing operations of the Debtors' mine, cost reductions, creditor negotiations, and expedite decision making; b) facilitate further cost cutting, cash management and controls, materials and labor management, accounts receivable management and collection, employee and management evaluation, and claims and creditor management efforts to improve short-term results; c) aid in negotiating and facilitating a forbearance arrangement, adequate protection arrangements, and debtor-in-possession financing with the Debtors' lenders in order to preserve value, insure continued operations, and allow for all business alternatives to be properly evaluated; d) assist management with cash flow and liquidity management to sustain business viability, including management of cash disbursements; e) develop and assess alternative business and asset disposition strategies; f) develop a "critical path" timeline for continuing business and sale efforts; g) assist in the evaluation, development and implementation of any employee retention and incentive plan; h) facilitate valuations on a sale, liquidation and going- concern basis; i) supervise, lead, direct, and facilitate aggressive sale efforts of the business and its assets to maximize recovery, including management of the entire sale process, preparation of offering materials, leading active, solicitation of interested acquirors, due diligence, and competitive bidding; j) supervise and direct, with management, communication with lenders, lessors, creditors, stakeholders, and other parties-in-interest; k) assist and advise in the evaluation of executory contracts and leases, including renegotiation and restructuring of supply contracts; l) provide testimony regarding all of the foregoing, and collateral value and adequate protection of the lenders' collateral, as needed; m) assist counsel and direct the evaluation, prosecution, and negotiation of potential litigation arising from or related to the acquisition of the Debtors' assets; and n) provide additional financial advisory services to assist the Debtors and their operations, including but not limited to bankruptcy planning and reorganization services, development of a plan of reorganization, documentation and testimony supporting the feasibility and approval of the plan, and post-approval wind-down an implementation. The Debtors disclosed that Michael L. Kayman, Esq., a principal of the firm, will receive $35,000 per month for this engagement. Mr. Kayman will also receive a non-refundable retainer of $35,000 at the end of his tenure as chief restructuring officer. Mr. Kayman assured the Court that his firm does not hold any interest adverse to the Debtors' estate and is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. Mr. Kayman can be reached at: Michael L. Kayman, Esq. Realization Advisors, Inc. 10 S. Riverside Plaza, Suite 1800 Chicago, Illinois 60606 Tel: (630) 531-6050 Fax: (630) 563-0799 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: Taps Buchanan Ingersoll as Special Counsel ------------------------------------------------------- White River Coal, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Indiana, for permission to employ Buchanan Ingersoll, PC, as their special counsel, nunc pro tunc to May 22, 2006. Buchanan Ingersoll will provide legal services to the Debtors in connection with the negotiation and documentation of a coal supply agreement between the Debtor's affiliate, Bronco Hazelton Co., and PSI Energy, Inc. On Dec. 29, 2005, Bronco Hazelton purchased an underground coal mining operation for $30.25 million. As a result of the purchase, White River acquired the PSI Energy coal supply agreement. Bruce A. Americus, Esq., a shareholder at the firm, will bill at $500 per hour for this engagement. Matthew Burger, Esq., will also be rendering his services and will bill at $335 per hour. Mr. Americus assures the Court that his firm does not hold any interest adverse to the Debtors' estates and is a "disinterested person" as that term define 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. WINN-DIXIE: Wants to Reject Seven Negotiated Contracts ------------------------------------------------------ Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida to approve the negotiated rejection of prepetition supply agreements with five vendors, effective as of Oct. 12, 2006. The Contracts include agreements between: (1) Winn-Dixie Stores, Inc., and AT&T Corp., effective July 1, 2000; (2) Winn-Dixie Stores and Bergensons Property Services, Inc., dated March 3, 2004; (3) Winn-Dixie Stores and Personal Optics, Inc., effective December 12, 2002; (4) Winn-Dixie Stores and The Smithfield Packing Company, dated September 7, 2004; (5) Winn-Dixie Stores and TRM Corp., dated December 11, 2001; (6) Winn-Dixie Raleigh, Inc., and TRM, dated December 11, 2001; and (7) Winn-Dixie Montgomery, Inc., and TRM, dated December 11, 2001. Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida, relates that the Debtors and the Vendors have negotiated the terms by which the prepetition supply agreements will be rejected, and the treatment of the Vendors' claims. The Debtors used the Vendors' services before their bankruptcy filing, and desire to continue their relationship with the Vendors. Due to the current condition of the Debtors' business, however, the terms of the prepetition supply agreements are no longer economically feasible. As a result of the negotiations, Ms. Jackson says, the Debtors have decided to reject the prepetition supply agreements in favor of new contracts with the Vendors on more favorable terms. Although each agreement is unique, the Vendors have agreed to waive all claims for rejection damages. A full-text copy of the claims resolution is available for free at http://ResearchArchives.com/t/s?12c8 In addition, the Debtors ask the Court to allow them to reject their contracts with CSX Corporation and Brigham, Moore, Gaylord, Schuster, Merlin & Tobin LLP. According to Ms. Jackson, the two contracts are no longer necessary to the Debtors' businesses. Accordingly, the Debtors further ask the Court to approve the agreed resolution of the Vendors' associated claims and establish October 23, 2006 as the deadline for filing rejection damage claims relating to the rejection of the CSX and Brigham, et al. Contracts. 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: Court Okays Rejection of 267 Contracts & Leases ----------------------------------------------------------- The Honorable Jerry A. Funk of the U.S. Bankruptcy Court for the Middle District of Florida authorizes Winn-Dixie Stores, Inc., and its debtor-affiliates to reject 267 contracts and leases, effective as of Sept. 21, 2006. The Debtors withdraw without prejudice, and reserve the right to include in a subsequent request to assume or reject, their contract with Air Products & Chemicals, Inc. As reported in the Troubled Company Reporter on Sept 15, 2006, the contracts were for goods and services that are no longer necessary to the Debtors' businesses, according to Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida. A list of the contracts is available free of charge at http://ResearchArchives.com/t/s?118d In addition, the Debtors were parties to 162 prepetition arrangements with various counterparties for goods or services that are also unnecessary to the Debtors' ongoing operations and businesses. The Debtors have not been able to locate any written contracts or leases documenting the prepetition arrangements, Ms. Jackson related. A list of these items is available free of charge at http://ResearchArchives.com/t/s?118c 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: Judge Funk Okays Assumption of 12 Store Leases ---------------------------------------------------------- The Honorable Jerry A. Funk of the U.S. Bankruptcy Court for the Middle District of Florida authorizes Winn-Dixie Stores, Inc., and its debtor-affiliates to assume the leases for Store Nos. 153, 231, 281, 426, 454, 460, 556, 698, 2258, 2301, 2311, and 2348, effective as of the effective date of their Joint Plan of Reorganization. Judge Funk fixes the cure amounts for the assumed leases not subject to cure objections by the landlords. Judge Funk orders the Debtors to pay on the Effective Date the cure amounts due to landlords who filed cure objections. If the parties are unable to resolve the cure objections consensually, the Debtors are directed to set the objections for hearing before the Court. Judge Funk clarifies that if the Effective Date does not occur, the Court Order will be null and void. 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: Leesburg Asset Sold to FL DOT & Edgewood Asset to AJDC ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida grants Winn-Dixie Stores, Inc., and its debtor-affiliates' request to sell the Leesburg Outparcel to the State of Florida Department of Transportation, and the Edgewood Outparcel to AJDC LLC, free and clear of liens, claims, interests, and encumbrances. The Court denies all objections to the transactions and overrules them on the merits. The Court notes that the Debtors have afforded all interested parties a reasonable opportunity to make higher or better offers for the Outparcels. The Court also waives the 10-day stay period to permit the Debtors to close the transactions promptly. Leesburg Outparcel Purchase Agreement As reported in the Troubled Company Reporter on Sept. 13, 2006, the Florida Transportation Dept. entered on Aug. 18, 2006, into a real estate purchase agreement with the Debtors and Huber Investments, which holds the remaining 50% interest in the Leesburg Outparcel. Material terms of the Leesburg Outparcel Purchase Agreement included: (i) The net aggregate purchase price for the entire fee simple interest in the Leesburg Outparcel is $354,500, of which $177,250 will go to the Debtors; (ii) The Debtors are responsible for payment of the commission due to their brokers; and (iii) The Leesburg Outparcel and related assets are to be transferred free and clear of any liens, claims, interests and encumbrances other than the permitted encumbrances. Edgewood Outparcel Purchase Agreement The Debtors and AJDC entered into a real estate purchase agreement on March 16, 2006, and have amended the agreement seven times since then. Material terms of the Edgewood Outparcel Purchase Agreement include: * The net aggregate purchase price for the Edgewood Outparcel is $480,000. AJDC has deposited $35,000 with escrow agent Smith, Gambrell & Russell LLP; * The Debtors have agreed to pay a $20,000 termination fee if AJDC is not the successful bidder at the auction for the Edgewood Outparcel; * The Debtors are responsible for payment of a brokerage commission of 3% of the Purchase Price due to AJDC's broker if the transaction is consummated; and * The Edgewood Outparcel are to be transferred free and clear of liens, claims, interests and encumbrances other than the permitted encumbrances. 