/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/061110.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, November 10, 2006, Vol. 10, No. 268 Headlines 612 LLC: Case Summary & 10 Largest Unsecured Creditors ADVENTRX PHARMA: Gets Investors' Subscription for 14 Mil. Shares AEGIS ASSET: Moody's Rates Class M10 Certificates at Ba1 AGRICORE UNITED: Moody's Holds Ba2 Rating on CDN$525 Mil. Sr. Debt AMB INSTITUTIONAL: To Complete Dissolution by End of November AMCAST INDUSTRIAL: Disclosure Hearing Continued on November 20 AMERICAST TECHNOLOGIES: Moody's Rates $100 Mil. Senior Notes at B3 AMERIVEST: Discloses $130MM Assets in Liquidation at September 30 APOSTOLIC CHURCH: Case Summary & Six Largest Unsecured Creditors APRIA HEALTHCARE: Names Chris Karkenny as Chief Financial Officer AEGIS ASSET: Moody's Puts Ba1 Rating on Class M10 Certificates AUSTIN CONVENTION: S&P Puts 'BB' Rating on $93 Mil. Revenue Bonds BEAR STEARNS: Moody's Rates Class II-M-11 Certificates at Ba2 BIG OAK: Case Summary & Two Largest Unsecured Creditors BNC MORTGAGE: Moody's Assigns Low-B Ratings on Two Cert. Classes CARRINGTON SOUTH: Selling All Healthcare Assets on November 20 CATHOLIC CHURCH: Spokane Ct. Delays Plan Filing Period to Nov. 13 CHIQUITA BRANDS: Posts $96 Million Net Loss for 2006 Third Quarter CINRAM INTERNATIONAL: Earns $18.4 Mil. in Quarter Ended Sept. 30 CINRAM INTERNATIONAL: To Engage Advisor for Strategic Review CITIGROUP MORTGAGE: Moody's Rates Two Certificate Classes at Low-B CITIZENS COMMS: Frontier to Deploy Ill. and Tenn. Wireless Service COMMERCIAL REALTY: Case Summary & 20 Largest Unsecured Creditors CONTINENTAL AIRLINES: Reports 9.5% Increase in October Traffic CONTINENTAL AIRLINES: Moody's Junks Rating on $200 Mil. Sr. Notes CONTINENTAL AIRLINES: S&P Rates $200 Mil. Senior Notes at 'CCC+' COZZOLINO FURNITURE: Taps Spector & Ehrenworth as Bankr. Counsel CRI RESOURCES: Disclosure Statement Hearing Set for November 16 CS MORTGAGE: Fitch Rates $4.6-Mil Class B-1 Certificates at BB DBO HOLDINGS: S&P Rates Proposed $1.275 Bil. Senior Loan at 'B+' DURA AUTOMOTIVE: Taps Kirkland & Ellis as Bankruptcy Counsel DURA AUTOMOTIVE: Taps Richards Layton as Local Counsel EMMIS COMMS: Declares $4/Share Special Dividend to Common Holders ENTERGY NEW ORLEANS: Bankruptcy Clerk Records 14 Claim Transfers EQUISTAR CHEMICALS: Moody's Assigns Loss-Given-Default Rating FLEXTRONICS INT'L: Earns $184.8 Mil. in Second Qtr. Ended Sept. 30 FLEXTRONICS INTERNATIONAL: Shareholders Okays 2001 Plan Changes FLYI INC: Inks Claim Settlement Agreement with UAL Insurers FOAMEX INT'L: Wants Amended Plan Solicitation Procedures Approved FOAMEX INT'L: Wants Cure Amount Determination Protocol Established GENERAL MOTORS: Raises 2007 Vehicle Prices Due to Increased Costs GENERAL NUTRITION: Moody's Junks Rating on Proposed $325MM Notes GOODYEAR TIRE: Posts $48 Million Net Loss in 2006 Third Quarter GOODYEAR TIRE: Outlines New Proposal for Workers on Strike GREENPOINT MORTGAGE: S&P Junks Rating on Cl. B-2 Securitized Debts GREENWICH CAPITAL: Fitch Puts Low-B Ratings on Six Cert. Classes H&A INVESTMENTS: Voluntary Chapter 11 Case Summary HARROW STORES: Case Summary & 20 Largest Unsecured Creditors HEXION SPECIALTY: Moody's Assigns Loss-Given-Default Rating HORNBECK OFFSHORE: S&P Rates Proposed $220 Million Notes at 'BB-' HOUGHTON INTERNATIONAL: Moody's Assigns Loss-Given-Default Rating HUNTSMAN INTERNATIONAL: Moody's Assigns Loss-Given-Default Rating INNOPHOS INVESTMENTS: Moody's Assigns Loss-Given-Default Rating INSIGHT HEALTH: $191 Mil. Debt Write-Off Cues Moody's Junk Ratings INTEGRATED HEALTH: Wants Until March 5 to Remove Civil Actions INTERSTATE BAKERIES: Trade Creditors Sell 140 Claims Totaling $12M INTERSTATE BAKERIES: Wants Railcar Purchase Option Sale Pact OK'd JETBLUE AIR: S&P Puts 'B+' Prelim Rating on $49.4MM Class B Certs. JLG: Oshkosh Deal Cues S&P to Affirm 'BB' Corporate Credit Rating JOHN B. SANFILIPPO: Delays 2006 Quarterly Report Filing KENDLE INTERNATIONAL: Earns $3.9 Million in Third Quarter of 2006 L-3 COMMS: Heavy Debt Levels Prompt Moody's to Affirm CFR at Ba2 LE-NATURE'S HOLDINGS: Case Summary & 30 Largest Unsec. Creditors LIVE NATION: S&P Holds 'B+' Corp. Credit Rating, Strips Neg. Watch MABS TRUST: Moody's Assigns Ba2 Rating to Class M-11 Certificates MAGNOLIA ENERGY: Wants Court's Approval to Use Cash Collateral MAIN STREET: Chapter 11 Trustee Hires Lewis Freeman as Accountants MACDERMID INCORPORATED: Moody's Assigns Loss-Given-Default Rating MAIN STREET: U.S. Trustee Picks 7-Member Creditors' Committee MDC HOLDINGS: Earns $48.706 Million in Third Quarter of 2006 METHANEX CORPORATION: Moody's Assigns Loss-Given-Default Rating MEZZITT AGRICULTURAL: Case Summary & 8 Largest Unsec. Creditors MILLENNIUM CHEMICALS: Moody's Assigns Loss-Given-Default Rating MKHSR PROPERTIES: Case Summary & Four Largest Unsecured Creditors MUSICLAND HOLDING: Inks Pact Allowing Committee to Pursue Actions MUSICLAND HOLDING: Wants St. Clair Settlement Agreement Approved NEW CENTURY: Moody's Puts Ba2 Rating on Class B-3 Certificates NEW YORK RACING: Wants to Hire UHY LLP as Financial Advisors NEW YORK RACING: Selects Dewey Ballantine as Special Corp. Counsel NEW YORK RACING: Wants Until Jan. 2 to File Schedules & Statements NORTEL NETWORKS: Declares Preferred Share Dividends NORTH STREET: Fitch Affirms C Rating on Fixed-Rate Income Notes ORTHOMETRIX INC: Sept. 30 Balance Sheet Upside Down by $1.4 Mil. OSHKOSH TRUCK: $3.2 Billion JLG Deal Cues Moody's Ba3 Debt Rating OSHKOSH TRUCK: $3.2 Billion JLG Deal Cues S&P's 'BB' Credit Rating PACIFIC BAY: Fitch Holds BB- Rating on $17 Mil. Preference Shares PANAVISION INC: AFM Acquisition Prompts Moody's to Affirm B2 CFR PBG AIRCRAFT: S&P Pares Rating on Class B Notes to 'B' From 'BB' PEDRO ORTEGA: Voluntary Chapter 11 Case Summary PENN NATIONAL: To Acquire Zia Park Racetrack for $200 Million PILLOWTEX CORP: Disclosure Statement Hearing Set for December 18 PREDIWAVE CORP: Hires Allen & Overy as Hong Kong Counsel PRIMA CAPITAL: Fitch Rates Three Note Classes at Low Bs PSYCHIATRIC SOLUTIONS: Loan Add-On to Buy Alternative Behavioral PSYCHIATRIC SOLUTIONS: FHC Deal Cues Moody's to Affirm CFR at B1 QUEEN ANNE: Case Summary & Largest Unsecured Creditor REVLON INC: Posts $100.5 Million Net Loss in 2006 Third Quarter RONALD SERAFIN: Case Summary & 12 Largest Unsecured Creditors SAI HOLDINGS: Case Summary & 46 Largest Unsecured Creditors SAINT VINCENTS: Court Issues Revised Caronia Retention Order SAINT VINCENTS: Inks Assignment Pact with Kingsbrook and BBC SAINT VINCENTS: Court Allows A. Forger to Conduct Rule 2004 Probe SAMUEL BURROW: Case Summary & 10 Largest Unsecured Creditors SASKATCHEWAN WHEAT: S&P Puts 'B+' Credit Rating on CreditWatch SCOTT BERGER: Case Summary & 12 Largest Unsecured Creditors SEITEL INC: Inks $780 Million Merger Pact With ValueAct Capital TALECRIS BIOTHERAPEUTICS: Moody's Rates New $1.2 Bil. Loan at B2 TEEKAY SHIPPING: Appoints Peter Evensen as CSO & Vince Lok as CFO TOWER RECORDS: Selects Bryan Cave as Bankruptcy Counsel TRAPEZA CDO: Fitch Rates $10 Million Class F Notes at BB TRUSTREET PROPERTIES: Purchase Offer Cues Fitch's Positive Watch TSG INC: Case Summary & 174 Largest Unsecured Creditors UNITEDHEALTH GROUP: Provides Past Option Grants Accounting Update UNITEDHEALTH GROUP: Fitch Maintains Rating Watch Negative WASHINGTON MUTUAL: Moody's Rates Class B Certificates at Ba1 WAVE WIRELESS: Asks Court to Move Schedules Filing Date to Dec. 30 WAVE WIRELESS: Wants to Sell Repair Business Assets for $150,000 WELLS FARGO: Fitch Affirms Low-B Ratings on 12 Certificate Classes WENDY'S INTERNATIONAL: Names Kerrii Anderson as CEO and President * BOOK REVIEW: Legal Aspects of Health Care Reimbursement ********* 612 LLC: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------ Debtor: 612, LLC 7 West Ridgley Road, Suite 100 Lutherville, MD 21093 Bankruptcy Case No.: 06-17122 Debtor-affiliates that earlier filed separate chapter 11 petitions: Entity Case No. Petition Date ------ -------- -------------- Q-C Golden Mile II, LLC 06-15846 Sept. 22, 2006 Q-C Perryville, LLC 06-15847 Sept. 22, 2006 James Paul Quillen, Jr. 06-15938 Sept. 26, 2006 Type of Business: The Debtors develop real estate. Chapter 11 Petition Date: November 8, 2006 Court: District of Maryland (Baltimore) Judge: Robert A. Gordon Debtor's Counsel: Marc Robert Kivitz, Esq. 201 North Charles Street, Suite 1330 Baltimore, MD 21201 Tel: (410) 625-2300 Fax: (410) 576-0140 Debtor's financial condition as of Nov. 8, 2006: Total Assets: $105,000,000 Total Debts: $9,322,812 Debtor's 10 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Quillen Development, Inc. $500,000 7 West Ridgely Road Suite 100 Lutherville, MD 21093 Fred Brandt $69,000 124 Lorretta Avenue Forest Hill, MD 21050 C.J. Johnston, Inc. $10,000 9500 Amberly Lane Perry Hall, MD 21128 Buchanan Ingersoll & Rooney, P.C. $7,524 One Oxford Centre 301 Grant Street, 20th Floor Pittsburgh, PA 15219-1410 The Hartord $4,000 Commercial Billing P.O. Box 620 New Harford, NY 13413-6200 C. Dudley Campbell $1 Joseph Snee $1 Barry G. Andrews $1 Erie Ins. Co. $1 Harford County Government $1 ADVENTRX PHARMA: Gets Investors' Subscription for 14 Mil. Shares ---------------------------------------------------------------- Adventrx Pharmaceuticals Inc. has received signed subscription terms from a group of accredited and institutional investors for the purchase of 14,545,000 shares of the Company's common stock at a price of $2.75 per share. The Company expects the gross proceeds of the offering to be approximately $40 million, before offering expenses and commissions. All the shares are being sold by the Company and the offering is expected to close on or about Nov. 8, 2006, subject to the satisfaction of customary closing conditions. ThinkEquity Partners LLC acted as lead placement agent and Fortis Securities LLC acted as co-placement agent for the offer. The shares of common stock may only be offered by means of a prospectus. Copies of the final prospectus supplement and accompanying base prospectus relating to the offering may be obtained from the offices of ThinkEquity Partners LLC, 31 West 52nd Street, 17th Floor, New York, NY 10019, or directly from the Company. The Company further disclosed that a registration statement relating to the securities was filed with and has been declared effective by the Securities and Exchange Commission. ADVENTRX Pharmaceuticals (Amex: ANX) -- http://www.adventrx.com/ -- is a biopharmaceutical research and development company focused on commercializing low development risk pharmaceuticals for cancer and infectious disease that enhance the efficacy or safety of existing therapies. * * * ADVENTRX Pharmaceuticals' balance sheet at June 30, 2006, showed total assets of $20 million and total liabilities of $31 million, resulting to an $11 million total shareholders' deficiency. AEGIS ASSET: Moody's Rates Class M10 Certificates at Ba1 -------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by Aegis Asset Backed Securities Trust 2006-1 and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Aegis Funding Corporation and Aegis Lending Corporation originated adjustable-rate and fixed- rate, subprime mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, excess spread, rate cap and an interest rate swap agreement provided by Bear Stearns Financial Products Inc. Moody's expects collateral losses to range from 5.3% to 5.8%. Ocwen Loan Servicing LLC, will service the mortgage loans and Wells Fargo Bank N.A. will act as master servicer. Moody's has assigned Ocwen an SQ2- servicer quality rating as a primary servicer of sub-prime mortgage loans. Moody's has also assigned Wells Fargo Bank, N.A. its top servicer quality rating of SQ1 as a master servicer. These are the rating actions: * Issuer: Aegis Asset Backed Securities Trust 2006-1 Cl. A1, Assigned Aaa Cl. A2, Assigned Aaa Cl. A3, Assigned Aaa Cl. M1, Assigned Aa1 Cl. M2, Assigned Aa2 Cl. M3, Assigned Aa3 Cl. M4, Assigned A1 Cl. M5, Assigned A2 Cl. M6, Assigned A3 Cl. M7, Assigned Baa1 Cl. M8, Assigned Baa2 Cl. M9, Assigned Baa3 Cl. M10,Assigned Ba1 AGRICORE UNITED: Moody's Holds Ba2 Rating on CDN$525 Mil. Sr. Debt ------------------------------------------------------------------ Moody's Investors Service affirmed all ratings for Agricore United and Agricore United Holdings, but changed the outlook to developing from stable. Moody's also affirmed Agricore's SGL-2 speculative grade liquidity rating. The change in rating outlook to developing was after the disclosure that the Saskatchewan Wheat Pool intends to make a formal offer to acquire Agricore in a stock-for-stock transaction. The developing nature of the outlook stems from the questions surrounding the financial profile of the borrower should a transaction ultimately be consummated. For example, while a combination would result in an agribusiness with greater processing capacity and market share, SWP is smaller than Agricore and there could be material integration risks in combining the two businesses. Furthermore, the SWP bid may prompt other industry players to make competing bids for Agricore with the business and financial profile of the ultimate entity uncertain. The affirmation of Agricore's long term ratings reflect Moody's view that -- pending further developments concerning any possible acquisition -- the company's fundamental credit profile continues to reflect its current Ba3 corporate family rating. The key rating factors currently influencing Agricore's ratings and developing outlook include the following. Agricore is a moderate size agribusiness which is smaller and less diversified than its key global competitors. Its leverage is high and its debt protection measures weak for its rating, particularly given the volatility inherent in its commodity-oriented business. Its franchise strength is moderate, while its profitability has been relatively weak in recent years. Liquidity under stress is moderate given relatively thin covenant cushion. The affirmation of Agricore's liquidity rating of SGL-2 reflects Moody's view that despite the volatility of its commodity-based businesses and the high seasonality of earnings and cash flows, Agricore has demonstrated its ability to operate efficiently and maintain sufficient liquidity. Over the next 12-18 months, Moody's anticipates that the company will generate enough free cash flow to satisfy its working capital, dividend, and capital expenditure requirements. Moody's expects Agricore to remain in compliance with financial covenants over the next 12- 18 months, although the cushion is thin. Agricore's alternative sources of liquidity are limited since all of its assets are pledged to its credit facilities. Ratings affirmed with a developing outlook: * Agricore United -- Corporate family rating at Ba3 -- Probability of default rating at Ba3 -- CDN$100 million senior secured 7-year term loan at Ba2 (LGD3, 40%) -- CDN$525 million 3-year senior secured revolving credit at Ba2 (LGD3, 40%) -- Speculative grade liquidity assessment of SGL-2 * AU Holdings Inc. -- CDN$50 million senior secured 7-year term loan at Ba2 (LGD3, 40%) based on the full unconditional guarantee of Agricore United Based in Winnipeg, Manitoba Canada, Agricore is a leading Canadian agribusiness involved in grain handling, the production and sale of agricultural production inputs such as fertilizer and crop protection chemicals, and animal feed. The company also provides loans and financial services to farmers in western Canada. FY2005 revenues were CDN$2.7 billion. AMB INSTITUTIONAL: To Complete Dissolution by End of November ------------------------------------------------------------- AMB Property LP has reported the dissolution of AMB Institutional Alliance Fund I, LP. Fund I completed the sale of substantially all of its assets in December 2005. After the final distribution of assets to its partners, Fund I will be finally dissolved and cancelled. AMB expects to complete the dissolutions by the end of November. These partners and subsidiaries will also be dissolved: -- AMB Institutional Alliance, REIT I, Inc. -- AMB Fund Special GP, LLC -- AMB/TR Three 2000, Ltd. -- Dulles Airport Development, LLC Inquiries may be directed to: Lindsey Adams AMB Property, LP Pier 1, Bay 1, San Francisco, CA 94111 AMB Property Corporation -- http://www.amb.com/-- owns industrial real estate, focused on major hub and gateway distribution markets throughout North America, Europe and Asia. The Company operates its business through its subsidiary, AMB Property, L.P. As of Sept. 30, 2006, AMB owned, or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects expected to total approximately 124.8 million square feet (11.6 million square meters) and 1,109 buildings in 42 markets within 11 countries. AMCAST INDUSTRIAL: Disclosure Hearing Continued on November 20 -------------------------------------------------------------- The Honorable Frank J. Otte of the U.S. Bankruptcy Court for the Southern District of Indiana in Indianapolis will continue the hearing to consider the adequacy of the Disclosure Statement explaining Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc.'s Joint Plan of Reorganization at 2:00 p.m., on Nov. 20, 2006. The Official Committee of Unsecured Creditors as well as creditors NexBank, SSB and General Motors Corporation all filed separate objections to the Debtors' disclosure statement on October 30. Plan Overview The Plan proposes the sale of all of the Debtors' remaining assets and their subsequent liquidation and dissolution. The Plan also substantively consolidates the Debtors. Under the Plan, claims against the Debtors will be consolidated for distribution and other purposes. The Plan provides that: -- on or promptly after the effective date all Allowed Administrative Expense Claims, Priority Tax Claims, and Allowed Priority Claims will be paid in full; -- holders of Allowed Secured Claims of the Revolving Lenders will receive the lesser of the amount of their Claims and their Pro Rata Portion of the proceeds of the sale of the Credit Agreement Collateral. Any deficiency will be an Unsecured Claim; -- holders of Allowed Secured Claims of the Term Loan A Lenders will receive the lesser of the amount of their claims and their Pro Rata Portion of the proceeds of the sale of the Credit Agreement Collateral remaining after the satisfaction of the Allowed Secured Claims of the Revolving Lenders. Any deficiency will be an Unsecured Claim; -- holders of Allowed Secured Claims of the Term Loan B Lenders will receive the lesser of the amount of their Claims and their Pro Rata Portion of the proceeds of the sale of the Credit Agreement Collateral remaining after the satisfaction of the Allowed Secured Claims of the Revolving Lenders and the Allowed Secured Claims of the Term Loan A Lenders. Any deficiency will be an Unsecured Claim; -- holders of Allowed Other Secured Claims will receive either the Collateral securing their claims or the proceeds from the sale of that Collateral; -- Holders of Allowed Unsecured Claims will receive their Pro Rata Portion of the Class 6 Assets, generally being all assets of the Debtors which do not secure Secured Claims or which are remaining after all other senior classes of claims have been satisfied; -- all claims between the Debtors will be subordinated to all other Classes of Claims and will be cancelled and extinguished; and -- all equity interests in the Debtors will be cancelled and extinguished on the effective date. A full-text copy of the Debtors' Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=061109043135 About Amcast Industrial Headquartered in Fremont, Indiana, Amcast Industrial Corporation, manufactures and distributes technology-intensive metal products to end-users and suppliers in the automotive and plumbing industry. The Company and four debtor-affiliates filed for chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court for the Southern District of Ohio confirmed the Debtors' Third Amended Joint Plan of Reorganization on July 29, 2005. The Debtors emerged from bankruptcy on Aug. 4, 2005. Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc., filed for chapter 11 protection a second time on Dec. 1, 2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman, Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C., represent the Debtors in their restructuring efforts. Henry A. Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP, represent the Official Committee of Unsecured Creditors. Kevin I. Dowd at Berkeley Square Group LLC serves as Amcast's financial advisor. The Creditors' Committee receives financial advice from Thomas E. Hill at Alvarez & Marsal, LLC. When the Debtor and its affiliate filed for protection from their creditors, they listed total assets of $97,780,231 and total liabilities of $100,620,855. AMERICAST TECHNOLOGIES: Moody's Rates $100 Mil. Senior Notes at B3 ------------------------------------------------------------------ Moody's Investors Service assigned first time ratings to AmeriCast Technologies, Inc. - Corporate Family rating, B2; and Probability of Default rating, B2. Moody's also assigned ratings to the proposed senior unsecured notes, B3, LGD4, 62%. The proposed senior unsecured notes, together with equity from Castle Harlan Partners IV, L.P., Bradken Operating Pty Ltd., and management, will be used to finance the purchase of AmeriCast from KPS Special Situation Fund II, and repay existing debt. The ratings reflect the company's credit metrics which have been at relatively strong levels in a cyclical industry. AmeriCast operates in the steel casting segment of the foundry industry with approximately 60% of the company's revenues derived from steel castings over 10,000 pounds. Given the end-markets served by AmeriCast, the company maintains high revenue concentrations with a relatively small number of key customers in the mining, off-highway equipment manufacturing, and rail transportation sectors. This concentration risk is somewhat mitigated by the current demand experienced in AmeriCast's end- product markets, limited competition in the market for large castings, and longstanding relationships with its major customers. AmeriCast's pro forma credit metrics for the transaction are expected to include total debt/EBITDA of about 5.1x; and EBIT/Interest of about 1.5x. AmeriCast generated break even free cash flow for the LTM ended Sept. 30, 2006, and this is expected to continue into the coming year due to higher planned capital expenditures. Timothy Harrod, Moody's analyst covering capital goods companies, said that "despite Americast's recent favorable operating performance, the company's pro forma financial leverage, significant customer concentration risk and exposure to cyclical end markets solidly positions the company's Corporate Family Rating in the B2 category." The stable outlook anticipates that AmeriCast will continue to benefit from the strength of demand for new equipment from the mining, non-residential construction, and transportation markets. These markets are expect to continue to be driven by general economic growth supporting commodity demand, and government transportation spending on infrastructure. Liquidity under the company's proposed senior secured revolving credit facility is expected to be adequate in the near-term. These ratings are assigned: -- B2 Corporate Family Rating; -- B2 Probability of Default Rating; -- $100 million of senior unsecured notes due 2014, issued under Rule 144A without registration rights, B3, LGD4, 62%; AmeriCast's proposed $25 million senior secured revolving credit facility is not rated by Moody's. Future events that could put downward pressure on AmeriCast's outlook and/or ratings include pricing pressures which are not mitigated by additional cost savings, the inability to adequately pass through raw material costs, loss of market share or a significant customer, or significant deterioration in demand in the company's end markets. Consideration for a lower outlook or rating could arise if EBIT/Interest coverage deteriorates below 1x or if leverage increases to over 6x. Future events that could improve AmeriCast's outlook and ratings would be generated from a consistent operating environment in which the company can maintain high levels of capacity utilization, or increase and further diversify its customer base. Consideration for an improved outlook or higher ratings could arise if EBIT/Interest coverage is maintained consistently over 1.8x and leverage reduces to 4x. AmeriCast Technologies Inc., headquartered in