/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/061030.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 30, 2006, Vol. 10, No. 258 Headlines ALIMENTATION: Moody's Assigns Loss-Given-Default Ratings AMERICAN AIRLINES: Earns $1 Million in Quarter Ended Sept. 30 AMES DEPARTMENT: Court Approves Settlement With MGM Home Ent. AMES DEPARTMENT: Has Until April 26 to Solicit Plan Acceptances ARBY'S RESTAURANT: Signs Development Commitments for New Locations ARBY'S RESTAURANT: Moody's Assigns Loss-Given-Default Rating ARBY'S RESTAURANT: S&P Affirms B+ Corporate Credit Rating BALL INC: Fitch Holds BB Rating on $34 Million Class L Certs. BALL INC: Fitch Rates $2 Million Class M-MC Certs. at BB+ BANC OF AMERICA: Good Credit Cues S&P to Affirm & Raise Ratings BEAR STEARNS: Fitch Affirms Low-B Ratings on Six Cert. Classes BEST MANUFACTURING: Panel Hires Otterbourg Steindler as Counsel BEST MANUFACTURING: Court Approves Ravin Greenberg as Co-Counsel BORALEX INVESTMENT: S&P Rates Planned $80M Sec. Term Loan B at B+ BORGER ENERGY: Moody's Holds Ba3 Rating on Senior Secured Debt BUFFETS HOLDINGS: Moody's Assigns Loss-Given-Default Rating CARRAWAY METHODIST: Admin. Claim Filing Period Ends Tomorrow CARMIKE CINEMAS: Paying Quarterly Cash Dividend on November 22 CLEAR CHANNEL: Evaluates Strategic Options & Hires Goldman Sachs CLEAR CHANNEL: Company Evaluation Cues Moody's to Review Ratings CELESTICA INC: Incurs $42.1 Million Net Loss in 2006 Third Quarter CHAPARRAL STEEL: S&P Raises Bank Loan Rating to BB From BB- CIGNA CORP: Board Declares $0.025 Cents Per Share Cash Dividend CITIMORTGAGE ALTERNATIVE: Fitch Puts B Rating on $1.7MM of Certs. CKE RESTAURANTS: Moody's Assigns Loss-Given-Default Rating COMPLETE RETREATS: Files DIP Loan Budget at Ad Hoc Panel's Request COMPLETE RETREATS: Panel Wants Dec. 2 Claims Investigation Period COMPLETE RETREATS: Court Approves Holly Felder Etlin as CRO COPELANDS' ENTERPRISES: Seeks Court's OK on CEO, CFO Services Pact COUDERT BROTHERS: Gets Okay to Hire Dunn Koes as Special Counsel COUDERT BROTHERS: Wants to Hire Yeo Wee as Special Counsel DAIMLERCHRYSLER AG: Rules Out Sale of Chrysler Unit DANA CORP: Court Okays Pact for Entry Into Mitsubishi Master Lease DANA CORP: Six Retirees Balk at Proposed Burns, et al. Fees DANA CORP: American Materials Wants Return of Henderson Facility DOV PHARMACEUTICAL: Receives Delisting Notice from NASDAQ EL POLLO: IPO Withdrawal Cues Moody's to Slice CFR to B3 from B1 ENTERGY NEW: Court Denies Claims Objection & Class Classification ENTERGY NEW: Wants Order on Gordon & Lowenburg Claimants Clarified ERIC METCALF: Case Summary & 15 Largest Unsecured Creditors EVERGREEN INT'L: Extends 12% Senior Notes Offering to October 31 FOAMEX INTERNATIONAL: Panel Opposes Incentive Plan Request FOAMEX INTERNATIONAL: Court Okays PMC & GFC-East Settlement Pact FORD MOTOR: To Rely on Cheaper Chinese-Made Parts to Cut Costs FTI CONSULTING: Appoints James Crownover to Class II of the Board GENERAL NUTRITION: Moody's Assigns Loss-Given-Default Ratings GENTEK HOLDING: Moody's Assigns Loss-Given-Default Rating GETTY IMAGES: Sees Job Cuts, Staff Restructuring GREIF INC: Moody's Assigns Loss-Given-Default Rating GLOBAL POWER: Has Until Nov. 12 to File Schedules and Statements GREENWICH CAPITAL: S&P Rates $1.6 Mil. Class Q Certificates at B- HARRY & DAVID: Moody's Assigns Loss-Given-Default Ratings HEARTLAND PARTNERS: Court Set Compromise Pact Hearing for Nov. 7 HVHC INC: Moody's Assigns Loss-Given-Default Ratings INLAND FIBER: Wants Removal Period Extended to January 15 INTERLINE BRANDS: Moody's Assigns Loss-Given-Default Rating INTERMEC INC: Moody's Assigns Loss-Given-Default Rating IPEX INC: Posts $150,174 Net Loss in First Quarter of 2006 ITEC ENVIRONMENTAL: Hires M. Sandoval as Chief Operating Officer JEAN COUTU: Moody's Assigns Loss-Given-Default Ratings JO-ANN STORES: Moody's Assigns Loss-Given-Default Ratings JORDAN INDUSTRIES: Moody's Assigns Loss-Given-Default Rating KAISER ALUMINUM: Owl Creek Companies Disclose Equity Stake KB HOME: Internal Stock Option Probe Delays Form 10-Q Filing KB HOME: Receives Default Notice for 7-1/4% Senior Notes Due 2018 KB HOME: Wants to Amend $1.65 Bil. Sr. Notes' Indenture KINETEK INDUSTRIES: Moody's Assigns Loss-Given-Default Rating KOPPERS HOLDINGS: Reports Problem at Monessen, Pennsylvania Plant LANGUAGE LINE: Moody's Holds $109 Mil. Senior Rating at Caa1 LE GOURMET: Turns to Minken & Assoc. for Tax Advisory Services LENNOX INTERNATIONAL: Moody's Assigns Loss-Given-Default Rating LEVEL 3: Fitch Affirms Junk Issuer Default Rating LEVEL 3: S&P Junks $600 Million of 9.25% Senior Notes at CCC- MAAX HOLDINGS: Moody's Assigns Loss-Given-Default Rating MAPCO EXPRESS: Moody's Assigns Loss-Given-Default Ratings MCDONOUGH FOREST: Case Summary & 17 Largest Unsecured Creditors MARSHALL WORLEY: Case Summary & 18 Largest Unsecured Creditors MERIDIAN: Files Further Revised Fourth Plan & Approved Disclosure MERIDIAN AUTOMOTIVE: Confirmation Hearing Scheduled on Nov. 29 MERIDIAN AUTOMOTIVE: Ballots Must Be Received by November 22 MERRILL LYNCH: Fitch Lifts Rating on Class B-5 Certs. to B+ MESABA AVIATION: Reaches Tentative Accord with Flight Attendants MESABA AVIATION: Reaches Tentative Agreement with Pilots' Union MESABA AVIATION: Court Okays Credit Pact With LaSalle Bank MORGAN STANLEY: Fitch Retains Low-B Ratings on Six Cert. Classes MUELLER GROUP: Moody's Assigns Loss-Given-Default Rating NANCY CIAMBOR: Case Summary & 15 Largest Unsecured Creditors NASH FINCH: Moody's Assigns Loss-Given-Default Ratings NATIONAL ENERGY: Inks Pact With AREP to Sell Stake in NEG Holdings NORCROSS SAFETY: Moody's Assigns Loss-Given-Default Rating NORD RESOURCES: Inks Settlement Pact with TMD Acquisition OFFICEMAX INC: Moody's Assigns Loss-Given-Default Ratings ORIGEN MANUFACTURED: S&P Junks Ratings on Class B-1 Certificates OVERWATCH SYSTEMS: Textron Extends $325 Mil Purchase Offer OVERWATCH SYSTEMS: Likely Textron Merger Cues S&P's Positive Watch PANTRY INC: Moody's Assigns Loss-Given-Default Ratings PILGRIM'S PRIDE: To Reduce Chicken Processing by 5% in January PITTSFIELD WEAVING: Section 341(a) Meeting Scheduled on Oct. 31 PLASTICON INT'L: BUYINS.NET Spots Short Selling of $91.9MM Shares PROCESS CAPITAL: Plans to Construct Waste Oil Refinery in Kingston PURADYN FILTER: Board Appoints Joseph Vittoria as CEO RADIANT ENERGY: Closes 12% Debentures Conversion with GE Capital RBS GLOBAL: Moody's Assigns Loss-Given-Default Rating RED HAT: Launches $325 Mil. Stock and Debenture Repurchase Program RED HAT: S&P Affirms Corporate Credit Rating at B+ REDDY ICE: Moody's Assigns Loss-Given-Default Rating RENT-A-CENTER: Moody's Assigns Loss-Given-Default Ratings RESORTS INT'L: Prepayments Cue Moody's to Withdraw Junk Ratings REVERE INDUSTRIES: Moody's Assigns Loss-Given-Default Rating ROOMLINX INC: Posts $609,774 Net Loss in Qtr. Ended Sept. 30 SANTA FE: Wants Court to Approve Kean Miller as Special Counsel SEA CONTAINERS: Can Assign Priority Status to Intercompany Claims SEA CONTAINERS: Can Continue Using Existing Business Forms SEARS CANADA: Moody's Assigns Loss-Given-Default Ratings SECURITIZED ASSET: Fitch Rates $10 Million of Certs at BB+ SENSATA TECHNOLOGIES: Moody's Assigns Loss-Given-Default Rating SENSUS METERING: Moody's Assigns Loss-Given-Default Rating SKYEPHARMA PLC: Aviva Acquires 5.53% of Issued Share Capital SOUTH COAST: Involuntary Chapter 11 Case Summary SPX CORPORATION: Moody's Assigns Loss-Given-Default Rating STARTECH ENVIRONMENTAL: Earns $337,902 in Quarter Ended July 31 SUN MICROSYSTEMS: Posts $56 Million Net Loss in Fiscal 1st Quarter SUPERIOR ESSEX: Moody's Assigns Loss-Given-Default Rating SURETY CAPITAL: Posts $167,000 Net Loss in 2nd Quarter TECHNICAL OLYMPIC: Amends Terms of Existing $800MM Debt Facility TECHNICAL OLYMPIC: Fitch Cuts Sr. Subor. Debt Rating to CCC+ THERMADYNE HOLDINGS: Moody's Assigns Loss-Given-Default Rating TIMKEN CO: Earns $46 Million in the Third Quarter of 2006 TIMKEN CO: Moody's Assigns Loss-Given-Default Rating TJT PROPERTIES: Case Summary & Four Largest Unsecured Creditors TRIMAS CORP: Moody's Assigns Loss-Given-Default Rating TURBO POWER: Raises GBP6 Million in Common Share Placement UNITY VIRGINIA: Court Converts Ch. 11 Cases to Ch. 7 Proceedings UNITY VIRGINIA: Meeting of Creditors Scheduled Tomorrow URANERZ ENERGY: Continues Hydrologic Testing At 2 Uranium Sites US MAIL: Case Summary & 20 Largest Unsecured Creditors VALMONT INDUSTRIES: Moody's Assigns Loss-Given-Default Rating WASTEQUIP INC: Moody's Assigns Loss-Given-Default Rating WENDY'S INTERNATIONAL: Earns $72 Million in Third Quarter 2006 WILLIAMS PARTNERS: Increases Cash Distribution to 45 Cents WOLVERINE TUBE: Moody's Assigns Loss-Given-Default Rating * BOND PRICING: For the week of October 23 -- October 27, 2006 ********* ALIMENTATION: 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 Ba1 Corporate Family Rating for Alimentation Couche-Tard, 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 ---------- ------- ------- ------ ---------- CDN$50MM Sr. Sec. Revolver Ba1 Ba1 LGD3 47% US$75MM Sr. Sec. Revolver Ba1 Ba1 LGD3 47% US$265MM Sr. Sec. Term Loan A Ba1 Ba1 LGD3 47% US$245MM Sr. Sec. Term Loan B Ba1 Ba1 LGD3 47% US$350MM 7.5% Gtd. Sr. Sub. Notes Ba2 Ba2 LGD5 81% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Laval, Quebec, Alimentation Couche-Tard, Inc., operates or licenses about 3,500 convenience stores in the United States and Canada under the "Circle K", "Couche-Tard", "Mac's", and other banners. The company also licenses around 4,200 "Circle K" convenience stores in Mexico and East Asia. AMERICAN AIRLINES: Earns $1 Million in Quarter Ended Sept. 30 ------------------------------------------------------------- American Airlines, Inc., posted a $1 million net income for the three months ended Sept. 30, 2006, on $5.83 billion of revenues, compared to a $161 million net loss earned on $5.47 billion of revenues for the same period in 2005. The company's balance sheet at Sept. 30, 2006, showed $26.7 billion in total assets and $27.5 billion in liabilities, resulting in a stockholders' deficit of approximately $800 million. At Sept. 30, 2006, the company had $5 billion in unrestricted cash and short-term investments, an increase of $1.2 billion from Dec. 31, 2005. Net cash provided by operating activities in the nine-month period ended Sept. 30, 2006 was $1.5 billion, an increase of $679 million over the same period in 2005. The increase was primarily the result of improved economic conditions which allowed the industry to increase fare levels. The company contributed $184 million to its defined benefit pension plans during the nine month period ended Sept. 30, 2006, and completed its required 2006 calendar year funding by contributing an additional $39 million on Oct. 13, 2006. As of Sept. 30, 2006, the company had commitments to acquire an aggregate of 47 Boeing 737-800s and seven Boeing 777-200ERs in 2013 through 2016. Future payments for all aircraft, including the estimated amounts for price escalation, will be approximately $2.8 billion in 2011 through 2016. American Airlines currently expects fourth quarter mainline unit costs to decrease more than four percent year over year. Capacity for the company's mainline jet operations in the fourth quarter is expected to decrease approximately 0.5 per cent year over year. A full-text copy of the company's quarterly report is available for free at http://researcharchives.com/t/s?1417 About American Airlines American Airlines, Inc. -- http://www.AA.com/-- American Eagle, and the AmericanConnection regional airlines serve more than 250 cities in over 40 countries with more than 3,800 daily flights. The combined network fleet numbers more than 1,000 aircraft. American Airlines, Inc. and American Eagle are subsidiaries of AMR Corporation. * * * As reported in the Troubled Company Reporter on April 25, 2006, Standard & Poor's Ratings Services placed its ratings on AMR Corp. (B-/Watch Pos/B-3) and subsidiary American Airlines Inc. (B-/Watch Pos/--) on CreditWatch with positive implications. The CreditWatch placement reflected improving earnings and cash flow prospects, which should translate into a strengthened financial profile. The 'B+' bank loan rating on American's $773 million credit facility was placed on CreditWatch, but the '1' recovery rating (which addresses recovery prospects in a default scenario) was not placed on CreditWatch. As reported in the Troubled Company Reporter on Feb. 24, 2006, Moody's Investors Service affirmed all debt ratings of AMR Corp., and its primary subsidiary American Airlines, Inc. - corporate family rating at B3 -- as well as all tranches of the Enhanced Equipment Trust Certificates supported by payments from American and the SGL-2 Speculative Grade Liquidity Rating. AMES DEPARTMENT: Court Approves Settlement With MGM Home Ent. ------------------------------------------------------------- The Honorable Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York approves the stipulation between Metro-Goldwyn-Mayer Home Entertainment, Inc., Ames Department Stores, Inc., and GMAC Commercial Finance LLC, formerly known as GMAC Commercial Credit LLC. As reported in the Troubled Company Reporter on Oct. 9, 2006, MGM commenced in September 2002 an adversary proceeding seeking $298,242 from the Debtors and GMAC. The issue has been joined, pretrial discovery has taken place, and pretrial requests have been brought. Settlement discussions have also ensued between the parties wherein they agreed to discontinue the Adversary Proceeding. The parties stipulated that: * GMAC CF will pay $10,000, and the Debtors will pay $25,000, to MGM immediately after the settlement agreement earns Court Approval; * upon MGM's receipt of the settlement amounts and the dismissal of the Adversary Proceeding, the parties will be deemed to have waived and released each other from any and all claims that they may have against each other as of Sept. 27, 2006, and which in any way relate to the Complaint; * the Debtors will file a voluntary dismissal of the preference adversary proceeding styled Ames Merchandising Corporation v. MGM Home Entertainment, Adv. Pro. No. 03-08569, with prejudice and without costs, immediately after the Court's approval of the Settlement Agreement; * upon the dismissal of the Adversary Proceeding and the Preference Adversary Proceeding, the Debtors will be deemed to have forever discharged MGM from all claims and causes of actions, which they have against MGM in connection with their Chapter 11 cases; * upon the dismissal of the Adversary Proceeding, GMAC CF and the Debtors will be deemed to have waived and released each other from any claims and causes of actions that they may have against each other as of Sept. 27, 2006, which in any way relate to the Complaint; and * after MGM's receipt of the settlement payments and the dismissal of the Preference Adversary Proceeding, MGM will file a voluntary dismissal of the Adversary Proceeding with prejudice and without costs. MGM will then indemnify the Debtors and GMAC CF for all costs and expenses incurred relating to any claims by anyone other than the Debtors, GMAC CF, and their affiliates in any way related to the Complaint. Ames Department Stores filed for chapter 11 protection on Aug. 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $1,901,573,000 in assets and $1,558,410,000 in liabilities. (AMES Bankruptcy News, Issue No. 86; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) AMES DEPARTMENT: Has Until April 26 to Solicit Plan Acceptances --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extends the period during which Ames Department Stores and its debtor-affiliates have the exclusive right to solicit acceptances of their Chapter 11 Plan through and including April 26, 2007. As reported in the Troubled Company Reporter on Oct. 9, 2006, the Debtors filed their Chapter 11 Plan of Reorganization and Disclosure Statement on Dec. 6, 2004. The Court had previously extended the Debtors' exclusive solicitation period to Oct. 26, 2006. Since the Debtors decided to wind down their business, they have been diligently laboring to maximize values for creditors. Specifically, the Debtors have: (1) sold all their inventory; (2) fully satisfied their obligations under their postpetition financing facilities; (3) rejected or assumed and assigned majority of their unexpired leases of nonresidential property in accordance with Section 365 of the Bankruptcy Code; (4) been settling and reconciling claims; (5) commenced and are continuing to prosecute and collect substantial sums from avoidance actions; (6) sold, or are in the process of selling, their remaining real estate holdings; (7) made interim distributions to holders of administrative expense claims; and (8) developed, drafted, and filed the Plan and related disclosure statement. While the Debtors are optimistic that the Plan will be confirmed, at this point, it is not possible for them to determine: -- the full extent of their administrative obligations; -- the resources available to satisfy the obligations; and -- at what point they will achieve administrative solvency. The Debtors anticipated that they will have approximately $74,900,000 in administrative expense claims, many of which still need to be fully reconciled. As a result, the Debtors are in no position to determine if and when a recovery will be available for prepetition creditors until they complete the process of liquidating their remaining real property interests, reconciling administrative expense claims, and prosecuting avoidance actions. In light of these circumstances, an extension of the solicitation period is warranted and will avoid unnecessary intrusion on management's time occasioned by a competing plan. Moreover, the extension will not prejudice any party-in-interest, but rather will afford the Debtors an opportunity to solicit acceptances of a plan that will be confirmable. Ames Department Stores filed for chapter 11 protection on Aug. 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $1,901,573,000 in assets and $1,558,410,000 in liabilities. (AMES Bankruptcy News, Issue No. 86; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ARBY'S RESTAURANT: Signs Development Commitments for New Locations ------------------------------------------------------------------ Arby's Restaurant Group, Inc. continues to expand its reach with the signing of commitments to develop 34 new Arby's restaurants. The agreements, which include three new and ten existing franchisees, provide for the development of new Arby's restaurants in Arizona, California, Florida, Georgia, Illinois, Iowa, Michigan, Ohio and Texas. "We are working towards a long term goal of having 5,000 domestic Arby's restaurants so that we can increase access and convenience to our loyal customers," said Tom Garrett, President and COO, Arby's Restaurant Group, Inc." While many of our franchisees have been with us for generations, we continue to attract new entrepreneurs as well. Our new franchisees realize we offer a unique business opportunity in the fast food industry." Signed development agreement with existing franchisees include: -- Charlie Harmon - Charlie Harmon, President of FX4, currently owns and operates 47 Arby's in the Phoenix market and has signed on to open 16 more. Mr. Harmon, who started his restaurant career at 16 as a bus boy, previously worked for Arby's then largest franchisee, RTM, before owning and operating his own Arby's restaurants starting in 2000. -- Mark Rhude - Mark Rhude of Marglen, Inc. currently owns and operates eight Arby's restaurants in Arizona and has agreed to open three Arby's restaurants in Tucson, Rincon and Oro Valley, Arizona. Mr. Rhude has been an Arby's franchisee since 1988. -- Bob McDonald - Bob McDonald of Capital Foods, Inc. currently owns and operates seven Arby's in Ohio and has signed on to open two more located in New Albany and Pataskala, Ohio. Mr. McDonald has been an Arby's franchisee since 1996. -- Stephen Huse - Stephen Huse joined the Arby's family just three years after its inception in 1964 and currently owns and operates 30 restaurants in Illinois and Indiana. Mr. Huse has agreed to open an additional Arby's restaurant in Clinton, Iowa. -- Lunan Corporation - A family owned and operated franchisee, Lunan Corporation has been a part of the Arby's organization for nearly forty years and holds the distinction of opening Arby's 3,500th restaurant in Antioch, Illinois in 2006. Lunan currently owns and operates 64 Arby's restaurants in California, Illinois, and Nevada, and has signed on for one more to open in Yorkville, Illinois. -- James Pipino - James Pipino of Niles Restaurant Business, Inc. joined Arby's as a franchisee in 1992 and currently owns and operates 10 restaurants across Ohio. Mr. Pipino has signed an agreement to open an additional Arby's in North Lima, Ohio. -- William Brusslan - William Brusslan owns and operates three Arby's restaurants in California and has agreed to add one more in Simi Valley, Calif. Mr. Brusslan has been with Arby's since 1969. -- Michael P. Schiappa - Michael Schiappa of Schiappa Foods Corp. has been with the Arby's system since 2002 with six restaurants in Florida. Mr. Schiappa has signed on to open one more Arby's in Fort Pierce, Florida. -- Michael Kay/Jason Palmer - Michael Kay and Jason Palmer have agreed to add an additional Arby's restaurant in Douglas, Georgia to their restaurant portfolio. Messrs. Kay and Palmer currently own and operate one Arby's in Vidalia, Georgia and joined the system in 2005. -- Patrick Higgins - Patrick Higgins currently owns and operates one Arby's restaurant in Troy, Mich. and has agreed to open another in Sterling Heights, Mich. Mr. Higgins originally joined the Arby's system in 2004 as a Director of Brand Marketing for Sybra, Inc. before becoming an Arby's franchisee in 2005. New franchisees to the Arby's system are: -- Alfred Wong & Kenneth Wan will build an Arby's in Tustin, California. -- Gene Lehman has agreed to build four restaurants in the Orlando area and one restaurant in Gainesville, Florida. -- Perrin Larsh has a commitment to build one Arby's in Hill Country Village, Texas. About Arby's Based in Atlanta, Arby's Restaurant Group, Inc. -- http://www.arbys.com/--, is the franchisor of the Arby's restaurant system, which consists of more than 3,500 restaurants worldwide, and is owner and operator of more than 1,000 of those restaurants located in the United States. ARBY'S RESTAURANT: 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 restaurant sector, the rating agency revised its Corporate Family Rating for Arby's Restaurant Group Inc. from B1 to B2. Moody's also revised its ratings on the company's $100 million Senior Secured Revolver Due 2011 and $620 million Senior Secured Term Loan Due 2012. Moody's assigned the debentures an LGD2 rating suggesting lenders will experience a 28% 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%). ARBY'S RESTAURANT: S&P Affirms B+ Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'B+' corporate credit rating, on Fort Lauderdale, Fla.-based Arby's Restaurant Group Inc. All ratings were removed from CreditWatch, where they were placed June 23, 2006, with negative implications, following S&P's review of financial policies and operating performance. The outlook is negative. "The ratings on Arby's reflect its participation in the highly competitive quick-service sector of the restaurant industry, competition from significantly larger players, and a highly leveraged capital structure," Standard & Poor's credit analyst Jackie Oberoi said. Large players dominate the highly competitive quick-service sandwich sector of the restaurant industry. Arby's has a relatively small 4% market share compared with about 35% for McDonald's Corp., 11% for Burger King Corp., and 11% for Wendy's International Inc. Moreover, Arby's average unit volumes--at about $850,000--are relatively low compared with $1.8 million for McDonald's and $1.3 million for Wendy's. Still, Arby's has an established brand and niche position specializing in roast beef sandwiches. Operating results have been far below expectations due to slower- than-planned integration progress and higher-than-expected costs related to the 2005 acquisition of RTM (formerly Arby's largest franchisee). The acquisition exposed Arby's to more of the typical operating risks for restaurant companies, including rising utility and labor costs, as more than 50% of EBITDA is now generated by company- operated restaurants. The acquisition was expected to improve overall operating efficiency, as RTM historically had better operating metrics than the overall Arby's system. Instead, increased costs have caused operating margins to decline. Arby's parent, Triarc Cos. Inc., recently replaced the senior management at Arby's in an effort to turn around performance. System-wide same-store sales rose 3.5% in the first eight months of 2006 and are expected to remain positive for the year. Credit measures are currently weak for the rating category but are expected to improve over time as synergies related to the RTM acquisition are realized and one-time integration costs subside. The company is highly leveraged, with total debt to EBITDA for the 12 months ended July 2, 2006, at more than 6x. EBITDA coverage of interest is thin at less than 2x. BALL INC: Fitch Holds BB Rating on $34 Million Class L Certs. ------------------------------------------------------------- Fitch Ratings upgrades these classes of Banc of America Large Loans, Inc.'s commercial mortgage pass-through certificates, series 2003-BBA2: -- $35.3 million class F to 'AAA' from 'AA+'; -- $37.2 million class G to 'AAA' from 'A+'; -- $22.7 million class H to 'A' from 'A-'. In addition, these classes are affirmed: -- $44.7 million class D at 'AAA'; -- $31.1 million class E at 'AAA'; -- $23.9 million class J at 'BBB+'; -- $23.3 million class K at 'BBB-'; -- $34 million class L at 'BB'. Classes A-1, A-2, A-3, B, C, and Interest Only classes X-1A, X-1B, X-2. X-3 and X-4 have paid in full. The upgrades are due to the repayment of several loans in the transaction as well as the partial pay down of the Colonnade Portfolio loan. As of the October distribution date, the transaction balance had paid down 82.4% to $252.2 million from $1.4 billion at issuance. Despite the partial pay down of the Colonnade loan (52.4%), Fitch remains concerned with the ongoing performance of this specially serviced loan. As of September 2006, the overall occupancy in the remaining Atlanta based collateral was 61%. Occupancy at the Minneapolis property remains at 35%. All of the remaining collateral backing the Colonnade loan is being marketed for sale. Fitch will continue to closely monitor the performance of this loan. Two additional loans remain in the transaction; the JW Marriott hotel in Washington D.C. (27.8%) and the Westland Shopping Center (19.8%) in Westland MI. Both maintain investment grade credit assessments. The review of the loans in this transaction is based on financial information for the year ending Dec. 31, 2005, provided by the servicers, and updated occupancy information as of September 2006. BALL INC: Fitch Rates $2 Million Class M-MC Certs. at BB+ --------------------------------------------------------- Banc of America Large Loan, Inc., Series 2006-BIX1, commercial mortgage pass-through certificates are rated by Fitch: -- $670,386,391 class A-1 'AAA'; -- $223,462,130 class A-2 'AAA'; -- $1,149,644,401 class X-1A* 'AAA'; -- $1,149,644,401 class X-1B* 'AAA'; -- $60,000,000 class X-2* 'AAA'; -- $103,500,000 class X-3* 'AAA'; -- $605,592,020 class X-4* 'AAA'; -- $229,500,000 class X-5* 'AAA'; -- $15,035,235 class B 'AAA'; -- $43,214,117 class C 'AA+'; -- $42,413,742 class D 'AA'; -- $28,275,828 class E 'AA-'; -- $28,275,828 class F 'A+'; -- $28,275,828 class G 'A'; -- $28,270,667 class H 'A-'; -- $11,266,622 class J 'BBB+' -- $11,839,155 class K 'BBB'; -- $18,928,858 class L 'BBB-'; -- $13,676,531 class J-CP 'BBB+'; -- $20,277,448 class K-CP 'BBB'; -- $39,763,525 class L-CP 'BBB-'; -- $5,219,219 class J-CA 'BBB+'; -- $3,575,567 class K-CA 'BBB'; -- $4,157,595 class L-CA 'BBB-'; -- $2,000,000 class M-MC 'BB+'; -- $400,000 class L-SC 'BBB-'. * Notional Amount and Interest Only. All classes are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 18 floating-rate loans having an aggregate principal balance of approximately $1,149,644,401, as of the cutoff date. BANC OF AMERICA: Good Credit Cues S&P to Affirm & Raise Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on 25 classes of commercial mortgage pass-through certificates from Banc of America Commercial Mortgage Inc.'s series 2003-2. Concurrently, ratings are affirmed on 11 other classes from the same series. The raised and affirmed ratings on the pooled certificates reflect credit enhancement levels that provide adequate support through various stress scenarios. The upgrades of several senior certificates reflect the defeasance of $209.4 million (12%) in collateral since issuance. The raised ratings on the raked certificates reflect the improved performance of the underlying collateral properties, which provide 100% of the support for those certificates. As of the Oct. 11, 2006, remittance report, the collateral pool consisted of 147 loans with an aggregate trust balance of $1.683 billion, down from 150 loans with a $1.768 billion balance at issuance. The master servicer, Bank of America N.A., reported primarily full-year 2005 financial information for 99% of the pool. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.68x, up from 1.59x at issuance. The current DSC figure excludes the loans for the defeased collateral. All of the loans in the pool are current. To date, the trust has experienced one loss totaling $200,000. The top 10 loans secured by real estate have an aggregate outstanding balance of $536.8 million (37%) and a weighted average DSC of 1.85x, compared with 1.94x at issuance. The fifth-largest exposure ($37.6 million, 2%) posted a full-year 2005 DSC of 1.65x. The coverage declined to 0.84x for the six- month period ended June 2006, however, due to an increase in operating expenses coupled with the end of the loan's interest- only period. The loan is secured by the 218,170-sq.-ft. Colonnade Office Building in Coral Springs, Fla. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans. One property was characterized as "excellent," while the remaining collateral was characterized as "good." Credit characteristics for three of the top 10 loans in the pool remain consistent with those of investment-grade obligations. Details of these loans are: -- The largest exposure in the pool, the Hines-Sumitomo Life Office portfolio, is encumbered by a $264.6 million class A note and a $51.8 million class B note. The A note is divided into two pari passu pieces, of which $160 million serves as the trust collateral. The B note provides 100% of the cash flow to the raked certificates noted with an "HS" prefix. The loan is secured by the fee and leasehold interests in three office properties totaling 1.2 million sq. ft. The 675,678-sq.-ft. 425 Lexington Avenue office property in Midtown Manhattan is 100% occupied and spans the entire block between East 43rd Street and East 44th Street. The 280,404-sq.-ft. 499 Park Avenue office property, also in Manhattan, was 88% occupied as of June 30, 2006. The 231,641-sq.-ft. 1200 19th Street office property in Washington, D.C., was 100% occupied as of June 30, 2006. The combined year-end 2005 DSC for all three properties was 2.34x, down from 2.66x at issuance. The decline was attributable to $11.4 million in capital expenditures for tenant improvements at the 425 Lexington Avenue property. For the six months ended June 30, 2006, the DSC was 3.86x. Standard & Poor's adjusted loan-to-value ratio (LTV) is 49%. -- The second-largest exposure in the pool, the 1328 Broadway loan, has a senior and subordinate interest. The senior interest has a trust balance of $96.6 million (8%). The subordinate interest is $35.4 million and provides 100% of the cash flow supporting the class BW certificates. The loan is secured by a 351,750-sq.-ft. office property in Midtown Manhattan. The ground floor of the property is leased to retail tenants that account for 56% of the revenue produced at the property. The 1328 Broadway loan appears on the watchlist because the property reported a 1.23x DSC for the three-month period ended March 2006, down from a year-end 2005 DSC of 1.54x. The decline was primarily due to lower expense reimbursements resulting from a real estate tax reimbursement credit that occurred during the first quarter of 2006. Occupancy was 99% as of June 30, 2006. Standard & Poor's adjusted NCF is 15% above the level at issuance. -- The third-largest exposure, Newgate Mall, has a trust balance of $42.9 million (3%). The loan is secured by 605,380 sq. ft. of a 724,299-sq.-ft. regional mall in Ogden, Utah. The sponsor of the loan and manager of the property is General Growth Properties Inc. (BBB-/Negative/--). Standard & Poor's adjusted NCF is 7% above the level at issuance. In addition to the 1328 Broadway loan, there are nine other loans on the watchlist totaling $81.6 million (5% of the pool). Standard & Poor's stressed the loans on the watchlist and other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised (Pooled Certificates) Banc of America Commercial Mortgage Inc. Commercial mortgage pass-through certificates series 2003-2 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ B AAA AA 15.09% C AAA AA- 13.78% D AA+ A 11.02% E AA A- 9.58% F A+ BBB+ 8.26% G A- BBB 6.82% H BBB+ BBB- 5.50% J BBB BB+ 4.32% K BB+ BB 3.67% Ratings Raised (Raked Certificates) Banc of America Commercial Mortgage Inc. Commercial mortgage pass-through certificates series 2003-2 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ HS-A AA+ A N/A HS-B AA A- N/A HS-C AA- BBB+ N/A HS-D A+ BBB N/A HS-E A BBB- N/A BW-A A+ BBB+ N/A BW-B A BBB N/A BW-C A- BBB- N/A BW-D BBB+ BB+ N/A BW-E BBB BB+ N/A BW-F BBB- BB N/A BW-G BB+ BB N/A BW-H BB BB- N/A BW-J BB- B+ N/A BW-K B+ B N/A BW-L B B- N/A Ratings Affirmed Banc of America Commercial Mortgage Inc. Commercial mortgage pass-through certificates series 2003-2 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 18.64% A-1A AAA 18.64% A-2 AAA 18.64% A-3 AAA 18.64% A-4 AAA 18.64% L BB- 3.01% M B+ 2.48% N B 1.96% O B- 1.70% X-C AAA N/A X-P AAA N/A N/A - Not applicable BEAR STEARNS: Fitch Affirms Low-B Ratings on Six Cert. Classes -------------------------------------------------------------- Fitch upgrades Bear Stearns commercial mortgage pass-through certificates, series 2003-TOP10: -- $34.8 million class B to 'AA+' from 'AA'. In addition, Fitch affirms: -- $238.2 million class A-1 at 'AAA'; -- $749.2 million class A-2 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $37.9 million class C at 'A'; -- $12.1 million class D at 'A-'; -- $15.2 million class E at 'BBB+'; -- $9.1 million class F at 'BBB'; -- $7.6 million class G at 'BBB-'; -- $10.6 million class H at 'BB+'; -- $4.5 million class J at 'BB'; -- $6.1 million class K at 'BB-'; -- $4.5 million class L at 'B+'; -- $3 million class M at 'B'; -- $3 million class N at 'B-'. Fitch does not rate the $12.1 million class O. The upgrade is due to the defeasance of nine loans (3.0% of the pool), stable pool performance, and scheduled amortization. As of the October 2006 distribution date, the pool's aggregate principal balance has decreased 5.3% to $1.15 billion from $1.21 billion at issuance. There are currently no specially serviced loans. There are seven credit-assessed loans (25.5%) in the pool; all are considered investment grade. Fitch reviewed year-end 2005 operating statement analysis reports and other performance information provided by the master servicer. The Fitch stressed debt service coverage ratio for the loan is calculated based on a Fitch adjusted net cash flow and a stressed debt service based on the current loan balance and a hypothetical mortgage constant. North Shore Towers (6.4%) is secured by shares in a 1,844-unit cooperative apartment complex in Floral Park, Queens, New York. Occupancy as of June 2006 is 99.3% compared to 100% at issuance. The Fitch stressed DSCR, based on an imputed NCF which assumes market rate rental income, remains strong at 4.19 times (x) for YE 2005 compared to 5.32x at issuance. 1290 Avenue of the Americas (6.1%) is secured by a 43-story class A office building totaling 2 million square feet, located in midtown Manhattan. The whole loan was divided into four pari passu notes and a subordinate B-note. Only the $70 million A-4 note serves as collateral in the subject transaction. As of YE 2005, the Fitch stressed DSCR increased to 1.59x from 1.46x at issuance. Occupancy as of April 2006 is 97.9% compared to 98.7% at issuance. 575 Broadway (2.3%) is secured by a 152,299 sf office building, with basement and ground floor retail space, located in SoHo, New York City. In January 2006, the six-story building was engulfed by a fire. Currently, the Prada store and ground floor restaurant are open for business and American Eagle Outfitters is expected to open for business by the end of the fall. The majority of the office tenants have moved back into the building; however, renovations are still ongoing. As of YE 2005, the Fitch stressed DSCR was 2.28x from 1.57x at issuance. The remaining five credit assessed loans: Federal Center Plaza (5.9%), One Canal Place (2.5%), Towne Mall (1.3%), and Mount Pleasant Villa Apartments (1.1%) have performed better or remained stable since issuance. BEST MANUFACTURING: Panel Hires Otterbourg Steindler as Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey allowed the Official Committee of the Unsecured Creditors appointed in Best Manufacturing Group LLC and its debtor-affiliates' chapter 11 cases, to employ Otterbourg, Steindler, Houston & Rosen, P.C., as their lead bankruptcy counsel. As reported in the Troubled Company Reporter on Sept. 18, 2006, Otterbourg Steindler will: a) assist and advise the Committee in its consultation with the Debtors relative to the administration of the Debtors' cases; b) attend meetings and negotiate with the representative of the Debtors; c) assist and advise the Committee in its examination and analysis of the conduct of the Debtors' affairs; d) assist the Committee in the review, analysis and negotiation of the filed plan and disclosure statement, as well as any plan(s) of reorganization or related disclosure statement(s) that may be filed; e) assist the Committee in the review, analysis, and negotiation of any financing agreements; f) take all necessary action to protect and preserve the interests of the Committee, including: i) possible prosecution of actions on its behalf, ii) if appropriate, negotiations concerning all litigation in which the Debtors are involved, and iii) if appropriate, review and analysis of claims filed against the Debtors' estates; g) prepare on behalf of the Committee all necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Committee; h) appear, if appropriate, before the Court, the Appellate Courts, and the U.S. Trustee, and protect the interests of the Committee before those Courts and before the U.S. Trustee; and i) perform all other necessary legal services in the Debtors' cases. Scott L. Hazan, Esq., an Otterbourg Steindler member, disclosed that the firm's professionals bill: Designation Hourly Rate ----------- ----------- Partner/Counsel $490 - $725 Associate $240 - $525 Paralegal/Legal Assistant $150 - $195 Mr. Hazan assured the Court that his firm does not represent nor hold any interest adverse to the Debtors or their estates and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Jersey City, New Jersey, Best Manufacturing Group LLC -- http://www.bestmfg.com/-- and its subsidiaries manufacture and distribute textiles, career apparel and other products for the hospitality, healthcare and textile rental industries. The Company and four of its subsidiaries filed for chapter 11 protection on Aug. 9, 2006 (Bankr. D. N.J. Case No. 06-17415). Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., represent the Debtors. Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, will represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. BEST MANUFACTURING: Court Approves Ravin Greenberg as Co-Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey has allowed the Official Committee of the Unsecured Creditors appointed in Best Manufacturing Group LLC and its debtor- affiliates' chapter 11 cases, to retain Ravin Greenberg PC as its bankruptcy co-counsel. Ravin Greenberg is expected to: a) attend all necessary court appearances; b) research, prepare and draft pleadings and other legal documents, hearing preparation and related work; and c) negotiate and advice the Committee with respect to the Debtors' chapter 11 proceedings. Stephen B. Ravin, Esq., a Ravin Greenberg member, disclosed that the firm's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Nathan Ravin, Esq. Partner $450 Howard S. Greenberg, Esq. Partner $550 Stephen Ravin, Esq. Partner $430 Bruce J. Wisotsky, Esq. Partner $410 Larry Lesnik, Esq. Partner $400 Morris S. Bauer, Esq. Partner $390 Brian L. Baker, Esq. Associate $300 Alyson Weckstein Tiegel, Esq. Associate $275 Sheryll S. Tahiri, Esq. Associate $265 Chad D. Friedman, Esq. Associate $225 Mr. Ravin assured the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Jersey City, New Jersey, Best Manufacturing Group LLC -- http://www.bestmfg.com/-- and its subsidiaries manufacture and distribute textiles, career apparel and other products for the hospitality, healthcare and textile rental industries. The Company and four of its subsidiaries filed for chapter 11 protection on Aug. 9, 2006 (Bankr. D. N.J. Case No. 06-17415). Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., represent the Debtors. Scott L. Hazan, Esq., at Otterbourg, Steindler, Houston & Rosen, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. BORALEX INVESTMENT: S&P Rates Planned $80M Sec. Term Loan B at B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B+' rating and a '4' recovery rating to Boralex Investment L.P.'s proposed $80 million secured term loan B due on the seventh anniversary of closing in 2013. "The rating reflects the exposure of the merchant power project's financial performance to numerous risks," said Standard & Poor's credit analyst David Bodek. These risks include: -- The project's high fixed and variable costs that represent a vulnerability for a revenue stream that is highly dependent on competitive merchant electric markets; -- A history of volatile operational performance that raises concerns about the strength of future financial results; -- The electric generation fleet's exposure to variability in the price and availability of biomass fuel, variations in hydrological conditions, and transmission constraints; -- Management's expectation that renewable energy credit revenues will escalate in short order from less than 9% of 2005's operating revenues to between 12% and 19% of operating revenues during the loan's term. This growth could be frustrated by volatility within the renewable energy credit markets and Boralex's need to make capital improvements for additional facilities to qualify for renewable energy credit revenues. However, credit concerns related to the capital improvements are tempered by the plan to use some of the loan's proceeds to fund the improvements; and Refinancing risk that may be present at maturity if the generation portfolio fails to yield cash flow that can meaningfully reduce loan balances that could range from 100% amortization under the base case to a 50% amortization under Standard & Poor's price assumptions. However, the amount of amortization under the Standard & Poor's price assumptions could be greater if unexpended monies are available in the operating and debt-service reserves to be applied to debt reduction. Credit risks are tempered by these lender protections: -- The projects do not face construction risk and have produced electricity for numerous years; -- The dispatch attributes of low-cost run-of-the-river hydroelectric assets representing 12% of capacity, partially mitigates credit issues associated with the biomass facilities; and -- In addition, lenders benefit from structural protections that include: * A trustee's custody of project monies; * A requirement that 85% of available monies remaining following the payment of interest and a mandatory 1% annual amortization of the loan be used to repay principal; * A cash trap that precludes distributions if post-cash-sweep debt service coverage is not at least 1.2x; * The presence of a $5 million operating reserve to be funded from proceeds of the loan; and * The presence of a debt service reserve account that must be maintained at a level equivalent to the succeeding 12 months' debt service, which is stronger than the typical account that is sized at six months' debt service for most other projects. The '4' recovery rating indicates that Standard & Poor's expects marginal recovery of principal (between 25% to 50%) if a payment default occurs. BORGER ENERGY: Moody's Holds Ba3 Rating on Senior Secured Debt -------------------------------------------------------------- Moody's Investors Service affirmed Borger Energy Associates, L.P.'s 7.26% first mortgage bonds due 2022 at Ba3 following the announcement by Quixx Corporation that it has reached a definitive agreement for the sale of its interests in Borger to affiliates of Energy Investors Funds. The rating outlook is stable. Quixx Corporation, a subsidiary of Xcel Energy, Inc. has entered into a definitive agreement for the sale of its .45% general partnership and 43.4256% limited partnership interests in Borger to EIF-Borger LLC and EIF-Borger Holdings, LLC, both of which are existing partnership interests held by United States Power Fund, L.P., a private equity fund managed by EIF. Following completion of the transaction, 100% of the partnership interests of Borger will be held directly or indirectly by funds managed by EIF. The project operator, Quixx Power Services, will also be transferred to affiliates of EIF; it is anticipated that existing operational personnel will remain in place. Although the sale of the partnership interests concentrates the ownership of the project with funds managed by EIF, ownership will be maintained through two separate funds, United States Power Fund L.P. and Project Finance Fund III, L.P., and the voting provisions of the partnership agreement will remain unchanged. Borger's Ba3 senior secured rating is driven by the project's operating and financial performance, which in 2004 and 2005 suffered from significant unscheduled outages and reduced steam sales. In 2006, generating performance has returned to more normal standards; however, steam sales remain depressed and cash flow coverage of debt service remains weak at approximately 1.13x. There is potential for improved financial performance in 2007, although improvement is largely dependent on increased steam sales, the timing and amount of which remains somewhat uncertain. The transaction is subject to various consents and notifications and is anticipated to close by year-end. Borger Energy Associates, L.P. is a 225-megawatt gas-fired cogeneration facility located near Borger, Texas. Power generated by the project is sold to Southwestern Public Service Company and steam is sold to ConocoPhillips Company. BUFFETS HOLDINGS: Moody's Assigns Loss-Given-Default Rating ----------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the restaurant sector, the rating agency confirmed its B2 Corporate Family Rating for Buffets Holdings Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $30M Gtd. Sr. Sec. Revolver d. 6/2007 B1 Ba2 LGD2 16% $230M Gtd. Sr. Sec. Term Loan B d.6/2009 B1 Ba2 LGD2 16% $20M Gtd. Sr. Sec. LC Facility d. 6/2007 B1 Ba2 LGD2 16% $30M Gtd. Sr. Sec. Synthetic LC Facility d. 6/2009 B1 Ba2 LGD2 16% $132M 13.875% Sr. Disc. Notes d. 12/2010 Caa1 Caa1 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. 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%). Buffets Holdings Inc. operates portfolios of buffet restaurants, with about 360 locations in 38 states. Operating mostly under the Old Country Buffet and HomeTown Buffet brands, the company's locations are self-service buffets featuring entrees, sides, and desserts for an all-inclusive price. Its other brands include Granny's Buffet, Country Roadhouse Buffet & Grill, and Tahoe Joe's Famous Steakhouse. In addition to its company-owned restaurant operations, Buffets franchises about 20 locations. Private equity firm Caxton-Iseman Capital owns 79% of the company. CARRAWAY METHODIST: Admin. Claim Filing Period Ends Tomorrow ------------------------------------------------------------ The Honorable Tamara O. Mitchell of the U.S Bankruptcy Court for the Northern District of Alabama set Oct. 31, 2006, as the deadline for filing requests for allowance and payments of administrative expense claims in Carraway Methodist Health Systems' chapter 11 case. Administrative claims filed after the bar date will be denied under Section 503(b)(9) of the Bankruptcy Code. Based in Birmingham, Alabama, Carraway Methodist Health Systems, dba Carraway Methodist Medical Center -- http://www.carraway.org/ -- is a major teaching hospital, referral center and acute care hospital that serves Birmingham and north central Alabama. The Company and its affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bankr. N.D. Ala. Case No. 06-03501). Christopher L. Hawkins, Esq., Helen D. Ball, Esq., and Patrick Darby, Esq., at Bradley Arant Rose & White LLP, represent the Debtors. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for protection from their creditors, they listed estimated assets between $10 million and $50 million and estimated debts of more that $100 million. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 16, 2007. CARMIKE CINEMAS: Paying Quarterly Cash Dividend on November 22 -------------------------------------------------------------- The Board of Directors of Carmike Cinemas Inc. has declared a quarterly dividend payable for the third quarter of 2006. The amount of the dividend will be $0.35 per share. This amount includes Carmike's customary quarterly dividend of $0.175 per share, for the third quarter of 2006, as well as an additional $0.175 per share that normally would have been declared for the second quarter. The additional $0.175 per share dividend is consistent with Carmike's previously disclosed expectation to declare a quarterly dividend following resolution of Carmike's lease accounting review, restatement, and credit facility amendment process. The dividend of $0.35 per share is payable on Nov. 3, 2006, to all stockholders of record as of the close of business on Oct. 16, 2006. Headquartered in Columbus, Georgia, Carmike Cinemas, Inc. (NASDAQ: CKEC) -- http://www.carmike.com/-- is a motion picture exhibitor in the United States with 301 theatres and 2,475 screens in 37 states, as of Dec. 31, 2005. Carmike's focus for its theatre locations is small to mid-sized communities with populations of fewer than 100,000. * * * As reported in the Troubled Company Reporter on Oct. 13, 2006, Moody's Investors Service revised its Corporate Family Rating for Carmike Cinemas to B3 from B2 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. As reported in the Troubled Company Reporter on Sept. 6, 2006, Standard & Poor's Ratings Services' 'B-' corporate credit and senior secured debt ratings on Carmike Cinemas Inc. remained on CreditWatch with negative implications, where they were placed on March 31, 2006. CLEAR CHANNEL: Evaluates Strategic Options & Hires Goldman Sachs ---------------------------------------------------------------- Clear Channel Communications Inc.'s Board of Directors is evaluating various strategic alternatives to enhance shareholder value. The Board of Directors has retained Goldman, Sachs & Co. as its financial advisor in connection with its evaluations. The Company further stated that there could be no assurance that this process will result in any specific transaction. The Company does not intend to comment further publicly with respect to the exploration of strategic alternatives unless a specific transaction is approved by its Board. The Company will release its third quarter 2006 financial results today, Monday, Oct. 30, 2006, at approximately 7:00 a.m. Eastern Time. San Antonio, Tex.-based Clear Channel Communications, Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. CLEAR CHANNEL: Company Evaluation Cues Moody's to Review Ratings ---------------------------------------------------------------- Moody's Investors Service placed the ratings for Clear Channel Communications, Inc. and its subsidiaries on review for possible downgrade following the company's announcement that its Board of Directors is evaluating various strategic alternatives to enhance shareholder value. Moody's believes that the recent announcement creates uncertainty around the company's business strategy and business portfolio mix, capital structure and credit metrics. Moody's review will focus on the nature of the specific transaction, if any, and the resulting impact on the company's capitalization (including structural subordination issues) and credit metrics. Moody's will also evaluate Clear Channel's business strategy in the context of the current softness in radio advertising and competitive threats facing the mature radio business, including emerging satellite and cross media competition. On review for possible downgrade: Issuer: CCCI Capital Trust I -- Preferred Stock Shelf, Placed on Review for Possible Downgrade, currently (P)Ba1 Issuer: CCCI Capital Trust II -- Preferred Stock Shelf, Placed on Review for Possible Downgrade, currently (P)Ba1 Issuer: CCCI Capital Trust III -- Preferred Stock Shelf, Placed on Review for Possible Downgrade, currently (P)Ba1 Issuer: Chancellor Media Corporation of Los Angeles -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently Baa3 Issuer: Clear Channel Communications, Inc. -- Multiple Seniority Shelf, Placed on Review for Possible Downgrade, currently (P)Ba2 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently Baa3 Clear Channel Communications, Inc. with its headquarters in San Antonio, Texas, is a global media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, outdoor displays, and television stations. CELESTICA INC: Incurs $42.1 Million Net Loss in 2006 Third Quarter ------------------------------------------------------------------ Celestica Inc. reported revenue of $2.3 billion for the third quarter ended Sept. 30, 2006, up 20% from $1.9 billion in the third quarter of 2005. Net loss on a GAAP basis for the third quarter was $42.1 million, compared to GAAP net loss of $19.6 million for the same period last year. Included in GAAP net loss for the quarter are charges of $82 million associated with previously announced restructuring plans . For the same period in 2005, restructuring charges of $41 million were incurred. Adjusted net earnings for the quarter were $40.5 million, compared to $27.1 million for the same period last year . Adjusted net earnings is defined as net earnings before amortization of intangible assets, gains or losses on the repurchase of shares and debt, integration costs related to acquisitions, option expense, option exchange costs and other charges, net of tax and significant deferred tax write-offs. These results compare with the company's guidance for the third quarter, announced on July 27, 2006, of revenue of $2.15 to $2.35 billion. For the nine months ended Sept. 30, 2006, revenue was $6,550 million compared to $6,396 million for the same period in 2005. Net loss on a GAAP basis was $89.8 million compared to net loss of $18.6 million for the same period last year. Adjusted net earnings for the first nine months of 2006 were $87 million compared to adjusted net earnings of $100.2 million for the same period in 2005. "Revenues were very strong sequentially and year over year driven primarily by the growth realized in our consumer segment. Other segments were solid as well in this seasonally lower quarter," said Steve Delaney, CEO, Celestica. "I'm pleased with the added diversification and the improvement in operating margins, despite the setbacks we've had in the performance of some of our facilities in the Americas and Eastern Europe. We remain focused on overcoming these challenges and accelerating the improvement in our returns on capital." For the fourth quarter ending Dec. 31, 2006, the company anticipates revenue to be in the range of $2.25 billion to $2.45 billion. About Celestica Headquartered in Toronto, Ontario, Celestica, Inc. (NYSE: CLS, TSX: CLS/SV) -- http://www.celestica.com/-- is a world leader in the delivery of innovative electronics manufacturing services. Celestica operates a highly sophisticated global manufacturing network with operations in Asia, Europe and the Americas, providing a broad range of integrated services and solutions to original equipment manufacturers. Celestica's expertise in quality, technology and supply chain management, enables the company to provide competitive advantage to its customers by improving time-to-market, scalability and manufacturing efficiency. * * * Celestica carries Fitch's 'BB-' issuer default and unsecured credit facility ratings. Fitch also assigned a 'B+' rating to the Company's senior subordinated debt. The Rating Outlook is Stable. In February 2005, Moody's Investors Service lowered Celestica's senior implied rating to Ba3 from Ba2, senior unsecured issuer rating to B1 from Ba3 and the subordinated notes rating to B2 from Ba3. CHAPARRAL STEEL: S&P Raises Bank Loan Rating to BB From BB- ----------------------------------------------------------- Standard & Poor's Ratings Service upgraded its corporate credit rating on Midlothian, Texas-based Chaparral Steel to 'B+' from 'B'. At the same time, Standard & Poor's raised the ratings on the company's bank loan to 'BB' from 'BB-' and affirmed the recovery rating of '1', which indicates expectations of full recovery of principal in the event of a payment default. The outlook is stable. "The upgrade reflects the strong industry conditions in the structural beam segment of the steel industry that has resulted in very strong credit metrics and improved balance sheet and liquidity position," Standard & Poor's credit analyst Marie Shmaruk said. "The upgrade also reflects our expectation that strong conditions, despite additional announced structural capacity, should last at least over the intermediate term. "In addition, the upgrade reflects the company's stated goal of maintaining a conservative balance sheet while prudently using its substantial cash balances to improve its businesses, reward shareholders, and make bolt-on acquisitions." Chaparral operates two mills and is the second-largest structural steel producer in the U.S. "Over the intermediate term, we expect the industry and company to continue to benefit from production discipline among domestic participants," Ms. Shmaruk said. "We could revise the outlook to negative should market fundamentals meaningfully deteriorate, although at present the likelihood is remote, or if the company increases its debt levels to fund growth and shareholder initiatives. "Conversely, we could revise the outlook to positive or raise the ratings on Chaparral if the company improves and diversifies its product offerings--while maintaining a consistently conservative financial profile and strong liquidity--and reduces its debt levels." CIGNA CORP: Board Declares $0.025 Cents Per Share Cash Dividend --------------------------------------------------------------- The board of directors of CIGNA Corporation declared a quarterly cash dividend of $0.025 cents per common share, payable on Jan. 8, 2007 to shareholders of record as of Dec. 11, 2006. The Company disclosed that its Board also: -- Set Feb. 27, 2007, as the record date for shareholders entitled to vote at the Company's annual meeting of shareholders, to be held at the Philadelphia Museum of Art at 3:30 p.m. on April 25, 2007. -- Voted to adopt a majority vote standard in uncontested elections of directors, effective immediately and will apply to all future elections of directors. Under the new standard, each director will be elected if the number of votes cast "for" the director exceeds the number of votes cast "against" the director. Any director who fails to receive the required vote for election must tender his or her resignation. -- Increased the Company's stock repurchase authority by $500 million. With the new authority, the Company has approximately $820 million of repurchase authority remaining. -- Announced plans to voluntarily withdraw its common stock, par value $0.25, from listings on the Philadelphia Stock Exchange and NYSE Arca, Inc. The Company's common stock will continue to be listed on the New York Stock Exchange. Headquartered in Philadelphia, CIGNA Corporation (NYSE: CI) -- http://www.cigna.com-- and its subsidiaries are publicly owned providers of health care, disability, life and accident insurance benefits in the United States and selected markets around the world. * * * As reported in the Troubled Company Reporter on Aug. 22, 2006 Standard & Poor's Ratings Services assigned its preliminary 'BB+' preferred stock rating to Cigna Corp.'s recently filed universal shelf. The outlook remains positive. CITIMORTGAGE ALTERNATIVE: Fitch Puts B Rating on $1.7MM of Certs. ----------------------------------------------------------------- Fitch rates CMALT (CitiMortgage Alternative Loan Trust), series 2006-A5 REMIC pass-through certificates: -- $570,180,911 classes IA-1 through IA-13, IA-IO, IIA-1, IIA-IO, IIIA-1 through IIIA-3, IIIA-IO and A-PO certificates (senior certificates) 'AAA'; -- $13,157,000 class B-1 'AA'; -- $5,082,000 class B-2 'A'; -- $3,288,000 class B-3 'BBB'; -- $2,690,000 class B-4 'BB'; -- $1,793,000 class B-5 'B'. The $1,798,100 class B-6 is not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 4.65% subordination provided by the 2.20% class B-1, the 0.85% class B- 2, the 0.55% class B-3, the 0.45% privately offered class B-4, the 0.30% privately offered class B-5, and the 0.30% privately offered class B-6. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and CitiMortgage, Inc.'s servicing capabilities (rated 'RPS1' by Fitch) as primary servicer. As of the cut-off date, Oct. 1, 2006, the mortgage pool consists of 1,764 conventional, fully amortizing, 12-30 year fixed-rate mortgage loans secured by first liens on one- to four-family residential properties with an aggregate principal balance of approximately $597,989,011, located primarily in California (33.71%), Florida (9.04%) and New York (7.24%). The weighted average current loan to value ratio of the mortgage loans is 70.69%. Approximately 65.26% of the loans were originated under a reduced documentation program. Condo and co-op properties account for 8.43% of the total pool. Cash-out refinance loans and investor properties represent 40.21% and 5.53% of the pool, respectively. The average balance of the mortgage loans in the pool is approximately $338,996. The weighted average coupon of the loans is 6.823% and the weighted average remaining term is 353 months. The mortgage loans were originated or acquired by CMI and in turn sold to CMSI. A special purpose corporation, CMSI, deposited the loans into the trust, which then issued the certificates. U.S. Bank National Association will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. CKE RESTAURANTS: 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 restaurant sector, the rating agency confirmed its B1 Corporate Family Rating for CKE Restaurants 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 ---------- ------- ------- ------ ---------- $150m Senior secured revolver due 2007 B1 Ba2 LGD2 29% $230m Senior secured term loan B due 2009 B1 Ba2 LGD2 29% $105m 4% convertible subordinated notes due 2023 Caa1 B3 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%). CKE Restaurants Inc., through its wholly owned subsidiaries, engages in the ownership, operation, and franchising of quick- service and fast-casual restaurants. The company operates its restaurants primarily under Carl's Jr., Hardee's, La Salsa Fresh Mexican Grill, and Green Burrito brand names. As of Jan. 31, 2006, the company operated or franchised approximately 3,160 restaurants in 43 states and 13 countries. The company was founded in 1941 and is headquartered in Carpinteria, California. COMPLETE RETREATS: Files DIP Loan Budget at Ad Hoc Panel's Request ------------------------------------------------------------------ In connection with Complete Retreats LLC and its debtor- affiliates' proposed $80,000,000 debtor-in-possession financing facility from Ableco Finance, LLC, the Debtors filed with the U.S. Bankruptcy Court for the District of Connecticut a 13-week cash flow forecast ending Jan. 19, 2007, and a six-month budget for the period October 2006 to March 2007. The Debtors previously filed with the Court a draft of its proposed Replacement DIP Financing, a full-text copy of which is available for free at: http://researcharchives.com/t/s?1403 According to the Debtors, the Ableco DIP Financing Facility Draft is subject to continuing negotiations among the parties and to further revision. The Debtors filed the Ableco Financing Budget following the Ad Hoc Committee of Members of Complete Retreats' demand. The Ad Hoc Committee is a group comprised of more than 350 current and former members of Private Retreats, LLC, and Distinctive Retreats, LLC, who share common interests in the Debtors' bankruptcy cases and who represent at least $115,000,000 in claims. The Ad Hoc Committee noted that the DIP Budget was not attached to the Ableco DIP Financing Facility Draft despite the fact that: (1) information derived from the Budget is a component cap of the Ableco Revolving Credit Facility; and (2) the proceeds of the proposed Ableco DIP Facility are expressly governed by the Budget. Complete Retreats, et al. 13-Week Cash Flow Forecast Beginning Week Ending November 3, 2006 13-Week Total ------------- Operating Receipts Membership Deposits - Membership Dues $1,406,300 Daily Fees 1,862,100 Member Services 603,200 Other Revenue/(Credit Card Chargebacks) (91,000) ---------------- Total Recurring Receipts 3,708,500 Operating Disbursements Payroll-Field Operations 1,349,500 Rent-Properties 2,042,000 Field Expenses 877,200 HOA, Property Management & Memberships 983,600 International Destination Expenses 569,500 Housekeeping & Contract Labor 538,100 Host & Employee Expenses 144,000 Member Expenses 25,000 Utilities 313,200 Insurance 196,100 Repairs & Maintenance 185,500 Mortgages 86,200 Taxes 427,600 Other G&A 113,800 ---------------- Total Operating Disbursements 7,851,500 Operating Cash Flow 4,070,900 Non-recurring Receipts Asset/Property Sales $3,756,600 ---------------- Total Non-recurring Receipts 3,756,600 General and Administrative Disbursements HQ/Sales Office Payroll 1,441,000 Office Space & Storage 197,500 Sales & Marketing - CapEx 36,400 Other Disbursements 114,800 ---------------- Total Non-operating Disbursements 1,789,700 Cash Flow before Restructuring (2,104,100) Restructuring Disbursements Professional Fees 3,873,100 Deposits - Bank Fees 1,164,100 Interests 2,041,800 UST Fees 50,000 ---------------- Total Restructuring Disbursements 7,128,900 ---------------- Total Disbursements 16,770,100 ---------------- Net Cash Flow (9,233,000) ---------------- Total Debt $57,462,200 ================ A full-text copy of the 13-Week Budget is available for free at: http://researcharchives.com/t/s?1405 Complete Retreats, et al. Six-Month Cash Flow Forecast October 2006 to March 2007 Six-Month Total --------------- Operating Receipts Membership Deposits - Membership Dues $2,985,900 Daily Fees 3,483,900 Member Services 918,600 Other Revenue/(Credit Card Chargebacks) (270,800) ---------------- Total Recurring Receipts 7,117,600 Operating Disbursements Payroll-Field Operations 2,498,800 Rent-Properties 3,986,300 Field Expenses 1,454,500 HOA, Property Management & Memberships 1,308,900 International Destination Expenses 1,127,400 Housekeeping & Contract Labor 960,100 Host & Employee Expenses 278,300 Member Expenses 68,000 Utilities 627,100 Insurance 390,100 Repairs & Maintenance 329,600 Mortgages 171,900 Taxes 612,300 Airplane Services - Other G&A 220,600 ---------------- Total Operating Disbursements 14,033,900 Operating Cash Flow (3,916,400) Non-recurring Receipts Asset/Property Sales 3,779,100 ---------------- Total Non-recurring Receipts 3,779,100 General and Administrative Disbursements HQ/Sales Office Payroll 2,660,600 Office Space & Storage 394,300 Sales & Marketing 10,900 CapEx 73,800 Other Disbursements 351,400 ---------------- Total Non-operating Disbursements 3,491,000 Cash Flow before Restructuring (6,628,300) Restructuring Disbursements Professional Fees 5,511,100 Deposits - Bank Fees 3,131,500 Interests 4,012,300 UST Fees 75,000 ---------------- Total Restructuring Disbursements 12,729,900 ---------------- Total Disbursements 30,254,800 ---------------- Net Cash Flow (19,358,200) ---------------- Total Debt $63,412,900 ================ A full-text copy of the 6-Month Budget is available for free at: http://researcharchives.com/t/s?1406 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. 12; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). COMPLETE RETREATS: Panel Wants Dec. 2 Claims Investigation Period ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in Complete Retreats LLC and its debtor-affiliates' chapter 11 cases further asks the U.S. Bankruptcy Court for the District of Connecticut to extend the time for it to investigate and bring claims relating to the prepetition liens and conduct of the Debtors' prepetition lenders through and including Dec. 2, 2006. The Creditors Committee previously obtained an Oct. 26, 2006 deadline to file its objections to the Debtors' loan agreements with The Patriot Group LLC and LPP Mortgage Ltd. The Committee has uncovered allegations of wrongdoing associated with the Debtors' prepetition financing, according to Jonathan B. Alter, Esq., at Bingham McCutchen LLP, in Hartford, Connecticut. Mr. Alter explains that the investigation of the Lenders must run in tandem with the broader investigation of the extent of any wrongdoing related to the Debtors' prepetition management and operations, which have just commenced and will take additional time to complete. In furtherance of its investigation, the Committee has made informal requests for information to, and has received documents from, the DIP Lenders, Mr. Alter informs the Court. The Committee has also obtained the Court's permission to conduct examinations pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure on John Howe, a former officer of The Patriot Group, LLC, and various former officers and employees of the Debtors. DIP Lenders Object Patriot Group and LPP Mortgage assert that the Creditors Committee has not shown that cause exists to support a further extension of the Objection Period. Moreover, the Creditors Committee's request is contrary to the terms of the Final DIP Order and prejudicial to the Lenders and other creditors, the Lenders add. The current DIP Facility is due on Oct. 31, 2006. The Lenders assert that if the Debtors do not pay them in full by October 31, they have the right under the DIP Final Order to foreclose on their collateral. The Lenders relate that they have voluntarily produced documents requested by the Committee and have fully cooperated with the discovery request. The Committee has reviewed all of their loan and related documentation and has made no allegations that the Existing Loans are unsecured, undersecured or are not properly perfected. Patriot notes that the timing of the Committee's discovery request seems tied not to any legitimate need for investigation, but rather to an effort to manufacture a justification for a further Extension, defer repayment of the Existing Loans, and create an additional $7,000,000 in liquidity for the Debtors through a priming lien that directly contravenes the provisions of the Final DIP Order. The Debtors' cases cannot withstand the costs of a prolonged investigation of the Lenders' claims, combined with the continued cost of interest, costs and fees accruing on any remaining unpaid balance on their loans, the Lenders argue. Accordingly, the Lenders ask the Court to: (a) deny the Committee's request; or (b) grant an extension without prejudice to the Lenders' right to receive full payment of the Existing Loans by October 31, 2006, pursuant to the Ableco DIP Facility. 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. 12; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). COMPLETE RETREATS: Court Approves Holly Felder Etlin as CRO ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Connecticut gave Complete Retreats LLC and its debtor-affiliates authority to employ Holly Felder Etlin as their chief restructuring officer, provided that the Debtors' indemnification obligations will be limited to the similar obligations provided by the Debtors to the officers and directors under the Debtors' corporate documents, available insurance and applicable state law. Without imposing a requirement on XRoads Solution Group, LLC, to submit fee applications pursuant to Sections 330 and 331 of the Bankruptcy Code, the Court rules that XRoads will invoice the Debtors on a monthly basis and provide copies of the invoices to the U.S. Trustee and the Official Committee of Unsecured Creditors by the 20th day of each month for the previous month. Approximately every 120 days, XRoads will file with the Court and serve on the U.S. Trustee and the Committee quarterly reports of compensation earned and expenses incurred. The U.S. Trustee and the Committee will have the right to object to the Quarterly Compensation Reports within 10 days of the filing. As reported in the Troubled Company Reporter on Oct 5, 2006, the Debtors sought to employ Holly Felder with a financial advisory services support team from XRoads Solutions. The Debtors believe that Ms. Etlin is a qualified restructuring consultant with valuable experience in numerous corporate turnarounds, financial reorganizations, and asset sales. The Debtors previously filed an application under Section 327(a) of the Bankruptcy Code to employ XRoads Solutions as their financial and restructuring advisor. On July 25, 2006, the Court approved the Debtors' request, on an interim basis. After multiple communications among the Debtors' counsel, XRoads and the U.S. Trustee, the Debtors have elected to voluntarily withdraw the XRoads Retention Application. Pursuant to the terms of a Retention Letter between XRoads and the Debtors dated July 1, 2006, and amended on July 20, 2006, Ms. Etlin, as the Debtors' CRO, is authorized and responsible for: -- making decisions with respect to all aspects of the management and operation of the Debtors' business and assisting in identifying cost reduction, working capital turn, and other operations improvement opportunities; -- communicating and meeting with creditors and their representatives in connection with the formulation, negotiation, and execution of a plan of reorganization, and discussing the business operations, financial performance, and general condition of the Debtors; and -- making decisions with respect to hiring new employees and terminating the Debtors' existing employees. Ms. Etlin, together with certain additional XRoads personnel, will: (a) evaluate the Debtors' strategic alternatives; (b) assist in implementing any Court-approved capital structure; (c) review, assess the restructuring impact of, and develop action plans for key contracts; (d) review and validate the Debtors' cash flow forecasts and related processes; (e) evaluate the Debtors' business, reorganization and restructuring plans; (f) assist in the development and implementation of a recapitalization plan; (g) provide financial information in support of, and participation in, the Debtors' investment banking process; (h) assist in communications, negotiations with, and presentations to vendors, creditors, and other key constituents; (i) assist in the development of employee-related plans, including retention, severance, and replacement plans; (j) assume the leadership role for the design and implementation of new effective management and financial reporting methodologies; (k) analyze and lead the Debtors' cash management and related activities; and (1) assist in the preparation of the Debtors' Schedules of Assets and Liabilities, Statements of Financial Affairs, the initial reporting package for the United States Trustee, and monthly operating reports. The CRO and any other additional personnel would report to and operate under the direction of the Debtors' board, which may terminate the engagement upon 15 days' written notice. The Debtors' current board of directors consists of James Mitchell, Michael Shelton and Jason Bitsky. None of the personnel employed by XRoads to represent the Debtors, including the CRO, would serve as a director of the Debtors. In addition, XRoads agrees that neither it nor any of its affiliates would make any investment in the Debtors or the reorganized Debtors for three years after the conclusion of its engagement with the Debtors. The Debtors will pay XRoads a fixed fee of $150,000 per month for the CRO and Financial Advisory Services; provided, that if those services total more than 480 hours in any month, the Debtors will pay XRoads $375 per hour for the additional services. The Debtors will pay all expenses reasonably incurred by XRoads for services rendered on the Debtors' behalf. The CRO and other additional XRoads personnel will be covered by the Debtors' directors and officers insurance liability policy. If any Restructuring is consummated during the term of XRoads' engagement and 12 months after the termination of its services, XRoads will receive a Restructuring Performance Fee equal to: (i) 0.5% of the first $100,000,000 of the Debtors' debt securities and other indebtedness, obligations, or liabilities restructured; and (ii) 0.25% of all amounts in excess of $100,000,000 of the Debtors' cumulative debt securities and other indebtedness, obligations, or liabilities restructured. If a Sale Transaction is consummated during the term of XRoads' engagement or within 12 months after the termination of its services, XRoads will receive a Sale Performance Fee equal to: (i) 0.5% of the first $100,000,000 of Aggregate Gross Considerations paid; and (ii) 0.25% of the Aggregate Gross Consideration paid in excess of $100,000,000. The Restructuring Performance Fee and the Sales Performance Fee, if earned, would be subject to the Court's approval. Prior to the Debtors' bankruptcy filing, XRoads received a $150,000 retainer. The Retainer will be applied to XRoads' final bill for fees and expenses, Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, informed the Court. The unused portion of the Retainer, if any, will be returned to the Debtors. The Debtors have been advised by XRoads that it will endeavor to coordinate with the other retentions in the Debtors' bankruptcy cases to eliminate unnecessary duplication or overlap of work. "The assistance of Ms. Etlin and her team will provide a fresh perspective on the Debtors' business, as well as valuable expertise on various business management and operational issues," Mr. Daman explained. "With the aid of XRoads, the Debtors will be better able to assess possible areas of cost reduction and other operational improvement opportunities, as well as successfully navigate through the critical early stage of these cases and beyond." Because the CRO is not to be retained under Section 327, XRoads should not be subject to the compensation requirements of Sections 328, 330 and 331 of the Bankruptcy Code, Mr. Daman contended. Thus, the Debtors ask the Court to: -- treat XRoads' fees and expenses as an administrative expense of the Debtors' estates; and -- exempt XRoads from filing fee applications or seeking Court approval for the payment of its services and reimbursement of its expenses. Ms. Etlin, as principal of XRoads Solutions Group, LLC, assured the Court that XRoads is a "disinterested" person as that term is defined in Section 101(14) of the Bankruptcy Code. XRoads does not hold or represent an interest adverse to the Debtors or their estates. 