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). W.R. GRACE: Wants Court to Bar 43 Proofs of Claim ------------------------------------------------- W.R. Grace Co. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to disallow, reclassify, or reduce, as appropriate, 43 proofs of claim, aggregating approximately $10,500,000, filed in their Chapter 11 cases. Specifically, the Debtors ask the Court to disallow and expunge 28 claims having no liability according to their books and records. The No Liability Claims, aggregating approximately $9,600,000, include: Claimant Claim No. Amount -------- --------- ------ Florida Dep't. of Environmental Protection 8596 $9,314,032 Unifirst Corp. 9562 86,697 NTFC Capital Corp. 749 74,736 Toyota Motor Credit Corp. 450 46,732 CSX Transportation 673 24,648 The Debtors want two claims reclassified as general unsecured claims and reduced to these amounts: Amount Amount Claimant Claim No. Asserted Reduced -------- --------- -------- ------- Xerox Corp. 391 $10,696 $199,435 207,925 0 Chesapeake Industrial 1195 129 0 Leasing Co., Inc. 643 129 The Debtors seek to reduce and allow, based on their books and records, seven claims asserting incorrect amounts: Amount Amount Claimant Claim No. Asserted Reduced -------- --------- -------- ------- Bankers Trust Co. 736 $7,770 $5,000 Gordon & Rees LLP 615 249,280 149,280 Kent Holding LLC 13948 412,174 252,095 Public Service Co. of Colorado 884 13,501 13,094 Sierra Capital 763 2,738 2,857 TXU Electric Co. 323 1,904 189 Williams Communications Sol. 875 9,274 3,625 In addition, the Debtors identified two claims having no basis for priority under Section 507(a) of the Bankruptcy Code and, thus should be reclassified as general unsecured claims: Claimant Claim No. Amount -------- --------- ------ Burroughs, Hepler, Broom, MacDonald, HEB 687 $60,311 Cowles & Thompson PC 67 14,815 The Debtors want Cummings Properties LLC's Claim No. 4242 expunged because it asserts an unliquidated amount. Furthermore, the Debtors ask the Court to disallow and expunge three claims due to insufficient documentation: Claimant Claim No. Amount -------- --------- ------ Bellsouth Consolidated 438 $2,283 CSX Transportation 673 24,648 Tennessee Revenue Department 17020 1,818 About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan LLP represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Anderson Kill & Olick, P.C., represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C. Alan Runyan, Esq., at Speights & Runyan,to represent it. Lexecon, LLP, provided asbestos claims consulting services to the Official Committee of Equity Security Holders. (W.R. Grace Bankruptcy News, Issue No. 116; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Wants Anderson Memorial's Lift Stay Request Denied -------------------------------------------------------------- W.R. Grace Co. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to deny Anderson Memorial Hospital's request to lift the stay so it can ask a South Carolina state court to unseal a record from a prepetition case. James E. O'Neill, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in Wilmington, Delaware, tells Judge Fitzgerald that issues relating to the South Carolina proceeding have already been extensively addressed in filings and hearings in January and August 2006 before the Bankruptcy Court. Mr. O'Neill notes that as of September 15, 2006, there are 656 pending asbestos property damage claims -- 300 fewer claims than in January, when the Bankruptcy Court recognized that the numerosity requirement for class certification purposes cannot be met. Thus, Mr. O'Neill states, it is even clearer now that there is no need to lift the automatic stay because, regardless of whatever transpired in the South Carolina case before February 2001, "in this Bankruptcy Court matter, no class can be certified because the numerosity requirement cannot be met." About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan LLP represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Anderson Kill & Olick, P.C., represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C. Alan Runyan, Esq., at Speights & Runyan,to represent it. Lexecon, LLP, provided asbestos claims consulting services to the Official Committee of Equity Security Holders. (W.R. Grace Bankruptcy News, Issue No. 116; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) YI INVESTMENT: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: YI Investment Group Incorporated dba YIs Car Wash 2035 