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/raid1/www/Hosts/bankrupt/TCR_Public/061016.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, October 16, 2006, Vol. 10, No. 246 Headlines ADELPHIA COMMS: Unit Can Sell Property to Tulsat $1.7 Million ADVANCED MICRO: ATI Purchase Gets Canadian Regulatory Approval AES CORPORATION: Moody's Assigns Loss-Given-Default Ratings AIR AMERICA: Files for Chapter 11 Protection in Manhattan AIRNET COMMS: Emerges from Chapter 11 Protection ALANCO TECHNOLOGIES: Semple & Cooper Raises Going Concern Doubt ALLEGHENY ENERGY: Moody's Assigns Loss-Given-Default Ratings AMERIVEST PROPERTIES: Sells Dallas Property for $25.5 Million AQUILA INC: Moody's Assigns Loss-Given-Default Ratings ASSET BACKED: Fitch Rates $ 10.99 Million Class B Certs. at BB+ ASSET BACKED: S&P Junks Rating on Class B Certificates B&B FARMS: Voluntary Chapter 11 Case Summary BANC OF AMERICA: S&P Rates $49.8 Mil. Commercial Certs. at BB+ BOLTHOUSE FARMS: Moody's Assigns Loss-Given-Default Ratings C-BASS: High Delinquencies Prompt S&P's Negative Creditwatch CALIFORNIA STEEL: Earns $33.9 Million for Quarter Ended Sept. 30 CATHOLIC CHURCH: Davenport Taps Lane & Waterman as General Counsel CATHOLIC: Davenport Wants to Continue Using Cash Management System CITIGROUP COMMERCIAL: S&P Puts Low-B Ratings on Three Certificates CMS ENERGY: Subsidiary Inks Peabody Pact to Co-Develop Power Plant CMS ENERGY: Moody's Assigns Loss-Given-Default Ratings COGENTRIX ENERGY: Moody's Assigns Loss-Given-Default Ratings COMM 2006-FL12: S&P Puts Low-B Ratings on Two Class Certificates COMPLETE RETREATS: Hires 19 Ordinary Course Professionals COVANTA ENERGY: Moody's Assigns Loss-Given-Default Ratings DANA CORP: Court Okays Pact Extending Committees' Challenge Period DELTA WOODSIDE: Files for Bankruptcy Protection in Delaware DELTA WOODSIDE: Case Summary & 20 Largest Unsecured Creditors DYNEGY HOLDINGS: Moody's Assigns Loss-Given-Default Ratings EMMIS COMMS: Moody's Rates Proposed $600 Million Sr. Loan at B1 EMMIS COMMS: S&P Rates $600 Million Secured Credit Facility at B ENCOMPASS HOLDINGS: Timothy Steers Raises Going Concern Doubt ENERGYTEC INC: Posts $792,670 Net Loss in Quarter Ended March 31 ENTERGY GULF: Fitch Holds Preferred Stock's Rating at BB+ EUROFRESH INC: Moody's Assigns Loss-Given-Default Ratings FAYETTEVILLE PARTNERS: Voluntary Chapter 11 Case Summary FEP RECEIVABLES: Fitch Junks Ratings on $51.2 Million Notes FERRO CORP: Earns $16.2 Million in Year Ended Dec. 31, 2005 FOAMEX INT'L: Obtains Commitment of $790 Million Exit Financing FREESTAR TECHNOLOGY: Russell Bedford Raises Going Concern Doubt FRENCH LICK: Moody's Assigns Loss-Given-Default Rating GAYLORD ENTERTAINMENT: Moody's Assigns Loss-Given-Default Rating GLOBAL POWER: U.S. Trustee Appoints Seven-Member Creditors' Panel GMAC COMMERCIAL: Fitch Cuts Rating on $5.7 Mil. Certificates to B- GOLD KIST: Moody's Assigns Loss-Given-Default Ratings GOLDEN STATE: Moody's Assigns Loss-Given-Default Ratings GOODYEAR TIRE: Borrows $1 Billion Under Revolving Credit Facility HARTCOURT COS: Accumulated Deficit Tops $67.8 Million at Aug. 31 HERBST GAMING: Moody's Assigns Loss-Given-Default Rating HEXION SPECIALTY: Loan Refunding Prompts Moody's to Hold Ratings HILTON HOTELS: Moody's Assigns Loss-Given-Default Rating INTERACTIVE BRAND: June 30 Balance Sheet Upside-Down by $5,964,118 JACUZZI BRANDS: Inks $1.25 Billion Merger Deal with Apollo JACUZZI BRANDS: Apollo Merger Deal Prompts Fitch's Negative Watch JACUZZI BRANDS: Apollo's Offer Cues Moody's to Review Ratings KINETEK INC: S&P Says Ratings Remain on Watch After Purchase Offer KOLORFUSION INT'L: Carver Moquist Raises Going Concern Doubt LAND O' LAKES: Moody's Assigns Loss-Given-Default Ratings LEVITZ HOME: Panel Taps Gazes LLC as Special Counsel LOEHMANNS CAPITAL: Moody's Assigns Loss-Given-Default Ratings M-FOODS HOLDINGS: Moody's Assigns Loss-Given-Default Ratings MCCORMICK LLC: Case Summary & Eight Largest Unsecured Creditors MEDCOM USA: S.E. Clark & Co. Raises Going Concern Doubt MERISANT WORLDWIDE: Moody's Assigns Loss-Given-Default Ratings MESABA AVIATION: Wants to Reopen Record on CBA Rejection MESABA AVIATION: Wants Unions to Refrain from Going On Strike MOONEY AEROSPACE: Files Restated December 31, 2005 Annual Report MORGAN STANLEY: S&P Revises Watch on Notes' B Rating to Positive MOVIE GALLERY: Moody's Assigns Loss-Given-Default Ratings NATIONAL BEEF: Moody's Assigns Loss-Given-Default Ratings NATIONAL ENERGY: Committees Want Claim Inclusion Moved to Oct. 2 NATIONAL ENERGY: Court Denies Mirick, Hoffman, & Vallieres' Claims NBC ACQUISITION: Moody's Assigns Loss-Given-Default Ratings NEENAH FOUNDRY: S&P Rates Planned $300 Mil. Sr. Sec. Notes at B NEIMAN MARCUS: Moody's Assigns Loss-Given-Default Ratings NEOPLAN USA: Committee Taps Chanin Capital as Financial Advisors NEOPLAN USA: Committee Taps Landis Rath as Conflicts Counsel NRG ENERGY: Moody's Assigns Loss-Given-Default Ratings OCEAN SPRAY: Moody's Assigns Loss-Given-Default Ratings OLYMPIC TOOL: Case Summary & 20 Largest Unsecured Creditors OWENS CORNING: Can Pay Contemplated Securities Issuance Expenses OWENS CORNING: Wants Claims Settlement with Pinal County Approved PA MEADOWS: S&P Junks Rating on Planned $70 Mil. Sr. Sec. Facility PACIFIC LUMBER: Improved Liquidity Cues S&P to Raise Corp. Rating PARMALAT: Creditors Convert Warrants to Buy 91,308 Parmalat Shares PETROBRAS INT'L: Fitch Rates $500 Million Senior Notes at BB+ PHILLIPS-VAN HEUSEN: Inks Pact to Acquire Superba for $110 Million PILGRIM'S PRIDE: 73.2% of Outstanding Noteholders Give Consent PILGRIM'S PRIDE: Disappointed on Gold Kist's Tender Offer Rebuff PILGRIM'S PRIDE: Moody's Assigns Loss-Given-Default Ratings PLAN C: Case Summary & 20 Largest Unsecured Creditors PLIANT CORP: Moody's Junks Rating on $250 Million Sr. Sec. Notes PUTNAM LOVELL: Fitch Junks Rating on $32.4 Million Notes QWEST COMMS: Inks $3.8 Million VOIP Deal with Willamette Dental REAL ESTATE: Court Dismisses Chapter 11 Case REGINA CATHOLIC: Could Opt for Ch. 11 Protection to Shield Assets RIO VALLEY: Case Summary & 17 Largest Unsecured Creditors ROOMSTORE INC: Preparing to Issue Stock to Creditors RURAL/METRO: June 30 Stockholders' Deficit Declines to $93.4 Mil. RURAL/METRO: Names Kristine Ponczak as SVP, CFO & Corp. Secretary SAINT VINCENTS: Taps Pride Capital as Liquidator SEA CONTAINERS: Files for Bankruptcy Protection in Delaware SEA CONTAINERS: Case Summary & 20 Largest Unsecured Creditors SIERRA PACIFIC: Moody's Assigns Loss-Given-Default Ratings SMITHFIELD FOODS: Moody's Assigns Loss-Given-Default Ratings SPECIALTYCHEM PRODUCTS: Wants Anderson Tackman as Accountant SWIFT & COMPANY: Moody's Assigns Loss-Given-Default Ratings SYSTEMS EVOLUTION: Losses Prompt Auditor to Raise Going Concern TATER TIME: Gets Court Nod to Hire Gregory Lockwood as Counsel TECO ENERGY: Moody's Assigns Loss-Given-Default Ratings TIMKEN CO: Plans to Exit Seamless Steel Tube Manufacturing in UK TOWER RECORDS: Great American to Close Mass. Stores This Year TVO ACQUISITION: Case Summary & 20 Largest Unsecured Creditors UNIVERSAL EXPRESS: Pollard-Kelley Expresses Going Concern Doubt UNIVERSITY HEIGHTS: Case Summary & 20 Largest Unsecured Creditors UNIVERSITY MEDICAL: Case Summary & 19 Largest Unsecured Creditors USA COMMERCIAL: Rights Holders Tap Gordon & Silver as Counsel USGEN NEW ENGLAND: Court Denies Request to Preclude Bid Reference WACHOVIA BANK: Good Credit Cues S&P to Raise & Affirm Ratings WACHOVIA BANK: S&P Puts Low-B Ratings on Six Certificate Classes WISCONSIN AVENUE: Paydown Prompts Fitch to Lift Rating to BB+ YARRAMAN WINERY: Kabani & Company Raises Going Concern Doubt YORKVIEW TERRACE: Case Summary & 20 Largest Unsecured Creditors * BOND PRICING: For the week of October 9 -- October 13, 2006 ********* ADELPHIA COMMS: Unit Can Sell Property to Tulsat $1.7 Million ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York granted permission to ACC Operations, Inc., an Adelphia Communications Corp. debtor-affiliate, to sell the Property pursuant to the Tulsat Agreement. As reported in the Troubled Company Reporter on Aug. 29, 2006, ACC Operations owns various models of digital set-top converters that are not being used in any of the Debtors' operations and are not being transferred to Time Warner NY Cable, LLC, or to Comcast Corporation in connection with the sale of substantially all of the ACOM Debtors' assets. Accordingly, ACC Operations has entered into a sale terms agreement to sell digital converters to Tulsat-Pennsylvania, LLC, for $1,741,179. According to Shelley C. Chapman, Esq., at Willkie Farr & Gallagher LLP, in New York, the proceeds of the sale of the Property will be deposited in the Debtors' post-closing accounts held by JPMorgan Chase Bank, N.A., and invested in accordance with the investment practices and guidelines approved by the Court on July 28, 2006. 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: ATI Purchase Gets Canadian Regulatory Approval -------------------------------------------------------------- Advanced Micro Devices, Inc., and ATI Technologies Inc. disclosed that the proposed acquisition of ATI by AMD has been approved by the Minister of Industry under the Investment Canada Act, satisfying one of the conditions to the closing of the acquisition. "We are confident that our plans for the combination of AMD and ATI will deliver world-class customer-centric solutions and will benefit Canada and its future role in the technology industry," said AMD Chairman and CEO Hector Ruiz. "We look forward to the successful completion of the transaction that will generate new opportunities for both companies, the employees and the communities in which we operate." The proposed acquisition, announced on July 24, 2006, still remains subject to the approval of ATI shareholders, court approval of the plan of arrangement and other customary closing conditions. Subject to satisfaction or waiver of these conditions, the transaction is expected to be completed during the week of October 23. As reported in the Troubled Company Reporter on Oct. 12, 2006, the Fair Trade Commission of Taiwan cleared the proposed merger. Demonstrating that the transaction will be a net benefit to Canada, AMD made several commitments to the Minister of Industry with respect to its Canadian operations, including: -- Plans to expand research and development in Canada by committing to increase the number of employees in the R&D sector in Canada, increase total expenditures on research and development in Canada when compared to -- ATI's expenditures in this area in the prior years, and increase the number of student co-op positions that will be available to Canadian students at its operations in Canada; -- Nominating a Canadian for election to AMD's board of directors over the next five years, highlighting the importance that Canada will play in the ongoing operations of the combined AMD-ATI entity; and -- Plans for a global mandate for the current ATI consumer business unit, which will continue to be based in Markham, Canada. The current head of this unit, a Canadian citizen, is expected to continue in this leadership role. About ATI ATI Technologies Inc. designs and manufactures 3D graphics, PC platform technologies and digital media silicon solutions. With fiscal 2005 revenues of $2.2 billion, ATI has approximately 4,000 employees in the Americas, Europe and Asia. About AMD Based in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- provides microprocessor solutions for computing, communications and consumer electronics markets. * * * As reported in the Troubled Company Reporter on Oct. 6, 2006, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on AMD. The rating agency also assigned its 'BB-' bank loan rating, one notch above the corporate credit rating, and a '1' recovery rating to the company's proposed $2.5 billion senior secured term loan, to be used as partial funding of the acquisition. S&P further raised its rating on the company's $600 million ($390 million outstanding) senior notes to 'B+' from 'B'. At the same time, Moody's Investors Service assigned a Ba3 rating to AMD's $2.5 billion senior secured bank facility while confirming the Ba3 corporate family rating and Ba3 rating on the company's $390 million senior notes due 2012. The ratings reflect both the overall probability of default of the company, to which Moody's assigns a PDR of Ba3, and a loss given default of LGD3 for both the new bank facility and the $390 million senior notes both of which will share the same collateral and security package. AES 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 downgraded its B1 Corporate Family Rating for AES 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 ---------- ------- ------- ------ ---------- Senior secured term loan due 2011 Ba2 Ba1 LGD1 2% Senior secured revolving credit facility due 2010 Ba2 Ba1 LGD1 2% Second priority senior secured notes 8.75% due 2013 Ba3 Ba3 LGD3 40% Second priority senior secured notes 9.00% due 2015 Ba3 Ba3 LGD3 40% Senior unsecured notes 8.75% due 2008 B1 B1 LGD4 55% Senior unsecured notes 9.50% due 2009 B1 B1 LGD4 55% Senior unsecured notes 9.375% due 2010 B1 B1 LGD4 55% Senior unsecured notes 8.875% due 2011 B1 B1 LGD4 55% Senior unsecured notes 7.75% due 2014 B1 B1 LGD4 55% 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%). AES Corp. (NYSE:AES) -- http://www.aes.com/-- is a global power company. The Company operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the Company delivers electricity through 15 distribution companies. AES's Latin America business group is comprised of generation plants and electric utilities in Argentina, Brazil, Chile, Colombia, Dominican Republic, El Salvador, Panama and Venezuela. Fuels include biomass, diesel, coal, gas and hydro. The group also pursues business development activities in the region. AES has been in the region since May 1993, when it acquired the CTSN power plant in Argentina. AIR AMERICA: Files for Chapter 11 Protection in Manhattan --------------------------------------------------------- Air America Radio has filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the Southern District of New York, Reuters reports. According to Reuters, the liberal talk and news radio network sought protection from its creditors after negotiations with its lenders collapsed. Don Jeffrey at Bloomberg News disclosed that a creditor, Multicultural Radio Broadcasting Inc., had frozen all of Air America's bank accounts, leaving the network with no funds to operate. Scott Elberg, Air America's new Chief Executive Officer, said the bankruptcy filing will free up these accounts. Air America will remain on the air while under bankruptcy protection. Bloomberg News says that the network has received court permission to obtain an initial $900,000 in financing from Democracy Allies LLC. Reports indicate that Air America intends to borrow up to $3 million of debtor-in-possession loans from Democracy Allies. In September, Air America had discounted rumors that it will file for bankruptcy. Air American spokeswoman Jaime Horn had said that no decision has been taken to make any filing of any kind. Rumors of a possible bankruptcy filing were fanned by layoffs at the network and comments by radio personality, Al Franken, saying that he has not received his paycheck. Air America Radio -- http://www.airamerica.com/-- is a full- service radio network and program syndication service in the United States. The network debuted on March 31, 2004, and features discussion and information programs reflecting a liberal, left wing, or progressive point of view. The network specializes in presentations and monologues by on-air personalities, guest interviews, calls by listeners, and news reports. AIRNET COMMS: Emerges from Chapter 11 Protection ------------------------------------------------ AirNet Communications Corporation has disclosed that its plan of reorganization was approved by a court order entered on Oct. 2, 2006, allowing AirNet to emerge from Chapter 11. TECORE Wireless Systems and AirNet also reported that TECORE has completed its acquisition of AirNet by acquiring all of re- organized AirNet's new stock; and provided exit financing to further strengthen AirNet's balance sheet. AirNet's operation will remain in Melbourne, Florida. "We are extremely pleased to have concluded our reorganization while simultaneously retaining our valuable customers and our core technical personnel and assets," said Glenn Ehley, AirNet's emeritus CEO. The plan approved by the court maximizes creditor recovery and affords the company a new opportunity to compete in today's wireless telecom environment. As long time strategic partners, the acquisition of AirNet by TECORE enhances the existing relationship by building on the best of both companies to form an advanced, wireless systems provider. "TECORE's network expertise coupled with AirNet's advanced radio technologies make this combination stronger than just the sum of the parts," said Jay Salkini, President and CEO of TECORE. "We are now not only a full-line supplier, but AirNet's latest IP- based product offerings strategically coordinated with TECORE's SoftMSC provide the most advanced network architectures available. Focusing our specific strengths will allow us to penetrate new markets while continuing to support and expand our existing customers' networks." A copy of the AirNet's Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=060823061028 About TECORE Founded in 1991, TECORE Wireless Systems --htpp://www.tecore.com/ -- provides wireless communications systems. TECORE provides complete end-to-end wireless networks comprised of SoftMSC-based network subsystems, advanced radio access networks featuring CoreCell base stations offerings and a suite of professional services. Headquartered in Melbourne, Florida, AirNet Communications Corporation -- http://www.aircom.com/-- designs, manufactures, and markets wireless infrastructure products and offers infrastructure solutions for commercial GSM customers, and government, defense, homeland security based agencies. The Debtor filed for chapter 11 protection on May 22, 2006 (Bankr. M.D. Fla. Case No. 06-01171). R. Scott Shuker, Esq., at Gronek & Latham, LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $15,701,881 and total debts of $21,615,346. ALANCO TECHNOLOGIES: Semple & Cooper Raises Going Concern Doubt --------------------------------------------------------------- Semple & Cooper LLP expressed substantial doubt about Alanco Technologies, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended June 30, 2006. The auditing firm pointed to the Company's recurring losses from operations, working capital deficit and anticipates additional losses in the next year. The Company reported a $4.5 million net loss on $6.6 million of net revenues for the fiscal year ended June 30, 2006, compared to a $4.3 million net loss on $7.1 million of net revenues in 2005. The Company's June 30 balance sheet also showed strained liquidity with $6.6 million in total current assets available to pay $13.8 million in total current liabilities coming due within the next 12 months. A full-text copy of the Company's Annual Report is available for free at http://researcharchives.com/t/s?135e Headquartered in Scottsdale, Arizona, Alanco Technologies, Inc., develops TSI PRISM RFID continuous tracking system for the corrections industry, which tracks the location and movement of inmates and officers, resulting in significant prison operating cost reductions and dramatically enhanced officer safety and facility security. Utilizing RFID (Radio Frequency Identification) tracking technology with proprietary software and patented hardware components, TSI PRISM provides real-time inmate and officer identification, location and tracking capabilities both indoors and out. The TSI PRISM system is currently utilized in prisons in Michigan and California, and a new 2,000-bed medium- security prison in Illinois. The company also participates in the data storage industry through two subsidiary companies: Arraid Inc., a manufacturer of proprietary storage products to upgrade older "legacy" computer systems; and Excel/Meridian Data Inc., a manufacturer of Network Attached Storage systems. ALLEGHENY ENERGY: 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 Allegheny Energy, Inc. and Senior Unsecured Credit Facility. Moody's assigned those debentures an LGD4 rating suggesting noteholders will experience a 50% loss in case of default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Greensburg, Pennsylvania, Allegheny Energy, Inc., (NYSE:AYE) -- http://www.alleghenyenergy.com/-- is an investor- owned utility consisting of two major businesses. Allegheny Energy Supply owns and operates electric generating facilities, and Allegheny Power delivers low-cost, reliable electric service to customers in Pennsylvania, West Virginia, Maryland and Virginia. AMERIVEST PROPERTIES: Sells Dallas Property for $25.5 Million ------------------------------------------------------------- AmeriVest Properties Inc. completed the sale of its Parkway Centre III office building in Dallas, Texas for $25,575,000 to Koll/PER LLC. The estimated cash proceeds of approximately $10 million, after assignment of the first mortgage, closing costs and adjustments, will be accumulated with other proceeds and made available, subject to the expenses and other costs of the Company, for distribution to shareholders under the plan of liquidation approved by AmeriVest shareholders. This is the fourth closing under the July 17, 2006 purchase and sale agreement with Koll/PER. Additional closings will be scheduled as loan assumption approvals are received from AmeriVest's mortgage lenders and other traditional closing activities are completed. The Board of Directors of AmeriVest has not yet established any dates for the payment of liquidating distributions. There can be no assurance with respect to the timing or amount of any distribution or distributions to be made by AmeriVest, or that any other closings will occur under the purchase and sale agreement or otherwise. Koll/PER LLC a limited liability company owned by The Koll Company of Newport Beach, California, and the Public Employee Retirement System of Idaho. About AmeriVest Properties Headquartered in Denver, Colorado, AmeriVest Properties Inc. (AMEX: AMV) -- http://www.amvproperties.com/-- provides Smart Space for Small Business(TM) in Denver, Phoenix, and Dallas through the acquisition, repositioning and operation of multi- tenant office buildings in those markets. * * * As reported in the Troubled Company Reporter on June 5, 2006, AmeriVest Properties Inc.'s stockholders approved a Plan of Liquidation at its annual meeting. Under the Plan, the Company's remaining 12 office properties will be sold on an orderly basis and proceeds distributed to stockholders. All 12 properties are listed with Trammell Crow Company and the sales process is being managed through Trammell Crow's Denver office. Detailed information regarding the properties was released to over 4,000 prospective purchasers on May 1, 2006. AQUILA 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 downgraded its B1 Corporate Family Rating for Aquila Inc. to B2. 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 ---------- ------- ------- ------ ---------- Senior secured credit facility Ba2 Ba1 LGD1 2% Senior unsecured notes B2 B2 LGD3 43% Convertible subor. debentures Caa1 Caa1 LGD5 88% Senior unsecured shelf (P)B2 (P)B2 LGD3 43% 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 Kansas City, Missouri, Aquila, Inc. (NYSE:ILA) -- http://www.aquila.com/-- operates electricity and natural gas transmission and distribution utilities serving customers in Colorado, Iowa, Kansas, Michigan, Minnesota, Missouri and Nebraska. The company also owns and operates power generation assets. ASSET BACKED: Fitch Rates $ 10.99 Million Class B Certs. at BB+ --------------------------------------------------------------- Fitch rates Asset Backed Funding Asset-Backed Certificates, $1.072 billion mortgage pass-through certificates, Series 2006- OPT2 (which closed on Oct. 12, 2006): --$866.22 million classes A1, A2 and A-3A through A-3D 'AAA'; --$49.47 million class M1 'AA+'; --$30.62 million class M2 'AA'; --$21.59 million class M3 'AA-'; --$19.24 million class M4 'A+'; --$19.24 million class M5 'A'; --$18.69 million class M6 'A-; --$17.04 million class M7 'BBB+'; --$10.44 million class M8 'BBB'; --$8.79 million class M9 'BBB-'; --$10.99 million privately offered class B 'BB+'. The 'AAA' rating on the senior certificates reflects the 21.20% total credit enhancement provided by the 4.50% class M1, the 2.79% class M2, the 1.96% class M3, the 1.75% class M4, the 1.75% class M5, the 1.70% class M6, the 1.55% class M7, the 0.95% class M8, the 0.80% class M9, 1% privately offered class B and the initial and target overcollateralization of 2.45%. All certificates have the benefit of monthly excess cash flow to absorb losses. In addition, the ratings reflect the quality of the loans, the integrity of the transaction's legal structure as well as the capabilities of Option One Mortgage Corp. as servicer and Wells Fargo Bank, N.A., as Trustee. The certificates are supported by three collateral groups. Group I will consist of 1,679 mortgage loans that have original principal balances that conform to Fannie Mae guidelines. The Group I mortgage pool consists of first and second lien, adjustable-rate and fixed-rate mortgage loans that have a cut-off date pool balance of $294,999,036. Approximately 13.09% of the mortgage loans are fixed rate mortgage loans and 86.91% are adjustable-rate mortgage loans. The second lien amount is 0.95%. The weighted average current loan rate is approximately 8.895%. The weighted average remaining term to maturity is 358 months. The average principal balance of the loans is $175,699. The weighted average original combined loan-to-value ratio is 78.21%. The weighted average FICO score is 594. The properties are primarily located in California (16.79%), Florida (15.00%), and Texas (9.77%). Group II will consist of 1,653 mortgage loans that have original balances that conform to Freddie Mac guidelines. The Group II mortgage pool consists of first and second lien, adjustable-rate and fixed-rate mortgage loans that have a cut-off date pool balance of $295,006,330. Approximately 12.96% of the mortgage loans are fixed rate mortgage loans and 87.04% are adjustable-rate mortgage loans. The second lien amount is 1.28%. The weighted average current loan rate is approximately 8.895%. The weighted average remaining term to maturity is 358 months. The average principal balance of the loans equals $178,467. The weighted average original combined loan-to-value ratio is 77.78%. The weighted average FICO score is 594. The properties are primarily located in California (17.01%), Florida (12.49%), and New York (9.77%). Group III will consist of 1,720 mortgage loans that have original balances that may or may not conform to Fannie Mae or Freddie Mac guidelines. The Group III mortgage pool consists of first and second lien, adjustable-rate and fixed-rate mortgage loans that have a cut-off date pool balance of $509,258,617. Approximately 19.95% of the mortgage loans are fixed rate mortgage loans and 80.05% are adjustable-rate mortgage loans. The second lien amount is 2.12%. The weighted average current loan rate is approximately 8.409%. The weighted average remaining term to maturity is 358 months. The average principal balance of the loans equals $296,081. The weighted average original combined loan-to-value ratio is 81.30%. The weighted average FICO score is 622. The properties are primarily located in California (35.64%), New York (10.60%), and Florida (10.46%). For federal income tax purposes, multiple real estate mortgage investment conduit elections will be made with respect to the trust estate. Option One was incorporated in 1992, and began originating and servicing subprime loans in February 1993. Option One is a subsidiary of Block Financial, which is in turn a subsidiary of H & R Block, Inc. ASSET BACKED: S&P Junks Rating on Class B Certificates ------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on four classes from three transactions issued by Asset Backed Securities Corp. Home Equity Loan Trust. Three of the lowered ratings remain on CreditWatch with negative implications, where they were placed on July 19, 2006. In addition, the rating on class B from series 2002-HE2 is removed from CreditWatch negative because the rating is lowered to 'CCC'. According to Standard & Poor's surveillance practices, ratings lower than 'CCC+' on classes of certificates or notes from RMBS transactions are not eligible to be on CreditWatch. Finally, the ratings on five other classes are affirmed. The lowered ratings are the result of realized losses that have continuously exceeded excess interest, which has resulted in a constant erosion of overcollateralization. During the previous six remittance periods, average monthly realized losses have outpaced excess interest by approximately 2.20x for series 2001-HE1, 3.23x for series 2002-HE2, and 3.19x for series 2003-HE1. As of the September 2006 distribution date, the transactions with lowered ratings had paid down to less than 12% of their original issuance amounts. Severely delinquent loans (90-plus-days, foreclosure, and REO) ranged from 18.92% to 27.10% of the current pool balances, and cumulative realized losses ranged from 1.59% to 3.80% of the original pool balances. Standard & Poor's will continue to monitor the performance of these transactions. If delinquencies continue to translate into realized losses and overcollateralization is eroded further, we will take additional negative rating actions. Conversely, if realized losses no longer outpace monthly excess interest and the levels of overcollateralization rebuild toward their target balances, we will affirm the ratings and remove them from CreditWatch. Credit support for these transactions is provided by a combination of subordination, overcollateralization, and excess spread. The underlying collateral for these transactions consists of pools of closed-end, first-lien, fixed- and adjustable-rate mortgage loans with original terms to maturity not greater than 30 years. Ratings Lowered and Remaining on Creditwatch Negative Asset Backed Securities Corp. Home Equity Loan Trust Asset-backed pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2001-HE1 B BB/Watch Neg BBB-/Watch Neg 2003-HE1 M3 BB/Watch Neg BBB/Watch Neg 2003-HE1 M4 B/Watch Neg BB/Watch Neg Rating Lowered Asset Backed Securities Corp. Home Equity Loan Trust Asset-backed pass-through certificates Rating Series Class To From ------ ----- -- ---- 2002-HE2 B CCC B/Watch Neg Ratings Affirmed Asset Backed Securities Corp. Home Equity Loan Trust Asset-backed pass-through certificates Series Class Rating ------ ----- ------ 2001-HE1 M-1 AAA 2001-HE1 M-2 A 2002-HE2 M2 A 2003-HE1 M1 AA 2003-HE1 M2 A B&B FARMS: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: B&B Farms c/o Art Beckwith P.O. Box 1029 Progreso, TX 78579 Tel: (956) 565-1998 Bankruptcy Case No.: 06-70470 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Arthur E. Beckwith and 06-70471 Nan W. Beckwith Arthur Benton Beckwith and 06-70472 Melissa K. Beckwith Chapter 11 Petition Date: October 13, 2006 Court: Southern District of Texas (McAllen) Judge: Richard S. Schmidt Debtors' Counsel: David R. Langston, Esq. Mullin Hoard & Brown, LLP P.O. Box 2585 Lubbock, TX 79408 Tel: (806) 765-7491 Fax: (806) 765-0553 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtors did not file a list of their 20 largest unsecured creditors. BANC OF AMERICA: S&P Rates $49.8 Mil. Commercial Certs. at BB+ -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Banc of America Large Loan, Inc.'s $1.2 billion commercial mortgage pass-through certificates series 2006-BIX1. The preliminary ratings are based on information as of Oct. 12, 2006. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying mortgage loans, and the geographic and property type diversity of the loans. Standard & Poor's Ratings Services' analysis determined that, on a weighted average basis, the trust pool has a debt service coverage of 1.38x based on a weighted average stressed constant of 9.5%, a beginning LTV of 67.8%, and an ending LTV of 67.7%. Preliminary Ratings Assigned Banc Of America Large Loan, Inc. Preliminary Recommended credit Class Rating amount support ----- ------ ----------- ------------------ A-1 AAA $670,386,391 41.688% A-2 AAA $223,462,130 22.250% B AAA $15,035,235 20.942% C AA+ $43,214,117 17.183% D AA $42,413,742 13.494% E AA- $28,275,828 11.034% F A+ $28,275,828 8.575% G A $28,275,828 6.115% H A- $28,270,667 3.656% J BBB+ $11,266,622 2.676% K BBB $11,839,155 1.646% L BBB- $18,928,858 0.000% X-1A* AAA $1,149,644,401 N/A X-1B* AAA $1,149,644,401 N/A X-2* AAA $60,000,000 N/A X-3* AAA $103,500,000 N/A X-4* AAA $605,592,020 N/A X-5* AAA $229,500,000 N/A Junior nonpool certificates J-CP BBB $13,676,531 N/A K-CP BBB- $20,277,448 N/A L-CP BB+ $39,763,525 N/A J-CA BBB- $5,219,219 N/A K-CA BB+ $3,575,567 N/A L-CA BB+ $4,157,595 N/A M-MC BB+ $2,000,000 N/A L-SC BB+ $400,000 N/A * Interest-only class with a notional amount. N/A - Not applicable. BOLTHOUSE FARMS: 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. Consumer Products sector, the rating agency confirmed its B2 Corporate Family Rating for Bolthouse Farms Inc. Additionally, Moody's revised its probability-of- default ratings and assigned loss-given-default ratings on these debt and equity securities: Projected Old POD New POD LGD Loss-Given Security Issue Rating Rating Rating Default -------------- ------- ------- ------ ---------- $75 million Gtd. Sr. Sec. Revolving Credit Facility Due Nov. 17, 2011 B2 B1 LGD3 41% $500 million Gtd. Sr. Sec. 1st Lien Term Loan Due Nov. 17, 2012 B2 B1 LGD3 41% $150 million Gtd. Sr. Sec. Second Lien Term Loan Due Nov. 17, 2013 B3 Caa1 LGD6 91% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Bakersfield, California, Bolthouse Farms Inc. -- http://www.bolthouse.com/-- is a fourth-generation family farm, located in California's fertile San Joaquin Valley. The company is a producer of fresh-cut carrots, carrot sticks and chips, carrot juice and pre-cut and pre-peeled baby carrots for both retail consumers and foodservice industry customers. The company's other products include orange juice, passion fruit juice, fruit smoothies, chai tea, and lemonade. Founded in 1915, Bolthouse Farms grows its carrots year-round and ships more than 35,000 tons of carrots every month. C-BASS: High Delinquencies Prompt S&P's Negative Creditwatch ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on three classes from three C-BASS transactions on CreditWatch with negative implications. At the same time, the ratings on 12 other classes from these transactions are affirmed based on the level of credit enhancement available to support the notes. The CreditWatch placements reflect relatively high delinquencies, which have the potential to reduce credit enhancement for these classes. Serious delinquencies (90-plus days, foreclosures, and REO) for these transactions range from 11.51% to 28.00% of the current pool balances, and cumulative realized losses range from 2.77% to 5.98% of the original pool balances. The transactions have paid down to less than 15% of their original issuance amounts. In addition, series 2002-CB5 and 2002-CB6 have fully stepped down. Standard & Poor's will continue to monitor the performance of these transactions. If delinquencies translate into realized losses that exceed monthly excess interest, S&P will likely lower our ratings on these classes. Conversely, if excess interest covers monthly losses and overcollateralization levels build toward their respective target balances, S&P will affirm the ratings and remove them from CreditWatch. The pools were initially composed of performing, nonperforming, and reperforming conventional, subprime, fixed- and adjustable- rate mortgage loans. The mortgage loans are secured mostly by first liens on one- to four-family residential properties. A small percentage of the mortgage pools consists of mortgage loans secured by second liens. Ratings Placed on Creditwatch Negative 2002-CB1 Trust C-BASS Mortgage Loan Asset-Backed Certificates Series 2002-CB1 Rating ------ Series Class To From ------ ----- -- ---- 2002-CB1 B-2 BB/Watch Neg BB 2002-CB5 Trust C-BASS Mortgage Loan Asset-Backed Certificates Series 2002-CB5 Rating ------ Series Class To From ------ ----- -- ---- 2002-CB5 B-1 A/Watch Neg A 2002-CB6 Trust C-BASS Mortgage Loan Asset-Backed Certificates Series 2002-CB6 Rating ------ Series Class To From ------ ----- -- ---- 2002-CB6 B-3 BB+/Watch Neg BB+ Ratings Affirmed 2002-CB1 Trust C-BASS Mortgage Loan Asset-Backed Certificates Series 2002-CB1 Series Class Rating ------ ----- ------ 2002-CB1 M-1 AAA 2002-CB1 M-2 A+ 2002-CB1 B-1 BBB 2002-CB5 C-BASS Mortgage Loan Asset-Backed Certificates Series 2002-CB5 Series Class Rating ------ ----- ------ 2002-CB5 AF-3, AV-2, M-1, M-2 AAA 2002-CB6 Trust C-BASS Mortgage Loan Asset-Backed Certificates Series 2002-CB6 Series Class Rating ------ ----- ------ 2002-CB6 M-1 AA 2002-CB6 M-2F, M-2V A 2002-CB6 B-1 BBB+ 2002-CB6 B-2 BBB- CALIFORNIA STEEL: Earns $33.9 Million for Quarter Ended Sept. 30 ---------------------------------------------------------------- California Steel Industries, Inc., reported third quarter results for the quarter ended Sept. 30, 2006. Net sales for the period were $382.3 million, from shipments of almost 505,000 net tons and net income for the period is $33.9 million. The Company shipped 504,647 net tons of steel products, a 10% increase over third quarter 2005, and about 4% lower than the second quarter of 2006. The higher shipment levels, along with improved sales prices resulted in sales revenues for third quarter 2006 about 33% higher than third quarter 2005. Net income of $33.9 million is higher than third quarter 2005's net loss of $1.1 million, and consistent with second quarter 2006's net income of $36.3 million. EBITDA for the quarter was $62.9 million, compared with third quarter 2005 results of $6.7 million. Year-to-date, sales revenues total $1.04 billion, compared with $933.6 million in 2005. Year-to-date net income is $100.5 million versus $30.7 million in 2005. EBITDA is $191.8 million, compared with 2005's $80.8 million. "Market conditions in third quarter continued to be strong, particularly in galvanized and pipe products," Masakazu Kurushima, president and chief executive officer, said. "This is again an excellent quarter for California Steel Industries," Mr. Kurushima continued. The Company disclosed that during third quarter 2006, it paid dividends to its shareholders in the amount of $73.3 million, of which, $33.3 million represent dividends paid against the first semester 2006 earnings and $40 million represent a special dividend. The Company also disclosed that it had no outstanding balance under its revolving credit agreement as of Sept. 30, 2006, and availability is over $108.7 million. The Company has a cash balance as of Sept. 30, 2006 of $103.1 million. Headquartered in Fontana, California, California Steel Industries produces flat rolled steel products in the western United States based on tonnage billed, with a broad range of products, including hot rolled, cold rolled, and galvanized sheet and electric resistant welded pipe. The company has about 1,000 employees. * * * California Steel Industries' 6-1/8% Series B Senior Notes due 2014 carry Moody's Investor Service's Ba2 rating and Standard & Poor's BB- rating. CATHOLIC CHURCH: Davenport Taps Lane & Waterman as General Counsel ------------------------------------------------------------------ The Catholic Diocese of Davenport seeks permission from the U.S. Bankruptcy Court for the Southern District of Iowa to employ Lane & Waterman LLP as its general reorganization and restructuring counsel effective as of Oct. 10, 2006. L&W has the accessibility, experience, expertise, and resources to provide the multi-faceted legal services needed by the Diocese, Charlene Maaske, Davenport's chief financial office, tells Judge Lee Jackwig. Lane & Waterman will assist the Diocese in the: (a) negotiation and refinement of a plan of reorganization; (b) selection and coordination of the efforts of the experts, which may be employed by the Diocese to ascertain the values of the bankruptcy estate, and to perform other analyses as may be presented by the creditors and other interested parties in the case; (c) evaluation of personal and real property issues; (d) evaluation and advice on the unique aspects of the reorganization case and the relationship between the Bankruptcy Code and applicable law and the law governing the activities of a Roman Catholic Diocese; and (e) evaluation and prosecution, where appropriate, of any claims which may be asserted by the Diocese. Ms. Maaske relates that the firm's professionals will be paid at these hourly rates: Professional Hourly Rate ------------ ----------- Richard A. Davidson, Esq. $230 R. Scott Van Vooren, Esq. $230 Catherine E. Hult, Esq. $190 Other Partners $190 - $215 Associates $150 Paralegals $90 The Diocese has paid the firm $34,718 as retainer fee, which was deposited in a segregated trust account pursuant to L&W's letter of engagement. L&W's services will not duplicate or overlap the efforts of any other professional employed by the Diocese, Ms. Maaske assures. The Diocese intends to employ McGladrey & Pullen P.C., as accountants, and Donald Stanforth, as investment advisor. Ms. Maaske attests that the L&W is a "disinterested" person. To the best of the Diocese's knowledge, the L&W does not have any connections with the Diocese or its creditors, or any other parties-in-interest in the bankruptcy case. About Davenport Diocese The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on October 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. In its Schedules of Assets and Liabilities filed with the Court, the Davenport Diocese reports $4,492,809 in assets and $1,650,439 in liabilities. (Catholic Church Bankruptcy News, Issue No. 71; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC: Davenport Wants to Continue Using Cash Management System ------------------------------------------------------------------ The Catholic Diocese of Davenport seeks the U.S. Bankruptcy Court for the Southern District of Iowa's authority to continue the use of its cash management system. Richard A. Davidson, Esq., at Lane & Waterman LLP, in Davenport, Iowa, relates that as of the its chapter 11 filing, the Diocese maintained several bank accounts including an operating account and several other special purpose accounts. By limiting the number of its bank accounts, the Diocese has reduced the complexity of its cash management system and the accompanying risk of error and loss, Mr. Davidson tells the Court. All deposits and payment activity occurs through the Operating Account. The Diocese receives funds from a variety of sources, including from its own operations, billings to parishes and other organizations for services, and voluntary gifts from the Parishes. The Diocese serves as the collection agent and custodian for numerous national Catholic special collections that are collected in the Parishes for restricted purposes to which parishioners donate. That system, Mr. Davidson notes, is more efficient for those organizations to receive one check from the Diocese than it is to receive a number of checks from each Parish. The Diocese also bills and collects for other employee benefits and insurance premiums from Parishes and other Catholic organizations. The Diocese takes charge in paying for those employee benefits and insurance premiums in a lump sum. All the receipts and amounts remitted are deposited by the Diocese into the Operating Account and fully accounted for on the books and records. Funds are then disbursed out of the Operating Account directly to the organization, which is the ultimate beneficiary or payee. Mr. Davidson says the Diocese's cash management system provides an efficient and a secured means of managing and disbursing cash for the Davenport's operations. About Davenport Diocese The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on October 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. In its Schedules of Assets and Liabilities filed with the Court, the Davenport Diocese reports $4,492,809 in assets and $1,650,439 in liabilities. (Catholic Church Bankruptcy News, Issue No. 71; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CITIGROUP COMMERCIAL: S&P Puts Low-B Ratings on Three Certificates ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary ratings to Citigroup Commercial Mortgage Trust 2006-FL2's $1.32 billion commercial mortgage pass-through certificates from series 2006-FL2. The preliminary ratings are based on information as of Oct. 12, 2006. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying mortgage loans, and the geographic and property type diversity of the loans. Preliminary Ratings Assigned Citigroup Commercial Mortgage Trust 2006-FL2 Preliminary Preliminary Recommended Class rating(i) amount credit support ----- ----------- ----------- -------------- A-1 AAA $712,094,000 20.500% A-2 AAA $237,365,000 20.500% B AA+ $17,915,000 17.000% C AA+ $20,900,000 17.000% D AA $38,814,000 13.625% E AA- $26,872,000 11.250% F A+ $26,871,000 9.000% G A $23,886,000 6.750% H A- $20,900,000 4.500% J BBB+ $22,393,000 3.875% K BBB $22,393,000 2.000% L BBB- $23,886,245 0.000% CAC-1* TBD $978,603 N/A CAC-2* TBD $670,418 N/A CAC-3* TBD $779,549 N/A CAN-1* TBD $2,564,349 N/A CAN-2* TBD $3,802,021 N/A CAN-3* TBD $7,455,660 N/A CNP-1* BBB- $10,600,000 N/A CNP-2* TBD $20,117,692 N/A CNP-3* BB+ $5,182,308 N/A DHC-1* BBB $1,000,000 N/A DHC-2* BBB- $1,100,000 N/A DHC-3* BBB- $1,100,000 N/A DSG-1* NR $1,000,000 N/A DSG-2* NR $1,400,000 N/A HFL* NR $1,200,000 N/A HGI-1* BBB- $4,000,000 N/A HGI-2* BBB- $8,500,000 N/A HMP-1* NR $2,800,000 N/A HMP-2* NR $3,300,000 N/A HMP-3* NR $2,700,000 N/A MVP* AA- $7,018,338 N/A PHH-1* NR $12,000,000 N/A PHH-2* NR $8,800,000 N/A RAM-1* NR $2,000,000 N/A RAM-2* BB+ $2,400,000 N/A SRL* NR $1,100,000 N/A WBD-1* BBB- $6,000,000 N/A WBD-2* BB+ $4,000,000 N/A WPP* NR $1,100,000 N/A X-1A(ii) AAA $1,194,289,245(iii) N/A X-1B(ii) AAA $1,194,289,245(iii) N/A (i) The rating of each class of securities is preliminary and subject to change at any time. (ii) Interest-only class. (iii) Notional amount. * Loan-specific class. N/A - Not applicable. NR - Not rated. TBD - To be determined. CMS ENERGY: Subsidiary Inks Peabody Pact to Co-Develop Power Plant ------------------------------------------------------------------ CMS Enterprises, a subsidiary of CMS Energy, signed agreements with Peabody Energy to co-develop the Prairie State Energy Campus, a 1,600-megawatt power plant and coal mine in southern Illinois. "Selecting CMS Enterprises as operator marks significant progress in our development process, allowing Prairie State to move forward with a recognized leader to deliver clean, low-cost energy for the region," Rick A. Bowen, Peabody President of Generation and Btu Conversion, said. "CMS Enterprises brings terrific expertise in power plant construction and operations that complements Peabody's skills." "We're excited about our partnership with Peabody Energy and the opportunities presented by the Prairie State Energy Campus. This business brings together the strengths of both companies," Thomas Elward, president and chief operating officer of CMS Enterprises, said. The Company disclosed that CMS Enterprises and Peabody Energy will co-develop and each own 15% of Prairie State indirectly through a jointly owned limited liability company. The remainder is expected to be owned by a number of Midwest municipal utilities and electric cooperatives with commitments already secured for 53% of the ownership. CMS Enterprises will serve as lead developer, construction manager, and operator of the mine-mouth power plant, which will be able to generate enough power to serve a million people. Peabody Energy - the largest private sector coal producer in the world - will be lead developer of the Lively Grove Mine that will fuel the power plant for an estimated 30 years. The plant and mine site is about 40 miles southeast of St. Louis, near Lively Grove. Ill. Financial close of the project is contingent upon Peabody and CMS Enterprises being able to secure: -- Non-recourse project financing; -- An engineering, procurement, and construction contract for the power plant; and -- Long-term power purchase agreements for a substantial portion of CMS Enterprises' and Peabody Energy's share of the project's output. The Company also disclosed that CMS Enterprises and Peabody Energy are optimistic that the conditions can be met for a financial close. An engineering, procurement, and construction contract for the power plant is being negotiated. The plant cost is estimated to be in excess of $2.5 billion. CMS Enterprises expects to make a long-term equity investment of about $200 million at the completion of construction. Construction of the first 800-megawatt generating unit is expected to take about four years to complete and the second 800-megawatt unit will be completed shortly afterward. David Joos, president and chief executive officer, said Prairie State fits well into the Company's strategy of pursuing growth opportunities at CMS Enterprises while focusing on its Michigan utility, Consumers Energy. "We are pursuing a disciplined growth strategy at CMS Enterprises. That strategy is focused on enhancing future earnings and cash flow with low financial risk. With the Prairie State Energy Campus, we will have a strong partnership team, long-term power purchase contracts, and extremely stable fuel costs. It's an opportunity that also allows CMS Enterprises to utilize its main strengths, building and operating power plants," Mr. Joos said. About Peabody Energy Peabody Energy (NYSE: BTU) is a private-sector coal company. Its coal products fuel more than 10% of all U.S. electricity generation and 3% of worldwide electricity. About CMS Energy CMS Energy Corporation -- http://www.cmsenergy.com-- is a Michigan-based company that has as its primary business operations an electric and natural gas utility, natural gas pipeline systems, and independent power generation. Through its regulated utility subsidiary, Consumers Energy, the company provides natural gas and electricity to almost 60% of nearly 10 million customers in Michigan's lower-peninsula counties. CMS ENERGY: 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 downgraded its Ba1 Corporate Family Rating for CMS Energy Corporation to Ba2. 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 ---------- ------- ------- ------ ---------- Senior secured revolving credit facility Ba2 Ba2 LGD3 49% Senior unsecured notes Ba3 Ba3 LGD4 69% Preferred stock B3 Ba3 LGD5 89% Senior unsecured shelf (P)Ba3 (P)Ba3 LGD4 69% Subordinate debt shelf (P)B2 (P)Ba3 LGD5 87% Preferred stock shelf (P)B3 (P)Ba3 LGD5 89% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). CMS Energy Corp. (NYSE: CMS) -- http://www.cmsenergy.com/-- is an integrated energy holding company that operates through two principal subsidiaries, Consumers Energy Co. and CMS Enterprises Co. The company operates in three business segments: electric utility, gas utility and enterprises. COGENTRIX ENERGY: 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 Cogentrix Energy Inc. 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 ---------- ------- ------- ------ ---------- Senior secured term loan due 2012 Ba2 Ba2 LGD4 50% Senior secured revolving credit facility due 2010 Ba2 Ba2 LGD4 50% 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%). Cogentrix Energy, Inc., a wholly owned subsidiary of The Goldman Sachs Group, Inc., is a leading owner and operator of independent power and cogeneration assets in North America. Headquartered in Charlotte, North Carolina, Cogentrix Energy, Inc., owns a substantial portfolio of assets consisting primarily of interests in 26 generation facilities aggregating 3,349 megawatts net ownership in operation. COMM 2006-FL12: S&P Puts Low-B Ratings on Two Class Certificates ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to COMM 2006-FL12's $2.573 billion commercial mortgage pass-through certificates series 2006-FL12. The preliminary ratings are based on information as of Oct. 12, 2006. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, liquidity provided by the fiscal agent, economics of the underlying loans, transaction structure, and geographic diversity of the loans. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.51x on a weighted average assumed refinance constant of 9.52, and a beginning and ending LTV of 59.3%. Preliminary Ratings Assigned COMM 2006-FL12 Class Rating Amount Recommended credit support ----- ------ ------ -------------------------- A-1 AAA $217,035,000 40.894% A-2 AAA $1,303,965,000 40.894% A-J AAA $507,000,000 21.192% B AA+ $111,000,000 16.879% C AA+ $78,000,000 13.848% D AA $86,000,000 10.506% E AA $64,000,000 8.019% F AA- $64,000,000 5.532% G A+ $61,000,000 3.161% H A $38,000,000 1.684% J A- $43,345,775 0.000% CN1 BBB- $41,000,000 N/A CN2 NR $28,000,000 N/A CN3 NR $27,754,225 N/A KR1 BBB+ $75,500,000 N/A KR2 BBB $23,500,000 N/A KR3 BBB- $66,590,000 N/A IP1 BBB+ $6,800,000 N/A IP2 BBB- $11,200,000 N/A IP3 BBB- $11,000,000 N/A HDC1 BBB $5,000,000 N/A FSH1 BBB $7,700,000 N/A FSH2 BBB- $10,000,000 N/A FSH3 BBB- $10,500,000 N/A CA1 NR $2,700,000 N/A CA2 BBB- $4,200,000 N/A CA3 NR $4,800,000 N/A CA4 NR $5,300,000 N/A AN1 A+ $2,800,000 N/A AN2 A $3,900,000 N/A AN3 BBB $6,300,000 N/A AN4 BBB- $5,000,000 N/A SR1 BBB $4,762,597 N/A MSH1 BBB+ $3,300,000 N/A MSH2 BBB $2,900,000 N/A MSH3 BBB- $4,800,000 N/A MSH4 BB+ $4,000,000 N/A FG1 NR $5,900,000 N/A FG2 NR $3,300,000 N/A FG3 NR $2,800,000 N/A FG4 NR $4,300,000 N/A FG5 NR $5,500,000 N/A FG6 NR $7,200,000 N/A LS1 BBB $2,500,000 N/A LS2 BBB- $2,700,000 N/A LS3 NR $2,600,000 N/A TC1 BBB- $2,900,000 N/A TC2 NR $2,400,000 N/A LB1 NR $2,300,000 N/A LB2 NR $1,600,000 N/A LB3 NR $1,600,000 N/A ES1 BBB- $1,800,000 N/A ES2 BBB- $1,700,000 N/A ES3 NR $1,500,000 N/A AH1 BBB $1,300,000 N/A AH2 BBB- $1,300,000 N/A AH3 BBB- $1,500,000 N/A AH4 BB+ $1,900,000 N/A CM1 A- $1,300,000 N/A CM2 BBB- $2,500,000 N/A X-1* AAA TBD N/A X-2* AAA TBD N/A X-3-BC* AAA TBD N/A X-3-DB* AAA TBD N/A X-3-SG* AAA TBD N/A X-4* AAA TBD N/A X-5-BC* AAA TBD N/A X-5-DB* AAA TBD N/A X-5-SG* AAA TBD N/A * Interest-only class with a notional amount. NR - Not rated. N/A - Not applicable. TBD - To be determined. COMPLETE RETREATS: Hires 19 Ordinary Course Professionals --------------------------------------------------------- Complete Retreats LLC and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the District of Connecticut to employ professionals that they use in the ordinary course of their business, as of July 23, 2006. The Court permitted the Debtors to pay compensation and reimburse expenses to the Ordinary Course Professionals up to an aggregate of $110,000 in any month or a greater amount that is agreed upon by the Debtors, the United States Trustee, and the Official Committee of Unsecured Creditors. The Court also directed the Debtors to file with the Court and serve on the U.S. Trustee and counsel to the Official Committee of Unsecured Creditors monthly statements, on the 20th day of the following month, detailing the amounts of fees and expenses paid to the Ordinary Course Professionals. As reported in the Troubled Company Reporter on Sept. 6, 2006, before their bankruptcy filing, the Debtors utilized numerous professionals to provide the services required to assist them in managing their affairs on a day-to-day basis. The Debtors contend that it would be impractical, inefficient and unnecessarily costly for them to submit individual applications for each professional. The Ordinary Course Professionals are: Professional Services ------------ -------- McAfee & Taft General Corporate Legal Services Simbro & Stanley Litigation Services (DMB & Borgata) Geoffrey Romany Legal Services (Villa Paradiso) Shoman & Chebat Legal Services (Cayo Espanto Foreclosure) DLA Piper Rudnick General Legal Services Gonzales Calvillo Legal Services, Mexican counsel Higgs & Johnson Legal Services, Bahamian counsel Shipman & Goodwin Legal Services (Schlierff Litigation) Nunez Duran & Asso. Legal Services (Schlierff Litigation) CPS Legal Services (Schlierff Litigation) Morris Nichol Arsht Legal Services (Pinnacle Litigation) & Tunnell Carson McDowell Sol. Legal Services, European counsel Incorporating Services Corporate Legal Services Goldblatt McGuigan Accounting Services (Europe) WTAS Accounting Services (US) Smith Katzenstein Legal Services (Town Clubs) & Furlow Studio Legale Legal Services (Umbria Property) Scassellati-Sforzolini Majors & Fox Legal Services (Hubers Litigation) Barrow & Williams Legal Services, Belize counsel The Debtors propose that: (a) Each OCP will file with the Court and serve on the U.S. Trustee and the counsel of the Official Committee of Unsecured Creditors: * an affidavit stating, among other things, that it does not represent or hold any interest materially adverse to the Debtors or their estates with respect to the matters for which it would be retained; and * a completed retention questionnaire, detailing the type of services it will provide and the payment for its services. (b) Upon receipt of each Retention Affidavit, the U.S. Trustee, the Committee, and other parties-in-interest, will have 30 days to object to the OCP's employment. Otherwise, the OCP's employment, retention, and compensation will be approved without further Court order; and (c) The Debtors will pay each approved OCP 100% of its fees and expenses incurred upon the submission and their approval of an appropriate invoice describing, in reasonable detail, the nature of its services rendered and expenses actually incurred, without the need of a Court- filed fee application. If an OCP's monthly fees and disbursements exceed $25,000, That OCP must apply to be retained under the Bankruptcy Code. The payments to the Professional for the excess amounts, as well as any future payments will be subject to the Court's approval. The Debtors disclose that certain of the OCP may hold unsecured claims against them in respect of prepetition services they have rendered. However, the Debtors assure the Court, none of the OCPs represent or hold any interest adverse to the Debtors or to their estates with respect to the matters on which they are to be employed. About Complete Retreats 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. 11; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). COVANTA ENERGY: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its Ba3 Corporate Family Rating for Covanta Energy 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 ---------- ------- ------- ------ ---------- Senior secured revolving credit facility due 2011 B1 B1 LGD4 64% Senior secured term loans 2012 B1 B1 LGD4 64% Senior secured letter of credit facility due 2012 B1 B1 LGD4 64% Second lien senior secured term loan due 2013 B2 B2 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 Fairfield, New Jersey, Covanta Energy Corporation -- http://www.covantaenergy.com/-- is a publicly traded holding company whose subsidiaries develop, own or operate power generation facilities and water and wastewater facilities in the United States and abroad. The Company filed for Chapter 11 protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826). Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $3,280,378,000 in assets and $3,031,462,000 in liabilities. On March 10, 2004, Covanta Energy Corporation and its core subsidiaries emerged from chapter 11 as a wholly owned subsidiary of Danielson Holding Corporation. Some of Covanta's non-core subsidiaries have liquidated under separate chapter 11 plans. DANA CORP: Court Okays Pact Extending Committees' Challenge Period ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York previously extended the challenge period for the Official Committee of Unsecured Creditors and the Ad Hoc Noteholders' Committee in Dana Corporation and its debtor-affiliates' chapter 11 cases to contest the liens and claims under the receivables facility. The Receivables Facility refers to: * the receivables securitization program pursuant to which the Debtors sold certain of their receivables to Dana Asset Funding LLC, a non-debtor affiliate, under an Amended and Restated Purchase and Contribution Agreement dated April 15, 2005; and * an Amended and Restated Receivables Purchase Agreement dated April 15, 2005, between DAF, on the one hand, and Dana Corporation, Falcon Asset Securitization Corporation, Variables Funding Capital Company LLC, JPMorgan Chase Bank, N.A., and Wachovia Bank National Association, on the other hand. Under the RPA, interests in the Receivables Portfolio were simultaneously sold or pledged by DAF. JPMorgan and Wachovia are committed purchasers under the RPA and serve as Receivables Facility Agents under the RPA. On Feb. 24, 2006, the Debtors, DAF and the Receivables Facility Agents entered into a waiver of the Receivables Facility wherein the Agents required DAF to pay an aggregate $1,000,000 waiver fee. On Feb. 27, 2006, Dana paid the Waiver Fee in two equal payments of $500,000 to each of the Agents. The Creditors' Committee has performed its due diligence relative to the liens asserted by the Agents, and have determined that the liens were valid and perfected prepetition liens in all respects, except relative to the payment of the Waiver Fee by Dana Corporation. The Creditors' Committee has informally raised a potential challenge relative to the payment of the Waiver Fee. Accordingly, in a Court-approved stipulation, the Debtors, the Creditors Committee, the Ad Hoc Committee and the Agents agree that the Challenge Period for the Creditors' Committee and the Ad Hoc Committee to contest the liens and claims under the Receivables Facility expired on Sept. 29, 2006, with the exception of the Committees' right to challenge all liens and claims relative to, and the payment of, the Waiver Fee. The Challenge Period, solely with regard to the Waiver Fee, is extended until the earlier of the date that is 100 days after: (a) any of the Debtors, the Committees or the Agents send a written notice to other parties setting the last day of the Challenge Period on the 100th day; and (b) the Debtors or any other party-in-interest first files a disclosure statement with the Court pursuant to Section 1125 of the Bankruptcy Code. The Stipulation does not prejudice the Committees' rights to seek additional extensions of the Challenge Period, solely as it relates to the Waiver Fee. 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. 23; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELTA WOODSIDE: Files for Bankruptcy Protection in Delaware ----------------------------------------------------------- Delta Woodside Industries, Inc., its wholly owned subsidiary Delta Mills, Inc., and Delta Mills Marketing, Inc., the wholly owned subsidiary of Delta Mills, filed voluntary petitions for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware on Oct. 13, 2006. The companies are operating as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code, and the directors and officers of each of the companies are expected to continue to oversee the operations of their respective company, subject to supervision and orders of the Bankruptcy Court for matters outside the ordinary course of business. The companies intend to proceed immediately after filing the bankruptcy petition with an orderly wind-down of their operations designed to result in liquidation and distribution to creditors. The companies have reached an agreement with Delta Mills' credit facility lender GMAC to provide debtor-in-possession financing, subject to the approval of the Bankruptcy Court, which the companies believe they will receive, though there can be no assurance to this effect. As part of an orderly wind-down process, Delta Mills intends to fill most existing orders from its customers and to continue to operate its Beattie plant for a period of several weeks and its Delta 3 finishing plant for a longer period. The Companies intend to petition the Bankruptcy Court to permit them to solicit bids over approximately a ten-day period for a sale of most of the assets of the Companies as a going concern under Section 363 of the Bankruptcy Code. Any bid accepted by the Companies would be subject to Bankruptcy Court approval. There can be no assurance that the Bankruptcy Court will authorize the auction, that the Companies will receive any bids that they deem in the best interest of the estates of the Companies and their creditors as a whole or that the Bankruptcy Court would approve any bid accepted by the Companies. Prior to filing their bankruptcy petitions, the Companies were negotiating a potential sale of a majority of their assets as a going concern to a potential acquirer; however, the parties were unable to agree on terms that the Companies' Boards of Directors believed were in the best interest of the Companies and their creditors as a whole, and negotiations were terminated shortly before the Companies filed their bankruptcy petitions. Based in Greenville, South Carolina, Delta Woodside Industries, Inc. (OTCBB: DLWI), through its wholly owned subsidiary, Delta Mills, it manufactures and sells textile products for the apparel industry. The Company employs about 600 people and operates two plants located in South Carolina. DELTA WOODSIDE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Delta Woodside Industries, Inc. 700 Northwoods Drive Fountain Inn, SC 29644 Tel: (302) 658-9200 Bankruptcy Case No.: 06-11146 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Delta Mills, Inc. 06-11144 Delta Mills Marketing, Inc. 06-11147 Type of Business: Through its wholly-owned subsidiary, Delta Mills, the Debtor manufactures and sells textile products for the apparel industry. Chapter 11 Petition Date: October 13, 2006 Court: District of Delaware Judge: Christopher S. Sontchi Debtor's Counsel: Robert J. Dehney, Esq. Morris, Nichols, Arsht & Tunnell 1105 N. Market Street P.O. Box 1347 Wilmington, DE 19899 Estimated Assets Estimated Debts ---------------- --------------- Delta Woodside Industries, $1 Million to $100,000 to Inc. $100 Million $1 Million Delta Mills, Inc. $1 Million to $1 Million to $100 Million $100 Million Delta Mills Marketing, $0 to $50,000 $10,000 to Inc. $100,000 Debtors' Consolidated List of 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Hedge Hog Capital $5,000,000 1117 E. Putnam Ave. #320 Riverside, CT 06878 John Hancock $4,000,000 200 Clarendon St. Boston, MA 02116 Fort Washington $3,000,000 420 E. Fourth St. Cincinnati, OH 45202 ALJ Capital $3,000,000 Attn: Adam L. Gubner 6300 Wilshire Blvd., Ste. 700 Los Angeles, CA 90048 AIG $2,000,000 1 Sun America Center Los Angeles, CA 90067 Flagg Street Capital $2,000,000 Attn: Keith Kirstein 44 Battle Street - 1st Floor Cambridge, MA 02138 Parkdale Mills, Inc. $1,499,547 531 Corton Blossom Circle Gastonia, NC 28054 Sun America AIG $1,250,000 1 Sun America Center Los Angeles, CA 90067 Dilman Investment Ltd. $1,000,000 Attn: David Jansen 27 Berkeley Square London, UK W1J6EL NC Department of Revenue $321,000 501 N. Wilmington Street Raleigh, NC 27604 Converse & Co., Inc. $167,269 Unifi Inc. $84,396 Astro America Chemical Company, Inc. $57,325 Dexter Chemical LLC $54,181 Defender Services Inc. $48,690 Olin Corporation $46,548 Basic Chemicals Co., LLC $39,500 Bayer/Lanxess $38,102 Everlight USA, Inc. $28,500 AEP Industries $23,392 DYNEGY 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 B1 Corporate Family Rating for Dynegy Holdings 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 ---------- ------- ------- ------ ---------- Senior secured revolving credit facility due Mar. 6, 2009 Ba3 Ba1 LGD1 8% Senior secured letter of credit facility due Jan 31, 2012 Ba3 Ba1 LGD1 8% Senior secured term loan due Jan. 31, 2012 Ba3 Ba1 LGD1 8% 9.875% second priority senior secured notes due July 15, 2010 B1 Ba1 LGD2 19% 6.875% senior unsec. notes due Apr. 1, 2011 B2 B2 LGD4 61% 8.75% senior unsec. notes due Feb. 15, 2012 B2 B2 LGD4 61% 8.375% senior unsec. notes due May 1, 2016 B2 B2 LGD4 61% 7.125% senior debentures due May 15, 2018 B2 B2 LGD4 61% 7.625% senior debentures due Oct. 15, 2026 B2 B2 LGD4 61% Multiple seniority shelf (P)B2 (P)B2 LGD4 61% Multiple seniority shelf (P)B3 (P)B3 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%). Dynegy Inc. -- http://www.dynegy.com-- provides electricity to markets and customers throughout the United States. The company's fleet of power generation facilities consists of baseload, intermediate and peaking power plants fueled by a mix of coal, fuel oil and natural gas. Located in 12 states, the portfolio is well-positioned to capitalize on regional differences in power prices and weather-driven demand. EMMIS COMMS: Moody's Rates Proposed $600 Million Sr. Loan at B1 --------------------------------------------------------------- Moody's Investors Service downgraded Emmis Communications Corporation's Corporate Family rating from Ba3 to B1. Additionally, Moody's assigned a B1 rating to the proposed $600 million senior secured credit facilities of Emmis' subsidiary, Emmis Operating Company. Proceeds from the proposed facilities will be used to fund a $150 million special dividend to Emmis' common stockholders in addition to refinancing EOC's 6-7/8% senior subordinated notes and current bank facilities. According to the company's announcement, EOC has commenced an offer to purchase, at par value, all of the outstanding 6-7/8% senior subordinated notes pursuant to an asset sale offer required under the indenture for a portion of the notes and a tender offer for the balance of the notes that is combined with a consent solicitation to eliminate substantially all of the restrictive covenants and certain events of default. Emmis' rating reflects the company's substantial debt to EBITDA leverage, lower than previously expected de-leveraging due to the special dividend payment, competition in the company's radio markets balanced by the substantial value of these markets. The rating also incorporates the inherent cyclicality of the advertising market and Moody's belief that growth prospects for radio, particularly in large markets, will be challenging as advertising spending gets fragmented across a growing number of media. Emmis' rating is supported by its strong large-market radio presence and continued focus on its attractive radio assets. Ratings downgraded: Emmis Communications Corporation * Corporate family rating from Ba3 to B1; * Probability-of-default rating B1 * Series A cumulative convertible preferred from B2 to B3 Emmis Operating Company * 6-7/8% senior subordinated notes due 2012 from B1 to B3 These notes are subject to an Asset Sale offer/tender and consent offer. If a meaningful portion of the notes are not tendered, the debt instrument ratings may change. Ratings assigned: Emmis Operating Company * $150 million 6-year revolving credit facility B1 * $450 million 7-year Term Loan B1 Ratings withdrawn: Emmis Operating Company * Secured revolver Ba1 * Secured Term Loan Ba1 Ratings affirmed: Emmis Communications Corporation * SGL-2 speculative grade liquidity The rating outlook is stable. Emmis Communications Corporation, headquartered in Indianapolis, Indiana and is a diversified media company comprised of radio and television stations and magazine publishing assets. EMMIS COMMS: S&P Rates $600 Million Secured Credit Facility at B ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Indianapolis, Indiana-based Emmis Communications Corp. and subsidiary Emmis Operating Co. by one notch, to 'B'. S&P removed the ratings from CreditWatch, where they were placed with negative implications in May 2005. At the same time, S&P assigned its 'B' bank loan rating, at the same level as the corporate credit rating, to Emmis Operating's $600 million secured credit facility. The bank loan rating and recovery rating of '2' indicate expectation of substantial recovery of principal in the event of a payment default. Proceeds from the proposed transaction will be used to redeem $375 million of the company's existing 6.875% senior subordinated notes, refinance its existing $150 million term loan B, and issue a special dividend of $150 million. The outlook is stable. Pro forma for the transaction, Indianapolis, Ind.