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. 12; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). COPELANDS' ENTERPRISES: Seeks Court's OK on CEO, CFO Services Pact ------------------------------------------------------------------ Copelands' Enterprises Inc. asks the U.S. Bankruptcy Court for the District of Delaware for permission to approve a salary payment arrangement for: -- John P. Brincko as chief executive officer, nunc pro tunc Sept. 15, 2006; and -- Thora Thoroddsen as chief financial officer, nunc pro tunc Sept. 27, 2006. The Debtor tells the Court that Mr. Brinck will replace Barry Soosman, its existing chief executive officer. Ms. Thoroddsen will replace Brian Allen, its existing CFO. The Debtor's principals say the immediate change in management will improve operational performance and maximize the chances of reorganizing the Debtor as a going concern. The Debtor will pay Mr. Brincko $75,000 per month. It will pay Ms. Thoroddsen $50,000 per month. The employment of the new officer will result in cost savings over the former employments of Mr. Soosman, Mr. Allen and Clear Thinking Group -- the Debtor's financial advisor. To the Debtor's best knowledge, Mr. Brincko and Ms. Thoroddsen do not hold any interest adverse to the Debtor's estate. Based in San Luis Obispo, California, Copelands' Enterprises, Inc., dba Copelands' Sports -- http://www.copelandsports.com/-- operates specialty sporting goods stores. The Company filed for chapter 11 protection on Aug. 14, 2006 (Bankr. D. Del. Case No. 06-10853). Laura Davis Jones, Esq., Marc A. Berlinson, Esq., and Ira A. Kharasch, Esq., at Pachulski, Stang, Ziehl, Young, Jones, & Weintraub LLP, in Los Angeles, California, represent the Debtor. Clear Thinking Group serves as the Debtor's financial advisor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $50 million and $100 million. COUDERT BROTHERS: Gets Okay to Hire Dunn Koes as Special Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York allowed Coudert Brothers LLP to employ Dunn Koes LLP as its special counsel, nunc pro tunc to Sept. 22, 2006. As reported in the Troubled Company Reporter on Oct. 4, 2006, Dunn Koes will continue representation of the Debtor in an appeal to a malpractice jury verdict and judgment entered in the matter of Lyman Gardens Apartments, LLC, et al., v. Coudert Brothers LLP, et al. Lyman Gardens Apartments, LLC and Darryl Wong commenced an action in the Superior Court of California for the County of Los Angeles, Case No. BC299990, against Debtor and Ralph Navarro, a partner of the Debtor, asserting certain causes of action for professional negligence/attorney malpractice fraud, breach of fiduciary duty, legal malpractice, fraudulent concealment, and negligence arising from a real estate transaction for which the Lyman Gardens Plaintiffs engaged the services of the Debtor. In June 2006, a jury awarded the Lyman Gardens Plaintiffs approximately $2.5 million in compensatory and punitive damages against the Debtor. The Debtor's appeal on the Lyman Gardens judgment is currently pending and has not yet been perfected. Pamela Dunn, Esq., a partner at Dunn Koes, tells the Court that the firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $275 - $350 Associates $250 Paralegal $110 Ms. Dunn assured the Court that her firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Coudert Brothers LLP was an international law firm specializing in complex cross border transactions and dispute resolution. The Debtor filed for Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No. 06-12226). John E. Jureller, Jr., Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represents the Debtor in its restructuring efforts. In its schedules of assets and debts, Coudert listed total assets of $29,968,033 and total debts of $18,261,380. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 20, 2007. COUDERT BROTHERS: Wants to Hire Yeo Wee as Special Counsel ---------------------------------------------------------- Coudert Brothers LLP asks the U.S. Bankruptcy Court for the Southern District of New York for authority to employ Yeo Wee Kiong Law Corporation as its special counsel, nunc pro tunc to Sept. 22, 2006. Yeo Wee will continue to represent the Debtor in litigation matters pending in Singapore. The firm has worked in a suit involving Oliver Langton Wright and Dan Marjonovic, the Debtor's former partners, who have asserted claims against the Debtor in Singapore. Foo Maw Shen, Esq., a partner at Yeo Wee, tells the Court that the firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $350 Associates $200 Mr. Shen assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Shen can be reached at: Foo Maw Shen, Esq. Yeo Wee Kiong Law Corporation 1 Raffles Place #39-02 OUB Centre Singapore 048616 Coudert Brothers LLP was an international law firm specializing in complex cross border transactions and dispute resolution. The Debtor filed for Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No. 06-12226). John E. Jureller, Jr., Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represents the Debtor in its restructuring efforts. In its schedules of assets and debts, Coudert listed total assets of $29,968,033 and total debts of $18,261,380. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 20, 2007. DAIMLERCHRYSLER AG: Rules Out Sale of Chrysler Unit --------------------------------------------------- DaimlerChrysler AG is not planning to sell its Chrysler division as the U.S.-German carmaker disclosed of an "aggressive" review of the unit, The Financial Times says. Bodo Uebber, DaimlerChrysler's Finance Director, said the company would review all options, including structural changes, to turn around its U.S. unit. Mr. Uebber, however, ruled out a sale or partnership for the Chrysler unit. "DaimlerChrysler reaffirms its previous statements made to the media that there are no plans to sell Chrysler Group," the company said in a statement. "The company appropriately chose not to add to the speculation regarding this topic. However, the resulting coverage and comments made it clear that this 'not-for-sale' statement needed to be reaffirmed." In the third quarter of 2006, Chrysler posted an operating loss of $1.477 billion, compared with an operating profit of $393 million in the same period last year. The operating loss, according to a statement by DaimlerChrysler, was primarily the result of a decrease in worldwide factory unit sales, an unfavorable shift in product and market mix, and negative net pricing. "These factors reflect a continuing difficult market environment in the United States as the Chrysler Group faced increased dealer inventory levels from the prior quarter, a shift in consumer demand toward smaller vehicles due to higher fuel prices, and increased interest rates," DaimlerChrysler added. About DaimlerChrysler DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- engages in the development, manufacture, distribution, and sale of various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures - particularly on light trucks - by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DANA CORP: Court Okays Pact for Entry Into Mitsubishi Master Lease ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York approved a stipulation permitting Dana Corporation and its debtor- affiliates to enter into a master lease agreement with Mitsubishi Caterpillar Forklift America. Under the Stipulation, the parties agree that the Master Lease is a transaction in the ordinary course of the Debtors' business, pursuant to Section 363(c) of the Bankruptcy Code. As of their bankruptcy filing, the Debtors were party to approximately 1,000 active equipment lease schedules with eight different lessors. The Debtors estimate that approximately 60% of those Schedules relate to forklift leases. Accordingly, the Debtors believe that their entry into a new postpetition master lease with Mitsubishi for the lease of forklifts to be used in their businesses is a transaction in the ordinary course of business that does not require Court approval. Mitsubishi, however, has expressed concern that any claims it might have under the Master Lease might be subject to challenge on the basis that the Debtors' entry into the Master Lease was not an ordinary course of business transaction. About Dana Corporation Toledo, Ohio-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. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. 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. 24; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANA CORP: Six Retirees Balk at Proposed Burns, et al. Fees ----------------------------------------------------------- Six retirees filed separate letters with the U.S. Bankruptcy Court for the Southern District of New York on Oct. 16, 2006: * David Kuchcinski, * Edwin Riffle, * George Soroka, * Lois Stroh, * Louis Benien, and * Marion Napienala. The Retirees object to Dana Corporation and its debtor-affiliates' proposed compensation for Michael Burns and the key executives in his core management team. The Retirees believe that the Executives should focus more on how to keep the company running, and not spend too much time working on how they can earn more money. The Retirees also assert that their health and retiree benefits and their shares of stock in the company should be preserved. About Dana Corporation Toledo, Ohio-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. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. 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. 24; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANA CORP: American Materials Wants Return of Henderson Facility ---------------------------------------------------------------- American Materials Inc., and Dana Corporation and its debtor- affiliates are parties to a Warehouse Services Agreement, pursuant to which the Debtors leases up to 157,500 square feet of warehouse space at AMI's facility at Highway 426 and U.S. 41, in Henderson, Kentucky. The Debtors use the Henderson Facility for non-residential purposes, Richard M. Meth, Esq., at Pitney Hardin, LLP, in New York, relates. The Debtors are currently paying $0.22 per square foot every month for the Warehouse Lease. AMI also provides the Debtors with basic services relating to the unloading, movement, inventory, loading and storage of the Debtors' goods. AMI retains full ownership of the Henderson Facility, Mr. Meth says. The Debtors have no option to purchase the Henderson Facility or any other interest in the Facility. AMI is responsible for any repairs and maintenance of the Facility and for paying all utilities, taxes and other assessments. The Debtors, on the other hand, are responsible for maintaining insurance on the Goods they store at the Facility. Shortly after the Debtors' bankruptcy filing, Mr. Meth relates that AMI exchanged correspondence with the Debtors concerning its continued performance under the Warehouse Lease. AMI also sought payment of the Debtors' prepetition obligations owed under the Warehouse Lease. As of Oct. 3, 2006, the Debtors had neither filed a motion for, nor obtained an order approving, the assumption of the Warehouse Lease, Mr. Meth relates. Oct. 3, 2006 is the deadline for the Debtors to decide on non-residential real property leases. Because the Debtors have failed to assume the Warehouse Lease before the October 3 deadline, it is deemed rejected by operation of law and thus, AMI is entitled to the immediate surrender and possession of the Henderson Facility, Mr. Meth asserts. As of Oct. 5, 2006, the Debtors owe AMI $155,661 for unpaid postpetition amounts under the Warehouse Lease, including late fees, Mr. Meth relates. Pursuant to both Sections 363(d)(3) and 503(b)(1), AMI is entitled to an award of an administrative expense and the immediate payment of that amount by the Debtors, Mr. Meth maintains. Accordingly, AMI asks the U.S. Bankruptcy Court for the Southern District of New York to: (a) direct the Debtors to immediately surrender the property subject under the Warehouse Lease; (b) award it an administrative expense claim for not less than $155,661; and (c) direct the Debtors to immediately pay the administrative expense claim. About Dana Corporation Toledo, Ohio-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. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. 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. 24; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DOV PHARMACEUTICAL: Receives Delisting Notice from NASDAQ --------------------------------------------------------- DOV Pharmaceutical, Inc. has received notification that the NASDAQ Listing Qualifications Panel has determined to delist the Company's securities, effective at the open of business on Oct. 27, 2006. The delisting is a result of the Company's failure to meet the minimum market value of listed securities requirement for continued listing. The Company has been advised that its securities are immediately eligible for quotation on the Pink Sheets, an electronic quotation service for securities traded over-the-counter, effective with the open of business on Oct. 27, 2006. The Company's common stock may, in the future, also be quoted on the Over-the-Counter Bulletin Board maintained by the NASD, provided that a market maker in the common stock files the appropriate application with, and such application is cleared by, the NASD. The Company anticipates disclosing further trading venue information for its common stock once such information becomes available. The delisting of the Company's common stock represents a "fundamental change" under the indenture governing the Company's 2.50% convertible subordinated debentures due 2025. As a result, the Company is obligated to offer to repurchase the debentures. The Company must make this offer to repurchase the debentures on or prior to November 11, 2006. The Company is obligated to designate a repurchase date for the debentures that is not less than twenty, nor more than thirty-five, business days following the date of the Company's offer to repurchase. Holders of the debentures will have the option, but not the obligation, to require the Company to repurchase their debentures at 100% of the principal amount of the debentures, plus any accrued and unpaid interest. There are currently $70 million in aggregate principal amount of debentures outstanding. The Company cannot predict the number of holders of debentures that will exercise their option to require the Company to repurchase their debentures. The Company does not presently have the capital necessary to repurchase all $70 million of the debentures if all holders of debentures exercise their option to require the Company to repurchase the debentures. The Company will continue to explore a variety of initiatives to address its current capital structure issues and improve its liquidity position. The Company intends to initiate discussions with its major stakeholders regarding the Company's strategic alternatives, including potentially a consensual restructuring of its capital structure. As with any negotiations, no assurance can be given as to when and if the Company will succeed in concluding any such agreement with its stakeholders. If the Company is unable to raise sufficient funds to repurchase the requisite amount of debentures or restructure its obligations under the debentures, it may be forced to seek protection under the United States bankruptcy laws. The Company has retained Houlihan Lokey Howard & Zukin Capital, Inc. to serve as its financial advisor to assist with its evaluation of strategic alternatives and restructuring efforts with respect to the debentures. The Company believes that its current cash-on-hand is adequate to meet the day-to-day obligations of the business during the restructuring process and its operations should not be affected by the delisting and restructuring process. The Company will continue to focus its internal efforts on its Phase I and II clinical and preclinical research programs for the development and discovery of drugs to treat neuropsychiatric disorders and advance the Company's later-stage drug development programs through external partnerships and collaborations. About DOV Pharmaceutical DOV Pharmaceutical Inc. is a biopharmaceutical company focused on the discovery, acquisition and development of novel drug candidates for central nervous system disorders. The Company's product candidates address some of the largest pharmaceutical markets in the world including depression, pain and insomnia. EL POLLO: IPO Withdrawal Cues Moody's to Slice CFR to B3 from B1 ---------------------------------------------------------------- Moody's Investors Service moved El Pollo Loco, Inc.'s corporate family rating back to B3 from B1 following the company's recent announcement to withdraw its proposed $135 million initial public offering. At the same time, the B1 ratings on the proposed $210 million senior secured credit facility consisting of a $25 million revolver and a $185 million term loan B were withdrawn. The existing capital structure ratings, namely the Ba3 $25 million revolver, the Ba3 $104.5 million term loan B and the Caa1 senior unsecured notes, as well as the SGL-2 Speculative Grade Liquidity rating were all affirmed along with this rating action. The rating outlook remains stable. Moody's previous rating action on El Pollo was May 18, 2006 when the corporate family rating was upgraded to B1 from B3 and B1 ratings were assigned to the company's proposed $210 million senior secured credit facility (consisting of a $25 million revolver and a $185 million term loan B) following the company's $135 million proposed IPO of shares of its common stock and planned refinancing of its existing debt. The SGL-2 Speculative Grade Liquidity rating was affirmed at that time. Ratings downgraded with a stable outlook: -- Corporate family rating to B3 from B1, -- Probability of default rating to B3 from B2. Assessment changed: -- LGD4-50% from LGD3-35% loss given default assessment. Ratings withdrawn: -- B1 (LGD3, 31%) for the $185 million senior secured term loan B maturing in 2013, -- B1 (LGD3, 31%) for the $25 million senior secured revolver maturing in 2012. Ratings affirmed: -- Ba3 (LGD2, 18%) for the $104.5 million senior secured term loan B maturing in 2011, -- Ba3 (LGD2, 18%) for the $25 million senior secured revolver maturing in 2010, -- Caa1 (LGD5, 71%) for the $123.4 million senior unsecured notes maturing in 2013, -- SGL-2 speculative grade liquidity rating. El Pollo Loco Inc, headquartered in Irvine, California, is a leading quick-service restaurant chain specializing in flame- grilled chicken and other Mexican-inspired entrees. The company operated or franchised 341 restaurants at June 30, 2006 with locations primarily around Los Angeles and throughout the Southwest. Revenues for fiscal 2005 totaled $237 million. ENTERGY NEW: Court Denies Claims Objection & Class Classification ----------------------------------------------------------------- On April 18, 2006, the Gordon and Lowenburg Plaintiffs each filed a class proof of claim in Entergy New Orleans, Inc.'s Chapter 11 case in relation their motion for certification of classes. The Plaintiffs filed their claims a day before the April 19, 2006 claim bar date. The Plaintiffs include Reverend C.S. Gordon, Jr., on behalf of the New Zion Baptist Church, J. Michael Malek, Darryl Malec-Wiley, Willie Webb, Jr., Masison St. Charles LLC, dba Quality Inn Maison St. Charles; and Thomas P. Lowenburg, Martin Adamo, Vern Baxter, Philip D. Carter, Bernard Gordon, Leonard Levine, Ivory S. Madison and Donetta Dunn Miller. On May 11, 2006, ENOI filed objections to both the Plaintiffs' Claim Nos. 326 and 328 on the basis that it is not possible from the face of the claims to determine how the claims were calculated. The Claims are disputed and unliquidated. ENOI also filed a motion for summary judgment, asking the U.S. Bankruptcy Court for the Eastern District of Louisiana to deny the Plaintiff's motion and disallow both of the Claims. Court Denies Claims Objection The Bankruptcy Court, however, holds that the documentation filed with the claims detailing the administrative and judicial remedies sought by the Plaintiffs in other fora outside the Court is sufficient documentation of the proof of claim as of now. The Court notes that properly filing a proof of claim constitutes prima facie evidence of the claim's validity. Therefore, the Court overrules ENOI's objection to Claim Nos. 326 and 328 because it provided no evidence to overcome the prima facie effect of the claims. Court Declines Class Certification Judge Jerry A. Brown relies on certain Circuit Court of Appeal opinions on how class certification and class proofs of claim should properly be addressed. Judge Brown notes the minority view espoused by the Tenth Circuit holds, "Class action procedures can be employed in a bankruptcy proceeding only to consolidate claims that have already been properly filed." In In re Standard Metals Corp., 817 F.2d 625, 632 (10th Cir. 1987), the court held that "a proof of claim filed by an investor for himself and on behalf of all other bondholders as a class was not allowed because the Bankruptcy Code does not permit filing a claim on behalf of a class." Although it did not allow the class proof of claim to be filed, on rehearing, the Tenth Circuit issued in 11 Sheftelman v. Standard Metals Corp., 839 F.2d 1383 (10th Cir. 1987), a per curiam opinion reversing the prior Standard Metals opinion and the orders of the bankruptcy court to the extent that the bankruptcy court did not require the debtor to give actual notice to the bondholders and did not set a new bar date for the filing of claims by those bondholders. Therefore, although the class proof of claim was not allowed in the Standard Metals case, the Tenth Circuit required the debtor to provide the putative class members with actual notice of the bankruptcy and the bar date and extend the bar date so that individual proofs of claim could be filed, Judge Brown notes. The Bankruptcy Court also notes that in contrast to the Tenth Circuit's opinion that class proofs of claim are impermissible, the Seventh Circuit opinion allows a class representative to file a proof of claim. In In re American Reserve Corp., 840 F.2d 487 (7th Cir. 1988), the Seventh Circuit ruled that the filing by a representative of a class proof of claim was clearly contemplated by Rule 7023 of the Federal Rule of Bankruptcy Procedure, which could be made applicable to contested matters by Rule 9014, and that it was within the bankruptcy judge's discretion to apply Rule 7023 and allow a class proof of claim. The Seventh Circuit also stated, "Rule 9014 thus allows bankruptcy judges to apply Rule 7023-and thereby Federal Rule Civil Procedure 23, the class action rule-to 'any stage' in contested matters. Filing a proof of claim is a 'stage'. All disputes in bankruptcy are either adversary proceedings or contested matters, so Rule 23 may apply throughout a bankruptcy case at the bankruptcy judge's discretion." The Bankruptcy Court notes that ENOI is regulated by the City Council for the City of New Orleans under Article IV, Section 21(c) of the Constitution of the State of Louisiana and the Home Rule Charter of the City of New Orleans. Under the Louisiana Constitution, the Louisiana Public Service Commission regulates most of the public utilities in the state of Louisiana, but some utilities that were municipally regulated as of the effective date of the Constitution continue to be regulated by the municipalities, which includes New Orleans. According to Judge Brown, with respect to their duties as regulators of public utilities, the City Council and the LPSC perform approximately the same function, and that for purposes of its jurisdictional analysis, the cases decided by Louisiana state courts with respect to the jurisdictional powers of the LPSC can also be applied to the jurisdiction of the City Council. Therefore, the Bankruptcy Court finds that the prescribed channels for adjudication of rate related complaints against ENOI are apparently working as they should, which is why it is not in favor invoking Rule 7023 in the proceeding between the Gordon and Lowenburg Plaintiffs and ENOI. The Bankruptcy Court acknowledges ENOI's objection to any reopening of the bar date to allow individual claims to be filed, arguing that doing so would disrupt the formation of a plan of reorganization, and the high costs associated in mailing notices and proof of claim forms to 180,000 potential class members. However, the Bankruptcy Court takes note of the agreement by ENOI, its parent, Entergy, Inc., and the Official Committee of Unsecured Creditors that they would not object to the proofs of claim of the Gordon and Lowenburg Plaintiffs on the basis that a non-certified class representative will file a proof of claim on behalf of a subsequently certified class. Therefore, the Bankruptcy Court declines to apply Rule 7023 to the contested matter and will not certify either the Gordon Plaintiffs or the Lowenburg Plaintiffs as a class. The Court, however, will allow the Plaintiffs to make a motion to apply Rule 7023 to any claim objection filed by the Debtor in the event that either class is certified by a court that is hearing the actions for class certification. Court Extends Time to Appeal ENOI sought and obtained the Court's authority to file until Nov. 13, 2006, the time to file a notice of appeal or to file a motion for reconsideration of the Court's opinion and order dated Oct. 13, 2006. The Oct. 13, 2006 order granted in part and denied in part ENOI's motions for summary judgment against the Gordon and Lowenburg Plaintiffs' motion for certification of classes. Joshua J. Lewis, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., in New Orleans, Louisiana, points out that from ENOI's reading of the Court's order, there is a misunderstanding of the Court's ruling that ENOI "would not object to the proofs of claim of either the Gordon or Lowenburg Plaintiffs on the basis that a non-certified class representative filed a proof of claim on behalf of a subsequently certified class." Mr. Lewis says that the extension is necessary so that all parties in the case may obtain a clearer picture of the Court's intent in the order, which may obviate the need for appeal altogether. About Entergy Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERGY NEW: Wants Order on Gordon & Lowenburg Claimants Clarified ------------------------------------------------------------------ Entergy New Orleans, Inc., asks Judge Jerry A. Brown of the U.S. Bankruptcy Court for the Eastern District of Louisiana for a rehearing or clarification on the Court's reasons behind the October 13, 2006 Court Order that partially granted its request for summary judgment on the Motions for Class Certification filed by the Lowenburg and Gordon Claimants. Nan Roberts Eitel, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in Washington, D.C., reminds Judge Brown that he orally ruled from the bench on July 13, 2006, granting ENOI's request for summary judgment and denying class certification because of the Plaintiffs' inability to establish superiority. Subsequently, the Court requested briefing on the treatment of the proofs of claim. On Oct. 13, 2006, the Court entered its order and reasons for denying class certification and overruling Debtor's objection to the proofs of claim filed by the Claimants. In its reasons, the Court ruled that it "declines to apply Fed. R. Bankr. P. 7023 to this contested matter and will not certify either the Gordon or Lowenburg [P]laintiffs as a class." Mr. Eitel notes that the Court incorrectly interpreted Debtor's purported "agreement . . . [of March 29, 2006] that they would not object to the proofs of claim of either the Gordon or the Lowenburg plaintiffs on the basis that a non-certified class representative filed a proof of claim on behalf of a subsequently certified class . . ." The Court then went on to rule that it "will allow the Gordon and Lowenburg [P]laintiffs to make a motion to apply Rule 7023 to any claim objection filed by the debtor in the event that either class is certified by a court hearing the actions for class certification." The Debtor's statements were not intended to leave open indefinitely the class certification decision for another court, particularly when there is no class action now pending for the Lowenburg Plaintiffs and the class action for the Gordon Plaintiffs remains stayed, Mr. Eitel explains. He adds that the Debtor's statement was simply meant to avoid placing Claimants in a "trick bag" by urging them to file a proof of claim for the putative class in the Bankruptcy Court and then objecting to that very same proof of claim because it was improper without a certification decision before the bar date. Thus, ENOI urges the Court to exercise its discretion to correct legal and factual errors and to prevent manifest injustice by granting its request for summary judgment and denying class certification on the basis of superiority. Joshua J. Lewis, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., in New Orleans, Louisiana, points out that from ENOI's reading of the Court's order, there is a misunderstanding of the Court's ruling that ENOI "would not object to the proofs of claim of either the Gordon or Lowenburg Plaintiffs on the basis that a non-certified class representative filed a proof of claim on behalf of a subsequently certified class." Mr. Lewis says that the extension is necessary so that all parties in the case may obtain a clearer picture of the Court's intent in the order, which may obviate the need for appeal altogether. About Entergy Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ERIC METCALF: Case Summary & 15 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Eric Q. Metcalf Lori L. Metcalf 7465 South 114th Street Seattle, WA 98178 Bankruptcy Case No.: 06-13758 Chapter 11 Petition Date: October 26, 2006 Court: Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtors' Counsel: Raymond G. Sandoval, Esq. RGS Legal 801 Pine Street, Suite 100 Seattle, WA 98101-1801 Tel: (206) 343-4465 Fax: (206) 343-4467 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ David Ballard Real Estate - $200,000 5403 20th Avenue 2016 28th Avenue Secured: Seattle, WA 98108 98144 & 2020 28th $650,000 Avenue 98144 Senior Lien: $454,432 National City Credit Card Credit Card $16,826 1 National City Parkway Kalamazoo, MI 49009 AT&T Universal Card Credit Card $13,201 Citibank 8787 Baypines Jacksonville, FL 32201 Bank of America Credit Card $5,803 P.O. Box 1598 Norfolk, VA 23501 Telhio Credit Union Credit Card $2,817 96 North 4th Street Columbus, OH 43215 Hilco Receivables LLC Factoring Company $1,908 Account MBNA NCO Financial System Collection Bank of $1,244 America Merchants Me. Medical Debt - $539 Internal Medicine Medical Debt - $866 Radiologists Allied Credit/Alliance Collection King $842 County District Court Pinnacle Credit Services Inc. Collection Verizon $838 Wireless HSBC Charge Account $498 [Unknown Debtor] Medical Debt $318 Childrens Place Charge Account $257 Anderson Financial Network Consumer Debt $68 AFNI, Inc. Collection Verizon $68 Wireless EVERGREEN INT'L: Extends 12% Senior Notes Offering to October 31 ---------------------------------------------------------------- Evergreen International Aviation, Inc.'s pending offer to purchase any and all of its outstanding 12% Senior Second Secured Notes Due 2010 (CUSIP No. 30024DAF7) previously scheduled to expire at 5:00 p.m., New York City time, on Oct. 24, 2006, has been extended until 5:00 p.m., New York City time, on Oct. 31, 2006, unless otherwise extended or earlier terminated. Except for the change, all terms and conditions of the tender offer are unchanged and remain in full force and effect. Holders of approximately 97.94% of the outstanding principal amount of the Notes have tendered and consented to the proposed amendments to the indenture governing the Notes. Subject to the satisfaction or waiver of the remaining conditions (including the consummation of a new Senior Secured Credit Facility by Evergreen) set forth in the Offer to Purchase and Consent Solicitation Statement dated July 20, 2006, Evergreen currently intends to accept the entire amount of Notes tendered pursuant to the tender offer and consent solicitation. Credit Suisse Securities (USA) LLC is serving as the exclusive Dealer Manager and Solicitation Agent for the tender offer and consent solicitation. Questions regarding the terms of the tender offer or consent solicitation should be directed to Credit Suisse Securities (USA) LLC Attn: Liability Management Group at (212) 325-7596 or (800) 820-1653. The Tender Agent and Information Agent is D.F. King & Co., Inc. Any questions or requests for assistance or additional copies of documents may be directed to the Information Agent toll free at (800) 290-6426 (bankers and brokers call collect at (212) 269-5550). Based in McMinnville, Oregon, Evergreen International Aviation, Inc. -- http://www.evergreenaviation.com/-- is a privately held global aviation services company that is active through several subsidiary companies. * * * As reported in the Troubled Company Reporter on Aug. 11, 2006, Standard & Poors' Ratings Services raised its rating on Evergreen International Aviation Inc.'s first-lien bank loan rating to 'B+' from 'B' and changed the recovery rating to '1' from '2'. The rating action reflects a change in the structure of the proposed credit facility. FOAMEX INTERNATIONAL: Panel Opposes Incentive Plan Request ---------------------------------------------------------- Representing the Official Committee of Unsecured Creditors, Donald J. Detweiler, Esq., at Greenberg Traurig LLP, in Wilmington, Delaware, contends that the implementation of an incentive plan tied solely to achieving certain EBITDA numbers at this late date in 2006 cannot reasonable be expected to incentivize employees to meet Foamex International Inc. and its debtor-affiliates' 2006 EBITDA goals. The Debtors previously sought the U.S. Bankruptcy Court for the District of Delaware to approve their 2006 incentive plan for salaried employees pursuant to Sections 363(b)(1) and 105(a) of the Bankruptcy Code. The Creditors Committee asserts that the Debtors should be designing incentive plans for 2007, and not a retroactive, back- dated plan for a year in which the financial results are, for the most part, already established. The Debtors have not cited any cases that have approved incentive plans after the target results have been substantially met, and just days or weeks before a plan of reorganization will be filed, Mr. Detweiler points out. Implementing the Incentive Plan, without also tying it to confirmation and consummation of the Debtors' contemplated amended plan of reorganization, will not provide a true incentive for the Debtors' employees, Mr. Detweiler asserts. Mr. Detweiler argues that tying payment of incentive compensation to both achieving the EBITDA goals and consummation of the proposed amended plan will impose a real and meaningful incentive for employees while at the same time, assure that employees and unsecured creditors receive the benefit of the improved operating results. Mr. Detweiler points out that the Incentive Plan's basic structure is significantly flawed because too high a percentage, 40%, of the increased profits would be allocated to employees in the event the Debtors exceeds their target EBITDA by only 10%. In order to remedy the defect, Mr. Detweiler proposes, that the trigger for the maximum payout should be adjusted from 110% of EBITDA goal to 120% or higher. Murray Capital Management supports the Creditors Committee's objection. Murray Capital adds that the Debtors' motion is devoid of details regarding how many employees are eligible for awards under the Incentive Plan and what individual employees are eligible to receive. Murray Capital notes that about 77 employees have already benefited from the key employee retention plan approved earlier in the Debtors' cases, and now stand to benefit once again from the Incentive Plan. In addition, on behalf of Murray Capital, Stuart M. Brown, Esq., at Edwards Angell Palmer & Dodge LLP, in Wilmington, Delaware, argues that the treatment of payments to employees under the Incentive Plan as administrative expense claims under the Bankruptcy Code will enable employees to leapfrog over the claims of creditors. Mr. Brown notes that the Debtors identify only certain significant equityholders as supporters of the Incentive Plan. However, members of the Creditors Committee, who represent the only constituency with something to lose in these cases, do not support the Debtors' request, he adds. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FOAMEX INTERNATIONAL: Court Okays PMC & GFC-East Settlement Pact ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved Foamex International Inc. and its debtor-affiliates' settlement agreement with PMC Inc. and GFC-East Rutherford LLC. Pursuant to the unredacted Settlement Agreement, the parties agree that: (a) on the Closing Date, GFC-East Rutherford, LLC, will pay Foamex L.P., $1,000,000 from GFC-ER's proceeds of sale of the real property under the Purchase and Escrow Agreement dated May 12, 2006, as amended; (b) PMC, Inc., will pay Foamex's portion of the legal fees on a going forward basis in the defense of the Rhode Island Action -- a consolidated master complaint of 200 individual lawsuits filed in Rhode Island against various entities, including Foamex -- assuming the Closing Date is on or before October 31,2 006. If the Closing Date occur after October 31 to November 30, Foamex will pay one-half of the legal fees accruing to Foamex during that period. Thereafter, PMC will pay Foamex' portion of those legal fees incurred in defense of the Action; (c) Foamex will dismiss its adversary proceeding against PMC, and releases PMC from any claims relating to the Rhode Island Action and the Adversary Proceeding; and (d) If Foamex' insurance carriers reimburse it the legal fees it incurred in defense of the Rhode Island Action, Foamex will deliver to PMC the reimbursed funds exceeding Foamex' insurance deductible of $750,000, and any costs incurred by Foamex related to the Rhode Island Action not reimbursed by PMC. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FORD MOTOR: To Rely on Cheaper Chinese-Made Parts to Cut Costs -------------------------------------------------------------- Ford Motor Company aims to purchase between $2.5 and $3 billion in auto parts from China this year, almost double the $1.6 to $1.7 billion it spent on Chinese-made parts in 2005, Eugene Tang and Stephen Engle at Bloomberg News reports. William Ford Jr., Ford's chairman, said the company is buying more parts from China to further cut costs. According to Bloomberg News, components procured from China include steering systems, suspension, brakes, batteries and windshield glass. In an interview in Beijing, Bloomberg News relates Mr. Ford's declaration of China as a key component in Ford's global sourcing strategy. Mr. Ford said that Ford intends to buy more Chinese parts as the quality of the country's manufacturing industry improves. Mr. Ford was recently in China to recognize the awardees for the seventh annual Ford Motor Conservation & Environmental Grants (China). As reported in the Troubled Company Reporter on Oct, 25, Ford posted a third quarter net loss of $5.8 billion, compared with a $284 million net loss in the 2005 third quarter. Ford disclosed its performance in the current third quarter reflected operating challenges in its North America, Asia Pacific and Africa, and Premier Automotive Group operations. In September this year, Ford unveiled a revised version of its "Way Forward" turnaround plan. The company expects ongoing annual operating cost reductions of approximately $5 billion from its restructuring efforts. Ford's actions have included buyout offers for all 75,000 of its U.S. hourly workers, a 30% reduction in salaried staff, and the suspension of quarterly dividends. The revised plan will also cut fourth-quarter production by 21% -- or 168,000 units -- compared with the fourth quarter a year ago, and reduce third-quarter production by approximately 20,000 units. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Oct. 24, 2006, Standard & Poor's Ratings Services placed its 'B' senior unsecured debt issue ratings on Ford Motor Co. on CreditWatch with negative implications. At the same time, S&P affirmed all other ratings on Ford, Ford Motor Credit Co., and related entities, except the rating on Ford Motor Co. Capital Trust II 6.5% cumulative convertible trust preferred securities, which was lowered to 'CCC- ' from 'CCC.' At the same time, Fitch Ratings placed Ford Motor's 'B+/RR3' senior unsecured debt on Rating Watch Negative reflecting Ford's intent to raise secured financing that would impair the position of unsecured debt holders. Under Fitch's recovery rating scenario it was estimated that unsecured holders would recover approximately 68% in a bankruptcy scenario, equating to a Recovery Rating of 'RR3' (50-70% recovery). Moody's Investors Service has disclosed that Ford's very weak third quarter performance, with automotive operations generating a pre-tax loss of $1.8 billion and a negative operating cash flow of $3 billion, was consistent with the expectations which led to the September 19 downgrade of the company's long-term rating to B3. FTI CONSULTING: Appoints James Crownover to Class II of the Board ----------------------------------------------------------------- FTI Consulting, Inc.'s Board of Directors appointed James W. Crownover, an independent director, to the Class II of the Board. His term will expire at the Company's next annual meeting in the spring of 2007. Mr. Crownover had a 30-year career with McKinsey & Company, Inc. when he retired in 1998. He headed McKinsey's Southwest practice for many years, and also co-headed the firm's worldwide energy practice. He served as a member of McKinsey's Board of Directors and also served as director of Allied Waste Industries, Inc., Chemtura Corporation and Weingarten Realty Investors. Mr. Crownover also is chairman of Rice University's Board of Trustees. Commenting on Mr. Crownover's appointment, Jack Dunn, president and chief executive officer, said: "Jim brings to FTI and its stockholders unquestioned integrity, a wealth of experience and a tremendous amount of energy and enthusiasm for our mission. We will benefit enormously from his addition to our Board." FTI Consulting Inc. (NYSE:FCN) provides problem-solving consulting and technology services to major corporations, financial institutions and law firms when confronting critical issues that shape their future and the future of their clients, such as financial and operational improvement, major litigation, complex investigations, mergers and acquisitions and regulatory issues. FTI has 25 offices in major U.S. cities, and offices in Europe, Asia and Australia. FTI's total workforce of more than 1,400 employees includes numerous PhDs, MBAs, CPAs, CIRAs and CFEs, who are committed to delivering the highest level of service to clients. * * * As reported in the Troubled Company Reporter on Sept. 19, 2006, Standard & Poor's Ratings Services assigned its 'B+' rating to FTI Consulting Inc.'s $215 million senior notes due 2016, affirmed its 'BB-' corporate credit rating on FTI and revised the outlook to positive from stable. As reported in the Troubled Company Reporter on Sept. 18, 2006 Moody's Investors Service assigned a Ba2 rating to FTI Consulting, Inc.'s proposed $215 million of senior unsecured notes and lowered the ratings on its $150 million senior subordinated convertible notes to B1 from Ba3. Moody's affirmed the Ba2 corporate family rating and the Ba2 rating on FTI's existing senior unsecured notes. The rating outlook remains stable. GENERAL NUTRITION: 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 & Canadian Retail sector, the rating agency confirmed its B2 Corporate Family Rating for General Nutrition Centers, 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 ---------- ------- ------- ------ ---------- $75MM Gtd. Sr. Sec. Revolver B1 Ba2 LGD1 4% $96.2MM Gtd. Sr. Sec. Term Loan B B1 Ba2 LGD2 13% $150MM 8.625% Gtd. Senior Notes B3 B1 LGD3 40% $215MM 8.5% Gtd. Sr. Sub. Notes Caa1 Caa1 LGD5 81% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Pittsburgh, Pennsylvania, GNC Corp. fka General Nutrition Centers Inc. -- http://www.gnc.com/-- is a specialty retailer of nutritional supplements, which includes vitamin, mineral and herbal supplements, sports nutrition products, diet and energy products and specialty supplements. GNC has more than 4,800 retail locations throughout the United States, including more than 1,000 domestic franchise locations, and locations in 43 international markets. GENTEK HOLDING: Moody's Assigns Loss-Given-Default Rating --------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed its B2 Corporate Family Rating for Gentek Holding, as well as its Caa1 rating on the company's $135 million 2nd-lien term loan due 2012. Those debentures were assigned an LGD5 rating suggesting lenders will experience a 78% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $60m sr. sec revolver due 2010 B2 B1 LGD3 34% $235m sr. sec TL B due 2011 B2 B1 LGD3 34% 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 Akron, Ohio, Gentek Holding, Incorporated, thru its subsidiary, Gentek Building Products, is engaged in the manufacture of vinyl, aluminum and steel sidings and accessories, as well as vinyl replacement and new construction windows. http://www.gentekinc.com GETTY IMAGES: Sees Job Cuts, Staff Restructuring ------------------------------------------------ Getty Images, Inc., plans to layoff some of its employees as it proceeds with a staff restructuring, Kim Peterson at the Seattle Times reports. News of the proposed layoffs come in the wake of the company's third quarter results that analysts say fell short of revenue estimates, the Associated Press writes. The company reported $37.6 million of net income for the third quarter ended Sept. 30, 2006, versus $39.3 million in the third quarter of 2005. Getty's chief executive officer Jonathan Klein said in the Seattle Times article that increased competition from cheaper image providers is hurting the company. The company expects to improve its finances by, among other things, placing its sales team in direct contact with its key costumers. Andrea James, a Seattle Post-Intelligencer reporter, said the staff restructuring will include a six-fold increase in the Company's market development executive staff. Headquartered in Seattle, Washington, Getty Images, Inc. -- http://corporate.gettyimages.com/-- creates and distributes visual content. * * * As reported in the Troubled Company Reporter on June 13, 2006, Moody's Investors Service upgraded the credit ratings of Getty Images, Inc. and changed the ratings outlook to stable from positive. The upgrade in the corporate family rating to Ba1 from Ba2 reflected Getty's leading market position, improving credit metrics, impressive operating margins and good secular growth trends in the stock imagery market. Moody's also upgraded its rating on the company's $265 million series B convertible subordinated notes due 2023, to Ba2 from Ba3. GREIF INC: Moody's Assigns Loss-Given-Default Rating ---------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed its Ba2 Corporate Family Rating for Greif, Incorporated, as well as revised its rating on the company's $250 million 8.875% senior subordinate notes due 2012 to Ba3 from B1. Those debentures were assigned an LGD5 rating suggesting lenders will experience an 82% 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 Delaware, Ohio, Greif, Incorporated, - http://www.greif.com- is engaged in industrial packaging products and services. GLOBAL POWER: Has Until Nov. 12 to File Schedules and Statements ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extend, until Nov. 12, 2006, Global Power Equipment Group Inc. and its debtor-affiliates' period to file their schedules of assets and liabilities and statement of financial affairs. The Debtors tell the Court they were unable to complete their schedules and statements within the provided time under the Bankruptcy Code due to their complex and diverse operations. The Debtors say they need substantial time to gather information form records to prepare the required schedules and statements. The Debtors believe that the extension will provide sufficient time to prepare its requirements. 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. The Official Committee of Unsecured Creditors appointed in the Debtors' cases has selected Landis Rath & Cobb LLP as its counsel. 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. GREENWICH CAPITAL: S&P Rates $1.6 Mil. Class Q Certificates at B- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Greenwich Capital Commercial Mortgage Trust 2006-RR1's $661.0 million commercial mortgage-backed securities pass-through certificates series 2006-RR1. The preliminary ratings are based on information as of Oct. 26, 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 securities and the geographic and property type diversity of the mortgaged properties securing the underlying CMBS collateral. The collateral pool consists of 74 classes of pass-through certificates taken from 34 CMBS transactions. A copy of Standard & Poor's complete presale report for this transaction can be found on RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at http://www.ratingsdirect.com/ The presale can also be found on Standard & Poor's Web site at http://www.standardandpoors.com/ Select Credit Ratings, and then find the article under Presale Credit Reports. Preliminary Ratings Assigned Greenwich Capital Commercial Mortgage Trust 2006-RR1 Preliminary Recommended credit Class Rating amount support ----- ------ ----------- ------------------ A-1 AAA $429,619,000 35.000% A-2 AAA $122,276,000 16.500% B AA+ $16,524,000 14.000% C AA $9,914,000 12.500% D AA- $4,957,000 11.750% E A+ $13,219,000 9.750% F A $5,783,000 8.875% G A- $14,872,000 6.625% H BBB+ $11,567,000 4.875% J BBB $4,957,000 4.125% K BBB- $6,609,000 3.125% L BB+ $4,957,000 2.375% M BB $3,305,000 1.875% N BB- $2,479,000 1.500% O B+ $3,304,000 1.000% P B $827,000 0.875% Q B- $1,652,000 0.625% S NR $4,131,500 0.000% NR - Not rated HARRY & DAVID: 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 & Canadian Retail sector, the rating agency confirmed its B2 Corporate Family Rating for Harry & David Holdings, 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 ---------- ------- ------- ------ ---------- $70 Million Gtd. Sr. Notes B3 B3 LGD4 68% $175 Million Gtd. Sr. Notes B3 B3 LGD4 68% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Medford, Oregon, Harry & David Holdings, Inc. -- http://www.hndcorp.com/-- (formerly Bear Creek Holdings Inc.) is a leading multi-channel specialty retailer and producer of branded premium gift-quality fruit and gourmet food products and gifts marketed under the Harry and David(R) brand, and premium rose plants, horticultural products and home and garden decor, marketed under the Jackson & Perkins(R) brand. HEARTLAND PARTNERS: Court Set Compromise Pact Hearing for Nov. 7 ---------------------------------------------------------------- Heartland Partners L.P, and its debtor-affiliates gave notice to all of their known and unknown creditors that on Oct. 9, 2006, the Debtors have filed a motion seeking approval of their proposed settlement agreement with Montana Department of Environmental Quality, Trinity Railcar Repair, Inc., and Trinity Industries, Inc., in connection with the Debtors' pending action in the District Court for the Sixteenth Judicial District of Montana related to the Debtors' activities in Miles City, Montana and certain claims asserted by DEQ and Trinity against the Debtors' estates. The Hon. Eugene R. Wedoff of the U.S. Bankruptcy Court for the Northern District of Illinois will convene a hearing on Nov. 7, 2006, at 10:00 a.m., in Courtroom 744, U.S. Courthouse, 219 South Dearborn Street, in Chicago, Illinois, to consider the Debtors' request. The proposed compromise agreement states that: a) the Debtors will make a $2.5 million payment to the Montana Court, DEQ and Trinity Railcar; b) Trinity Railcar will receive an allowed general unsecured claim against the Debtors' estates for $5 million capped at a distribution of $800,000; c) Trinity Railcar will hold a claim of $250,000 against CMC Heartland Partners' estate entitled to administrative expense priority under Section 503(b)(1); d) the Debtors and each of their successors (together with the appointed Trustee, their affiliates, officers, directors, shareholders, environmental consultants, etc.) will be released from any and all claims held by DEQ relating to any liability those entities may have because of their relationship to the Debtors with respect to environmental contamination of property located in Montana, including claims arising under Mont. Code Ann. Section 75-10-715, and DEQ will be released by the Debtors; and e) the Debtors and each of their successors will be released from any and all claims held by Trinity Railcar and Trinity Industries will be similarly released by the Debtors. Objections to the Debtors' motion must be filed with the Clerk of the Bankruptcy Court, received on or before Nov. 1, 2006, and served upon the Debtors' attorneys at: Matthew A. Swanson, Esq. Shaw Gussis Fishman Glantz Wolfson & Towbin LLC 321 North Clark Street, Suite 800 Chicago, Illinois 60610 Tel: (312) 276-1333 Fax: (312) 275-0569 Headquartered in Chicago, Illinois, Heartland Partners, LP, (Amex: HTL) is a based real estate limited partnership with properties, primarily in the upper Midwest and northern United States. CMC Heartland is a subsidiary of Heartland Partners, L.P. and is the successor to the Milwaukee Road Railroad, founded in 1847. The company and four of its affiliates filed for chapter 11 protection on Apr. 28, 2006 (Bankr. N.D. Ill. Case No. 06-04764). Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC, represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed total assets of $4,375,000 and total debts of $3,951,000. The Debtors' consolidated list of 20 largest unsecured creditors however showed more than $30 million in environmental litigation claims. HVHC 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 US & Canadian Retail sector, the rating agency downgraded its Ba3 Corporate Family Rating for HVHC, 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 ---------- ------- ------- ------ ---------- $30MM Gtd. Sr. Sec. Revolving Credit Facility Ba3 Ba2 LGD2 26% $155MM Gtd. Sr. Sec. Term Loan B Ba3 Ba2 LGD2 26% 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%). Headquarters in Pittsburgh, Pennsylvania, HVHC Inc., owns Davis Vision, Inc and Viva Optique, Inc. Davis administers employee vision care benefit programs and operates 89 retail stores, while Viva distributes eyeglass frames in more than 60 countries. INLAND FIBER: Wants Removal Period Extended to January 15 --------------------------------------------------------- Inland Fiber Group LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend until Jan. 15, 2007, the period within which they may file notices of removal with respect to pending prepetition civil actions. The Debtors inform the Court that they are parties to state court action involving, among other things, the Debtors' $225 million 9- 5/8% unsecured senior notes due 2007. The extension, the Debtors say, will give them more time to confirm and consummate their plan of reorganization through resolving the pending actions. Headquartered in Klamath Falls, Oregon, Inland Fiber Group LLC, aka U.S. Timberlands Klamath Falls LLC, and its affiliate Fiber Finance Corp., grow trees and sell logs, standing timber, and timberland. The Debtors filed a chapter 11 petition on Aug. 18, 2006 (Bankr. D. Del. Case Nos. 06-10884 & 06-10885). William P. Bowden, Esq. at Ashby & Geddes P. A. and Glenn E. Siegal, Esq. At Dechert LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, Inland Fiber reported $81,890,311 in total assets and $264,433,754 in total liabilities while its debtor-affiliate, Fiber Finance, disclosed $1,048 in total assets and $263,074,983 in total debts. INTERLINE BRANDS: Moody's Assigns Loss-Given-Default Rating ----------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed its B1 Corporate Family Rating for Interline Brands Inc., as well as its B3 rating on the company's $200 million 8.125% Senior Subordinate Notes due 2014. Those debentures were assigned an LGD5 rating suggesting noteholders will experience an 82% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $100m Sr. Sec. Revolver Due 2012 Ba3 Ba2 LGD2 29% $100m Sr. Sec. Term Loan Due 2013 Ba3 Ba2 LGD2 29% $130m Sr. Sec. Delayed Draw Term Loan Due 2013 Ba3 Ba2 LGD2 29% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Jacksonville, Florida, Interline Brands Inc. -- http://www.interlinebrands.com-- markets plumbing, electrical, hardware, security hardware, HVAC and other related items. INTERMEC INC: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed its Ba2 Corporate Family Rating for Intermec Inc., as well as its Ba3 rating on the company's $400 million Senior Unsecured Shelf. Those debentures were assigned an LGD5 rating suggesting noteholders will experience an 85% loss in the event of default. Additionally, Moody's revised or affirmed its probability-of- default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $100m 7% Sr. Unsec. Notes Due 2008 Ba3 Ba3 LGD5 85% $400m Sub. Shelf (P)B1 (P)B1 LGD6 97% $400m Pref. Shelf (P)B2 (P)B1 LGD6 97% $400m Pref. Shelf (P)B2 (P)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%). Intermec Inc. -- http://www.intermec.com/-- develops, manufactures and integrates technologies that identify, track and manage supply chain assets. Core technologies include RFID, mobile computing and data collection systems, bar code printers and label media. The company has locations in Australia, Bolivia, Brazil, China, France, Hong Kong, Singapore and the United Kingdom. IPEX INC: Posts $150,174 Net Loss in First Quarter of 2006 ---------------------------------------------------------- Ipex, Inc. reported a $150,174 net loss on $1,801,886 trading revenues for the first quarter ended Mar. 31, 2006, compared to a net loss of $337,904 on $3,307,770 trading revenues in 2005. At Mar. 31, 2006, the company's balance sheet showed $10,314,379 in total assets, $2,618,135 in total liabilities and $7,696,244 in total stockholders' equity. A full-text copy of the company's annual report is available for free at http://researcharchives.com/t/s?1402 The company has not filed its quarterly report for the period ended June 30, 2006. The company told the Securities and Exchanged Commission in August that "the compilation, dissemination and review of the information required to be presented in the Form 10-QSB for quarter has imposed time constraints that have rendered timely filing impracticable without undue hardship and expense." Going Concern Doubt Peterson & Co., LLP expressed substantial doubt about Ipex, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2005. The company pointed to the company's recurring losses from operations through Dec. 31, 2005 and working capital deficit at Dec. 31, 2005. About Ipex, Inc. IPEX, Inc., fka Tamarack Ventures, Inc., operates an electronic platform that directs telecommunication traffic and digital content. In March of 2006, RGB Channel, Inc. Nevada was formed by the company as a wholly owned subsidiary for the purpose of owning certain assets purchased by the company pursuant to: (a) the Purchase Agreement dated June 7, 2005 by and among the company, B Tech Ltd., Massimo Ballerini and Emanuele Boni; and (b) the Purchase Agreement dated June 7, 2005 by and among the company, RGB Channel SRL, Emanuele Boni, Massimo Ballerini and B Tech Ltd. The company has not yet transferred ownership of the RGB Assets to RGB Channel Nevada. RGB Channel Nevada has no separate business operations or assets to date. ITEC ENVIRONMENTAL: Hires M. Sandoval as Chief Operating Officer ---------------------------------------------------------------- Mario Sandoval will be joining the management team of Itec Environmental Group, Inc., as the company's new Chief Operating Officer. Mr. Sandoval begins his new role with Itec on Nov. 6, 2006. Mr. Sandoval brings to Itec 19 years of extensive experience in operations, supply chain management, quality control and chemical engineering. Most recently, Mr. Sandoval served as Senior Business Process Leader and Director of Operations at Johns Manville. Prior to Johns Manville, Mr. Sandoval was VP and Supply Chain Leader for GE Plastics' Polymershapes business. Mr. Sandoval held various operations management and engineering roles for 17 years in GE Plastics and is a GE certified Six Sigma Master Black Belt. "I am extremely excited to be joining the Itec team," stated Mr. Sandoval. "I believe the Itec recycling process delivers a significant competitive advantage and enables the company to meet our aggressive growth plans. I intend to initially focus on completing the ramp up and optimization of our first plant in Northern California, through Q4, and then on expanding our recycling footprint to include additional plants throughout North America." "Mario's world class operations experience is a key component in Itec's growth plans," Rod Rougelot, CEO added. "I am confident that his presence will drive us towards achieving our operating objectives. With Mario focused on our operations, I will be able to better focus on executing the company's expansion strategy." About Itec Environmental Headquartered in Riverbank, California, Itec Environmental Group -- http://www.iteceg.com/-- offers solutions to pressing environmental problems faced by public agencies and private entities involved in the recycling of plastics. In a research partnership with Honeywell FM&T, Itec has developed and successfully commercialized a new system for the recycling of plastic containers. Its proprietary Eco2(tm) System costs 30% less to operate, uses no water, removes all contaminates and odors from the finished flake, is closed-loop and thus non-polluting, and produces no toxic by-products. At June 30, 2006, Itec Environmental Group's balance sheet showed a stockholders' deficit of $11,466,047, compared to a deficit of $2,333,960 at Sept. 30, 2005. JEAN COUTU: 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 & Canadian Retail sector, the rating agency downgraded its B3 Corporate Family Rating for The Jean Coutu 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 ---------- ------- ------- ------ ---------- $350MM Gtd. Sr. Sec. Revolver B2 B2 LGD2 25% $250MM Gtd. Sr. Sec. Term Loan A B2 B1 LGD2 25% $1.1 Bil. Gtd. Sr. Sec. Term Loan B B2 B1 LGD2 25% $350MM 7.625% Gtd. Senior Notes B3 B3 LGD4 57% $850MM 8.5% Gtd. Sr. Sub. Notes Caa2 Caa2 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 Longueuil, Quebec, The Jean Coutu Group Inc. (TSX: PJC.A) -- http://www.jeancoutu.com/-- has a combined network of 2,175 corporate and franchised drugstores (under the banners of Brooks and Eckerd Pharmacy, PJC Jean Coutu, PJC Clinique and PJC Sante Beaute) in North America. The Group's United States operations employ 46,000 people and comprise 1,853 corporate owned stores located in 18 states of the Northeastern, mid-Atlantic and Southeastern United States. The Group's Canadian operations and franchised drugstores in its network employ over 14,000 people and comprise 322 PJC Jean Coutu franchised stores in Quebec, New Brunswick and Ontario. JO-ANN STORES: 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 Jo-Ann Stores, 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 ---------- ------- ------- ------ ---------- $100MM 7.5% Gtd. Sr. Sub. Notes B3 B3 LGD5 80% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Hudson, Ohio-based Jo-Ann Stores, Inc. -- http://www.joann.com/-- is the leading U.S. fabric and craft retailer with locations in 47 states, operates 688 Jo-Ann Fabrics and Crafts traditional stores and 154 Jo-Ann superstores. JORDAN INDUSTRIES: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency revised its Corporate Family Rating for Jordan Industries Inc. to Caa2 from Caa3, as well as revise its rating on the company's 11.75% Senior Subordinate Disc. Debentures due 2009 to C from Ca. Those debentures were assigned an LGD6 rating suggesting noteholders will experience a 95% loss in the event of default. Additionally, Moody's affirmed its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 10.375% Series B and D Senior Unsecured Notes Due 2007 Ca Ca LGD5 89% 13% Senior 2nd Lien Secured Bonds Caa3 Caa3 LGD4 61% 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 Deerfield, Illinois, Jordan Industries Inc., thru its subsidiary Kinetec Inc., is a manufacturer of electric motors, gears, gear-boxes, and electronic controls. http://www.jordanindustries.com KAISER ALUMINUM: Owl Creek Companies Disclose Equity Stake ---------------------------------------------------------- Owl Creek I LP, Owl Creek II LP, Owl Creek Advisors LLC, and Owl Creek Asset Management LP reports in a regulatory filing with the Securities and Exchange Commission dated Oct. 5, 2006, that they are deemed to be the beneficial owners of a combined 1,934,235 shares of Kaiser Aluminum Corporation's common stock. According to the SC 13G filing: * Owl Creek I beneficially owns 55,096 shares or 0.3% of Kaiser's outstanding common stock; * Owl Creek II beneficially owns 472,960 shares or 2.3% of Kaiser's outstanding common stock; * Owl Creek Advisors beneficially owns 528,056 shares or 2.6% of Kaiser's outstanding common stock; and * Owl Creek Asset Management beneficially owns 878,123 shares or 4.3% of Kaiser's outstanding common stock. The four companies have shared voting and dispositive powers over the shares of Kaiser common stock they own. Kaiser's outstanding shares total 20,516,803 as of July 31, 2006. Owl Creek Advisors' managing member, Jeffrey A. Altman, also discloses in the same SEC filing that he is deemed to be the beneficial owner of 1,406,179 shares or 6.9% of Kaiser's outstanding common stock. Mr. Altman also has shared voting and dispositive power over the shares he beneficially owns. Owl Creek Advisors is the general partner of Owl Creek I and Owl Creek II, and has the power to direct their affairs, including decisions regarding the receipt of dividends from, and the disposition of the proceeds from the sale of, the shares. Owl Creek Asset Management is the investment manager of Owl Creek Overseas Fund Ltd., Owl Creek Overseas Fund II Ltd., and Owl Creek Socially Responsible Investment Fund, Ltd. Mr. Altman is the managing member of Owl Creek Advisors and the managing member of the general partner of Owl Creek Asset Management, and in that capacity directs their operations. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. Lazard Freres & Co. serves as the Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July 6, 2006. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 107; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 609/392-0900) KB HOME: Internal Stock Option Probe Delays Form 10-Q Filing ------------------------------------------------------------ KB Home has delayed filing its Quarterly Report on Form 10-Q for the fiscal third quarter ended Aug. 31, 2006 in order to gain additional time to complete the review of historical stock option grants and related accounting. Members of the Audit and Compliance Committee of the KB Home Board of Directors, in conjunction with outside legal counsel and accountants, are conducting an internal review of the company's stock option grants. Although the internal review has not been concluded and no final conclusions have been reached, the Sub-Committee has reached a preliminary conclusion that the actual measurement dates for financial accounting purposes of certain stock option grants likely differ from the recorded grant dates. As a result, additional non-cash charges for stock based compensation relating to these grants may need to be recorded. Because the review is not yet complete, KB home has not yet determined the aggregate amount or the materiality of additional non-cash charges for such expense to be recorded in any specific prior period or in any future period. It has also not yet determined the impact of any related tax consequences. Until conclusions are reached regarding the impact of the stock option review on the financial statements, the company says it will not be able to file the Third Quarter 10-Q. According to KB Home, the delayed filing of the Third Quarter 10-Q and the unavailability of third quarter financial statements may result in a default under the indentures governing its senior and senior subordinated notes and credit agreements. The company is in the process of seeking extensions of time to deliver third quarter financial statements to the banks under each of its credit agreements. The company intends to file the Third Quarter 10-Q and to provide copies of that report to all trustees under its indentures and to the banks under its credit agreements on or before Dec. 24, 2006. Unaudited Results KB Home anticipates significant changes in its results of operations for the fiscal three- and nine-month periods ended Aug. 31, 2006 compared to its results in the corresponding periods of 2005. Total revenues for the quarter ended Aug. 31, 2006 reached $2.67 billion, an increase of 6% from $2.53 billion in the year- earlier quarter. Total revenues for the nine months ended Aug. 31, 2006 reached $7.46 billion in 2006, up 19% from $6.29 billion in the nine months ended Aug. 31, 2005. The increase in total revenues in the third quarter and first nine months of 2006 was mainly due to growth in housing revenues. In the third quarter of 2006, the increase in housing revenues was due to a higher average selling price compared to the same period of 2005, partly offset by lower unit deliveries. For the first nine months of 2006, housing revenue growth resulted from increased unit deliveries and a higher average selling price. The company expects third quarter net income to decrease by approximately 32%, from $227.5 million in the third quarter of 2005 to $155.3 million in the third quarter of 2006. For the nine months ended Aug. 31, 2006, the company expects net income to increase slightly, from $531.8 million in the 2005 period to $536.4 million in the 2006 period. Despite higher revenues generated in the third quarter of 2006, the company expects construction operating income to decrease by approximately 36%, from $373.8 million in the third quarter of 2005 to $238.6 million in the third quarter of 2006, and construction operating income margin to decrease by approximately 6 percentage points, from 14.9% for the third quarter of 2005 to 8.9% for the third quarter of 2006. The margin decrease resulted primarily from a lower housing gross margin, charges associated with inventory impairments and the abandonment of land purchase options it no longer plans to pursue. For the nine months ended Aug. 31, 2006, the Company expects construction operating income to decrease by approximately 1%, from $864.2 million in the 2005 period to $854.6 million in the 2006 period. Construction operating income margin for the same nine-month period is expected to decrease by approximately 2.3 percentage points, from 13.8% for the 2005 period to 11.5% for the 2006 period, due to a lower housing gross margin. KB Home generated 5,989 net orders in the third quarter of 2006, a decrease of 43% from 10,467 net orders in the year-earlier quarter. The decrease in third quarter net orders reflected a 53% decline in U.S. net orders, partially offset by a 9% increase in France. The company generated 24,616 net orders in the first nine months of 2006, a decrease of 25% from 32,658 net orders in the year-earlier period. The decrease in net orders for the first nine months reflected a 32% decline in U.S. net orders, partially offset by a 12% increase in France. Unit backlog totaled 23,878 units at Aug. 31, 2006 versus 27,744 units at Aug. 31, 2005. The backlog value decreased 8% to approximately $6.53 billion at Aug. 31, 2006 from approximately $7.06 billion at Aug. 31, 2005. The year-over- year decrease in backlog value resulted from decreases in all U.S. regions, partly offset by an increase in France. KB Home funds its business activities with cash flows generated from operations and from debt financing, including the issuance of publicly-traded notes and by entering into credit agreements to borrow funds from banks and other financial institutions. Currently, its primary credit agreement is a $1.5 billion unsecured revolving credit facility that allows the company to draw funds as needed to support our business. As of Oct. 10, 2006, the company had $600 million of outstanding borrowings under its $1.5 Billion Credit Facility and $487 million of outstanding letters of credit, leaving $413 million of available capacity. Headquartered in Los Angeles, California, KB Home (NYSE: KBH) -- http://www.kbhome.com/-- is a homebuilder with domestic operating divisions in some of the fastest-growing regions and states: West Coast-California; Southwest-Arizona, Nevada and New Mexico; Central-Colorado, Illinois, Indiana and Texas; and Southeast- Florida, Georgia, North Carolina and South Carolina. Kaufman & Broad S.A., the Company's publicly traded French subsidiary, a homebuilding company in France. It also operates KB Home Mortgage Company, a full-service mortgage company for the convenience of its buyers. * * * As reported in the Troubled Company Reporter on Oct. 27, 2006, Standard & Poor's Ratings Services placed its BB+ corporate credit, BB+ senior unsecured, and BB- senior subordinated debt ratings on KB Home on CreditWatch with negative implications. The CreditWatch listings affect $1.65 billion of senior notes and $750 million