Royal Lane, Suite 290 Dallas, TX 75229 Bankruptcy Case No.: 06-33842 Chapter 11 Petition Date: September 6, 2006 Court: Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtor's Counsel: Arthur I. Ungerman, Esq. One Glen Lakes Tower 8140 Walnut Hill Lane, No. 301 Dallas, TX 75231 Tel: (972) 239-9055 Fax: (972)-239-9886 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America Credit Card $19,467 P.O. Box 2463 Spokane, WA 99210-2463 Twin Distributing, Inc. $12,969 PO Box 2229 Denison, TX 75021 David Childs $5,201 Tax Assessor/Collector PO Box 139066 Dallas, TX 75313-9066 Cactus Environmental $2,766 Tara Energy Utilities $818 Grand Prairie Disposal Utilities $142 AT&T Utilities $87 United Central Bank $0 State Bank of Texas $0 City of Grand Prairie Utilities $0 Water Utilities Atmos Energy Utilities $0 * Cooley Godward Completes Merger With Kronish Lieb --------------------------------------------------- Cooley Godward LLP and Kronish Lieb Weiner & Hellman LLP begin operating as one firm, on Oct. 2, 2006, under the name Cooley Godward Kronish LLP. The combination creates a 550-attorney firm with a high-caliber litigation practice and extensive corporate, tax and bankruptcy capabilities. Effective Oct. 1, 2006, the merger significantly expands the firm's national presence. A leading legal publication called the transaction, after it was announced in August, "one of the most significant U.S. mergers in recent years." Cooley Godward Kronish's combined 250-lawyer litigation practice includes nationally known trial lawyers and more than 10 former federal prosecutors and offers clients deep experience and expertise representing major corporations, boards and individuals in high-profile complex commercial, white collar crime, securities fraud and intellectual property cases. In addition, the firm has a preeminent national business practice in venture capital, emerging and public companies, corporate finance, life sciences, technology transactions and mergers and acquisitions, with long- standing ties on the West Coast and in New York. The combination also creates a firm, which offers clients the nation's foremost bankruptcy and restructuring representation and transactional tax and tax controversy services, as well as a substantial real estate transactional and land use practice. "The reaction to the merger announcement has been overwhelmingly positive both internally and externally as the value and benefits of the combination for clients, attorneys and staff were quickly realized," said Stephen C. Neal, Cooley Godward Kronish's chairman and chief executive officer. "Integration is progressing rapidly and smoothly. Since the announcement, we have begun to realize many of the benefits we hoped to achieve, particularly in the form of new client matters and business development opportunities. We are very excited about the future of the combined firm." Executive committee member Alan Levine, who heads the combined firm's New York office, said, "There is so much excitement among the partnership at both firms that we are already off to a running start. We are extremely pleased with how the integration is progressing, and our clients are interested in learning more about the combined firm's capabilities." The combined firm also unveiled a new logo, which can be seen at http://www.cooley.com/ About Cooley Godward Kronish LLP Cooley Godward Kronish's 550 attorneys have an entrepreneurial spirit and deep, substantive experience and are committed to solving clients' most challenging legal matters. From small companies with big ideas to international enterprises with diverse legal needs, Cooley Godward Kronish has the breadth of legal resources to enable companies of all sizes to seize opportunities in today's global marketplace. The firm represents clients across a broad array of dynamic industry sectors, including technology, life sciences, financial services, retail and energy. The firm has full-service offices in major commercial, government and technology centers: Palo Alto, CA, New York, NY, San Diego, CA, San Francisco, CA, Reston, VA, Broomfield, CO and Washington, DC. * Robert Caruso Joins A&M as Managing Director in Chicago --------------------------------------------------------- Alvarez & Marsal reported that Robert M. Caruso joined the Chicago office as a managing director. Mr. Caruso joins in the firm's central region. "Bob is one of the best and brightest advisors in the restructuring industry," said Jeffery Stegenga, head of A&M's central region restructuring practice. "His expertise, longstanding relationships and broad knowledge of manufacturing and automotive issues will be invaluable as we continue to meet the needs of organizations looking to improve operational and financial performance and navigate challenging periods of change." Bringing nearly two decades of experience across a range of industries including automotive and manufacturing, Mr. Caruso specializes in advising management teams, boards, lenders and other stakeholders of companies engaged in financial restructurings or performance improvement situations. His background includes advising on restructuring