Atchison, Kansas, is a designer and manufacturer of large, highly engineered steel and iron castings. Approximately 60% of the company's volume is for products over 10,000 pounds. Products include locomotive and transit trucks, mining truck frames, axle housings, valve bodies and compressor housings. Annual revenues approximate $200 million. AMERIVEST: Discloses $130MM Assets in Liquidation at September 30 ----------------------------------------------------------------- AmeriVest Properties Inc. reported its net assets in liquidation at Sept. 30, 2006, aggregated $130.4 million based upon 24,114,316 common shares outstanding. Net assets in liquidation aggregated $122.2 million or $5.06 per share at June 30, 2006. The $8.2 million increase in net assets in liquidation from June 30, 2006 to September 30, 2006 is primarily attributable to an increase of $6 million in our remaining real estate assets, due to a revision of the estimated selling costs and certain contractual provisions which we believed impacted the net realizable value of our real estate assets and a $1 million reduction in the estimated future costs of severance, professional fees and additional liquidation costs. AmeriVest announced in May 2006 that its stockholders approved a Plan of Liquidation at its annual meeting of stockholders held on May 24, 2006. As required by generally accepted accounting principles, the Company adopted the liquidation basis of accounting on June 1, 2006. Under the liquidation basis of accounting, assets are stated at their estimated net realizable value and liabilities are stated at their estimated settlement amounts, with the associated estimates periodically reviewed and adjusted as appropriate. As detailed in the Company's Form 10-Q for the quarter ended Sept. 30, 2006, the amount also includes an estimated net liability for future estimated general and administrative expenses and other costs during the liquidation period. There can be no assurance that these estimated values will be realized, nor if the estimated general and administrative expenses are adequate. For all periods prior to June 1, 2006, the Company's financial statements are presented on the going concern basis of accounting. The Company filed its third quarter Form 10-Q with the Securities and Exchange Commission on November 7, 2006. Further information regarding the calculation of net assets in liquidation and related disclosures are contained within the filing. Plan of Liquidation On July 17, 2006, AmeriVest entered into a definitive agreement to sell its entire portfolio of twelve office buildings to Koll/PER LLC. The gross purchase price is $273 million, which includes an assumption of existing property level debt of approximately $126 million. The Company has closed on the following six properties to date: -- On Aug. 17, 2006, Greenhill Park, a 248,249-square-foot office property, was sold for $29.8 million. The Company received cash proceeds for approximately $28.4 million, after closing costs and adjustments. -- On Sept. 21, 2006, Scottsdale Norte, a 79,689-square- foot office property, was sold for $18 million. The Company received cash proceeds of approximately $11 million after payoff of the first mortgage, closing costs and adjustments. -- On Sept. 28, 2006, Hackberry View, a 114,598-square-foot office property, was sold for $17.5 million. The Company received cash proceeds of approximately $5.5 million, after assignment of the first and second mortgages, closing costs and adjustments. -- On Oct. 11, 2006, Parkway Centre III, a 152,396-square-foot office property, was sold for $25.6 million. The Company received cash proceeds of approximately $10 million, after assignment of the first mortgage, closing costs and adjustments. -- On Oct. 20, 2006, Hampton Court, a 108,588-square-foot office property, was sold for $17 million. The Company received cash proceeds of approximately $9 million, after assignment of the first mortgage, closing costs and adjustments. -- On Oct. 25, 2006, Camelback Lakes, a 203,794-square-foot office property, was sold for $50.4 million. The Company received cash proceeds of approximately $28 million, after assignment of the first mortgage, closing costs and adjustments. The net cash proceeds of approximately $91.9 million from these sales to Koll/PER have been accumulated and made available, subject to the expenses, liabilities and other costs of the Company, for distribution to stockholders under the Plan. Closings on the remaining six properties will be scheduled as loan assumption approvals are received from AmeriVest's mortgage lenders and other traditional closing activities are completed. There can be no assurance that any additional closings will occur under the Agreement or otherwise. On Oct. 30, 2006, the Company's Board of Directors declared an initial liquidating cash distribution of $3.50 per share, for a total distribution of approximately $84.4 million, payable on Nov. 16, 2006 to shareholders of record as of Nov. 10, 2006. The timing and amount of subsequent liquidating distributions will depend on the timing and amount of proceeds the Company receives upon the sale of the remaining assets and the extent to which the Company believes it needs to retain cash reserves. The AmeriVest Board of Directors also terminated the AmeriVest Dividend Reinvestment Plan effective Nov. 3, 2006. All participants in the plan will have their DRIP shares converted to AmeriVest shares and fractional shares will be converted to cash. Based upon the property closings to date and our revised estimates, as mentioned above, the Company has updated its range of estimated total cash distributions in liquidation to $5.40 to $5.65 per share, including the $3.50 per share distribution mentioned above. The estimates supporting the low end of this range and the net assets in liquidation at Sept. 30, 2006 are contained in the Company's third quarter Form 10-Q filed with the Securities and Exchange Commission on Nov. 7, 2006. Headquartered in Denver, Colorado, AmeriVest Properties Inc. (AMEX: AMV) -- http://www.amvproperties.com/-- provides Smart Space for Small Business(TM) in Denver, Phoenix, and Dallas through the acquisition, repositioning and operation of multi- tenant office buildings in those markets. * * * As reported in the Troubled Company Reporter on June 5, 2006, AmeriVest Properties Inc.'s stockholders approved a Plan of Liquidation at its annual meeting. Under the Plan, the Company's remaining 12 office properties will be sold on an orderly basis and proceeds distributed to stockholders. All 12 properties are listed with Trammell Crow Company and the sales process is being managed through Trammell Crow's Denver office. Detailed information regarding the properties was released to over 4,000 prospective purchasers on May 1, 2006. APOSTOLIC CHURCH: Case Summary & Six Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: The Apostolic Church, USA 1623 West Parmer Lane Austin, TX 78727 Bankruptcy Case No.: 06-11819 Type of Business: The Debtor is a religious organization. The Debtor filed for chapter 11 protection on Dec. 12, 2003 (Bankr. W.D. Tex. Case No. 03- 16045). Chapter 11 Petition Date: November 6, 2006 Court: Western District of Texas (Austin) Judge: Frank R. Monroe Debtor's Counsel: Stephen W. Sather, Esq. Barron & Newburger, P.C. 1212 Guadalupe, Suite 104 Austin, TX 78701 Tel: (512) 476-9103 Ext. 220 Fax: (512) 476-9253 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Femi Onabajo Loan $300,000 1623 Parmer Lane Austin, TX 78727 Ezekiel Adejobi Loan $35,000 2074 Fieldview Tracy, CA 95377 Mike Faulk Loan $19,000 8905 Joachim Lane Austin, TX 78717 Stephen Onabajo Loan $11,000 6302 Eldridge View Houston, TX 77083 Adetutu Adesanya Loan $8,000 1623 Parmer Lane Austin, TX 78727 The Meadows at Chandler Creek Fees $5,000 MUD 14050 Summit Drive, Suite 113 Austin, TX 78728-7101 APRIA HEALTHCARE: Names Chris Karkenny as Chief Financial Officer ----------------------------------------------------------------- Apria Healthcare Group Inc. has named Chris A. Karkenny as the Company's executive vice president and chief financial officer. Mr. Karkenny will join the Company on Nov. 13, 2006. The Company disclosed that, as chief financial officer, Mr. Karkenny will have broad responsibility for its financial operations, capital oversight, corporate finance, mergers and acquisitions, tax and treasury operations. Mr. Karkenny recently served as senior vice president of Corporate Development and Treasury Operations for PacifiCare Health Systems, Inc. and was responsible for corporate finance, debt and equity capital markets, treasury operations, real estate, procurement, insurance, rating agency interface and mergers and acquisitions. PacifiCare was sold to UnitedHealth Group for approximately $8.1 billion in December 2005. Prior to joining PacifiCare in 2003, Mr. Karkenny served as chief executive officer of NetCatalyst, a Santa Monica, California-based investment-banking firm, where he managed clients ranging in size from start-ups to multi-national corporations, and opened and expanded international offices and partnerships. From 1998 to 1999, he served as a partner in Technologz, a Los Angeles, California-based business incubator and was a Founder, board member and initial chief financial officer of CardioNow, a healthcare application service provider. Mr. Karkenny's previous work experience includes leadership and executive roles in companies in the software and technology infrastructure, corporate finance advisory consulting and active wear industries. "Chris Karkenny's wide range of financial and strategic experience will help us build an even stronger executive leadership team," Lawrence M. Higby, chief executive officer, said. "We are looking forward to Chris' contributions to Apria's overall strategic vision to continue to strengthen our position as one of the largest providers of diversified home healthcare services and products in the United States." Mr. Karkenny received a Masters of Business Administration from Pepperdine University and a Bachelor of Science in Business Administration from the University of Richmond. Headquartered in Lake Forest, California, Apria Healthcare Group Inc. (NYSE:AHG) -- http://www.apria.com/-- provides home respiratory therapy, home infusion therapy and home medical equipment through approximately 500 branches serving patients in all 50 states. * * * As reported in the Troubled Company Reporter on June 5, 2006, Standard & Poor's Ratings Services affirmed its BB+, Stable, rating on Apria Healthcare. AEGIS ASSET: Moody's Puts Ba1 Rating on Class M10 Certificates -------------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by Aegis Asset Backed Securities Trust 2006-1 and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Aegis Funding Corporation and Aegis Lending Corporation originated adjustable-rate and fixed- rate, subprime mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, excess spread, rate cap and an interest rate swap agreement provided by Bear Stearns Financial Products Inc. Moody's expects collateral losses to range from 5.3% to 5.8%. Ocwen Loan Servicing LLC, will service the mortgage loans and Wells Fargo Bank N.A. will act as master servicer. Moody's has assigned Ocwen an SQ2- servicer quality rating as a primary servicer of sub-prime mortgage loans. Moody's has also assigned Wells Fargo Bank, N.A. its top servicer quality rating of SQ1 as a master servicer. These are the rating actions: * Issuer: Aegis Asset Backed Securities Trust 2006-1 Cl. A1, Assigned Aaa Cl. A2, Assigned Aaa Cl. A3, Assigned Aaa Cl. M1, Assigned Aa1 Cl. M2, Assigned Aa2 Cl. M3, Assigned Aa3 Cl. M4, Assigned A1 Cl. M5, Assigned A2 Cl. M6, Assigned A3 Cl. M7, Assigned Baa1 Cl. M8, Assigned Baa2 Cl. M9, Assigned Baa3 Cl. M10,Assigned Ba1 AUSTIN CONVENTION: S&P Puts 'BB' Rating on $93 Mil. Revenue Bonds ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB-' rating to the $164 million revenue bonds series 2006A and its 'BB' rating to the $93.525 million revenue bonds series 2006B issued by Austin Convention Center Enterprises Inc. in Austin, Texas. The outlook is stable. The bonds are secured by the hotel net revenues. The proceeds will be used to refund the 2001 revenue bonds, which were used to construct the 800-room convention center headquarters hotel in downtown Austin, Texas. The hotel has been operating since its opening on Dec. 27, 2003. The stable outlook on Austin Convention Center Enterprises is based on hotel operations meeting its projected financial performance. The ratings could be lowered or the outlook revised to negative, if coverage levels are lower than projections due to a prolonged economic slowdown, or other competitive factors that reduce net hotel revenues. Although it is not expected at this time, a successful track record of financial performance well in excess of forecasts could result in a ratings upgrade after stabilization. BEAR STEARNS: Moody's Rates Class II-M-11 Certificates at Ba2 ------------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by Bear Stearns Asset Backed Securities I Trust 2006-HE8 and ratings ranging from Aa1 to Ba2 to the mezzanine and subordinate certificates in the deal. The securitization is backed by adjustable-rate and fixed-rate subprime mortgage loans acquired by EMC Mortgage Corporation. The collateral was originated by EMC Mortgage Corporation and Bear Stearns Residential Mortgage Corporation for Group I, Quick Loan Funding Inc., and Quicken Loans Inc. for Group II, and various other originators, none of which originated more than 10% of the mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, excess spread, and a swap agreement. Moody's expects collateral losses to range from 5.6% to 6.1% for Group I, and collateral losses to range from 5.75% to 6.25% for Group II. EMC Mortgage Corporation will act as master servicer. These are the rating actions: * Bear Stearns Asset Backed Securities I Trust 2006-HE8 * Asset-Backed Certificates, Series 2006-HE8 Cl. I-A-1, Assigned Aaa Cl. I-A-2, Assigned Aaa Cl. I-A-3, Assigned Aaa Cl. I-M-1, Assigned Aa1 Cl. I-M-2, Assigned Aa2 Cl. I-M-3, Assigned Aa3 Cl. I-M-4, Assigned A1 Cl. I-M-5, Assigned A2 Cl. I-M-6, Assigned A2 Cl. I-M-7, Assigned A3 Cl. I-M-8, Assigned Baa1 Cl. I-M-9, Assigned Baa1 Cl. I-M-10, Assigned Baa3 Cl. I-M-11, Assigned Ba1 Cl. II-1A-1,Assigned Aaa Cl. II-1A-2,Assigned Aaa Cl. II-1A-3,Assigned Aaa Cl. II-2A, Assigned Aaa Cl. II-M-1, Assigned Aa1 Cl. II-M-2, Assigned Aa2 Cl. II-M-3, Assigned Aa3 Cl. II-M-4, Assigned A1 Cl. II-M-5, Assigned A2 Cl. II-M-6, Assigned A3 Cl. II-M-7, Assigned Baa1 Cl. II-M-8, Assigned Baa1 Cl. II-M-9, Assigned Baa2 Cl. II-M-10,Assigned Ba1 Cl. II-M-11,Assigned Ba2 BIG OAK: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------- Debtor: Big Oak Radiology Inc. aka Big Oak Imaging 2820 Townsgate Road, Suite 100A Westlake Village, CA 91361 Bankruptcy Case No.: 06-12049 Type of Business: The Debtor offers radiology and imaging services. Chapter 11 Petition Date: November 7, 2006 Court: Central District Of California (San Fernando Valley) Judge: Kathleen Thompson Debtor's Counsel: Kenneth B. Rodman, Esq. 223 East Thousand Oaks Boulevard, Suite 405 Thousand Oaks, CA 91360 Tel: (805) 371-0555 Total Assets: $665,830 Total Debts: $1,635,344 Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ WKV Imaging, LLC Trade Debt $1,445,344 2829 University Drive South Collateral: Fargo, ND 58103 $709,935 c/o Anderson & Bottrell Unsecured: State Bank Center, Suite 302 $735,409 3100 13th Avenue Southwest Fargo, ND 58106-0247 Regency Centers, L.P. Trade Debt $150,000 121 West Forsyth Street Suite 200 Jacksonville, FL 32202 BNC MORTGAGE: Moody's Assigns Low-B Ratings on Two Cert. Classes ---------------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by BNC Mortgage Loan Trust 2006-2 and a ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by BNC Mortgage, Inc. originated, adjustable-rate and fixed-rate, subprime mortgage loans acquired by Lehman Brothers Holding Inc. The ratings are based primarily on the credit quality of the loans and on protection against credit losses by subordination, excess spread, and overcollateralization. The ratings also benefit from both the interest-rate swap and interest-rate cap agreements provided by ABN AMRO Bank N.V. After taking into account the benefit from the mortgage insurance Moody's expects collateral losses to range from 4.3% to 4.8%. Option One Mortgage Corporation will service the mortgage loans and Aurora Loan Services will act as master servicer. Moody's has assigned Option One its servicer quality rating of SQ1 as a servicer of subprime mortgage loans. Moody's has assigned Aurora its servicer quality rating of SQ1- as a master servicer of mortgage loans. These are the rating actions: * BNC Mortgage Loan Trust 2006-2 * Mortgage Pass-Through Certificates, Series 2006-2 Cl. A1, Assigned Aaa Cl. A2, Assigned Aaa Cl. A3, Assigned Aaa Cl. A4, Assigned Aaa Cl. A5, Assigned Aaa Cl. M1, Assigned Aa1 Cl. M2, Assigned Aa2 Cl. M3, Assigned Aa3 Cl. M4, Assigned A1 Cl. M5, Assigned A2 Cl. M6, Assigned A3 Cl. M7, Assigned Baa1 Cl. M8, Assigned Baa2 Cl. M9, Assigned Baa3 Cl. B1, Assigned Ba1 Cl. B2, Assigned Ba2 CARRINGTON SOUTH: Selling All Healthcare Assets on November 20 -------------------------------------------------------------- Carrington South Healthcare Center Inc. will sell substantially all of its assets through an auction on Nov. 20, 2006, 10:00 a.m., Eastern Time, at the U.S. Bankruptcy Court for the Northern District of Ohio, 10 East Commerce Street in Youngstown, Ohio. Only qualified bidders who have submitted a qualified bid by 2:00 p.m., Eastern Time, by Nov. 14, 2006, as well as other parties specified in the Court-approved bidding procedures are eligible to participate in or make statements on the record at the auction. 850 Midlothian LLC is the stalking horse bidder for the Debtor's assets. Pursuant to an asset purchase agreement, 850 Midlothian has offered to purchase the assets for $4 million. The Honorable Kay Woods will convene a hearing on Nov. 29, 2006, at 10:00 a.m., to confirm the results of the auction and approve the sale of the healthcare assets either to 850 Midlothian or the prevailing bidder. Copies of the sale documents may be obtained by written request to the Debtor's counsel: Suhar & Macejko Attn: Andrew W. Suhar, Esq. 1101 Metropolitan Tower P.O. Box 1497 Youngstown, OH 44501 Tel: (330) 744-9007 Fax: (330) 758-5993 About Carrington South Headquartered in Youngstown, Ohio, Carrington South Health Care Center, Inc. operates a 25-bed critical access hospital with a rural health care clinic, and operates three satellite clinics and a 24-bed basic care facility. The company and its affiliate, Carrington South Real Estate Inc., filed for chapter 11 protection on Oct. 17, 2006 (Bankr. N.D. Ohio Case Nos. 06-41692 & 06-41693). Andrew W. Suhar, Esq. at Suhar & Macejko, LLC and Donald J. DeSanto, Esq. at DeSanto & DeSanto represent the Debtors in their restructuring efforts. When Carrington Health sought protection from its creditors, it listed $3,998,655 in total assets and $6,074,043 in total debts, while Carrington Real Estate listed $500,000 in total assets and $4,694,530 in total debts. CATHOLIC CHURCH: Spokane Ct. Delays Plan Filing Period to Nov. 13 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Washington directs parties in the Catholic Diocese of Spokane's Chapter 11 case to file plans of reorganization and disclosure statements, amended or otherwise, on or before Nov. 13, 2006. The Court vacates its prior ruling directing parties to file their Plans on or before Oct. 30, 2006, due to the: * ongoing mediation process; and * agreement between Judge Gregg Zive, as mediator, and other parties to extend a standstill agreement. Judge Patricia C. Williams will conduct a status conference via telephone regarding the plans and disclosure statements on Nov. 15, 2006, at 2:00 p.m. The Court will also tackle issues relating to the settlement agreements entered by the Diocese with certain of its insurers. The Court has scheduled a hearing for Jan. 22, 2007, to consider those settlement agreements. Judge Williams previously directed the parties to refrain from any further activity, including filing of any objections or commencing any discovery on the certain filed motions until a status conference on those matters is held. At a status conference in September 2006, Judge Williams issued a standstill order giving more time for the parties to focus on mediation. The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. (Catholic Church Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CHIQUITA BRANDS: Posts $96 Million Net Loss for 2006 Third Quarter ------------------------------------------------------------------ Chiquita Brands International Inc. released financial and operational results for the third quarter 2006, in which net sales increased by 8% year-over-year to $1 billion, from $954 million in the third quarter 2005. The increase resulted primarily from increased banana volume in Europe, higher banana pricing in North America and increased sales in retail value-added salads. The company reported a quarterly net loss of $96 million, including a noncash charge of $43 million for goodwill impairment at Atlanta AG, its German distributor. In the third quarter 2005, the company reported net income of $300,000. "Our third quarter results were disappointing and worse than expected for several reasons," Fernando Aguirre, chairman and chief executive officer, said. "First, we recorded a noncash charge for goodwill impairment at Atlanta AG due to a decline in its business performance resulting primarily from intense pricing pressure in Germany. Second, temperatures during the third quarter reached record highs across much of northern Europe. This unusually hot weather reduced consumer demand for bananas, depressed prices and contributed to substantial price weakness in trading markets, where we incurred substantial losses on the sale of temporary excess supply from Latin America. Third, beginning in September, our Fresh Express operations experienced lower sales and unforeseen costs due to consumer concerns regarding the safety of fresh spinach in the United States, despite the fact that no confirmed cases of consumer illness were linked to our Fresh Express products." Operating loss for the quarter ended Sept. 30, 2006, was $79 million, compared to operating income of $20 million in the year-ago period. For the Quarter ended Sept. 30, 2006, operating cash flow was $27 million, compared to $63 million in the year-ago period. Total debt was $990 million at Sept. 30, 2006, compared to $1.1 billion at Sept. 30, 2005. Cash was $102 million at Sept. 30, 2006, compared to $181 million at Sept. 30, 2005. Quarterly Segment Result In the company's Banana segment, net sales were $444 million, up 8% from $411 million. The operating loss for the segment was $43 million, compared to operating income of $17 million in the prior year. In the company's Fresh Select segment, net sales were $291 million, up 8% from $268 million. The operating loss was $30 million, including a $29 million noncash charge for goodwill impairment at Atlanta AG, compared to an operating loss of $3 million in the 2005 third quarter. In the company's Fresh Cut segment, net sales were $278 million, up 8% from $259 million. The operating loss for the segment was $3 million, compared to operating income of $7 million in the same quarter of 2005. Financial Covenant Waiver The Company further disclosed that, at the beginning of October it obtained from its lenders a temporary waiver of certain financial covenants in its revolving credit and term loan facility, effective through Dec. 15, 2006. The company is currently seeking an amendment of its credit facility to cure any violation of its covenants that otherwise would occur upon the expiration of the temporary waiver and to provide additional flexibility in future periods. Cincinnati, Ohio-based Chiquita Brands International, Inc. (NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes fresh food products including bananas and nutritious blends of green salads. The company markets its products under the Chiquita(R) and Fresh Express(R) premium brands and other related trademarks. Chiquita employs approximately 25,000 people operating in more than 70 countries worldwide. * * * As reported in the Troubled Company Reporter on Oct. 3, 2006, Moody's Investors Service affirmed all ratings for Chiquita