of senior subordinated notes. As reported in the Troubled Company Reporter on Sept. 15, 2006, Fitch Ratings affirmed and revised the Rating Outlook to Stable from Positive for KB Home's Issuer Default Rating 'BB+', Senior unsecured debt and revolving credit facility 'BB+' and Senior subordinated debt 'BB-'. As reported in the Troubled Company Reporter on July 14, 2006, Moody's Investors Service affirmed all of the ratings of KB Home, including its Corporate Family Rating of Ba1, senior debt rating of Ba1, and senior subordinated debt rating of Ba2. The rating outlook is revised to stable, from positive. KB HOME: Receives Default Notice for 7-1/4% Senior Notes Due 2018 ----------------------------------------------------------------- KB Home received, on Oct. 26, 2006, a letter stating it serves as a notice of default under the indenture related to its 7-1/4% Senior Notes due 2018 from an entity claiming to manage funds that beneficially own more than 25% of the 7-1/4% Senior Notes. The letter states that KB Home is in default under the indenture because it has not filed its Quarterly Report on Form 10-Q for the quarter ended Aug. 31, 2006 with the Securities and Exchange Commission. Under the indenture for any series of its senior notes, including the 7-1/4% Senior Notes, if KB Home fails to cure such a default within the 60 days after notice is effectively given, the default could become an "event of default" under the indenture, allowing the Trustee or the holders of at least 25% in aggregate outstanding principal amount of such senior notes to accelerate the maturity of such series of senior notes. The Company is soliciting consents from the holders of each series of its senior notes, including the 7-1/4% Senior Notes, to approve a proposed amendment to the indenture governing such senior notes to extend the time for the Company to file its Quarterly Report on Form 10-Q for the quarter ended Aug. 31, 2006. Headquartered in Los Angeles, California, KB Home (NYSE: KBH) -- http://www.kbhome.com/-- is a homebuilder with domestic operating divisions in some of the fastest-growing regions and states: West Coast-California; Southwest-Arizona, Nevada and New Mexico; Central-Colorado, Illinois, Indiana and Texas; and Southeast- Florida, Georgia, North Carolina and South Carolina. Kaufman & Broad S.A., the Company's publicly traded French subsidiary, a homebuilding company in France. It also operates KB Home Mortgage Company, a full-service mortgage company for the convenience of its buyers. * * * As reported in the Troubled Company Reporter on Oct. 27, 2006, Standard & Poor's Ratings Services placed its BB+ corporate credit, BB+ senior unsecured, and BB- senior subordinated debt ratings on KB Home on CreditWatch with negative implications. The CreditWatch listings affect $1.65 billion of senior notes and $750 million of senior subordinated notes. As reported in the Troubled Company Reporter on Sept. 15, 2006, Fitch Ratings affirmed and revised the Rating Outlook to Stable from Positive for KB Home's Issuer Default Rating 'BB+', Senior unsecured debt and revolving credit facility 'BB+' and Senior subordinated debt 'BB-'. As reported in the Troubled Company Reporter on July 14, 2006, Moody's Investors Service affirmed all of the ratings of KB Home, including its Corporate Family Rating of Ba1, senior debt rating of Ba1, and senior subordinated debt rating of Ba2. The rating outlook is revised to stable, from positive. KB HOME: Wants to Amend $1.65 Bil. Sr. Notes' Indenture ------------------------------------------------------- KB Home is soliciting consents from the holders of its $1.65 billion of outstanding Senior Notes to approve a proposed amendment to the indenture governing the Senior Notes to allow the Company to file its Quarterly Report on Form 10-Q for its fiscal quarter ended Aug. 31, 2006 a maximum of 60 days after the current deadline. Holders of the Senior Notes are referred to the Company's Consent Solicitation Statement dated Oct. 25, 2006 and the related Letter of Consent, which are being mailed to holders, for the detailed terms and conditions of the Consent Solicitation. The Company is offering a consent fee of $7.50 in cash for each $1,000 principal amount of Senior Notes, subject to the terms of the Consent Solicitation. The record date for determining the holders who are entitled to consent is 5:00 p.m., New York City time, on Oct. 24, 2006. The Consent Solicitation will expire at 5:00 p.m., New York City time, on Nov. 7, 2006, unless extended. The Company has not yet filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q for the fiscal quarter ended Aug. 31, 2006 in order to allow additional time to complete an internal review of its historical stock option grants and related accounting. The Company intends to file the Third Quarter 10-Q and to provide copies of that report (including its third quarter financial statements) to the trustee under the Indenture on or before Dec. 24, 2006, which would be in time to cure any default that might be declared under the Indenture as a result of the delayed filing of the Third Quarter 10-Q. Specifically, the Consent Solicitation proposes to amend the Indenture to suspend until Feb. 23, 2007, the occurrence of events of defaults under Sections 501(4) and 501(5) of the Indenture caused by matters described in Part III of the 12b-25 Filing, matters, and matters incidental that are not material to the Company, and to obtain the waiver of all defaults caused by these matters prior to the effective date of the proposed amendment. The proposed amendment and waiver will become effective promptly following execution of a supplemental indenture to the Indenture, receipt of the requisite consents and payment of the consent fee. The Company has retained Global Bondholder Services Corporation to serve as its information agent and tabulation agent for the Consent Solicitation. Requests for documents should be directed to Global Bondholder Services at (866) 470-3800 or (212) 430-3774. The Company has also retained Banc of America Securities LLC and Citigroup Corporate and Investment Banking as joint solicitation agents for the Consent Solicitation. Questions concerning the terms of the Consent Solicitation should be directed to Banc of America Securities LLC at (888) 292-0070 (US toll-free) or (704) 388-4813 (collect) or Citigroup Corporate and Investment Banking at (800) 558-3745 (US toll-free). Headquartered in Los Angeles, California, KB Home (NYSE: KBH) -- http://www.kbhome.com/-- is a homebuilder with domestic operating divisions in some of the fastest-growing regions and states: West Coast-California; Southwest-Arizona, Nevada and New Mexico; Central-Colorado, Illinois, Indiana and Texas; and Southeast- Florida, Georgia, North Carolina and South Carolina. Kaufman & Broad S.A., the Company's publicly traded French subsidiary, a homebuilding company in France. It also operates KB Home Mortgage Company, a full-service mortgage company for the convenience of its buyers. * * * As reported in the Troubled Company Reporter on Oct. 27, 2006, Standard & Poor's Ratings Services placed its BB+ corporate credit, BB+ senior unsecured, and BB- senior subordinated debt ratings on KB Home on CreditWatch with negative implications. The CreditWatch listings affect $1.65 billion of senior notes and $750 million of senior subordinated notes. As reported in the Troubled Company Reporter on Sept. 15, 2006, Fitch Ratings affirmed and revised the Rating Outlook to Stable from Positive for KB Home's Issuer Default Rating 'BB+', Senior unsecured debt and revolving credit facility 'BB+' and Senior subordinated debt 'BB-'. As reported in the Troubled Company Reporter on July 14, 2006, Moody's Investors Service affirmed all of the ratings of KB Home, including its Corporate Family Rating of Ba1, senior debt rating of Ba1, and senior subordinated debt rating of Ba2. The rating outlook is revised to stable, from positive. KINETEK INDUSTRIES: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the Caa1 Corporate Family Rating for Kinetek Industries, Inc., as well as revised the rating on the company's 10.75% Senior Notes due 2006 to Caa2 from Caa3. Those debentures were assigned an LGD4 rating suggesting noteholders will experience a 66% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $15m 5% Senior Secured Notes Due 2007 B3 B1 LGD2 10% $11m 10% Senior Secured Notes Due 2007 B3 B1 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%). Headquartered in Deerfield, Illinois, Kinetek Industries Inc. is engaged in the design and manufacture of motors, components and control systems. http://www.kinetekinc.com KOPPERS HOLDINGS: Reports Problem at Monessen, Pennsylvania Plant ----------------------------------------------------------------- Koppers Holdings Inc., reported an operational problem at its coke facility in Monessen, Pennsylvania. The Company disclosed that production at the plant was interrupted on Oct. 20, 2006 due to a pipeline failure. Repairs have been completed and operations are in the process of restarting; the Company expects production to be back to normal today. The Company also disclosed that the impact on fourth quarter pre-tax earnings is expected to be approximately $600,000 to $800,000. Koppers Holdings Inc., (NYSE: KOP) -- http://www.koppers.com/-- with corporate headquarters and a research center in Pittsburgh, Pennsylvania, is an integrated producer of carbon compounds and treated wood products. Including its joint ventures, Koppers operates facilities in the United States, United Kingdom, Denmark, Australia, China, the Pacific Rim and South Africa. * * * Koppers Holdings Inc.'s balance sheet at June 30, 2006 showed total assets of $625 million and total liabilities of $733 million resulting in a total stockholders' deficit of $108 million. Total stockholders' deficit at Dec. 31, 2005 stood at $206 million. LANGUAGE LINE: Moody's Holds $109 Mil. Senior Rating at Caa1 ------------------------------------------------------------ Moody's Investors Service affirmed the credit ratings of Language Line Holdings, Inc. and changed the outlook to stable from negative. The speculative grade liquidity rating was upgraded to SGL-2 from SGL-3. These rating actions reflect improved operating performance and liquidity. During the first six months of 2006 billed minutes increased by 18%, while the average revenue per minute declined 6%. Revenues grew 12% year over year and profitability improved. The SGL-2 rating reflects a good liquidity profile with the expectation of positive free cash flow from operations, solid availability under the $40 million revolver and expanded headroom under bank financial covenants as a result of a proposed amendment to its secured credit facility. The ratings continue to reflect high leverage and a relatively small revenue base for the rating category, a leading market position supported by high EBITDA margins, and good growth prospects for language translation services. Moody's took these rating actions with respect to Language Line Holdings, Inc.: -- Affirmed $109 million 14.125% senior discount notes due 2013, rated Caa1 (LGD 6- 93%) -- Affirmed corporate family rating, rated B2 -- Affirmed probability of default rating, rated B2 -- Upgraded speculative grade liquidity rating to SGL-2 from SGL-3 Moody's affirmed these ratings of Language Line, Inc.: -- $244 million senior secured term due 2011, Ba3 (LGD 2- 24%) -- $40 million senior secured revolving credit facility due 2010, Ba3 (LGD 2- 24%) -- $165 million 11.125% senior subordinated notes due 2012, B3 (LGD 5-- 74%) The stable outlook anticipates moderate revenue and profitability growth over the next 12-18 months. Consistent with Language Line's performance in the first half of 2006, Moody's expects billed minute growth to substantially exceed declines in average revenue per minute. The ratings could be upgraded if improving financial performance results in Debt to EBITDA and free cash flow to debt that can be sustained at less than 4.5x and over 8%, respectively. The ratings could be pressured if pricing trends worsen or new competitors or technologies emerge resulting in declining revenues and operating margins. A significant debt financed acquisition that weakens credit metrics could also pressure the rating. If these conditions result in Debt to EBITDA and free cash flow to debt that are expected to be sustained at 7x and less than 3%, respectively, a downgrade is possible. Based in Monterey, California, Language Line, through its operating subsidiaries, is a leading global provider of over-the-phone interpretation services from English into more than 150 languages. The company reported revenues of $154 million for the twelve month period ending June 30, 2006. LE GOURMET: Turns to Minken & Assoc. for Tax Advisory Services -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey gave Le Gourmet Chef, Inc., authority to employ Minken & Associates, P.C., as its tax advisors. As reported in the Troubled Company Reporter on Oct. 5, 2006, the Debtor anticipates that Minken will provide tax compliance and advisory services, including, but not limited to: a) preparation of the Jan. 29, 2006, federal and state income tax returns; b) preparation of the Jan. 28, 2007, federal and state income tax returns; and c) assistance with tax inquiries and tax issues on an ongoing basis. Steven Minken told the Court that his firm charges: -- $21,500, on a fixed fee basis, for income tax return preparation services; and -- $150 to $225 an hour for tax advisory services. Mr. Minken assured the Court that his firm does not hold any interest adverse to the Debtor, and is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. Headquartered in Shrewsbury, New Jersey, Le Gourmet Chef, Inc., -- http://www.legourmetchef.com/-- is a retailer specializing in solutions for entertaining and gift giving. The Company filed for bankruptcy on Aug. 8, 2006 (Bankr. D. N.J. Case No. 06-17364). John DiIorio, Esq., at Shapiro & Croland, and Wendy G. Marcari, Esq., at Dreier LLP represent the Debtor. John K. Sherwood, Esq., and Kenneth Rosen, Esq., at Lowenstein Sandler, represents the Official Committee of Unsecured Creditors. When the Debtor filed for bankruptcy, the Debtor estimated its assets and debts at $10 million to $50 million. LENNOX INTERNATIONAL: Moody's Assigns Loss-Given-Default Rating --------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the Ba2 Corporate Family Rating for Lennox International Inc., as well as the (P)B1 rating on the company's $250 million Subordinate Shelf LGD6, 97%. Those debentures were assigned an LGD6 rating suggesting noteholders will experience a 97% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company and its subsidiary Lennox Trust I: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $250m sr unsec shelf (P)Ba3 (P)B1 LGD6 97% $250m preferred shelf (P)B2 (P)B1 LGD6 97% $250m preferred shelf PS2 (P)B2 (P)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 Richardson, Texas, Lennox International Inc. is engaged in the manufacture of home and industrial heating and cooling equipments. http://www.lennoxinternational.com/ LEVEL 3: Fitch Affirms Junk Issuer Default Rating ------------------------------------------------- Fitch assigns a rating of 'B/RR1' to Level 3 Financing, Inc.'s issuance of $600 million of 9.25% senior notes due 2014. In addition, Fitch affirms the 'CCC' Issuer Default Rating and each issue rating for Level 3 Communications, Inc. and Level 3 Financing, Inc. The Rating Outlook is Positive. The Positive Rating Outlook continues to reflect Fitch's belief that the company's acquisitions, including the recently announced Broadwing Corporation acquisition, gives Level 3 a firm path, if successfully integrated, toward de-leveraging its credit profile and achieving positive free cash flow in 2008. The timing of an upgrade of Level 3's IDR is linked to the company's ability to improve free cash flow, materially reduce leverage, generate positive organic revenue growth and improve margins. Additionally, the company will need to maintain liquidity and financial flexibility. The new notes will constitute purchase money indebtedness under the indentures of Level 3. The net proceeds can be used for acquisitions or expansion of the company's infrastructure. With this offering, the company will have a fully drawn $730 million secured term loan facility due 2011 as well as $1.8 billion of senior unsecured notes at Level 3 Financing. Fitch expects that the proceeds from this new offering will be in part used for the company's acquisition of Broadwing. The total cash requirement in this transaction is $744 million, but only $394 million when netted against second quarter 2006 outstanding cash at Broadwing. The Broadwing acquisition is expected to close in first quarter 2007. Level 3 continues to maintain strong liquidity and finished third quarter 2006 with $731 million of cash and $509 million of marketable securities. Level 3's current maturity schedule is $2 million in 2007, $138 million in 2008 and $362 million in 2009. Level 3's third quarter earnings results showed strong year-over- year revenue and operating EBITDA growth in core communications services due to both organic growth as well as contributions from acquisitions. Integration and capital expenditures are expected to remain high for the next couple of years, but with a steady trend of strengthening operating and free cash flow. Gross margins continued to strengthen in the third quarter reaching 57% and this trend should continue as the low margin SBC contract contribution continues to reduce and acquisitions are integrated. Fitch believes that acquisition activity at Level 3 will be curtailed due to the outstanding amount of integration effort which is currently present. Fitch also expects that Level 3 could take advantage of opportunities to reduce interest expense in order to strengthen its credit profile on a going forward basis. Opportunities to reduce interest expense could include the ability to convert debt to equity, which is present at $1.2 billion of senior convertible notes that can convert at less than $4 per share. The company also has the ability to call over $600 million of high coupon debt due in 2010, in March 2007. These ratings are affirmed with a Positive Outlook: Level 3 Communications, Inc. -- IDR 'CCC'; -- Senior unsecured debt 'CCC-/RR5'; -- Subordinated debt 'CC/RR6'. Level 3 Financing, Inc.: -- IDR 'CCC'; -- Senior secured term loan 'B/RR1'; -- Senior unsecured debt 'B/RR1'. Fitch's Recovery Ratings, introduced in 2005, are a relative indicator of creditor recovery on a given obligation in the event of a default. LEVEL 3: S&P Junks $600 Million of 9.25% Senior Notes at CCC- ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC-' rating to the $600 million of 9.25% senior notes due 2014 issued by Level 3 Financing Inc., a subsidiary of Broomfield, Colo.-based Level 3 Communications Inc. The notes are issued under Rule 144A with registration rights. Under the indentures of Level 3, the new debt will constitute purchase money indebtedness and will be used solely to fund the cost of construction, installation, acquisition, lease, and development or improvement of telecommunications assets. All ratings on Level 3, including the 'CCC+' corporate credit rating, are affirmed. The outlook is stable. Debt outstanding as of Sept. 30, 2006, totaled approximately $6.6 billion. "The ratings on Level 3 reflect an aggressive financial policy, elevated leverage, negative discretionary cash flow, integration risk resulting from an active acquisition strategy, and concerns about weakness in the long-distance telecommunications industry," Standard & Poor's credit analyst Susan Madison said. Tempering factors include a sizable cash balance, an absence of significant debt maturities until 2010, and modest benefits from industry consolidation. A facilities-based provider of communications services, Level 3 historically provided predominantly long-haul telecom services. In response to falling prices and declining narrowband demand, the company, like many of its peers, has shifted its strategic focus to selling new products like wholesale voice over Internet protocol in regional and metropolitan areas. Level 3's entry into these new markets has been accelerated through a series of acquisitions of regional competitive local exchange carriers, as well as the pending acquisition of Broadwing Corp., a long-haul communications provider with a sizable enterprise business. MAAX HOLDINGS: Moody's Assigns Loss-Given-Default Rating -------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency revised the Corporate Family Rating for Maax Holdings Inc. to B2 from B3, as well as the rating on the company's 11.57% Senior Unsecured Discount Notes due 2013 to Caa1 from Caa3. Those debentures were assigned an LGD6 rating suggesting noteholders will experience a 99% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- C$50m bank fac due 2010 (Rev.) B2 B2 LGD3 49% C$130m bank fac due 2010 B2 B2 LGD3 49% US$115m bank fac due 2012 B2 B2 LGD3 49% 9.75% sr unsec sub notes due 2012 Caa1 Caa1 LGD6 91% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Brooklyn Park, Minnesota, Maax Holdings, Inc. is engaged in the manufacture of bathroom fixtures. MAPCO EXPRESS: 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 downgraded its B2 Corporate Family Rating for Jo-Ann Stores, Inc to B3. 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 ---------- ------- ------- ------ ---------- $120MM Gtd. Sr. Sec. Revolving Credit Facility B2 B2 LGD3 34% $165MM Gtd. Sr. Sec. Term Loan B2 B2 LGD3 34% 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 Franklin, Tennessee, MAPCO Express, Inc. -- http://www.mapcoexpress.com/-- is a wholly owned subsidiary of Delek US Holdings, Inc. Delek US Holdings, Inc., operates 349 convenience stores under the MAPCO Express, Discount Food Mart(TM) and East Coast(R) brand names located primarily in and around Memphis and Nashville, Tennessee, northern Alabama and Richmond, Virginia. MCDONOUGH FOREST: Case Summary & 17 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: McDonough Forest Properties L.P. 10 Glenwood Way Stockbridge, GA 30281 Tel: (404) 995-4446 Bankruptcy Case No.: 06-73556 Chapter 11 Petition Date: October 27, 2006 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: David G. Bisbee, Esq. 2929 Tall Pines Way Atlanta, GA 30345 Tel: (770) 939-4881 Fax: (770) 939-4881 Total Assets: $19,683,777 Total Debts: $17,304,294 Debtor's 17 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Henry County Water & Sewer $7,141 McDonough, GA 30253 Seagull Floors $3,468 Atlanta, GA 31192 Martinez Turnkey Services $2,615 Snellville, GA 30078 North Atlanta Contractors $2,275 Suwanee, GA 30024 WLC, Inc. $1,500 Snellville, GA 30078 Hughes Maintenance Supply $1,486 Waste Management of Atlanta $1,324 Rent.com $1,245 Media Works $979 ProMove LLC $824 ProKleen Carpet Services $800 Magic Carpet Cleaning $760 First Advantage Safe Rent $520 Original 7 $348 Home Depot Supply $316 Northwest Exterminating $264 Quill Office Supplies $214 MARSHALL WORLEY: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Marshall G. Worley Carol J. Worley fdba Mountain Gate Limestone Quary, Inc. fdba FNVB, Inc. P.O. Box 1131 Palo Cedro, CA 96073 Bankruptcy Case No.: 06-24406 Chapter 11 Petition Date: October 26, 2006 Court: Eastern District of California (Sacramento) Judge: Michael S. McManus Debtor's Counsel: Dennis K. Cowan, Esq. P.O. Box 992090 Redding, CA 96099-2090 Tel: (530) 221-7300 Fax: (530) 223-5317 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 18 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Dave Anderson $78,282 P.O. Box 3334 Redding, CA 96099 Frank Coughlin $47,304 213 O'Shea Way Redding, CA 96003 Ken Mariette $39,978 19705 Gray Rock Road Redding, CA 96003 Nan Derrah $32,816 Wendy Elder 2901 Smith Road Redding, CA 96002 The Livingston Group $23,354 985 Pearce Court Folsom, CA 95630 Ron Gray $12,768 Ralph Andrews $9,000 Droscher Equipment $5,000 UBC Card $4,800 Bank of California $2,436 American Express $957 Gottchalks $941 JC Penney $563 Capital One Services $554 Macy's $350 Redding Oil $300 76 Gas $203 Chevron Gas $100 MERIDIAN: Files Further Revised Fourth Plan & Approved Disclosure ----------------------------------------------------------------- Meridian Automotive Systems, Inc., and its eight debtor- affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware last week further revised copies of their Fourth Amended Joint Plan of Reorganization and Disclosure Statement. The Honorable Mary F. Walrath approved Oct. 25 the Debtors' Disclosure Statement as published in the Troubled Company Reporter on Oct. 27, 2006. Meridian President and Chief Executive Officer Richard E. Newsted related that the Debtors were able to resolve various intercreditor issues, including valuation of the Debtors' estates and the assertion of adequate protection claims under Section 507(b) of the Bankruptcy Code, with the Prepetition First Lien Lenders, the Prepetition Second Lien Lenders, and the Official Committee of Unsecured Creditors. Compromise and Settlement of Intercreditor Issues The latest Plan contemplates a proposed compromise and settlement of intercreditor issues, which avoids the burden and expense of litigation related to the intercreditor issues, reduces Meridian's administrative expenses, and removes potential impediments to timely confirmation of the Plan, Mr. Newsted says. Pursuant to the Compromise and Settlement, the Prepetition Lenders will not be required to prosecute the allowance of their Section 507(b) Claims and the Committee will not have to oppose the allowance of the Claims on valuation and other grounds. Instead, the Section 507(b) Claims that may be asserted by the Prepetition Lenders will be settled based on the agreed-upon formula for the distribution of recoveries by the Litigation Trust. The Compromise and Settlement further contemplates that the Prepetition Lenders will retain all postpetition interest and professional fees they have received to date and are entitled to receive through the Effective Date. Exit Facility The Reorganized Debtors expect the Exit Facility to consist of: (i) a $70,000,000 senior secured revolving line of credit; and (ii) an $80,000,000 senior secured term loan, plus a $25,000,000 synthetic letter of credit facility. Issuance of New Notes The aggregate face amount of the $98,000,000 worth of New Notes to be issued on the Effective Date will be reduced by the net proceeds realized by the Debtors in connection with the Fowlerville Sale or Leaseback if the transaction closes by the Effective Date. The issue price of a New Note will equal its fair market value on the date it is issued if the New Notes or the First Lien Claims are considered traded on an established market for United States federal income tax purposes. If the New Notes and First Lien Claims are not considered traded on an established market for United States federal income tax purposes, then the issue price of a New Note will equal its stated principal amount. De Minimis Distributions Under the Amended Plan, the Reorganized Debtors will have no obligation to make a distribution on account of an Allowed Claim from any Distribution Reserve or otherwise if the amount to be distributed is less than $25. A full-text blacklined copy of Meridian's Oct. 25, 2006, Fourth Amended Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?1412 A full-text blacklined copy of Meridian's Oct. 25, 2006, Disclosure Statement is available for free at http://ResearchArchives.com/t/s?1411 Plan Compendium Meridian also delivered to the Court a Plan Compendium together with its October 25, 2006 Fourth Amended Plan and Disclosure Statement. Most of the Plan Compendium Exhibits contain minor revisions. The six Exhibits are: 1. Certificate of Incorporation, a full-text copy of which is available for free at http://ResearchArchives.com/t/s?141c 2. Reorganized Meridian's By-Law, a full-text copy of which is available for free at http://ResearchArchives.com/t/s?141d The Certificate of Incorporation and By-Laws will govern the selection of directors and officers of Reorganized Meridian after the Effective Date. 3. Litigation Trust Agreement After the payment of expenses incurred prosecuting the Avoidance Actions and the Reserved Actions, any recoveries obtained by the Litigation Trust will be distributed in this manner: (i) Prepetition First Lien Claim Trust Interests will be paid Pro Rata from the Litigation Trust assets consisting of 30% of the net proceeds; (ii) Prepetition Second Lien Claim Trust Interests will be paid Pro Rata from the Litigation Trust assets consisting of 60% of the net proceeds; and (iii) the General Unsecured Claim Trust Interests will be paid Pro Rata from the Litigation Trust assets consisting of 10% of the net proceeds. The General Unsecured Claim Trust Interests are entitled to a maximum aggregate distribution of $2,000,000 from the Litigation Trust assets. Thereafter, the Prepetition First Lien Claim Trust Interests will be paid Pro Rata from the trust assets consisting of 30% of the proceeds realized by the Litigation Trust, and the Prepetition Second Lien Claim Trust Interests will be paid Pro Rata from the trust assets consisting of 70% of the proceeds realized by the Litigation Trust. A full-text copy of the Litigation Trust Agreement is available for free at http://ResearchArchives.com/t/s?141e 4. Michigan Merger Certificate, a full-text copy of which is available for free at http://ResearchArchives.com/t/s?141f 5. Delaware Merger Certificate, a full-text copy of which is available for free at http://ResearchArchives.com/t/s?1420 6. Warrant, a full-text copy of which is available for free at http://ResearchArchives.com/t/s?1421 Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). MERIDIAN AUTOMOTIVE: Confirmation Hearing Scheduled on Nov. 29 -------------------------------------------------------------- The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware will convene a confirmation hearing on Nov. 29, 2006, to consider Meridian Automotive Systems Inc. and its debtor-affiliates' Revised Fourth Amended Joint Plan of Reorganization. Judge Walrath directs the Debtors to cause the Confirmation Hearing Notice to be published in The Detroit Free Press, USA Today, and the national edition of The Wall Street Journal no later than Nov. 8, 2006. The Court fixes Nov. 22, 2006, as the last date for filing and serving written objections to confirmation of the Plan. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). MERIDIAN AUTOMOTIVE: Ballots Must Be Received by November 22 ------------------------------------------------------------ The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware approves Meridian Automotive Systems Inc. and its debtor-affiliates' proposed procedures for the solicitation and tabulation of votes to accept the Oct. 25, 2006, Fourth Amended Joint Plan of Reorganization, subject to certain modifications. Judge Walrath permits the Debtors to distribute or cause to be distributed, no later than Oct. 28, 2006, the Voting Solicitation Packages by first class mail to all Holders of Claims in Classes 3 through 6. Record Date Judge Walrath establishes Oct. 25, 2006, as the record date for purposes of determining Holders of Claims and Meridian Prepetition Interests entitled to receive the Voting Solicitation Package, the Unimpaired Notice of Non-Voting Status or the Rejecting Classes Notice and determining which Holders of Claims are entitled to vote on the Fourth Amended Plan. Voting Deadline The Court rules that the original ballots must be properly executed, completed and returned to the Voting Agent no later than Nov. 22, 2006. Rule 3018 Motion Deadline Judge Walrath gives the Debtors until Oct. 27, 2006, to object to claims for purposes of voting. The Court directs any party to file, by Nov. 10, 2006, a Motion pursuant to Rule 3018 of the Federal Rules of Bankruptcy Procedure to have its claims allowed for purposes of voting on the Plan. The Court will convene a hearing on Nov. 17, 2006, to consider any Rule 3018 Motions. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). MERRILL LYNCH: Fitch Lifts Rating on Class B-5 Certs. to B+ ----------------------------------------------------------- Fitch Ratings affirms these ratings on Merrill Lynch Credit Corporation's mortgage pass-through certificates: Series 2004-B -- Class A affirmed at 'AAA'; -- Class B-1 upgraded to 'AAA' from 'AA+'; -- Class B-2 upgraded to 'AA' from 'A+'; -- Class B-3 upgraded to 'A+' from 'BBB+'; -- Class B-4 upgraded to 'BBB+' from 'BB+'; -- Class B-5 upgraded to 'BB+' from 'B+'. Series 2004-C -- Class A affirmed at 'AAA'; -- Class B-1 upgraded to 'AAA' from 'AA'; -- Class B-2 upgraded to 'AA' from 'A+'; -- Class B-3 upgraded to 'A+' from 'BBB+'; -- Class B-4 upgraded to 'BBB+' from 'BB+'; -- Class B-5 upgraded to 'BB+' from 'BB-'. Series 2004-E -- Class A affirmed at 'AAA'; -- Class B-1 upgraded to 'AA+' from 'AA'; -- Class B-2 upgraded to 'AA-' from 'A+'; -- Class B-3 upgraded to 'A' from 'BBB+'; -- Class B-4 upgraded to 'BBB' from 'BB+'; -- Class B-5 upgraded to 'BB' from 'B+'. Series 2004-F -- Class A affirmed at 'AAA'; -- Class B-1 upgraded to 'AAA' from 'AA'; -- Class B-2 upgraded to 'AA' from 'A+'; -- Class B-3 upgraded to 'A+' from 'BBB'; -- Class B-4 upgraded to 'BBB+' from 'BB+'; -- Class B-5 upgraded to 'BB+' from 'B+'. Series 2004-HB1 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B+'; The collateral in the aforementioned transactions consists of adjustable-rate mortgages extended to prime borrowers secured by first liens on primarily one- to four-family residential properties. As of the September 2006 distribution date, the transactions are seasoned from a range of 22 to 28 months and the pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from approximately 29% to 37%. The affirmations reflect a satisfactory relationship between credit enhancement and future loss expectations and affect approximately $1.3 billion of outstanding certificates. All affirmed classes have experienced a slight growth in CE since the last rating action in November 2004. The upgrades reflect an improvement in the relationship of CE to future loss expectations and affect approximately $90.5 million of certificates. The CE levels for all upgraded classes have more than doubled their original enhancement levels since the closing date. MESABA AVIATION: Reaches Tentative Accord with Flight Attendants ---------------------------------------------------------------- Mesaba Aviation Inc. reached Oct. 29, 2006, a tentative agreement with its flight attendants, represented by the Association of Flight Attendants-CWA. The agreement is subject to approval by Mesaba's AFA-represented employees and supports the airline in meeting its required reduction in annual labor costs. "We appreciate the hard work of the flight attendants' representatives in reaching this deal. We have been in non-stop negotiations the past few days that have resulted in a solution that works for the company and the flight attendants," Mesaba Airlines president and chief operating officer John Spanjers said. "Reaching a second consensual agreement in just as many days builds on the progress we have already made in our plan to emerge successfully from restructuring." Mesaba reached Oct. 28 a tentative agreement with the Airline Pilots Association. Mesaba employees represented by the Transport Union of America also have reached an agreement on permanent wage and benefit reductions. Mesaba remains focused on reaching a similar agreement with the Aircraft Mechanics Fraternal Association. The company's restructuring plan centers on three goals: -- securing its core business of 49 Saabs with Northwest Airlines; -- growing its business with Northwest; and -- achieving a cost structure that positions Mesaba to be very competitive for new opportunities. 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 AVIATION: Reaches Tentative Agreement with Pilots' Union --------------------------------------------------------------- Mesaba Aviation Inc. reached Oct. 28, 2006, a tentative agreement with its pilots, represented by the Airline Pilots Association. The agreement, which is subject to approval by the union's master executive council and by Mesaba's ALPA-represented employees, assists the airline in meeting its required reduction in annual labor costs. "All along we have believed that consensual agreements are in the best interest of all involved -- the company, its employees, and our passengers," Mesaba Airlines president and chief operating officer John Spanjers said. "This has been a challenging process and we appreciate ALPa's efforts in working toward a solution. We look forward to continuing to work together to ensure Mesaba emerges successfully from bankruptcy and is positioned for growth." To date, a tentative agreement on permanent wage and benefit reductions also has been reached by Mesaba employees represented by the Transport Workers Union of America. The company's restructuring plan centers on three goals: -- securing its core business of 49 Saabs with Northwest Airlines; -- growing its business with Northwest; and -- achieving a cost structure that positions Mesaba to be very competitive for new opportunities. 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 AVIATION: Court Okays Credit Pact With LaSalle Bank ---------------------------------------------------------- The Honorable Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota grants Mesaba Aviation, Inc.'s request to obtain a postpetition credit card secured by a cash deposit in accordance with a pledge agreement with LaSalle Bank National Association. Pending a final ruling on the Debtor's request, Judge Kishel authorizes the Debtor to: (a) borrow, subject to and in accordance with the terms and conditions set forth in its request; and (b) enter into the Pledge Agreement with LaSalle Bank National Association to secure the payment of its obligations. The lien in the collateral granted to Marathon Structured Finance Fund, LP, by the Pledge Agreement constitutes a valid, binding, enforceable and perfected first priority lien in the Collateral in favor of Marathon and constitutes a "Perfected Permitted Lien," provided that the collateral pledged to secure the lien will not exceed $50,000, Judge Kishel rules. Judge Kishel also authorizes Marathon to take any action it deems necessary or appropriate to perfect the liens and security interests granted to it under the Pledge Agreement. As reported in the Troubled Company Reporter on Oct. 12, 2006, Will R. Tansey, Esq., at Ravich Meyer Kirkman McGrath & Nauman, in Minneapolis, Minnesota, discloses that the Debtor is transferring its banking from Wells Fargo NA to LaSalle. In view of this transfer, the Debtor is terminating its credit cards with Wells Fargo and seeks credit in connection with a LaSalle Commercial Card Agreement. Mr. Tansey tells the Court that the Debtor seeks the new credit card to insure that it has immediate credit available -- 24 hours a day -- to address unforeseen emergencies and normal operating costs. The credit sought is merely to replace the Debtor's credit card with Wells Fargo and is not significantly increasing the amount of the Debtor's outstanding credit, Mr. Tansey explains. 