strategies; business plans and related financial projections; cost cutting and revenue enhancement strategies; liquidity management; sizing, structuring and raising DIP and other financing; preparing and operating companies through a Chapter 11 process; supplier management; and asset dispositions and wind-downs. Before joining A&M, Mr. Caruso was a senior managing director with the corporate finance practice of FTI Consulting in Chicago. Before that, he was a partner with PricewaterhouseCoopers LLP, and a managing director with the corporate recovery services practice of KPMG. Mr. Caruso holds a bachelor's degree in accountancy from the University of Illinois at Urbana, is a certified public accountant in the State of Illinois, and a certified insolvency and reorganization advisor, a member of the AICPA, Illinois CPA Society, the Turnaround Management Association and the American Bankruptcy Institute. About Alvarez & Marsal Alvarez & Marsal is a leading global professional services firm with expertise in guiding underperforming companies and public sector entities through complex operational, financial and organizational challenges. The firm excels in problem solving and value creation, and brings a bias toward executing solutions with a distinctive hands-on approach to serving clients, management and stakeholders. Founded in 1983, Alvarez & Marsal draws on its strong operational heritage to provide specialized services, including Turnaround and Management Advisory, Crisis and Interim Management, Performance Improvement, Creditor Advisory Services, Corporate Finance, Dispute Analysis and Forensics, Tax Advisory, Business Consulting, Real Estate Advisory and Transaction Advisory. A network of experienced professionals in locations across the U.S., Europe, Asia and Latin America, enables the firm to deliver on its proven reputation for leadership, problem solving and value creation. * Senate OKs Legislation Shielding Tithing from Bankruptcy ---------------------------------------------------------- The United States Senate has unanimously approved Sen. Orrin G. Hatch's bill to protect an individual's right to continue reasonable charitable contributions, including religious tithing, during the course of a consumer bankruptcy. Co-sponsored by Sen. Barack Obama, the measure responds to a recent court ruling that above-medium income debtors in Chapter 13 cannot deduct charitable contributions from their payment plans. The August ruling by a New York bankruptcy court sidelined the clear Congressional intent behind the Religious Liberties and Charitable Donation Protection Act of 1998 and the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Sen. Hatch was a cosponsor of both laws, and the Hatch-Obama bill ensures that future courts allow individuals to uphold their religious obligations. "As a whole, last year's bankruptcy reform was - and still is - a good law," Sen. Hatch said. "However, like many large bills, it was not perfect. As an architect of some of those reforms, I can say that Congress intended to preserve an individual's religious freedom to tithe. I believe that Sen. Obama and I have put together a narrowly tailored bill that clarifies the law." * Upcoming Meetings, Conferences and Seminars --------------------------------------------- October 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Featuring a Panel Discussion on Hyper-Liquidity in the Marketplace Junior League, Houston, TX Contact: http://www.turnaround.org/ October 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION Panel & Breakfast Meeting: Financial Fraud Center Club, Baltimore, MD Contact: http://www.turnaround.org/ October 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION Negotiations Workshop Standard Club, Chicago, IL Contact: http://www.turnaround.org/ October 6, 2006 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy 2006: Views from the Bench Georgetown University Law Center, Washington, DC Contact: 1-703-739-0800; http;//www.abiworld.org/ October 10, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Center Club, Baltimore, Maryland Contact: 703-912-3309 or http://www.turnaround.org/ October 11, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 11-14, 2006 TURNAROUND MANAGEMENT ASSOCIATION 2006 Annual Conference Milleridge Cottage, Long Island, New York Contact: 312-578-6900; http://www.turnaround.org/ October 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION UTS Fundamentals of Turnaround Management Melbourne, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 12, 2006 NEW YORK SOCIETY OF SECURITY ANALYSTS Alternative Analysts' Forum: An Insider's Perspective on Distressed Debt Investing New York, NY Contact: http://www.nyssa.org/ October 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION UTS Fundamentals of Turnaround Management Mecure Hotel - Haymarket, Sydney, Australia Contact: http://www.turnaround.org/ October 19, 2006 BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Contact: http://www.beardaudioconferences.com 240-629-3300 October 25, 2006 BEARD AUDIO CONFERENCES Deepening Insolvency - Widening Controversy: Current Risks, Latest Decisions Review