Brands L.L.C. (senior secured at Ba3), as well as for its parent Chiquita Brands International, Inc. (corporate family rating at B2), but changed the outlook to negative from stable. The action followed the company's announcement that its operating performance continues to be negatively impacted by lower pricing in key European and trading markets, as well as excess fruit supply. CINRAM INTERNATIONAL: Earns $18.4 Mil. in Quarter Ended Sept. 30 ---------------------------------------------------------------- Cinram International Income Fund reported consolidated revenue of $477.2 million for the quarter ended September 30, 2006, down from $544.7 million in 2005, principally as a result of lower DVD and CD sales. The Fund recorded net earnings of $18.4 million for the quarter, down from net earnings of $35.5 million for the third quarter of 2005. "Our results were in line with expectations of softer DVD sales in the third quarter compared to the exceptionally strong third quarter performance we reported in 2005," said Cinram Chief Executive Officer, Dave Rubenstein. "Looking out to 2007, we are confident that our customers' upcoming slate of releases will translate into DVD unit volume growth on a year-over-year basis." Cinram generated third quarter earnings before interest, taxes and amortization of $89.3 million compared with $118.5 million in 2005, due to lower DVD and CD volumes, increased one-time costs, and lower printing and distribution revenue, which were offset by lower raw material costs as well as cost reductions and efficiencies. Cinram's liquidity and balance sheet remained strong in the third quarter. The Fund had cash on hand of $108.9 million, debt of $679.1 million, resulting in a net debt position of $570.2 million at September 30, 2006. Cinram's $150-million revolving line of credit was not used during the third quarter and currently remains undrawn. Working capital was $208.4 million at September 30, 2006, relatively unchanged from June 30, 2006. Year-to-Date Performance Consolidated revenue for the nine months ended Sept. 30, 2006, was $1.3 billion, compared with $1.4 billion in 2005. EBITA for the nine months decreased to $215.4 million from $268.8 million in 2005. Year-to-date EBITA declined relative to 2005 as a result of lower DVD, CD and printing revenue, as well as increased costs related to Sarbanes-Oxley compliance and severance costs. EBITA for the nine months ended September 30, 2006, also included unusual items of $11.1 million related to restructuring expenses and costs incurred in relation to the May income trust reorganization. The Fund reported net earnings of $3.7 million for the nine months ended Sept. 30, 2006, compared with net earnings of $44.2 million in 2005. Product Revenue Third quarter DVD revenue was down 15 per cent to $237.4 million from $279.6 million in 2005 principally as a result of lower volume for some from our major customers and their comparatively strong performance in the third quarter of 2005. DVD sales remained our major source of revenue, representing 50 per cent of consolidated revenue for the third quarter compared with 51 per cent last year. For the nine months ended September 30, 2006, DVD revenue was down 10 per cent to $650.1 million from $723.2 million in 2005. On a year-to-date basis, DVD revenue accounted for 49 per cent of consolidated revenue, compared with 50 per cent in the comparable prior year period. Cinram recorded third quarter and year-to-date high-definition DVD revenue of $1.6 million and $2.8 million, respectively, following the June retail launch of both formats. CD revenue was down 16 per cent in the third quarter to $71.8 million from $85.7 million in 2005, and decreased 11 per cent year-to-date relative to 2005, part of which was attributable to cessation of CD manufacturing operations at Louviers in France earlier this year. Printing revenue for the third quarter was down three per cent to $63.3 million from $65.2 million in 2005, primarily due to lower DVD and CD replication volume. For the year to date, printing revenue was down 13 per cent to $145.5 million from $167.6 million, principally as a result of lower DVD volumes for customers for whom we also provide related printing products. Distribution revenue declined four per cent in the third quarter to $66.1 million from $68.9 million in 2005. The impact of the decline in DVD revenue on distribution was mitigated in the third quarter as some of its major customers shipped a greater proportion of units from inventory that was replicated in previous periods. On a year-to-date basis, distribution revenue increased four per cent to $205.6 million from $197.7 million in 2005, with the full nine-month contribution from new Twentieth Century Fox Home Entertainment business in Europe. Giant Merchandising generated revenue of $31.8 million in the third quarter up six per cent from $30.1 million in 2005. For the nine months ended Sept. 30, 2006, Giant Merchandising recorded revenue of $97.1 million compared with $97.4 million in 2005. Geographic Revenue North American revenue was down 12 per cent in the third quarter to $360.6 million, compared with $410.8 million in 2005, principally as a result of lower DVD and CD sales. Year-to-date, North American revenue was down 11 per cent to $981.0 million from $1.1 billion in 2005 as a result of lower DVD, CD and printing revenue. North America accounted for 76 and 74 per cent of third quarter and year-to-date consolidated revenue, respectively, compared with 75 and 76 per cent, respectively, in 2005. European revenue decreased 13 per cent in the third quarter to $116.6 million from $133.9 million in 2005 as a result of lower DVD, CD and distribution revenue from The Entertainment Network. Year-to-date, European revenue declined marginally to $342.9 million from $345.0 million in 2005. Third quarter European revenue represented 24 per cent of consolidated sales compared with 25 per cent in the third quarter of 2005. Year-to-date, European revenue represented 26 per cent of consolidated revenue, up from 24 per cent in 2005. Distributions The Fund paid distributions of $40.3 million in the third quarter. Cinram's current annual distribution policy remains unchanged at CDN$3.25 per unit, to be paid in monthly distributions of CDN$0.2708 on or about the 15th day of the month to unitholders of record on the last business day of each previous month. Cinram has declared a cash distribution of CDN$0.2708 per unit for the month of November 2006, payable on Dec. 15, 2006, to unitholders of record at the close of business on Nov. 30, 2006. Cinram International Limited Partnership has also declared a cash distribution of CDN$0.2708 per Class B limited partnership unit for the month of November 2006, payable on Dec. 15, 2006, to unitholders of record at the close of business on Nov. 30, 2006. Full Year 2006 Guidance Cinram expects to generate EBITA for the year ending Dec. 31, 2006, in the range of $335 to $340 million, including unusual items for the full year which are expected to result in a net gain of $4.1 million. Cinram also expects capital expenditures to be in the range of $70 million for the full year in 2006. This guidance does not include the impact of any future merger or unidentified restructuring charges, as well as sales and acquisitions of operating assets that may occur from time to time due to management decisions and changing business circumstances, which the Fund is currently unable to forecast. About Cinram Cinram International Inc. (TSX: CRW.UN) - http://www.cinram.com/ -- an indirect wholly owned subsidiary Cinram International Income Fund, provides pre-recorded multimedia products and related logistics services. With facilities in North America and Europe, Cinram International Inc. manufactures and distributes pre- recorded DVDs, VHS video cassettes, audio CDs, audio cassettes and CD-ROMs for motion picture studios, music labels, publishers and computer software companies around the world. * * * As reported in the Troubled Company Reporter on Aug. 3, 2006, Moody's Investors Service assigned a definitive B1 senior secured rating to the $825 million credit facility of Cinram International Inc. dated May 5, 2006, removing the provisional status from this rating. Moody's also withdrew the B1 senior secured rating from Cinram's prior credit facility, originally dated October 2003. Cinram's Corporate Family Rating is B1 and the outlook is stable. 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 Cinram International, Incorporated, as well as its B1 rating on the company's $675 million Senior Secured Term Loan. The debentures were assigned an LGD3 rating suggesting creditors will experience a 32% loss in the event of default. As reported in the Troubled Company Reporter on May 11, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on prerecorded multimedia manufacturer Cinram International Inc. to 'BB-' from 'BB' following the company's announcement that it had successfully converted into an income trust. The ratings were removed from CreditWatch with negative implications, where they were placed March 3, 2006. CINRAM INTERNATIONAL: To Engage Advisor for Strategic Review ------------------------------------------------------------ Cinram International Income Fund's Board of Trustees disclosed it has directed management to retain a financial advisor to review strategic and financial alternatives. This will include a careful review of Cinram's business plan, growth strategy and market valuation. "Although it does not appear that Cinram will be directly impacted by the Department of Finance's Tax Fairness Plan for Canadians, this plan will significantly change the landscape for income trusts in Canada. Given these circumstances, the Board of Trustees must consider such factors which could ultimately impact the value of the Fund," said Henri A. Aboutboul, Chairman of the Fund's Board of Trustees. "The Board of Trustees is focused on creating long-term value for unitholders. To that end, we wish to carefully evaluate and pursue strategic and financial alternatives which represent the best use of the Fund's capital, taking into account our commitment to enhance the Fund's market valuation and grow Cinram's business." Mr. Aboutboul added. As reported in the Troubled Company Reporter on Sept. 26, 2006, Cinram informed Amaranth Advisors that its Board of Directors has no intention of selling, or exploring the possibility of selling, the Fund or any of its operating subsidiaries or their respective businesses. The statement came in response to a memorandum issued by Amaranth Canada Trust urging Cinram to immediately retain financial advisors to explore a sale of the Fund, including a going private transaction. Amaranth had issued the memorandum after the Amaranth investment fund group announced significant trading losses in its natural gas trading business. Following Amaranth's disclosure, the trust units of Cinram came under intense selling pressure. Amaranth Canada Trust has beneficial ownership of 8,000,000 trust units of Cinram representing approximately 15.3% of the issued and outstanding trust units, and is the largest equity holder in the fund. Amaranth LLC indirectly beneficially owns all units beneficially owned by Amaranth Canada Trust. In addition, Amaranth has an economic interest in 2,654,895 units. About Cinram Cinram International Inc. (TSX: CRW.UN) - http://www.cinram.com/ -- an indirect wholly owned subsidiary Cinram International Income Fund, provides pre-recorded multimedia products and related logistics services. With facilities in North America and Europe, Cinram International Inc. manufactures and distributes pre- recorded DVDs, VHS video cassettes, audio CDs, audio cassettes and CD-ROMs for motion picture studios, music labels, publishers and computer software companies around the world. * * * As reported in the Troubled Company Reporter on Aug. 3, 2006, Moody's Investors Service assigned a definitive B1 senior secured rating to the $825 million credit facility of Cinram International Inc. dated May 5, 2006, removing the provisional status from this rating. Moody's also withdrew the B1 senior secured rating from Cinram's prior credit facility, originally dated October 2003. Cinram's Corporate Family Rating is B1 and the outlook is stable. 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 Cinram International, Incorporated, as well as its B1 rating on the company's $675 million Senior Secured Term Loan. The debentures were assigned an LGD3 rating suggesting creditors will experience a 32% loss in the event of default. As reported in the Troubled Company Reporter on May 11, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on prerecorded multimedia manufacturer Cinram International Inc. to 'BB-' from 'BB' following the company's announcement that it had successfully converted into an income trust. The ratings were removed from CreditWatch with negative implications, where they were placed March 3, 2006. CITIGROUP MORTGAGE: Moody's Rates Two Certificate Classes at Low-B ------------------------------------------------------------------ Moody's Investors Service assigned an Aaa rating to the senior certificates issued by Citigroup Mortgage Loan Trust 2006-WFHE3 and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by Wells Fargo Bank, N.A. originated adjustable-rate and fixed-rate subprime mortgage loans acquired by Citigroup Global Markets Realty Corp. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, overcollateralization and mortgage insurance. After taking into account the benefits of mortgage insurance, Moody's expects collateral losses to range from 4.6% to 5.1%. Wells Fargo Bank, N.A. will service the loans. Moody's has assigned Wells Fargo Bank, N.A. its top servicer quality rating of SQ1 as a primary servicer of subprime loans. These are the rating actions: * Issuer: Citigroup Mortgage Loan Trust 2006-WFHE3 * Asset-Backed Pass-Through Certificates, Series 2006-WFHE3 Cl. A-1, Assigned Aaa Cl. A-2, Assigned Aaa Cl. A-3, Assigned Aaa Cl. A-4, Assigned Aaa Cl. M-1, Assigned Aa1 Cl. M-2, Assigned Aa2 Cl. M-3, Assigned Aa3 Cl. M-4, Assigned A1 Cl. M-5, Assigned A2 Cl. M-6, Assigned A3 Cl. M-7, Assigned Baa1 Cl. M-8, Assigned Baa2 Cl. M-9, Assigned Baa3 Cl. M-10,Assigned Ba1 Cl. M-11,Assigned Ba2 CITIZENS COMMS: Frontier to Deploy Ill. and Tenn. Wireless Service ------------------------------------------------------------------ Citizens Communications Company has reached agreements with the Cities of Cookeville, Tenn. and Carlinville, Ill., to deploy its Frontier Mobile wireless broadband data service to its markets in the Cities of Cookeville, Tennessee and Carlinville, Illinois. The deployments join the City and County of Elko, Nevada and the State University of New York in Orange County as customers of Frontier Mobile's public wireless broadband network. The Company disclosed that the new wireless data offering is a valuable addition to Frontier's existing suite of voice, video, and High-Speed Internet products and services, all fully integrated on a single bill. The company's agreements with the cities allow for scaleable, cost-efficient additions designed to expand network coverage as needed. Cookeville and Carlinville are growth areas, and wireless broadband ubiquity is a value-added enhancement. Cookeville is home to Tennessee Tech University, a major Frontier customer. The Frontier Mobile service will launch this spring. Carlinville, Illinois is the county seat and home to Blackburn College and a number of companies that design and manufacture software solutions, dairy food products and more. "Frontier's focus has been, and continues to be, small and medium- sized communities experiencing strong growth. Cookeville and Carlinville - like Elko County, Nevada and SUNY Orange -- offer an outstanding quality of life, educational opportunity, a locally based Frontier workforce. These cities will benefit from increased broadband Internet choices," Maggie Wilderotter, chairman and chief executive officer of Citizens Communications Company, says. Headquartered in Stamford, Connecticut, Citizens Communications fka Citizens Utilities (NYSE: CZN) -- http://www.czn.net/-- provides phone, TV, and Internet services to more than two million access lines in parts of 23 states, primarily in rural and suburban markets, where it is the incumbent local-exchange carrier operating under the Frontier brand. * * * As reported in the Troubled Company Reporter on Sept. 20, 2006, Fitch Ratings affirmed Citizens Communications Company's Issuer Default Rating rating at 'BB'. The Rating Outlook is Stable. As reported in the Troubled Company Reporter on Sept. 20, 2006, Moody's Investors Service upgraded the corporate family rating of Citizens Communications to Ba2 from Ba3 and also assigned a Ba2 probability of default rating to the company. The ratings on the senior unsecured revolver and the senior unsecured notes and debentures were also upgraded to Ba2 from Ba3. The instrument ratings reflect both the overall Ba2 probability of default of the company, and a loss given default of LGD 4. The ratings on the preferred EPPICS were upgraded to B1 from B2, and assigned an LGD6 assessment. The outlook is stable. COMMERCIAL REALTY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Commercial Realty and Development Company 138 Center Street St. Marys, PA 15857 Tel: (877) 477-5817 Bankruptcy Case No.: 06-11436 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Towne House Inn, Inc. 06-11437 Towne House Enterprises, Inc. 06-11438 Type of Business: The Debtors operate a 59-room hotel and inn, complete with Executive and VIP Suites. Its Towne House Inn Dining Room is open to the public and offers a full country breakfast, luncheon menu and dinner menu. Chapter 11 Petition Date: November 8, 2006 Court: Western District of Pennsylvania (Erie) Debtor's Counsel: Guy C. Fustine, Esq. Knox McLaughlin Gornall & Sennett, P.C. 120 West Tenth Street Erie, PA 16501 Tel: (814) 459-2800 Fax: (814) 453-4530 Estimated Assets Estimated Debts ---------------- --------------- Commercial Realty $1 Million to $1 Million to and Development $100 Million $100 Million Company Towne House $100,000 to $1 Million to Inn, Inc. $1 Million $100 Million Towne House $10,000 to Less than $50,000 Enterprises, Inc. $100,000 A. Commercial Realty and Development Company does not have any creditors who are not insiders. B. Towne House Inn, Inc.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Suburban Building Center $27,726 Johnsonburg Road St. Marys, PA 15857 National City $25,657 P.O. Box 856176 Louisville, KY 40285-6176 Preferred Capital $18,130 c/o Groen, Lamm, Goldberg & Rubenstone 4 Greenwood Square, Suite 200 Bensalem, PA 19020 F D H Management $12,000 P.O. Box 152 St. Marys, PA 15857 W S Lee and Sons Inc. $11,013 P.O. Box 1631 Altoona, PA 16603-1631 Elk County $7,413 Kemper Insurance $6,438 National Fuel $5,045 Nollau and Young $3,010 Transworld Systems $2,311 Allegheny Power $2,250 Booking Center $2,102 St. Mary's Sewer Service Bill $1,575 Tyler Landscape $1,500 Compsolve Inc. $1,419 Burke's Ace Hardware $1,410 St. Mary's Water Authority $1,240 Centre Publications $1,123 AAA $1,117 Commtrak $1,010 B. Towne House Enterprises, Inc. does not have any creditors who are not insiders. CONTINENTAL AIRLINES: Reports 9.5% Increase in October Traffic -------------------------------------------------------------- Continental Airlines reported an October 2006 consolidated load factor of 79.3%, 2 points above last year's October consolidated load factor. The Company reported a mainline load factor of 79.5%, 2.1 points above the October 2005 mainline load factor, and a domestic mainline load factor of 83.1%, 2.9 points above October 2005. The Company also had an international mainline load factor of 75.4%, 1.4 points above October 2005. The Company disclosed that during the month of October, it recorded a U.S. Department of Transportation on-time arrival rate of 71.4% and an October mainline completion factor of 99.6%. In October 2006, the Continental flew 7.3 billion consolidated revenue passenger miles and 9.2 billion consolidated available seat miles, resulting in a traffic increase of 9.5% and a capacity increase of 6.8% as compared to October 2005. In October 2006, Continental flew 6.4 billion mainline RPMs and 8.1 billion mainline ASMs, resulting in a mainline traffic increase of 9.5% and a 6.6% increase in mainline capacity as compared to October 2005. Domestic mainline traffic was 3.6 billion RPMs in October 2006, up 8% from October 2005, and domestic mainline capacity was 4.3 billion ASMs, up 4.4% from October 2005. For October 2006, consolidated passenger revenue per available seat mile is estimated to have increased between 4.5% and 5.5% compared to October 2005, while mainline passenger RASM is estimated to have increased between 5% and 6% compared to October 2005. For September 2006, both consolidated and mainline passenger RASM increased 4.8% compared to September 2005. October 2006 sales at continental.com increased 26% over October 2005. The Company's regional operations had an October load factor of 77.3%, 0.6 points above last year's October load factor. Regional RPMs were 854.6 million and regional ASMs were 1.105 billion in October 2006, resulting in a traffic increase of 9.6% and a capacity increase of 8.6% versus October 2005. Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/ -- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 3,200 daily departures throughout the Americas, Europe and Asia, serving 154 domestic and 138 international destinations. More than 400 additional points are served via SkyTeam alliance airlines. With more than 43,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 61 million passengers per year. Continental consistently earns awards and critical acclaim for both its operation and its corporate culture. * * * As reported in the Troubled Company Reporter on May 26, 2006, Moody's Investors Service assigned Aaa rating to the Class G Certificates and B1 rating to the Class B Certificates of Continental Airlines, Inc.'s 2006-1 Pass Through Trusts Pass Through Certificates, Series 2006-1. As reported in the Troubled Company Reporter on Oct. 23, 2006, Standard & Poor's Ratings Services affirmed its ratings, including the 'B' long-term and 'B-3' short-term corporate credit ratings, on Continental Airlines Inc. The outlook is revised to stable from negative. Continental has about $17 billion of debt and leases. As reported in the Troubled Company Reporter on Oct. 23, 2006, Fitch Ratings has upgraded Continental Airlines Inc.'s Issuer Default Rating (IDR) to 'B-' from 'CCC' and Senior Unsecured Debt to 'CCC/RR6' from 'CC/RR6'. Rating outlook was stable. CONTINENTAL AIRLINES: Moody's Junks Rating on $200 Mil. Sr. Notes ----------------------------------------------------------------- Moody's Investors Service assigned ratings of Caa1, LDG5-75% to the $200 million of senior unsecured notes issued by Continental Airlines, Inc.'s. Moody's affirmed the B3 corporate family rating. The outlook is stable. The Caa1 rating assigned to the Notes reflects the structural subordination of the Notes to the substantial amount of secured debt in Continental's capital structure. The LGD-5 reflects a loss given default between 70 to 90%. Continental's B3 corporate family rating reflects debt to EBITDA of 7.4x and retained cash flows to debt of 5.8%. Both metrics are somewhat weaker than the midrange for the rating level, although improved with strong recent operating results. Operating performance has benefited from high demand for air travel, as well as higher yields with capacity reductions by competitors in several of Continental's markets. Notably, Continental expects to be profitable in FY 2006 despite substantially higher fuel expense. Nonetheless, Continental is highly leveraged, and the company's debt is expected to increase going forward given the substantial aircraft deliveries through 2009. As well, the company's near- term cash demands are substantial as debt maturities will approximate $563 million in FY 2007 alone. Liquidity is strong at this time, however, with approximately $2.5 billion of cash as of Sept. 30, 2006. The stable outlook reflects the expectation of steadily improving operating and financial performance over the near term, from yield-driven revenue growth as well as capacity increases to support such growth, while maintaining control of the growth of unit costs. Downward ratings pressure could occur should the company's planned cost reductions fail to materialize, that could put downward pressure on key credit metrics such as debt to EBITDA above 10x and EBIT to interest expense below 0.5x. The rating could be raised after sustained growth sufficient to improve EBIT to interest expense greater than 2x and retained cash flow to debt greater than 10%. Rating Assigned: -- Continental Airlines, Inc. senior unsecured notes at Caa1, LGD5, 75% Continental Airlines, based in Houston Texas, operates a commercial airline. CONTINENTAL AIRLINES: S&P Rates $200 Mil. Senior Notes at 'CCC+' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' rating to Continental Airlines Inc.'s (B/Stable/B-3) $200 million senior unsecured notes due 2011. The rating is the same as that on other senior unsecured obligations of Continental, and is rated lower than the corporate credit rating because a large amount of secured debt and leases places unsecured creditors in an effectively subordinated position. Houston, Texas-based Continental is the fourth-largest U.S. airline, with about $17 billion of debt and leases. "Improving earnings, cash flow generation, and liquidity have bolstered Continental's financial profile, though the airline remains highly leveraged and exposed to industrywide risks of high fuel prices and price competition," said Standard & Poor's credit analyst Philip Baggaley. The company generated $309 million of net earnings before special items over the first three quarters of 2006, reversing a loss in the same period last year, and had $2.5 billion of unrestricted cash at Sept. 30. We revised our long-term rating outlook on Continental to stable from negative on Oct. 19, 2006. The 'B' corporate credit rating, which was affirmed, reflects Continental's participation in the high-risk airline industry and a heavy debt and lease burden. These factors outweigh better- than-average operating performance among its peer large U.S. hub- and-spoke airlines. Sale of the notes being rated will help refinance upcoming debt maturities, $292 million in the fourth quarter and $556 million in 2007. Remaining aircraft deliveries in 2006 and 2007 have financing arranged, which, along with positive operating cash flow, should allow Continental to maintain unrestricted cash in the $2 billion to $2.5 billion range. Ratings List: * Continental Airlines Inc. -- Corporate Credit Rating -- B/Stable/B-3 Ratings Assigned: * Continental Airlines Inc. -- $200 Million Senior Unsecured Notes Due 2011 -- CCC+ COZZOLINO FURNITURE: Taps Spector & Ehrenworth as Bankr. Counsel ---------------------------------------------------------------- Cozzolino Furniture Design Inc. asks the U.S Bankruptcy Court for the District of New Jersey for permission to employ Spector & Ehrenworth P.C., as its bankruptcy counsel, nunc pro tunc Nov. 3, 2006. The firm will: a) prepare all necessary applications, pleadings, orders, reports, disclosure statements, plans and other legal papers required in connection with the administration of the estate; and b) advise and assist the Debtor in all matters pertaining to the proper conduct and administration of the estate. The Debtor's application did not disclose the firm's compensation. Brian D. Spector, Esq., a member of the firm, assures the Court that his firm does not hold any interest adverse and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Spector can be reached at: Brian D. Spector, Esq. Spector & Ehrenworth, P.C. 30 Columbia Turnpike Florham Park, NJ 07932-2261 Tel: (973) 593-4800 Fax: (973) 593-4848 Headquartered in West Orange, New Jersey, Cozzolino Furniture Design Inc. -- http://www.cozzolino.com/manufactures wooded household and office furniture. The Company filed it chapter 11 protection on Nov. 3, 2006 (Bankr. D. N.J. Case No. 06-20898). Douglas A. Goldstein, Esq., at Spector & Ehrenworth P.C., represents the Debtor on its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy proceedings. When the Debtor filed for protection from its creditors, it estimated assets of $704,136 and debts of $1,977,572. CRI RESOURCES: Disclosure Statement Hearing Set for November 16 --------------------------------------------------------------- The Honorable Erithe A. Smith of the U.S. Bankruptcy Court for the Central District of California will convene a hearing on Nov. 16, 2006, at 2:00 p.m., to consider approval of CRI Resources Inc.'s amended disclosure statement. The hearing will be held at Courtroom 860, 255 E. Temple St., in Los Angeles, California. As reported in the Troubled Company Reporter on Oct. 20, 2006, the Plan contemplates: -- reinstatement of Cleveland Wrecking Company fka CWC Acquisition Corp.'s secured claim for $13.9 million; -- providing general unsecured claims the option of new common stock or cash equal to their pro rata share of a $100,000 fund; and -- cancellation of all old common stock. On the effective date of the Plan, CWC will be the majority equity holder of the Reorganized Debtor. CWC's secured claim is approximately $44.7 million as of Aug. 31, 2006. To effectuate the Plan, CWC agreed to accept new common stock in return for the $30.8 million unsecured deficiency created after reinstatement of CWC's secured claim. CWC also agreed to set aside $100,000 in a fund for holders of general unsecured claims that elect not to receive new common stock. Headquartered in Los Angeles, California, CRI Resources Inc. provides demolition services. The Company filed for chapter 11 protection on March 1, 2005 (Bankr. C.D. Calif., L.A. Div., Case No. 05-13899). Stephen F. Biegenzahn, Esq., at Biegenzahn Weinberg represents the Debtor's restructuring. When the Company filed for protection from its creditors, it listed total assets of $5,243,614 and total debts of $43,078,461. CS MORTGAGE: Fitch Rates $4.6-Mil Class B-1 Certificates at BB -------------------------------------------------------------- CS Mortgage Pass-Through Certificates, series 2006-CF3 is rated by Fitch Ratings: -- $126,930,000 class A-1 certificates (senior certificates) 'AAA'; -- $12,486,000 class M-1 certificates 'AA'; -- $3,788,000 class M-2 certificates 'AA-'; -- $6,372,000 class M-3 certificates 'A'; -- $5,597,000 class M-4 certificates 'BBB+'; -- $2,152,000 class M-5 certificates 'BBB'; -- $2,583,000 class M-6 certificates 'BBB-'; -- $4,650,000 class B-1 certificates 'BB'. The 'AAA' rating on the class A certificates reflects the 26.3% credit enhancement provided by the 7.25% class M-1, the 2.20% class M-2, the 3.70% class M-3, the 3.25% class M-4, the 1.25% class M-5, the 1.50% class M-6, and the 2.70% class B-1, along with 4.45% fully funded overcollateralization. In addition, the ratings on the certificates reflect the quality of the underlying collateral, and Fitch's level of confidence in the integrity of the legal and financial structure of the transaction. The mortgage pool consists of fixed- and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties, with an aggregate principal balance of $172,225,515. As of the cut-off date, Oct. 1, 2006, the mortgage loans had a weighted average loan-to-value ratio of 75.5% on first liens and 101.8% on second liens, weighted average coupon of 8.018% and an average principal balance of $190,094. Single-family properties account for approximately 78.4% of the mortgage pool, two- to four-family properties 7.4%, and condos 6.4%. The three largest state concentrations are California (25.5%), New York (12.6%), and Florida (7.7%). None of the mortgage loans is a 'high cost' loans as defined under any local, state or federal laws. Credit Suisse First Boston Mortgage Securities Corp. deposited the loans into the trust, which issued the certificates, representing beneficial ownership in the trust. For federal income tax purposes, the Trust will consist of multiple real estate mortgage investment conduits. U.S. Bank National Association will act as trustee. Select Portfolio Servicing, Inc., rated 'RSS2' will act as Servicer for this transaction. DBO HOLDINGS: S&P Rates Proposed $1.275 Bil. Senior Loan at 'B+' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating and stable outlook to Collingswood, N.J.-based tubular products manufacturer DBO Holdings Inc. At the same time, Standard & Poor's assigned its 'BB' bank loan rating, two notches above the corporate credit rating, and '1' recovery rating to the company's proposed $450 million senior secured revolving credit facility, indicating expectations of full recovery of principal in the event of a payment default. Standard & Poor's also assigned its 'B+' bank loan rating, the same as the corporate credit rating, and '3' recovery rating to the company's proposed $1.275 billion senior secured term loan, indicating expectations of meaningful (50%-80%) recovery of principal in the event of a payment default. "The ratings on DBO Holdings reflect the cyclical nature of the company's end markets, its sole reliance on nonresidential construction spending, and aggressive financial leverage," said Standard & Poor's credit analyst Dominic D'Ascoli. "Ratings also reflect the company's good market position, its low capital expenditure requirements, its highly variable cost structure, and currently good market conditions." Proceeds from the proposed facilities will be used to fund the acquisition of Atlas Tube Inc. and a smaller U.S. tubular goods manufacturer, the name of which has not been publicly disclosed, with John Maneely Co. Standard & Poor's expect that the transactions will close before year-end. DURA AUTOMOTIVE: Taps Kirkland & Ellis as Bankruptcy Counsel ------------------------------------------------------------ DURA Automotive Systems Inc. and its debtor affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Kirkland & Ellis as their bankruptcy counsel, under a general retainer, nunc pro tunc Oct. 30, 2006. Keith Marchiando, chief financial officer of Dura Automotive Systems, Inc., tells the Court that Kirkland has been actively involved in major reorganization cases, and has represented several debtors, including W.R. Grace & Co., Harnischfeger Indus., Inc., Musicland Holding Corp., Leaseway Motorcar Transport Company, Calpine Corp., Collins & Aikman Corp., Tower Automotive Inc., and UAL Corp. Mr. Marchiando discloses that Kirkland has been counsel to the Debtors on a number of matters for ten years, including the preparation of their Chapter 11 filings, and, accordingly, will be able to quickly respond to any issues that may arise during the Reorganization Cases. Specifically, Kirkland will: (a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their business and properties; (b) attend meetings and negotiate with representatives of creditors and other parties in interest; (c) take all necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors' interests in negotiations concerning all litigation in which the Debtors are involved; (d) prepare all motions, applications, answers, orders, reports, and papers necessary to the administration of the Debtors' estates; (e) take any necessary action on behalf of the Debtors to obtain approval of a disclosure statement and confirmation of the Debtors' plan of reorganization; (f) represent the Debtors in connection with obtaining financing after its filing for Chapter 11 protection; (g) advise the Debtors in connection with any potential sale of assets; (h) appear before the Court, any appellate courts, and the U.S. Trustee, and protect the interests of the Debtors' estates before the courts and the U.S. Trustee; and (i) perform all other necessary legal services to the Debtors in connection with the Reorganization Cases, including: * analyze the Debtors' leases and executory contracts and their assumption or assignment; * analyze the validity of liens against the Debtors; and * advise on corporate, litigation, environmental, and other legal matters. Kirkland will be paid based on the firm's standard hourly rates: Professional Hourly Rate ------------ ------------ Partners $425 to $950 Counsel $325 to $740 Associates $245 to $540 Paraprofessionals $90 to $280 Nineteen professionals are expected to have primary responsibility for providing services to the Debtors: Lyndon E. Norley $975 Richard M. Cieri $825 Todd F. Maynes, P.C, $795 Partha Kar $775 Marc Kieselstein, P.C. $745 Dennis M. Myers, P.C. $745 Natasha Watson $610 Maureen Sweeney $575 Dr. Bernd Meyer-Lowy $575 Roger J. Higgins $545 David A. Agay $545 Leo Plank $525 Ryan Blaine Bennett $510 Michelle Mulkem $430 Uday Gorrepati $355 Joy Lyu Monahan $350 Kathryn Koenig $350 Thad Davis $325 Lauren Hawkins $295 The Debtors will reimburse Kirkland for necessary out-of-pocket expenses. Marc Kieselstein, Esq., a partner at Kirkland, informs the Court that in August 2006, the Debtors advanced $400,000 to Kirkland as a retainer. In September, the Debtors advanced a further $900,000 as an increase to the retainer. The Debtors have since then replenished the retainer to $500,000 on a weekly basis. Mr. Marchiando adds that Kirkland received payments for professional services performed in the 90 days prior to the Petition Date, and additional amounts for the reimbursement of reasonable and necessary expenses incurred. The Debtors have agreed that fees, after the date of filing for Chapter 11 protection, are an advance payment and not a retainer. As of Oct. 30, 2006, the Debtors do not owe Kirkland any amounts for legal services rendered prior to the bankruptcy filing. Mr. Kieselstein assures the Court that his firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) Kirkland does not hold or represent an interest adverse to the Debtors or their estates, Mr. Kieselstein adds. Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co- counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Taps Richards Layton as Local Counsel ------------------------------------------------------ DURA Automotive Systems, Inc. and its debtor affiliates, seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Richards, Layton & Finger, P.A., as their local counsel, general co-counsel, and conflicts counsel, nunc pro tunc to Oct. 30, 2006. Keith Marchiando, chief financial officer, explains that granting the application will avoid unnecessary litigation and reduce the overall expense of administering the Debtors' bankruptcy cases. Mr. Marchiando relates that RL&F, a Delaware counsel, has extensive experience and knowledge in the field of debtors' and creditors' rights and business reorganizations under Chapter 11 of the Bankruptcy Code. Moreover, Mr. Marchiando says RL&F has become familiar with the Debtors' business and affairs and many of the potential legal issues that may arise in the context of their Chapter 11 cases. RL&F will: * provide legal advice to the Debtors with respect to their rights, powers, and duties as debtors-in-possession in the continued operation of their business and management of their properties; * take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of di8sputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; * prepare and pursue confirmation of the Debtors' plan, approval of that plan, and approval of the Debtors' disclosure statement; * prepare necessary applications, motions, answers, order, reports, and other legal papers on behalf of the Debtors; * appear in Court and protect the interests of the debtors before the Court; and * perform all other legal services for the Debtors that may be necessary and proper in the bankruptcy proceeding. The firm will be paid based on their customary hourly rates. The principal attorneys and paralegals presently designated to represent the Debtors and their hourly rates are: Directors $390 to $605 Mark D. Collins $520 Daniel J. DeFranceschi $465 Associates $210 to $350 Jason M. Madron $270 Mark Kurtz $225 Paralegals $125 to $180 Ann Jerominski $165 Rebecca V. Speaker $165 The Debtors will reimburse RL&F for necessary out-of-pocket expenses. Mr. Marchiando discloses that RL&F has received a $193,638 retainer as an advance against expenses for services to be performed in the preparation and prosecution of the Debtors' Chapter 11 cases, which will be applied to postpetition allowances of compensation and reimbursement of expenses. Daniel J. DeFranceschi, a director of RL&F, assures the Court that his firm is "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. RL&F does not hold or represent an interest adverse to the Debtors or their estates, Mr. DeFranceschi says. Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co- counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). EMMIS COMMS: Declares $4/Share Special Dividend to Common Holders ----------------------------------------------------------------- Emmis Communications Corporation's Board of Directors has declared a special cash dividend of $4 per share payable pro rata to all holders of the Company's common stock, with a record date of Nov. 12, 2006 and a payment date of Nov. 22, 2006. "The $4 per share dividend, the first dividend on our common stock in Emmis' 25 year history, demonstrates our commitment to creating shareholder value and our enthusiasm about what lies ahead for our core radio and publishing businesses," Emmis chairman and chief executive officer Jeff Smulyan said. The company announced Sept. 18 that its Board had directed management to take the necessary steps for the special dividend to be declared. The company expects the dividend to be treated for tax purposes as approximately 35% return of capital and 65% dividend. Indianapolis, Ind.-based Emmis Communications Corporation (NASDAQ: EMMS) -- http://www.emmis.com/-- is a diversified media firm with radio broadcasting, television broadcasting, and magazine publishing operations. Emmis owns 22 FM and 2 AM domestic radio stations serving New York, Los Angeles, and Chicago as well as St. Louis, Austin, Indianapolis and Terre Haute, Indiana. In addition, Emmis owns a radio network, international radio interests, two television stations, regional and specialty magazines, and ancillary businesses in broadcast sales and publishing. * * * As reported in the Troubled Company Reporter on Oct. 16, 2006, Moody's Investors Service downgraded Emmis Communications Corp.'s Corporate Family rating from Ba3 to B1 and assigned a B1 rating to the $600 million senior secured credit facilities of Emmis' subsidiary, Emmis Operating Company. As reported in the Troubled Company Reporter on Oct. 16, 2006, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Emmis Communications Corp. and subsidiary Emmis Operating Co. by one notch, to 'B' and S&P assigned its 'B' bank loan rating to Emmis Operating's $600 million secured credit facility. ENTERGY NEW ORLEANS: Bankruptcy Clerk Records 14 Claim Transfers ---------------------------------------------------------------- The Bankruptcy Clerk of the U.S. Bankruptcy Court for the Eastern District of Louisiana has recorded 14 claim transfers in Entergy New Orleans Inc. and its debtor-affiliates' chapter 11 cases, as of Nov. 2, 2006: Creditor Transferee Claim Amount -------- ---------- ------------ Formed Plastics Trade-Debt.Net Inc. $212 Inc. Roussel Welding & Trade-Debt.Net Inc. Metal Works Inc. 185 Magnus Entergy Deutsche Bank 2,226,291 Marketing, Ltd. Securities, Inc. CNP Houston Electric Entergy Services, Inc. 184,653 LLC, a/k/a/ CenterPoint Energy Capital Electric ESI Builders, Inc. 95,331 Coral Power, L.L.C. Cottonwood Energy 787,827 Company LP Professional Shorthand ESI Reporters not disclosed Chain Electric ESI Company 41,652 Killen Contractors, Inc. ESI 15,230 Inc. Alliance Reporting, Inc. ESI not disclosed D.M.T., Inc. ESI not disclosed NRG Power Hain Capital 3,679,190 Marketing, Inc. Holdings, LLC Osmose Utilities Hain Capital 117,327 Services, Inc. Holdings Don Bohn Ford Inc. Trade-Debt.Net Inc. 3,277 The claims transfer notices were filed by: -- Trade-Debt.Net Inc. P.O. Box 1487 West Babylon, NY 11704 -- Deutsche Bank Securities, Inc. 60 Wall Street, 3rd Floor New York, NY 10005 -- Entergy Services, Inc. c/o Alan H. Katz P.O. Box 61000 New Orleans, LA 70161 -- Cottonwood Energy Company LP 35 Corporate Drive, 4th Floor Burlington, MA 01803 -- Hain Capitol Holdings, LLC 301 Route 17, 6th Floor Rutherford, NJ 07070 The Court has approved the transfer of the claims of Formed Plastics, Roussel Welding, CNP Houston, Coral Power and Professional Shorthand. 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. 26; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) EQUISTAR CHEMICALS: 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. chemical and allied products sectors, the rating agency confirmed its Ba3 Corporate Family Rating for Equistar Chemicals LP. Additionally, Moody's affirmed 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 ---------- ------- ------- ------ ---------- $700 Million 10.125% Senior Unsecured Notes Due Sept. 2008 B1 B1 LGD4 64% $600 Million 8.75% Senior Unsecured Notes Due Feb. 2009 B1 B1 LGD4 64% $700 Million 10.58% Senior Unsecured Notes Due May 2011 B1 B1 LGD4 64% $150 Million 7.55% Senior Unsecured Debentures Due Feb. 2026 B1 B1 LGD4 64% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Houston, Texas, Equistar Chemicals LP is engaged in the production of basic chemicals, such as polyethylene, in North America. FLEXTRONICS INT'L: Earns $184.8 Mil. in Second Qtr. Ended Sept. 30 ------------------------------------------------------------------ Flextronics International Ltd. filed its financial statements for the second quarter ended Sept. 30, 2006, with the Securities and Exchange Commission on Nov. 8, 2006. For the three months ended Sept. 30, 2006, the Company reported $184.870 million of net income compared with a $2.447 million net loss in the comparable quarter of 2005. Net Sales Net sales during the three months ended Sept. 30, 2006, totaled $4.7 billion, representing an increase of $894.3 million over the three months ended Sept. 30, 2005. Net sales during the three months ended Sept. 30, 2006, increased by $721.1 million and $239.2 million in Asia and the Americas, respectively, offset by a decline of $66 million in Europe. Overall, the increase in net sales was primarily attributable to: -- an increase of $514.2 million in the mobile communications market due to new program wins from various customers, -- an increase of $154.9 million to customers in the infrastructure market, -- an increase of $121.2 million to customers in the industrial, medical, automotive and other markets, -- an increase of $59.5 million to customers in the computing market, and -- an increase of $44.5 million to customers in the consumer digital market. Net sales during the six months ended Sept. 30, 2006, totaled $8.8 billion, representing an increase of $1.1 billion over the six months ended Sept. 30, 2005. Net sales during the six months ended Sept. 30, 2006, increased by $1.2 billion and $335.2 million in Asia and the Americas, respectively, offset by a decline of $373.6 million in Europe. Overall, the increase in net sales was primarily attributable to: -- an increase of $732.8 million in the mobile communications market due to new program wins from various customers, -- an increase of $181.4 million to customers in the industrial, medical, automotive and other markets, and -- an increase of $119.6 million to customers in the computing market, -- an increase of $114.5 million to customers in the infrastructure market, offset by a decrease of $18 million to customers in the consumer digital market. The Company's 10 largest customers during the three months ended Sept. 30, 2006, and 2005 accounted for approximately 68% and 62% of net sales, respectively, with Hewlett-Packard and Sony-Ericsson each accounting for greater than 10% of its net sales. The Company's 10 largest customers during the six months ended Sept. 30, 2006, and 2005 accounted for approximately 67% and 63% of net sales, respectively, with Hewlett-Packard and Sony-Ericsson each accounting for greater than 10% of its net sales. Restructuring Charges Historically, the Company initiated a series of restructuring activities, which were intended to realign its global capacity and infrastructure with demand by its OEM customers and improve its operational efficiency. These activities included: -- reducing excess workforce and capacity; -- consolidating and relocating certain manufacturing facilities to lower-cost regions; and -- consolidating and relocating certain administrative facilities. The restructuring costs were comprised of employee severance, costs related to leased facilities, owned facilities that were no longer in use and were to be disposed of, leased equipment that was no longer in use and