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. 27 and 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) MORGAN STANLEY: Fitch Retains Low-B Ratings on Six Cert. Classes ---------------------------------------------------------------- Fitch affirms Morgan Stanley Capital I Trust's (MSCI) commercial mortgage pass-through certificates, series 2004-IQ7: -- $56 million class A-1 at 'AAA'; -- $70 million class A-2 at 'AAA'; -- $53 million class A-3 at 'AAA'; -- $550.5 million class A-4 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-Y at 'AAA'; -- $29.1 million class B at 'AA'; -- $22.7 million class C at 'A'; -- $6.8 million class D at 'A-'; -- $9.4 million class E at 'BBB+'; -- $5.4 million class F at 'BBB'; -- $4.3 million class G at 'BBB-'; -- $5.4 million class H at 'BB+'; -- $4.3 million class J at 'BB'; -- $2.2 million class K at 'BB-'; -- $2.2 million class L at 'B+'; -- $2.2 million class M at 'B'; -- $2.2 million class N at 'B-'. Fitch does not rate the $7.6 million class O certificates. The rating affirmations reflect the stable pool performance and minimal paydown since issuance. As of the October 2006 distribution date, the pool has paid down 3.5% to $833 million from $863 million at issuance. One loan (.9%) is currently in special servicing. The loan is secured by an office property in Duluth, Georgia. The property has been 100% vacant since the sole tenant declared bankruptcy in 2005. The special servicer is actively marketing the space. Losses are possible; however, any losses are expected to be absorbed by the non-rated class O. Fitch reviewed the credit assessments of the following three loans: Beverly Center (7.3%); 111 Eighth Avenue (7.2%); and 315 Hudson Street (2.5%). All three loans maintain investment grade credit assessments. The Fitch stressed debt service coverage ratios for Beverly Center and 315 Hudson Street as of year-end 2005 were 1.38 times (x) and 2.57x, respectively, compared to 1.38x and 1.75x at issuance. In addition, occupancy at the two properties has been relatively stable since issuance. The net cash flow for 111 Eighth Avenue has declined considerably since issuance. However, the property is now 100% occupied and the decline in NCF was attributable to tenant improvement and leasing commissions in connection with new leases. MUELLER GROUP: Moody's Assigns Loss-Given-Default Rating -------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the B1 Corporate Family Rating for Mueller Group Inc., as well as the B3 rating on the company's $315 million 10% Senior Unsecured Subordinate Notes due 2012. Those debentures were assigned an LGD5 rating suggesting noteholders will experience an 82% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company and its subsidiary Mueller Water Products: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $145 Million Sr. Sec. bank facility due 2010 (Rev.) B1 Ba3 LGD3 31% $1.05 Billion Sr. Secured Bank Fac. due 2012 B1 Ba3 LGD3 31% $223m 14.75 Sr. Unsec. Disc. Notes due 2014 Caa1 B3 LGD6 94% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Portsmouth, New Hampshire, Mueller Group Inc. manufactures water infrastructure and flow control products for use in water distribution networks and piping systems. NANCY CIAMBOR: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Nancy C. Ciambor 46 Tim Tam Terrace West Seneca, NY 14224 Bankruptcy Case No.: 06-03332 Chapter 11 Petition Date: October 26, 2006 Court: Western District of New York (Buffalo) Debtor's Counsel: Arthur G. Baumeister, Jr. Amigone, Sanchez, Mattrey & Marshall LLP 1300 Main Place Tower 350 Main Street Buffalo, NY 14202 Tel: (716) 852-1300 Total Assets: $1,375,541 Total Debts: $520,511 Debtor's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Fargo Business Direct Credit Card $33,041 P.O. Box 348750 Purchases Sacramento, CA 95834 United Cardmember Service Credit Card $61,154 P.O. Box 16296 Wilmington, DE 19850-5298 AOL Cardmember Service Credit Card $25,214 P.O. Box 15298 Purchases Wilmington, DE 19850-5298 Key Bank Personal Guaranty $23,881 Commercial Loan Department P.O. Box 94525 Cleveland, OH 44101-4525 Bank of America Credit Card $20,576 P.O. Box 2463 Purchases Spokane, WA 99210-2463 Five Point Capital Inc. Personal Guaranty $19,000 Key Bank Personal Guaranty $15,317 Capital One Services Credit Card $11,389 Purchases MBNA America Credit Card Purchases $9,112 Sears Premier Card Credit Card Purchases $4,406 Citi Cards Credit Card Purchases $3,500 American Express Credit Card Purchases $1,185 Discover Card Credit Card Purchases $516 WFNNB New York & Co. Credit Card $300 Key Bank Credit Card Purchases $258 NASH FINCH: 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 Nash Finch Company. 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 ---------- ------- ------- ------ ---------- $125MM Gtd. Sr. Sec. Revolver B1 B1 LGD4 54% $175MM Gtd. Sr. Sec. Term Loan B B1 B1 LGD4 54% $150.1MM 3.5% Sr. Sub. Conv. Notes B3 B3 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 its 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%). Nash Finch Company -- http://www.nashfinch.com/-- is a food distribution company. Nash Finch's core business, food distribution, serves independent retailers and military commissaries in 31 states, the District of Columbia, Europe, Cuba, Puerto Rico, Iceland, the Azores and Honduras. The Company also owns and operates a base of retail stores, primarily supermarkets under the Econofoods(R), Family Thrift Center(R) and Sun Mart(R) trade names. NATIONAL ENERGY: Inks Pact With AREP to Sell Stake in NEG Holdings ------------------------------------------------------------------ National Energy Group, Inc., has entered into an agreement with NEG Oil & Gas LLC, NEG, Inc. and American Real Estate Holdings Limited Partnership for the possible purchase of the Company's membership interest in NEG Holding LLC. The Company says, that assuming its membership interest in NEG Holding is purchased, it is anticipated that it will distribute to its common stockholders, including NEG Oil & Gas, through a dividend or a tender offer, an aggregate of about $37 million. Following the distribution and after giving effect to any tax reserves or payments and the repayment of its 10.75% senior notes due 2007, the Company expects to retain cash balances of about $40 million to $47 million. In the event that the purchase pushes through, the Company's Board of Directors intends to consider the appropriate application of the funds, including but not limited to the acquisition of producing oil and gas properties and related businesses and assets or the equity in another entity which owns the properties, businesses and assets. The Company disclosed that American Real Estate Partners, L.P. intends to exercise its option to purchase the membership interest only if AREP's previously announced transaction under its letter of intent with Riata Energy, Inc. is completed. The Company also disclosed that if the transactions AREP are not consummated, then it will remain subject to the terms of the Merger Agreement, which includes an agreed upon termination date of Dec. 1, 2006 in the event the transactions contemplated by the Merger Agreement is not consummated. The Company previously disclosed on Dec. 7, 2005, that it had entered into an Agreement and Plan of Merger with NEG Oil & Gas, Newco and AREH, pursuant to which the Company was to merged into Newco. NEG Oil & Gas, a wholly-owned indirect subsidiary of AREP, is the owner of 50.1% of the Company's common stock. On Sept. 11, 2006, the Company also disclosed that Riata and AREP entered into the Letter of Intent, where Riata obtained an option to acquire NEG Oil & Gas, which holds all of AREP's oil and gas investments, including the acquisition by NEG Oil & Gas or NEG Holding of the Company's membership interest in NEG Holding> But excluding the acquisition of any of the Company's common stock by Riata. The transaction also contemplates that the management agreements pursuant to which the Company manages the operations of NEG Operating LLC, National Onshore LP and National Offshore LP will be terminated. Under Section 5.4 of the NEG Holding Operating Agreement, NEG Oil & Gas, or its successor is permitted to purchase the Company's membership interest in NEG Holding at a price equal to the fair market value of the interest. The Company further disclosed that its Board of Directors has approved the agreement. A full text-copy of the agreement with NEG Oil & Gas LLC, NEG, Inc. and American Real Estate Holdings Limited Partnership may be viewed at no charge at http://ResearchArchives.com/t/s?1418 Based in Dallas, Texas, National Energy Group, Inc., (OTC BB: NEGI) -- http://www.negx.com-- is a management company engaged in the business of managing the exploration, development, production and operations of oil and natural gas properties, primarily located in Texas, Oklahoma, Arkansas and Louisiana (both onshore and in the Gulf of Mexico). The Company manages the oil and natural gas operations of NEG Operating LLC, National Onshore LP and National Offshore LP, all of which are affiliated entities. The Company's principal assets are its membership interest in NEG Holding LLC and its management agreements with NEG Operating LLC, National Onshore LP and National Offshore LP. National Energy Group Inc.'s balance sheet at June 30, 2006 showed total assets of $147 million and total liabilities of $151 million resulting in a total stockholders' deficit of $4 million. NORCROSS SAFETY: Moody's Assigns Loss-Given-Default Rating ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the B1 Corporate Family Rating for Norcross Safety Products L.L.C., as well as revised the rating on the company's $151.6 Million 9.875% Senior Subordinate Notes due 2011. Those debentures were assigned an LGD4 rating suggesting noteholders will experience a 64% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company and its holding parent Safety Products Holdings, Inc: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $50 Million Sr. Sec Revolver due 2010 B1 Ba1 LGD2 17% $152.8 Million Sr. Sec. term loan due 2012 B1 Ba1 LGD2 17% $134.5 Million 11.75% Sr. fixed PIK Notes due 2012 Caa1 B3 LGD5 89% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Oak Brook, Illinois, Norcross Safety Products LLC is a manufacturer of branded products in the fragmented personal protection equipment industry. NORD RESOURCES: Inks Settlement Pact with TMD Acquisition --------------------------------------------------------- Nord Resources Corporation has entered into an agreement with TMD Acquisition Corporation to settle certain outstanding matters relative to the transactions to acquire assets comprising ASARCO Inc.'s Tennessee Mines Division zinc business. The TMD Settlement Agreement provides that the Company will reimburse the TMD Expenses upon the earlier of: (a) Dec. 22, 2006, and (b) the closing date of: (i) a registered equity offering and/or a debt project financing in which the Company raises not less than the aggregate amount of $25,000,000, or (ii) a significant corporate transaction in which any person, together with all affiliates and associates, becomes the beneficial owner of 51% or more of the outstanding shares of common stock, or there is a sale, lease, exchange or other transfer of assets valued at $12,000,000 or greater. The settlement also provides that if the Company receives any cash payment in full or partial settlement of the ASARCO Claim, it is required to first remit the portion of the cash payment to TMD Acquisition to fully pay the outstanding balance of the TMD Expenses. The principals of TMD Acquisition are Ronald Hirsch and Stephen Seymour. Mr. Hirsch serves as the Company's chairman of the board of directors, and Mr. Seymour is a director. Zinc Assets Transaction The Company pursued, in May 2004, an opportunity to acquire assets comprising ASARCO Inc.'s Tennessee Mines Division zinc business. ASARCO selected the Company with whom to negotiate the sale and purchase of the Zinc Assets. The Company, in Oct. 2004, entered into a secured bridge loan agreement with Regiment Capital III, L.P., the terms of which prevented an investment in the Zinc Assets without Regiment Capital's prior written consent. Regiment Capital did not consent to the direct acquisition of the Zinc Assets. Mr. Hirsch and Mr. Seymour, to assist the Company, entered into an Agreement pursuant to which they obtained the right to acquire the Zinc Assets. They subsequently assigned the right to TMD Acquisition, a private corporation formed by them to facilitate an asset purchase agreement with ASARCO. ASARCO, on Aug. 2, 2005, ASARCO purported to terminate the Acquisition Agreement and filed for Chapter 11 protection. To preserve any right of action that it may have against ASARCO and its bankruptcy trustee, the Company and TMD Acquisition entered into a settlement agreement pursuant to which the Company has taken an assignment of the Acquisition Agreement. Headquartered in Dragoon, Arizona, Nord Resources Corporation (Pink Sheets: NRDS) -- http://www.nordresources.com/-- is a natural resource company focused on near-term copper production from its Johnson Camp Mine and the exploration for copper, gold and silver at its properties in Arizona and New Mexico. The Company also owns approximately 4.4 million shares of Allied Gold Limited, an Australian company. In addition, the Company maintains a small net profits interest in Sierra Rutile Limited, a Sierra Leone, West African company that controls the world's highest-grade natural rutile deposit. * * * As reported in the Troubled Company Reporter on Sept. 8, 2006 Nord Resources Corporation's balance sheet at June 30, 2006, showed $4,214,657 in total assets and $8,430,713 in total liabilities, resulting in a $4,216,056 stockholders' deficit. The Company had a $3,120,573 deficit at March 31, 2006. OFFICEMAX 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. and Canadian retail sector, the rating agency confirmed its Ba2 Corporate Family Rating for OfficeMax Incorporated. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 7.5% Notes due 2008 Ba2 Ba3 LGD4 67% 9.45% Debentures due 2009 Ba2 Ba3 LGD4 67% 6.5% Sr. Notes due 2010 Ba2 Ba3 LGD4 67% 7.35% Debentures due 2016 Ba2 Ba3 LGD4 67% Medium Term Notes Ba2 Ba3 LGD4 67% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Itasca, Illinois, OfficeMax(R) Incorporated (NYSE: OMX) -- http://www.officemax.com/-- provides office supplies and paper, print and document services, technology products and solutions, and furniture to consumers and to large, medium and small businesses. OfficeMax customers are served by approximately 40,000 associates through direct sales, catalogs, the Internet and approximately 950 superstores. ORIGEN MANUFACTURED: S&P Junks Ratings on Class B-1 Certificates ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the mezzanine and subordinate classes issued by Origen Manufactured Housing Contract Senior/Subordinate Asset-Backed Certificates Series 2002-A. In addition, the ratings on the four senior classes are affirmed. Concurrently, the ratings on all classes are removed from CreditWatch with negative implications, where they were placed Sept. 21, 2006. The lowered ratings reflect deterioration in credit enhancement resulting from the continued poor performance of the underlying pool of manufactured housing contracts, which were originated by Origen Financial LLC. In addition, the cumulative net loss rate of 15.24% is trending higher than initially expected. The high level of losses has depleted the transaction's credit support. Overcollateralization has been reduced to 1.95% of the initial collateral balance, which is below the required level of 7%, and it continues to decline as a percent of the current pool balance. With 55 months of performance and a pool factor of 52.59%, the transaction continues to have high delinquency levels, with almost 4.00% of the pool 60-plus-days delinquent, including repossession inventory. The affirmed ratings reflect credit enhancement that is sufficient to support the senior classes relative to the stressed losses at the current rating levels. The senior notes are benefiting from the sequential-pay structure of the scheduled principal payments, which has increased the percentage of subordination available. S&P believes that because of the higher-than-expected cumulative net losses, the remaining credit support is no longer sufficient to maintain the previous ratings on the mezzanine and subordinate certificates. Standard & Poor's will continue to monitor the ratings associated with this transaction in anticipation of future credit deterioration and a higher level of losses. Ratings Lowered and Removed From Creditwatch Negative Origen Manufactured Housing Contract Senior/ Subordinate Asset-Backed Certificates Series 2002-A Rating ------ Class To From ----- -- ---- M-1 A- A/Watch Neg M-2 BB- BBB-/Watch Neg B-1 CCC- B-/Watch Neg Ratings Affirmed and Removed From Creditwatch Negative Origen Manufactured Housing Contract Senior/ Subordinate Asset-Backed Certificates Series 2002-A Rating ------ Class To From ----- -- ---- A-1 AA AA/Watch Neg A-2 AA AA/Watch Neg A-3 AA AA/Watch Neg A-4 AA AA/Watch Neg OVERWATCH SYSTEMS: Textron Extends $325 Mil Purchase Offer ---------------------------------------------------------- Textron Inc. disclosed that its Textron Systems unit has reached an agreement to acquire Overwatch Systems for a purchase price of approximately $325 million. "This acquisition is in perfect alignment with our strategy to add important capabilities to our current strong businesses, to further serve our government, military and homeland security customers," said Textron Chairman, President and CEO, Lewis B. Campbell. "In addition, it truly complements our current precision engagement strategy, adding critical new products to our intelligent battlefield offerings." "As with the recent acquisition of Innovative Survivability Technologies (IST), Overwatch products and technologies clearly complement our existing portfolio," said Richard J. Millman, president of Textron Systems. "This addition of exceptional intelligence analysis capabilities will allow us to more fully address the emerging needs of our government and other customers in this dynamic wartime and global environment while also gaining some of the industry's top talent and their established and highly loyal customer base." Mr. Millman added, "Due to high customer demand and the complementary nature of these products with our existing platforms, we expect this acquisition to result in annual revenues exceeding $300 million over the next five years." The transaction is subject to normal regulatory approvals and is expected to close by the end of the year. About Textron Systems Textron Systems Corporation supports military and homeland security missions with strike weapons, as well as mobility and surveillance systems, and provides commercial and general aviation with engines and actuation systems. About Overwatch Headquartered in Morristown, New Jersey, Overwatch Systems -- http://www.overwatch.com/-- develops and markets integrated systems that enable analysts to generate actionable intelligence faster and more effectively for the war fighter, first responder, analyst and policy maker. With approximately 385 employees in several major locations, Overwatch Systems is expected to generate approximately $105 million of revenue with strong margins, in 2006. OVERWATCH SYSTEMS: Likely Textron Merger Cues S&P's Positive Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings, including the 'B+' corporate credit rating, on Overwatch Systems LLC on CreditWatch with positive implications. "The CreditWatch placement follows the announcement that Overwatch is to be acquired by higher-rated Textron Inc. [A-/Stable/A-2] for $325 million," said Standard & Poor's credit analyst Christopher DeNicolo. The transaction is subject to customary regulatory approvals and is expected to close by the end of the year. Ratings are likely to be withdrawn after the close, as all rated debt is expected to be repaid. Overwatch develop intelligence analysis software tools for the intelligence community and the U.S. military. The market outlook for the company's products is quite favorable due to the high levels of U.S. defense spending and the importance of intelligence analysis and dissemination to both the global war on terror and the transition to network centric warfare. PANTRY 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 US and Canadian Retail sector, the rating agency confirmed its B1 Corporate Family Rating for The Pantry, 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 ---------- ------- ------- ------ ---------- $150MM Gtd. 1st Lien Sr. Sec. Revolver Ba3 Ba2 LGD2 28% $205MM Gtd. 1st Lien Sr. Sec. Revolver Ba3 Ba2 LGD2 28% $250MM 7.75% Gtd. Sr. Sub. Notes B3 B3 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 its 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 Sanford, North Carolina, The Pantry, Inc. operates convenience store chains in the southeastern United States. As of June 29, 2006, the Company operated 1,499 stores in eleven states under select banners including Kangaroo Express(SM), its primary operating banner. PILGRIM'S PRIDE: To Reduce Chicken Processing by 5% in January -------------------------------------------------------------- Pilgrim's Pride Corp. disclosed it will reduce weekly chicken processing by 5% year over year, or approximately 1.3 million head per week, by January 2007 as part of its continuing effort to better balance supply and demand amid declining chicken prices and sharply higher costs for corn. The reduction will begin with eggs set as of Oct. 30, 2006, and will take effect with weekly processing beginning Jan. 1, 2007. The Company said it intends that the reduction will remain in effect until average industry margins return to more normalized levels. "The U.S. chicken industry is subject to volatility and there are a number of factors impacting near-term market conditions. Although industry dynamics improved in the spring and early summer of 2006, market conditions have weakened over the past few months, as evidenced by a decrease in prices for boneless breast meat and leg quarters, as well as a sharp increase over the past two months in the price of corn," said O.B. Goolsby Jr., Pilgrim's Pride president and chief executive officer. "We believe the reduction announced [Sun]day will help to strike a better balance between production and demand and strengthen our competitive position. As we have said before, reducing overall supply to better match demand is an important component in helping return the industry to more normalized levels. While the short- term operating environment remains challenging, we are confident that continued demand for high-quality, convenient and low-fat meat proteins will position our Company for profitable long-term growth when conditions in the chicken markets improve," added Mr. Goolsby. Amy Thomson at Bloomberg News disclosed that the company's bid to acquire Gold Kist Inc., will not be affected by the reduction and that there are no immediate plans to lessen its workforce or the number of its factories. 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. * * * 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 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 the company's note issues, including an LGD6 rating on its $100 million 9.250% Sr. Sub. Global Notes Due Nov. 15, 2013, suggesting noteholders will experience a 95% loss in the event of a default. PITTSFIELD WEAVING: Section 341(a) Meeting Scheduled on Oct. 31 --------------------------------------------------------------- The U.S. Trustee for Region 1 will convene a meeting of Pittsfield Weaving Co.'s creditors, at 10:00 p.m., tomorrow, Oct. 31, 2006, at 1000 Elm Street, 7th floor in Room 702 in Manchester, New Hampshire. This the first meeting of creditors required under Section 341(a) meeting of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Based in Pittsfield, New Hampshire, Pittsfield Weaving Company -- -- http://www.pwcolabel.com/-- provides brand identification to the apparel and soft goods industries, and manufactures woven and printed labels and RFID/EADS solutions. The Company filed it chapter 11 protection on Sept. 20, 2006 (Bankr. D. NH Case No. 06- 11214). Williams S. Gannon, Esq., at William S. Gannon PLLC represent the Debtor in its restructuring efforts. Pittsfield Weaving estimated its assets and debts at $10 million to $50 million when it filed for protection from its creditors. PLASTICON INT'L: BUYINS.NET Spots Short Selling of $91.9MM Shares ----------------------------------------------------------------- BUYINS.NET, an organization that monitors trading activity in US stocks, has reported that the total aggregate number of Plasticon International, Inc.'s shares shorted from January 2005 to October 2006 is approximately 1.1 billion shares with an approximate total dollar value of $91.9 million. According to BUYINS.NET, the Squeeze Trigger price of $0.0065 is the volume weighted average short price of all short selling in PLNI. A short squeeze is anticipated when PLNI shares close above $0.0065. SqueezeTrigger prices can be accessed at http://www.buyins.net/ "It has been our goal to identify and publish the pattern of brokers shorting our stock with the failure to deliver shares," stated Plasticon President and CEO Jim Turek. "Naked short selling is a financial assault and robs millions of dollars from investors as well as the ability for small cap companies to capitalize their operations. We are distressed by naked short selling and this practice wrongly influences the market. Our primary focus right now is to restore shareholder value and confidence in Plasticon International, Inc." Plasticon International, Inc. was on the OTC Naked Short Threshold list in January and in February of 2005. At the conclusion of each settlement day, data was provided on securities in which there were at least 10,000 shares in aggregate failed deliveries for five consecutive settlement days. The failures were to have constituted at least 0.5% of the issuer's total shares outstanding. The Securities Exchange Act of 1934 mandates that if a clearing agent has had a fail-to-deliver position for 13 consecutive settlement days, that clearing agent and the broker/dealer it clears for must purchase securities to close out its fail to deliver position. About Plasticon Based in Lexington, Kentucky, Plasticon International Inc. (PINKSHEETS: PLNI) -- http://www.plasticonintl.com/-- designs, produces, and distributes high-quality concrete accessories, informational & directional signage and plastic lumber, which are all produced from recycled and recyclable plastics. At Dec. 31, 2005, the Company's balance sheet showed a stockholders' deficit of $6,840,176, compared to a deficit of $10,005,952 at Dec. 31, 2004. PROCESS CAPITAL: Plans to Construct Waste Oil Refinery in Kingston ------------------------------------------------------------------ Process Capital Corp. has agreed to sell up to 51,500,000 units at a price of $0.05 per unit for total proceeds of up to $2,575,000, as of the Oct. 24, 2006, and subject to TSX Venture Exchange approval and the receipt of any required regulatory consents. Each unit will consist of one common share of the company, and one share purchase warrant, with each full warrant entitling the holder to acquire one common share of the Company, at a price of $0.10 for a period of 18 months from the date of issuance. The company has signed a letter agreement with EnviroMatrix Technologies Inc., a private Ontario corporation, wherein EnviroMatrix agreed, subject to the terms and conditions of the letter agreement, to subscribe for a total of up to 35,500,000 units for total proceeds of up to $1,775,000. Harris Brown & Partners Limited acted as Advisor to EnviroMatrix on this transaction. H. John Stollery, together with other members of the management team and directors of the Company have indicated their intention to subscribe for up to 16,000,000 units for total proceeds of up to $800,000. The common shares and warrants acquired under these transactions will be subject to a 4-month hold period. As some of the subscribers to these private placements are insiders of the Company, the Company is required to comply with Policy 5.9 of the Exchange (Insider Bids, Going Private Transactions and Related Transactions), which incorporates Ontario Securities Commission Rule 61-501, unless there is an exemption available. The Company expects to rely upon the Financial Hardship Exemption with respect to these private placements. The Private Placement is expected to be completed in one or more tranches, with an initial tranche of up to 13,000,000 units, with hhhmproceeds of up to $650,000. Funds from the initial tranche will be used by the Company to pay existing debt of the Company, costs associated with the Private Placement, and provide working capital to the Company. The company to pay existing debt and to commence construction of a new commercial 30 million liter micro- refinery to be built at the Company's site in Kingston, Ontario, will use funds from subsequent tranches. This will replace the current 8 million liter pilot plant that was developed and used to test and confirm the technology. Immediately upon completion of the Private Placements, the Company intends to engage Colt Engineering to begin work on the new plant and to de-commission the current pilot plant. Management expects it will take 15 months to put the new refinery into commercial operation. In addition to the private placements, EnviroMatrix has committed to use its best efforts to arrange, subject to Exchange approval, and the receipt of any necessary regulatory approvals, additional financing for the Company, by way of convertible debentures of up to $3,000,000 and a first mortgage in the amount of up to $3,657,000 for a total amount of up to $6,637,500 to enable the Company to complete construction of the new plant facility. It has been agreed that the Additional Financing will not bear interest at a rate greater than 12% per annum, and must be on reasonable terms, with respect to commissions and/or other terms acceptable to the Board of the Company. EnviroMatrix has agreed to commit a minimum of $500,000 and act as lead investor in the Debenture Offering. Final terms of the Debenture Offering have not been established at this time. While Process Capital Corp. will own the new micro-refinery, it has granted to EnviroMatrix, as additional consideration for the private placements and for raising, at a minimum, $5 million of the Additional Financing, the exclusive rights to build and/or sell these micro-refineries throughout North America for a 10 year period. For each plant that is constructed in North America, Process Capital Corp. will receive a fee of $500,000 and a royalty of $0.02 per liter on all diesel fuel sold. Process will retain the rights to develop and sell these plants throughout the rest of the world, except for China. Dr. Yu, the inventor of the technology, and a consultant to Process Capital Corp, has retained the rights to China. If EnviroMatrix is unable to provide this Additional Financing within 12 months, it will result in EnviroMatrix being obligated to offer to sell up to 30,000,000 common shares owned by it to H. John Stollery for a buyer to be determined at a price of $0.035 for a period of six months, and the rights granted to EnviroMatrix to build and/or sell these micro-refineries throughout North America for a 10-year period will be revoked. There are currently 77,472,574 common shares and 24,451,111 common share purchase warrants of the Company, which are issued and outstanding. The price of the Company's common shares as at the close of business on Oct. 23, 2006, the day prior to this announcement was $0.03 per share. Headquartered in Toronto, Ontario, Process Capital Corporation (TSX: POR) -- http://www.processcapital.ca/-- constructs, sells, and leases equipment used to recycle industrial and motor waste lubricants. At June 30, 2006, the Company's balance sheet showed a stockholders' deficit of $518,838, compared to a deficit of $420,169 at Dec. 31, 2005. PURADYN FILTER: Board Appoints Joseph Vittoria as CEO ----------------------------------------------------- puraDYN Filter Technologies, Inc.'s Board of Directors has appointed Joseph V. Vittoria, chairman, as chief executive officer. Richard C. Ford, who has been with the Company since 1987, has stepped down as chief executive officer as of Oct. 23, 2006. Mr. Ford will remain on the board of directors as vice-chairman and will focus on developing specific and targeted accounts within the Company. Mr. Ford stated, "After serving almost 20 years at the helm of Puradyn, it's in the best interests of the Company to effect a change. I'm now able to promote the product without the daily obligations of directing a public company. Joe Vittoria is highly respected in the business arena; given his successful track record and knowledge of the product and Company, he's the ideal person to take the reins as Chairman and CEO." The Company disclosed that Mr. Vittoria has an extensive business background that includes serving as Chairman and chief executive officer of Avis, Inc. for ten years. He negotiated the management acquisition of Avis in 1986 and one year later converted Avis to the then-largest Employee Stock Option Plan ever established. In 1997, Mr. Vittoria coordinated the sale of the Avis ESOP and retired. Several months later, he helped create Travel Services International, Inc. leading an immediate IPO at its founding and later selling the Company to a large British tour operator. Mr. Vittoria also serves on the boards of Autoeurope, Inc. and Flexcar, Inc. Mr. Vittoria concluded, "As a show of confidence in where the Company is positioned at this time, we have both chosen not to receive any salaries. As Richard and I are major stockholders, our compensation will be linked to long-term share performance for the benefit of all our stockholders." Messrs. Vittoria and Ford own 2,878,536 million shares, or 11.4%, and 3,225,651 million shares, or 12.7%, respectively, of the Company's outstanding common shares. puraDYN Filter Technologies, Inc., -- http://www.puradyn.com/-- designs, manufactures and markets the puraDYN(R) Bypass Oil Filtration System. The Company's patented and proprietary system is effective for internal combustion engines, transmissions and hydraulic applications. The Company has established aftermarket programs with Volvo Trucks NA, Mack Trucks, PACCAR; and made a strategic alliance with Honeywell Consumer Products Group, producers of FRAM(R) filtration products. puraDYN(R) equipment has been certified as a 'Pollution Prevention Technology' by the California Environmental Protection Agency and was selected as the manufacturer used by the U.S. Department of Energy in a three-year evaluation to research and analyze performance, benefits, and cost analysis of bypass oil filtration technology. Going Concern Doubt DaszkalBolton LLP in Boca Raton, Fla., raised substantial doubt about puraDYN Filter Technologies, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring operating losses, stockholders' deficit, and reliance on cash inflows from an institutional investor and current stockholder. RADIANT ENERGY: Closes 12% Debentures Conversion with GE Capital ---------------------------------------------------------------- Radiant Energy Corporation disclosed significant progress in the Company's debt reduction program. The Company and General Electric Capital Corporation completed the settlement of a 12% unsecured debenture in exchange for common shares and the transfer of other assets to Radiant. 12% Unsecured Debentures Conversion The principal of US$250,000 was converted into 1,793,400 common shares (approximately CDN$0.25 per share) and the accrued interest equal to US$150,312 was written off. The net affect on after-tax profits to Radiant is a gain of approximately US$320,000. The common shares cannot be sold, transferred or hypothecated or otherwise traded in Canada until Jan. 11, 2007. The ownership of the deicing facility in operations at Newark Liberty International Airport and an unassembled structure, heating units, control booth and other miscellaneous parts were transferred to Radiant at no cost from GECC. Debt Reduction Program As at July 31, 2006 the Company had US$16.8 million of debt outstanding. The exchange of the 12% debenture for common shares reduced the debt by $400,313. In September, the Company, GECC and three insiders being significant shareholders signed agreements whereby insiders of Radiant purchased the outstanding secured loans, including accrued interest equal to $5.3 million from GECC. The three shareholders completed an agreement with Radiant to write-off US$3.6 million of the debt in exchange for the Company to grant a conversion feature on the remaining US$1.75 million of debt into 13,300,000 common shares of Radiant. The net affect on after-tax profits is a gain of US$2.9 million and a reduction in debt of $3.6 million. The transaction is subject to acceptance by the TSX Venture Exchange. The Company received payment from a customer that allowed the company to reduce the debt by a further $1.0 million. The Company also extended an offer to the three 7.75% Series A Debenture holders to convert a total US$708,000 in principal and accrued interest outstanding into 3,228,442 common shares (approximately CDN$0.25 per share). The MD&A originally filed on May 8, 2006, for the year ended Oct. 31, 2005, was re-filed to include the section on Disclosure Procedures and Controls. On October 23, 2006, the Company re-filed Certificate 52-109F2 for the CEO and CFO for the interim periods ended Jan. 31, 2006 and April 30, 2006. The Company was required to re-file the Certificates in a format acceptable to the Ontario Securities Commission. Radiant has 60,985,217 common shares outstanding after the transaction. The InfraTek Radiant Deicing System, the only FAA- approved for use, non-glycol based alternative to the conventional pre-flight ground deicing process. InfraTek offers substantial savings to airports and airlines by reducing treatment costs and by significantly reducing the negative environmental impact of glycol. The InfraTek Radiant Energy Deicing System is in use at Newark International Airport, and Rhinelander-Oneida County Airport, Wisconsin, with facilities recently installed or about to open at JFK Airport, New York and Oslo, Norway. About Radiant Energy Based in Port Colborne, Ontario, Radiant Energy Corporation (TSX: RDT) -- http://www.radiantenergycorp.com/-- through its wholly owned subsidiary Radiant Aviation Services developed and sells the only infrared alternative to traditional glycol-based aircraft deicing. Its fully patented InfraTek(R) systems are approved for use by the FAA. Prior to the introduction of InfraTek, spraying with glycol was the only feasible method to satisfy FAA safety guidelines for ensuring that aircraft are properly deiced prior to take-off. At July 31, 2006, the Company's balance sheet showed a stockholders' deficit of $12,093,699, compared to a deficit of $11,269,492 at Oct. 31, 2005. RBS GLOBAL: Moody's Assigns Loss-Given-Default Rating ----------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the B2 Corporate Family Rating for RBS Global Inc., as well as the Caa1 rating on the company's $300 million 11.75% Senior Subordinate Notes due 2016 LGD6, 91%. Those debentures were assigned an LGD6 rating suggesting noteholders will experience a 91% loss in the event of default. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $150m Revolver due 2012 B1 Ba2 LGD2 20% $610m Term Loan Facility due 2013 B1 Ba2 LGD2 20% $485m 9.50% Sr. Notes due 2014 B3 B3 LGD4 66% 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 Milwaukee, Wisconsin, RBS Global Inc. is engaged in the manufacture of motion technology products that includes gears, couplings, industrial bearings, flattop chain and modular conveyor belts, special components, industrial chain and aerospace bearings and seals. RED HAT: Launches $325 Mil. Stock and Debenture Repurchase Program ------------------------------------------------------------------ Red Hat, Inc.'s Board of Directors has authorized a $325 million Stock and Debenture Repurchase Program. Under the program, the Company is authorized to repurchase in aggregate up to $250 million of the Company's common stock and in aggregate up to $75 million of the Company's 0.5% Convertible Senior Debentures due 2024. Repurchases of common stock and Convertible Debentures may be effected, from time to time, either on the open market or in privately negotiated transactions, as applicable. Headquartered in Raleigh, North Carolina Red Hat, Inc. -- http://www.redhat.com/-- is an open source and Linux provider. Red Hat provides operating system software along with middleware, applications and management solutions. Red Hat also offers support, training, and consulting services to its customers worldwide and through top-tier partnerships. RED HAT: S&P Affirms Corporate Credit Rating at B+ -------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Raleigh, North Carolina-based operating systems provider Red Hat Inc. to stable from positive, and affirmed its 'B+' corporate credit rating. The revision comes after Oracle Corp. (A-/Stable/A-1) announced plans to offer support services for Red Hat's Linux customers, at the enterprise level, at a steep discount to Red Hat's prices. While the near-term impact on Red Hat's profitability is likely to be limited, in the best case, upgrade prospects have been pushed out until the impact of Oracle's competitive move can be better assessed. "If the company is able to blunt Oracle's impact and realize increased profitability from current levels, as well as improve financial leverage, we could revise the outlook back to positive. However, if Oracle has a significant competitive impact and sales momentum stalls and pricing pressures mount, the outlook could be revised to negative," Standard & Poor's credit analyst Stephanie Crane said. REDDY ICE: Moody's Assigns Loss-Given-Default Rating ---------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the B1 Corporate Family Rating for Reddy Ice Holdings Inc., as well as revised the rating on the company's $151 million 10.5% Senior Disc. Notes due 2012. Those debentures were assigned an LGD5 rating suggesting noteholders will experience an 89% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on the loans and bond debt obligations of the company's subsidiary Reddy Ice Group Inc.: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $240 Mil. Senior Secured Term loan Due 2012 B1 Ba3 LGD3 34% $60 Mil. Senior Secured Revolver Due 2010 B1 Ba3 LGD3 34% 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, Reddy Ice Holdings Inc. manufacture and distributes packaged ice in the United States. RENT-A-CENTER: 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 Ba2 Corporate Family Rating for Rent-A- Center, 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 ---------- ------- ------- ------ ---------- $400MM Revolving Credit Facility Ba2 Ba1 LGD3 32% $200MM Gtd. Sr. Sec. Tranche A Term Loan Ba2 Ba1 LGD3 32% $125MM Gtd. Sr. Sec. Tranche B Term Loan Ba2 Ba1 LGD3 32% $300MM 7.5% Sr. Sub. Notes Ba3 Ba3 LGD5 83% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Rent-A-Center, Inc, with headquarters in Plano, Texas operates the largest chain of consumer rent-to-own stores in the U.S. with 2,749 company operated stores located in the U.S., Canada, and Puerto Rico. Rent-A-Center also franchises 295 rent-to-own stores that operate under the "ColorTyme" and "Rent-A-Center" banners. Revenue for the twelve months ending June 2006 was about $2.3 million. The company will add 784 stores and sales of more than $500 million with the pending Rent-Way acquisition. RESORTS INT'L: Prepayments Cue Moody's to Withdraw Junk Ratings --------------------------------------------------------------- Moody's Investors Service withdrew Resorts International Holdings, LLC's ratings following the cancellation of its $75 million first lien revolver and prepayment of its $625 million first lien term loan and $350 million second lien term loan. Ratings withdrawn: -- Corporate family rating, Caa1; -- PD rating, Caa1; -- LGD Assessment, 50%, LGD4; -- $75 million first lien revolver due 2010, B3, 33%, LGD3; -- $625 million first lien term loan B due 2012, B3, 33%, LGD3; -- $350 million second lien term loan due 2013, Caa3, 86%, LGD5; -- SGL-4 speculative grade liquidity rating. Outlook is negative. Resorts International Holdings, LLC owns and operates casinos in Atlantic City, New Jersey, the Chicagoland gaming market and Tunica, Mississippi. REVERE INDUSTRIES: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the B2 Corporate Family Rating for Revere Industries LLC, as well as the Caa1 rating on the company's $60 million Graduated Second Lien Term Loan. Those debentures were assigned an LGD5 rating suggesting noteholders will experience a 78% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $25m Gtd. First Lien Revolver Due 2010 B2 B1 LGD3 33% $107.5 Mil. Gtd. First Lien Term Loan B Due 2011 B2 B1 LGD3 33% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in New Orleans, Louisiana, Revere Industries LLC is a manufacturer of security, video and sound products. http://www.reverenet.com/ ROOMLINX INC: Posts $609,774 Net Loss in Qtr. Ended Sept. 30 ------------------------------------------------------------ RoomLinx, Inc., has filed its third quarter financial statements for the quarter ended Sept. 30, 2005 with the Securities and Exchange Commission and is making progress towards being fully SEC compliant by the end of the fourth quarter. The company reported a $609,774 net loss on $637,685 revenues for the quarter ended Sept. 30, 2005, compared to a $712,951 net loss on $624,186 revenues for the third quarter in 2004. As Sept. 30, 2006, the company's balance sheet showed $2,283,590 in total assets and $3,950,140 in total liabilities, resulting in a $1,666,550 total stockholders' deficit. The company's balance sheet also showed strained liquidity with $487,544 in total current assets available to pay $3,950,140 in total current liabilities. A full-text copy of the company's third quarter financial statements for the third quarter ended Sept. 30, 2005, are available for free at http://researcharchives.com/t/s?1424 Going Concern Doubt Eisner LLP expressed substantial doubt about the company's ability to continue as a going concern to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2004 and Dec. 31, 2003. The auditing firm pointed to the company's recurring net losses, working capital deficiency and sustained cash outflows from operating activities. During the quarter ended Sept. 30, 2005, however, the company increased cash by $106,561. About RoomLinX Headquartered in Bloomfield, Colorado, RoomLinX, Inc. (PINKSHEETS: RMLX) -- http://www.roomlinx.com/-- is a pioneer in Broadband High Speed Wireless Internet connectivity, specializing in providing the most advanced Wi-Fi Wireless and Wired networking solutions for High Speed Internet access to Hotel Guests, Convention Center Exhibitors, Corporate Apartments, and Special Event participants. Designing, deploying and servicing site- specific wireless networks for the hospitality industry is RoomLinX's core competency. SANTA FE: Wants Court to Approve Kean Miller as Special Counsel --------------------------------------------------------------- 15375 Memorial Corporation, sole shareholder of Santa Fe Minerals Inc., and its debtor-affiliates, asks the U.S. Bankrupt Court for the District of Delaware for permission to employ Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, LLP, as the Debtors' special counsel. Kean Miller will continue to represent the Debtors with: * the Tebow Lawsuit, litigation arising from the Santa Fe's dissolution; * the Adversary Proceeding commenced by Santa Fe against BEPCO, LP fka Bass Enterprises Production Company seeking preliminary and permanent declaratory and injunctive relief that the "alter-ego" and "single business enterprise" claims are property of Santa Fe's estate and that Bass has violated the automatic stay in its efforts to assert the claims and must be enjoined from taking any actions to assert the claims; * the continued investigation into and possible efforts to realize insurance assets covering claims against the Debtors; and * other litigation matters in the bankruptcy cases. Richard S. Pabst, Esq., a partner at Kean Miller, discloses that the firm will bill for services rendered at its regular hourly rates and will bill for expenses. Mr. Pabst assures the Court that 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 Santa Fe Minerals Headquartered in Houston, Texas, 15375 Memorial Corporation is the sole shareholder of Santa Fe Mineral, Inc. Santa Fe Minerals is a Wyoming based corporation dissolved in 2000. Under Wyoming law, creditors of a dissolved corporation can recover their debts from the dissolved corporation's shareholders, up to the value of the assets that each shareholder received at the dissolution. 15375 Memorial and Santa Fe Minerals filed for chapter 11 protection on Aug. 16, 2006 (Bankr. D. Del. Case No. 06-10859 & 06-10860). When the Debtors filed for protection from their creditors, they estimated their assets between $100,000 to $500,000 and liabilities of more than $100 million. SEA CONTAINERS: Can Assign Priority Status to Intercompany Claims ----------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware grants, on an interim basis, Sea Containers, Inc. and its debtor-affiliates' request to accord administrative priority expense status to all Intercompany Claims against a Debtor by another Debtor arising after the Petition Date as a result of an Intercompany Transaction, pursuant to Sections 503(b)(1) and 364(b) of the Bankruptcy Code. Judge Carey grants the Debtors' request for 30 days, to ensure that each individual Debtor will not fund, at the expense of its creditors, the operations of another entity. In the normal operations of their business, the Debtors engage in intercompany transactions involving intercompany trade and intercompany cash and capital needs. As a result, there are numerous intercompany claims that reflect intercompany receivables and payments made in the ordinary course of the Debtors' businesses. These Intercompany Transactions include, but are not limited to expense allocation and advances. At any given time, there may be Intercompany Claims owing among the Debtors. The Debtors maintain records of all Intercompany Transactions and can ascertain, trace and account for all Intercompany Transactions. If postpetition Intercompany Claims are accorded administrative priority expense status, each entity will continue to bear ultimate repayment responsibility for those ordinary course transactions, Robert D. MacKenzie, president and chief executive officer of Sea Containers, Ltd., and a director of Sea Containers Services, Ltd., says. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, 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. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. 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. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Can Continue Using Existing Business Forms ---------------------------------------------------------- Sea Containers, Inc. and its debtor-affiliates obtained authority from the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to continue to use all correspondence, business forms, and checks existing immediately before the Debtors' filing of the petition without reference to their status as a debtor-in-possession. Judge Carey grants the Debtors' request on an interim basis, for 30 days. Robert D. MacKenzie, president and chief executive officer of Sea Containers, Ltd., and a director of Sea Containers Services, Ltd., points out that parties doing business with the Debtors will undoubtedly be aware of the Debtors' status as a debtor-in- possession as a result of the size and publicity surrounding the cases, the press releases issued by the Debtors, and other press coverage. If the Debtors were required to change their correspondence, business forms, and checks, Mr. MacKenzie says, the Debtors would be forced to choose standard forms rather than current forms with which the Debtors' employees, customers and vendors are familiar. A change in operations would create a sense of disruption and potential confusion within the Debtors' organization and confusion for the Debtors' customers and vendors, Mr. MacKenzie asserts. The Debtors believe that it would be costly and disruptive to cease using all existing forms and to purchase and begin using new stationery, business forms, and checks. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, 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. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. 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. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEARS CANADA: 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. and Canadian retail sector, the rating agency confirmed its Ba1 Corporate Family Rating for Sears Canada, Inc. Additionally, Moody's revised or held its probability-of- default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 7.45% Canadian Bonds Ba1 Baa3 LGD3 36% 7.05% Canadian Medium Term Notes Ba1 Baa3 LGD3 36% CAD 200M Revolving Credit Facility Ba1 Baa3 LGD3 36% Delayed Draw Term Loan Facility Ba1 Baa3 LGD3 36% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Sears Canada -- http://www.sears.ca/-- is a multi-channel retailer with a network of 188 corporate stores, 182 dealer stores, 65 home improvement showrooms, over 1,900 catalogue merchandise pick-up locations, 107 Sears Travel offices and a nationwide home maintenance, repair, and installation network. SECURITIZED ASSET: Fitch Rates $10 Million of Certs at BB+ ---------------------------------------------------------- Fitch has rated the Securitized Asset Backed Receivables Trust mortgage pass-through certificates, series 2006-WM2, which closed on Oct. 26, 2006: -- $812.78 million privately offered class A-1 and public classes A-2A, A-2B, A-2C, A-2D 'AAA', -- $32.53 million class M-1 'AA+'; -- $30.10 million class M-2 'AA'; -- $18.52 million class M-3 'AA'; -- $32.03 million class M-4 'A+'; -- $15.01 million class M-5 'A'; -- $13.51 million class B-1 'BBB+'; -- $10.01 million class B-2 'BBB'; -- $7.01 million class B-3 'BBB-'; -- $10.01 million privately offered class B-4 'BB+' The 'AAA' rating on the senior certificates reflects the 18.80% total credit enhancement provided by the 3.25% class M-1, 3.00% class M-2, 1.85% class M-3, 3.20% class M-4, 1.50% class M-5, 1.35% class B-1, 1.00% class B-2, 0.70% class B-3, 1.00% privately offered class B-4 and 1.95% initial and target overcollateralization. All certificates have the benefit of monthly excess cash flow to absorb losses. In addition, the ratings reflect the quality of the loans, the soundness of the legal and financial structures, and the capabilities of HomEq Servicing Corporation as servicer (rated 'RPS1' by Fitch) and Wells Fargo Bank, National Association as Trustee. The certificates are supported by two collateral groups. Group I consists of mortgage loans with principal balances that conform to Fannie Mae and Freddie Mac guidelines. Group II consists of all other remaining mortgage loans. The group I mortgage pool consists of adjustable-rate and fixed-rate, first and second lien mortgage loans with a cut-off date pool balance of $220,770,640. Approximately 23.66% of the mortgage loans are fixed-rate mortgage loans, 76.34% are adjustable-rate mortgage loans and 9.90% are second lien mortgage loans. The weighted average loan rate is approximately 8.191%. The weighted average remaining term to maturity is 338 months. The average principal balance of the loans is approximately $143,172. The weighted average combined loan-to-value ratio is 81.68%. The properties are primarily located in California (21.79%), Florida (9.16%) and Illinois (8.41%). The group II mortgage pool consists of adjustable-rate and fixed- rate, first and second lien mortgage loans with a cut-off date pool balance of $780,185,416. Approximately 21.06% of the mortgage loans are fixed-rate mortgage loans, 78.94% are adjustable-rate mortgage loans and 11.90% are second lien mortgage loans. The weighted average loan rate is approximately 8.213%. The WAM is 335 months. The average principal balance of the loans is approximately $215,521. The weighted average CLTV is 82.56%. The properties are primarily located in California (48.81%), Florida (10.14%) and New York (7.01%). WMC is a mortgage banking company incorporated in the State of California. WMC was owned by a subsidiary of Weyerhaeuser Company until May 1997 when it was sold to WMC Finance Co., a company owned principally by affiliates of Apollo Management, L.P., a private investment firm. On June 14, 2004, GE Consumer Finance acquired WMC Finance Co. For federal income tax purposes, multiple real estate mortgage investment conduit elections will be made with respect to the trust estate. SENSATA TECHNOLOGIES: Moody's Assigns Loss-Given-Default Rating --------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the B2 Corporate Family Rating for Sensata Technologies B.V., as well as the Caa1 rating on the company's $301.6 million of Senior Subordinate Notes Due 2016. Those debentures were assigned an LGD6 rating suggesting noteholders will experience a 93% loss in the event of default. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $150 Mil. Multicurrency Revolver due 2012 B1 B1 LGD3 32% $950 Mil. TL B & 325m ($400m) TL B due 2013 B1 B1 LGD3 32% $450 Mil. 8% Sr. Notes Due 2014 B2 Caa1 LGD5 81% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Attleboro, Massachusetts, Sensata Technologies is a supplier of sensors and controls across a range of markets and applications. http://www.sensata.com/ SENSUS METERING: Moody's Assigns Loss-Given-Default Rating ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the B2 Corporate Family Rating for Sensus Metering Systems Inc., as well as revised the rating on the company's $275 Million 8.625% Senior Subordinate Notes due 2013 to B3 from Caa1. Those debentures were assigned an LGD5 rating suggesting noteholders will experience a 77% loss in the event of default. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $40 Mil. Sr. Sec U.S. Revolver due 2009 B2 Ba3 LGD2 23% $200 Mil. Sr. Sec U.S. term Loan Fac. due 2010 B2 Ba3 LGD2 23% $30 Mil. Sr. Sec. European TL Fac. due 2010 B2 Ba3 LGD2 23% $30 Mil. Sr. Sec. European Revolver Due 2009 B2 Ba3 LGD2 23% 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 Raleigh, North Carolina, Sensus Metering Systems Inc. is a provider of metering and Automatic Meter Reading (AMR) solutions for water, gas, electric, and heat utilities as well as sub-metering entities worldwide. http://www.sensus.com/ SKYEPHARMA PLC: Aviva Acquires 5.53% of Issued Share Capital ------------------------------------------------------------ SkyePharma PLC in a regulatory filing with the Securities and Exchange Commission on Oct. 25, 2006, disclosed that Aviva PLC and its subsidiaries had acquired a beneficial interest in 20,802,221 ordinary shares in which it had previously held a non-beneficial interest. Accordingly, Aviva now has a beneficial interest in a total of 41,713,719 ordinary shares, representing 5.53% of the issued share capital of the Company. Headquartered in London, SkyePharma PLC (Nasdaq: SKYE; LSE: SKP) -- http://www.skyepharma.com/-- develops pharmaceutical products benefiting from world-leading drug delivery technologies that provide easier-to-use and more effective drug formulations. There are now twelve approved products incorporating SkyePharma's technologies in the areas of oral, injectable, inhaled and topical delivery, supported by advanced solubilisation capabilities. Going Concern Doubt As reported in the Troubled Company Reporter on Aug. 1, 2006, PricewaterhouseCoopers LLP in London raised substantial doubt about Skyepharma PLC's ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the uncertainty as to when Skyepharma's certain strategic initiatives may be concluded and their effect on the company's working capital requirements. SOUTH COAST: Involuntary Chapter 11 Case Summary ------------------------------------------------ Alleged Debtor: South Coast Oil Corp. 1901 California Street Huntington Beach, CA 92648 Case Number: 06-11919 Involuntary Petition Date: October 26, 2006 Chapter: 11 Court: Central District Of California (Santa Ana) Judge: Theodor Albert Petitioners' Counsel: Richard A. Lapping, Esq. Thelen Reid & Priest LLC 101 Second Street, Suite 1800 San Francisco, CA 94105-3601 Tel: (415) 469-7311 Fax: (415) 369-8678 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ ThunderCreek Holding LLC Stock Rescission Not Less Than 15 Southwest Colorado 500,000 Shares $500,000 Suite 280 Bend, OR 97702 Jonathon C. Keith Stock Rescission Not Less Than Dita Keith 500,000 Shares $550,000 15 Southwest Colorado Suite 280 Bend, OR 97702 Advisory Services and Loan $126,000 Investment LLC Interest and 15 Southwest Colorado Stock Rescission Suite 280 Bend, OR 97702 SPX CORPORATION: Moody's Assigns Loss-Given-Default Rating ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the Ba1 Corporate Family Rating for SPX Corporation, as well as the Ba2 rating on the company's 7.50% Senior Notes due 2013. Those debentures were assigned an LGD6 rating suggesting noteholders will experience a 96% loss in the event of default. Additionally, Moody's held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $350 Mil. Sr. Revolver due 2010 Ba1 Ba1 LGD4 53% $100 Mil. Global Revolver due 2010 Ba1 Ba1 LGD4 53% $750 Mil. Sr. TL due 2010 Ba1 Ba1 LGD4 53% $425 Mil. Foreign Trade Facility Due 2010 Ba1 Ba1 LGD4 53% 6.25% Sr. Notes Due 2011 Ba2 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 Charlotte, North Carolina, SPX Corporation manufactures pumps, valves, metering and mixing solutions, air filtration and dehydration products, special service tools, diagnostic systems and testing equipment, cooling towers, air- cooled condensers, boilers and residential heating products, TV and radio broadcast antennas, power transformers, high-tech die- castings and products for loading docks. http://www.spx.com/ STARTECH ENVIRONMENTAL: Earns $337,902 in Quarter Ended July 31 --------------------------------------------------------------- Startech Environmental Corp. has filed its financial statements for the third quarter ended July 31, 2006 with the Securities and Exchange Commission. After posting losses in the first two quarters, Startech Environmental reversed the trend and reported a $337,902 net income on $286,131 revenues for the three month period ended July 31, 2006, compared to a $845,014 net loss on $96,064 revenues for the third quarter in 2005. The company's accumulated deficit at July 31, 2006 stood at $28,964,606. The company's balance sheet at July 31, 2006 showed $5,654,104 in total assets, $3,191,048 total liabilities and $2,463,056 in total stockholders' equity. A full-text copy of the company's third quarter report is available for free at http://researcharchives.com/t/s?1407 Going Concern Doubt As reported in the Troubled Company Reporter on Mar. 31, 2006, Marcum & Kliegman LLP expressed substantial doubt about the company's ability to continue as a going concern after auditing the company's financial statements for the year ended Oct. 31, 2005. The auditing firm pointed to the Company' recurring losses since its inception. About Startech Environmental Headquartered in Wilton, Connecticut, StarTech Environmental Corporation is an environmental technology company commercializing its proprietary plasma processing technology known as the Plasma Converter(TM) that achieves closed-loop elemental recycling which irreversibly destroys hazardous and non-hazardous waste and industrial by-products while converting them into useful commercial products. These products include a rich synthesis gas called PCG (Plasma Converted Gas)(TM) surplus energy for power, hydrogen, metals and silicates for use and for sale. SUN MICROSYSTEMS: Posts $56 Million Net Loss in Fiscal 1st Quarter ------------------------------------------------------------------ Sun Microsystems, Inc., incurred a $56 million net loss for its fiscal first quarter ended Oct. 1, 2006, compared with a net loss of $123 million for the first quarter of fiscal 2006. Net loss for the first quarter of fiscal 2007 included: $21 million of restructuring and related impairment of asset charges and a $7 million benefit for related tax effects, $58 million of stock-based compensation charges and $79 million of intangible asset amortization relating to recent acquisitions. Revenues for the first quarter of fiscal 2007 were $3.189 billion, an increase of 17% as compared with $2.726 billion for the first quarter of fiscal 2006. Year over year revenue increase resulted from both acquisitions and increasing acceptance of the Solaris 10 Operating System, as well as growth in the services business. Computer Systems Products revenues increased 15% year over year, the third consecutive quarter of year over year revenue increase. Cash generated from operations for the first quarter was $157 million, and cash and marketable debt securities balance at the end of the quarter was $4.671 billion. "It's great to grow faster than the competition, maintain strong gross margins and see continued adoption of Solaris on HP, Dell and IBM computers," said Jonathan Schwartz, CEO of Sun Microsystems. "Customers across the world are turning to Sun as the safe choice for open source innovation, for industry leading identity and security management platforms and for the most eco- responsible infrastructure to power the network." Headquartered in Santa Clara, California, Sun Microsystems, Inc. (Nasdaq: SUNW) -- http://www.sun.com/-- provides products and services for network computing. It provides network computing infrastructure solutions that consist of computer systems, network storage systems, support services, and professional and knowledge services. * * * Sun Microsystems, Inc.'s 7-1/2% Senior Notes due Aug. 15, 2006, and 7.65% Senior Notes due Aug. 15, 2009, carry Moody's Investors Service's Ba1 rating and Standard & Poor's BB+ rating. SUPERIOR ESSEX: Moody's Assigns Loss-Given-Default Rating --------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the B2 Corporate Family Rating for Superior Essex Communications LLC, as well as the B3 rating on the company's $257.1 Million 9.% Senior Unsecured Notes due 2012. Those debentures were assigned an LGD5 rating suggesting noteholders will experience a 76% 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 Atlanta, Georgia, Superior Essex Communications LLC -- http://www.superioressex.com/-- is a manufacturer of data communications, cables magnet wire, winding wire and electrical insulations. SURETY CAPITAL: Posts $167,000 Net Loss in 2nd Quarter ------------------------------------------------------ Surety Capital Corp. filed its financial statements for the second quarter ended June 30, 2006 with the Securities and Exchange Commission on Sept. 25, 2006. The company reported a $167,000 net loss on $604,000 total interest income for the second quarter ended June 30, 2006, compared to a $480,000 net loss on $927,000 total interest income for the second quarter in 2005. The company's balance sheet at June 30, 2006 showed $32,252,000 in total assets, $30,586,000 in total liabilities and $1,666,000 of total stockholders' equity. A full-text copy of the Company's Annual Report is available for free at http://researcharchives.com/t/s?13fc Going Concern Doubt Payne Falkner Smith & Jones, P.C., expressed substantial doubt about Surety Capital Corporation's ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Dec 31, 2005. The auditing firm pointed to the Company's recurring losses. The Company is operating under a written agreement with the Federal Reserve Bank, and the Company's subsidiary is operating under a determination letter with the Texas Department of Banking. About Surety Capital Surety Capital Corporation is the holding company of its wholly owned subsidiary, Surety Bank. The Bank has full service offices in Converse, Fort Worth, New Braunfels, San Antonio, Schertz, Universal City, and Whitesboro, Texas. TECHNICAL OLYMPIC: Amends Terms of Existing $800MM Debt Facility ---------------------------------------------------------------- Technical Olympic USA, Inc. amended its revolving credit facility and also provided additional details regarding the Company's 2006 third quarter results. Credit Facility Amendment The Company has reached an agreement with its lenders replacing TOUSA's existing $800 million unsecured revolving credit facility with an amended $800 million secured revolving credit facility that increases the Company's current borrowing capacity and provides additional liquidity on a pro-forma basis. There are no changes to the existing terms or pricing. The amendment process was initiated as a result of a material adverse change in one of TOUSA's guarantor subsidiaries, which holds the Company's investment in the Transeastern joint venture. Third Quarter Results TOUSA also reported consolidated net sales orders of 1,470 for the quarter ended Sept. 30, 2006, a 19% decrease from the 1,821 consolidated net sales orders reported in the quarter ended Sept. 30, 2005. Joint venture net sales orders for the third quarter of 2006 were 125, an 86% decrease from the 871 net sales orders reported in the third quarter of 2005. TOUSA's consolidated cancellation rate was 33% for the third quarter of 2006 compared to 20% for the third quarter of 2005. TOUSA's combined cancellation rate for the third quarter of 2006 was 44% compared to 18% for the third quarter of 2005. The Company expects a pre-tax charge in the range of $35 million to $48 million for the third quarter of 2006 related to land deposit write-offs and asset impairment charges, excluding the impact of the Transeastern joint venture, based on reviews currently in process and not yet completed. TOUSA is currently assessing impairment charges related to the Transeastern joint venture and expects to announce these charges in its third quarter earnings announcement. As stated on Sept. 29, 2006, a pre-tax charge of $141 million could be required should TOUSA determine that its investment and receivables are impaired. Headquartered in Hollywood, Florida, Technical Olympic USA, Inc. (NYSE:TOA) -- http://www.tousa.com/-- is a homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid- Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first- time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title, Inc. * * * As reported in the Troubled Company Reporter on Oct. 26, 2006, Moody's Investors Service lowered the rating on the senior unsecured notes of Technical Olympic USA, Inc. to Ba3 from Ba2 and the LGD assessment and rate to LGD4, 53% from LGD3, 35% due to changes in the priority of claim in the company's capital structure. TOA changed its $800 million revolving credit facility to secured from unsecured. TECHNICAL OLYMPIC: Fitch Cuts Sr. Subor. Debt Rating to CCC+ ------------------------------------------------------------ Fitch Ratings has revised the ratings of Technical Olympic USA, Inc.'s revolving credit facility, senior unsecured notes and senior subordinated notes to reflect the changes in priority of debt repayments following TOA's $800 million revolving credit facility being changed from an unsecured facility to a secured facility. The company's Issuer Default Rating remains at 'B+' and TOA's ratings remain on Rating Watch Negative. These ratings are revised by Fitch: -- Secured revolving credit facility to 'BB' from 'BB-'; -- Senior unsecured notes to 'B' from 'BB-'; -- Senior subordinated debt to 'CCC+' from 'B-'. Fitch assigned a Recovery Rating of 'RR1' to TOA's amended secured revolving credit facility, indicating outstanding (90%-100%) recovery prospects for holders of this debt issue. Although an 'RR1' would typically warrant a 3-notch upgrade (from the 'B+' IDR) to 'BB+', Fitch is assigning a 'BB' rating to the secured revolving credit facility, reflecting potential uncertainties pertaining to the restructuring of TOA's Transeastern joint venture and the current, quite weak housing environment in most of TOA's key markets. Fitch assigned an 'RR5' to TOA's senior unsecured notes, indicating below average (10%-30%) recovery for unsecured bond holders in a default scenario. Fitch also assigned an 'RR6' to TOA's senior subordinated debt, representing poor (0%- 10%) recovery prospects. Fitch applied a liquidation value analysis for these recovery ratings, which was roughly comparable to the enterprise value using the going concern method. On Oct. 23, 2006, the company replaced its existing $800 million unsecured revolving credit facility with an amended $800 million secured revolving credit facility. The amendment process was initiated as a result of a material adverse change in one of TOA's guarantor subsidiaries which solely holds the company's investment in the Transeastern joint venture. In addition to granting security to the revolving credit facility lenders, the amendment to the credit agreement included a change in the definition of material adverse change, changes to the borrowing base, and restrictions on TOA's ability to make additional investments in the Transeastern joint venture without consent of the required lenders. On Sept. 28, 2006, Fitch placed TOA's ratings on Rating Watch Negative due to the severe slowdown in Technical Olympic's major markets and financial difficulties being experienced by the company's large Transeastern joint venture. Fitch continues to monitor pending asset impairment charges relating to TOA's investment in the Transeastern JV and potential peripheral legal action that may arise from the restructuring of the Transeastern JV. The company is currently assessing impairment charges related to the Transeastern JV. As previously announced, a pre-tax charge of $141 million could be required ($89 million after tax) should TOA determine that its investment and receivables are impaired. The Rating Watch will in part be resolved by the ability of the Transeastern joint venture to execute a successful refinancing and/or restructuring without further meaningful support from Technical Olympic. In this currently challenging environment, management of the balance sheet and cash flow generation will also be taken into account as to the Watch status. Fitch anticipates that Technical Olympic will take a more cautious stance on land purchases during the balance of the year (and in 2007) and that inventories, which have been growing into mid-2006, will decline by fiscal year-end 2006. Fitch anticipates that liquidity will improve as cash flow comparisons in the second half of 2006 should be much stronger that in the first half of the year. Fitch will also continue to closely monitor the trends of the broad housing market in its assessment of the appropriate credit ratings for all homebuilders. THERMADYNE HOLDINGS: Moody's Assigns Loss-Given-Default Rating -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the Caa1 Corporate Family Rating for Thermadyne Holdings Corporation, as well as the Caa2 rating on the company's $175 Million 9.25% Senior Subordinate Notes due Feb. 1, 2014. Those debentures were assigned an LGD5 rating suggesting noteholders will experience a 73% 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 St. Louis Missouri, Thermadyne Holdings Corporation -- http://www.thermadyne.com/-- is a multi-national manufacturer of welding and cutting products. TIMKEN CO: Earns $46 Million in the Third Quarter of 2006 --------------------------------------------------------- The Timken Company reported sales of $1.27 billion in the third quarter of 2006, up slightly from $1.25 billion for the same period in 2005. Strong sales in industrial markets were largely offset by significant declines in automotive markets. The company achieved third-quarter net income of $46 million, up from $39 million, in last year's third quarter. Special items in the third quarter of 2006 included manufacturing restructuring and rationalization charges that totaled $7.1 million of pretax expense, compared to $28.3 million in the same period a year ago. "Our industrial and steel businesses performed well in the third quarter with industrial markets continuing to drive strong demand for our products," James W. Griffith, president and chief executive officer, said. "Dramatic volume reductions are posing significant challenges across the North American automotive market. We are taking actions to adapt to the decline in demand and will continue to pursue structural changes to bring our Automotive business to profitability." For the first nine months of 2006, sales were $4 billion, an increase of 3% from $3.8 billion for the same period in the prior year. Net income for the first nine months of 2006 was $187 million, versus $165 million for the comparable nine-month period in 2005. Special items in the first nine months of 2006 totaled $32.9 million of pretax expense, compared to $33.1 million in the same period a year ago, and included manufacturing, restructuring and rationalization charges and the impact of asset dispositions. Total debt was $752.8 million as of Sept. 30, 2006, or 30.7% of capital. Net debt at Sept. 30, 2006, was $698.7 million, or 29.2% of capital, compared to $655.6 million, or 30.5% of capital, as of Dec. 31, 2005. The Industrial Group had third-quarter sales of $501.8 million, up 7% from $468.2 million for the same period last year. The company continued to benefit from strong demand across its broad industrial segments, led by increases in the aerospace, industrial distribution and heavy industry segments. The Company continues to make investments in Asia and key global industrial markets, including construction of the company's fifth manufacturing facility in China, opening of a global aerospace facility in Arizona and introduction of a new line of large-bore seals. For the first nine months of 2006, Industrial Group sales were $1.5 billion, up 7 percent over the same period a year ago. EBIT for the first nine months of 2006 was $157.6 million, compared to EBIT of $158.1 million over the prior-year period. Automotive Group Results The Automotive Group's third-quarter sales of $363.6 million were 11% below the same period a year ago. The decline in sales was the result of significant reductions in vehicle production by automakers headquartered in North America. The Automotive Group recorded a third-quarter loss of $26.3 million, compared to a loss of $6 million for the same period a year ago. In response to the recent drop in demand, the Company announced in September 2006 the reduction of 700 positions from its Automotive Group, which is expected to result in savings of approximately $35 million, to be fully realized by the middle of 2007, at a cost of approximately $25 million. The program is in addition to the automotive restructuring plan disclosed in July 2005, which has targeted savings of approximately $40 million by the end of 2007. The company anticipates taking additional actions to structurally improve the performance of the business. For the first nine months of 2006, Automotive Group sales of $1.2 billion were 3% below the same period last year. The group recorded a loss of $31.4 million for the first nine months of 2006, compared to a loss of $12.4 million in the first nine months of 2005. Steel Group third-quarter sales were $442.6 million, a 3% increase from $427.9 million in the same period a year ago. During the quarter, the Steel Group disclosed an investment in a new induction heat-treat line that will increase the Company's capacity and ability to provide differentiated products to more customers in important global energy markets. In addition, the group recently disclosed its intention to exit its European seamless steel tube manufacturing operation as part of its strategy to strengthen its business portfolio. For the first nine months of 2006, Steel Group sales were $1.4 billion, a 3% increase over the first nine months of last year. 