Risks, Examine Latest Decisions Affecting Directors, Advisors and Lenders of Troubled Companies Management for Bankruptcy Practitioners and Litigators Contact: http://www.beardaudioconferences.com 240-629-3300 October 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Presentation with guest speaker Jeff Carhart of Miller Thomson Petroleum Club, Edmonton, AB Contact: http://www.turnaround.org/ October 16, 2006 AMERICAN BANKRUPTCY INSTITUTE A Year After BAPCPA Georgetown University Law Center, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ October 17, 2006 TURNAROUND MANAGEMENT ASSOCIATION Updates on the New Bankruptcy Law Kansas City, Missouri Contact: http://www.turnaround.org/ October 18-19, 2006 EUROMONEY 2nd Annual Latin America Syndicated Loans Conference JW Marriott Hotel, Miami, FL Contact: http://www.euromoneyplc.com/ October 18, 2006 TURNAROUND MANAGEMENT ASSOCIATION Dinner Meeting Washington Athletic Club, Seattle, WA Contact: http://www.turnaround.org/ October 19, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA of Nevada's 1st Breakfast Meeting The A,B,C's of Valuing and Selling a Business Palace Station, Las Vegas, NV Contact: http://www.turnaround.org/ October 19, 2006 TURNAROUND MANAGEMENT ASSOCIATION Navigating the Potholes and Speed Bumps on Today's Economic Highway Waller Lansden Dortch & Davis Nashville, TN Contact: http://www.turnaround.org/ October 19, 2006 BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in e-Discovery and Records Management for Bankruptcy Practitioners and Litigators Contact: 240-629-3300; http://www.beardaudioconferences.com/ October 19, 2006 TURNAROUND MANAGEMENT ASSOCIATION Billards Networking Night - Young Professionals TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ October 21, 2006 TURNAROUND MANAGEMENT ASSOCIATION Applying Lean Methodology to Manage Operational Turnarounds Oxford Hotel, Denver, CO Contact: http://www.turnaround.org/ October 23, 2006 TURNAROUND MANAGEMENT ASSOCIATION Annual Meeting and Networking Reception 100th Bomb Group & Banquet Facility Cleveland, OH Contact: http://www.turnaround.org/ October 23, 2006 TURNAROUND MANAGEMENT ASSOCIATION A View from the Bench: A Panel Discussion Recent Developments in Bankruptcy Sheraton at Four Seasons, Greensboro, NC Contact: http://www.turnaround.org/ October 25, 2006 BEARD AUDIO CONFERECES Deepening Insolvency - Widening Controversy: Current Risks, Latest Decisions, Review Risks, Examine Latest Decisions Affecting Directors, Advisors and Lenders of Troubled Companies Contact: http://www.beardaudioconferences.com/ 240-629-3300 October 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Event "The Latest in Fraud Investigations" with guest speaker Chad Cretney of PricewaterhouseCoopers Ernst & Young Tower Calgary, AB Contact: http://www.turnaround.org/ October 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Hedge Funds - Expanded Financing Opportunities in Business Turnarounds Arizona Contact: http://www.turnaround.org/ October 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Series #3 TBA, Calgary, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ October 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Series #3 TBA, Calgary, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ October 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast with Coach Dan Reeves Westin Buckhead, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ October 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION BK/TMA Golf Tournament Orange Tree Golf Resort, AZ Contact: 623-581-3597 or http://www.turnaround.org/ October 30-31, 2006 Distressed Debt Summit: Preparing for the Next Default Cycle Financial Research Associates LLC Helmsley Hotel, New York, NY Contact: http://www.frallc.com/ October 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ October 31 - November 1, 2006 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC Annual Conference San Francisco, California Contact: http://www.iwirc.com/ November 1, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS AIRA/NCBJ Dessert Reception Marriott, San Francisco, CA Contact: 415-896-1600 or http://www.airacira.org/ November 1, 2006 TURNAROUND MANAGEMENT ASSOCIATION Halloween Isn't Over! - Ghosts of turnarounds past who remind you about what you should have done differently Portland, Oregon Contact: http://www.turnaround.org/ November 1-4, 2006 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges San Francisco, California Contact: http://www.ncbj.org/ November 2, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA UK Annual Conference Millennium Gloucester Hotel, London, UK Contact: http://www.turnaround.org/ November 2-3, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Third Annual Conference on Physician Agreements & Ventures Successful Strategies for Medical Transactions and Investments The Millennium Knickerbocker Hotel - Chicago Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ November 3, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS AIRA/NCBJ Breakfast Program Marriott, San Francisco, CA Contact: 415-896-1600 or http://www.airacira.org/ November 