was to be disposed of, and other costs associated with the exit of certain contractual agreements due to facility closures. The overall impact of these activities was that the Company shifted its manufacturing capacity to locations with higher efficiencies and, in most instances, lower costs, resulting in better utilization of its overall existing manufacturing capacity. This enhances its ability to provide cost-effective manufacturing service offerings, which enables the Company to retain and expand its existing relationships with customers and attract new business. Although the Company believes it is realizing its anticipated benefits from these efforts, it continues to monitor its operational efficiency and capacity requirements and may utilize similar measures in the future to realign its operations relative to future customer demand, which may materially affect its results of operations in the future. The Company believes that the potential savings in cost of goods sold achieved through lower depreciation and reduced employee expenses as a result of its restructurings will be offset in part by reduced revenues at the affected facilities. During the three and six months ended Sept. 30, 2006, the Company recognized charges of approximately $96.2 million related to the impairment, lease termination, exit costs and other charges primarily related to the disposal and exit of certain real estate owned and leased by the Company in order to reduce its investment in property, plant and equipment. During the three and six months ended Sept. 30, 2006, charges recognized by reportable geographic region amounted to $59 million, $22.5 million, and $14.7 million for the Americas, Asia and Europe, respectively. Approximately $95.7 million of the charges were classified as a component of cost of sales during the three and six months ended Sept. 30, 2006. During the three and six months ended Sept. 30, 2005, the Company recognized restructuring charges of approximately $50.3 million and $83 million, respectively. During the three months ended Sept. 30, 2005, restructuring charges recognized by reportable geographic region amounted to $14.6 million and $35.7 million for the Americas and Europe, respectively. During the six months ended Sept. 30, 2005, restructuring charges recognized by reportable geographic region amounted to $27.3 million and $55.7 million for the Americas and Europe, respectively. During the three months ended Sept. 30, 2005, involuntary employee terminations identified by reportable geographic region amounted to 388 and 607 for the Americas and Europe, respectively. During the six months ended Sept. 30, 2005, involuntary employee terminations identified by reportable geographic region amounted to 453 and 2,257 for the Americas and Europe, respectively. Approximately $38.5 million and $66 million of the restructuring charges were classified as a component of cost of sales during the three and six months ended Sept. 30, 2005, respectively. Liquidity and Capital As of Sept. 30, 2006, the Company had cash and cash equivalents of $1 billion and bank and other borrowings of $1.7 billion, including approximately $225 million outstanding under its various credit facilities. These credit facilities are subject to compliance with certain financial covenants. As of Sept. 30, 2006, the Company was in compliance with the covenants under its indentures and credit facilities. Working capital as of Sept. 30, 2006, and March 31, 2006, was approximately $1 billion and $938.6 million, respectively. Cash used in operating activities amounted to $49.2 million during the six months ended Sept. 30, 2006. Cash provided by operating activities amounted to $432.9 million during the six months ended Sept. 30, 2005. At Sept. 30, 2006, the Company's balance sheet showed $12.409 million in total assets, $6.752 million in total liabilities, and $5.656 million in total shareholders' equity. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?14b3 About Flextronics International Headquartered in Singapore, Flextronics International Ltd. -- http://www.flextronics.com/-- provides electronics manufacturing services through a network of facilities in over 30 countries worldwide. The company delivers complete design, engineering, and manufacturing services to aerospace, automotive, computing, consumer digital, industrial, infrastructure, medical and mobile original equipment manufacturers. * * * Moody's Investors Service confirmed Flextronics International Ltd.'s Ba1 Corporate Family Rating in connection with the rating agency's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology. FLEXTRONICS INTERNATIONAL: Shareholders Okays 2001 Plan Changes --------------------------------------------------------------- Shareholders of Flextronics International Ltd. have approved the amendments to the Company's 2001 Equity Incentive Plan during their 2006 Annual General Meeting held last month. The amendments to the 2001 Plan provides: a. the elimination of the 2-million share sub-limit on the number of ordinary shares subject to stock bonus awards that may be outstanding at any time during the term of the 2001 Plan; b. the modification of the automatic option grant to non- employee directors so that the option grant will not be pro-rated based on the service of the director during the prior 12 months; and c. the increase of the share reserve by 5,000,000 ordinary shares to an aggregate of 32,000,000 ordinary shares (not including shares available under plans consolidated into the 2001 Plan). Pursuant to the approval of Non-Employee Director Compensation under Singapore law, the Company may only provide cash compensation to its non-employee directors for their services rendered with the prior approval from its shareholders at a general meeting. Accordingly, at the 2006 Annual Meeting, the Company's shareholders approved the cash compensation arrangements for the non-employee directors: a. annual cash compensation of $40,000, payable quarterly in arrears, for services rendered as a director; b. additional annual cash compensation of $10,000, payable quarterly in arrears to the Chairman of the Audit Committee (if appointed) of the Board of Directors for services rendered as Chairman of the Audit Committee; and c. additional annual cash compensation of $5,000, payable quarterly in arrears for participation on any standing committee of the Board of Directors. The standing committees of the Board of Directors of the Company are currently the Audit, Compensation, Nominating and Corporate Governance, and Finance Committees. The cash compensation for the directors of the Company approved at the 2006 Annual Meeting is unchanged from the amounts approved by the Company's shareholders at the 2005 Annual General Meeting of Shareholders. Moreover, at the 2006 Annual Meeting, the Company's shareholders also approved the amendment and restatement of the Company's Articles of Association, which defines the rights of holders of the Company's ordinary shares. As a result of the shareholder approval, which became effective on October 4, 2006, the Company's Articles of Association were amended to: a. reflect certain changes made by the Singapore Companies (Amendment) Act 2005, including the elimination of the concepts of par value, share premium, shares issued at a discount and authorized share capital; b. provide for the holding of treasury shares and to modernize and streamline certain provisions to be more consistent with, and take greater advantage of, the Singapore Companies Act, as amended; and c. re-word a number of provisions in order to improve clarity and readability. Headquartered in Singapore, Flextronics International Ltd. -- http://www.flextronics.com/-- provides electronics manufacturing services through a network of facilities in over 30 countries worldwide. The company delivers complete design, engineering, and manufacturing services to aerospace, automotive, computing, consumer digital, industrial, infrastructure, medical and mobile original equipment manufacturers. * * * Moody's Investors Service confirmed Flextronics International Ltd.'s Ba1 Corporate Family Rating in connection with the rating agency's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology. FLYI INC: Inks Claim Settlement Agreement with UAL Insurers ----------------------------------------------------------- Independence Air Inc. and FLYi Inc. advise the U.S. Bankruptcy Court for the District of Delaware that they have reached an agreement with AIG Aviation; United States Aviation Underwriters, Inc.; and United States Aircraft Insurance Group pursuant to the order establishing procedures for the settlement and payment of certain categories of claims and controversies The parties settle an action the Debtors and their insurers initiated against the insurers of United Air Lines, Inc., and certain related parties with respect to an October 2004 collision involving the Debtors' aircraft and United Air Lines' bus at O'Hare International Airport, in Chicago, Illinois. The entire settlement amount, including the amount received by the Debtors' insurer for amounts that it paid to the Debtors to cover the Debtors' loss, is $1,400,000. The portion of the settlement amount to be paid to the Debtors is $148,400. The Debtors were seeking recovery of the $250,000 deductible that they had to pay under the applicable insurance policy to cover their loss. No general unsecured claim will be allowed in connection with the Settlement. The Debtors will make no payment to any party. Matthew B. Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that the Settlement resolves claims for property damage and repair costs to the Debtors' aircraft, but does not include a release of the Debtors' claims to the loss of revenue from the date of the incident until the aircraft was repaired and returned to the Debtors' fleet. Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent of Independence Air Inc., a small airline based at Washington Dulles International Airport. The Debtor and its six affiliates filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del. Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon, Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. Brett H. Miller, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors listed assets totaling $378,500,000 and debts totaling $455,400,000. (FLYi Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). FOAMEX INT'L: Wants Amended Plan Solicitation Procedures Approved ----------------------------------------------------------------- Foamex International Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to: (i) approve the form and contents of their proposed solicitation package relating to their October 23, 2006 First Amended Joint Plan of Reorganization and accompanying Disclosure Statement; (ii) approve the form and manner of notice of the hearing to consider confirmation of the Amended Plan; (iii) establish a record date and approve procedures for distributing solicitation packages; (iv) approve the form of ballots; (v) establish a voting deadline for the receipt of ballots; (vi) approve procedures for tabulating acceptances and rejections of the Amended Plan; and (vii) establish the deadline and procedures for filing objections to confirmation of the Plan. In accordance with Rule 3017(c) of the Federal Rules of Bankruptcy Procedure, the Debtors ask the Court to schedule the hearing to consider the confirmation of the Amended Plan on Jan. 18, 2007, at 9:30 a.m., prevailing Eastern Time. The proposed Confirmation Hearing date is approximately 58 days after the Debtors' anticipated date for the entry of an order approving the Disclosure Statement. Upon approval of the Disclosure Statement, the Debtors propose to provide all creditors and equity security holders with the distribution of solicitation packages, either the solicitation package notice or the unimpaired party notice, setting forth: (a) the Court's approval of their Disclosure Statement, (b) the date of the Confirmation Hearing, and (c) the deadline and procedures for filing objections to Plan Confirmation. The Debtors also propose to publish a notice of the time set for the Confirmation Hearing and the filing of Plan Confirmation Objections in their Web site -- http://www.foamex.com/-- and in The Wall Street Journal (National Edition), The New York Times (National Edition), or USA Today (National Edition). The Debtors will provide the Publication Notice in not less than 20 days before the Confirmation Hearing. The Debtors ask the Court to deem their proposed procedures as adequate notice of the Confirmation Hearing. Plan Confirmation Objection Procedures In accordance with Rules 2002(b) and 2002(d), and to permit them adequate time to respond to objections prior to the Confirmation Hearing, the Debtors propose to establish Jan. 4, 2007, as the deadline for filing written objections to the confirmation of the Plan. Plan Confirmation Objections must specify in detail: (i) the name and address of the objector, (ii) all grounds for the objection, and (iii) the amount of the claims or other interests held by the objector. Solicitation Package Holders of Existing Common Stock and Existing Preferred Stock are impaired under the Plan. Pursuant to Rule 2002, the Debtors propose to transmit by first class mail to equity security holders entitled to vote on the Plan, a solicitation package containing copies of these documents: (a) a written notice regarding, among others: * the Court's approval of the Disclosure Statement, * the deadline for voting on the Plan, * the Confirmation Hearing Date, and * the Confirmation Objection deadline. A full-text copy of the Debtors' proposed Solicitation Package Notice is available for free at: http://researcharchives.com/t/s?14a7 (b) the Amended Plan; (c) the Disclosure Statement; (d) a ballot and a self-addressed return envelope to be used to return a completed Ballot. A full-text copy of the Ballots is available for free at: http://researcharchives.com/t/s?14a8 (e) the Court's order approving, inter alia, the Disclosure Statement; and (f) any other information as the Court may direct or approve. The Debtors propose that they not be required to transmit a Solicitation Package to the unimpaired classes of creditors -- holders of Administrative Claims, Priority Tax Claims, DIP Financing Claims, Other Priority Claims, Other Secured Claims, Senior Secured Note Claims, Senior Subordinated Note Claims, General Unsecured Claims, Unliquidated Claims, Intercompany Claims, Equity Interests in Surviving Debtor Subsidiaries and Other Equity Interests in Foamex International. Instead, the Debtors propose to mail, pursuant to Rule 2002(g), to each holder of unimpaired claims under the Amended Plan, a notice containing a brief summary of the Plan, including but not limited to the non-debtor release provision contained in Article VIII of the Amended Plan and the procedure for resolution of postpetition interest disputes, and sets forth: (i) the Court's approval of the Disclosure Statement; (ii) the procedure by which the Unimpaired Parties may opt-out of the Non-Debtor Release; (iii) the Confirmation Hearing Date; and (iv) the deadline and procedures for filing Plan Confirmation Objections. A full-text copy of the Unimpaired Party Notice is available for free at http://researcharchives.com/t/s?14a9 Record Date The Debtors propose that the Court establish Nov. 15, 2006, as the record date for the purposes of determining which equity security holders are entitled to receive a solicitation notice and to vote on the Plan, and for purposes of determining which creditors and equity security holders are entitled to receive the Unimpaired Party Notice. Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, states that since the Disclosure Statement Hearing is currently scheduled on Nov. 21, 2006, setting the November 15 Record Date will enable the Debtors to timely expedite the mailing of the Solicitation Packages. The Debtors relate that typically, they are able to obtain the list of holders of Existing Common Stock from the various bankers and brokers and the Depository Trust Company in seven to 10 days. Voting Deadline The Debtors propose that all Ballots from a holder of a Claim or Equity Interest in a Class entitled to vote must be properly executed, completed, and delivered so as to be received by Bankruptcy Services, LLC, the Debtors' solicitation and tabulation agent, no later than 4:00 p.m., prevailing Eastern Time, on January 4, 2007. Procedures for Ballot Tabulation For the purpose of voting to accept or reject the Amended Plan, the Debtors propose that these voting procedures and standard assumptions be used in tabulating the Ballots: (a) Equity security holders must vote all of their interests within a particular class either to accept or reject the Plan. A Ballot that partially rejects and partially accepts the Amended Plan will not be counted; (b) Ballots that fail to indicate an acceptance or rejection of the Amended Plan, or that indicate both acceptance and rejection of the Amended Plan, will not be counted even if properly executed or timely filed; (c) Only Ballots that are timely received with original signatures will be counted. Facsimile or e-mail Ballots will not be counted unless the equity security holder receives the written consent of the Debtors; (d) If an equity security holder casts more than one Ballot voting the same equity interest prior to the Voting Deadline, the last Ballot received by BSI prior to the Voting Deadline will be deemed to reflect the voter's intent and will supersede all prior Ballots; (e) No Ballot will be counted if it is: * actually received after the Voting Deadline, unless the Debtors have granted in writing an extension of the Voting Deadline with respect to the equity security holder submitting that Ballot; * illegible or contains insufficient information to permit identification of the equity security holder, the amount of the equity interest or nature of the vote cast; or * cast by a person or entity that does not hold an equity interest in a class entitled to vote on the Plan; and (f) The Debtors may accept corrected Ballots to cure any defect after the Voting Deadline. The Debtors also propose that all banks and brokerage firms through which beneficial owners hold Existing Common Stock be required to receive and summarize on a Master Ballot all Beneficial Owner Ballots cast by the beneficial owners and timely returned. The banks and brokerage firms will deliver the Master Ballots and copies of the Beneficial Owner Ballots to BSI no later than the Voting Deadline. Beneficial Owner Ballots delivered directly to BSI will not be counted. 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. 32; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FOAMEX INT'L: Wants Cure Amount Determination Protocol Established ------------------------------------------------------------------ To aid in the implementation of their First Amended Joint Plan of Reorganization, Foamex International Inc. and its debtor- affiliates ask the U.S. Bankruptcy Court for the District of Delaware to establish: (i) a procedure for determining cure amounts; and (ii) a deadline for objections relating to contracts and leases that may be assumed pursuant to the Plan. Under the Debtors' Amended Joint Plan of Reorganization, certain executory contracts and unexpired leases will be assumed as of, and subject to, the effective date of the Plan, Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates. The Amended Plan and Section 365(b) of the Bankruptcy Code require the Debtors to cure or provide adequate assurance that they will promptly cure existing defaults under that executory contracts and unexpired leases. According to Mr. Barry, establishing the amounts to be paid in satisfaction of all the cure obligations is an important element of Plan confirmation and feasibility. To facilitate a prompt resolution of cure disputes and objections relating to the assumption of the agreements, the Debtors propose these deadlines and procedures: (a) The Debtors will serve a notice of: * possible assumption of contracts and leases, * fixing of cure amounts, and * deadline to object to the assumption, on the non-debtor parties to all executory contracts and unexpired leases to be assumed under the Amended Plan within 10 business days after the Court approves the Disclosure Statement and the Solicitation Procedures. Among others, the Cure Notice will set forth the amount which the Debtors believe must be paid in order to cure all monetary defaults under each of the Subject Contracts; (b) The non-debtor parties to the Subject Contracts will have 14 days after service of the Cure Notice to object to the: * Cure Amounts listed by the Debtors and propose alternative cure amounts; or * proposed assumption of the Subject Contracts under the Amended Plan. If the Debtors amend the Contract Notice or any related pleading that lists the Subject Contracts to add a contract or lease, or to reduce the cure amount, the non-debtor party will have an additional 10 days after service of the amendment to object or to propose an alternative cure amount; (c) Objections to the proposed Cure Amounts, or the contract or lease assumptions must be served upon each of the Notice Parties by no later than 4:00 p.m., prevailing Eastern Time, on the Cure Objection Deadline. If a Cure Objection is timely filed and the parties are unable to settle it, the Court will determine the amount of any disputed Cure Amount, or objection to assumption, at a hearing to be held on December 21, 2006; (d) In the event no Cure Objection is timely filed: * the counterparty to the Subject Contract will be deemed to have consented to the assumption of the Subject Contract and the Cure Amount proposed by the Debtors; * the counterparty will be forever enjoined and barred from seeking any additional amounts on account of the Debtors' cure obligations under Section 365; and * upon the Effective Date, the Reorganized Debtors and the counterparty to the Subject Contract will have all the rights and benefits under that Subject Contract without the necessity of obtaining any party's written consent to the Debtors' assumption. Mr. Barry assures the Court that the inclusion of the Subject Contract in the Cure Notice is without prejudice to the Debtors' right to modify their election to assume or reject that contract before the entry of a final, non-appealable Court order deeming the contract assumed or rejected. Inclusion in the Cure Notice is not a final determination that any Subject Contract will be assumed, 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. 32; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Raises 2007 Vehicle Prices Due to Increased Costs ----------------------------------------------------------------- General Motors Corp. has raised prices on about one-third of its 2007 model-year vehicles in the United States to cover increased costs for steel and other commodities, Reuters reports. The price increases range from $60 to $425 per vehicle at an average of about 0.5% increase per vehicle, affecting 239 of GM's 681 vehicle models and its variants, the report said. About General Motors General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. * * * As reported in the Troubled Company Reporter on Oct. 11, 2006, Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. would remain on CreditWatch with negative implications, where they were placed March 29, 2006. As reported in the Troubled Company Reporter on July 27, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of General Motors Corporation and General Motors of Canada Limited to B. The commercial paper ratings of both companies are also downgraded to R-3 (low) from R-3. As reported in the Troubled Company Reporter on June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new $4.48 billion senior secured bank facility. The 'RR1' is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to $4.5 billion being proposed by General Motors Corporation, affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. The rating outlook is negative. GENERAL NUTRITION: Moody's Junks Rating on Proposed $325MM Notes ---------------------------------------------------------------- Moody's Investors service assigned a Caa1, LGD5, 87% rating to GNC Parent Corporation's proposed $325 million note issue. GNC Parent Corp. ultimately owns General Nutrition Centers Inc. Moody's also affirmed the secured bank loan rating and corporate family rating at Ba2 and the B2, respectively. Per Moody's loss given default methodology and the capital structure change, the senior notes and senior subordinated notes were upgraded to Ba3 and B3, respectively. Proceeds from the new debt principally will be used to retire its PIK preferred stock for $149 million and to pay a $190 million dividend. In conjunction with disclosing the new holding company debt, the company also announced that it is exploring strategic alternatives such as a sale of the company or an initial public offering. Affirmation of the corporate family rating reflects that quantitative and qualitative debt reflects that credit risk remains consistent with a B2 rating, in spite of the higher leverage. These are the newly assigned rating: -- $325 million notes issued by GNC Parent Corp. at Caa1, LGD5, 87%. Ratings affirmed: -- Senior secured bank loan at Ba2, LGD1, 6%; -- Corporate family rating at B2; -- Probability of Default Rating at B2. These ratings are upgraded: -- $150 million of 8.625% senior notes (2011) to Ba3, LGD3, 31% from B1; -- $215 million of 8.5% senior subordinate notes (2010) to B3, LGD4, 64% from Caa1. GNC's corporate family rating of B2 balances the company's aggressive financial policy, weak credit metrics, and revenue vulnerability to new product introductions against certain qualitative aspects that have low investment grade or high non- investment characteristics. Weighing down the overall rating with B characteristics are the company's shareholder enhancement policy and credit metrics that have remained weak since the November 2003 leveraged buyout. The ongoing challenges in matching changes in consumer preferences for VMS products also constrain the ratings. The company's geographic diversification and the relative lack of cash flow seasonality have solidly investment grade scores, while the company's scale and widespread consumer recognition of the GNC name in the intensely competitive segment of vitamin, mineral, and nutritional supplement retailing have Ba scores. The stable rating outlook recognizes that the recent negative trends in sales and operating profit have turned positive, and that debt protection measures have progressed to levels that are appropriate for a B rated credit. The outlook also considers Moody's expectation that a material portion of future discretionary cash flow will be applied to balance sheet improvement. A permanent decline in cash balances or revolving credit facility availability that would result if free cash flow fell below break-even, a return to declining store- level operating performance, or an aggressive financial policy action would cause the ratings to be lowered. Given the sizable contribution to operating profit from franchise royalties, difficulties or closure of many franchisees also would negatively impact the ratings. Specifically, debt to EBITDA sustained above 6.5x, EBIT to interest expense below 1 time, or break-even free cash flow to debt would cause ratings to be lowered. In the near term, a rating upgrade is unlikely. Ratings could eventually move upward if the company establishes a long-term track record of sales stability and improved margins, the system expands both from new store development and existing store performance, and if financial flexibility were to sustainably strengthen such that EBIT coverage of interest expense approaches 2 times, leverage falls toward 5 times, and Free Cash to Debt rises to exceeds 5%. General Nutrition Centers Inc., with headquarters in Pittsburgh, Pennsylvania, retails and manufactures vitamins, minerals, and nutritional supplements domestically and internationally through about 5850 company operated and franchised stores. Revenue for the twelve months ending September 2006 approached $1.5 billion. GOODYEAR TIRE: Posts $48 Million Net Loss in 2006 Third Quarter --------------------------------------------------------------- Including $126 million in after-tax restructuring charges, The Goodyear Tire & Rubber Company reported a net loss of $48 million during the 2006 third quarter. Of those charges, $107 million is related to the previously announced plan to close the Tyler, Texas, tire plant. Net income for the first nine months of 2006 was $28 million compared to net income of $279 million during the year-ago period. Sales for the first nine months of 2006 were a record $15.3 billion, an increase of 3% from $14.8 billion in the 2005 period. The results also reflect higher raw material costs of $249 million, offset partially by $225 million of improved price/mix, and lower tire volume. During the period, the company also recorded an after-tax gain of $10 million from a supplier settlement, and after-tax expenses of $7 million share) related to accelerated depreciation primarily for a previously announced plant closure in New Zealand. Net income in the 2005 quarter was $142 million, Goodyear reported third quarter sales of $5.3 billion, a record for any quarter and a 6% improvement compared to the year-ago period excluding the impact of businesses divested in 2005, and despite the strategic decision to exit certain segments of the private label tire business in North America. Third quarter 2006 sales were driven by improved pricing and product mix, particularly in North American Tire, and the favorable impact of currency translation, estimated at $77 million. All five of the company's tire businesses achieved sales that were a record for any quarter. Tire unit volume was 55.8 million units in the quarter, compared to 58.4 million units in the 2005 period. This 4% decrease was in part a result of the company's move to exit certain segments of the private label tire business in North America. Revenue per tire increased 8% compared to the third quarter of 2005. "Despite ongoing market weakness in North America and record high raw material costs, we continue to demonstrate the strength of our business model changes and successful product portfolio," said Chairman and Chief Executive Officer Robert J. Keegan. "After a challenging first half, our European Union business achieved year-over-year improvements in sales, units and segment operating income. Our key business strategies are also continuing to drive excellent results in the Asia Pacific, Latin America and Eastern Europe, Middle East and Africa tire businesses," he said. "Although we are in the midst of a strike by the United Steelworkers in North America, we continue to work hard for a contract that is fair to all stakeholders and puts Goodyear on a level playing field with our competitors," Keegan said. "In the meantime, we are executing on our contingency plans to continue providing our customers with outstanding value, products and services." Segment Results Third quarter total segment operating income was $313 million, a decrease of 5% compared to $330 million in the 2005 period. The European Union; Eastern Europe, Middle East and Africa, and Asia Pacific businesses each achieved segment operating income records. Prior-year segment operating income benefited from $8 million related to businesses divested in 2005. North America North American Tire's sales were a record for any quarter, and increased 5% compared to the year-ago period excluding the impact of divestitures in 2005, as a result of strong sales in the chemical and other tire related businesses, and favorable price and product mix, led by high-value Goodyear and Dunlop branded tires. Third quarter segment operating income was $19 million, compared to $58 million in the prior year period, reflecting lower volume resulting from reduced demand in the consumer replacement market, the exit from the wholesale private label business, and higher costs related to lower production. Favorable price and product mix of $103 million partially offset approximately $108 million in higher raw material costs. Segment operating income also benefited from lower SAG expenses and higher operating income from other tire related businesses. Divestitures in 2005 reduced third quarter 2006 sales by approximately $61 million, segment operating income by $8 million, and volume by 200,000 units. The 2005 quarter also included approximately $10 million of costs associated with Hurricanes Katrina and Rita in the U.S. Gulf Coast region. European Union European Union Tire's sales were a record for any quarter and 12% higher than in the 2005 quarter, due primarily to improved pricing and product mix, the impact of foreign currency translation, estimated at $61 million, and higher volume. Segment operating income was a third-quarter record. The increase primarily reflected improved pricing and product mix, as increased sales of consumer replacement tires - especially winter tires - compensated for a decline in OE unit sales. Lower SAG expense also helped to partially offset higher raw material costs, estimated at $66 million. Eastern Europe Eastern Europe, Middle East and Africa Tire's sales were a record for any quarter and up 9% compared to the third quarter of 2005 due to improved pricing and product mix, and higher volume. The company estimates currency translation had a negative impact on sales of approximately $10 million in the third quarter. Segment operating income was a record for any quarter, and represented a 20% improvement over 2005. This gain was due to improved pricing and product mix and higher volume. These offset higher raw material costs, estimated at $17 million. Latin America Latin American Tire's sales were a record for any quarter and increased 9% compared to the prior-year period due to higher volume, the favorable impact of currency translation, estimated at $9 million, and favorable pricing and product mix. Segment operating income was flat compared to the 2005 quarter, as the approximately $7 million favorable impact of currency translation, higher volume, and improved pricing and product mix, were offset by higher raw material costs, estimated at $26 million. Asia Pacific Asia Pacific Tire's sales were a record for any quarter and a 7% increase compared to the 2005 period due to improved pricing and product mix and favorable currency translation, estimated at $2 million, partially offset by lower volume. Segment operating income was a record for any quarter and a 17% improvement compared to the 2005 quarter as a result of improved pricing and product mix, offset in part by higher raw material costs, estimated at $22 million, and lower volume. Engineered Products Engineered Products' third quarter 2006 sales decreased 9% due to lower volume, primarily related to anticipated declines in military sales. This offset improved pricing and product mix, as well as favorable currency translation of approximately $4 million. Segment operating income increased 15% due primarily to a favorable legal settlement with a supplier of approximately $10 million. Pricing and product mix improved compared to the prior- year quarter, but higher raw material costs, estimated at $10 million, and lower volume had a negative impact on results. Contract Proposal Goodyear disclosed that its bargaining team is returning to Cincinnati in the hopes USW representatives will return to discussions. The company says its union proposal includes provisions to protect employment levels at all tire manufacturing plants other than Tyler, Texas, which the company has announced the intention to close. Also included is a proposal to contribute $660 million to a Voluntary Employees Beneficiary Association, an independent trust fund that would provide retiree health care benefits to USW members and would eliminate the portion of Goodyear's post-retirement health care obligations related to the USW workforce. About Goodyear Tire Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. It has marketing operations in almost every country around the world. Goodyear employs more than 80,000 people worldwide. * * * As reported in the Troubled Company Reporter on Oct. 23, 2006, Fitch Ratings placed The Goodyear Tire & Rubber Company on Rating Watch Negative. Goodyear's current debt and recovery ratings are -- Issuer Default Rating (IDR) 'B'; $1.5 billion first lien credit facility 'BB/RR1'; $1.2 billion second lien term loan 'BB/RR1'; $300 million third lien term loan 'B/RR4'; $650 million third lien senior secured notes 'B/RR4'; Senior Unsecured Debt 'CCC+/RR6'. As reported in the Troubled Company Reporter on Oct. 19, 2006, Standard & Poor's Ratings Services placed its 'B+' corporate credit rating on Goodyear Tire & Rubber Co. on CreditWatch with negative implications because of the potential for business disruptions and earnings pressures that could result from the ongoing labor dispute at some of its North American operations. Goodyear has total debt of about $7 billion. As reported in the Troubled Company Reporter on Oct. 18, 2006, Moody's Investors Service affirmed Goodyear Tire & Rubber Company's B1 Corporate Family rating, but changed the outlook to negative from stable. At the same time, the company's Speculative Grade Liquidity rating was lowered to SGL-3 from SGL-2. These rating actions reflect the increased operating uncertainty arising from the ongoing United Steelworkers strike at Goodyear's North American facilities, and the company's decision to increase cash on hand by drawing-down $975 million under its domestic revolving credit facility. GOODYEAR TIRE: Outlines New Proposal for Workers on Strike ---------------------------------------------------------- The Goodyear Tire & Rubber Company informed all striking steelworkers, in a letter dated November 9, of its proposal to the United Steelworkers of America. The United Steelworkers struck Goodyear on October 5 after refusing to further extend a three-year master contract with the Company. Following the July 22, 2006 termination of the master contract, USW and Goodyear had agreed to a day-to-day extension of the pact. The master contract between the USW and Goodyear covers 14,000 workers at 12 U.S. plants in Akron, Ohio; Gadsden, Ala.; Buffalo, N.Y., St. Marys, Ohio; Lincoln, Neb.; Topeka, Kan.; Tyler, Texas; Danville, Va.; Marysville, Ohio; Union City, Tenn.; Sun Prairie, Wis.; and Fayetteville, N.C. Pursuant to the master contract, the USW had agreed to the closure of Goodyear's Huntsville, Ala. facility and wage, pension and health care cuts aimed at providing Goodyear with additional financial flexibility. As reported in the Troubled Company Reporter on Oct. 6, 2006, USW executive vice president Ron Hoover commented that the union struck because Goodyear had left it with no other option. Mr. Hoover said "we cannot allow additional plant closures after the sacrifices we made three years ago to help this company survive." Goodyear's Offer Goodyear's package of proposals, as of November 9, would: -- preserve the current wage structure of every active associate in every circumstance, including those on layoff for less than two years; -- provide wage increases for some associates; -- continue 100% COLA for all current employees; -- maintain or improve current benefits package; -- restore service credit to current associates for the two- year pension freeze; -- protect all USW master agreement plants except Tyler; -- share profits on an ongoing basis; -- maintain the current Supplemental Unemployment Benefits program; -- maintain the current Supplemental Workers Compensation program, and; -- except in Gadsden, continue all current incentive programs on all incentive jobs for all current employees who are currently on incentive jobs. USW has rejected this offer. However, Goodyear urged individual union members to decide for themselves whether to continue supporting the strike. Under the applicable terms of the 2003 master agreement, striking workers are entitled to return to work at any time. Goodyear said associates who return to work prior to Jan. 3, 2007, will maintain their company-provided benefits package beyond the Jan. 3, 2007 cut-off date. Tyler Closure In the same letter to the union members, Goodyear explained the reasons behind its decision to close its facility in Tyler, Texas. According to the company, the Tyler plant closure is related to the company's exit from the extremely unprofitable wholesale private label business. Goodyear said the problem was getting worse for the Tyler plant because of a continuous drop in demand for the types of products made there, the ongoing flood of imports from low-cost countries and rising raw material costs. The company explained that continuing the wholesale private label business would mean less money available to modernize factories, bring more new branded high value added products into production at USW plants, fund pensions, provide retirement benefits and fund marketing and other programs needed to continue its turnaround. Goodyear also disputed allegations that the Tyler closure is the first step in a grander plan to phase out the Company's North American manufacturing operations and that it had been investing disproportionately offshore. The company assured its workers that going forward, it is proposing minimum investments in USW master plants of $447 million over the life of the contract. The company added that it has agreed to protect all plants, except for Tyler, for the life of the agreement. Retiree Medical Benefits Goodyear also explained why it believes that establishing a trust fund provides the best solution for retirees, Goodyear and all stakeholders. The Company said the intent of proposing an independent trust fund is to make retiree benefits more secure as well as more affordable in the long run, with the potential for retirees to keep pace with, if not out-run, inflation. According to Goodyear, establishing a Voluntary Employees' Beneficiary Associations, commonly called VEBA trusts, for Goodyear retirees would provide increased security for current and future retirees. Under the Company's current retiree medical benefits plan, there is zero money currently set aside to provide and secure retiree medical benefits. Under the new proposal, Goodyear would make a contribution valued at $660 million to initiate the trust and secure the benefits. The only alternative to the VEBA trust is to continue the current approach of providing retiree medical benefits. However, Goodyear warned that premiums will inevitably go higher and higher. According to the company, premiums are projected to exceed $200 in 2008 and reach nearly $350 in 2009 and will continue to increase with medical inflation. About Goodyear Tire Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. It has marketing operations in almost every country around the world. Goodyear employs more than 80,000 people worldwide. * * * As reported in the Troubled Company Reporter on Oct. 23, 2006, Fitch Ratings placed The Goodyear Tire & Rubber Company on Rating Watch Negative. Goodyear's current debt and recovery ratings are -- Issuer Default Rating (IDR) 'B'; $1.5 billion first lien credit facility 'BB/RR1'; $1.2 billion second lien term loan 'BB/RR1'; $300 million third lien term loan 'B/RR4'; $650 million third lien senior secured notes 'B/RR4'; Senior Unsecured Debt 'CCC+/RR6'. As reported in the Troubled Company Reporter on Oct. 19, 2006, Standard & Poor's Ratings Services placed its 'B+' corporate credit rating on Goodyear Tire & Rubber Co. on CreditWatch with negative implications because of the potential for business disruptions and earnings pressures that could result from the ongoing labor dispute at some of its North American operations. Goodyear has total debt of about $7 billion. As reported in the Troubled Company Reporter on Oct. 18, 2006, Moody's Investors Service affirmed Goodyear Tire & Rubber Company's B1 Corporate Family rating, but changed the outlook to negative from stable. At the same time, the company's Speculative Grade Liquidity rating was lowered to SGL-3 from SGL-2. These rating actions reflect the increased operating uncertainty arising from the ongoing United Steelworkers strike at Goodyear's North American facilities, and the company's decision to increase cash on hand by drawing-down $975 million under its domestic revolving credit facility. GREENPOINT MORTGAGE: S&P Junks Rating on Cl. B-2 Securitized Debts ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on classes B-1 and B-2 from GreenPoint Mortgage Securities Inc.'s series 2003-1. Concurrently, the rating on class B-1 is placed on CreditWatch with negative implications. In addition, ratings are affirmed on four other classes of mortgage-backed securities from this series, eight classes from GreenPoint Mortgage Loan Trust's series 2004-1, and 156 classes from nine GreenPoint Mortgage Funding Trust transactions. The lowered ratings and CreditWatch placement on series 2003-1 are based on deteriorating pool performance due to a large realized loss that has reduced credit support. The resulting credit support for the most subordinate class, B-2, is 0.01%. In addition, projected losses based on the delinquency pipeline suggest that this class will default. Credit support for the class above it, B-1, has also significantly eroded. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings on the securities. Credit support for these transactions is provided through the subordination of junior classes, overcollateralization, and excess interest. As of the Sept. 2006 remittance period, total delinquencies ranged from 0.29% to 3.90%. Cumulative realized losses ranged from 0.00% for most of the transactions to 0.70%. The collateral for these transactions primarily consists of adjustable-rate mortgages and 15- or 30-year fixed-rate mortgages. GreenPoint Mortgage Funding Inc. either originated or acquired all of the mortgages in these pools in accordance with its underwriting standards. Rating Lowered -------------- GreenPoint Mortgage Securities Inc. Rating ------ Series Class To From ------ ----- -- ----- 2003-1 B-2 CCC B Rating Lowered And Put On Creditwatch Negative GreenPoint Mortgage Securities Inc. Rating ------ Series Class To From ------ ----- -- ---- 2003-1 B-1 B/Watch Neg BB Ratings Affirmed ---------------- GreenPoint Mortgage Securities Inc. Series Class Rating ------ ----- ------ 2003-1 A-1 AAA 2003-1 M-1 AA 2003-1 M-2 A 2003-1 M-3 BBB GreenPoint Mortgage Loan Trust Series Class Rating ------ ----- ------ 2004-1 A, SP, A-R AAA 2004-1 B-1 AA 2004-1 B-2 A 2004-1 B-3 BBB 2004-1 B-4 BB 2004-1 B-5 B GreenPoint Mortgage Funding Trust Series Class Rating ------ ----- ------ 2005-AR4 I-A-1, I-A-2a, I-A-2b, I-A-2b, I-A-3 AAA 2005-AR4 II-A-1, II-A-2, III-A-1, III-A-2 AAA 2005-AR4 IV-A-1a, IV-A-1b, IV-A-2, IV-A-3 AAA 2005-AR4 X-1, X-2, X-3, X-4, R, IV-A-1b AAA 2005-AR4 M-X, M-1, M-2 AA+ 2005- AR4 M-3, M-4 AA 2005-AR4 M-5 AA- 2005-AR4 M-6 A+ 2005-AR4 B-1 A 2005-AR4 B-2 BBB+ 2005-AR4 B-3 BBB 2005-AR4 B-4 BB 2005-AR4 B-5 B 2005-AR5 I-A-1, I-A-2, I-X-1, I-X-2 AAA 2005-AR5 II-A-1, II-A-2, II-X-1, II-X-2 AAA 2005-AR5 II-X-3, III-A-1, III-A-2, III-X-1 AAA 2005-AR5 IV-X-1, IV-X-2, IV-A-1, IV-A-2, R AAA 2005-AR5 M-X, M-1 AA+ 2005-AR5 M-2 AA 2005-AR5 M-3 AA- 2005-AR5 M-4 A+ 2005-AR5 M-5 A 2005-AR5 M-6 A- 2005-AR5 B-1 BBB+ 2005-AR5 B-2 BBB 2005-AR5 B-3 BBB- 2005-AR5 B-4 BB 2005-AR5 B-5 B 2005-HE1 A-1A, A-1B, A-2, A-3, A-4, A-5 AAA 2005-HE1 M-1 AA 2005-HE1 M-2 AA- 2005-HE1 M-3 A+ 2005-HE1 M-4 A 2005-HE1 M-5 A- 2005-HE1 M-6 BBB+ 2005-HE1 M-7 BBB 2005-HE1 M-8 BBB- 2005-HE1 B-1 BB+ 2005-HE1 B-2 BB 2005-HE1 B-3 BB- 2005-HE3 A-1 AAA 2005-HE3 M-1 BB+ 2005-HE3 M-2 BB 2005-HE4 I-A1 AAA 2005-HE4 IIA-1a, II-A1b, II-A1c, II-A2c AAA 2005-HE4 III-A3c, III-A-4c AAA 2005-HE4 M-1, M-2 AA+ 2005-HE4 M-3 AA 2005-HE4 M-4 AA- 2005-HE4 M-5 A+ 2005-HE4 M-6 A 2005-HE4 M-7 A- 2005-HE4 M-8 BBB+ 2005-HE4 M-9 BBB 2005-HE4 M-10, M-11 BB+ 2005-HE4 B-1 BB 2005-HE4 B-2 BB- 2005-HY1 A-AIA, A-A1B, 2-A AAA 2005-HY1 M-1 AA+ 2005-HY1 M-2 AA 2005-HY1 M-3 A+ 2005-HY1 M-4 A 2005-HY1 M-5 BBB 2005-HY1 M-6 BBB- 2005-HY1 M-7 BB+ 2006-AR1 A-1A, A-1B, A-2A, A-2B, A-3 AAA 2006-AR1 M-1 AA+ 2006-AR1 M-2 AA 2006-AR1 M-3 AA- 2006-AR1 B-1 A 2006-AR1 B-2 BBB 2006-AR1 B-3 BBB- 2006-AR2 I-A-1, I-A-1B, II-A-1, II-A-2, II-X AAA 2006-AR2 III-A-1, III-A-2, III-A-3 AAA 2006-AR2 IV-A-1, IV-A-2, IV-A-3, IV-X AAA 2006-AR2 M-1 AA+ 2006-AR2 M-2 AA 2006-AR2 M-3 AA- 2006-AR2 B-1 A 2006-AR2 B-2 BBB 2006-AR2 B-3 BBB- 2006-AR3 I-A, II-A-1, II-A-2 AAA 2006-AR3 III-A-1, III-A-2, III-A-3 AAA 2006-AR3 IV-A-1, IV-A-2, IV-A-3, IV-X AAA 2006-AR3 B-1 AA+ 2006-AR3 B-2 AA 2006-AR3 B-3 AA- 2006-AR3 B-4 A+ 2006-AR3 B-5 A 2006-AR3 B-6 BBB 2006-AR3 B-7 BBB- GREENWICH CAPITAL: Fitch Puts Low-B Ratings on Six Cert. Classes ---------------------------------------------------------------- Fitch assigns these ratings to Greenwich Capital Commercial Mortgage Trust 2006-RR1: -- $429,619,000 class A-1 certificates 'AAA'; -- $122,276,000 class A-2 certificates 'AAA'; -- $16,524,000 class B certificates 'AA+'; -- $9,914,000 class C certificates 'AA'; -- $4,957,000 class D certificates 'AA-'; -- $13,219,000 class E certificates 'A+'; -- $5,783,000 class F certificates 'A'; -- $14,872,000 class G certificates 'A-'; -- $11,567,000 class H certificates 'BBB+'; -- $4,957,000 class J certificates 'BBB'; -- $6,609,000 class K certificates 'BBB-'; -- $4,957,000 class L certificates 'BB+'; -- $3,305,000 class M certificates 'BB'; -- $2,479,000 class N certificates 'BB-'; -- $3,304,000 class O certificates 'B+'; -- $827,000 class P certificates 'B'; -- $1,652,000 class Q certificates 'B-'. Additional information is available through the new issue report titled 'Greenwich Capital Commercial Mortgage Trust 2006-RR1', available at http://www.derivativefitch.com/ and http://www.fitchratings.com/ H&A INVESTMENTS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: H&A Investments Co., LLC 2200 Mission Street San Francisco, CA 94110 Bankruptcy Case No.: 06-31054 Chapter 11 Petition Date: November 8, 2006 Court: Northern District of California (San Francisco) Debtor's Counsel: William F. McLaughlin, Esq. Law Offices of Robert A. Ward 1305 Franklin Street, Suite 301 Oakland, CA 94612 Tel: (510) 839-5333 Estimated Assets: $1 Million to $100 Million Estimated Debts: $50,000 to $100,000 The Debtor did not file a list of its 20 largest unsecured creditors. HARROW STORES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Harrow Stores, Inc. 270 Spagnoli Road Melville, NY 11747 Bankruptcy Case No.: 06-72860 Type of Business: The Debtor sells furniture. Chapter 11 Petition Date: November 8, 2006 Court: Eastern District of New York (Central Islip) Judge: Dorothy Eisenberg Debtor's Counsel: Gerard R. Luckman, Esq. Silverman Perlstein & Acampora LLP 100 Jericho Quadrangle, Suite 300 Jericho, NY 11753 Tel: (516) 479-6300 Fax: (516) 479-6301 Total Assets: $5,369,059 Total Debts: $11,274,126 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Jenasaqua Realty Co. $951,478 270 Spagnoli Road Melville, NY 11747 Johnny Weissmuller Pools $803,471 9000 River Road Delair, NJ 08110 Doughboy Recreational $572,764 Dept. 120 P.O. Box 1000 Memphis, TX 38148 Jacuzzi Premium $539,901 14525 Monte Vista Avenue Chino, CA 91710 Woodward Worldwide $505,786 P.O. Box 61874 Chicago, IL 60661 Mallin $256,618 c/o Paul Septoff 4930 Sabal Palm Blvd. E Tamarac, FL 33319 Dimplex $165,639 Tropitone $151,222 Casual Living Worldwide $142,688 AGIO International $117,061 L.B. International $115,172 Embassy Entertainment $109,582 Pacific Casual LLC $101,025 Lloyd Flanders $86,366 Bellini $85,643 Erwin & Sons Direct Imp. $82,441 Advantage ESM Metro $79,225 120 Voice Road LLC $78,859 Swimline Corp. $72,984 Union-Transport Brokerage $71,144 HEXION SPECIALTY: 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. Chemicals and Allied Products sectors, the rating agency confirmed its B2 Corporate Family Rating for Hexion Specialty Chemicals 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 ---------- ------- ------- ------ ---------- $225 Million Guaranteed Senior Secured Revolving Credit Facility due 5/2011 B2 Ba3 LGD2 29% $50 Million Guaranteed Senior Secured Letter of Credit Facility due 5/2011 B2 Ba3 LGD2 29% $1.625 Million Guaranteed Senior Secured Term Loan due 5/2013 B2 Ba3 LGD2 29% $300 Million Float Rate Guaranteed Second Lien Senior Secured Notes due 7/2010 B3 B3 LGD5 77% $325 Million 9.0% Guaranteed Second Lien Senior Secured Notes due 7/2014 B3 B3 LGD5 77% $114.8 Million 9.2% Unsecured Debentures due 3/2021 Caa1 Caa1 LGD6 94% $246.8 Million 7.875% Unsecured Notes due 2/2023 Caa1 Caa1 LGD6 94% $78.0 Million 8.375% S.F. Debentures due 4/2016 Caa1 Caa1 LGD6 94% $34.0 Million Pollution Control Revenue Bonds Series 1992 due 12/2009 Caa1 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 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 Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://hexionchem.com/-- makes thermosetting resins (or thermosets). Thermosets add a desired quality (heat resistance, gloss, adhesion) to a number of different paints and adhesives. Hexion also makes formaldehyde and other forest product resins, epoxy resins, and raw materials for coatings and inks. The Company has 86 manufacturing and distribution facilities in 18 countries. HORNBECK OFFSHORE: S&P Rates Proposed $220 Million Notes at 'BB-' ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' senior unsecured rating to marine services firm Hornbeck Offshore Services Inc.'s proposed $220 million, 1.625% convertible notes due 2026. At the same time, Standard & Poor's affirmed its 'BB-' corporate credit rating on the company. The outlook is stable. Pro forma the proposed $220 million note offering, Covington, La.- based Hornbeck is expected to have roughly $520 million of debt. Hornbeck intends to use the proceeds for general corporate purposes, including potential acquisitions and additional fleet expansion, various costs associated with the offering, as well as $63.3 million of the net proceeds to repurchase 1.8 million shares of its common stock. "The stable outlook reflects expectations that Hornbeck will fund future fleet expansion through its existing liquidity and operating cash flows," said Standard & Poor's credit analyst Paul B. Harvey. "However, if Hornbeck pursues additional leveraging transactions, including acquisitions or additional fleet growth, ratings would face significant negative pressure," he continued. Over the medium to long term, positive rating actions are likely, if Hornbeck can significantly increase and diversify its fleet without weakening its balance sheet. HOUGHTON 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. chemicals and allied products sectors, the rating agency confirmed its B2 Corporate Family Rating for Houghton International 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 ---------- ------- ------- ------ ---------- $90 Million Guaranteed Senior Secured Term Loan due 2011 B2 B2 LGD3 45% $25 Million Guaranteed Senior Secured Revolving Credit Facility due 2010 B2 B2 LGD3 45% 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 Forge, Pennsylvania, Houghton International Inc. manufactures oils and specialty chemicals for lubrication in most of the big Midwestern industries: metalworking, automotive, and steel. Its products range from aluminum and steel rolling lubricants to rust preventatives to fire-resistant hydraulic fluids. The FLUIDCARE division helps manufacturers reduce costs through chemical management and recycling. It maintains more than 30 sales and manufacturing facilities in North and South America, Europe, Africa, Australia, and Asia. The Company was founded in 1865. HUNTSMAN 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. Chemicals and Allied Products sectors, the rating agency confirmed its B1 Corporate Family Rating for Huntsman International LLC. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $650 Million Guaranteed Senior Secured Revolving Credit Facility due 7/2010 Ba3 Ba3 LGD3 31% $220 Million Guaranteed Senior Secured Term Loan B due 7/2012 Ba3 Ba3 LGD3 31% $296 Million 11.625% Guaranteed Senior Secured Global Notes due 10/2010 Ba3 Ba3 LGD3 31% $300 Million 9.875% Guaranteed Global Notes due 3/2009 B2 B2 LGD4 69% $150 Million 9.875% Guaranteed Global Notes due 3/2009 B2 B2 LGD4 69% $198 Million 11.5% Guaranteed Senior Global Notes due 7/2012 B2 B2 LGD4 69% EUR122.02 Million 10.125% Senior Subordinated Notes due 7/2009 B3 B3 LGD6 91% EUR135 Million 7.5% Senior Subordinated Notes due 1/2015 B3 B3 LGD6 91% EUR250 Million 10.125% Senior Subordinated Notes due 7/2009 B3 B3 LGD6 91% $175 Million 7.375% Senior Subordinated Notes due 1/2015 B3 B3 LGD6 91% $366.05 Million 10.125% Senior Subordinated Notes due 7/2009 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 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 Salt Lake City, Utah, Huntsman International LLC produces basic chemicals and petrochemicals like ethylene and propylene. INNOPHOS INVESTMENTS: 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. Chemicals and Allied Products sectors, the rating agency confirmed its B2 Corporate Family Rating for Innophos Investments Holdings Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Issuer: Innophos Investments Holdings, Inc. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $120 Million Flt. Rate Senior Notes due 2015 Caa2 Caa1 LGD5 89% Issuer: Innophos Inc. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $50 Million Senior Secured Revolving Credit Facility due 2009 B2 Ba2 LGD2 17% $220 Million Senior Secured Credit Facility Term Loan B due 2010 B2 Ba2 LGD2 17% $190 Million Senior Sub. Notes due 2013 Caa1 B3 LGD4 62% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Cranbury, New Jersey, Innophos Investments Holdings Inc. produces phosphoric acid, phosphate-based salts and acid and sodium tripolyphosphate for consumer and industrial applications. INSIGHT HEALTH: $191 Mil. Debt Write-Off Cues Moody's Junk Ratings ------------------------------------------------------------------ Moody's Investors Service downgraded Insight Health Services Corp.'s credit ratings. The outlook is negative. Moody's took these rating actions: Ratings downgraded: -- $300 million, senior secured floating rate notes due 2011, to B2 from B1, LGD2, 27% -- Probability of Default Rating, to Caa1 from B3 -- Corporate Family Rating, to Caa1 from B3 Ratings affirmed: -- $250 million, 9.875% senior subordinated notes due 2011, Caa2, LGD5, 83% The outlook is negative. The downgrades primarily reflect the company's continued poor operating results in conjunction with a material write-off in goodwill of nearly $191 million. Moody's believes that the asset impairment signals the expectation of significant incremental reductions in revenues and cash flows as a result of overcapacity in the industry, reductions in Medicare and third-party reimbursements, competition from other mobile providers and by equipment OEMs, industry-wide increases in technologists' compensation and questionable management oversight. Resultant free cash flow is expected to be materially negative and financial leverage as measured by adjusted debt to EBITDA is expected to readily exceed 7.0x during 2007. Interest coverage, already weak, is expected to further deteriorate. These concerns are reflected in the downgrade to a Caa1 Corporate Family Rating and are underscored by the negative ratings outlook. The negative outlook reflects Moody's concern with respect to the company's negative revenue and EBITDA growth prior to the implementation of reductions in Medicare reimbursements that take effect Jan. 1, 2007. It is Moody's expectation that Insight's revenues and cash flow will come under further pressure as a consequence of these reductions, particularly if there is material follow-on by third party payors. Moody's continues to be concerned about the highly competitive nature of the industry, characterized by regional and national companies as well as individual and group physician practices with ready access to inexpensive equipment financing from OEMs as well as the potential for incremental Medicare reimbursement cuts. Further downward rating pressure could develop if there is a decline in the company's ratio of adjusted free cash flow to debt below a value of negative 4% or if the ratio of adjusted total debt to EBITDA increases above 7.5x on a sustained basis. Moody's does not foresee an upgrade in the ratings in the near-term unless there is a material reduction of debt or increase in equity capital. InSight, headquartered in Lake Forest, California, provides diagnostic imaging and information, treatment and related management services. INTEGRATED HEALTH: Wants Until March 5 to Remove Civil Actions -------------------------------------------------------------- IHS Liquidating LLC asks the Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware to further extend the period within which it may file notices of removal with respect to civil actions pending on the Petition Date, through and including March 5, 2007. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, says IHS Liquidating needs more time to: * make fully informed decisions concerning removal of certain prepetition actions; and * ensure that it will not forfeit its rights under Section 1452 of the Judiciary Procedures Code. IHS Liquidating is still in the process of determining which Prepetition Actions will be litigated or removed pursuant to Rule 9027(a) of the Federal Rules of Bankruptcy Procedure, Mr. Brady notes. IHS Liquidating has recently spent considerable time resolving disputes with Baltimore County in Maryland and the United States Trustee, Mr. Brady relates. IHS Liquidating believes it is prudent to preserve the bankruptcy estate's right to seek removal until the analysis of those actions is complete. IHS Liquidating is responsible for litigating, settling or resolving disputed claims against the Debtors, some of which are currently pending in various state courts and federal districts, Mr. Brady further notes. Majority of the Prepetition Actions have been resolved through the claims reconciliation process, he adds. Mr. Brady assures the Court that the rights of IHS Liquidating's adversaries will not be prejudiced by an extension of the removal deadline. Any party to a Prepetition Action, which has been removed, may seek remand of that Action to the state court pursuant to Section 1452(b), Mr. Brady says. Judge Walrath will hold a hearing to consider IHS Liquidating's request on December 18, 2006, at 11:30 a.m. IHS Liquidating's removal period is automatically extended through the conclusion of that hearing by application of Del.Bankr.LR 9006-2. Integrated Health Services, Inc. -- http://www.ihs-inc.com/-- operated local and regional networks that provide post-acute care from 1,500 locations in 47 states. The Company and its 437 debtor-affiliates filed for chapter 11 protection on February 2, 2000 (Bankr. Del. Case No. 00-00389). Rotech Medical Corporation and its direct and indirect debtor-subsidiaries broke away from IHS and emerged under their own plan of reorganization on March 26, 2002. Abe Briarwood Corp. bought substantially all of IHS' assets in 2003. The Court confirmed IHS' Chapter 11 Plan on May 12, 2003, and that plan took effect September 9, 2003. Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D. Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP, represent the IHS Debtors. On September 30, 1999, the Debtors listed $3,595,614,000 in consolidated assets and $4,123,876,000 in consolidated debts. (Integrated Health Bankruptcy News, Issue No. 108; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Trade Creditors Sell 140 Claims Totaling $12M ------------------------------------------------------------------ In June 2006, the Clerk of the U.S. Bankruptcy Court for the Western District of Missouri recorded 140 claims transfers in Interstate Bakeries Corporation and its debtor-affiliates' chapter 11 cases totaling $12,365,745 to: (a) Debt Acquisition Company of America V, LLC: Transferor Claim Amount ---------- ------------ Metro Packaging $9,034 Jensen Trucking Service 5,095 We Clean Janitorial 3,935 RP Morrison Company 3,609 Betts Truck Parts 2,215 All Auto LLC 2,089 MTC Kenworth 2,073 Durand Chevrolet, Inc. 1,928 Warner Candy Co., Inc. 1,905 Environmental Resource 1,742 SCS Refrigerated 1,661 Gail Bettencourt 1,505 New York Lim DCS 1,457 Rick Rogers 1,146 Uni-Chem 1,129 Hasler, Inc. 1,022 AmeriTemps, Inc. 986 Horizon Packaging 972 Anderson-Magruder 893 Estes Foods 887 Bradleys Truck Service 887 OJS Service Company 859 West-Link Corporation 825 Freightliner 825 Pope Marketing 816 Wilson Way Glass 808 Kens Service Station 762 Rays Janitorial 750 North Jackson Chevrolet 747 Buffalo Truck Center 746 John Hosley 721 State Building 704 Ad Pate and Co., Inc. 693 Tomenko Truck Service 662 Daily Bulletin 645 Philadelphia Chem-Dry 630 Fleet Auto Electric 571 Royal Crown Bottling 559 Postal Express, Inc. 552 Welchs Commercial 540 Gilbert Window 516 Kenosha News 512 Handling & Storage 483 Reese Dellorso 455 Ben Wikoff 450 XI Building Services 449 Hampton Inn Helena 441 University Town 440 Holiday Inn 432 Gills Electric 432 Midwest Sheet Metal 400 Justin Blackwell 396 Marks Pest Control 387 Superior Wash, Inc. 375 TBS Office Automations 371 Finley Janitorial 367 Consolidated Truck 363 DPI Sales & Mktg. 357 Marva Maid Dairy 355 Patsy Brooks 350 Sleep Inn Missoula 335 Taylors 333 ANACOMP 325 Air Conditioning Sales 321 Universal AdCom 310 Bills Towing, Inc. 304 Rainbow Building 300 Transtar Industries 292 Jerry Noble 260 John Gault Lawn 250 GVB Enterprises 235 Cloverleaf Farms 234 Ambest J&N Truck Stop 228 Piggly Wiggly 222 De Four Radiator 198 Spic and Span, Inc. 195 Bill Heard Chevrolet 194 D&D Cleaning Services 191 Rogers Telesystmes 188 Summers Towing 180 White Cloud Coffee 175 Accurate Welding 170 Trophy Magic 168 Utility Trailer Sales 167 Laser Connection 166 A&M Glass 158 Midwest Fuel Injection 157 Covington Foods 156 B&M Automotive 154 New Creations Curbing 144 Advantage Waste 135 Regal Plastic Supply 134 Comfort Zone, Inc. 132 Noland Corp. 130 Lamberts Coffee 128 Halbert Plumbing 123 Johnson Irrigation 120 EJ Harrison & Sons 119 The Pied Piper 104 Kens Coffee Service 103 William Burks 100 Affiliated Environment 100 Boykin & Son 92 Lakeside Pepsi Cola 90 Sergeant Locksmith 88 Center Glass 87 Marty Green 80 Federico Camancho Lawn 80 Able Safe & Lock 78 Brunswick Key & Lock 77 CSI Waste Services 76 Michael Smith 70 Hills True Value 70 Oasis Bottled Water 69 Carnells Garage 65 Tennessee Spring 64 Gaudin 62 Shine Master 60 Ferrel Gas 60 All Seasons Services 60 Quaker City Auto Parts 56 Ismael Montalvo 54 Great Falls Truck 52 Parkway Ford 51 (b) Madison Liquidity Investors 123, LLC, and Madison Niche Opportunities, LLC: Transferor Claim Amount ---------- ------------ Advantage Technologies $19,316 Business Cards, Ltd. 7,061 Joseph M. Day Co. 6,242 Century Equipment 3,530 (c) 3V Capital Master Fund, Ltd. Transferor Claim Amount ---------- ------------ Madison Investment $6,150,240 Madison Niche Opportunities 504,250 Madison Niche Opportunities 146,008 Madison Liquidity 95,472 3V Capital Master Fund, Ltd., has offices at 1 Greenwich Office Park North, 51 East Weaver Street, in Greenwich, Connecticut. Contact person is Scott A. Stagg. (d) Pierce Diversified Strategy Master Fund, LLC Transferor Claim Amount ---------- ------------ Madison Liquidity $849,688 Madison Niche Opportunities 121,965 Madison Investment 32,188 Pierce Diversified Strategy Master Fund, LLC, has offices at 1 Greenwich Office Park North, 51 East Weaver Street, in Greenwich, Connecticut. Contact person is Jason M. Alper. The Court also recorded five claim transfers to: Transferee Transferor Claim Amount ---------- -------- ------------ Varde Investment Restoration Holdings $4,075,397 Houston Energy Service Contrarian Funds, LLC 130,452 Midwest Industrial Hain Capital Holdings 79,775 Paris Packaging, Inc. Longacre Master Fund 66,546 Aquila, Inc. Michigan Gas Utilities 20 Restoration Holdings, Ltd., could be reached through Pamela Lawrence, at 909 Third Avenue, 30th Floor, in New York, with phone number (212) 350-1630. Contrarian Funds, LLC, could be reached through Alpa Jimenez, at 411 West Putnam Avenue, Suite 225, in Greenwich, Conn., with phone number (203) 862-8236. Kathryn B. Bussing can be contacted for Michigan Gas Utilities at P.O. Box 2176, in Scottsbluff, Nebraska. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Wants Railcar Purchase Option Sale Pact OK'd ----------------------------------------------------------------- Interstate Bakeries Corporation and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Western District of Missouri to: (a) enter into the Agreement to sell the Purchase Option to The Andersons, Inc.; and (b) assume the Leases, contingent upon the purchase and re-lease of the Railcars. The Debtors lease 90 5,125-cubic capacity pressure discharge covered hopper railcars from Chase Equipment Leasing Inc., fka Banc One Leasing Corporation, pursuant to Master Rail Lease Agreement No. 7783798 and three Lease Schedules. The Debtors use the Railcars to transport flour from certain of their suppliers. The Railcar Leases are approaching the ends of their rental terms. Pursuant to the Leases, the Debtors have the option to purchase the Railcars for fair market value, not exceeding 70% of the original equipment cost, plus applicable taxes. The Purchase Option's cap of 70% of the original equipment cost equals approximately $52,691 per Railcar. The Debtors and the Suppliers are interested in continuing the current use of the Railcars after the expiration of the Leases. The parties have agreed that the Suppliers will lease the Railcars instead of the Debtors. To implement the new arrangement, the Debtors issued Bid Requests to leading railcar lessors and have subsequently received seven bids. The top three bidders were invited to participate in an auction held on Oct. 9, 2006. During the Auction, The Andersons, Inc., increased its bid to $66,750 per Railcar. In addition, Andersons removed all of the conditions, which the Debtors asked the bidders to remove from their bid proposals. After consultation with the Official Committee of Unsecured Creditors and the Official Committee of Equity Security Holders, the Debtors determined that Andersons' bid represented the best bid for the Railcars, and consequently the best Sale Payment. Thus, with the approval of Interstate Bakeries Corporation's Board of Directors, the Debtors declared Andersons the winning bidder. The Settlement Agreement Subsequently, the Debtors, Andersons and Chase executed an agreement. Pursuant to the Agreement, the Debtors will assume the Leases pursuant to Section 365 of the Bankruptcy Code and sell the Purchase Option to Andersons by agreement with Chase, contingent upon the simultaneous closing of: -- the purchase of the Railcars by Andersons; and -- Andersons' re-lease of the Railcars to certain suppliers. In exchange for the Purchase Option, Andersons will pay the Debtors $1,251,210. Immediately upon the sale of the Purchase Option to Andersons, Andersons will exercise the Purchase Option and purchase the Railcars, and Chase will sell the Railcars to Andersons for $4,742,230, subject to certain terms and conditions. Andersons will then lease the Railcars to those certain suppliers of the Debtors. To the extent not otherwise paid in the ordinary course of business before the Closing, the Debtors will pay Chase $52,497 for November 2006 rental payments and $166,002 for all remaining rental amounts to Chase, in full satisfaction of the Debtors' cure obligations under the Leases. Immediately after the Closing, Chase will withdraw Claim Nos. 6909 and 6911. The parties expect the Closing to occur when the conditions precedent to closing have all been met and the Escrow Agent has made the distributions, but in no event later than Nov. 20, 2006. A full-text copy of the Andersons Agreement is available for free at http://ResearchArchives.com/t/s?1491 Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) JETBLUE AIR: S&P Puts 'B+' Prelim Rating on $49.4MM Class B Certs. -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'AAA' preliminary rating to JetBlue Airways Corp.'s $74.1 million Class G pass- through certificates, and its 'B+' preliminary rating to the $49.4 million Class B pass-through certificates. The Class G certificates have an expected maturity of Jan. 2014, and a final maturity date of Jan. 2, 2016; the Class B certificates mature Jan. 2, 2014. Final ratings will be assigned upon completion of the review of legal documentation. "The rating on the Class G certificates is based on an insurance policy provided by MBIA Insurance Corp. [AAA/Stable/-]," said Standard & Poor's credit analyst Betsy Snyder. "The rating on the Class B certificates is based on the credit of JetBlue Airways, the strategic importance of the aircraft spare parts that collateralize the certificates in any bankruptcy reorganization, and various structural features intended to maintain collateral access and asset protection for certificateholders." The transaction has a structure similar to those of aircraft- backed enhanced equipment trust certificates, but it benefits from credit strengths that parallel those for debtor-in-possession