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. TIMKEN CO: Moody's Assigns Loss-Given-Default Rating ---------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the Ba1 Corporate Family Rating for The Timken Company, as well as the Ba1 rating on the company's $300 Million Unsecured Medium Term Notes Series A due 2028. Those debentures were assigned an LGD3 rating suggesting noteholders will experience a 46% 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 Canton, Ohio, The Timken Company is engaged in the manufacture of tapered roller bearings, alloy steels and related products. http://www.timken.com/ TJT PROPERTIES: Case Summary & Four Largest Unsecured Creditors --------------------------------------------------------------- Debtor: TJT Properties, LLC 4541 Thyme Court Northwest Acworth, GA 30102-8153 Bankruptcy Case No.: 06-73248 Debtor-affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- LTT1 Services, LLC 06-73247 Type of Business: TJT Properties, LLC owns two commercial properties in Kennesaw and Acworth, Georgia. The properties are leased to LTT1 Services, LLC, which operates two automobile repair facilities under the name Meineke Car Care Center. LTT1 Services recently defaulted on one month's rent which has caused financial hardship for TJT Properties. Chapter 11 Petition Date: October 20, 2006 Court: Northern District of Georgia (Atlanta) Judge: C. Ray Mullins Debtors; Counsel: Rodney L. Eason, Esq. The Eason Law Firm Suite 200 6150 Old National Highway College Park, GA 30349-4367 Tel: (770) 909-7200 Estimated Assets Estimated Debts ---------------- --------------- TJT Properties, LLC $1 Million to $1 Million to $10 Million $10 Million LTT1 Services, LLC Less than $50,000 $50,000 to $100,000 A. TJT Properties, LLC's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cobb County Tax Comm. 2006 Property $9,914 P.O. Box 649 Taxes for Marietta, GA 30061-0649 Kennesaw 2006 Property $7,092 Taxes for Acworth B. LTT1 Services, LLC's Three Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Capital One $17,443 P.O. Box 70885 Charlotte, NC 28272-0885 Advanta Master Card $17,422 P.O. Box 8088 Philadelphia, PA 19101-8088 Meineke Car Care Center, Inc. $2,848 128 South Tryon Street Charlotte, NC 28202 TRIMAS CORP: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the B2 Corporate Family Rating for Trimas Corporation, as well as revised the rating on the company's $438 Million 9.875% Subordinated Notes to B3 from Caa1. Those debentures were assigned an LGD5 rating suggesting noteholders will experience a 75% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $90 Mil. Sr. Sec Revolving Credit Facility B1 Ba2 LGD2 20% $60 Mil. Sr. Sec. Synthetic L/C Credit Facility B1 Ba2 LGD2 20% $260 Mil. Sr. Sec. Term Loan B B1 Ba2 LGD2 20% 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 Bloomfield Hills, Michigan, Trimas Corporation is a manufacturer of trailer products, recreational accessories, packaging systems, energy products and industrial specialty products for the commercial, manufacturing, and consumer markets. http://www.trimascorp.com/ TURBO POWER: Raises GBP6 Million in Common Share Placement ---------------------------------------------------------- Turbo Power Systems Inc. has conditionally raised GBP6 million by placing a combination of common shares of no par value in its capital, and of A-Shares of 8 pence each in the capital of its subsidiary, Turbo Power Systems Ltd. In addition, the company has received conditional commitments from, and undertakings in respect of holders of up to GBP8.8 million of loan notes to accept either Common Shares or A-Shares upon a redemption of those Loan Notes by TPSL. The company will also issue 3,500,000 warrants over A-Shares to holders of certain loan notes. The company is posting a circular to its shareholders convening a special meeting of shareholders to approve the cancellation of its listing on the Official List of the UK Listing Authority and transferring the company's quotation to AIM. As required by the Listing Rules, a resolution will be proposed at the Special Meeting being convened for Nov. 27, 2006 to cancel the company's listing on the Official List. Application will be made for the company's shares to be admitted to trading on AIM and it is expected that the last date of dealings in the company's shares on the Official List will be Dec. 27, 2006 and admission to AIM is expected to occur at 8:00 a.m on the following day. The Toronto Stock Exchange has conditionally approved the listing of these securities. Listing is subject to the company fulfilling all of the requirements of the exchange on or before Jan. 11, 2007. Colin Besant, the company's Chairman, commented: "The last 18 months have seen TPS make considerable commercial progress and we are now involved in a number of high profile programs with blue chip customers. The funds from the placing announced today will ensure that we have the infrastructure to service these programs and can invest in sales and marketing to underpin our continued growth. I am delighted that a significant number of our loan note holders have chosen to exchange their holdings for common stock and our balance sheet is substantially strengthened as a result. The proposed transfer to AIM will provide us with a regulatory framework more appropriate to a company of our size and should provide the potential to generate cost savings." TSX Listing Unaffected Under the Placing, the company has conditionally placed with institutions and other investors, in aggregate 50,000,000 new Common Shares and 25,000,000 new A-Shares at a price of 8 pence per share. Once completed, the Placing will raise approximately GBP5.5 million. The total net proceeds of the Placing received will be used over time. Approximately GBP5 million will be used to fund working capital and GBP0.5 million for premises relocation. As part of the Placing, the directors of the company will in aggregate be subscribing for 612,500 Placing Shares under the terms of the Placing. KBC Peel Hunt has agreed to subscribe or procure subscribers for 50,000,000 Placing Shares which are not taken up by placees under the Placing. On Admission KBC Peel Hunt, the company's financial adviser and broker, has agreed to act as the company's nominated adviser and broker. The Placing and the Loan Note Redemption are conditional, inter alia, on the passing of the Special Resolution and Admission. Reasons for Placing The company has made significant sales progress in 2005 and 2006 and has seen continued order book growth, winning a number of new contracts with major industrial customers. Most of these contracts have design, prototype development and field-testing phases, which need to be completed before production revenue is available. Once into the production phase significant expenditure is made on stock and work in progress ahead of receiving payment for shipped production units, creating a requirement for additional working capital. Having experienced strong growth in its order book, the power electronics division of the company will require larger premises in the northeast of England. The company has today announced that a suitable site has been selected and the relocation is expected to take place in early 2007. Conditional grant funding of GBP550,000 has been confirmed by One North East, a regional grant development agency covering the northeast of England, but some additional funds are required to complete the factory fit out. Although the majority of the company's product development expenditure is covered by customer funding in the pre-production phase of contracts, the company is continuing to develop its product portfolio, particularly in its larger size motors and generators where the Directors see considerable market potential. Over the next six to nine months the company has to raise additional cash to continue operations. The company has identified a number of different methods of raising the funds that it will require. However, the Directors believe that the Placing is the most appropriate way to secure the company's long-term future. If Shareholders do not vote in favor of the Transfer to AIM, there will be uncertainty relating to the company's ability to continue as a going concern. If the Special Resolution is not passed, the Directors will immediately start exploring alternative sources of funding. Based on current expectations the Company will have to complete any fundraising by the end of June 2007, at the latest, in order to continue its operations. The total net proceeds of the Placing received by the company will be used over time as follows: approximately GBP5.0 million to fund working capital and GBP0.5 million for premises relocation. Reasons for the Loan Note Redemption The Directors believe that a Loan Note Redemption would be beneficial to the Group, as it would result in a reduction in long-term debt and an associated reduction in the Group's gearing which would help to strengthen the Group's balance sheet. The Directors believe that this would enhance the Group's financial credibility with potential customers and partners. In addition, a Loan Note Redemption would result in a reduction in annual interest payments and so be beneficial to the Group's cash flows. Background and Reasons for Transfer to AIM The Directors believe that AIM is a more appropriate market for the company and should lead to a simplification of administration requirements and lower ongoing costs associated with being a public company. The Directors also believe that the intended admission to AIM will enable the company to agree and execute transactions more quickly should any acquisition or other development opportunities arise in the future. The Directors, however, expect no alteration in the standards of reporting and governance which the Group currently achieves. The Directors therefore see the company as continuing to be attractive to specialist institutional investors as well as to the retail investor. Current Trading and Prospects During 2005 and 2006 the company has made significant progress both in building its order book and reducing its cash burn. Revenues have grown significantly and substantial strides have been made in focusing resources on commercial programs. First half results for 2006 show revenue and development income of GBP2.5 million and operating cash outflow of GBP2.2 million. Since August 2005 the company has announced a number of significant contract wins. These contracts cover different production periods, with the longest being the Hamilton Sundstand contract which extends to 2021. As a result of these contract wins the company's order book has grown substantially and the company now has long term trading relationships with a number of blue chip customers. Most of the new contracts are characterized by an up front design, prototype and testing phase before moving into a production phase. Whilst the majority of the contracts receive customer funding in the initial phases it is in the production phase that the most significant revenues and cash margins are expected to be achieved. Most contracts entered into by the company have a preproduction phase of 12 to 18 months. As a consequence of this order book profile the company expects to continue to make losses, and thus have a working capital requirement, until a number of these contracts have moved into the production phase. The company has noted a growing customer interest in its technology and has increased its investment in sales and marketing resources in 2006. In addition the company expects to expand its potential sales pipeline in the near term and is encouraged that opportunities, such as the recently announced Hamilton Sundstrand contract, have arisen with the help of end customer referrals. Special Meeting A Special Meeting has been convened for holders of Common Shares at 9.00 a.m. on Nov. 27, 2006 at the offices of KBC Peel Hunt, 111 Old Broad Street, London, EC2N 1PH to approve the Special Resolution and the Ordinary Resolution. At the Special Meeting the Special Resolution will be proposed to approve the cancellation of the listing of the Common Shares on the Official List and the admission of the Enlarged Share Capital to trading on AIM. At the meeting the Ordinary Resolution to approve the Amended Stock Option Plan will also be proposed. A circular incorporating the notice convening the Special Meeting is being posted to holders of Common Shares and will also be available for collection from the offices of KBC Peel Hunt Ltd, 111 Old Broad Street, London EC2N 1PH for a period of one month from the date of this announcement. The Directors of the company believe that the Placing is the most appropriate way to secure the long-term future of the Company. About Turbo Power Turbo Power Systems Inc. (TSX:TPS) (LSE:TPS) develops innovative products for power generation and power conditioning. The group was established as a spin-off from Imperial College, London, was floated on the London stock exchange in July 2000 and soon after obtained a secondary listing in Toronto. In July 2001, the Group acquired Intelligent Power Systems Limited, a company specialising in power electronics. * * * In its unaudited, consolidated financial statements for the six months ended June 30, 2006, Turbo Power Systems reported GBP11,899,000 in total assets and GBP13,008,000 in total liabilities, resulting in a GBP1,109,000 stockholders' deficit. UNITY VIRGINIA: Court Converts Ch. 11 Cases to Ch. 7 Proceedings ---------------------------------------------------------------- The Honorable Harlin DeWayne Hale of the U.S. Bankruptcy Court for the Northern District of Texas in Dallas converted the chapter 11 cases of Unity Virginia Holdings LLC and its debtor-affiliates to chapter 7 liquidation proceedings. According to the Debtors, they have been unable to consummate a sale of their assets, despite their attempt to do so. The Debtors said that they have no remaining unencumbered cash reserves to fund the processing, filing, and confirmation of even one joint plan of reorganization and disclosure statement, or to continue operations and efforts to market their assets. Headquartered in Dallas, Texas, Unity Virginia Holdings LLC operates a coal mining and processing company. The company filed for chapter 11 protection on May 10, 2006 (Bankr. N.D. Tex. Case No. 06-31937). James C. Jarret, Esq., and Arnaldo N. Cavazos, Jr., Esq., at Cavazos, Hendricks & Poirot, P.C., represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. Four of the Debtor's affiliates, Glamorgan Coal Resources LLC, Glamorgan Processing LLC, Glamorgan Properties LLC, and Glamorgan Refuse LLC, filed for chapter 11 protection on May 12, 2006 (Bankr. N.D. Tex. Case Nos. 06-31953 through 06-31956). Another affiliate, Glamorgan Operations, LLC, filed for chapter 11 protection on May 17, 2006 (Bankr. N.D. Tex. Case No. 06-31995). Judge Harlin DeWayne Hale converted the Debtors' chapter 11 cases to chapter 7 proceedings on Oct. 3, 2006. UNITY VIRGINIA: Meeting of Creditors Scheduled Tomorrow ------------------------------------------------------- William T. Neary, the U.S. Trustee for Region 6, will convene a meeting of Unity Virginia Holdings LLC and its debtor-affiliates' creditors tomorrow, Oct. 31, 2006, 1:00 p.m., at Room 524 in the Office of the U.S. Trustee, 1100 Commerce Street located in Dallas, Texas. This is the first meeting of creditors after conversion of the jointly administered chapter 11 cases to chapter 7 liquidation proceedings. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the companies' financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Dallas, Texas, Unity Virginia Holdings LLC operates a coal mining and processing company. The company filed for chapter 11 protection on May 10, 2006 (Bankr. N.D. Tex. Case No. 06-31937). James C. Jarret, Esq., and Arnaldo N. Cavazos, Jr., Esq., at Cavazos, Hendricks & Poirot, P.C., represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. Four of the Debtor's affiliates, Glamorgan Coal Resources LLC, Glamorgan Processing LLC, Glamorgan Properties LLC, and Glamorgan Refuse LLC, filed for chapter 11 protection on May 12, 2006 (Bankr. N.D. Tex. Case Nos. 06-31953 through 06-31956). Another affiliate, Glamorgan Operations, LLC, filed for chapter 11 protection on May 17, 2006 (Bankr. N.D. Tex. Case No. 06-31995). Judge Harlin DeWayne Hale converted the Debtors' chapter 11 cases to chapter 7 proceedings on Oct. 3, 2006. URANERZ ENERGY: Continues Hydrologic Testing At 2 Uranium Sites --------------------------------------------------------------- Uranerz Energy Corporation has decided to continue development on both the Hank and Nichols Ranch projects in Wyoming. Uranerz Energy has completed installing hydrologic test wells at these two uranium properties in the Powder River Basin. These test wells were installed for upcoming pumping tests and core samples of the deposit were taken for the radiation environmental data requirements. The pump tests are used to demonstrate that the aquifers are confined, and to test the permeability of the mineralized sandstone unit for both feasibility and permitting purposes. The Wyoming Department of Environmental Quality has approved the company's plans for the hydrologic testing of the uranium- mineralized confined aquifers. The hydrologic test wells were installed in accordance with the plan. The company will also be collecting ground water samples in the near term at water wells in the region, and has reached an agreement with Cameco Corp.'s wholly owned US subsidiary, Power Resources Inc., to sample some of their monitor wells located on adjacent uranium properties. At both the Hank and Nichols Ranch projects, the vegetation and wildlife surveys have been completed and the data are being incorporated into the mine permit application as appendices, as required by the Wyoming Department of Environmental Quality. Soil surveys are currently ongoing. The mine plan chapter of the application is scheduled for management review and incorporation into this application. At this time, the submittal of the application covering both projects is still on schedule for the second half of 2007. Corporate Update As of the close of business on Oct. 17, 2006, Uranerz Energy had received notice for the exercise of a total of 2,490,000 warrants to purchase shares of the company. Upon the completion of the exercise of these warrants there will be 34,293,498 shares of common stock issued and outstanding. These "warrant shares" are "restricted securities" as defined in Rule 144 of the Securities Act of 1933, as amended. The company now has approximately $12.5 million in treasury, and no debt. On Oct. 17, 2006, 5,245,000 shares of common stock became eligible to be resold pursuant to Rule 144 of the Securities Act. About Uranerz Energy Based in Vancouver, British Columbia, Uranerz Energy Corporation (AMEX:URZ)(FWB:U9E)-- http://www.uranerz.com/-- is engaged in the acquisition, exploration and development of properties in the uranium sector. The company's goal is to become a primary producer of uranium which will be utilized as fuel in the western world's nuclear electrical generating facilities. Uranerz Energy is the only pure uranium company listed on the American Stock Exchange. The company is composed of an experienced team of mining personnel, many of whom are former officers, senior management and employees of the original Uranerz Exploration and Mining Limited and related companies. The Uranerz Group was acquired in 1998 by Cameco, the world's largest primary uranium producer. Going Concern Doubt Manning Elliott LLP, in Vancouver, Canada, raised substantial doubt about Uranerz Energy's ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's significant operating losses and need to generate any revenue. US MAIL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: US Mail Consolidation, Inc. dba MailCon 4 Aurora Drive, Suite 403 Building #4 Cranbury, NJ 08512 Bankruptcy Case No.: 06-20521 Type of Business: The Debtor provides mailing services. Chapter 11 Petition Date: October 27, 2006 Court: District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtor's Counsel: Christine M. Gravelle, Esq. Markowitz, Gravelle & Schwimmer 3131 Princeton Pike Lawrenceville, NJ 08648 Tel: (609) 896-2660 Estimated Assets: $0 to $10,000 Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Poland Spring Bottling $880,542 109 Poland Spring Drive Poland, ME 04274 Prologis $500,000 1 Capital Drive, Suite 103 Cranbury, NJ 08512 Graybar Electric Co., Inc. $240,000 34 North Meramec Ave Clayton, MO 63105 Bunzl $230,000 P.O. Box 27 Distribution Way South Brunswick, NJ Waterford Wedgewood $85,000 1330 Campus Parkway Wall, NJ 07719 Leroy Holding Co., Inc. $76,109 20 North Street Albany, NY 12204 Crown Credit Company $65,079 P.O. Box 640352 Cincinnati, OH 45264 Edison Fuel Stop $54,974 690 US Route 1 North Edison, NJ 08817 Lease Line, Inc. $48,787 Route 130 P.O. Box 6014 Noth Brunswick, NJ 08902 American Truck & Trailer $28,355 700 Jernee Mill Road Sayerville, NJ 08872 Valley Fertilizer & Chemical $28,000 Co., Inc. P.O. Box 816 Mt. Jackson, VA 22842 Holtzman Corp. $23,633 P.O. Box 7 Mt. Jackson, VA 22842 Mecca Trucking $20,780 P.O. Box 475 Jersey City, NJ 07303 Jersey Central Power & Light $18,315 P.O. Box 3687 Akron, OH 44309 Jans Trans, LLC $14,485 158 D Pelham Lane Monroe, NJ 08831 Ashland Inc. $12,000 P.O. Box 371002 Pittsburgh, PA 15250 Bost Logistics, Inc. $11,575 680 Stoner Morgan Road Salisbury, NC 28146 Ferrellgas $11,379 P.O. Box 517 Liberty, MO 64069 S&M Transport $14,400 P.O. Box 1766 Rahway, NJ 07065 Staffing Visions of New $9,852 Jersey, Inc. 800 S. Broad Street Trenton, NJ 08611 VALMONT INDUSTRIES: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the Ba2 Corporate Family Rating for Valmont Industries Inc., as well as the rating on the company's $150 Million Senior Subordinated 6.875% Notes due 2014. Those debentures were assigned an LGD5 rating suggesting noteholders will experience an 82% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $150 Mil. Sr. Unsec. Bank Facility Due 2009 (Rev.) Ba2 Ba1 LGD3 34% $75 Mil. Sr. Unsec. Bank Facility due 2014 Ba2 Ba1 LGD3 34% 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 Valley, Nebraska, Valmont Industries Inc. is engaged in the manufacture of fabricated metal products, metal and concrete pole and tower structures. http://www.valmont.com/ WASTEQUIP INC: Moody's Assigns Loss-Given-Default Rating -------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the B2 Corporate Family Rating for Wastequip Inc., as well as revised the rating on the company's $100 Million Senior Secures 2nd Lien Term Loan due 2012 to Caa1 from B3 LGD5, 86%. Those debentures were assigned an LGD5 rating suggesting noteholders will experience an 86% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $40 Mil. Sr. Sec. Revolver Due 2010 B2 B1 LGD3 36% $200 Mil. Sr. Sec. 1st Lien Term Loan Due 2011 B2 B1 LGD3 36% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Cleveland, Ohio, Wastequip Inc. is a manufacturer of solid and liquid waste container. http://www.wastequip.com/ WENDY'S INTERNATIONAL: Earns $72 Million in Third Quarter 2006 -------------------------------------------------------------- Wendy's International Inc. reported a $72.0 million net income for the third quarter of 2006, compared to a $72.1 million net income for the third quarter of 2005. The company also reported $623.8 million of total revenues for the current quarter, a 2.5% increase from $608.8 million of total revenues for the same period in 2005. Commenting on the results, Kerrii Anderson, the company's interim chief executive officer and president, said "[a]s we complete our strategic initiatives of spinning off Tim Hortons, selling Baja Fresh and reducing costs, we are sharpening our focus on the Wendy's brand. By following our new comprehensive strategic plan, 'Quality-Driven: Wendy's Recipe for Success,' we intend to continue driving improved restaurant-level economic performance by focusing on product innovation, targeted marketing, cost containment and operations excellence." Fourth Quarter Forecasts The company anticipates that it will incur additional costs in the fourth quarter, including $4 million to $8 million in pretax charges for the closure of Wendy's restaurants and approximately $3 million in pretax expense for research and development related to its breakfast test. In addition, the company expects to record higher expense for performance-based incentive compensation in the fourth quarter of 2006 commensurate with anticipated improved operating results compared to 2005. Board Approves 115th Consecutive Dividend The company's Board Of Directors approved a quarterly dividend of 8.5 cents per share, payable on November 20 to shareholders of record as of November 6. The dividend will be the company's 115th consecutive dividend. Because the record date for the dividend payment is before the expiration date of the tender offer, shareholders of record on November 6 who tender their shares in the tender offer will be entitled to the dividend payment. Headquartered in Dublin, Ohio, Wendy's International Inc. -- http://www.wendysintl.com/-- and its subsidiaries engage in the operation, development, and franchising of a system of quick service and fast casual restaurants in the United States, Canada, and internationally. * * * As reported in the Troubled Company Reporter on Oct. 17, 2006, Moody's Investors Service held its Ba2 Corporate Family Rating for Wendy's International Inc. Additionally, Moody's held its Ba2 ratings on the company's $200 million 6.25% Senior Unsecured Notes Due 2011 and $225 million 6.2% Senior Unsecured Notes Due 2014. Moody's assigned the debentures an LGD4 rating suggesting noteholders will experience a 54% loss in the event of default. WILLIAMS PARTNERS: Increases Cash Distribution to 45 Cents ---------------------------------------------------------- Williams Partners L.P. disclosed that the regular quarterly cash distribution to its unitholders has been increased to 45 cents per unit, the partnership's third distribution increase this year. The new per-unit amount is 5.8% higher than the 42.5-cent distribution paid for the second quarter this year. It is also 28.6% higher than the partnership's initial distribution level, paid on a pro rata basis in November 2005. The board of directors of the partnership's general partner approved the increase in the quarterly cash distribution, which is payable on Nov. 14, 2006, to unitholders of record at the close of business on Nov. 6, 2006. The distribution increase, the Company says, reflects the continued strong performance of Williams Partners' asset base, including the first full quarter of results from its 25.1% interest in Williams Four Corners LLC, and the partnership's forecast for operating earnings and cash flows. Effective June 20, the partnership acquired its interest in Four Corners, which owns certain natural gas gathering, processing and treating assets in the San Juan Basin in Colorado and New Mexico, from Williams for $360 million. Alan Armstrong, chief operating officer, said, "Four Corners, which represents one of the largest integrated natural gas- gathering systems in the country, is proving to be a key contributor to the partnership's financial performance and cash flow," Headquartered in Tulsa, Oklahoma, Williams Partners L.P. -- http://www.williamslp.com/-- gathers, transports and processes natural gas and fractionates and stores natural gas liquids. The general partner is Williams Partners GP LLC. * * * As reported in the Troubled Company Reporter on Oct. 24, 2006 Moody's Investors Service's relative to the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology affirmed its Ba3 corporate family rating and its Ba3 probability-of-default rating on the Company's 7.5% Sr. Unsec. Global Notes due 2011 on Williams Partners LP. At the same time, the rating agency assigned an LGD4 rating on the notes, suggesting noteholders will experience a 67% loss in the event of a default. WOLVERINE TUBE: Moody's Assigns Loss-Given-Default Rating --------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed the Caa1 Corporate Family Rating for Wolverine Tube Inc., as well as the Caa2 ratings on the company's 7.375% Senior Unsecured Notes due 2008 and the 10.5% Senior Unsecured Notes due 2009. Those debentures were assigned an LGD4 rating suggesting noteholders will experience a 61% 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 Huntsville, Alabama, Wolverine Tube Inc. manufactures copper and copper alloy tube, fabricated products, brazing alloys, fluxes and lead-free solder. http://www.wlv.com/ * BOND PRICING: For the week of October 23 -- October 27, 2006 -------------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 12/31/04 0 Adelphia Comm. 3.250% 05/01/21 0 Adelphia Comm. 6.000% 02/15/06 0 Adelphia Comm. 8.125% 07/15/03 71 Adelphia Comm. 9.500% 02/15/04 64 Allegiance Tel. 11.750% 02/15/08 41 Allegiance Tel. 12.875% 05/15/08 40 Amer & Forgn Pwr 5.000% 03/01/30 68 Amer Color Graph 10.000% 06/15/10 69 Antigenics 5.250% 02/01/25 64 Anvil Knitwear 10.875% 03/15/07 69 Archibald Candy 10.000% 11/01/07 0 ATA Holdings 13.000% 02/01/09 4 Atlantic Coast 6.000% 02/15/34 13 Autocam Corp. 10.875% 06/15/14 63 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 Budget Group Inc 9.125% 04/01/06 0 Burlington North 3.200% 01/01/45 57 Calpine Corp 4.750% 11/15/23 45 Calpine Corp 6.000% 09/30/14 39 Calpine Corp 7.625% 04/15/06 69 Calpine Corp 7.750% 04/15/09 70 Calpine Corp 7.750% 06/01/15 35 Calpine Corp 7.875% 04/01/08 70 Calpine Corp 8.500% 02/15/11 48 Calpine Corp 8.625% 08/15/10 45 Calpine Corp 8.750% 07/15/07 70 Calpine Corp 10.500% 05/15/06 70 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 Clark Material 10.750% 11/15/06 0 Collins & Aikman 10.750% 12/31/11 3 Columbia/HCA 7.500% 11/15/95 73 Comcast Corp 2.000% 10/15/29 40 Comprehens Care 7.500% 04/15/10 65 Cooper Standard 8.375% 12/15/14 74 Dal-Dflt09/05 9.000% 05/15/16 34 Dana Corp 5.850% 01/15/15 71 Dana Corp 7.000% 03/01/29 72 Dana Corp 7.000% 03/15/28 73 Dana Corp 9.000% 08/15/11 74 Delco Remy Intl 9.375% 04/15/12 43 Delco Remy Intl 11.000% 05/01/09 46 Delta Air Lines 2.875% 02/18/24 34 Delta Air Lines 7.700% 12/15/05 35 Delta Air Lines 7.900% 12/15/09 35 Delta Air Lines 8.000% 06/03/23 35 Delta Air Lines 8.300% 12/15/29 36 Delta Air Lines 9.250% 03/15/22 32 Delta Air Lines 9.250% 12/27/07 29 Delta Air Lines 9.750% 05/15/21 32 Delta Air Lines 10.000% 06/01/08 56 Delta Air Lines 10.000% 06/01/11 70 Delta Air Lines 10.000% 08/15/08 36 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 34 Delta Air Lines 10.375% 02/01/11 36 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 Drum Financial 12.875% 09/15/99 0 Dura Operating 8.625% 04/15/12 33 Dura Operating 9.000% 05/01/09 6 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 E.Spire Comm Inc 10.625% 07/01/08 0 E.Spire Comm Inc 13.750% 07/15/07 0 Eagle Family Food 8.750% 01/15/08 74 Empire Gas Corp 9.000% 12/31/07 1 Epix Medical Inc 3.000% 06/15/24 71 Exodus Comm Inc 10.750% 12/15/09 0 Exodus Comm Inc 11.625% 07/15/10 0 Fedders North AM 9.875% 03/01/14 66 Federal-Mogul Co. 7.375% 01/15/06 65 Federal-Mogul Co. 7.500% 01/15/09 65 Federal-Mogul Co. 8.160% 03/06/03 58 Federal-Mogul Co. 8.250% 03/03/05 61 Federal-Mogul Co. 8.330% 11/15/01 63 Federal-Mogul Co. 8.370% 11/15/01 58 Federal-Mogul Co. 8.370% 11/15/01 63 Federal-Mogul Co. 8.800% 04/15/07 65 Finova Group 7.500% 11/15/09 30 Ford Motor Co 6.500% 08/01/18 74 Ford Motor Co 6.625% 02/15/28 72 Ford Motor Co 7.125% 11/15/25 73 Ford Motor Co 7.400% 11/01/46 73 Ford Motor Co 7.500% 08/01/26 74 Ford Motor Co 7.700% 05/15/97 72 Ford Motor Co 7.750% 06/15/43 74 GB Property Fndg 11.000% 09/29/05 57 Golden Books Pub 10.750% 12/31/04 0 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 Imperial Credit 9.875% 01/15/07 0 Inland Fiber 9.625% 11/15/07 63 Insight Health 9.875% 11/01/11 20 Iridium LLC/CAP 10.875% 07/15/05 28 Iridium LLC/CAP 11.250% 07/15/05 24 Iridium LLC/CAP 13.000% 07/15/05 25 Iridium LLC/CAP 14.000% 07/15/05 26 Isolagen Inc. 3.500% 11/01/24 75 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 13 Kellstrom Inds 5.500% 06/15/03 0 Kmart Corp 8.540% 01/02/15 28 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 61 Macsaver Financl 7.600% 08/01/07 1 Macsaver Financl 7.875% 08/01/03 0 Merisant Co 9.500% 07/15/13 63 MHS Holdings Co 16.875% 09/22/04 0 Movie Gallery 11.000% 05/01/12 60 MSX Int'l Inc. 11.375% 01/15/08 73 Muzak LLC 9.875% 03/15/09 65 New Orl Grt N RR 5.000% 07/01/32 69 Northern Pacific RY 3.000% 01/01/47 57 Northern Pacific RY 3.000% 01/01/47 57 Northwest Airlines 6.625% 05/15/23 61 Northwest Airlines 7.248% 01/02/12 20 Northwest Airlines 7.625% 11/15/23 61 Northwest Airlines 7.875% 03/15/08 63 Northwest Airlines 8.700% 03/15/07 61 Northwest Airlines 8.875% 06/01/06 60 Northwest Airlines 9.152% 04/01/10 7 Northwest Airlines 9.179% 04/01/10 27 Northwest Airlines 9.875% 03/15/07 64 Northwest Airlines 10.000% 02/01/09 61 NTK Holdings Inc 10.750% 03/01/14 68 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 71 OSU-DFLT10/05 13.375% 10/15/09 0 Outboard Marine 9.125% 04/15/17 0 Overstock.com 3.750% 12/01/11 74 Owens Corning 7.000% 03/15/09 54 Owens Corning 7.500% 05/01/05 55 Owens Corning 7.500% 08/01/18 56 Owens Corning 7.700% 05/01/08 56 Owens-Corning Fiber 8.875% 06/01/02 48 Pac-West-Tender 13.500% 02/01/09 61 PCA LLC/PCA Fin 11.875% 08/01/09 25 Pegasus Satellite 9.625% 10/15/49 13 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 2 Piedmont Aviat 10.250% 01/15/49 3 Pixelworks Inc 1.750% 05/15/24 73 Plainwell Inc 11.000% 03/01/08 2 Pliant Corp 13.000% 07/15/10 44 Polaroid Corp 6.750% 01/15/02 0 Polaroid Corp 7.250% 01/15/07 0 Polaroid Corp 11.500% 02/15/06 0 Primus Telecom 3.750% 09/15/10 42 Primus Telecom 8.000% 01/15/14 61 Primus Telecom 12.750% 10/15/09 75 PSINET Inc 10.500% 12/01/06 0 PSINET Inc 11.000% 08/01/09 0 Radnor Holdings 11.000% 03/15/10 12 Railworks Corp 11.500% 04/15/09 1 Read-Rite Corp. 6.500% 09/01/04 8 RJ Tower Corp. 12.000% 06/01/13 20 Rotech HealthCare 9.500% 04/01/12 66 Spinnaker Inds 10.750% 10/15/06 0 Toys R Us 7.375% 10/15/18 74 Tribune Co 2.000% 05/15/29 66 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 United Homes Inc 11.000% 03/15/05 0 US Air Inc. 10.750% 01/01/49 24 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 9 Wheeling-Pitt St 6.000% 08/01/10 70 Winn-Dixie Store 8.875% 04/01/08 74 Winstar Comm Inc 12.750% 04/15/10 0 Xerox Corp 0.570% 04/21/18 43 Ziff Davis Media 12.000% 07/15/10 42 ********* 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, Ronald C. Sy, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin, and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***