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Marriott, Bridgewater, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ November 7-8, 2006 EUROMONEY 5th Annual Distressed Debt Investment Symposium Hyatt Regency, London, UK Contact: http://www.euromoneyplc.com/ November 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon & Guest Speaker, Joel Naroff to discuss the economy, lending and M&A markets Davio's Northern Italian Steakhouse, Philadelphia, PA Contact: http://www.turnaround.org/ November 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriott Tyson's Corner, Vienna, Virginia Contact: 703-912-3309 or http://www.turnaround.org/ November 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA Australia National Conference Sydney, Australia Contact: http://www.turnaround.org/ November 9, 2006 TURNAROUND MANAGEMENT ASSOCIATION Webinar "Second Lien Financing or Investing: Are There Opportunities for You?" TMA HQ, Chicago, IL Contact: http://www.turnaround.org/ November 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Program St. Louis, Missouri Contact: 815-469-2935 or http://www.turnaround.org/ November 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Program - Cost Containment Strategies St. Louis, MO Contact: http://www.turnaround.org/ November 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Holiday Cocktail Reception Honoring the Bankruptcy Benches of the Southern & Eastern Districts of New York and New Jersey Association of the Bar of the City of New York New York, NY Contact: http://www.turnaround.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION Joint Reception with NYIC/NYTMA TBA, New York Contact: 908-575-7333 or http://www.turnaround.org/ November 15, 2006 LI TMA Formal Event TMA Australia National Conference Long Island, New York Contact: http://www.turnaround.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ November 15-16, 2006 EUROMONEY INSTITUTIONAL INVESTOR Asia Capital Markets Forum Island Shangri-La, Hong Kong Contact: http://www.euromoneyplc.com/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Bankruptcy Judges Panel Duquesne Club, Pittsburgh, Pennsylvania Contact: http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Dinner Program TBA, Seattle, Washington Contact: 503-223-6222 or http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Dinner Program TBA, Seattle, WA Contact: 403-294-4954 or http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Life in the Bankruptcy Court with BAPCPA, A View from The Bench Oxford Hotel, Denver, CO Contact: http://www.turnaround.org/ November 16-17, 2006 STRATEGIC RESEARCH INSTITUTE 8th Annual West Distressed Debt Investing Forum Venetian Resort Hotel Casino, Las Vegas, NV Contact: http://www.srinstitute.com November 17, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast with Harry Nolan, Author of Airline without a Pilot - Lessons in Leadership Westin Buckhead, Atlanta, GA Contact: http://www.turnaround.org/ November 23, 2006 TURNAROUND MANAGEMENT ASSOCIATION Martini Party Vancouver, British Columbia Contact: 403-294-4954 or http://www.turnaround.org/ November 23-24, 2006 EUROMONEY CONFERENCES 5th Annual China Conference China World Hotel Beijing, China Contact: http://www.euromoneyconferences.com/ November 27-28, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Thirteenth Annual Conference on Distressed Investing Maximizing Profits in the Distressed Debt Market The Essex House Hotel - New York Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ November 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, FL Contact: 561-882-1331 or http://www.turnaround.org/ November 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Joint TMA Florida/ACG Tampa Bay Luncheon Buying and Selling a Troubled Company Centre Club, Tampa, FL Contact: http://www.turnaround.org/ November 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Special Program TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ November 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Industry Trends Jasna Polana, Princeton, NJ Contact: http://www.turnaround.org/ November 30, 2006 EUROMONEY CONFERENCES Euromoney/DIFC Annual Conference Managing superabundant liquidity Madinat Jumeirah, Dubai Contact: http://www.euromoneyconferences.com/ November 30-December 2, 2006 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Regency at Gainey Ranch, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ December 5, 2006 EUROMONEY CONFERENCES CFO Forum Hyatt Regency, Hangzhou, China Contact: http://www.euromoneyconferences.com/ December 6, 2006 TURNAROUND MANAGEMENT ASSOCIATION Holiday Dinner Portland, Oregon Contact: 503-223-6222 or http://www.turnaround.org/ December 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast The Newark Club, Newark, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ December 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Cash Management After The Storm: Near-Term Planning for Long-Term Business Success Sheraton, Metairie, LA Contact: http://www.turnaround.org/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI TMA Holiday Party TBA, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function