-based radio and television broadcaster Emmis had total debt outstanding, including debt-like preferred stock, of approximately $656 million at Aug. 31, 2006. "The rating action is based on Emmis' planned $150 million special dividend, which undermines the potential to reduce leverage," Standard & Poor's credit analyst Heather M. Goodchild said. "It is also based on the company's recent disappointing earnings, adverse radio industry fundamentals, and our expectation that pressure from shareholders may preclude meaningful deleveraging in the future." Standard & Poor's views the company's $150 million dividend, which equates to roughly $4 per share, as an alternative distribution for a failed CEO buyout proposal of $16.80 per share, which now represents a similar premium over the stock's current trading price. The ratings reflect Emmis' high financial risk from debt-financed acquisitions and shareholder-favoring initiatives, a competitive radio environment, and less portfolio diversity and asset flexibility following TV station sales. Also, the company's concentration in key markets increases its exposure to economic downturns, and much larger competitors exist in these markets. These factors are only partially offset by the respectable competitive positions of the company's large-market radio operations, the good discretionary cash flow-generating capability of the broadcasting business, and strong radio station asset values. ENCOMPASS HOLDINGS: Timothy Steers Raises Going Concern Doubt ------------------------------------------------------------- Timothy L. Steers, CPA, LLC, expressed substantial doubt about Encompass Holdings, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended June 30, 2006 and 2005. The auditing firm pointed to the Company's significant operating losses and working capital deficit. Encompass incurred a $4,689,645 net loss on sales of $ 4,372,317 for the year ended June 30, 2006, compared to a $5,394,890 net loss on sales of $1,316,697 in the prior year. The increase in sales during the year ended June 30, 2006 over 2005 was attributable to the purchase of all of the operating assets and liabilities of Nacio Systems, Inc., effective April 1, 2005. Sales as a result of the purchase of the Nacio assets aggregated $4,372,317 for the 12 months ended June 30, 2006. The Company's balance sheet at June 30, 2006 showed $19,151,849 in total assets, $10,986,657 in total liabilities, accrued interest of $71,847, Minority interest of $5,306,746 and stockholders' equity of $2,786,599. A full-text copy of the Company's annual report is available for free at http://researcharchives.com/t/s?1363 Encompass Holdings, Inc., fka Nova Communications Ltd. -- http://www.encompassholdings.com/-- is involved in acquiring ownership interests in developing companies in a wide range of industries and providing financing and managerial assistance to those companies. ENERGYTEC INC: Posts $792,670 Net Loss in Quarter Ended March 31 ---------------------------------------------------------------- Energytec, Inc., incurred a $792,670 net loss on $3,096,692 or revenue during the three months ended March 31, 2006, compared to net income of $720,231 earned on $3,050,890 of revenue for the same period in 2005. For the three months ended March 31, 2006, oil and gas revenue increased from $298,955, for the three months ended March 31, 2005, to $1,208,824, a 304% increase. Well service revenue for the three months ended March 31, 2006, reflects an increase over the same period in the prior year due to the utilization of additional equipment and the addition of well service units, which were put into service on additional properties during the last half of 2005. The revenue increased by 103%, from $579,699 for the three months ended March 31, 2005, to $1,177,878 for the same period in 2006. For the three months ended March 31, 2005, gas sales increased by 137%, to $709,990 from $300,164 from the same period in 2005. Gas purchases increased from $262,367 for the three months ended March 31, 2005 to $701,516 for the three months ended March 31, 2006. The Company's balance sheet at March 31, 2006 showed $52,855,687 in total assets, $20,192,572 in total liabilities and shareholders' equity of $32,663,115. A full-text copy of the Company's annual report is available for free at http://researcharchives.com/t/s?1369 CEO Ouster On March 18, 2006, Energytec's Board of Directors removed Frank W. Cole from office as the Chairman of the Board, Chief Executive Officer, and Chief Financial Officer, pursuant to reports of irregularities in financial reporting, lack of control over operations and assets at Energytec's Talco facility in East Texas, concerns related to the sale of working interests in leases and common stock of Energytec in private placements, and possible violations of Energytec's Code of Ethics. Going Concern Doubt As reported in the Troubled Company Reporter on July 27, 2006, Turner Stone & Company, L.L.P., in Dallas, Texas, raised substantial doubt about Energytec's ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2005 and 2004. The auditor pointed to the Company's: -- need to have cash reserves sufficient to meet its capital and operational expenditure budget of approximately $15,000,000 for the year ending Dec. 31, 2006, and -- belief that it may have potential liability for rescission or damages to investors in the working interest programs and purchasers of the Company's common stock in private placements. About Energytec Energytec, Inc. -- http://www.energytec.com/-- acquires oil and gas properties that have previously been the object of exploration or producing activity, but which are no longer producing or operating due to abandonment or neglect. The Company owns working interests in 62,466 acres of oil and gas leases in Texas and Wyoming that include 187 gross producing wells and 348 gross non- producing wells. The Company also owns a gas pipeline of approximately 63 miles in Texas and a well service business operated through its subsidiary, Comanche Well Service Corporation. On April 22, 2006, the Company formed two new wholly owned subsidiaries, Comanche Rig Services Corporation, which provides contract drilling services to third parties through the utilization of the drilling rigs owned by Comanche Well Service; and Comanche Supply Corporation, which sells and markets enhanced oil recovery chemicals and materials related to well operation services. Comanche Well Service Corporation became the operator of all the properties owned by Energytec on April 1, 2006, by posting a cash bond of $250,000 with the Texas Railroad Commission. ENTERGY GULF: Fitch Holds Preferred Stock's Rating at BB+ --------------------------------------------------------- Fitch revises the Rating Outlook of Entergy Corp. and its subsidiaries Entergy Arkansas, Inc. (EAI), Entergy Gulf States, Inc. (EGSI), Entergy Louisiana, LLC (ELL), Entergy Mississippi, Inc. (EMI) and System Energy Resources, Inc. (SERI) to Stable from Negative. Fitch also affirms the ratings for each of these companies. The Entergy organization has withstood the financial and operating challenges from last year's unprecedented storm damages without impairment of its consolidated credit profile. While a number of contingencies exist and their resolution cannot be predicted with certainty, Fitch believes the ultimate outcome of such items will have no rating implications. Approximately $8.7 billion of debt is affected. The Stable Rating Outlook for ETR reflects the partial and continuing recovery of utility cash flows to pre-hurricane levels, strong and growing cash flows from the company's merchant nuclear fleet, limited commodity price exposure, constructive regulatory developments relating to cost recovery, and ample liquidity. Consolidated credit metrics are strong for ETR's rating category as funds from operations (FFO)-to-interest coverage was 4 times (x) and total debt-to-FFO was 5.7x for the twelve months ended June 30, 2006. For 2007, Fitch projects that ETR's FFO interest coverage will be in the range of 4.5 to 5.5x, while debt to FFO will be in the range of 4.5 to 5.5x. These projections assume limited storm cost recovery before year-end 2007. EAI's ratings reflect its strong predictable cash flows, low-cost generation fleet, and the improved credit profiles of hurricane- affected affiliates. The Stable Rating Outlook is based on Fitch's expectation that EAI will maintain credit metrics consistent with its rating category. For 2007, Fitch projects EAI's FFO interest coverage will remain in the range of 5.5 to 6.5x, while debt to FFO will remain in the range of 3 to 4x. Fitch notes that EAI is currently waiting for several major decisions from regulators; while the company's present credit profile and rating can withstand a moderate deterioration in financial performance caused by any one unsupportive decision, multiple unsupportive decisions could change the rating or Rating Outlook of EAI and its parent, ETR, which relies on utility dividends to fund operations. EGSI's ratings reflect its limited commodity price exposure, adequate liquidity, and credit metrics consistent with its rating category. For the twelve months ended June 30, 2006, funds from operations (FFO)-to-interest coverage was 4.0x and total debt-to- FFO was 5.8x. The Stable Rating Outlook is based on Fitch's expectation that EGSI's credit metrics will remain adequate for its current rating category. For 2007, Fitch projects EGSI's FFO interest coverage will remain in the range of 3.75 to 4.25x, while debt to FFO will remain in the range of 5 to 6x. These projections assume limited storm cost recovery before year-end 2007. Fitch also assumes there will be no near-term repayment of debt or equity issued to fund storm restoration costs without proceeds from storm cost recovery. ELL's ratings reflect its limited commodity price exposure, a supportive capacity cost recovery mechanism, and slowly improving credit metrics. For the twelve months ended June 30, 2006, funds from operations (FFO)-to-interest coverage was 2.3 times and total debt-to-FFO was 10.4x; these metrics are substantially weaker than historical averages and reflect the magnitude of the hurricane damage in 2005. However, Fitch expects operating cash flows, interest coverage, and debt coverage ratios will improve through year-end 2006 and 2007 to pre-hurricane levels. The Stable Rating Outlook is based on Fitch's expectation that ELL's credit metrics will be adequate for its rating category. For 2007, Fitch projects FFO interest coverage will be in the range of 4.5 to 5.5x, and debt to FFO will be in the range of 5 to 6x. These projections assume limited storm cost recovery before year-end 2007. EMI's ratings reflect its constructive regulatory environment, the high likelihood of storm cost recovery, and slowly improving credit metrics. For the twelve months ended June 30, 2006, funds from operations (FFO)-to-interest coverage was 2.0 times and total debt-to-FFO was 16.9x; these metrics are substantially weaker than historical averages and reflect the magnitude of the hurricane damage in 2005. However, Fitch expects operating cash flows, interest coverage, and debt coverage ratios will improve through year-end 2006 and 2007 to pre-hurricane levels. The Stable Rating Outlook is based on Fitch's expectation that EMI's credit metrics will be adequate for its rating category. For 2007, Fitch projects EMI's FFO interest coverage will remain in the range of 4 to 5x, while debt to FFO will remain in the range of 4.5 to 5.5x. SERI's ratings are supported principally by the obligations of affiliated utilities, ETR's obligation to supply sufficient funds to maintain SERI's equity capital at 35% of capitalization and to pay its debt when due. The Stable Rating Outlook reflects the improved credit profiles of SERI's affiliated utilities. ETR is a diversified energy company focused on power production, including significant nuclear operations, distribution operations and other energy related services. ETR's utility subsidiaries serve approximately 2.7 million customers in Arkansas, Louisiana, Mississippi and Texas. ETR is also the second largest operator of nuclear power plants in the U.S. Fitch affirms these ratings and revises the Outlook to Stable from Negative: Entergy Corp. -- Long-term Issuer Default Rating (IDR) 'BBB-'; Entergy Arkansas -- Long-term IDR 'BBB-'; -- Senior secured 'BBB+'; -- Senior secured Pollution Control Revenue Bonds (PCRBs) 'BBB+' -- Senior unsecured PCRBs 'BBB'; -- Preferred Stock 'BBB-'. Entergy Gulf States -- Long-term IDR 'BB+'; --Senior secured 'BBB'; --Senior secured PCRBs 'BBB' --Senior unsecured PCRBs 'BBB-'; --Preferred Stock 'BB+'. Entergy Louisiana LLC --Long-term IDR 'BBB-'; --Senior Secured 'BBB+'; --Senior unsecured PCRBs 'BBB'; --Waterford lease obligation 'BBB'; --Preferred Stock 'BBB-'. Entergy Mississippi --Long-term IDR 'BBB-'; --Senior secured 'BBB+'; --Preferred stock 'BBB-'. System Energy Resources --Long-term IDR 'BBB-'; --Senior secured 'BBB-'; --Senior unsecured 'BBB-'. EUROFRESH INC: Moody's Assigns Loss-Given-Default Ratings --------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products sector, the rating agency confirmed Eurofresh, Inc.'s probability-of-default ratings and held its loss-given-default ratings on these bond issues: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $170.00M 11.500% Global Bonds Due Jan. 5, 2013 B3 B3 LGD4 53% $44.17M 14.500% Sr. Sub. Global Notes Due Jan. 15, 2014 Caa2 Caa2 LGD6 92% 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. Based in Willcox, Arizona, Eurofresh Inc. is a year-round producer of tomatoes-on-the-vine hydroponic, pesticide-free, greenhouse tomatoes for sale to wholesale distributors and directly to grocery stores. The company's greenhouses cover more than 200 acres in Arizona, and it is expanding its facilities. Tomato varieties include beefsteak, Campari, Roma, yellow, and cherry; it also sells cucumbers. Private equity firm Bruckmann, Rosser, Sherrill & Co. owns a controlling interest in the company, which was formed in 1990 by chairman Johan van den Berg and Wil van Heyningen. FAYETTEVILLE PARTNERS: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Fayetteville Partners, LLC 15140 Kingstree Dallas, TX 75248 Bankruptcy Case No.: 06-34404 Chapter 11 Petition Date: October 12, 2006 Court: Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Joyce W. Lindauer, Esq. Joyce W. Lindauer, Attorney at Law 8140 Walnut Hill Lane, Suite 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 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. FEP RECEIVABLES: Fitch Junks Ratings on $51.2 Million Notes ----------------------------------------------------------- Fitch Ratings downgrades three classes and affirms one class of notes issued by FEP Receivables Trust 2001-1, (FEP 2001-1). These rating actions are effective immediately: -- $27,635,300 class A3-L Floating-Rate Notes affirmed at 'CCC' and assigned a Distressed Recovery rating of 'DR3'; -- $5,000,000 class B-L Floating-Rate Notes downgraded to 'C' from 'CC' and assigned a 'DR5'; -- $13,659,777 class A Fixed-Rate Notes downgraded to 'CCC' from 'B-' and assigned a 'DR4'; -- $5,000,000 class B Fixed-Rate Notes downgraded to 'C' from 'CC' and assigned a 'DR5'. FEP 2001-1 is collateralized by the right to receive certain fees charged to the class B shareholders of a select pool of mutual funds. Namely, FEP 2001-1 receives, from a predetermined set of shareholders in the mutual funds, the asset-based sales charges (12b-1 fees), contingent deferred sales charges (CDSC fees), and shareholder servicing fees which are charged to these shareholders. The primary factors in determining cash flows in this transaction are the net asset values of the underlying funds and share redemption rates. The 12b-1 and SSF fees are charged as a percentage of NAV, meaning that the transaction's performance is highly correlated with the performance of the underlying funds. Share redemptions may result in a one-time CDSC charge to the shareholder, but will also reduce the future inflow of cash via 12b-1 and SSF fees. The underlying funds in FEP 2001-1 experienced significant NAV declines soon after the inception of the transaction. The poor performance led to insufficient cash flows supporting the notes, and therefore a slow rate of principal redemption of the notes. As of the July 31, 2006 trustee report, the prospects for full principal redemption of the senior-most remaining notes were bleak, with required annual returns of over 70% in the underlying funds. The affirmation of the class A3-L Floating Rate Notes and downgrade of the class A Fixed Rate Notes reflect the likelihood that these notes will continue to receive principal payments, but will likely not be paid in full. The downgrades of the class B-L Floating Rate Notes and class B Fixed Rate Notes reflect the likelihood that these notes will not receive any principal payments. Further, the assignments of the DR ratings address the ranges of total expected future cash flows for each class of notes. The ratings on the class A3-L, class B-L, class A, and class B notes represent Fitch's assessment that note holders will receive timely interest and principal payments in accordance with the terms of the legal documents. FERRO CORP: Earns $16.2 Million in Year Ended Dec. 31, 2005 ----------------------------------------------------------- Ferro Corporation reported $16.2 million of net income for the year ended Dec. 31, 2005, compared to $24.9 million of net income earned in the prior year. Sales from continuing operations for the year ended Dec. 31, 2005, of $1,882.3 million were 2.1% higher than for the comparable 2004 period. Improved pricing and more favorable product mix in North America, Asia-Pacific and Latin America were the primary drivers for the revenue gain. Weakness in the market for multiplayer capacitors depressed unit demand and revenues, particularly in the first half of 2005. On a consolidated basis, the impact of strengthening foreign currencies versus the U.S. dollar had only a minimal positive impact on revenues. The Company's balance sheet at Dec. 31, 2005, showed $1.66 billion in total assets, $1.17 billion in total liabilities, total shareholders' equity of $468,091 and Series A convertible preferred stock of $20.4 million. At Dec. 31, 2005, the Company had a $300 million revolving credit facility that was scheduled to expire in September 2006, as well as $200 million of senior notes and $155 million of debentures outstanding with varying maturities, the majority of which extended beyond 2010. The Company also had an accounts receivable securitization facility under which the Company could receive advances of up to $100 million, subject to the level of qualifying accounts receivable. Subsequent to Dec. 31, 2005, the Company replaced or modified its existing facilities to secure future financial liquidity. The $300 million revolving credit facility was replaced by a $700 million credit facility, consisting of a $250 million multi- currency senior revolving credit facility expiring in 2011 and a $450 million senior delayed-draw term loan facility expiring in 2012. In addition, the Company extended its $100 million accounts receivable securitization facility for up to three additional years. The Company expects to file its 2005 reports on Form 10-Q for the quarters ending March 31, June 30 and Sept. 30, 2005 by the end of October. With the completion of the 2005 financial filings, the Company will then focus on the completion of its Form 10-Q filings for the first three quarters of 2006, and expects to file these reports with the SEC by the end of 2006. A full-text copy of the Company's annual report is available for free at http://researcharchives.com/t/s?1362 About Ferro Corporation Headquartered in Cleveland, Ohio, Ferro Corporation -- http://www.ferro.com-- supplies technology-based performance materials for manufacturers. Ferro materials enhance the performance of products in a variety of end markets, including electronics, telecommunications, pharmaceuticals, building and renovation, appliances, automotive, household furnishings, and industrial products. The Company has approximately 6,800 employees globally. * * * Standard & Poor's Ratings Services' 'B+' long-term corporate credit and 'B' senior unsecured debt ratings on Ferro Corp. remains on CreditWatch with negative implications, where they were placed Nov. 18, 2005. FOAMEX INT'L: Obtains Commitment of $790 Million Exit Financing --------------------------------------------------------------- Foamex International Inc. received a commitment for a new equity investment and that its primary operating subsidiary, Foamex, L.P., has received a commitment for exit financing to fund the Company's emergence from chapter 11. These commitments are subject to the satisfaction of certain conditions. Specifically, as part of the new equity investment, Foamex International has entered into an equity commitment agreement to conduct a $150 million rights offering to existing common and preferred shareholders. Subject to the terms of that agreement, five existing shareholders -- D. E. Shaw Laminar Portfolios, L.L.C., Goldman, Sachs & Co., Par IV Master Fund, Ltd., Sunrise Partners Limited Partnership, and Sigma Capital Associates, LLC -- have committed to fund any shortfall between $150 million and the actual rights offering proceeds through the purchase of new preferred or common stock in reorganized Foamex International. Separately, Foamex L.P. has received a commitment from a group of lenders led by Bank of America, N.A. and Banc of America Securities LLC for up to $790 million of exit financing, of which it expects to draw approximately $645 million upon the Company's emergence from chapter 11. If consummated, the combination of the new equity investment and the exit financing would allow the Company to satisfy all valid claims of creditors in full and allow holders of Foamex International's stock to retain their ownership interests, subject to any dilution that may occur in connection with the rights offering or otherwise. The Company filed a motion in the Bankruptcy Court on Oct. 13, 2006, seeking approval of the commitments, the commencement of the rights offering, and the Company's payment of certain premiums, fees and expenses in connection with the commitments. The Company has requested that a hearing to consider approval of the commitments and the payment of such amounts be scheduled for Oct. 30, 2006. As a part of its commitment from the Significant Equityholders, the Company and the Significant Equityholders have reached agreement on the principal terms of an amended plan of reorganization. The Company plans to file shortly the Amended Plan and an accompanying disclosure statement with the Bankruptcy Court. The Amended Plan and disclosure statement and the contemplated transactions are subject to Bankruptcy Court approval. The proposed rights offering will be made pursuant to a registration statement covering the additional shares of common stock being offered. In order to commence the rights offering, the Company must obtain the approval of the Bankruptcy Court and the Securities and Exchange Commission must declare the registration statement to be effective. "These commitments represent a significant and very positive step toward Foamex's emergence from chapter 11, and, combined with our notable operating performance over the past several months, provide further evidence that we are gaining strong momentum," Raymond E. Mabus, Jr., Chairman and Chief Executive Officer of Foamex International, stated. "We have worked closely with our lenders and Significant Equityholders over the last few months to facilitate these commitments, which, if consummated, will enable the Company to emerge from chapter 11 as promptly as possible while also maximizing the recovery for all of the Company's stakeholders. "[The] announcement is the positive result of a lot of hard work -- both by the people involved in the chapter 11 process and by all of our employees who have produced such impressive results so far this year. Assuming all goes as planned, we expect to emerge from chapter 11 during the first quarter of 2007 as a company that is better able to compete and grow in the markets in which we operate and that will provide our customers with quality products and the high level of service they demand." Equity Rights Offering A rights offering will be conducted to generate gross proceeds of $150 million. Each holder of Foamex International's common stock (including the Significant Equityholders) will be offered the right to purchase 2.56 shares of common stock in the Reorganized Company for each share of common stock held on the applicable record date, in exchange for a cash payment of $2.25 per share. Each holder of Foamex International's preferred stock (one share of which is convertible into 100 shares of common stock) will be offered the right to purchase 255.78 shares of common stock in the Reorganized Company at $2.25 per share for each share of preferred stock held on the applicable record date. The additional shares of common stock in the Reorganized Company will be issued on the Effective Date of the Amended Plan. The Company will utilize the proceeds from the Rights Offering and, if applicable, the Significant Equityholders' purchase of new preferred stock or common stock under the Amended Plan, to fund required payments under the Amended Plan, to pay the expenses of the rights offering and to pay the balance of certain premiums that become due and payable on the Effective Date. Loan Facilities The Company has entered into a commitment letter with Bank of America, N.A., Banc of America Securities LLC, Morgan Stanley Senior Funding, Inc., and Barclays Capital, the investment banking division of Barclays Bank PLC, outlining the terms on which the lenders will provide the Company with up to $790 million in exit financing. The Company expects to draw approximately $645 million under the facilities upon its emergence from chapter 11 to fund payments required under the Amended Plan and the fees and expenses to be paid in connection with the exit financing and to satisfy the Company's working capital and other needs. Bank of America, N.A. will act as the sole and exclusive administrative and collateral agent for this financing. The new financing facilities will be: a $175 million Senior Secured Revolving Credit Facility; a $425 million First Lien Term Loan Facility; and a $190 million Second Lien Term Loan Facility. Preferred Stock Put Option Foamex International and the Significant Equityholders will, subject to Bankruptcy Court approval, enter into an agreement under which the Significant Equityholders will sell a put option to Foamex International for an aggregate premium of up to $9.5 million. Under the put option, Foamex International may require the Significant Equityholders to purchase new preferred stock in the Reorganized Company for an aggregate purchase price of $150 million minus the gross amount of proceeds received by the Company as a result of the rights offering. Any such preferred stock will be issued on the Effective Date of the Amended Plan. The put option may be exercised only if the Significant Equityholders do not exercise a call option to be issued under the Amended Plan. Common Stock Call Option As a condition to the Significant Equityholders' obligations to fund the Shortfall, the Amended Plan shall provide that the Significant Equityholders will purchase a call option from Foamex International for an aggregate premium of $2 million. If the call option is exercised as provided under the Amended Plan that is to be filed, the Significant Equityholders will fund the Shortfall, if any, by purchasing shares of common stock in the Reorganized Company at $2.25 per share. Any such common stock will be issued on the Effective Date of the Amended Plan. Anticipated Treatment of Claims and Interests Full payment in cash will be made to holders of allowed claims based upon the Company's Senior Secured Notes and Senior Subordinated Notes. Other allowed unsecured claims will be satisfied in full in cash. Allowed administrative claims, priority tax claims, DIP financing claims, other priority claims and other secured claims will be satisfied in full in cash or, with respect to other secured claims, as otherwise provided in the term sheet. Existing preferred stock will be converted into common stock on the Effective Date of the Amended Plan. Existing common stock will remain outstanding after the Effective Date, but will be subject to dilution as a result of the issuance of additional common stock pursuant to the rights offering and, if exercised, the call option and any common stock to be issued under the proposed Management Incentive Plan and the existing Key Employee Retention Program or upon exercise of any stock options. Holders of common equity interests other than common stock, including any options, warrants or rights to acquire the same, will retain their interests. Board of Directors Representation The Significant Equityholders will have the right to nominate four members of the Reorganized Company's Board of Directors. The Board of Directors will also include one independent director, as well as the Company's Chief Executive Officer and its General Counsel. Reorganized Company's Senior Management The officers of the Reorganized Company will be substantially the same as the existing officers of Foamex International. Mr. Mabus will remain as President and Chief Executive Officer of the Reorganized Company. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. FREESTAR TECHNOLOGY: Russell Bedford Raises Going Concern Doubt --------------------------------------------------------------- Russell Bedford Stefanou Mirchandani LLP expressed substantial doubt about FreeStar Technology Corporation's ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended June 30, 2006. The auditing firm pointed to the Company's difficulty in generating sufficient cash flow to meet it obligations and sustain its operations. FreeStar recorded a $13,999,773 net loss for the year ended June 30, 2006, a decrease of $8,102,690 or approximately 36% compared to the $22,102,463 loss for the year ended June 30, 2005. The Company says the primary reason for the decrease in net loss was due to the reduction in selling, general, and administrative expenses, which was primarily due to the absence in fiscal year 2006 of expenses related to the long-term incentive compensation package for our senior executives that was adopted in fiscal year 2005. For the year ended June 30, 2006, the Company reported revenue of $2,097,749, compared to $1,602,819 for the year ended June 30, 2005, an increase of $494,930 or approximately 30% . The increase was due primarily to an increase in consulting and development fees by the Company's subsidiary, Rahaxi Processing Oy. The other reason for the increase in revenue was an increase in transaction processing fees by Rahaxi due to an increase in the number of transactions processed. At June 30, 2006, the Company's balance sheet showed total assets of $8,387,891, total liabilities of $1,071,245, and stockholders' deficit of $7,316,646. A full-text copy of FreeStar's annual report is available for free at http://researcharchives.com/t/s?1361 About FreeStar Technology FreeStar Technology Corporation -- http://www.freestartech.com/-- is a payment processing company. Its wholly owned subsidiary Rahaxi Processing Oy., based in Helsinki, is a robust Northern European BASE24 credit card processing platform. Rahaxi currently processes in excess of 1 million card payments per month for such companies as Finnair, Ikea, and Stockman. FreeStar is focused on exploiting a first-to-market advantage for its Enhanced Transactional Secure Software, which is a software package that empowers consumers to consummate e-commerce transactions with a high level of security using credit, debit, ATM (with PIN), electronic cash or smart cards. The company, based in Dublin, maintains satellite offices in Helsinki, Santo Domingo, Dominican Republic, and Geneva. FRENCH LICK: 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 gaming, lodging and leisure sectors, the rating agency confirmed its B3 Corporate Family Rating for French Lick Resorts & Casino LLC as well as its B3 rating on the company's $270 million Senior Secured Secured Mortgage Notes. Moody's assigned the debentures an LGD4 rating suggesting noteholders will experience a 54% loss in the event 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%). French Lick Resorts & Casino LLC, a development stage company, develops a luxury resort casino, two historic hotels, and 45 holes of golf in French Lick, Indiana. GAYLORD ENTERTAINMENT: 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 gaming, lodging and leisure sectors, the rating agency confirmed its B2 Corporate Family Rating for Gaylord Entertainment Company. Moody's also confirmed its B3 ratings on the Company's $350 million 8% Senior Unsecured Notes Due 2013 and $225 million 6.75% Senior Unsecured Notes Due 2014. Moody's assigned those debentures an LGD5 rating suggesting noteholders will experience 77% loss in the event of default. Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Nashville, Tennessee, Gaylord Entertainment Co. -- http://www.gaylordentertainment.com/-- through its subsidiaries, operates as a diversified hospitality and entertainment company. GLOBAL POWER: U.S. Trustee Appoints Seven-Member Creditors' Panel ----------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, appointed seven creditors to serve on an Official Committee of Unsecured Creditors in Global Power Equipment Group Inc. and its debtor- affiliates' chapter 11 case: 1. Steelhead Investments Ltd. Attn: Jeffrey D. Estes c/o HBK Investments L.P. 300 Crescent Court Dallas, TX 75201 Phone: 214-758-6107 Fax: 214-758-1207; 2. Kings Road Investments Ltd. Attn: Erik M.W. Casperson 598 Madison Avenue, 14th Floor, New York, NY 10022 Phone: 212-359-7331 Fax: 212-359-7303; 3. D.B. Zwirn Special Opportunity Fund, L.P. Attn: Robert A. Levinson 745 Fifth Avenue, 18th Floor New York, NY 10151 Phone: 646-720-9140 Fax: 646-720-9040; 4. Aarding Thermal Acoustics B.V., Attn: Norbert Pieterse/Hugo V. Vredendaal Industrieweg 5g Nunspeet, The Netherlands, 8071 C.S. Phone: 31-341-252635 Fax: 31-341-262112; 5. Fan Group Inc. Attn: John E. Tinsley 1701 Terminal Road Suite B Niles, MI 49120 Phone: 269-687-1216 Fax: 269-683-2789; 6. Turner Industries, Inc. Attn: Don Wendt, 1700 South Westport Drive Port Allen, LA 70767, Phone: 225-376-4157 Fax: 225-376-4176; and 7. Cogburn Bros. Inc. Attn: Scott Sullivan, 3300 Faye Rd. Jacksonville, FL 32226 Phone: 904-358-7344 Fax: 904-358-0446. The Committee has selected Landis Rath & Cobb LLP as its counsel in the Debtors' bankruptcy proceedings. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Headquartered in Tulsa, Oklahoma, Global Power Equipment Group Inc., aka GEEG, Inc. -- http://www.globalpower.com/-- provides power generation equipment and maintenance services for its customers in the domestic and international energy, power and infrastructure and service industries. The Company designs, engineers and manufactures a range of heat recovery and auxiliary equipment primarily used to enhance the efficiency and facilitate the operation of gas turbine power plants as well as for other industrial and power-related applications. The Company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The Company and 10 of its affiliates filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045). Attorneys at White & Case LLP and The Bayard Firm, P.A., represent the Debtors. As of Sept. 30, 2005, the Debtors reported total assets of $381,131,000 and total debts of $123,221,000. The Debtors' exclusive period to filed a chapter 11 plan expires on Jan. 26, 2007. GMAC COMMERCIAL: Fitch Cuts Rating on $5.7 Mil. Certificates to B- ------------------------------------------------------------------ Fitch Ratings downgraded and assigned a Distressed Recovery rating to GMAC Commercial Mortgage Securities, Inc., mortgage pass-through certificates, series 2002-FL-1: -- $5.7 million class F to 'B-/DR1' from 'BB'. In addition, this class is affirmed: -- Interest-only class X at 'AAA'. Classes A, B, C, D and E have paid in full. The downgrade is due to the pending sale of the Stevens-Arnold Building note, the only remaining loan in the pool, which Fitch expects to result in a loss to the trust. The loan is currently under contact with a note sale buyer and the sale is estimated to occur in November 2006. The Stevens-Arnold Building is secured by a 100,026 square foot office, research and development building located in Milpitas, California. The loan was transferred to the special servicer after its triple net master leased single tenant, Artesyn Technologies, Inc., vacated the building at lease expiration in December 2005, prior to the loan's final maturity in July 2006. GOLD KIST: 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. Consumer Products sector, the rating agency confirmed its B1 Corporate Family Rating for Gold Kist Inc., and revised its B3 rating from B2 on the company's $130 million, 10.250% Guaranteed Senior Global Notes due March 15, 2014. Additionally, Moody's assigned an LGD5 rating to those bonds, suggesting noteholders will experience a 78% 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 Atlanta, Georgia, Gold Kist Inc. fka formerly Gold Kist Holdings Inc. -- http://ir.goldkist.com/-- is a fully integrated chicken processor and marketer in the United States. The company operates nine divisions, located Alabama, Georgia, Florida, North Carolina and South Carolina. It contracts with 2,300 family farmers to produce approximately 14 million chickens per week. Gold Kist employs more than 16,000 people in its hatcheries, feed mills, processing plants, distribution centers and other operations. GOLDEN STATE: 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. Consumer Products sector, the rating agency affirmed its B1 Corporate Family Rating for Golden State Foods Corp. In addition, Moody's held its probability-of-default ratings and assigned loss-given-default ratings on three loans and a bond issue: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $90MM Sub. Notes B3 B3 LGD5 88% $30MM Gtd. Sr. Sec. Term Loan A Due Feb. 28, 2009 B1 B1 LGD3 48% $30MM Gtd. Sr. Sec. Revolving Credit Facility Due Feb. 28, 2009 B1 B1 LGD3 48% $135MM Gtd. Sr. Sec. Term Loan B Due Feb. 28, 2011 B1 B1 LGD3 48% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Irvine, California, Golden State Foods Corporation -- http://www.goldenstatefoods.com-- processes meat, liquid and vegetable products, and distributes frozen beef patties, condiments, syrup topping, sauces and prepared meats. The company has distributing centers in the U.S., Australia, and Egypt, and operates 12 processing plants that produce such McDonald's essentials as buns, beef, ketchup, and other condiments. One of McDonald's largest suppliers, Golden State is now controlled by Yucaipa, an investment firm which owns 70% of the company, and Wetterau Associates, a management company owning most of the remainder. GOODYEAR TIRE: Borrows $1 Billion Under Revolving Credit Facility ----------------------------------------------------------------- The Goodyear Tire & Rubber Company has significantly enhanced its cash position by borrowing nearly $1 billion under an existing revolving credit facility. The company said it borrowed approximately $675 million on October 13 and $300 million on October 5 under its $1.5 billion U.S. First-Lien Credit Facility. Thus, this particular facility is almost fully drawn, when including its $500 million deposit-funded facility. "Before the start of the United Steelworkers strike in North America, Goodyear had about $1.3 billion in cash and cash equivalents and approximately $1.6 billion in available credit lines," said Richard J. Kramer, executive vice president and chief financial officer. "This action provides additional cash in the unlikely event of a prolonged strike." Goodyear has implemented contingency plans to meet customer needs during the strike, which began on October 5 at 16 facilities in the United States and Canada. "We are shipping products to customers from existing inventory, operating non-affected tire plants as usual, operating affected plants with salaried employees and importing from our international operations," Kramer said. Kramer reiterated Goodyear's position that its goal in the negotiations with the USW is to reach a fair contract that enhances the company's competitiveness and helps Goodyear win with customers. "We cannot accept a contract that creates competitive and cost disadvantages versus our foreign- owned competitors and imports," he said. About Goodyear Tire Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. It has marketing operations in almost every country around the world. Goodyear employs more than 80,000 people worldwide. * * * As reported in the Troubled Company Reporter on June 8, 2006, Fitch affirmed The Goodyear Tire & Rubber Company's Issuer Default Rating at 'B'; $1.5 billion first lien credit facility at 'BB/RR1'; $1.2 billion second lien term loan at 'BB/RR1'; $300 million third lien term loan at 'B/RR4'; $650 million third lien senior secured notes at 'B/RR4'; and Senior Unsecured Debt at 'CCC+/RR6'. As reported in the Troubled Company Reporter on June 23, 2005, Moody's Investors Service assigned a B3 rating to Goodyear Tire & Rubber Company's $400 million ten-year senior unsecured notes. As reported in the Troubled Company Reporter on June 22, 2005, Standard & Poor's Ratings Services assigned its 'B-' rating to Goodyear Tire & Rubber Co.'s $400 million senior notes due 2015 and affirmed its 'B+' corporate credit rating. HARTCOURT COS: Accumulated Deficit Tops $67.8 Million at Aug. 31 ---------------------------------------------------------------- The Hartcourt Companies, Inc., reported a $126,740 net loss on $12.4 million of net revenues for the three months ended Aug. 31, 2006, compared to $31,534 of net income on $10.7 million of net revenues in 2005, the Company disclosed in its first quarter financial statements on Form-10Q filed with the Securities and Exchange Commission. As of Aug. 31, 2006, the Company had an accumulated deficit of $67.8 million. http://researcharchives.com/t/s?1353 Going Concern Doubt Kabani & Company, Inc., expressed substantial doubt about The Hartcourt Companies, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the transition period ended May 31, 2005. The auditing firm pointed to the company's accumulated deficit of $64,874,414 and negative cash flow from operations amounting $1,256,734 at May 31, 2005. The Hartcourt Companies, Inc., is a business development and investment holding company specializing in the Chinese Information Technology market. HERBST GAMING: 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 gaming, lodging and leisure sectors, the rating agency confirmed its B1 Corporate Family Rating for Herbst Gaming Inc. 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 ---------- ------- ------- ------ ---------- Revolver B1 Ba1 LGD2 16% Term Loan B1 Ba1 LGD2 16% 8-1/8% Senior Subordinated Notes B3 B3 LGD5 78% 7% Senior Subordinated Notes B3 B3 LGD5 78% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Las Vegas, Nevada, Herbst Gaming Inc. is a diversified gaming company that focuses on two business lines, slot route operations and casino operations. HEXION SPECIALTY: Loan Refunding Prompts Moody's to Hold Ratings ---------------------------------------------------------------- Moody's Investors Service affirmed the long term debt ratings of Hexion Specialty Chemicals Inc. and changed the outlook on Hexion's ratings to stable from positive following the company's announcement that it plans to increase the size of its term loan to $2 billion and refinance its second lien notes, increasing the outstanding amount by $200 million. Hexion will use the additional proceeds to pay a $500 million dividend to its existing shareholders. The changes to the capital structure will likely change the Loss Given Default assessments for Hexion's rated debt and may cause the ratings of the second lien debt and the company's small pollution control revenue bonds to be downgraded by one notch; this will be determined once the final structures and documentation are reviewed. Moody's also affirmed the company's SGL-2 speculative grade liquidity rating, but this is also subject to change depending on the covenants in the new credit facility. The B2 corporate family rating of Hexion reflects elevated leverage on a historical EBITDA basis, the expectation that cash flows will be reduced by pension contributions and ongoing restructuring costs, integration risk due to the pace of additional tuck-in acquisitions, and concern over financial metrics in the trough of the cycle. Hexion has significant pension liabilities and modest litigation exposure, which is unusual for a highly leveraged company. The ratings benefit from the company's size, product diversity, global operations and the anticipation of significant additional synergies. The company's metrics would map to the upper end of the "B" rating category using Moody's Chemical Industry ratings methodology. However, the pro forma averages may not adequately reflect the company's through-the-cycle performance. The stable outlook reflects the continuing solid operating environment for thermoset resins that has resulted in substantial earnings growth over the past year and the expectation that trailing debt to EBITDA will remain elevated at over 5x and free cash flow to debt will remain below 5% over the next two years. Moody's believes that 2006 EBITDA will be in excess of $525 million excluding pro forma adjustments for ongoing acquisitions and planned synergies. Hexion Specialty Chemicals, Inc., headquartered in Columbus, Ohio is produces commodities such as formaldehyde, bisphenol A and epichlorhydrin, as well as formaldehyde-based thermoset resins, epoxy resins, and versatic acid and its derivatives. The company is also a supplier of specialty resins for inks and specialty coatings sold to a very diverse customer base. Hexion was formed from the merger of Borden Chemicals Inc., Resolution Performance Products LLC, Resolution Specialty Material LLC and the Bakelite Group. HILTON HOTELS: 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 gaming, lodging and leisure sectors, the rating agency confirmed its Ba2 Corporate Family Rating for Hilton Hotels Corporation. 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 ---------- ------- ------- ------ ---------- Senior Notes with an average rate of 8.1% due 2007 - 2031 Ba2 Ba2 LGD4 53% Chilean inflation indexed note effective rate 7.65% due 2009 Ba2 Ba2 LGD4 53% 3.375% Contingently convertible senior notes due 2023 Ba2 Ba2 LGD4 53% Minimum Leases Commitments Ba2 Ba2 LGD4 53% Term Loan A at adjustable rates due 2011 Ba2 Ba2 LGD4 53% Term Loan B at adjustable rates due 2013 Ba2 Ba2 LGD4 53% Revolving loans at adjustable rates, due 2011 Ba2 Ba2 LGD4 53% Senior unsecured debt shelf Ba2 Ba2 LGD4 53% Subordinate debt Shelf Ba3 B1 LGD6 97% Preferred B1 B1 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%). Headquartered in Beverly Hills, California, Hilton Hotels Corp. -- http://www.hilton.com/-- together with its subsidiaries, engages in the ownership, management, and development of hotels, resorts, and timeshare properties, as well as in the franchising of lodging properties in the United States and internationally. INTERACTIVE BRAND: June 30 Balance Sheet Upside-Down by $5,964,118 ------------------------------------------------------------------ At June 30, 2006, Interactive Brand Development Inc.'s balance sheet reported a $5,964,118 total shareholders' deficit resulting from total assets of $46,746,115 and total liabilities of $52,710,233. The company's balance sheet at June 30, 2006, also reported negative working capital with $4,005,038 in total current assets and $35,685,437 in total current liabilities. For the three months ended June 30, 2006, the company incurred a $2,962,064 net loss compared to a $622,340 net income for the three months ended June 30, 2005. Total revenues for the current quarter decreased to $80,520, from total revenues of $1,638,690 for the same period last year. Full-text copies of the company's financial statements for the quarter ended June 30, 2006, is available for free at: http://researcharchives.com/t/s?1364 Based in Deerfield, Florida, Interactive Brand Development, Inc. was an online auction and marketing Web site through its former subsidiary, iBid America. The company finished selling off all its auction-related assets in 2005. It is now focusing its efforts in becoming a media, marketing, and sales holding company for the adult entertainment sector. JACUZZI BRANDS: Inks $1.25 Billion Merger Deal with Apollo ---------------------------------------------------------- Jacuzzi Brands, Inc. has signed a definitive merger agreement under which affiliates of private equity firm Apollo Management L.P. will purchase Jacuzzi Brands in a transaction having a total value of $1.25 billion, which includes the assumption of outstanding debt approximating $260 million, net of cash. Under the terms of the merger agreement, Jacuzzi Brands' shareholders will receive $12.50 per share in cash. The transaction will be financed through a combination of equity contributed by Apollo and debt financing. The Board of Directors of Jacuzzi Brands has approved the merger agreement and has recommended to Jacuzzi Brands' shareholders that they vote in favor of the transaction. In connection with the proposed transaction, Jacuzzi Brands will make a cash tender offer for all of its outstanding 9.625% Senior Secured Notes due 2010. "In the year since we put Al Marini in charge of our overall operations, he and his team have made significant progress in improving the Bath segment and further strengthening Zurn's leadership position," Thomas B. Waldin, Chairman of Jacuzzi Brands, commented. "During this period there has been a significant increase in our share price, and these business advances allow for a transaction that offers a further premium for the benefit of our shareholders." "We are excited to be partnering with George M. Sherman, Non- Executive Chairman of Rexnord Corporation and former President and CEO of Danaher Corporation, in the acquisition of Jacuzzi Brands and look forward to supporting Al Marini and his management team in continuing the success of the Company," Larry Berg, a Senior Partner at Apollo said. "Upon completion of the merger, George will assume the role of Non-Executive Chairman of Jacuzzi Brands and will be a co-investor with Apollo in this transaction." "This is an exciting time for the employees, customers, and suppliers of Zurn and the Jacuzzi Bath and Spa businesses," Alex Marini, President and Chief Executive Officer of Jacuzzi Brands, said. "With the resources of Apollo and the experience brought by George Sherman, we will be well positioned to develop and implement cutting-edge strategies to build upon our already strong leadership positions. I want to stress to our customers and suppliers that they can expect to continue to receive the same high levels of service, product quality, and innovation they have enjoyed for many years." "Jacuzzi Brands brings two attractive operating segments to Apollo's portfolio: Zurn, a leader in the domestic commercial water management industry, and Jacuzzi, a global leader in branded bath, spa and shower products," Mr. Sherman. "I look forward to working with Al Marini and his management teams in both operating segments to build upon the strong positions they have achieved in their respective markets." The acquisition is subject to certain closing conditions, including the approval of Jacuzzi Brands' shareholders, regulatory approval, and the receipt by Apollo of all necessary debt financing, and is expected to close in the first quarter of 2007. In addition, it is contemplated that the Zurn business will be transferred to an Apollo portfolio company, Rexnord Corporation, following the close of this transaction at a price determined through negotiations between Rexnord and the Apollo affiliates that have agreed to purchase Jacuzzi Brands. The bath business will become an independent portfolio company of Apollo. Certain members of Jacuzzi Brands' management, including Alex Marini, are expected to remain with the businesses after the closing. Lazard Freres & Co. LLC advised Jacuzzi Brands on this transaction and provided a fairness opinion to the Board of Directors of Jacuzzi Brands. Credit Suisse served as advisor to Apollo. About Apollo Management Apollo, founded in 1990, is a leader in private equity, debt and capital markets investing. Since its inception, Apollo has invested over $16 billion in companies representing a wide variety of industries, both in the U.S. and internationally. Apollo is currently investing its sixth private equity fund, Apollo Investment Fund VI, L.P., which along with related co-investment entities, represents approximately $12 billion of new capital. About Jacuzzi Brands Jacuzzi Brands, Inc. -- http://www.jacuzzibrands.com/-- through its subsidiaries, manufactures and distributes branded bath and plumbing products for the residential, commercial and institutional markets. These include whirlpool baths, spas, showers, sanitary ware and bathtubs, as well as professional grade drainage, water control, commercial faucets and other plumbing products. The Company's products are marketed under its portfolio of brand names, including JACUZZI(R), SUNDANCE(R), ZURN(R), and ASTRACAST(R). JACUZZI BRANDS: Apollo Merger Deal Prompts Fitch's Negative Watch ----------------------------------------------------------------- Fitch Ratings has placed the ratings of Jacuzzi Brands, Inc., on Rating Watch Negative after JJZ's disclosure that a definitive merger agreement has been signed under which affiliates of private equity firm Apollo Management L.P. will purchase Jacuzzi Brands in a transaction having a total value of $1.25 billion, which includes the assumption of outstanding debt approximating $260 million, net of cash. The acquisition price is approximately 9.7 times trailing twelve months EBITDA. The current ratings are: -- Issuer Default Rating: 'B'; -- Asset Based Revolving credit facility: 'BB/RR1'; -- Senior Secured Notes: 'B+/RR3'. Under the terms of the merger agreement, Jacuzzi Brands' shareholders will receive $12.50 per share in cash. The transaction will be financed through a combination of equity contributed by Apollo and debt financing. The Board of Directors of Jacuzzi Brands has approved the merger agreement and has recommended to Jacuzzi Brands' shareholders that they vote in favor of the transaction. In connection with the proposed transaction, Jacuzzi Brands will make a cash tender offer for all of its outstanding 9.625% Senior Secured Notes due 2010, which is essentially all of the debt at JJZ. The acquisition is subject to certain closing conditions, including the approval of Jacuzzi Brands' shareholders, regulatory approval, and the receipt by Apollo of all necessary debt financing, and is expected to close in the first quarter of 2007. In addition, it is contemplated that the Zurn business will be transferred to an Apollo portfolio company, Rexnord Corporation, following the close of this transaction. The bath business will become an independent portfolio company of Apollo. RBS Global Inc., the parent company of Rexnord Corp., has agreed to buy the plumbing products business (Zurn) of JJZ for $950 million in cash from Apollo Management LP. Rexnord stated the purchase would be financed through an equity investment by Apollo and its affiliates of approximately $290 million and debt financing of approximately $660 million. While there is risk of a deteriorating credit profile, the note holders have a first priority lien on and security interest in substantially all of the domestic real property, plant and equipment. If JJZ's debt is retired, Fitch will withdraw its ratings. Ratings, including the IDR, could be lowered reflecting a more leveraged entity. Ratings could also move down on any senior secured notes not tendered because they may have weaker covenant protection. JACUZZI BRANDS: Apollo's Offer Cues Moody's to Review Ratings ------------------------------------------------------------- Moody's Investors Service placed Jacuzzi Brands Inc. on review for possible downgrade to reflect the announcement that Jacuzzi has agreed to be acquired by private equity firm Apollo Management L.P. for approximately $1.25 billion before fees, expenses, and other liabilities. Jacuzzi Brands plans to make a cash tender offer for all of its outstanding 9.625% senior secured Notes due 2010. It is contemplated that Jacuzzi's operating subsidiary Zurn will be acquired by Rexnord, an Apollo portfolio company. Moody's believes the transaction will close in the first quarter of 2007. These ratings were placed on review for possible downgrade: * Corporate Family Rating, rated B2; * $380 million 9.625% gtd notes due 2010, rated B2; * Probability of default rating, rated B2; * Loss given default assessment, LGD 50%, LGD-4. Jacuzzi Brands, Inc., headquartered in West Palm Beach, Florida, manufactures a broad range of products through operating subsidiaries in two business segments, bath products and plumbing products. Sales for the first half of 2006, excluding Rexair, totaled $845 million. KINETEK INC: S&P Says Ratings Remain on Watch After Purchase Offer ------------------------------------------------------------------ Standard & Poor's Ratings Services said that its ratings on Kinetek Inc. and related entities, including its 'B-' corporate credit rating, remain on CreditWatch with developing implications where they were placed on Sept. 13, 2006. This follows the announcement that private equity fund The Resolute Fund will acquire the company from current owner Jordan Industries Inc. (CCC+/Negative/--). Proceeds of the transaction are expected to be sufficient to refinance substantially all of Kinetek's indebtedness, including the company's $270 million senior unsecured notes due Nov. 15, 2006. The transaction is expected to close in the first week of November 2006. If it is completed successfully, Standard & Poor's expects to resolve the CreditWatch listing and to raise the corporate credit rating to 'B' from 'B-'. The outlook would be stable. Conversely, if the transaction is delayed or failed, or if the company defaults on its revolving credit facility, which matures prior to the expected close of the transaction, the rating could be lowered. At the same time, Standard & Poor's assigned its 'B' bank loan rating and a recovery rating of '2' to Kinetek's proposed $265 million first-lien credit facilities, indicating its expectation for a substantial recovery of principal by first-lien lenders (80%-100%) in the event of a default. In addition, Standard & Poor's assigned its 'CCC+' bank loan and a recovery rating of '5' to the proposed $85 million second-lien term loan, indicating its expectation of negligible recovery of principal by second-lien lenders in the event of a default. When the CreditWatch is resolved, the ratings that are assigned will be affirmed. "Subject to successful completion of the acquisition, the pending higher ratings will reflect Kinetek's improved liquidity as the significant refinancing risk, which had been a major rating factor in the recent past, will be removed," Standard & Poor's credit analyst Gregoire Buet said. KOLORFUSION INT'L: Carver Moquist Raises Going Concern Doubt ------------------------------------------------------------ Carver Moquist & O'Connor, LLC, in Minneapolis, Minnesota, raised substantial doubt about Kolorfusion International, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended June 30, 2006, and 2005. The auditor pointed to the Company's recurring operating losses and stockholders' deficit. For the year ended June 30, 2006, Kolorfusion International, Inc., reported a $292,378 net loss on $2,086,758 of total revenues compared with a $572,136 net loss on $2,344,019 of total revenues for the same period in 2005. At June 30, 2006, the Company's balance sheet showed $1,199,573 in total assets and $1,684,382 in total liabilities, resulting in a $484,809 stockholders' deficit. The Company had a $1,242,431 deficit at June 30, 2005. The Company current balance sheet also showed strained liquidity with $515,056 in total current assets available to pay $1,121,234 in total current liabilities coming due within the next 12 months. A full-text copy of the Company's Annual Report is available for free at http://ResearchArchives.com/t/s?136b Centennial, Colorado-based Kolorfusion International, Inc. -- http://www.kolorfusion.com/-- develops and markets a patented system for transferring colors and patterns into coatings on metal, wood, glass, and directly into plastic products. LAND O' LAKES: 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. Consumer Products sector, the rating agency held its Ba3 Corporate Family Rating for Land O' Lakes, Inc. Additionally, Moody's revised and held its probability-of- default ratings and assigned loss-given-default ratings on these loans and bond issues: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $190.7 million FIX 7.45% Gtd. Cap. Securities Due Oct. 15, 2028 B2 B2 LGD5 88% $350 million 8.750% Gtd. Global Notes Due Nov. 15, 2011 B1 Ba3 LGD4 58% $175 million 9.00% Gtd. Sr. Sec. Global Notes Due Dec. 15, 2010 Ba3 Ba2 LGD3 33% $225 million Sr. Sec. Revolving Credit Facility Ba2 Ba1 LGD2 21% 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 North Arden Hills, Minnesota, Land O' Lakes, Inc. is owned by and serves more than 7,000 dairy farmer members and 1,300 community cooperatives. Land O' Lakes is the one of the largest dairy co-ops in the U.S., along with Dairy Farmers of America and California Dairies. It provides its members with wholesale fertilizer and crop protection products, seed, and animal feed. Land O' Lakes produces one of its oldest products, LAND O' LAKES butter. It also produces packaged milk, margarine, sour cream, and cheese. The co-op's animal-feed division, Land O'Lakes Purina Feed, is a leading animal and pet food maker. LEVITZ HOME: Panel Taps Gazes LLC as Special Counsel ---------------------------------------------------- The Official Committee of Unsecured Creditors of Levitz Home Furnishings, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Gazes LLC, as its special litigation counsel to investigate and potentially pursue actions against the Debtors' officers and directors for breach of fiduciary duty. Creditors Committee Chairperson Richard E. Caruso relates that the Committee has been made aware of two civil actions currently pending in the U.S. District Court for the Southern District of New York: a) Xerion Partners I LLC, et al. v. Resurgence Asset Management, LLC, et al.; and b) Bay Harbour Management LLC v. Jay Carothers, et al. Mr. Caruso says Gazes would be responsible for both investigating and pursuing any action to be brought against the Debtors' officers and directors on behalf of the Debtors' estates, at the behest of the Creditors Committee. PLVTZ, LLC, concurs with the Creditors Committee's decision to retain Gazes as special litigation counsel. As special counsel, Gazes will: (a) review and analyze the legal and factual bases of the Actions; (b) analyze whether the pursuit of similar actions by the Creditors Committee would be likely to add value to the Debtors' estate and the GUC Trust; and (c) manage any actions brought by the Creditors Committee against the Debtors' officers and directors to resolution, whether through judgment after trial, settlement, or dismissal. The Creditors Committee submits that Gazes possesses the expertise in bankruptcy litigation and in representing committees and unsecured creditors in Chapter 11 cases to perform the tasks required. Gazes will be compensated on a contingent fee basis in an amount representing 30% of the gross amounts realized through judgment, settlement or other disposition of any actions commenced by the firm on behalf of the Creditors Committee. In addition to legal fees, Gazes will provide the Creditors Committee with monthly statements that will set forth expenses incurred and costs advanced on the Creditors Committee's behalf. Furthermore, Gazes will be permitted, upon Court approval, to receive from the gross recoveries of any actions commenced by Gazes on behalf of the Creditors Committee its percentage fee, as applicable, plus 100% of its expenses. Ian J. Gazes, Esq., a partner at the firm, assures the Court that he and his firm represent no interest adverse to the Creditors Committee, the Debtors, or their estates, in the matters upon which it is to be engaged. Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- retails furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. The Company and its 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq., at Jones Day, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman LLP represents the Official Committee of Unsecured Creditors. Levitz sold substantially all of its assets to Prentice Capital on Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) LOEHMANNS CAPITAL: 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 and Canadian Retail sector, the rating agency confirmed its B2 Corporate Family Rating for Loehmann's Capital Corporation. 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 ---------- ------- ------- ------ ---------- $20 mil. Class A Floating Rate Notes due 2011 B3 B2 LGD3 46% $55 mil. Class A 12% Sr. Sec. Notes due 2011 B3 B2 LGD3 46% $35 mil. Class B Sr. Sec. Notes due 2011 Caa1 Caa1 LGD5 89% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in The Bronx, New York, Loehmann's Capital Corp., is an off-price retailer of apparel and accessories, and operates 48 stores throughout the U.S. M-FOODS 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. Consumer Products sector, the rating agency affirmed its B1 Corporate Family Rating for M-Foods Holdings, Inc., and its subsidiary, Michael Foods, Inc. In addition, Moody's affirmed/revised its probability-of-default ratings and assigned loss-given-default ratings on these debt obligations and bond issues: Issuer: M-Foods Holdings, Inc. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $154.06 million 9.750% Sr. Discount Notes Due Oct. 1, 2013 Caa1 B3 LGD6 94% Issuer: Michael Foods, Inc. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $150 million 8.000% Gtd. Sr. Sub. Global Notes Due Nov. 15, 2013 B3 B3 LGD5 84% $540 million Gtd. Sr. Sec. Term Loan Due Jan. 20, 2010 B1 Ba3 LGD3 37% $100 million Gtd. Sr. Sec. Revolving Credit Facility Due Nov. 20, 2009 B1 Ba3 LGD3 37% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Minnetonka, Minnesota M-Foods Holdings, Inc., and its subsidiary, Michael Foods Inc., is producer and distributor of frozen, pre-cooked, and dried egg products. MCCORMICK LLC: Case Summary & Eight Largest Unsecured Creditors --------------------------------------------------------------- Debtor: McCormick, LLC 976 Airport Road, Suite 150 Chapel Hill, NC 27514 Bankruptcy Case No.: 06-81321 Debtor-affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- John G. McCormick, P.A. 06-81324 Chapter 11 Petition Date: October 13, 2006 Court: Middle District of North Carolina (Durham) Judge: William L. Stocks Debtors' Counsel: Stephanie Osborne-Rodgers, Esq. Northern Blue, LLP P.O. Box 2208 Chapel Hill, NC 27514-2208 Tel: (919) 968-4441 Total Assets Total Debts ------------ ----------- McCormick, LLC $3,119,666 $2,683,012 John G. McCormick, P.A. $49,186 $802,186 A. McCormick, LLC's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Orange County Tax Collector Real Property Taxes $2,045 P.O. Box 8181 North Street, Chapel Hillsborough, NC 27278 Hill, NC Real Property Taxes $1,111 F-2 Brookside, Chapel Hill, NC Real Property Taxes $935 927 Shadylawn, Chapel Hill, NC Real Property Taxes $570 927 Shadylawn Extension Chapel Hill, NC Real Property Taxes $3,934 400 McMasters Street Chapel Hill, NC Real Property Taxes $3,906 404 McMasters Street Chapel Hill, NC Real Property Taxes $3,780 301-305 Homestead Chapel Hill, NC Real Property Taxes $2,953 621 Sykes Street Chapel Hill, NC Real Property Taxes $2,722 408 McMasters Street Chapel Hill, NC Real Property Taxes $10,855 1-7 Amity Court Chapel Hill, NC Real Property Taxes $5,549 102 Christopher Court Chapel Hill, NC Real Property Taxes $5,313 111 Cameron Court Chapel Hill, NC Real Property Taxes $4,932 402 McMasters Street Chapel Hill, NC Real Property Taxes $4,929 112 Kenan Street Chapel Hill, NC Real Property Taxes $4,744 104 Christopher Chapel Hill, NC Real Property Taxes $4,661 106 Christopher Chapel Hill, NC Real Property Taxes $4,432 211-219 Homestead Chapel Hill, NC Real Property Taxes $4,389 617 Sykes Street Chapel Hill, NC Real Property Taxes $3,940 406 McMasters Street Chapel Hill, NC Internal Revenue Service Unknown Philadelphia, PA 19255-0030 B. John G. McCormick, P.A.'s Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ D.R. Horton, Inc. $802,186 c/o Scott Zimmerman 101 North Columbia Street Chapel Hill, NC 27514 Employment Security Commission Unknown 700 Wade Avenue Raleigh, NC 27605-1167 Internal Revenue Service Unknown Philadelphia, PA 19255-0030 Lawyer Mutual Liability Unknown Insurance Co. NC Department of Revenue Unknown Orange County Tax Collector Unknown MEDCOM USA: S.E. Clark & Co. Raises Going Concern Doubt ------------------------------------------------------- S.E. Clark & Company, PC, expressed substantial doubt about MedCom USA, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended June 30, 2006 and 2005. The auditing firm pointed to the Company's accumulated losses and capital shortage. MedCom incurred a $6,338,555 net loss for the fiscal year ended June 30, 2006, from a $7,133,884 loss in the prior year. Sales and marketing expenses along with interest expenses have increased for Fiscal 2005. The Company says it incurred these marketing and sales expenses in relation to increased demand for its products and services. Revenues for Fiscal 2006 increased to $6,000,257 from $2,747,271 during Fiscal 2005. This increase in revenue is directly the result of changes in the Company's strategic direction in core operations. The restructuring included discontinuing declining or unprofitable business sectors and officer and management changes. The Company's balance sheet at June 30, 2006, showed $3,681,139 in total assets and $10,516,537 in total liabilities, resulting in a stockholders' deficit of $6,835,398. A full-text copy of the Company's annual report is available for free at http://researcharchives.com/t/s?1366 MedCom USA, Inc. (OTC: EMED) -- http://www.medcomusa.com/-- provides innovative healthcare and financial transaction solutions for electronically processing HIPAA compliant transactions within the healthcare industry. MedCom USA provides a terminal based service package and a compatible Web Portal add-on for physicians, clinics and hospitals and dentists that include the following services: Real-time transactions including; Patient Eligibility, Referrals, Claims Status and Service Authorizations, 100% Paperless Claims Processing, Patient Easy Pay, Credit/Debit Cards, and Check Guarantee. MedCom USA is the licensor for a patented card activation program. MERISANT WORLDWIDE: 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. Consumer Products sector, the rating agency confirmed its Caa3 Corporate Family Rating for Merisant Worldwide, Inc., and its subsidiary, Merisant Co. Additionally, Moody's revised/held its probability-of-default ratings and assigned loss-given-default ratings on these loans and note issues: Issuer: Merisant Worldwide, Inc. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $136.04 million Sr. Sub. Discount Notes Due May 15, 2014 C Ca LGD6 92% Issuer: Merisant Co. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $36.650 million Gtd. Sr. Sec. Term Loan A Due Jan. 11, 2009 Caa1 B2 LGD2 10% $225.00 million 9.500% Sr. Sub. Global Notes Due July 15, 2013 Ca Ca LGD4 68% $35.00 million Gtd. Sr. Sec. Revolving Credit Facility Due Jan. 11, 2009 Caa1 B2 LGD2 10% $165.83 million Gtd. Sr. Sec. Term Loan A Due Jan. 11/2009 Caa1 B2 LGD2 10% 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 Chicago, Illinois, Merisant Worldwide, Inc. and its subsidiary, Merisant Co. -- http://www.merisant.com/-- are international corporations that manufacture and market a variety of tabletop sweetener products with nearly 20 regional brands and sales in more than 100 countries worldwide. Its sweetener products include Equal, Canderel, and Nutrasweet. The companies control more than one-third of the aspartame market. Pegasus Capital Advisors owns almost 89% of the company. MESABA AVIATION: Wants to Reopen Record on CBA Rejection -------------------------------------------------------- Mesaba Aviation, Inc. asks the Honorable Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota to reopen the record on its request for authority to reject collective bargaining agreements with unions pursuant to Section 1113 of the Bankruptcy Code, to the extent necessary to address the two issues identified by the U.S. District Court for the District of Minnesota as being the subject of remand. The two issues are: (a) whether the Debtor's evidence supports the Bankruptcy Court's conclusion that a snap-back provision would be futile and would hinder the Debtor's reorganization; and (b) whether the Debtor has met its burden of proof to show that its Section 1113 proposals treat the unions -- the Aircraft Mechanics Fraternal Association, Association of Flight Attendants-CWA, AFL-CIO, and the Air Line Pilots Association -- fairly and equitably in light of any sacrifices that MAIR Holdings, Inc., may be asked to make in the Debtor's reorganization. Pursuant to Section 1113(c), the Debtor also seeks the Court's authority to reject its CBAs with the Unions. According to Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman, in Minneapolis, Minnesota, the Debtor's need for Section 1113(c) relief is more acute than ever because has not reached a comprehensive settlement with its Unions. Mr. Meyer notes that since June 29, 2006, the Debtor: (a) has met with the ALPA and AMFA as often as they made themselves available; and (b) has repeatedly sought to meet with the AFA under the auspices of the National Mediation Board, and the NMB has issued multiple notices to the Debtor and the AFA for bargaining, but the AFA has steadfastly refused to attend. Mr. Meyer tells Judge Kishel that the Debtor gave the Unions all relevant information as is necessary to evaluate its proposals; and has stated consistently that consensual agreements with its Unions are the most desired outcome. As of Sept. 29, 2006, the Debtor has reached agreement only with the Transport Workers Union of America. "Uniformly, AMFA, AFA and ALPA adhere to the position that the Company does not need 19.4% in labor savings for six years," Mr. Meyer says. Furthermore, the Debtor has made all reasonable efforts to explain to the Unions the necessity of firmly identifying the cost structure it needs to successfully negotiate a new Omnibus airline services agreement with Northwest Airlines, Inc., and following through on the conditional bid it placed on Jan. 17, 2006, as amended, in response to a Northwest RFP for 126 regional jet aircraft. Mr. Meyer submits that the Debtor's survival is dependent on securing immediate relief under Section 1113(c) because it's losing money at the rate of approximately $1,000,000 per week. The Debtor believes, and has so advised the Unions, that their reasons for refusing to bargain do not constitute good cause. A delay in the Section 1113(c) process seriously jeopardizes the Debtor's ability to not only survive, but to take timely steps to put in place the principal building block of its plan of reorganization. Because the Unions have failed to provide good cause for rejecting the Debtor's Section 1113 proposals, the Debtor has no alternative but to reject the CBAs, Mr. Meyer contends. Mr. Meyer submits that the Debtor's Section 1113 proposals, as well as the underlying Business Plan, were based on the most complete and reliable information available to the Debtor at the time the proposals were made. Moreover, the Debtor's Section 1113 proposals assure that all relevant constituencies are treated fairly and equitably. The Bankruptcy Court will consider the Debtor's request on October 10, 2006. If there are no objections filed by October 4, the Bankruptcy Court may grant the request without a hearing. Unions Seek Discovery on Disputed Issues The Unions ask the Bankruptcy Court to allow a discovery for the purpose of investigating factual matters related to the issues of: (i) the effect of "snap-back" provisions in future contracts with the Unions; and (ii) how the proposed modifications to the Unions' contracts would affect creditors and other affected parties. A full-text copy of a summary of the issues raised in the "Discovery Requests," divided into two categories (i) those matters on which the parties have reached agreement, and (ii) those matters on which agreement has not been reached, is available for free at: http://researcharchives.com/t/s?132c Representing ALPA, James Jorissen, Esq., at Leonard, O'Brien, Spencer, Gale & Sayre, Ltd., in Minneapolis, Minnesota, notes that although the Unions could not know what specific issues would be raised by the Debtor in its Section 1113 request, they determined that, in light of the fast-approaching hearing date, discovery should be commenced immediately. Among other things, the Unions: * demand production of 8 categories of documents; and * demand a designation of a witness to give deposition testimony regarding 16 specified topics. The Unions believe that all of the information and materials sought through the Discovery Requests is relevant to the two issues that are indisputably at issue. In addition to being relevant, the information and materials sought through the Discovery Requests are plainly relevant to the Unions' analysis of the proposals included in the Debtor's most recent proposals, and are, therefore, discoverable, Mr. Jorissen tells Judge Kishel. Mr. Jorissen relates that on Sept. 29, 2006, counsel for ALPA and the Debtor conferred to try to resolve the disagreement. Despite good faith efforts on the part of all participants, however, the parties were unable to reach agreement. Thus, the Unions ask the Bankruptcy Court for an expedited treatment to the Discovery Requests. Specifically, the Unions ask the Court to direct that any response to the Discovery Requests must be filed on or before Oct. 7, 2006. Mr. Jorissen asserts that if the Unions are to have any reasonable opportunity to review and analyze any responses to the Discovery Requests in time to assist in preparing for the hearing on the Debtor's request, the responses must be provided before the deadline established by the applicable rules generally. MAIR Wants Discovery Requests Modified MAIR objects to the Discovery Requests to the extent that the Unions seek discovery that is outside the scope of appropriate discovery under Rule 26(b) of the Federal Rules of Civil Procedure. Kenric D. Kattner, Esq., at Haynes and Boone, LLP, in Houston, Texas, relates that the Unions seek to compel the Debtor to respond to all their discovery requests by Oct. 7, 2006. Yet, the Requests did not address the scope of discovery as to MAIR. Mr. Kattner argues that given the limited relief that the Debtor seeks in its latest Section 1113 request, the Bankruptcy Court should: (a) determine what discovery is appropriate for the contested matter; (b) limit ALPA's document requests to MAIR; and (c) limit the deposition topics for MAIR's designated representative. "Generally, MAIR is willing to produce documents and to give deposition testimony within the scope of discovery that is required of Mesaba," Mr. Kattner says. "However, MAIR should not be subjected to discovery that is broader in scope than the discovery that applies to Mesaba." To the extent necessary, MAIR asks the Bankruptcy Court to modify the deposition notice and the "Subpoena Duces Tecum" to reflect, among other things, that: (a) the deposition of MAIR's designated representative will occur on Oct. 9, 2006; (b) the deposition topics will be limited to appropriate areas of inquiry for the Section 1113 request, as determined by the Court at the Discovery Requests' October 5 hearing; (c) MAIR is only required to produce documents that are within the scope of relevance regarding the Section 1113 request, as determined by the Court at the October 5 Hearing; (d) any documents produced or deposition testimony given should be subject to the confidentiality provisions of the Court's ruling dated Feb. 10, 2006, or other similar confidentiality ruling. Given the circumstances and the expedited nature of the underlying Section 1113 contested matter, ALPA's discovery requests, and the October 5 Hearing, MAIR asks the Bankruptcy Court to waive the requirements of Rule 7037-1 of the Local Rules of the U.S. Bankruptcy Court for the District of Minnesota. MAIR further asks the Court to compel the parties to bear their own costs in the discovery matter. 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. (Mesaba Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) MESABA AVIATION: Wants Unions to Refrain from Going On Strike ------------------------------------------------------------- Mesaba Aviation, Inc. asks the U.S. Bankruptcy Court for the District of Minnesota for a preliminary injunction directing the Aircraft Mechanics Fraternal Association, Association of Flight Attendants-CWA, AFL-CIO, and the Air Line Pilots Association, to refrain from illegal job actions such as strikes, work stoppages, or withdrawal of services. Specifically, the Debtor asks the Court for: (a) a judgment declaring that its latest Section 1113(c) of the Bankruptcy Code request does not violate any provisions of the Railway Labor Act or any other law; (b) the preliminary injunction, to be made permanent upon final judgment, directing the Union, and all persons acting in concert or participation with them, to refrain, in any manner or by any means, from directing, calling, causing, authorizing, inducing, instigating, conducting, continuing, encouraging or engaging in any: * strike, * slowdown, * work stoppage, * refusal to work, * overtime ban, * sick-out, * withdrawal of services, or other interferences with the Debtor's usual operation before exerting every effort to make and maintain arguments and exhausting major dispute resolution procedures of the RLA; (c) the preliminary injunction, to be made permanent upon final judgment, directing the AFA-CWA, AFL-CIO and all persons acting in concert or participating with AFA (1) to make every reasonable effort to settle its dispute with the Debtor and (2) to attend all negotiation meetings scheduled by the National Mediation Board or its mediator in NMB Case No. A-13405; and (d) award of damages in the amount as the Bankruptcy Court determines that the Debtor has suffered as a result of the Union's unlawful activities, including the Debtor's attorneys' fees and costs. Timothy R. Thornton, Esq., at Briggs and Morgan P.A., in Minneapolis, Minnesota, notes that the RLA prohibits lawlessness. Carrier unions and employees are, therefore, precluded from resorting to self-help without first exhausting mandatory bargaining procedures. The "status quo" must likewise be maintained and economic coercion withheld until the parties are released by the NMB and the mandatory 30-day "cooling off" period has run, Mr. Thornton adds. The Debtor has addressed the two remanded issues identified by the U.S. Bankruptcy Court for the District of Minnesota by filing a second renewed request for Section 1113(c) relief with the Bankruptcy Court, Mr. Thornton explains. The Debtor expects the Bankruptcy Court to finally authorize the rejection of the existing collective bargaining agreements with the Unions on Oct. 13, 2006. The Debtor had asked the Court to reopen the record on its request for authority to reject collective bargaining agreements with unions pursuant to Section 1113 of the Bankruptcy Code. Mr. Thornton notes that receiving authorization to reject the CBAs, and impose the Section 1113 proposals immediately, are critical to the Debtor's survival. The Debtor's cash position and the covenants in its DIP financing agreement require that the Debtor achieve concessions by Oct. 15, 2006, to allow it to access DIP financing and forestall liquidation. According to Mr. Thornton, the Debtor has made repeated attempts, pre- and post-Section 1113(c) requests, to negotiate labor concessions that would have obviated the need for the Section 1113(c) rejection. The Debtor has made every effort to resolve the dispute without judicial intervention -- advised the leadership of the Unions that strikes would violate the RLA, and that the Debtor would be forced to seek immediate injunctive relief if the Unions failed to disavow any strike intentions. However, Mr. Thornton says, the Unions have still committed to strike if the Debtor employs Section 1113 to reject their CBAs. Mr. Thornton informs Judge Kishel that a strike by the Unions would result in: (a) the Debtor's liquidation because Federal Aviation Administration training requirements make pilots and flight attendants, as a practical matter, irreplaceable on short notice; and (b) the deprivation of the Debtor's more than 3,000 workers of their livelihood. Although the Debtor would struggle to survive, with its minimal financial resources, it could not endure a strike for more than a few days, Mr. Thornton says. At this point of the Debtor's bankruptcy proceeding, the creditors would brook no job action before demanding liquidation, he continues. Moreover, a demise or liquidation of the Debtor would: (i) hurt the many communities in Minnesota and other states that depend on the Debtor's air services, including the 19 cities for which it provides the only commercial service; and (ii) injure and complicate Northwest Airlines' reorganization. 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. (Mesaba Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) MOONEY AEROSPACE: Files Restated December 31, 2005 Annual Report ---------------------------------------------------------------- Mooney Aerospace Group, Ltd. filed with the Securities and Exchange Commission a restated annual report for the fiscal year ended Dec. 31, 2005, reflecting changes resulting from the restatement of the company's 2004 financial statements. The company restated its 2004 financial statements to: 1) reflect the transfer of Mooney Airplane Company, Inc. to Allen Holding & Finance Ltd. in May 2004 and the company's subsequent re-acquisition of MAC from Allen in December 2004; 2) correct an error in the calculation of the gain from the forgiveness of debt in connection with the company's emergence from bankruptcy in December 2004 and revise its related disclosures; 3) correct amounts presented in the Consolidated Statement of Stockholders' Deficiency and footnotes to the consolidated financial statements; and 4) corrected 2004's high and low stock prices. Restated 2005 Results The restated Dec. 31, 2005 balance sheet showed a $35,950,000 total stockholders' deficit resulting from total assets of $23,944,000 and total liabilities of $59,894,000. The company's balance sheet at Dec. 31, 2005, also showed strained liquidity with $17,370,000 in total current assets and $451,750,000 in total current liabilities. Net loss for the year ended Dec. 31, 2005, increased to $13,553,000 from a $7,320,000 net loss for the year ended Dec. 31, 2004. Net sales for the current year increased to $42,083,000 from a $19,314,000 net sales in the previous year. Full-text copies of the company's restated financial statements for the year ended Dec. 31, 2005, are available for free at: http://researcharchives.com/t/s?1368 About Mooney Aerospace Headquartered in Kerrville, Texas, Mooney Aerospace Group, Ltd. -- http://www.mooney.com/-- is a general aviation holding company that owns Mooney Airplane Co., that designs and manufactures four- place, single-engine, retractable gear aircraft, sells spare parts, manufactures aircraft components for other aerospace companies, and repairs aircraft. The Company filed for chapter 11 protection on June 10, 2004 (Bankr. Del. Case No. 04-11733). Mark A. Frankel, Esq., at Backenroth Frankel & Krinsky LLP, represented the Debtor. When the Company filed for protection from its creditors, it listed $16,757,000 in total assets and $69,802,000 in total debts. Judge Walrath confirmed Mooney's Plan of Reorganization on Dec. 15, 2004, and formally closed Mooney's bankruptcy cases on May 5, 2005. MORGAN STANLEY: S&P Revises Watch on Notes' B Rating to Positive ---------------------------------------------------------------- Standard & Poor's Ratings Services revised the CreditWatch implications of its 'B' rating on the $3 million class A-7 secured fixed-rate notes from Morgan Stanley ACES SPC's series 2006-8 to positive from developing. The rating was initially placed on CreditWatch developing on March 22, 2006. The rating action reflects the Sept. 29, 2006, revision of the CreditWatch implications of the rating on the referenced obligations issued by Huntsman International LLC to positive from developing. Morgan Stanley ACES SPC's $46 million secured fixed-rate notes series 2006-8 is a swap-dependent synthetic transaction that is weak-linked to the lower of: (i) the ratings on the respective reference obligations for each class; (ii) the long-term rating on the swap counterparty and contingent forward counterparty's guarantor, Morgan Stanley ('A+'); and (iii) the credit quality of the underlying securities, BA Master Credit Card Trust II's class A certificates from series 2001-B due 2013 ('AAA'). MOVIE GALLERY: 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 and Canadian Retail sector, the rating agency confirmed its Caa1 Corporate Family Rating for Movie Gallery, 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 ---------- ------- ------- ------ ---------- $75 mil. Senior Sec. Revolving Credit Facility Caa1 B3 LGD3 41% Term Loan A Caa1 B3 LGD3 41% Term Loan B Caa1 B3 LGD3 41% $325 mil. 11% Sr. Unsec. Notes Caa3 Caa2 LGD5 88% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Dothan, Alabama, Movie Gallery, Inc. -- http://www.moviegallery.com/-- is a North American video rental Company with approximately 4,800 stores located in all 50 U.S. states, Canada and Mexico. NATIONAL BEEF: 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. Consumer Products sector, the rating agency held its B2 Corporate Family Rating for National Beef Packaging Company LLC. Moody's revised its B3 rating to Caa1 on the company's $160 million, 10.5% Senior Global Notes Due Aug. 1, 2011. In addition, the rating agency assigned an LGD5 to those notes, suggesting noteholders will experience an 87% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Kansas, Missouri, National Beef Packaging Company LLC is a U.S. meatpacker and produces boxed, case-ready, portion- controlled, and branded fresh beef products for domestic and export customers. Its refrigerated trucking unit, National Carriers, transports beef within the U.S. The company has introduced its Naturewell Natural Beef and NatureSource brands of corn-fed, naturally raised beef products for sale through retail grocers. NATIONAL ENERGY: Committees Want Claim Inclusion Moved to Oct. 2 ---------------------------------------------------------------- The steering committees for the Lake Road and La Paloma project credit facilities, acting for and on behalf of certain syndicates of lenders to the Lake Road and La Paloma power projects, ask the U.S. Bankruptcy Court for the Middle District of Maryland to extend a June 19, 2006 Order Authorizing Inclusion of Disallowed Claims through Oct. 2, 2006. The Lenders are seeking allowance of additional Class 3 Lake Road and La Paloma Project Guarantee Claim amounts consisting of the Interest Claim aggregating $90,872,298 in Tranche A loan interest accrued by non-debtor project companies, and Expenses Claim amounting to $10,616,673. The U.S. District Court for the District of Maryland had affirmed the Bankruptcy Court's disallowance of the Interest Claim, but reversed the disallowance of the Expenses Claim and remanded for further proceedings. The Bankruptcy Court scheduled a trial on the Expenses Motion for Jan. 27, 2007. As required, National Energy & Gas Transmission, Inc., maintains a reserve for disputed claims from which to make distributions should they ultimately become Allowed claims. However, the Debtor declined to reserve for the Interest Claim. The Bankruptcy Court ordered the Debtor to maintain sufficient funds in the reserve for the Interest Claims, but only through Oct. 2, 2006. District Court Judge Alexander Williams had denied the Lenders' motion certifying the Interest Claim for an immediate appeal, holding that factual issues regarding the Expenses Claim should be resolved first. The Lenders have sought leave from the District Court to pursue, on an expedited basis to the U.S. Court of Appeals for the Fourth Circuit, an immediate appeal from the District Court's ruling. Patricia A. Borenstein, Esq., at Miles & Stockbridge P.C., in Baltimore, Maryland, argues that the Interest Claim ruling means the Lenders would be unable to pursue the matter until the end of January 2007, at the earliest. "If the [Bankruptcy] Court does not further extend the order compelling the Debtor to maintain the reserve, then, the Lenders face the real risk that a premature distribution by the Debtor would moot the Lenders' legitimate appeal," says Ms. Borenstein. Ms. Borenstein maintains there is serious risk that by the time the Lenders have the opportunity to appeal the District Court Order with regard to the Interest Claim, the Debtor will no longer have sufficient funds to cover the Interest Claim, if it is eventually allowed. Accordingly, the Lenders seek an order for the Debtors to maintain sufficient funds in the reserve to ensure a full ratable distribution on the additional claim amounts until the resolution of the appeal of the Interest Claim to the Fourth Circuit. NEGT Objects to Extension Although the Project Lenders carefully avoid using the term "Motion for Reconsideration" to describe their request, that is precisely what the Motion is, Matthew A. Feldman, Esq., at Willkie Farr & Gallagher LLP, in New York, tells Judge Mannes. Thus, pursuant to Rule 59(e) of the Federal Rules of Civil Procedure, the Motion was required to be made not later than 10 days after the date of entry of the Extension Order, or June 29, 2006. Moreover, pursuant to Rule 9006(b)(2) of the Federal Rules of Bankruptcy Procedure, the Bankruptcy Court has no discretion to enlarge that deadline, even if in the presence of equitable or other grounds for doing so which, in any event, do not exist here. Because the Motion lacks merit even without consideration of its lack of timeliness, the Motion must be denied, Mr. Feldman says. Even if the Project Lenders' request is not a motion for reconsideration, the Lenders are collaterally estopped from seeking the relief sought in the Motion, Mr. Feldman says. The issue of whether NEGT should be required to maintain an amount equal to a full ratable distribution on the Additional Claims in the Disputed Claims Reserve is the exact same issue raised in the Motion to Compel and in the First Reconsideration Motion the Lenders filed. In response to the First Reconsideration Motion, the Extension Order was entered, modifying the Reserve Order to extend the date for the inclusion of the Additional Claims through and including Oct. 2, 2006. The Extension Order did not grant the First Reconsideration Motion in its entirety and did not provide that it was without prejudice as requested by the Lenders. Now, not having appealed the Extension Order, the Lenders are back in the Bankruptcy Court seeking the same relief previously considered by the Court, but denied them before, Mr. Feldman says. Steering Committees Talk Back The Steering Committees of the Project Lenders clarify that at the time the Bankruptcy Court entered its June 9 Order with respect to the Disputed Claims Reserve, the Lenders had informed the Court that they were attempting to "dual track" the Interest Claim and the Expenses Claim to expedite the ultimate resolution of the Lenders' additional claims. The Court, therefore, ordered NEGT to maintain a sufficient amount of funds in the Disputed Claims Reserve through Oct. 2, 2006. However, the District Court subsequently denied the Lenders' motion for certification to pursue an expedited appeal on the Interest Claim issue to the Fourth Circuit. As a result of that denial, the Steering Committees say, the Lenders are now prohibited from pursuing the Interest Claim appeal until after the Expenses Claim is resolved. The Bankruptcy Court has scheduled a trial on the remanded Expenses Claim to begin in January 2007. Based on conversations with counsel, NEGT may well seek to further postpone that trial, further delaying the Lenders' ability to seek relief on the Interest Claim. As the Interest Claim appeal may not be pursued until sometime after the Bankruptcy Court rules on the Expenses Claim, the Lenders submitted their Motion for Extension to protect the Lenders against that appeal becoming moot through a premature distribution of funds by NEGT, the Steering Committees note. The Steering Committees tell Judge Mannes that NEGT devotes only a few sentences of its Objection to the merits of the Motion for Extension. Instead, NEGT raise two false issues not related to the merits of the Motion: -- that the Motion is time-barred; and -- that the doctrine of collateral estoppel prevents the Motion from being brought. These objections should be overruled, the Steering Committees assert. The Steering Committees explain that the Motion for Extension does not ask the Bankruptcy Court to reconsider a prior order. The Motion for Extension merely asks the Court to enlarge the time, as set in the June 19 Order, during which NEGT is required to maintain sufficient funds in the Disputed Claims Reserve to cover all Additional Claim Amounts. Far from asking the Bankruptcy Court to reconsider the factors that were relevant at the time it entered the June 19 Order, the Motion for Extension asks the Court to review facts and circumstances not known at that time, specifically that: a. the Lenders acted in good faith to pursue the appeal regarding the Interest Claim on a dual track by seeking immediate certification for an appeal; b. the District Court denied that request, and ordered instead that the Interest Claim appeal must await the outcome of the Expenses Claim on remand; and c. the Expenses Claim will not be heard by the Bankruptcy Court until at least Jan. 24, 2007 -- and perhaps later, if NEGT does indeed seek to adjourn that trial date. The Motion for Extension is no more a disguised motion for reconsideration than any routine motion for extension of exclusivity, or enlargement of time to remove certain claims, the Steering Committees insist. The Motion for Extension is a new motion based on the current facts and circumstances, to ask the Court to extend a date that it previously set. NEGT's argument that collateral estoppel precludes the Motion is similarly misplaced, the Steering Committees also argues. Collateral estoppel requires, inter alia, that the "issue to be precluded is identical to the issue already litigated," the Committees point out, citing Coleman v. Cmty. Trust Bank (In re Coleman), 426 F.3d 719, 729 (4th Cir., 2005). The "issue" is not the Court's previous decision regarding NEGT's obligation to maintain sufficient funds to cover the Interest Claim; rather, the issue is whether the time during which NEGT is required to maintain funds in the Disputed Claims Fund to cover the Additional Claim Amounts will be extended. Moreover, the Steering Committees continue, the purpose of the collateral estoppel doctrine is not implicated by the Motion for Extension. "Collateral estoppel protects parties from multiple lawsuits and the possibility of inconsistent decisions," the Steering Committees notes, citing Lytle v. Household Mfg., Inc., 494 U.S. 545, 553 (1990). Granting the Lenders' request creates no inconsistency with the Court's ruling on the prior motion, which extended a different Court order and which did not consider the recent factual developments. About National Energy Bethesda, MD-based PG&E National Energy Group Inc. nka National Energy & Gas Transmission Inc. -- http://www.pge.com/-- develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. The Company and six of its affiliates filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30459). When the Company filed for protection from its creditors, it listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT received bankruptcy court approval of its reorganization plan in May 2004, and emerged from bankruptcy on Oct. 29, 2004. NEGT's affiliates -- NEGT Energy Trading Holdings Corp., NEGT Energy Trading - Gas Corporation, NEGT ET Investments Corp., NEGT Energy Trading - Power, L.P., Energy Services Ventures, Inc., and Quantum Ventures -- filed their First Amended Plan and Disclosure Statement on March 3, 2005, which was confirmed on Apr. 19, 2005. Steven Wilamowsky, Esq., and Jessica S. Etra, Esq., at Willkie Farr & Gallagher LLP represent the ET Debtors. (PG&E National Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) NATIONAL ENERGY: Court Denies Mirick, Hoffman, & Vallieres' Claims ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Maryland denied the request of NEGT Energy Trading Holdings Corporation and National Energy & Gas Transmission, Inc., for summary judgment except with respect to the requests of Adam Mirick, Adam Hoffman, and Benoit Vallieres for treble damages on their 2002 supplemental bonus claims and their claims based on theories of unjust enrichment, constructive trust and fraudulent conveyances. The Court also denied the Claimants' partial motion for summary judgment and the partial motion for summary judgment filed by Messrs. Hoffman and Vallieres. The Honorable S. Martin Teel, Jr., signed the order for the Honorable Paul Mannes. Violation of Maryland Wage Payment and Collection Law The Court agrees with the Debtors that awards based solely on an employer's absolute discretion do not qualify as "compensation . . . promised in exchange for the employee's work." In a 45- page decision, Judge Teel says the Supplemental Bonus is not an enforceable promise to provide a "bonus" and the evidence adduced by the Objecting Debtors in support of their position forecloses any possibility of "bad faith." Thus, the Court grants the Debtors' summary judgment with respect to the treble damages component of section of the federal Fair Labor Standards Act. Breach of Contract The Court infers from the records that the Short Term Incentive Plan was a modified version of the Claimants' employment agreements, that the Supplemental Bonus was a binding part of the modified agreements, and that the program awarded traders in exchange for performance above and beyond that required by the employment agreements. Judge Teel denies summary judgment with respect to the Claimants' contract claims. Promissory Estoppel The Court infers that the Claimants could have procured employment elsewhere had they so desired. Judge Teel denies summary judgment with respect to the Claimants' promissory estoppel causes of action. Unjust Enrichment The Court has already concluded that the parties entered into binding employment agreements that were modified by the STIP. The question is whether the Supplemental Bonus is an enforceable part of the modified contract. According to Judge Teel, there is no question that the work performed by the Claimants was covered by their employment agreements. Judge Teel holds that summary judgment is appropriate with respect to their quasi-contract claims. Negligent Misrepresentation While there is scant evidence in the record that Mr. Hoffman was harmed by remaining at ET Holdings between Jan. 13, 2003, and March 3, 2003, the Court concludes that the evidence in the record permits a general inference that Mr. Hoffman could have pursued other employment opportunities during his tenure at ET Holdings. The record is equally clear, Judge Teel says, that Mr. Hoffman needed to stay at ET Holdings if he wanted to collect his anticipated Supplemental Bonus for work performed in 2002. Judge Teel concludes that there is a genuine dispute of material fact with respect to Mr. Hoffman's negligent misrepresentation claim. He denies the Debtors' motion for summary judgment insofar as it concerns Mr. Hoffman's negligent misrepresentation argument. Deferred Compensation Claims Judge Teel already held that the dispute exists with respect to the 2002 Supplemental Bonus claim and sees no basis for distinguishing these claims from the Deferred Compensation claims. The Court sustains the Debtors' objection to certain claims of Mr. Hoffman. Claim Nos. 102 and 103 are disallowed. Mr. Vallieres' Claim No. 214 is disallowed. Mr. Mirick's Claim No. 77 is disallowed. Joint Employer Liability Messrs. Hoffman and Vallieres had sought partial summary judgment against NEGT with respect to whether NEGT was a joint employer of the Claimants. The Court states that both claimants have amassed considerable evidence to support their assertions, but it does not support an inference of control over the day-to-day activities of ET Holdings' personnel when viewed in light of the contrary evidence presented by NEGT, and in some instances do not support an inference of control even when viewed in a vacuum. Judge Teel relates that there is at least a genuine dispute of material fact as to whether NEGT exercised any control over the daily activities of ET Holdings' personnel, and consequently no way for the Court to grant summary judgment in favor of the two claimants. The issue must await trial. The Court also denies as moot the Claimants' joint motion to compel NEGT and ET Holdings to produce documents. About National Energy Bethesda, MD-based PG&E National Energy Group Inc. nka National Energy & Gas Transmission Inc. -- http://www.pge.com/-- develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. The Company and six of its affiliates filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30459). When the Company filed for protection from its creditors, it listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT received bankruptcy court approval of its reorganization plan in May 2004, and emerged from bankruptcy on Oct. 29, 2004. NEGT's affiliates -- NEGT Energy Trading Holdings Corp., NEGT Energy Trading - Gas Corporation, NEGT ET Investments Corp., NEGT Energy Trading - Power, L.P., Energy Services Ventures, Inc., and Quantum Ventures -- filed their First Amended Plan and Disclosure Statement on March 3, 2005, which was confirmed on Apr. 19, 2005. Steven Wilamowsky, Esq., and Jessica S. Etra, Esq., at Willkie Farr & Gallagher LLP represent the ET Debtors. (PG&E National Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) NBC ACQUISITION: 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 and Canadian Retail sector, the rating agency confirmed its B2 Corporate Family Rating for NBC Acquisition 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 ---------- ------- ------- ------ ---------- $77 million Sr. Discount Notes Caa2 Caa1 LGD6 93% Nebraska Book Company, Inc. $204 million Term Loan B2 Ba2 LGD2 21% $65 million Sr. Sec. Revolving Credit Facility B2 Ba2 LGD2 21% $175 million 8.625% Senior Subordinated Notes Caa1 B3 LGD5 76% 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%). NBC Acquisition Corporation is the parent company of Nebraska Book Company, Inc. -- http://nebook.com/ Nebraska Book Company began in 1915 with a single bookstore near the University of Nebraska campus but now serves more than 1.5 million students through its network of over 240 stores located across the country. NBC's Textbook Division serves more than 2,500 bookstores through the sale of over seven million textbooks, and NBC's Complementary Services Division has installed more than 1,600 technology platforms and e-commerce sites. NEENAH FOUNDRY: S&P Rates Planned $300 Mil. Sr. Sec. Notes at B --------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B' rating and its '4' recovery rating to Neenah Foundry Co.'s proposed issuance of $300 million senior secured notes. The recovery rating indicates a marginal recovery of principal (25%-50%) in the event of default. Neenah also entered into a new $100 million five-year, asset-based revolving credit facility that allows the company to borrow up to an additional $30 million under the facility. The revolving credit facility is not rated. Standard & Poor's also affirmed its 'B' corporate credit rating on the Neenah, Wisconsin-based iron castings manufacturer. The outlook is stable. Ratings on Neenah's 11% currently outstanding senior second-lien notes due 2010 and its 13% senior subordinated notes due 2013, both of which are being refinanced, will be withdrawn once the company's refinancing transaction has been completed. All ratings are based on preliminary offering statements and are subject to review upon final documentation. NEIMAN MARCUS: 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 and Canadian Retail sector, the rating agency confirmed its B1 Corporate Family Rating for The Neiman Marcus Group 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 ---------- ------- ------- ------ ---------- $1.975 Billion Senior Secured Term Loan B1 Ba3 LGD3 40% $125 Million Senior Secured Debentures B1 Ba3 LGD3 40% $700 Million Sr. Unsec. Notes B2 B2 LGD4 67% $500 Million Sr. Sub. Notes B3 B3 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%). Headquartered in Dallas, Texas, The Neiman Marcus Group, Inc. -- http://www.neimanmarcusgroup.com/-- operates Neiman Marcus and Bergdorf Goodman stores, in addition to both print and online retail businesses. NEOPLAN USA: Committee Taps Chanin Capital as Financial Advisors ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Neoplan USA Corporation and its debtor-affiliates' chapter 11 cases, ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Chanin Capital Partners as its financial advisors, nunc pro tunc Sept. 6, 2006. Chanin Capital is expected to: a) review and analyze the Debtors' operations, financial condition, business plan, strategy, and operating forecasts; b) analyze any merger, divestiture, joint-venture, or investment transaction; c) assist in the determination of an appropriate capital structure for the Debtor; d) assist the Committee in developing, evaluating, structuring and negotiating the terms and conditions of a restructuring or plan of reoganization including the value of the securities, if any, that may be issued to the Committee under any restructuring or Plan; e) prepare of enterprise, assets and liquidation valuations; f) provide testimony, as necessary, before the Bankruptcy Court; and g) provide the Committee with other appropriate general restructuring advice and legal support. Brent Williams, a Chanin Capital partner, discloses that his firm will receive a flat rate of $50,000 per month, plus reimbursed expenses and out-of-pocket costs. Mr. Williams assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Denver, Colorado, Neoplan USA Corporation manufactures standard floor buses, low floor buses, and articulated buses. Neoplan USA licenses its designs from the German corporation, Neoplan. Neoplan USA is entirely separate from Neoplan in Germany. The Company, its parent, IAP Acquisition Corporation, and two affiliates, filed for chapter 11 protection on Aug. 17, 2006 (Bankr. D. Del. Lead Case No. 06-10872). Leslie Carol, Esq., and Tobey M. Daluz, Esq., at Heilman Ballard Spahr Andrews & Ingersoll, LLP, represents the Debtors. The Official Committee of Unsecured Creditors selects David M. Fournier, Esq., David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton LLP. When Neoplan USA filed for protection from its creditors, it listed $13,696,911 in total assets and $59,009,471 in total debts. NEOPLAN USA: Committee Taps Landis Rath as Conflicts Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors appointed in Neoplan USA Corporation and its debtor-affiliates' chapter 11 cases, ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Landis Rath & Cobb LLP as its conflicts counsel. Following Pepper Hamilton LLP's retention as the Committee's bankruptcy counsel, the firm was identified that it has connections with the entities involved in the Debtor's chapter 11 case. As reported in the Troubled Company Reporter on Oct. 13, 2006, the Committee asked the Court for permission to employ Pepper Hamilton as its bankruptcy counsel. These conflict parties are: a) Bank of New York; b) Merrill Lynch Business Financial Services; and c) Philip Gendall. As a result, the Committee selects Landis Rath to represent it in connection with any matters involving adversity between the Committee and the conflict parties where Pepper Hamilton may have a conflict in handling that matters. The firm's primary professionals who will represent the Debtors and its billing rates: Professional Designation Hourly Rate ------------ ----------- ----------- Adam G. Landis, Esq. Partner $480 Kerri K. Mumford, Esq. Associate $250 John H. Strock $195 Mr. Landis assures the Court that his firm does not hold or represent any interest adverse to the Debtors or their estates. Headquartered in Denver, Colorado, Neoplan USA Corporation manufactures standard floor buses, low floor buses, and articulated buses. Neoplan USA licenses its designs from the German corporation, Neoplan. Neoplan USA is entirely separate from Neoplan in Germany. The Company, its parent, IAP Acquisition Corporation, and two affiliates, filed for chapter 11 protection on Aug. 17, 2006 (Bankr. D. Del. Lead Case No. 06-10872). Leslie Carol, Esq., and Tobey M. Daluz, Esq., at Heilman Ballard Spahr Andrews & Ingersoll, LLP, represents the Debtors. The Official Committee of Unsecured Creditors selects David M. Fournier, Esq., David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton LLP. When Neoplan USA filed for protection from its creditors, it listed $13,696,911 in total assets and $59,009,471 in total debts. NRG ENERGY: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its Ba3 Corporate Family Rating for NRG Energy 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 ---------- ------- ------- ------ ---------- Senior secured term loan 2013 Ba2 Ba1 LGD2 25% Senior secured revolving credit facility due 2011 Ba2 Ba1 LGD2 25% 7.25% guaranteed Senior notes due 2014 B1 B1 LGD5 80% 7.375% senior notes due 2016 B1 B1 LGD5 80% 5.75% convertible preferred stock B3 B2 LGD6 98% 4% convertible perpetual preferred stock B3 B2 LGD6 98% Multiple seniority shelf(senior secured) (P)Ba2 (P)Ba1 LGD2 25% Multiple seniority shelf (senior unsecured) (P)B1 (P)B1 LGD5 80% Multiple seniority shelf (subordinate) (P)B2 (P)B2 LGD6 97% Multiple seniority shelf (preferred stock) (P)B3 (P)B2 LGD6 98% 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 Princeton, New Jersey, NRG Energy, Inc. (NYSE: NRG) -- http://www.nrgenergy.com/-- presently owns and operates a diverse portfolio of power-generating facilities, primarily in Texas and the Northeast, South Central and Western regions of the United States. Its operations include baseload, intermediate, peaking, and cogeneration facilities, thermal energy production and energy resource recovery facilities. NRG also has ownership interests in generating facilities in Australia and Germany. OCEAN SPRAY: 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. Consumer Products sector, the rating agency affirmed its Ba1 Corporate Family Rating for Ocean Spray Cranberries, Inc., and its Ba3 rating on the company's $150 million FIX 6.25% Perp. Cumulative Standard Preferred Shares, Series A. Additionally, Moody's assigned an LGD6 rating to those debentures, suggesting noteholders will experience a 100% 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 Lakeville-Middlesboro, Massachusetts, Ocean Spray Cranberries, Inc. -- http://www.oceanspray.com/-- is a marketing cooperative owned by more than 900 cranberry and citrus growers in the U.S. and Canada. The company produces its line of juices by blending the cranberry with fruits ranging from apples to tangerines. It also makes other cranberry products, such as sauce, snacks, grapefruit juice, and Ocean Spray Premium 100% juice drinks for both retailers and food service providers. The company controls more than half of the U.S. cranberry drink market. OLYMPIC TOOL: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Olympic Tool & Engineering, Inc. 324 West Bay Drive Northwest, Suite 201 Olympia, WA 98502 Tel: (360) 352-8311 Bankruptcy Case No.: 06-42471 Type of Business: The Debtor offers automotive maintenance, machine and shop services. Chapter 11 Petition Date: October 13, 2006 Court: Western District of Washington Seattle (Tacoma) Judge: Philip H. Brandt Debtor's Counsel: Daniel R. Tiffany, Esq. Ditlevson Rodgers Dixon, P.S. 324 West Bay Drive Northwest, Suite 201 Olympia, WA 98502 Tel: (360) 352-8311 Total Assets: $600,000 Total Debts: $1,089,993 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Port of Shelton $102,108 21 West Sanderson Way Shelton, WA 98584 Specialty Metals $68,567 8300 206th Street Kent, WA 98032 Greenburg - Taurig $53,957 5100 Town Center Circle Boca Raton, FL 33486 Mikem Enterprises LLC $36,158 1725 King Street Shelton, WA 98584 Airgas - Nor Pac Inc. $34,096 615 West Main Street Chehalis, WA 98532 Marks Brothers $34,050 Ringmasters $30,552 Puget Sound Pipe $30,475 Machinists, Inc. $25,674 Dixie Aerospace $14,714 Service Steel Aerospace Corp. $9,881 Tyco Valves $9,532 W.S. Wilson Corporation $8,608 Mason County Treasurer $8,297 Farwest Steel Corporation $7,938 Asko Processing, Inc. $7,824 Industrial Tectonics Bearings $7,352 E.F. Bailey Co. $7,323 J&S Fabrication, Inc. $6,960 Nova Machine Products $5,925 OWENS CORNING: Can Pay Contemplated Securities Issuance Expenses ---------------------------------------------------------------- The Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware authorizes Owens Corning and its debtor- affiliate to pay all fees and expenses associated with and attendant to the Contemplated Securities Issuance. The Debtors are also permitted to fund into escrow an amount equal to all interest that will accrue on the Senior Notes through the scheduled expiration date of the escrow, plus an amount equal to any underwriting, placement agent or initial purchaser fee paid directly from the proceeds of the offering. The Debtors had contemplated that on the effective date of their Modified Plan of Reorganization, Reorganized Owens Corning: -- will obtain $2,400,000,000 in bank financing, consisting of a $1,000,000,000 revolving credit facility and a $1,400,000,000 term loan facility; and -- might undertake one or more debt securities offerings to be completed concurrently with, prior to, or within six months of the Plan Effective Date, to raise at least $400,000,000 before underwriting fees. Reorganized Owens Corning will use the proceeds of any Contemplated Securities Issuance in excess of $400,000,000 to repay or reduce the Term Facility. The Debtors had obtained in July 2006 the Court's authority to enter into a Senior Credit Facilities Commitment Letter and related agreements with Citigroup Global Markets Inc., Bank of America, N.A., and Bank of America. The Senior Facilities Order, among others, permits the Debtors to pay fees and expenses relating to the Contemplated Securities Issuance. About Owens Corning Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 141; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) OWENS CORNING: Wants Claims Settlement with Pinal County Approved ----------------------------------------------------------------- Owens Corning and its debtor-affiliates ask the U.S. Bankruptcy for the District of Delaware to approve a claims settlement with Pinal County in Arizona. The Debtors own a property in Pinal County that created a secured real and personal property tax liability for the 2000 and 2004 tax years. Subsequently, Pinal County filed a prepetition tax claim -- Claim No. 12328 -- against the Debtors for tax year 2000. On Sept. 1, 2006, Pinal County objected to the Debtors' Sixth Amended Plan of Reorganization, asserting that it is unclear as to what class Claim No. 12328 is in, and when certain events will occur. Following arm's-length negotiations, the Debtors and Pinal County agree that: (a) Claim No. 12328 will be treated as an allowed Owens Corning Other Secured Tax Claim under Class A2-A of the Plan for $82,134, including interest, if the Claim is paid: * by Sept. 30, 2006, for $156,339; * by Oct. 31, 2006, for 157,491; * by Nov. 30, 2006, for 158,643; or * after Nov. 30, 2006, with additional interest at an applicable statutory rate. (b) The Settlement resolves all outstanding prepetition personal and real property claims among the Debtors and Pinal County. (c) All other taxes, interest, charges and penalties related to the Claim are disallowed. (d) The Debtors will pay the Claim as provided in the Plan. Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington, Delaware, tells the Court that if the Settlement is not approved, the Debtors will continue to accrue interest on the Pinal County's Claim. Pinal County also filed Claim No. 12559 for postpetition real and personal property tax. The parties have reached an agreement in principal regarding the Claim and are working on reducing the agreement to writing. About Owens Corning Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 141; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PA MEADOWS: S&P Junks Rating on Planned $70 Mil. Sr. Sec. Facility ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' bank loan rating and a '2' recovery rating to PA Meadows LLC's proposed $205 million first-lien senior secured credit facility, reflecting Standard & Poor's expectation of substantial (80%-100%) recovery of principal in the event of a payment default. At the same time, Standard & Poor's assigned its 'CCC+ rating with a recovery rating of '5' to the company's proposed $70 million second-lien senior secured credit facility, indicating the expectation for negligible (0%-25%) recovery of principal in the event of a payment default. Concurrently, a 'B' issuer credit rating was assigned to PA Meadows. The outlook is stable. On July 26, 2006, PA Meadows acquired The Meadows Racetrack from Magna Entertainment Corporation. PA Meadows is a wholly owned, unrestricted subsidiary of Cannery Casino Resorts LLC (CCR). Owned by Millennium Gaming Inc. (58%), whose controlling shareholders are William Paulos and William Wortman, and entities related to Oaktree Capital Management (42%), CCR currently has operations in the Las Vegas gaming market through the Cannery Casino and Hotel, the Rampart Casino, and the Nevada Palace Casino. The ratings on PA Meadows reflect its narrow business position as an operator of a single racino (construction is likely to start in October 2006), modest construction risks, and the expectation of meaningful competition in the Pittsburgh gaming market starting in 2009. Still, PA Meadows will have a first mover advantage in its market, given its phased development plan, and its liquidity position is expected to be adequate throughout construction. In addition, management has a long term proven track record within the gaming industry. PACIFIC LUMBER: Improved Liquidity Cues S&P to Raise Corp. Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Scotia, California-based Pacific Lumber Co. to 'CCC' from 'CCC-'. The outlook is developing. "The upgrade reflects Pacific Lumber's improved liquidity following the recent refinancing of its credit facilities," Standard & Poor's credit analyst Lisa Wright said. The company has about $20 million of availability under a new $60 million borrowing base facility, compared to its former $35 million facility with minimal availability. "We could lower the ratings if Scotia Pacific LLC, Pacific Lumber's wholly owned subsidiary and primary log supplier, fails to meet its financial obligations, or files for bankruptcy protection and we expect that the courts will force Pacific Lumber into the filing," Ms. Wright said. "We could raise the ratings if Scotia Pacific is able to significantly increase its harvest or otherwise refinance its debt to allow it to meet its interest and principal payments." PARMALAT: Creditors Convert Warrants to Buy 91,308 Parmalat Shares ------------------------------------------------------------------ Following the allocation of shares to creditors of the Parmalat Group in September 2006, the subscribed and fully paid up share capital has been increased by EUR91,308 to EUR1,640,849,194 from EUR1,640,757,886. The share capital increase is totally due to the conversion of warrants for 91,308 shares. The latest status of the share allotment is: Approximately 54,523,365 shares representing 3.3% of the share capital are still in a deposit account c/o Parmalat S.p.A., of which: * 17,009,992 or 1.0% of the share capital, registered in the name of individually identified commercial creditors, are still deposited by the intermediary account of Parmalat S.p.A. centrally managed by Monte Titoli (compared with 17,023,647 shares as at as at Aug. 31, 2006 ); * 37,513,373 or 2,3% of the share capital registered in the name of the Foundation, called Fondazione Creditori Parmalat, of which: -- 120,000 shares representing the initial share capital of Parmalat S.p.A. (unchanged); -- 37,393,373 or 2.3% of share capital that pertain to currently undisclosed creditors (compared with 42,043,868 shares as at Aug. 31, 2006). About Parmalat Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. (Parmalat Bankruptcy News, Issue No. 79; Bankruptcy Creditors' Service, Inc., 215/945-7000, http://bankrupt.com/newsstand/) PETROBRAS INT'L: Fitch Rates $500 Million Senior Notes at BB+ ------------------------------------------------------------- Fitch Ratings assigned a 'BB+' rating to Petrobras' $500 Million 6.125% Senior Notes due 2016 issued through its wholly owned subsidiary, Petrobras International Finance Company. PIFCo is unconditionally guaranteed by Petrobras. Proceeds are to be used for debt refinancing and other general corporate purposes. The ratings of Petroleo Brasileiro S.A. are supported by substantial proved hydrocarbon reserves and increasing upstream output, recognized leadership in offshore exploration and production, a favorable international product price environment, successful corporate and industry restructuring during the past decade, a transition to more transparent financial standards, and dominant domestic market shares. The company further benefits from material international operations and its shift to a net export position in 2005, which supports the generation of foreign currency cash flow. These factors are tempered by vulnerability to fluctuations in international commodity prices, exposure to local political interference, currency risk, domestic market revenue concentration, and significant medium-term capital- investment requirements linked to the company's ambitious strategic plan. The announced nationalization of Petrobras' Bolivian energy investments, while negative, is not expected to affect materially the company's credit quality or ratings. The combination of ultimate government control, which underscores the ability to influence corporate strategy and long-term policy decisions, and a significant domestic market focus continues to affect the company's rating. Earlier this year, Petrobras announced its 2007-2011 business plan, which primarily reflects new projects to increase production and refining both in Brazil and internationally, the increase in costs of related services and equipment in the productive chain, and a stronger local currency, all of which increases capital spending when expressed in U.S. dollars. Under the new business plan, Petrobras estimates it will invest $87.1 billion through 2011, an increase of $34.7 billion (66%) for the comparable period under the previous plan. Approximately $49 billion (56% of total), up from $31 billion (59%), has been allocated to exploration and production activities, representing a slight shift in allocation percentage toward downstream activities. Fitch views the planned increase in E&P investment, including additional investment in natural gas E&P, to be positive for the long-term credit quality of the company. Management projects no significant changes on the main corporate strategic targets or pressures on the financial profile, as approximately 87% of Petrobras' funding needs (investments and debt amortizations) should continue to be met via internal cash flows, with the rest to be financed with conventional financing mechanisms, project structures, and special-purpose vehicles. Fitch recognizes the positive credit effect of the market-oriented measures implemented in the past five years as well as improvements in corporate governance. The opening to private participation and deregulation, strong management commitment to increased financial transparency, corporate reorganization and modernization, and aggressive upstream production development, coupled with value-chain strategies, should strengthen credit fundamentals. While there has been close coordination of business plans with federal authorities, it does not appear to have affected market-oriented efforts to improve operational efficiencies, increase upstream production volumes, or adhere to capital discipline guidelines. Petrobras is a mixed-capital company, with the government owning approximately 40% of Petrobras' total capital and 55.7% of its voting capital. The remainder of the shares are publicly traded, and an estimated 40% is held by foreign investors. Despite Fitch's concerns generated by the significant imbalance between local currency revenues and hard currency expenses and liabilities, it is important to note that Petrobras' operations are of vital economic importance to the nation, suggesting the government has a prime incentive to ensure Petrobras' access to hard currency for servicing foreign obligations. Petrobras' financial profile remains strong, with solid credit- protection measures continuing to benefit from increased production and the global rise in hydrocarbon and product prices. The company reported total debt/LTM EBITDA of 0.4 times and EBITDA/interest expense of 26.5x under U.S. GAAP through June 2006. Petrobras maintains strong liquidity in relation to short- term debt obligations. The company ended the second quarter of 2006 with a total consolidated debt of $19.682 billion, of which approximately 25% was classified as short term. The company's sizeable $10.4 billion in cash and equivalents resulted in total net debt of $9.3 billion. Petrobras' management has indicated its preference to maintain a substantial cash balance going forward, partially debt funded, to minimize its exposure to international capital market volatility. The company's EBITDA continues to be favored by the increase in the domestic production of oil and natural gas liquid, even though it was offset by scheduled maintenance stoppages in several production systems during the semester. On July 25, 2006, the company closed its tender for certain outstanding bonds of its subsidiary PIFCo for liability management purposes, which totaled $866 million. Petrobras is an integrated international oil and gas company engaged in the exploration, development and production of hydrocarbons and in the refining, marketing, transportation and distribution of oil and a wide range of petroleum products, petroleum derivatives, petrochemicals and liquid petroleum gas. By law, the federal government must hold at least a majority of Petrobras' voting stock. PHILLIPS-VAN HEUSEN: Inks Pact to Acquire Superba for $110 Million ------------------------------------------------------------------ Phillips-Van Heusen Corporation has entered into a definitive agreement to acquire substantially all of the assets of privately held Superba, Inc., for $110 million. The acquisition price is subject to adjustment, plus an earn-out over a three-year period based on the earnings of the acquired business for each of the first three years after the closing, with a maximum value of $70 million. The all-cash transaction is subject to customary conditions and governmental approvals and is expected to close Jan. 1, 2007. "The acquisition of the Superba business is a good example of the type of acquisition opportunities we have said we will pursue," Emanuel Chirico, chief executive officer, stated. "It provides us with a means to grow our business by layering in a new product category that complements our core competencies -- in this case, our historical strength in dress shirts -- and fits well in our existing multiple brand, multiple channel, and multiple price point strategy. "Superba's management, which will remain intact after the acquisition, is strong, and we believe their manufacturing operation in Los Angeles provides the business with an advantage, both because of the quality of the ties produced there, as well as the reduction in time needed to get their product on customers' floors. We look forward to building upon their success." Mr. Chirico concluded that, "In addition to adding an opportunity for PVH's future growth, we expect this transaction to be modestly accretive to our earnings beginning in 2007 after giving effect to anticipated integration costs." "This combination is all about growing our business over the long term," Mervyn Mandelbaum, Superba chief executive officer and controlling shareholder, said. "PVH is a leader in implementing the multiple brand, multiple channel, and multiple price point strategy we have been using in the neckwear category and we believe they can bring us to the next level of performance through the strength of their brand management, marketing expertise and leveraged infrastructure. The Superba team looks forward to working with the people at PVH, who we believe are capable and committed to helping us successfully realize the full potential of our business." About Superba Superba, Inc.'s marketing, sales and design organizations are based in New York City and its manufacturing and back office operations are based in Los Angeles. The company is the licensee for neckwear under many well-known designer and brand names, including Arrow, DKNY, Tommy Hilfiger, Nautica, Perry Ellis, Ted Baker, Ike Behar, Michael Kors, JOE Joseph Abboud, Original Penguin, Jones New York and Hart Schaffner Marx, as well as private label offerings. The company is known for both its hand- tailored neckwear offered through its Insignia Division, and its machine made neckwear offered through its Superba Division. About Phillips-Van Heusen Phillips-Van Heusen Corporation -- http://www.pvh.com/-- owns and markets the Calvin Klein brand worldwide. It is a shirt company that markets a variety of goods under its own brands: Van Heusen, Calvin Klein, IZOD, Arrow, Bass and G.H. Bass & Co., Geoffrey Beene, Kenneth Cole New York, Reaction Kenneth Cole, BCBG Max Azria, BCBG Attitude, Sean John, MICHAEL by Michael Kors, Chaps and Donald J. Trump Signature. * * * As reported in the Troubled Company Reporter on Oct 10, 2006 Moody's Investors Service's in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Canadian Retail sector, confirmed its Ba3 Corporate Family Rating for Phillips Van Heusen Corporation. PILGRIM'S PRIDE: 73.2% of Outstanding Noteholders Give Consent -------------------------------------------------------------- As of 9:00 a.m., New York City time, on Oct. 12, 2006, Mellon Investor Services LLC, the Depository for the Offer, has informed Pilgrim's Pride Corporation that $95.2 million, or approximately 73.2%, of the outstanding Notes have been validly tendered and consents given and not withdrawn. Pilgrim's Pride also reported the consideration to be paid in its cash tender offer for, and consent solicitations with respect to, any and all of Gold Kist Inc.'s outstanding 10-1/4% Senior Notes due March 15, 2014 (CUSIP No. 380616AB8, ISIN US380616AB82). Based on an assumed payment date of Oct. 30, 2006, holders who have validly tendered with consents and not withdrawn their Notes at or prior to 5:00 p.m., New York City time, on Oct. 13, 2006 are eligible to receive $1,154.77 for each $1,000 principal amount of the Notes. The Total Consideration includes a consent payment equal to $30 in cash per $1,000 principal amount of the Notes. The consent payment is payable only to holders of Notes validly tendered with consents and not validly withdrawn on or prior to the Consent Date. Based on the same assumed payment date, holders who tender their Notes after 5:00 p.m., New York City time, on the Consent Date will not be eligible to receive the Consent Payment. Holders who have validly tendered with consents their Notes after 5:00 p.m., New York City time, on the Consent Date but at or prior to midnight, New York City time, on Oct. 27, 2006 (unless the tender offer is earlier terminated or extended) are eligible to receive $1,124.77 for each $1,000 principal amount of the Notes. In addition to the Total Consideration or the Tender Offer Consideration payable in respect of Notes purchased in the tender offer, Pilgrim's Pride will pay accrued and unpaid interest from the last interest payment date to, but not including, the Payment Date. The Total Consideration and the Tender Offer Consideration were determined as of 10:00 a.m., New York City time, Oct. 12, 2006, based on the Reference Yield of 4.779% for the Notes, and a Fixed Spread of 50 basis points for the Notes, using an assumed Oct. 30, 2006, Payment Date for calculation purposes. If the Expiration Date is extended for more than 10 business days following the scheduled Expiration Date, a new price determination date will be established (to be 10:00 a.m. New York City time on the 11th business day immediately preceding the new Expiration Date) and the Total Consideration for each Note tendered pursuant to the Offer at or prior to the new Expiration Date will be redetermined as of the new price determination date. Information regarding the pricing, tender and delivery procedures and conditions to the tender offer and consent solicitation relating to the Notes are contained in the Offer to Purchase. Pilgrim's Pride will accept validly tendered Notes for purchase promptly after the Expiration Date, provided that the conditions to the tender offer have been satisfied or waived, including the conditions with respect to Pilgrim's Pride 's tender offer for all of the outstanding common shares of Gold Kist. The "Payment Date" is expected to be promptly after the Expiration Date and immediately prior to the closing of the transactions contemplated by the tender offer for Gold Kist's common shares. Pilgrim's Pride has engaged Lehman Brothers Inc. to serve as the Dealer Manager for the tender offer and the Solicitation Agent for the consent solicitation. Mellon Investor Services LLC has been retained to serve as the Depository and Innisfree M&A Incorporated has been retained to serve as the Information Agent for the tender offer and consent solicitation. Requests for documents may be directed to: Innisfree M&A Incorporated 501 Madison Avenue, 20th Floor New York, NY 10022 Telephone (212) 750-5833 (collect) Toll Free (877) 687-1874 (U.S. and Canada) Questions regarding the tender offer and consent solicitation may be directed to Lehman Brothers Inc. by telephone at (800) 438-3242 (toll free in the U.S.) or (212) 528-7581 (call collect). About Gold Kist Based in Atlanta, Georgia, Gold Kist Incorporated (NASDAQ: GKIS) -- http://www.goldkist.com/-- operates a fully integrated chicken production, processing and marketing business. Gold Kist's production operations include nine divisions located in Alabama, Florida, Georgia, North Carolina and South Carolina. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the United States, Mexico and in Puerto Rico. Pilgrim's Pride employs approximately 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. PILGRIM'S PRIDE: Disappointed on Gold Kist's Tender Offer Rebuff ---------------------------------------------------------------- Pilgrim's Pride Corporation issued a statement in response to the Gold Kist Inc. board's recommendation regarding the Pilgrim's Pride offer to purchase all of the outstanding shares of Gold Kist common stock for $20 per share in cash: "We once again are disappointed in the Gold Kist board's recommendation which has failed to recognize both the value our offer affords Gold Kist's stockholders and the opportunity presented to employees and contract growers. For Gold Kist stockholders in particular, the transaction's benefits are reflected in the price we have offered, which represents a premium of 55% over Gold Kist's closing stock price on Aug. 18, 2006, the last day of trading before Pilgrim's Pride notified Gold Kist's board of directors in a public letter that it was offering $20 per share in cash for the company. Furthermore, we intend to vigorously defend the lawsuit filed in Federal Court in the Northern District of Georgia." Pilgrim's Pride has obtained financing for the tender offer through a combination of an amendment to its existing credit facility and a commitment letter for an additional credit facility from Lehman Brothers Inc. Pilgrim's Pride's tender offer is scheduled to expire at midnight, New York City Time, on Oct. 27, 2006, unless extended. Baker & McKenzie LLP and Morris, Nichols, Arsht & Tunnell, LLP are acting as legal counsel and Credit Suisse, Legacy Partners Group LLC and Lehman Brothers Inc. are acting as financial advisors to Pilgrim's Pride. Innisfree M&A Incorporated is acting as information agent for Pilgrim's Pride's offer. About Gold Kist Based in Atlanta, Georgia, Gold Kist Incorporated (NASDAQ: GKIS) -- http://www.goldkist.com/-- operates a fully integrated chicken production, processing and marketing business. Gold Kist's production operations include nine divisions located in Alabama, Florida, Georgia, North Carolina and South Carolina. About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the United States, Mexico and in Puerto Rico. Pilgrim's Pride employs approximately 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. PILGRIM'S PRIDE: Moody's 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. Consumer Products sector this week, the rating agency held its Ba2 Corporate Family Rating for Pilgrim's Pride Corp. In addition, Moody's revised or held 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 ---------- ------- ------- ------ ---------- $200 million 9.625% Gtd. Sr. Notes Due Sept. 15, 2011 Ba2 Ba3 LGD5 82% $100 million 9.625% Gtd. Sr. Notes Due Sept. 15, 2011 Ba2 Ba3 LGD5 82% $100 million 9.250% Sr. Sub. Global Notes Due Nov. 15, 2013 Ba3 B1 LGD6 95% 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 Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the United States, Mexico and in Puerto Rico. Pilgrim's Pride employs approximately 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. PLAN C: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------- Debtor: Plan C, L.L.C. dba The Athlete's Foot 15 Warren Street, Suite 25 Hackensack, NJ 07601 Bankruptcy Case No.: 06-19910 Chapter 11 Petition Date: October 12, 2006 Court: District of New Jersey (Newark) Debtor's Counsel: Kenneth Rosen, Esq. Sharon L. Levine, Esq. Lowenstein Sandler PC 65 Livingston Avenue Roseland, NJ 07068 Tel: (973) 597-2500 Fax: (973) 597-2400 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ NIKE USA, Inc. Trade $469,784 7932 Collection Center Drive Chicago, IL 60693 New Balance Athletic Shoe Trade $138,403 P.O. Box 31978 Hartford, CT 06150 Asics American Corporation Trade $71,716 P.O. Box 827483 Philadelphia, PA 19182 Thor Gallery at Military Rent $62,185 Circle P.O. Box 51040 Newark, NJ 07101 Converse Trade $58,112 One High Street No 14 North Andover, MA 01845 Arundel Mills Ltd. Rent $56,705 P.O. Box 406130 Atlanta, GA 30384 Franconia II LP Rent $49,608 Sprinfield Mall P.O. Box 33548 Hartford, CT 06150 North Hill Center, LLC Rent $47,693 P.O. Box 330 Anderson, SC 29622 Timberland Trade $43,840 P.O. Box 92550 Chicago, IL 60675 New Era Cap Company Trade $39,853 P.O. Box 054 Buffalo, NY 14240 Radio Shack Corp. Rent $36,333 300 RadioShack Circle P.O. Box 961090 Fort Worth, TX 76161 Mondawmin Mall Rent $35,581 2301 Liberty Heights Ave Suite 1200 Baltimore, MD 21215 White Marsh Mall Rent $35,406 c/o General Growth Properties 10275 Little Patuxent Pkwy. Columbia, MD 21044 Puma Trade $32,206 5 Lyberty Way Westford, MA 01886 DJM Asset Management Financial $31,975 Attn: Ed Zimmer 445 Broad Hollow Road Suite 417 Melville, NY 11747 Diadora America, Inc. Trade $31,545 P.O. Box 94688 Seattle, WA 98124 Saucony Trade $30,300 P.O. Box 644035 Pittsburgh, PA 15264 Patrick Henry Rent $29,850 P.O. Box 951750 Cleveland, OH 44193 Shaw Road Land Associates Rent $29,777 127 E. Georgia Street Woodruff, SC 29388 First Data Merchant Services $29,552 Corp. P.O. Box 407092 Fort Lauderdale, FL 33340 PLIANT CORP: Moody's Junks Rating on $250 Million Sr. Sec. Notes ---------------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Pliant Corporation subsequent to its emergence from Chapter 11 of the U.S. Bankruptcy Code on July 18, 2006. Moody's assigned these ratings: * $288 million senior secured 1st lien 11.85% PIK notes due June 15, 2009, B2 * $7.5 million senior secured 1st lien 11.35% notes due June 15, 2009, B2 * $250 million senior secured 2nd lien 11.125% notes due Sept. 1, 2009, Caa1 * Corporate Family Rating, B3 * Probability of Default Rating, B3 * Stable ratings outlook * Speculative Grade Liquidity Rating, SGL-3 The ratings reflect substantial leverage and minimal free cash flow subsequent to the recent financial restructuring. Pro forma for the reorganization and after application of Moody's standard adjustments, debt to EBITDA at June 30, 2006 was over 7x and free cash flow was negative. Moody's projects modest improvement by year end with adjusted debt to EBITDA at approximately 7x and free cash flow at breakeven. Adjusted EBIT to cash interest is projected to approach 1.3x. Moody's expects Pliant to maintain its adjusted EBIT margin in the mid single digits and EBIT to average gross fixed assets at approximately 10%. Strengths in Pliant's competitive profile include annual revenues of $1.1 billion, product diversity reflected in sales of both commodity and value added films and packaging, and formal customer agreements that account for over half of revenues. The stable ratings outlook anticipates that Pliant will meaningfully reduce financial leverage and improve free cash flow and interest coverage in the intermediate term. The outlook or ratings could be lowered if Pliant loses a significant customer or otherwise encounters operational difficulties that result in adjusted debt to EBITDA remaining above 7x, continued deficit free cash flow, or EBIT to cash interest falling below 1x. The outlook or ratings could be raised if Pliant exhibits a track record of sustained operating performance that results in adjusted debt to EBITDA of less than 6.5 times, adjusted free cash flow to debt of greater than 3% and EBIT interest coverage above 1.3 times. The first time assignment of an SGL-3 Speculative Grade Liquidity rating reflects Moody's expectations of adequate liquidity through the next twelve months as cash from operations should be sufficient to fund working capital requirements and capital expenditures. However, Moody's expects substantial reliance on the $200 million revolver, with average effective availability of less than $50 million. Headquartered in Schaumburg, Illinois, Pliant Corporation produces polymer-based films and flexible packaging products for food, beverage, personal care, medical, agricultural and industrial applications. Revenue for the twelve months ended June 30, 2006 was approximately $1.1 billion. PUTNAM LOVELL: Fitch Junks Rating on $32.4 Million Notes -------------------------------------------------------- Fitch downgrades three classes of notes issued by Putnam Lovell Finance Trust 1999-2, (PLFT 99-2). These rating actions are effective immediately: -- $16,438,563 class A-2 notes downgraded to 'CC' from 'B-' and assigned a Distressed Recovery rating of 'DR5'; -- $10,400,000 class B notes downgraded to 'C' from 'CC' and assigned a 'DR6'; -- $5,600,000 class C notes downgraded to 'C' from 'CC' and assigned a 'DR6'. PLFT 99-2 is collateralized by the right to receive certain fees charged to the class B shareholders of a select pool of mutual funds. Namely, PLFT 99-2 receives, from a predetermined set of shareholders in the mutual funds, the asset-based sales charges (12b-1 fees), contingent deferred sales charges (CDSC fees), and shareholder servicing fees, which are charged to these shareholders. The primary factors in determining cash flows in this transaction are the net asset values of the underyling funds and share redemption rates. The 12b-1 and SSF fees are charged as a percentage of NAV, meaning that the transaction's performance is highly correlated with the performance of the underlying funds. Share redemptions may result in a one-time CDSC charge to the shareholder, but will also reduce the future inflow of cash via 12b-1 and SSF fees. The underlying funds in PLFT 99-2, on the whole, experienced deteriorating NAVs in the early years of this transaction. This led to lower-than-anticipated cash flows received and resulted in virtually unachievable break-even returns for the underlying funds. The A-2 notes should continue to receive minimal principal payments until the final maturity in July 2007, and all notes have remained current on their interest payments to date. The downgrades reflect the insufficiency of realized and anticipated principal payments on the notes, and the DR assignments reflect the ranges of total future proceeds expected to be received by each class of notes. The ratings of the class A-2, B, and C notes address the likelihood that investors will receive timely payments of interest and principal in accordance with the terms of the legal documents. QWEST COMMS: Inks $3.8 Million VOIP Deal with Willamette Dental --------------------------------------------------------------- Qwest Communications International Inc. signed a three-year data networking and voice over Internet Protocol agreement worth $3.8 million with Willamette Dental, a managed dental care provider in the Northwest. Willamette Dental provides full- service dentistry at office locations in Idaho, Oregon and Washington state. Using its iQ Networking, Qwest's wide-area network solution, Qwest will connect 69 Willamette Dental locations and be the company's exclusive network provider for voice and data services. Qwest iQ Networking service will enable Willamette to better manage call volumes and transfer large amounts of complex data over a secure and reliable network, offering the practice's clients a higher level of customer service. Additionally, Qwest services will enhance Willamette's VoIP applications, managed by Qwest. Willamette uses VoIP to transfer calls to its call center, from which the dental provider can manage customer requests. "The deployment of Qwest's next-generation technology brings a great deal of flexibility and efficiency to our business, resulting in improvements in the way our patients are served," said Don Mason, director of information technology for Willamette Dental. "Qwest was easy to work with throughout the deployment process, and we see the return on investment from upgrading our telecommunications infrastructure." "Willamette Dental is a longtime Qwest customer, and transitioning to a WAN solution will allow the company to better serve customers and improve operations," said Tom Richards, executive vice president, Qwest business markets group. "Migrating from a frame relay network to Qwest iQ Networking service will allow Willamette to enhance many of its business needs, and Qwest is pleased to provide all of the benefits of a centralized voice and data infrastructure." Qwest launched iQ Networking in early 2004 as the company's convergence platform supporting any number of applications, such as VoIP, messaging and other IP communications. Qwest iQ Networking focuses on solving business problems, reducing total cost and delivering an unparalleled customer service experience. Based in Denver, Colorado, Qwest Communications International Inc. (NYSE: Q) -- http://www.qwest.com/-- provides high-speed Internet, data, video and voice services. With approximately 40,000 employees, Qwest is committed to the "Spirit of Service" and providing world-class services that exceed customers' expectations for quality, value and reliability. * * * As reported on the Troubled Company Reporter on Aug. 3, 2006, Qwest Communications International Inc.'s $1,265 million 3.5% convertible senior notes due 2025 carry Moody's Investors Service B3 Rating. REAL ESTATE: Court Dismisses Chapter 11 Case -------------------------------------------- The Honorable Mary P. Gorman of the U.S. Bankruptcy Court for the Central District of Illinois approved the request of Real Estate Investors of Decatur to dismiss its chapter 11 case. As reported in the Troubled Company Reporter on Oct. 4, 2006, the Debtor, its secured creditors, and major unsecured creditors met and discussed a resolution to matters, which would provide for the continuing operation of all the Debtor's properties. These properties, owned and operated by the Debtor located in Decatur, Illinois, includes: -- 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. 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., said. 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. REGINA CATHOLIC: Could Opt for Ch. 11 Protection to Shield Assets ----------------------------------------------------------------- Regina Catholic High School could seek bankruptcy protection if it loses in a sexual abuse lawsuit filed against Bishop Lawrence Soens, a former principal, the Associated Press reports. The school has been named as co-defendant in an abuse trial scheduled to begin on October 23, 2006. A former high school student at Regina is accusing Bishop Soens of molesting male students during his tenure as the school's first principal in the 1960s. According to AP, Regina is also party to two other lawsuits involving 14 former students. ABI World reports that a bankruptcy filing would prevent Regina's creditors from seizing its assets if a jury finds that it is partly responsible for Bishop Soens' behavior. AP says that the school is preparing for a possible bankruptcy filing by retaining counsel and inventorying its assets. Regina maintains that it should not be party to the lawsuit because the Roman Catholic Diocese of Davenport supervised the school and no faculty member had knowledge of any misconduct by Bishop Soens. As reported in the Troubled Company Reporter on Oct. 11, 2006, the Diocese of Davenport file a voluntary chapter 11 petition on Oct. 10, 2006, to settle 25 outstanding claims against four priests accused of sexual child abuse, all of which occurred thirty or forty years ago. The Diocese said its chapter 11 filing is the result of settlement demands, which are greater than its available assets. Todd Dvorak, an Associated Press writer stated that since 2004, the Diocese has paid more than $10.5 million to resolve dozens of claims filed against priests, including a $9 million deal reached with 37 victims in fall 2004. The Regina Inter-Parish Catholic Education Center in Iowa City, Iowa -- http://http://www.regina.pvt.k12.ia.us/-- provides a Catholic education for students from preschool through high school. RIO VALLEY: Case Summary & 17 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Rio Valley Motors Company LLC 505 South Paseo de Onate Espanola, NM 87532 Tel: (505) 753-2121 Fax: (505) 747-9981 Bankruptcy Case No.: 06-11866 Type of Business: The Debtor is a dealer and distributor of Ford and Mercury branded vehicles. See http://www.riovalleyfordmercury.com/ Chapter 11 Petition Date: October 13, 2006 Court: District of New Mexico (Albuquerque) Judge: Mark McFeeley Debtor's Counsel: William L. Needler, Esq. William L. Needler and Associates 555 Skokie Boulevard, Suite 500 Northbrook, IL 60062 Tel: (847) 559-8330 Fax: (847) 559-8331 -- and -- Walter L. Reardon, Esq. Walter L. Reardon, P.A. 3733 Eubank Northeast Albuquerque, NM 87111 Tel: (505) 293-7000 Fax: (505) 293-0831 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 17 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Valley National Bank $523,400 322 Riverside Drive Espanola, NM 87532 AER, Inc. $49,134 P.O. Box 974180 Dallas, TX 75397 Enterprise Rent-A-Car $1,577 4740 Pan American Northeast Albuquerque, NM 87109 Vic's Enterprise, Inc. $1,012 P.O. Box 26116 Albuquerque, NM 87125-6116 Dex Media East $895 P.O. Box 78041 Phoenix, AZ 85062 Yellow Book-Pacific $630 Thermos Fluids Inc. $589 Barnes Distribution $303 Round The Round House $253 RL Polk & Co. $218 IM Agistics $183 Auto Brite Distribution $170 SPS Finest Touch $145 Chemsearch $132 Cee-Jay Research & Sales LLC $84 Zep/Acuity Brands $76 Utley Brothers, Inc. $72 ROOMSTORE INC: Preparing to Issue Stock to Creditors ---------------------------------------------------- The Board of Directors of RoomStore, Inc. met on Oct. 11, 2006 and decided to take certain actions concerning the Company. Barring unforeseen circumstances, by Nov. 10, 2006, the Company intends to issue stock to creditors as provided in its plan of reorganization, which was confirmed on May 18, 2005 by the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division. In addition, the Company plans to establish a secure website for providing certain financial information to shareholders. Over the next 30 days, the Company will establish a process for verifying the identity of shareholders to receive stock and for granting access to this website. Headquartered in Atlanta, Georgia, Rhodes, Inc., sells brand-name residential furniture to middle- and upper-middle-income customers through 63 stores located in 11 southern and Midwestern states). The Company and two of its debtor-affiliates filed for chapter 11 protection on Nov. 4, 2004 (Bankr. N.D. Ga. Case No. 04-78434). Paul K. Ferdinands, Esq., and Sarah Robinson Borders, Esq., at King & Spalding represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated more than $50 million in total debts. RoomStore offers a wide selection of professionally coordinated home furnishings in complete room packages at value-oriented prices. RoomStore operates 65 stores located in Pennsylvania, Maryland, Virginia, North Carolina, South Carolina and Texas. The Company emerged from bankruptcy in June 2005, independent from its parent, Heilig-Meyers Company. RURAL/METRO: June 30 Stockholders' Deficit Declines to $93.4 Mil. ----------------------------------------------------------------- Rural/Metro Corporation filed its annual report for the year ended June 30, 2006, with the Securities and Exchange Commission on Sept. 22, 2006. For the year ended June 30, 2006, the Company earned $3,517,000 on $548,501,000 of net revenues compared with $88,331,000 of net income available to common stock on $501,514,000 of net revenues for the year ended June 30, 2005. At June 30, 2006, the Company's balance sheet showed $299,192,000 in total assets, $390,599,000 in total liabilities, and $2,065,000 in minority interest, resulting in a $93,472,000 stockholders' deficit. The Company had a $98,643,000 deficit at June 30, 2005. Subsequent Events On July 25, 2006, the Company was notified by the Town of Paradise Valley that it desired to terminate its contract for fire protection services effective June 30, 2007. The Town cited its location in the center of a growing urban area and its desire to transition services to the City of Phoenix Fire Department as primary reasons for its decision. The Company currently provides fire protection services on a subscription-fee basis to individual property owners in Paradise Valley. This business generated net revenue of $2.3 million, $1.9 million, and $2.0 million in the fiscal years ended June 30, 2006, 2005, and 2004, respectively. A full-text copy of the Company's Annual Report is available for free at http://ResearchArchives.com/t/s?1367 Headquartered in Scottsdale, Arizona, Rural/Metro Corporation -- http://www.ruralmetro.com/-- provides emergency and non-emergency medical transportation, fire protection, and other safety services in 23 states and approximately 400 communities throughout the United States. RURAL/METRO: Names Kristine Ponczak as SVP, CFO & Corp. Secretary ----------------------------------------------------------------- Rural/Metro Corporation disclosed the appointment of Kristine Beian Ponczak as Senior Vice President, Chief Financial Officer, and Corporate Secretary. Mrs. Ponczak, 42, brings more than 17 years of experience in all phases of financial management, including treasury, accounting, strategic planning and financial analysis. "Kristi is a nine-year member of our executive management team whose strong leadership has been instrumental to the growth and success of our company," Jack Brucker, president and chief executive officer, said. "Her longstanding commitment to operational, strategic, and financial excellence coupled with her industry knowledge and experience provide significant value to our stakeholders. We are very pleased to make this appointment and look forward to the continuing contribution of her financial leadership." Prior to her promotion, Mrs. Ponczak, served as Vice President and Treasurer of Rural/Metro Corporation, managing the Company's working capital strategies, financial planning and budgeting, operational performance measurement, financial risk management, corporate banking, investments, and taxation strategies. In her new role, Mrs. Ponczak's oversight will be expanded to include overall responsibility for driving financial direction, optimizing the organization's capital structure, investor relations, implementation of information technology solutions, and coordination of financial strategies to deliver results. She will report directly to the President and Chief Executive Officer. Mrs. Ponczak succeeds Michael S. Zarriello, who is no longer with the company. Prior to joining Rural/Metro in 1998, Mrs. Ponczak served as Corporate Controller for Sun Street Foods from 1995 to 1998 where she was responsible for managing the financial reporting and banking relationships of that privately held company, which represented a management buyout of certain subsidiaries of Main Street & Main Inc. From 1993 to 1995, she worked at Main Street & Main Inc. as Controller over two subsidiaries. Prior to that, Mrs. Ponczak was a member of the managing consulting/business valuation group at the public accounting firm Coopers & Lybrand, where she focused on corporate valuations, litigation support, and acquisition structures. Mrs. Ponczak is a graduate of Arizona State University with a Bachelor of Science degree in accountancy and is a Certified Public Accountant. Headquartered in Scottsdale, Arizona, Rural/Metro Corporation (Nasdaq: RURL) -- http://www.ruralmetro.com/-- provides emergency and non-emergency medical transportation, fire protection, and other safety services in 23 states and approximately 400 communities throughout the United States. SAINT VINCENTS: Taps Pride Capital as Liquidator ------------------------------------------------ Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Pride Capital Group, LLC, doing business as Great American Group, LLC, as their liquidator, nunc pro tunc to Sept. 15, 2006. The Debtors seek to privately sell certain tangible personal property, free and clear of all liens, claims, encumbrances and other interests. Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that the Debtors have no experience in liquidating large quantities of assets, and attempting to do so without the assistance of an experienced liquidator would require their management to dedicate a large amount of time and effort to the sale of the Surplus Assets. As the Debtors' sole and exclusive liquidator, Great American will develop and implement a strategy for the divestiture of the Surplus Assets for the highest and best price. In addition, Great American will: (a) provide a full time supervisor or supervisors to supervise and conduct the sale; (b) oversee the liquidation and disposal of the Surplus Assets; (c) determine and implement appropriate point-of-purchase, point-of-sale, and external advertising to effectively sell the Surplus Assets for the highest available price; (d) determine pricing and discounting of the Surplus Assets; (e) provide other related services deemed necessary by the parties under the circumstances leading to the sale; and (f) provide the Debtors with reporting and reconciliation of all accounting information in a form reasonably acceptable to the Debtors. Mr. Troop discloses that Great American has provided, and is continuing to provide, services related to transporting the Surplus Assets to Bayley Seton beginning Sept. 15, 2006. All services provided by Great American will be, and have been, performed at the Debtors' behest and in consultation and coordination with their other professionals to ensure no duplication of effort. Pursuant to the terms of a liquidator services agreement between the parties, the Debtors will: -- pay Great American a commission equal to 5% of the proceeds realized from the sale of any of the Surplus Assets; -- allow Great American to charge purchasers of the Surplus Assets a fee of up to 10% for on-site bidders and up to 13% for internet bidders; and -- entitle Great American, with respect to any sale of Surplus Assets, to reimbursement of the actual, direct and commercially reasonable operating expenses incurred in connection with that sale, subject to a $34,000 cap. The Debtors also propose that in lieu of Great American's filing of applications for compensation, the Debtors will file a summary of proceeds and buyer's premiums realized from the Sale, in full satisfaction of all application requirements. The Debtors have also agreed to indemnify Great American against certain losses arising out of their engagement. Mark P. Naughton, vice-president and general counsel of Great American, assures the Court that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). Great American and all of its employees do not have any connection with, or hold any interest adverse to, the Debtors, their creditors or any other party-in- interest. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 36 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Files for Bankruptcy Protection in Delaware ----------------------------------------------------------- Sea Containers Ltd., Sea Containers Caribbean Inc., and Sea Containers Services Ltd. filed for chapter 11 protection on Oct. 15, 2006, with the U.S. Bankruptcy Court for the District of Delaware. At June 30, 2006, the Company had approximately $1.673 billion in total assets and $1.582 billion in total liabilities on a consolidated basis, Robert D. MacKenzie president and chief executive officer of Sea Containers Ltd disclosed. Mr. MacKenzie added that the Debtors' principal liabilities consist of: a. indebtedness from public notes issued by Sea Containers Ltd., b. guarantee and related obligations of Sea Containers Ltd. and other prepetition financial obligations, and c. potential pension obligations. When the Debtors filed for bankruptcy, the Debtors have approximately $49 million in cash available to fund their operations during their stay in chapter 11, Mr. MacKenzie said. The four public notes are: a. $115 million 10-3/4% Notes due Oct. 15, 2006; b. $149.8 million 7-7/8% Notes due Feb. 15, 2008; c. $19.2 million 12-1/2% Notes due Dec. 1, 2009; and d. $103 million 10-1/2% Notes due May 15, 2012. The public notes are unsecured obligations of Sea Containers Ltd. and are not guaranteed by any of the other Debtors or any non- debtor subsidiary. The public notes rank equally in right of payment with respect to each other. Mr. MacKenzie said that the Debtors were forced to commence their bankruptcy filing because: a. they will not have sufficient cash available to meet their upcoming debt obligation, specifically the Oct. 15 Public Note payment; and b. they desire to minimize the risk of certain creditors taking precipitous enforcement actions against the Debtors and their assets which could jeopardize the value of the Company as a whole, and the Debtors' ability to successfully reorganize their operations and restructure their balance sheet. About Sea Containers Ltd. Sea Containers Ltd. -- http://www.seacontainers.com/-- is a Bermuda registered company with regional operating offices in London, Genoa, New York City, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. The company has three main business areas: passenger transport, leisure, and marine container leasing. In addition to its three principal divisions, the company has associated investments in property, publishing, and plantations. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. * * * In June 2006, Moody's Investors Service downgraded the senior unsecured ratings and confirmed the senior secured rating of Sea Containers -- Senior Unsecured to Caa3, Senior Secured at B3. Moody's said the outlook is negative. Standard & Poor's Ratings Services said that its ratings on Sea Containers Ltd., including the 'CCC-' corporate credit rating, remain on CreditWatch with negative implications. SEA CONTAINERS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Sea Containers Ltd. 22 Victoria Street P.O. Box HM 1179 Hamilton, HMEX Bermuda Bankruptcy Case No.: 06-11156 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Sea Containers Caribbean Inc. 06-11155 Sea Containers Services Ltd. 06-11157 Type of Business: The Debtor provides passenger and freight transport and marine container leasing. It operates in four segments: Ferry, Rail, Container, and Leisure. See http://www.seacontainers.com/ Chapter 11 Petition Date: October 15, 2006 Court: District of Delaware Debtor's Counsel: Robert S. Brady, Esq. Young, Conaway, Stargatt & Taylor The Brandywine Bldg. 1000 West Street, 17th Floor P.O. Box 391 Wilmington, DE 19899 Tel: (302) 571-6600 Fax: (302) 571-1253 Debtors' consolidated financial condition as of June 30, 2006: Total Assets: $1.673 billion Total Debts: $1.582 billion Debtors' Consolidated List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ United States Trust Company Note Debt $149,800,000 of New York 7 7/8% Senior Notes Attn: Corporate Trust and Due February 2006 Agency Division 114 W. 47th St. New York, NY 10036 United States Trust Company Note Debt $115,000,000 of New York 10 3/4% Senior Notes Attn: Corporate Trust and Due October 2006 Agency Division 114 W. 47th St. New York, NY 10036 The Bank of New York Note Debt $103,000,000 Attn: Corporate Trust 10 1/2% Senior Notes Administration Due May 2012 101 Barclay St. New York, NY 10285 SPCP (Silverpoint) Contract Debt $19,500,000 2 Greenwich Plaza Greenwich, CT 06830 The Bank of New York Note Debt $19,200,000 Attn: Corporate Trust 12 1/2% Senior Notes Administration Due December 2009 101 Barclay St. New York, NY 10285 Centrabanca Guarantee $19,166,720 Corso Europa 16 Borrower: Hoverspeed Milan, Italy Italia Collateral: Supersea Cat 4 HSH Nordbank Guarantee $15,800,000 Gerhart-Hauptmann-Piatz50 Borrower: Hoverspeed Hamburg 20095 Italia Germany Collateral: SuperSea Cat 3 GE SeaCo SRL Trade Debt $11,941,906 Randall M Cathell 2nd Fl., Chamberlain Place Broad Street Bridgetown, Barbados West Indies HSH Nordbank Bank Loan $5,100,000 Gerhart-Hauptmann-Piatz50 Co-Borrower: SeaCat 4 Hamburg 20095 Limited Germany Collateral: SeaCat Scotland HSH Nordbank Bank Loan $2,700,000 Gerhart-Hauptmann-Piatz50 Co-Borrower: YMCL Hamburg 20095 Collateral: Assets of Germany YMCL Bank of Scotland Bank Loan $2,300,000 155 Bishopsgate Collateral: IT London, EC2M 3YB equipment UK GE SeaCo America LLC Trade Debt $1,751,948 1601 Oceanic Street Charleston, SC 29405 Bank of Scotland Bank Loan $500,000 155 Bishopsgate Co-Borrower: SC Rail London EC2M 3YB Services UK Collateral: Rail infrastructure GE Seaco British Isles Ltd. Trade Debt $90,837 Law Office of Tank & Co. Professional Services $22,052 GE France Trade Debt $13,561 Jane Fryer Pension Obligations Unknown (1983 Scheme) Rosemary Kennell Pension Obligations Unknown (1990 Scheme) Citicapital Commercial Corp. Guarantee of Time Unknown Charter Obligations Primary Obligor: SeaStreak America, Inc. JP MorganChase Bank Guarantee of Time Unknown Charter Obligations Primary Obligor: SeaStreak America, Inc. SIERRA PACIFIC: 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 downgraded its Ba2 Corporate Family Rating for Sierra Pacific Resources to Ba3. 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 ---------- ------- ------- ------ ---------- Issuer Rating B1 B1 Senior unsecured B1 B1 LGD5 81% Multiple seniority shelf (senior unsecured) (P)B1 (P)B1 LGD5 81% Multiple seniority shelf (subordinate) (P)B2 (P)B2 LGD5 88% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Sierra Pacific Resources is a holding company whose principal subsidiaries, Nevada Power Company and Sierra Pacific Power Company, are electric and electric and gas utilities, respectively. Sierra Pacific Resources also holds relatively modest non-utility investments through other subsidiaries. Sierra Pacific Resources' headquarters are in Las Vegas, Nevada. SMITHFIELD FOODS: 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. Consumer Products sector, the rating agency confirmed its Ba1 Corporate Family Rating for Smithfield Foods, Inc. Additionally, Moody's held and revised its probability-of-default ratings and assigned loss-given-default ratings to these notes: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $600 million 7.000% Global Senior Notes Due Aug. 1, 2011 Ba2 Ba2 LGD5 82% $350 million 7.750% Global Notes, Series B, Due May 15, 2013 Ba2 Ba2 LGD5 82% $300 million 8.000% Global Senior Notes, Series B Due Oct. 15, 2009 Ba2 Ba2 LGD5 82% $200 million 7.625% Sr. Sub.Notes Due Feb. 15, 2008 Ba3 Ba2 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%). Headquartered in Smithfield, Virginia, Smithfield Foods, Inc. -- http://www.smithfieldfoods.com/-- produces fresh pork products that include unprocessed and trimmed cuts, loins, picnics, and ribs, as well as processed meat products, such as smoked and boiled hams, bacon, sausage, hot dogs, deli and luncheon meats, pepperoni, dry meat products, and ready-to-eat foods. The company's beef products comprise boxed beef and ground beef. Smithfield Foods also provides various other fresh and processed meats products. SPECIALTYCHEM PRODUCTS: Wants Anderson Tackman as Accountant ------------------------------------------------------------ SpecialtyChem Products Corporation and ChemDesign Corporation ask permission from the U.S. Bankruptcy Court for the District of Wisconsin to employ Anderson, Tackman & Company, PLC as their public accountant, nunc pro tunc Aug. 24, 2006. Anderson Tackman will: a) assist in the preparation of and filing of all prepetition and postpetition corporate tax returns, including preparation of federal, state, local income tax returns with supporting schedules. b) assist with ChemDesign's annual reporting obligation under Employee Retirement Income Security Act of 1974 for the ChemDesign 401k Plan, an audit of the statement of net assets available for benefits for the fiscal year ended Dec. 31, 2005, and related statement of changes of net assets available, including preparation of related schedules, and review of Form 5500 required by the Department of Labor. c) perform any bookkeeping necessary for preparation of the income tax returns. The Debtors disclose that the Firm will bill: Professional Designation Hourly Rate ------------ ----------- ----------- Steve Overly Partner $205 Conrad J. Schumitsch Partner $163 Randal G. Kahler Associate $125 Cindy Randall Payroll $75 The Debtors further disclose that a fee between $5,000 and $8,000 will be charged for services based on the actual time spent plus travel and other out-of-pocket costs such as report production, typing, postage, etc. To the best of the Debtors' knowledge, the firm 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. About ChemDesign Corporation Headquartered in Fitchburg, Massachusetts, ChemDesign Corporation -- http://www.chemdesigncorp.com/-- is a custom manufacturer of various fine organic chemicals for paper products, electronics, agricultural products and other materials. The Debtor filed for chapter 11 protection on Aug. 27, 2006 (Bankr. E.D. Wis. Case No. 06-24729. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. About SpecialtyChem Products Headquartered in Marinette, Wisconsin, SpecialtyChem Products, Corp., manufactures various organic chemicals for paper products, electronics, agricultural products and other materials. The company filed for chapter 11 protection on June 12, 2006 (Bankr. E.D. Wis. Case No. 06-23131). Christopher J. Stroebel, Esq., Timothy F. Nixon and Marie L. Nienhuis, Esq., at Godfrey & Kahn, S.C., represent the Debtor in its restructuring efforts. Fort Dearborn Partners, Inc., is the Debtor's turnaround consultant, and gives financial advice to the Debtor. Matthew M. Beier, Esq., and Eliza M. Reyes, Esq., at Brennan, Steil and Basting, S.C., and Matthew T. Gensburg, Esq., and Nancy A. Peterman, Esq., at Greenberg Traurig, L.L.P., represent the Official Committee of Unsecured Creditors of the Debtor. In its schedule of assets and liabilities, the Debtor disclosed $11,394,224 in total assets and $12,323,425 in total debts. SWIFT & COMPANY: 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. Consumer Products sector, the rating agency confirmed its B2 Corporate Family Rating for Swift & Company. In addition, Moody's affirmed its probability-of-default ratings and assigned loss-given-default ratings to these notes: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $257.26 million 10.125% Gtd. Global Notes Due Oct. 1, 2009 B3 B3 LGD4 61% $150 million 12.500% Sr. Sub. Global Notes Due Jan. 1, 2010 Caa1 Caa1 LGD5 77% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Swift & Company -- http://www.swiftbrands.com/-- provides quality beef and pork products to consumers nationwide. SYSTEMS EVOLUTION: Losses Prompt Auditor to Raise Going Concern --------------------------------------------------------------- Malone & Bailey, PC, in Houston, Tex., raised substantial doubt about Systems Evolution Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended May 31, 2006. The auditor pointed to the Company significant losses for the last three fiscal years. For the year ended May 31, 2006, Systems Evolution Inc. reported an $11,943,124 net loss on $4,524,662 of revenues compared with a $1,718,908 net loss on $3,768,687 of revenues for the same period in fiscal 2005. At May 31, 2006, SEVI's balance sheet showed $5,617,229 in total assets and $12,420,232 in total liabilities, resulting in a $6,803,003 stockholders' deficit. The Company's May 31 balance sheet also showed strained liquidity with $896,587 in total current assets available to pay $12,248,032 in total current liabilities coming due within the next 12 months. A full-text copy of the Company's Annual Report is available for free at http://ResearchArchives.com/t/s?136a Systems Evolution Inc. (OTCBB: SEVI) is a professional service organization that provides computer software development services, computer network support, and contract staff. The Company uses Microsoft, Novell, and IBM Rational tools to build software and support computer networks and its largest client is the State of Texas government. TATER TIME: Gets Court Nod to Hire Gregory Lockwood as Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Washington in Spokane and Yakima allowed Tater Time Potato Company, LLC, and its debtor-affiliates to employ J. Gregory Lockwood, Esq., and his firm, The Law Office of J. Gregory Lockwood, PLLC, as their new bankruptcy counsel. As reported in the Troubled Company Reporter on Sept 15, 2006, the Debtors hired Mr. Lockwood because their current bankruptcy counsel retired from practicing law effective Sept. 1, 2006. Mr. Lockwood will represent the Debtors in their chapter 11 cases. Mr. Lockwood disclosed that he will bill $225 per hour. Other professionals in his Firm bill: Designation Hourly Rate ----------- ----------- Paralegal $90 Legal Secretary $50 Mr. Lockwood assured the Court that he and his firm represent no interest adverse to the Debtors and are disinterested as defined in Section 101(14) of the Bankruptcy Code. Headquartered in Warden, Washington, Tater Time Potato Company, LLC, packs and ships potatoes. The Company and its debtor- affiliates filed for chapter 11 protection on January 24, 2005 (Bankr. E.D. Wash. Case No. 05-00509). Dan O'Rourke, Esq., at Southwell & O'Rourke, P.S., represented the Debtors. No Official Committee of Unsecured Creditors has been appointed in these cases. When the Debtors filed for protection from their creditors, it reported total assets of $11,312,000 and total debts of $7,639,184. TECO ENERGY: 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 downgraded its Ba1 Corporate Family Rating for TECO Energy Inc. to Ba2. 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 ---------- ------- ------- ------ ---------- Senior unsecured notes Ba2 Ba2 LGD4 56% Senior unsecured revenue bonds Ba2 Ba2 LGD4 56% Multiple seniority shelf (senior unsecured) (P)Ba2 (P)Ba2 LGD4 56% Multiple seniority shelf (subordinate) (P)Ba3 (P)Ba3 LGD5 86% Multiple seniority shelf (preferred stock) (P)B1 (P)Ba3 LGD5 88% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Tampa, Florida, TECO Energy, Inc. (NYSE: TE) -- http://www.tecoenergy.com/-- is an integrated energy-related holding company with regulated utility businesses, complemented by a family of unregulated businesses. Its principal subsidiary, Tampa Electric Company, is a regulated utility with both electric and gas divisions (Tampa Electric and Peoples Gas System). Other subsidiaries are engaged in waterborne transportation, coal and synthetic fuel production and electric generation and distribution in Guatemala. TIMKEN CO: Plans to Exit Seamless Steel Tube Manufacturing in UK ---------------------------------------------------------------- The Timken Company disclosed its intention to exit its European seamless steel tube manufacturing operations located in Desford, England, as part of its strategy to manage its business portfolio to improve performance. Timken will begin consultations with representatives of the 400 associates located at the Desford facility to explore alternative solutions to closure. "The proposed action is part of the company's strategy to focus on lines of business that produce differentiated products while driving profitable growth," said Salvatore J. Miraglia, Jr., president of Timken's Steel Group. "Exiting this business would further advance the focus of the Steel Group on differentiated products that deliver value to both customers and shareholders." The Desford facility generated sales of approximately $85 million to $95 million in recent years but has not been profitable. It manufactures seamless steel tube for machining and mechanical applications, primarily serving the bearing industry in Europe. In conjunction with the proposed exit of the business, Timken would intend to sell some portion of the plant's assets and secure a reliable alternative source of steel tube for its European bearing operations. Headquartered in Canton, Ohio, The Timken Company (NYSE: TKR) -- http://www.timken.com/-- is a manufacturer of highly engineered bearings and alloy steels. It also provides related components and services such as bearing refurbishment for the aerospace, medical, industrial and railroad industries. The Company has operations in 27 countries and employs 27,000 employees. * * * The Company's 7.16% Medium-Term Notes, Series A due 2027 carry Moody's Investors Service's Ba1 rating. TOWER RECORDS: Great American to Close Mass. Stores This Year ------------------------------------------------------------- Great American Group will close Tower Records stores in Burlington, Massachusetts, and Harvard Square in Cambridge this year, Boston Business Journal reports. The Court-approved liquidator began the liquidation process and going-out-of-business sales on Oct. 7, 2006. According to the Associated Press, the music chain's 3,000 employees have been told that they will be laid off. Karen Matthews, writing for AP, discloses that Tower Records has cut prices on CDs, books and other products. CDs were 10% off this week, including Beyonce's "B'day" with a discounted price of $17.09, compared with $9.99 on Amazon. Great American president Andy Gumaer said the discount would increase over the six to eight weeks it takes to shutdown the stores. Reports show that Music fans and customers alike were "devastated, frustrated and depressed" that the Tower stores were closing. About Tower Records Headquartered in West Sacramento, California, MTS, Inc., dba Tower Records -- http://www.towerrecords.com/-- is a retailer of music in the U.S., with nearly 100 company-owned music, book, and video stores. The Company and its affiliates previously filed for chapter 11 protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No. 04-10394). The Court confirmed the Debtors' plan on March 15, 2004. The Company and seven of its affiliates filed their second voluntary chapter 11 petition on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886 through 06-10893). Richards, Layton & Finger, P.A. and O'Melveny & Myers LLP represent the Debtors. The Official Committee of Unsecured Creditors is represented by McGuirewoods LLP. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Dec. 18, 2006. TVO ACQUISITION: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: TVO Acquisition Corporation dba John Gillen Company 2540 S. 50th Avenue Cicero, IL 60804 Bankruptcy Case No.: 06-13035 Type of Business: The Debtor manufactures standard and special ferrous and non-ferrous metal parts from round, square and flat coil for industry in the United States and Canada. Chapter 11 Petition Date: October 12, 2006 Court: Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtor's Counsel: John E. Gierum, Esq. Gierum & Mantas 1030 W. Higgins Rd., Ste. 220 Park Ridge, IL 60068 Tel: (847) 318-9130 Fax: (847) 318-9140 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Pension Benefit Guaranty Corporation $1,200,000 1200 K Street, NW Washington, DC 20005 Internal Revenue Service $200,000 Mail Stop 5010CHI 230 South Dearborn Street Chicago, IL 60604 Bekaert Corporation $38,445 P.O. Box 101280 Atlanta, GA 30392 Taubensee Steel & Wire Co. $24,286 P.O. Box 97616 Chicago, IL 60678-7616 Cincinnati Tool Steel Company $18,565 201 Stanley Street Elk Grove Village, IL 60007 Unicare $9,710 22234 Network Place Chicago, IL 60673-1222 Earl M. Jorgensen Co. $8,755 75 Remittance Drive, Ste. 6477 Chicago, IL 60675 NNT Corporation $7,353 1320 Norwood Avenue Itasca, IL 60143 Three J's Industries, Inc. $6,155 701 Landmeier Road Elk Grove, IL 60007 Bluestar Energy Services, Inc. $6,000 14034 Collections Center Drive Chicago, IL 60693 Banner Service Corporation $2,968 P.O. Box 88485 Chicago, IL 60680 FPM Heat Treating, LLC $2,200 1715 Momemtum Place Chicago, IL 60689 Sterling Die, Inc. $2,005 36825 Eagle Way Chicago, IL 60678 Hi-Temp Incorporated $1,913 P.O. Box 712534 Cincinnati, OH 45271 Major Wire Incorporated $1,740 7014 West Cullom Avenue Norridge, IL 60706 Abbco Industries $1,646 675 Greenleaf Avenue Elk Grove, IL 60007 Advance Grinding Service, Inc. $1,556 4828 South Lawndale Avenue McCook, IL 60525 Chem-Plate Industries, Inc. $1,545 1154 Momentum Place Chicago, IL 60687 Thomas Publishing Company LLC $1,439 Dept. CH 34193 Palatine, IL 60055 Riverdale Plating & Heat Treating, Inc. $1,438 689 West 134th Street Riverdale, IL 60827 UNIVERSAL EXPRESS: Pollard-Kelley Expresses Going Concern Doubt --------------------------------------------------------------- Pollard-Kelley Auditing Services, Inc., in Fairlawn, Ohio, expressed substantial doubt about Universal Express, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended June 30, 2006. The auditing firm pointed to the Company's generated losses to date. In its Form 10-KSB for the fiscal year ended June 30, 2006, submitted to the Securities and Exchange Commission, Universal Express incurs a $18,872,267 net loss on $1,073,486 of net revenues for fiscal 2006, compared to a $9,985,868 net loss on $931,009 of net revenues in 2005. As of June 30, 2006, the Company had an accumulated deficit of $77.8 million. A full-text copy of the Company's Annual Report is available for free at http://researcharchives.com/t/s?1360 Universal Express, Inc., -- http://www.usxp.com/ -- is a logistics and transportation conglomerate with multiple developing subsidiaries and services. Its principal subsidiaries include Universal Express Capital Corp. and Universal Express Logistics, Inc. (which includes Virtual Bellhop, LLC, Luggage Express and Worldpost, its international shipping divisions), and Private Postal Center Network.com and its division Postal Business Center Network.com. UNIVERSITY HEIGHTS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: University Heights Association, Inc. 130 New Scotland Avenue Albany, NY 12208 Bankruptcy Case No.: 06-12672 Type of Business: The Debtor is an organization established in 1995 to create an academic/medical consortium of international structure in the Capital Region. See http://www.universityheights.org/ Chapter 11 Petition Date: October 12, 2006 Court: Northern District of New York (Albany) Judge: Robert E. Littlefield Jr. Debtor's Counsel: Francis J. Smith, Esq. McNamee, Lochner, Titus & Williams, PC 677 Broadway Albany, NY 12207 Tel: (518) 447-3278 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Marty and Dorothy Silverman Alleged loan $24,862,569 Foundation 150 East 58th St., 29th Fl. New York, NY 10155 Albany Law School Loan $2,157,592 80 New Scotland Avenue Albany, NY 12208 Albany College of Pharmacy Loan $1,527,156 106 New Scotland Avenue Albany, NY 12208 The Sage Colleges Loan $65,025 45 Ferry Street Troy, NY 12180 Albany Medical Center Loan $43,300 43 New Scotland Avenue, MC-87 Albany, NY 12208 Citicorp Vendor Finance Equipment lease $16,000 44 Holland Partners Parking lease $15,600 Key Equipment Finance, Inc. Equipment lease $7,500 Com Doc, Inc. Equipment lease $2,100 Main Care Energy Goods $2,000 Applied Theory Corp. Trade debt $1,611 National Grid Goods and services $1,500 Schenectady Hardware & Goods and services $1,500 Electric Capital Diagnostics Goods and services $1,400 Center for Medical Services Goods and services $1,200 Exxom Mobil Credit card $1,000 Nextira One Goods and services $800 Pitney Bowes Credit Corp. Equipment lease $600 Broadview Goods and services $600 NYS Business Council Goods and services $600 UNIVERSITY MEDICAL: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: University Medical Center LLC 95 South Federal Highway Boca Raton, FL 33432 Bankruptcy Case No.: 06-15211 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: October 13, 2006 Court: Southern District of Florida (West Palm Beach) Judge: Steven H. Friedman Debtor's Counsel: Norman L. Schroeder II, Esq. Norman L. Schroeder II, P.A. 6801 Lake Worth Road, Suite 120 Lake Worth, FL 33467 Tel: (561) 642-8884 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ CMG Property Management Group $17,380 [no address provided] Gerstle Rosen Goldenberg $10,000 [no address provided] Thyssenkrup Elevator $6,545 [no address provided] Gerstin & Association $4,445 [no address provided] Old Dominion Insurance $3,010 [no address provided] Group One Safety $2,450 [no address provided] Calico Air Conditioning $2,174 [no address provided] Esser Glass $2,100 [no address provided] Lighting Management $2,018 [no address provided] Waste Management $1,469 [no address provided] Seagate Building Services $1,463 [no address provided] White Professional Window Clng. $1,378 [no address provided] Glynn Environmental $1,200 [no address provided] Green Environments $1,149 [no address provided] FPL $1,026 [no address provided] Jim Daily Irrigation $1,000 [no address provided] FL Department of Revenue $948 [no address provided] World Environmental $750 [no address provided] The Hartford Insurance Co. $506 [no address provided] USA COMMERCIAL: Rights Holders Tap Gordon & Silver as Counsel ------------------------------------------------------------- The Official Committee of Holders of Executory Contract Rights through USA Commercial Mortgage Company asks the U.S Bankruptcy Court for the District of Nevada, for permission to employ Gordon & Silver Ltd., as its bankruptcy counsel. Gordon & Silver will: a) advise the Committee of its rights and obligations and performance of its duties during administration of these bankruptcy cases; b) represent the Committee in all proceedings before this Court of other courts of jurisdiction over these cases; c) assist the Committee in the performance of its duties as set fort in 11 U.S.C. Section 1103; d) assist the Committee in developing legal positions and strategies with respect to all facets of these proceedings; and e) provide counsel and advise as the Committee may require in connection with the above-captioned proceedings. Gregory E. Garman, Esq., a shareholder of the firm, discloses that he and Gerald M. Gordon, Esq., also a shareholder, will bill hourly rates of $410 and $525, respectively. Mr. Garman further disclosed that the firm's other professionals' billing rates are: Designation Hourly Rate ----------- ----------- Shareholders $410 - $525 Associates $175 - $380 Law clerks $155 - $160 Paralegals $150 Mr. Garman assured the Court that his firm does not hold any interest adverse to the Debtor's estate and is disinterested as that term defined in Section 101(14) of the Bankruptcy Code. Mr. Garman can be reached at: Gregory E. Garman, Esq. 3960 Howard Hughes Pkway., 9th floor Las Vegas, Nevada 89109 Tel: (702) 796-5555 Fax: (702) 369-2666 http://gordonsilver.com About USA Commercial Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba USA Capital -- http://www.usacapitalcorp.com/-- provides more than $1 billion in short-term and permanent financing to homebuilders, commercial developers, apartment owners and institutions nationwide. The Company and its debtor-affiliates filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev. Case Nos. 06-10725 to 06-10729). Lenard E. Schwartzer, Esq., at Schwartzer & Mcpherson Law Firm, and Annette W. Jarvis, Esq., at Ray Quinney & Nebeker, P.C., represent the Debtors in their restructuring efforts. Thomas J. Allison, a senior managing director at Mesirow Financial Interim Management LLC, has been employed as Chief Restructuring Officer for the Debtors. Susan M. Freeman, Esq., and Rob Charles, Esq., at Lewis and Roca LLP represent the Official Committee of Unsecured Creditors of USA Commercial Mortgage Company. Edward M. Burr at Sierra Consulting Group, LLC, gives financial advice to the Creditors Committee of USA Mortgage. Marc A. Levinson, Esq., and Jeffery D. Hermann, Esq., at Orrick, Herrington & Sutcliffe LLP, and Bob L. Olson, Esq., and Anne M. Loraditch, Esq., at Beckley Singleton, Chartered, represent the Official Committee of Equity Security Holders of USA Capital Diversified Trust Deed Fund, LLC. FTI Consulting, Inc., gives financial advice to the Equity Committee of USA Diversified. Candace C. Carlyon, Esq., and Shawn w. Miller, Esq., at Shea & Carlyon, Ltd., and Jeffrey H. Davidson, Esq., Frank A. Merola, Esq., and Eve H. Karasik, Esq., at Stutman, Treister & Glatt, PC, represent the Official Committee of Equity Security Holders of USA Capital First Trust Deed Fund, LLC. Matthew A. Kvarda, at Alvarez & Marsal, LLC, gives financial advise to the Equity Committee of USA First. When the Debtors filed for protection from their creditors, they estimated assets of more than $100 million and debts between $10 million and $50 million. USGEN NEW ENGLAND: Court Denies Request to Preclude Bid Reference ----------------------------------------------------------------- On Nov. 20, 2003, the U.S. Bankruptcy Court for the Middle District of Maryland authorized USGen New England, Inc., to reject its 30-year power purchase agreement dated July 26, 1985, with Pontook Operating Limited Partnership. On Jan. 28, 2004, Brascan Energy Marketing, Inc., now known as Brookfield Energy Marketing Inc., as agent of Pontook, filed Claim No. 327 asserting $240,947 owed under the Pontook Agreement and $10,162,400 for damages arising from the rejection of the Agreement. On May 6, 2005, Brascan filed Claim No. 418, amending its prior claim, to assert rejection damages of $24,934,700. USGen did not dispute the $240,947 prepetition claim. However, USGen wanted the rejection claims disallowed or reduced. Accordingly, in a September 2006 hearing, the Court denied USGen New England, Inc.'s request to preclude from trial any reference to the purported bids of UBS AG and Constellation Global Commodities. The request of Brookfield Energy Marketing Inc., formerly known as Brascan Energy Marketing, to exclude the late-filed supplemental report of Robert B. Stoddard, on behalf of USGen, is also denied. The Honorable Paul Mannes relates that the Court has been advised that the Brascan claim dispute has been settled, including all counter-claims, cross-claims, and third-party claims. Accordingly, Judge Mannes dismisses the action with each party to bear its own costs unless otherwise agreed, in which event the costs will be adjusted between USGen and Brookfield. Both parties may reopen the case within 30 days if settlement is not consummated. About USGen New England Headquartered in Bethesda, Maryland, USGen New England Inc., an affiliate of PG&E Generating Energy Group LLC, owns and operates several electric generating facilities in New England and purchases and sells electricity and other energy-related products at wholesale. The Company filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30465). Marc Richards, Esq., at Blank Rome LLP represents USGen New England in its restructuring efforts. When it sought chapter 11 protection, the Debtor reported assets amounting to $2,337,446,332 and debts amounting to $1,249,960,731. The Debtor filed its Second Amended Plan of Liquidation and Disclosure Statement on March 24, 2005. The Plan was confirmed on May 13, 2005. (PG&E National Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WACHOVIA BANK: Good Credit Cues S&P to Raise & Affirm Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on seven classes of commercial mortgage pass-through certificates from Wachovia Bank Commercial Mortgage Trust's series 2003-C4. Concurrently, the ratings on the remaining 11 classes are affirmed. The raised and affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The upgrades of several senior certificates reflect the defeasance of $83.5 million (10%) in collateral since issuance. As of the remittance report dated Sept. 15, 2006, the trust collateral consisted of 138 loans with an outstanding principal balance of $839.4 million, compared with 140 loans totaling $891.8 million at issuance. The master servicer, Wachovia Bank N.A., reported primarily calendar year 2005 financial information for 91% of the pool. Based on this information and excluding the defeased collateral, Standard & Poor's calculated a weighted average debt service coverage for the pool of 1.52x, compared with 1.47x at issuance. All of the loans in the pool are current, and no loans are with the special servicer, Clarion Partners LLC. To date, the trust has not experienced a loss. The top 10 loans have an aggregate outstanding balance of $254.5 million (30%). Year-end 2005 financial information was available for nine of the top 10 loans. Based on this information, Standard & Poor's calculated a weighted average DSC of 1.60x, compared with 1.46x at issuance. The increase in DSC is attributable to the improved performance of six of the top 10 loans, which reported increases in DSC since issuance of 10% or more. One of the top 10 loans, however, is on the master servicer's watchlist. Standard & Poor's reviewed the property inspection reports provided by Wachovia, and all of the properties are reported to be in "good" or "excellent" condition. The master servicer reported 13 loans totaling $55 million (7%) on the watchlist. AmCap--80th & Wadsworth, the 10th-largest loan, has a current balance of $15.9 million (2%) and is secured by a 136,200-sq.-ft. retail strip center in Arvada, Colorado. The loan was placed on the watchlist due to a decline in DSC, which was 1.09x as of Dec. 31, 2005, compared with 1.32x at issuance. The decrease is attributable to increased operating expenses. As of June 30, 2006, the property had shown financial improvements, reporting a DSC of 1.26x and occupancy of 98%. The third-largest loan exposure ($30.9 million, 4%), the Portland Office portfolio, is not on the watchlist, but more than 20% of its gross leasable area is up for lease renewal within the next 12 to 18 months. Two office buildings and one mixed-use property in Portland, Oregon, totaling 283,800 sq. ft. secure this exposure. For the three properties combined, the DSC was 1.68x as of Dec. 31, 2005, and occupancy was 89% as of Aug. 31, 2006. The reported average rent for one of the office properties was $25.79 per sq. ft. as of Dec. 31, 2005. REIS Inc. reported that as of second-quarter 2006, the comparable group mean vacancy rate was 15.4% and the mean asking rent was $15.97 per sq. ft., which is lower than that of the aforementioned office property. The remaining loans on the watchlist have low occupancy, low DSC, and upcoming lease expirations. Standard & Poor's stressed various assets in the mortgage pool as a part of its analysis, including those on the watchlist or otherwise considered credit impaired. The resultant credit enhancement levels adequately support the raised and affirmed ratings. Ratings Raised Wachovia Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2003-C4 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ B AAA AA 18.19% C AA+ AA- 16.87% D AA A 14.21% E AA- A- 12.75% F A+ BBB+ 11.29% G A- BBB 9.83% H BBB+ BBB- 8.37% Ratings Affirmed Wachovia Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2003-C4 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 22.31 A-2 AAA 22.31 A-1A AAA 22.31 J BB+ 5.98 K BB 4.91 L BB- 4.12 M B+ 3.32 N B 3.19 O B- 2.66 X-C AAA N/A X-P AAA N/A N/A - Not applicable. WACHOVIA BANK: S&P Puts Low-B Ratings on Six Certificate Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Wachovia Bank Commercial Mortgage Trust's $3.595 billion commercial mortgage pass-through certificates series 2006-C28. The preliminary ratings are based on information as of Oct. 12, 2006. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings assigned to Wachovia Bank Commercial Mortgage Trust's $3.595 billion commercial mortgage pass-through certificates series 2006-C28 reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. The class A-1, A-2, A-PB, A-3, A-4, A-1A, X-P, A-M, A-J, B, C, D, and E notes are currently being offered publicly. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.24x, a beginning LTV of 107.5%, and an ending LTV of 101.6%. Preliminary Ratings Assigned Wachovia Bank Commercial Mortgage Trust Preliminary Recommended credit Class Rating amount support ----- ------ ----------- ------------------ A-1 AAA $38,820,000 30.000% A-2 AAA $418,678,000 30.000% A-PB AAA $168,397,000 30.000% A-3 AAA $215,000,000 30.000% A-4 AAA $1,052,214,000 30.000% A-1A AAA $623,528,000 30.000% X-P* AAA $3,479,706,000** N/A A-M AAA $359,520,000 20.000% A-J AAA $278,628,000 12.250% B AA+ $22,470,000 11.625% C AA $58,422,000 10.000% D AA- $31,458,000 9.125% E A $49,433,000 7.750% F A- $40,446,000 6.625% G BBB+ $40,446,000 5.500% H BBB $40,446,000 4.375% J BBB- $44,940,000 3.125% K BB+ $17,976,000 2.625% L BB $8,988,000 2.375% M BB- $13,482,000 2.000% N B+ $4,494,000 1.875% O B $8,988,000 1.625% P B- $8,988,000 1.375% Q NR $49,434,700 0.000% X-C* AAA $3,595,196,700 N/A FS NR $8,000,000 N/A * Interest-only class. ** Notional amount. NR - Not rated. N/A - Not applicable. WISCONSIN AVENUE: Paydown Prompts Fitch to Lift Rating to BB+ ------------------------------------------------------------- Fitch Ratings upgrades Wisconsin Avenue Securities, subordinate REMIC mortgage pass-through certificates, series 1996-M5: -- $5.6 million class C to 'BB+' from 'BB-'. The $6.6 million class D certificates are not rated by Fitch. To date, the deal has suffered $2.1 million in losses. The upgrade is due to additional paydown since Fitch's last rating action, which has resulted in increased credit enhancement. The certificates are collateralized by three mortgage loans, secured by multifamily properties. The properties are located in Georgia (43.9%), California (42%), and Florida (14%). As of the September 2006 distribution date, the transaction's aggregate principal balance has decreased 94% to $12.2 million from $216.0 million at issuance. Key Bank Real Estate Capital Markets, the master servicer, collected year-end 2005 operating statements for 100% of the loans in the pool. The YE 2005 weighted-average debt service coverage ratio increased to 0.75 times (x) from 0.54x at YE 2004. Currently, there are no delinquent or specially serviced loans. One loan (43.9%) continues to show declining performance due to increased operating expenses. YARRAMAN WINERY: Kabani & Company Raises Going Concern Doubt ------------------------------------------------------------ Kabani & Company, Inc., in Los Angeles, California, raised substantial doubt about Yarraman Winery, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended June 30, 2006. The auditor pointed to the Company's significant operating losses and insufficient capital. For the year ended June 30, 2006, Yarraman Winery reported a $1,216,766 comprehensive net loss on $1,830,151 of net sales compared with a $262,923 net loss on $2,293,354 of net sales for the same period in fiscal 2005. At June 30, 2006, the Company's balance sheet showed $9,909,698 in total assets, $7,364,142 in total liabilities, and $2,545,556 in total stockholders' equity. A full-text copy of the Company's Annual Report is available for free at http://ResearchArchives.com/t/s?136c Yarraman Winery, Inc., fka Dazzling Investments, Inc., through Yarraman Estate Pty Ltd., its wholly owned subsidiary in Australia, operates vineyards, and produces and distributes wine in Australia, U.S., Canada, New Zealand, Hong Kong, and throughout Europe. YORKVIEW TERRACE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Yorkview Terrace LLC c/o Stein & Farkas LLP 1639 East 13th Street Brooklyn, NY 11229 Bankruptcy Case No.: 06-43811 Type of Business: The Debtor buys and develops real estate to build a facility for individuals with muscular dystrophy. Chapter 11 Petition Date: October 12, 2006 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Gary M. Kushner, Esq. Forchelli, Curto, Schwartz, Mineo, et al 330 Old Country Road P.O. Box 31 Mineola, NY 11501 Tel: (516) 248-1700 Fax: (516) 248-1729 Total Assets: $1,686,665 Total Debts: $2,032,165 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Meridian Bank Mortgage $649,415 c/o Einig & Bush, LLP Secured Value: 420 Lexington Avenue $750,000 New York, NY 10170 Meridian Bank Mortgage $430,714 c/o Einig & Bush, LLP Secured Value: 420 Lexington Avenue $550,000 New York, NY 10170 Meridian Bank Mortgage $306,536 c/o Einig & Bush, LLP Secured Value: 420 Lexington Avenue $425,000 New York, NY 10170 Nicholas Sands Consulting Fee $240,000 61-41 71st Street Middle Village, NY 11379 Joseph Milano, Esq. Legal Fees $85,000 71 Vanderbilt New York, NY 10017 Nicholas Sands Expenses $75,000 61-41 71st Street Middle Village, NY 11379 Robert Barnett, Esq. Legal Fees $75,000 Capell Barnett & Matalon 100 Jericho Quadrangle Jericho, NY 11753 Edward Geller Exec. Asst. Fee $48,000 2 South End Avenue New York, NY 10280 Seth Akabas, Esq. $30,000 411 Madision Avenue New York, NY 10022 City of New York Real Estate Taxes $15,000 Department of Finance P.O. Box 32 New York, NY 10008 Warren Gran AIA Architectural Fees $15,000 29 Broadway New York, NY 10012 Tscherne Realty Market Study $15,000 7920 Eliot Avenue Middle Village, NY 11379 Carl Fisher Architect's Fee $10,000 530 Broadway New York, NY 10012 Marjorie Dilsheimer Secretarial Service $10,000 1919 Chestnut Street Philadelphia, PA 19103 Augusta & Augusta Zoning Analysis $5,000 62-15 Myrtle Avenue Glendale, NY 11385 Alfredo Plat Fin. Proj. Acctg. $5,000 21055 Yacht Club Drive North Tower, 1710 Aventura, FL 33160 Ben Davi Zoning Analysis $5,000 Design Group Ltd. 2724 Hoytave L. I, City, NY 11102 David Montrose Surveyor $4,000 Metropolitan Avenue Richmond HIll, NY New York Telephone Co. Services $2,500 39 Broadway New York, New York 10006 Keyspan Energy Services $2,000 89-67 162nd Street Jamaica, NY 11243 * BOND PRICING: For the week of October 9 -- October 13, 2006 ------------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 01/15/04 1 ABC Rail Product 10.500% 12/31/04 1 Adelphia Comm. 3.250% 05/01/21 0 Adelphia Comm. 6.000% 02/15/06 0 Adelphia Comm. 7.500% 01/15/04 66 Adelphia Comm. 7.750% 01/15/09 72 Adelphia Comm. 7.875% 05/01/09 72 Adelphia Comm. 8.125% 07/15/03 69 Adelphia Comm. 8.375% 02/01/08 72 Adelphia Comm. 9.250% 10/01/02 67 Adelphia Comm. 9.375% 11/15/09 73 Adelphia Comm. 9.500% 02/15/04 64 Adelphia Comm. 9.875% 03/01/05 69 Adelphia Comm. 9.875% 03/01/07 73 Adelphia Comm. 10.250% 11/01/06 69 Adelphia Comm. 10.500% 07/15/04 73 Adelphia Comm. 10.875% 10/01/10 71 Allegiance Tel. 11.750% 02/15/08 47 Allegiance Tel. 12.875% 05/15/08 48 Amer & Forgn Pwr 5.000% 03/01/30 66 Amer Color Graph 10.000% 06/15/10 69 Antigenics 5.250% 02/01/25 64 Anvil Knitwear 10.875% 03/15/07 72 Archibald Candy 10.000% 11/01/07 0 Armstrong World 6.350% 08/15/03 70 Armstrong World 6.500% 08/15/05 73 Armstrong World 7.450% 05/15/29 70 Armstrong World 9.000% 06/15/04 66 ATA Holdings 13.000% 02/01/09 4 Atlantic Mutual 8.150% 02/15/28 61 Autocam Corp. 10.875% 06/15/14 61 Avado Brands Inc 11.750% 06/15/09 1 Bank New England 8.750% 04/01/99 5 Bank New England 9.500% 02/15/96 13 BBN Corp 6.000% 04/01/12 0 Burlington North 3.200% 01/01/45 57 Calpine Corp 4.750% 11/15/23 48 Calpine Corp 6.000% 09/30/14 39 Calpine Corp 7.625% 04/15/06 71 Calpine Corp 7.750% 04/15/09 75 Calpine Corp 7.750% 06/01/15 33 Calpine Corp 7.875% 04/01/08 72 Calpine Corp 8.500% 02/15/11 47 Calpine Corp 8.625% 08/15/10 47 Calpine Corp 8.750% 07/15/07 70 Calpine Corp 10.500% 05/15/06 72 Cell Therapeutic 5.750% 06/15/08 70 Central Tractor 10.625% 04/01/07 0 Chic East Ill RR 5.000% 01/01/54 57 CIH 9.920% 04/01/14 71 CIH 10.000% 05/15/14 71 CIH 11.125% 01/15/14 74 Clark Material 10.750% 11/15/06 0 Collins & Aikman 10.750% 12/31/11 3 Columbia/HCA 7.050% 12/01/27 74 Columbia/HCA 7.500% 11/15/95 73 Comcast Corp 2.000% 10/15/29 41 Comprehens Care 7.500% 04/15/10 65 Cooper Standard 8.375% 12/15/14 75 Cray Research 6.125% 02/01/11 5 Dal-Dflt09/05 9.000% 05/15/16 29 Dana Corp 5.850% 01/15/15 73 Dana Corp 7.000% 03/01/29 73 Dana Corp 7.000% 03/15/28 73 Dana Corp 9.000% 08/15/11 68 Dana Corp 10.125% 03/15/10 71 Delco Remy Intl 9.375% 04/15/12 44 Delco Remy Intl 11.000% 05/01/09 48 Delta Air Lines 2.875% 02/18/24 30 Delta Air Lines 7.700% 12/15/05 29 Delta Air Lines 7.900% 12/15/09 33 Delta Air Lines 8.000% 06/03/23 31 Delta Air Lines 8.300% 12/15/29 32 Delta Air Lines 9.250% 03/15/22 29 Delta Air Lines 9.250% 12/27/07 29 Delta Air Lines 9.750% 05/15/21 30 Delta Air Lines 10.000% 06/01/08 56 Delta Air Lines 10.000% 06/05/13 74 Delta Air Lines 10.000% 08/15/08 32 Delta Air Lines 10.060% 01/02/16 73 Delta Air Lines 10.080% 06/16/07 65 Delta Air Lines 10.125% 05/15/10 29 Delta Air Lines 10.375% 02/01/11 30 Delta Air Lines 10.375% 12/15/22 30 Delta Mills Inc 9.625% 09/01/07 23 Deutsche Bank NY 8.500% 11/15/16 70 Diamond Triumph 9.250% 04/01/08 71 Diva Systems 12.625% 03/01/08 1 Dov Pharmaceutic 2.500% 01/15/25 48 Dura Operating 8.625% 04/15/12 39 Dura Operating 9.000% 05/01/09 5 Duty Free Int'l 7.000% 01/15/04 0 DVI Inc 9.875% 02/01/04 8 Dyersburg Corp 9.750% 09/01/07 0 Eagle-Picher Inc 9.750% 09/01/13 74 Empire Gas Corp 9.000% 12/31/07 1 Encysive Pharmac 2.500% 03/15/12 73 Exodus Comm Inc 10.750% 12/12/09 0 Exodus Comm Inc 11.625% 07/15/10 0 Fedders North AM 9.875% 03/01/14 67 Federal-Mogul Co. 7.375% 01/15/06 59 Federal-Mogul Co. 7.500% 01/15/09 61 Federal-Mogul Co. 8.160% 03/06/03 51 Federal-Mogul Co. 8.330% 11/15/01 59 Federal-Mogul Co. 8.370% 11/15/01 53 Federal-Mogul Co. 8.370% 11/15/01 59 Federal-Mogul Co. 8.800% 04/15/07 60 Finova Group 7.500% 11/15/09 30 Ford Motor Co 6.500% 08/01/18 75 Ford Motor Co 6.625% 02/15/28 74 Ford Motor Co 7.125% 11/15/25 75 Ford Motor Co 7.400% 11/01/46 74 Ford Motor Co 7.700% 05/15/97 73 Ford Motor Co 7.750% 06/15/43 74 GB Property Fndg 11.000% 09/29/05 53 Golden Books Pub 10.750% 12/31/04 0 Graftech Intl 1.625% 01/15/24 74 Graftech Intl 1.625% 01/15/24 74 GST Network Fndg 10.500% 05/01/08 0 Gulf Mobile Ohio 5.000% 12/01/56 75 HNG Internorth 9.625% 03/15/06 38 Home Prod Intl 9.625% 05/15/08 60 Inland Fiber 9.625% 11/15/07 64 Insight Health 9.875% 11/01/11 24 Iridium LLC/CAP 10.875% 07/15/05 29 Iridium LLC/CAP 11.250% 07/15/05 30 Iridium LLC/CAP 13.000% 07/15/05 30 Iridium LLC/CAP 14.000% 07/15/05 31 Isolagen Inc. 3.500% 11/01/24 74 IT Group Inc 11.250% 04/01/09 0 JTS Corp 5.250% 04/29/02 0 Kaiser Aluminum 9.875% 02/15/02 33 Kaiser Aluminum 12.750% 02/01/03 9 Kellstrom Inds 5.500% 06/15/03 0 Kmart Corp 8.540% 01/02/15 28 Kmart Corp 8.990% 07/05/10 4 Kmart Corp 9.350% 01/02/20 10 Kmart Funding 9.440% 07/01/18 23 Liberty Media 3.750% 02/15/30 62 Liberty Media 4.000% 11/15/29 67 Lifecare Holding 9.250% 08/15/13 69 Macsaver Financl 7.400% 02/15/02 4 Macsaver Financl 7.600% 08/01/07 1 Macsaver Financl 7.875% 08/01/03 0 Merisant Co 9.500% 07/15/13 65 Movie Gallery 11.000% 05/01/12 64 MSX Int'l Inc. 11.375% 01/15/08 70 Muzak LLC 9.875% 03/15/09 68 New Orl Grt N RR 5.000% 07/01/32 69 Northern Pacific RY 3.000% 01/01/47 56 Northern Pacific RY 3.000% 01/01/47 56 Northwest Airlines 6.625% 05/15/23 57 Northwest Airlines 7.248% 01/02/12 20 Northwest Airlines 7.625% 11/15/23 57 Northwest Airlines 7.875% 03/15/08 58 Northwest Airlines 8.700% 03/15/07 59 Northwest Airlines 8.875% 06/01/06 56 Northwest Airlines 9.152% 04/01/10 7 Northwest Airlines 9.179% 04/01/10 23 Northwest Airlines 9.875% 03/15/07 60 Northwest Airlines 10.000% 02/01/09 58 NTK Holdings Inc 10.750% 03/01/14 70 Nutritional Src 10.125% 08/01/09 66 Oakwood Homes 7.875% 03/01/04 9 Oakwood Homes 8.125% 03/01/09 6 Oscient Pharm 3.500% 04/15/11 67 OSU-DFLT10/05 13.375% 10/15/09 0 Outboard Marine 9.125% 04/15/17 0 Outboard Marine 10.750% 06/01/08 4 Overstock.com 3.750% 12/01/11 74 Owens Corning 7.000% 03/15/09 56 Owens Corning 7.500% 05/01/05 56 Owens Corning 7.500% 08/01/18 57 Owens Corning 7.700% 05/01/08 57 Owens-Corning Fiber 8.875% 06/01/02 48 Pac-West-Tender 13.500% 02/01/09 60 PCA LLC/PCA Fin 11.875% 08/01/09 25 Pegasus Satellite 9.625% 10/15/49 11 Pegasus Satellite 9.750% 12/01/06 11 Pegasus Satellite 12.375% 08/01/06 11 Pegasus Satellite 13.500% 03/01/07 0 Phar-mor Inc 11.720% 09/11/02 0 Piedmont Aviat 10.250% 01/15/49 1 Piedmont Aviat 10.250% 01/15/49 3 Pixelworks Inc 1.750% 05/15/24 71 Plainwell Inc 11.000% 03/01/08 2 Pliant Corp 13.000% 07/15/10 45 Polaroid Corp 6.750% 01/15/02 0 Primus Telecom 3.750% 09/15/10 46 Primus Telecom 8.000% 01/15/14 62 PSINET Inc 10.500% 12/01/06 0 PSINET Inc 11.000% 08/01/09 0 Radnor Holdings 11.000% 03/15/10 20 Railworks Corp 11.500% 04/15/09 1 Read-Rite Corp. 6.500% 09/01/04 6 Rite Aid Corp 6.875% 12/15/28 73 RJ Tower Corp. 12.000% 06/01/13 22 Rotech HealthCare 9.500% 04/01/12 70 Salton Inc 12.250% 04/15/08 72 Solectron Corp 0.500% 02/15/34 73 Spinnaker Inds 10.750% 10/15/06 0 Telcordia Tech 10.000% 03/15/13 71 Toys R Us 7.375% 10/15/18 73 Tribune Co 2.000% 05/15/29 66 United Air Lines 7.870% 01/30/19 54 United Air Lines 8.700% 10/07/08 39 United Air Lines 9.020% 04/19/12 56 United Air Lines 9.200% 03/22/08 49 United Air Lines 9.350% 04/07/16 33 United Air Lines 9.560% 10/19/18 61 United Air Lines 10.020% 03/22/14 49 United Air Lines 10.110% 01/05/06 3 United Air Lines 10.110% 02/19/49 41 US Air Inc. 10.750% 01/01/49 0 US Air Inc. 10.750% 01/15/49 24 USAutos Trust 5.100% 03/03/11 75 Venture Holdings 11.000% 06/01/07 0 Venture Holdings 12.000% 06/01/09 0 Vesta Insurance Group 8.750% 07/15/25 9 Werner Holdings 10.000% 11/15/07 13 Wheeling-Pitt St 6.000% 08/01/10 70 Winn-Dixie Store 8.875% 04/01/08 66 Winstar Comm Inc 12.750% 04/15/10 0 ********* 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. 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