GE Commercial Finance, Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ December 20, 2006 TURNAROUND MANAGEMENT ASSOCIATION Holiday Extravaganza - TMA, AVF & CFA Georgia Aquarium, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ January 11, 2007 TURNAROUND MANAGEMENT ASSOCIATION Lender's Panel University Club, Jacksonville, FL Contact: http://www.turnaround.org/ January 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Annual Lender's Panel Breakfast Westin Buckhead, Atlanta, GA Contact: http://www.turnaround.org/ January 17, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ January 17-19, 2007 TURNAROUND MANAGEMENT ASSOCIATION Distressed Investing Conference Wynn, Las Vegas, NV Contact: http://www.turnaround.org/ February 8-11, 2007 TURNAROUND MANAGEMENT ASSOCIATION Certified Turnaround Professional (CTP) Training NY/NJ Contact: http://www.turnaround.org/ February 22, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA PowerPlay - Atlanta Thrashers Philips Arena, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ January 25-27, 2007 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Hyatt Regency, Denver, CO Contact: 1-703-739-0800; http://www.abiworld.org/ February 25-26, 2007 NORTON INSTITUTES Norton Bankruptcy Litigation Institute Marriott Park City, UT Contact: http://www2.nortoninstitutes.org/ February 2007 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium San Juan, Puerto Rico Contact: 1-703-739-0800; http://www.abiworld.org/ March 15, 2007 TURNAROUND MANAGEMENT ASSOCIATION Martini Madness Cocktail Reception with Geraldine Ferraro Westin Buckhead, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ March 15-18, 2007 NATIONAL ASSOCIATION OF BANKRUTPCY TRUSTEES NABT Spring Seminar Ritz-Carlton Buckhead, Atlanta, GA Contact: http://www.NABT.com/ March 21, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ March 27-31, 2007 TURNAROUND MANAGEMENT ASSOCIATION Spring Conference Four Seasons Las Colinas, Dallas, Texas Contact: http://www.turnaround.org/ March 29-31, 2007 ALI-ABA Chapter 11 Business Reorganizations Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ April 11-15, 2007 AMERICAN BANKRUPTCY INSTITUTE ABI Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ April 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL Contact: 561-882-1331 or http://www.turnaround.org/ April 20, 2007 TURNAROUND MANAGEMENT ASSOCIATION Breakfast meeting with Chapter President, Bruce Sim Westin Buckhead, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ April 29 - May 1, 2007 INTERNATIONAL BAR ASSOCIATION International Insolvency Conference Zurich, Switzerland Contact: http://www.ibanet.org/ May 14, 2007 TURNAROUND MANAGEMENT ASSOCIATION Annual TMA Atlanta Golf Outing White Columns, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ May 16, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ June 6-9, 2007 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 23rd Annual Bankruptcy & Restructuring Conference Westin River North, Chicago, Illinois Contact: http://www.airacira.org/ June 14-17, 2007 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ June 28 - July 1, 2007 NORTON INSTITUTES Norton Bankruptcy Litigation Institute Jackson Lake Lodge, Jackson Hole, WY Contact: http://www2.nortoninstitutes.org/ July 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL Contact: 561-882-1331 or www.turnaround.org July 12-15, 2007 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Marriott, Newport, RI Contact: 1-703-739-0800; http://www.abiworld.org/ July 18, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ September 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ October 10-13, 2007 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Orlando, Florida Contact: http://www.ncbj.org/ October 11, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL Contact: 561-882-1331 or http://www.turnaround.org/ October 16-19, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ December 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, California Contact: 1-703-739-0800; http://www.abiworld.org/ December 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ January 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL March 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ June 4-7, 2008 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 24th Annual Bankruptcy & Restructuring Conference JW Marriott Spa and Resort, Las Vegas, NV Contact: http://www.airacira.org/ September 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Scottsdale, Arizona Contact: http://www.ncbj.org/ October 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ October 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ 2009 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Las Vegas, Nevada Contact: http://www.ncbj.org/ October 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ 2010 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergers - the New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Emerging Role of Corporate Compliance Panels Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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 ***