financings. As is the case for enhanced equipment trust certificates, creditors' access to collateral is based on legal protections available under Section 1110 of the federal bankruptcy code, there is a liquidity facility intended to cover a period during which the collateral could be repossessed and remarketed following a default by the airline, and the securities are tranched. However, the most important source of credit support in any Chapter 11 bankruptcy reorganization would be how essential the collateral is to maintaining JetBlue's operations, a feature shared with DIP credit facilities. The spare parts securing the notes consist of aircraft and engine spare parts that can be used on various models of Airbus A320 and Embraer 190 aircraft, which together comprise all of JetBlue's fleet. The spare parts have been appraised initially at $164.7 million, and the loan-to-value of the Class G notes upon issuance is 45%. The loan-to-value of the Class B notes upon issuance is 75%. JetBlue may also issue additional equipment notes secured by the collateral and additional pass-through certificates under certain conditions. Compared to an aircraft- backed EETC, the secured notes being rated benefit from spare parts' relatively stable values over time, their lower risk of obsolescence, and from the fact that the collateral would be crucial to any bankruptcy reorganization of JetBlue. The last implies that the senior and junior certificates would either be affirmed by the airline or renegotiated in a manner that would preserve payments to at least the Class G certificates. The Class B certificates do not have a dedicated liquidity facility, nor an insurance policy, and would therefore default on interest payments if a payment fell due during the first 60 days of a JetBlue bankruptcy, or if negotiations between the airline and certificateholders stretched beyond that initial automatic stay period under Section 1110 of the Bankruptcy Code. Drawbacks to spare parts financings include the inherent difficulty of tracking a pool of assets that turns over, the fact that collateral coverage could change materially in a short period due to normal operational use of spares, and that it would very likely take longer and be more costly to sell a large pool of repossessed spares than to sell aircraft. The last of these would likely be less of an issue in the case of JetBlue than for a large hub-and-spoke airline that operates many models of aircraft and holds spare parts in many locations. The certificates incorporate two mechanisms not found in typical EETCs to mitigate these drawbacks. I The first is collateral maintenance ratios, which require JetBlue to add spare parts, provide other collateral, or pay down debt to restore loan-to-values or to maintain a minimum 150% ratio of rotable spare parts to Class G certificates, in each case measured against semiannual appraised values. In a JetBlue bankruptcy, however, additions of spare parts or other collateral may be avoided by the bankruptcy judge under certain circumstances, and collateral other than spare parts would not benefit from Section 1110 protections. Because of the way the collateral maintenance and rotables ratios are calculated, substitution of cash for other collateral could actually cause the ratio of outstanding certificates to total collateral to be somewhat higher than the nominal loan-to-value ceilings. II Second, the liquidity facility is sized to cover eight quarterly interest payments (up to 24 months) on the Class G certificates, longer than the typical three semiannual (18 months) payments typical for aircraft EETCs. The primary liquidity facility is provided by Landesbank Hessen-Thueringen Girozentrale (A/Stable/A- 1). Even with these mechanisms to mitigate drawbacks of a spare parts financing, repossession and sale of the collateral would be a less attractive option for certificateholders than is the case for holders of aircraft-backed EETCs; this is due to the logistical difficulties and lengthy period likely needed to sell the spare parts collateral. Conversely, the risk of JetBlue choosing to abandon this collateral to reduce its financial burden in bankruptcy is far less than would be true for any aircraft collateral pool backing an EETC. The 'B' corporate credit rating on JetBlue reflects its participation in the high-risk airline industry and a weaker financial profile due to both weak profitability and losses that began in the third quarter of 2005. Ratings List: * JetBlue Airways Corp. -- Corporate Credit Rating -- B/Stable/B-3 Ratings Assigned: * JetBlue Airways Corp. -- Pass-thru cert, Class G-1* -- AAA/Stable (prelim.) -- Pass-thru cert, Class B-1 -- B+ (prelim.) *Insured by MBIA Insurance Corp. JLG: Oshkosh Deal Cues S&P to Affirm 'BB' Corporate Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed ratings on JLG including its 'BB' corporate credit rating and removed all ratings from CreditWatch where they were placed with negative implications on Oct. 16, 2006. This action concludes Standard & Poor's review of the proposed acquisition of JLG by Oshkosh Truck Corp. The outlook is stable. With the acquisition, JLG has recently tendered for all of its approximately $200 million existing outstanding notes, and after the completion of the transactions, Standard & Poor's expects to withdraw its ratings on JLG. The acquisition is expected to close at the end of 2006 or early 2007. Hagerstown, Md.-based JLG is a manufacturer of access and material-handling equipment for the cyclical construction equipment and rental markets. At the end of fiscal 2006, JLG had sales of $2.3 billion and outstanding debt of more than $200 million. JOHN B. SANFILIPPO: Delays 2006 Quarterly Report Filing ------------------------------------------------------- John B. Sanfilippo & Son Inc. disclosed in a form NT 10-Q filed with the Securities and Exchange Commission on Nov. 8, 2006, that it needs additional time to complete the preparation of its financial statements and related disclosures required in its Quarterly Report on Form 10-Q for the quarter ended Sept. 28, 2006. The delay has caused the Company to be in non-compliance with restrictive financial covenants under its two primary secured financing facilities. Non-compliance with restrictive covenants allows the lenders to demand immediate payment. The Company said that it would be able to secure alternative financing if waivers are not received or acceptable terms renegotiated with respect to current and future restrictive covenant requirements. The Company said that while it is seeking to complete the reporting process as quickly as possible, the preparation of the Quarterly Report on Form 10-Q cannot be completed within the prescribed time period without unreasonable effort or expense. The filing of John B. Sanfilippo's Annual Report on Form 10-K for the year ended June 29, 2006, was delayed until Sept. 27, 2006. Due to the delay in filing the Form 10-K, the Company did not have sufficient time to complete its monthly and quarterly closing processes in order to file its Form 10-Q in a timely manner. The filing of the Annual Report on Form 10-K for the year ended June 29, 2006, was delayed for these reasons: -- John B. Sanfilippo amended its Bank Credit Facility and Note Agreement on July 27, 2006. In exchange for securing the debt with working capital and fixed assets, the amendments waived the financial covenants that the Company was not in compliance with in fiscal 2006 and established new financial covenants. The amended Note Agreement requires the Company to meet or exceed a minimum level of earnings before interest, taxes, depreciation and amortization for each quarter in fiscal 2007 and thereafter. The Company needed additional time to evaluate as to whether or not the minimum EBITDA levels would be achieved for fiscal 2007. The inability of the Company to demonstrate future covenant compliance may have caused it to receive an opinion from its independent auditors that included an explanatory going concern paragraph. Additional time was required for the Company to analyze operating results subsequent to year end and complete its evaluation of the achievement of the minimum EBITDA requirements for fiscal 2007. -- The Company had not completed its assessment of the effectiveness of its internal controls under Section 404 of the Sarbanes-Oxley Act of 2002 as of the original due date of the filing. Management testing of its year-end controls over financial reporting and evaluating the results of individual and aggregate deficiencies was completed after the original due date. In a press release dated November 2, John B. Sanfilippo disclosed that it will file for a five day extension for its filing of its first quarter report on Form 10-Q beyond the due date of Nov. 7, 2006. The Company expects to report a net sales decrease of approximately $5 million for the first quarter of fiscal 2007 from the $138.7 million for the first quarter of fiscal 2006. Including a pre-tax gain of approximately $5 million ($3 million after tax) from the sale of three Chicago area facilities and termination of a capital lease, the net loss for the first quarter of fiscal 2007 is anticipated to be in excess of $3 million compared to a net loss of $1.1 million for the first quarter of fiscal 2006. John B. Sanfilippo & Son, Inc. -- http://www.fishernuts.com/-- is a processor, packager, marketer and distributor of shelled and in-shell nuts and extruded snacks that are sold under a variety of private labels and under the Company's Fisher(R), Evon's(R), Snack 'N Serve Nut Bowl(TM), Sunshine Country(R), Flavor Tree(R) and Texas Pride(TM) brand names. The Company also markets and distributes a diverse product line of other food and snack items. KENDLE INTERNATIONAL: Earns $3.9 Million in Third Quarter of 2006 ----------------------------------------------------------------- Kendle International Inc. has reported its third quarter 2006 financial results. Reflected in the Company's third quarter performance are results from mid-August through Sept. 30 related to its acquisition of the Phase II-IV clinical services business of Charles River Laboratories International Inc. Kendle completed this acquisition on Aug. 16. Net service revenues for third quarter 2006 were $75.2 million, an increase of 46% over net service revenues of $51.6 million for third quarter 2005. Of the growth in net service revenues, 24% was organic growth with the remainder of the growth due to the acquisition. Income from operations for the third quarter 2006 was approximately $8.1 million, or 11% of net service revenues, compared with income from operations of approximately $5.5 million in third quarter 2005. Net income for the quarter was approximately $4 million after accounting for certain acquisition-related expenses compared with net income of $3.4 million in third quarter 2005. New business awards were a record $148 million for third quarter 2006, an increase of 76% over new business awards in second quarter 2006. Contract cancellations for the quarter were $7 million. Total business authorizations, which consist of signed backlog and verbally awarded business, totaled a record $590 million at Sept. 30, 2006, a 69% increase from June 30, 2006. "Kendle continues to focus first and foremost on meeting the global clinical development needs of our customers," PharmD chairman and chief executive officer Candace Kendle said. "Our enhanced position in the marketplace and expanded therapeutic expertise are already having a strong impact on our results. During the quarter we delivered significant growth in backlog and new business awards, further strengthening and diversifying our customer base and demonstrating the confidence our customers have in Kendle as a global provider." She continued, "We are very pleased with the pace at which the integration is progressing and believe we are well positioned to meet the increasing needs of our customers for large global programs across all therapeutic areas and geographic regions." Net service revenues by geographic region for the third quarter were 59% in the Americas, 38% in Europe, and 3% in the Asia/Pacific region. The top five customers based on net service revenues accounted for 30% of net service revenues for third quarter 2006 compared with 34% of net service revenues for third quarter 2005. Reimbursable out-of-pocket revenues and expenses were $21.5 million for third quarter 2006 compared with $12.9 million in the same quarter a year ago. Cash flow from operations for the quarter was a positive $9.6 million. Cash and marketable securities totaled $27.9 million, including $2.6 million of restricted cash. Days sales outstanding in accounts receivable were 46 and capital expenditures for third quarter 2006 totaled $1.9 million. Net service revenues for the nine months ended Sept. 30, 2006, were $197.1 million compared with net service revenues of $149.2 million for the nine months ended Sept. 30, 2005. Net service revenues by geographic region for the nine months ended Sept. 30, 2006, were 60% in the Americas, 37% in Europe, and 3% in the Asia/Pacific region. The top five customers based on net service revenues accounted for 29% of net service revenues for the first nine months of 2006 compared with 35% of net service revenues for the first nine months of 2005. Income from operations for the nine months ended Sept. 30, 2006, was approximately $21.8 million, or 11% of net service revenues, compared with income from operations of approximately $12 million, or 8% of net services revenues, in the first nine months of 2005. For the three months ended Sept. 30, 2006, the Company reported $3.997 million of net income compared with $3.394 million of net income in the comparable period in 2005. Cash flow from operations for the nine months ended Sept. 30, 2006, was a positive $17.1 million. Capital expenditures for the nine-month period totaled $6.1 million. About Kendle International Cincinnati, Ohio-based Kendle International Inc. (Nasdaq: KNDL) -- http://www.kendle.com/-- is a global clinical research organization and is the fourth-largest provider of Phase II-IV clinical development services worldwide to biopharmaceutical companies. It delivers integrated clinical research services, including clinical trial management, clinical data management, statistical analysis, medical writing, regulatory consulting and organizational meeting management and publications services on a contract basis to the biopharmaceutical industry. The company operates in North America, Europe, Asia Pacific, Latin America, and Africa. Kendle's 3,000 associates worldwide have conducted clinical trials and provided regulatory and pharmacovigilance services in more than 80 countries. * * * As reported in the Troubled Company Reporter on Nov. 7, 2006, Moody's Investors Service revised Kendle International Inc.'s Corporate Family Rating to B2 from B1 in connection with the rating agency's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology. Standard & Poor's Ratings Services assigned in June 2006 its 'B+' corporate credit rating and stable outlook to Cincinnati, Ohio- based pharmaceutical contract research organization Kendle International Inc. L-3 COMMS: Heavy Debt Levels Prompt Moody's to Affirm CFR at Ba2 ---------------------------------------------------------------- Moody's Investors Service affirmed all ratings of L-3 Communications Holdings Inc. -- Corporate Family Rating Ba2, Subordinated Notes Rating of Ba3, LGD4, 68%, and Speculative Grade Liquidity Rating of SGL-1, and has changed L-3's ratings outlook to stable from negative. The ratings outlook had been negative since the largely debt- financed July 2005 acquisition of Titan Corporation for approximately $2.7 billion. At that time, Moody's was concerned about the substantial increase in leverage related to this transaction and about the ability of the company to restore credit metrics to those commensurate with its Ba2 rating in light of potential challenges associated with the acquisition of Titan, which had been its largest acquisition to date. Since that time, L-3 has demonstrated its ability to handle both organic and acquisition-related growth while maintaining operating margins and generating substantial cash flows despite significant levels of working capital investment and unexpected non-recurring charges. The company has also been successful in integrating the operations of Titan and other recent acquisitions into its existing operations. Based on L-3's announced financial results for the quarter-ending September 2006, Moody's observes that L-3 has largely achieved improvements in credit metrics, albeit without actual reduction in debt levels, sufficient to warrant the stabilization in ratings. The Ba2 Corporate Family rating continues to reflect L-3's considerable revenue base and backlog, as well as the company's increasing lead position in a variety of segments in the U.S. Government contracting sector, which supports expectations for strong free cash generation over the next few years. However, the rating also takes into consideration L-3's continued heavy debt levels, risk associated with the company's acquisition strategies, and uncertainty as to whether projected free cash generation will be used to repay debt or applied to more aggressive financial policies. The current stable outlook reflects Moody's expectations that L-3 will continue to grow its revenue base in 2007 through organic growth as well as through continued use of acquisitions. However, L-3's acquisition pace is expected to moderate over the next few years, suggesting a more focused approach on creating value from its existing business lines rather than from opportunistic acquisition patterns exhibited by the company until recently. Moody's further expects that the company will be able to achieve growth while maintaining operating margins in the 10% range, likely resulting in substantial free cash flows that should allow the company to begin to reduce outstanding debt levels and improve core credit metrics. Ratings or their outlook may be subject to upward revision if the company were to achieve planned growth levels while reducing debt, such that leverage were to fall below 3x and EBIT were to remain above 3.5x interest for a sustained period. Ratings would be subject to downward pressure if the company were to undertake an increased pace of levered acquisitions, or engage in any leveraging transactions that increase the company's risk profile, resulting in leverage in excess 4.5x, EBIT/Interest below 2.5x, or free cash flow below 7% of total debt. Headquartered in New York City, L-3 Communications is a provider of Intelligence, Surveillance and Reconnaissance systems, secure communications systems, aircraft modernization, training and government services. Its customers include the Department of Defense, Department of Homeland Security, selected U.S. Government intelligence agencies and aerospace prime contractors. LE-NATURE'S HOLDINGS: Case Summary & 30 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Le-Nature's Holdings, Inc. 11 Lloyd Avenue Latrobe, PA 15650 Bankruptcy Case No.: 06-25590 Debtor-affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Tea Systems International, LLC 06-25591 Type of Business: The Debtors manufacture and market bottled water, flavored beverages, iced teas and juice drinks. See http://www.le-natures.com/ The Debtors' affiliate, Le-Nature's, Inc. fka Global Beverage Systems, Inc., filed for chapter 7 liquidation on Nov. 1, 2006 (Bankr. W.D. Pa. Case No. 06-25454). Chapter 11 Petition Date: November 5, 2006 Court: Western District of Pennsylvania (Pittsburgh) Judge: M. Bruce McCullough Debtors' Counsel: Douglas Anthony Campbell, Esq. Campbell & Levine, LLC 1700 Grant Building Pittsburgh, PA 15219 Tel: (412) 261-0310 Fax: (412) 261-5066 Estimated Assets Estimated Debts ---------------- --------------- Le-Nature's Less than $10,000 More than Holdings, Inc. $100 Million Tea Systems $10,000 to More than International, LLC $100,000 $100 Million Debtors' Consolidated List of their 30 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Manufacturers & Traders $155,250,000 Trust Co., as Indenture Trustee For 9% Senior Subordinated Notes Due 2013 c/o Corporate Trust Department One M&T Plaza, 7th Floor Buffalo, NY 14203 Canusa Hershman $1,345,381 P.O. Box 785216 Philadelphia, PA 19178-5216 Bischof & Klein $1,301,906 Postfach 1160 Lengerich, Germany D-49525 C.H. Robinson Worldwide, Inc. $1,117,784 P.O. Box 9121 Minneapolis, MN 55480 Starpet, Inc. $1,071,739 P.O. Box 32101 Charlotte, NC 28232-2101 Owens Illinois $664,325 P.O. Box 91526 Chicago, IL 60693 CRV $663,363 1000 Winter Street Waltham, MA 02451 The CIT Group/EF $615,479 File #55603 Los Angeles, CA 90074 Renaissance Mark, Inc. $611,447 Dept. LA 22440 Pasadena, CA 91185-2440 Davis Gardner Gannon Pope $584,637 2325 East Carson Street, Suite 100 Pittsburgh, PA 15203 Ross & Christopher Refrigeration and $583,471 Construction, Inc. 7828 South Maple Avenue Fresno, CA 93725 Maricopa County Treasurer $408,585 301 West Jefferson, Suite 100 Phoenix, AZ 85003 Merrill Lynch Capital $400,236 4660 Paysphere Circle Chicago, IL 60674 General Press Corp. $354,114 c/o James V. Wolfe, President 110 Allegheny Drive Natrona Heights, PA 15065 C&H Distributors, Inc. $306,899 22133 Network Place Chicago, IL 60673-1133 Swift Transportation $306,296 P.O. Box 643116 Cincinnati, OH 45264 PricewaterhouseCoopers $296,620 125 High Street Boston, MA 02111 SMI USA Inc. $296,003 Department 655 P.O. Box 150473 Hartford, CT 06115 ORIX Financial Services, Inc. $294,434 P.O. Box 7247-0369 Philadelphia, PA 19170-0369 Arbor Insurance $284,073 1605 North Cedar Crest Boulevard Suite 410 Allentown, PA 18104 ADT Security Services $232,638 Menasha $209,046 AIG Commercial Equipment Finance $209,032 PCA $201,226 Ingersoll-Rand Co. $200,227 Exel, Inc. $198,954 Knight Transportation, Inc. $196,884 ECM Transport, Inc. $195,770 Creekridge Capital LLC-WELB $192,752 Wells Fargo Bank Northwest $189,787 LIVE NATION: S&P Holds 'B+' Corp. Credit Rating, Strips Neg. Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings, including its 'B+' corporate credit rating, on Live Nation Inc., and removed the ratings from CreditWatch, where they were placed with negative implications on Aug. 14, 2006. At the same time, Standard & Poor's affirmed its ratings on indirect wholly owned subsidiary Live Nation Worldwide Inc.'s senior secured bank loans, and assigned identical ratings to the company's $200 million term loan add-on to its existing senior secured term loan facilities. The facilities are assigned a 'B+' bank loan rating, at the same level as the corporate credit rating, with a recovery rating of '3', indicating the expectation for meaningful recovery of principal in the event of a payment default. The outlook is negative. The Los Angeles-based concert promoter, producer, and venue operator for live entertainment will have approximately $759 million of debt outstanding, including four-quarter-average letters of credit and $40 million of preferred stock, pro forma for the proposed transaction. Standard & Poor's expect that the company will use borrowings under the proposed facility to finance, in part, its $350 million acquisition of House of Blues; to ensure that the company maintains sufficient borrowing capacity under its $285 million revolving credit, which is primarily used for letters of credit; and for liquidity to make additional acquisitions. "Our rating on Live Nation reflects financial risk from high lease-adjusted leverage, volatile profitability levels, and minimal potential for margin expansion," said Standard & Poor's credit analyst Heather M. Goodchild. These factors are partially offset by the company's good competitive position in the live-entertainment industry, its significant geographic and format diversity, and historically positive discretionary cash flow. MABS TRUST: Moody's Assigns Ba2 Rating to Class M-11 Certificates ----------------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by MASTR Asset Backed Securities Trust 2006- AM3 and a ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by Aames Capital Corporation originated, adjustable-rate and fixed-rate, subprime mortgage loans acquired by UBS Real Estate Securities Inc. The ratings are based primarily on the credit quality of the loans and on protection against credit losses by subordination, excess spread, and overcollateralization. The ratings also benefit from both the interest-rate swap and interest-rate cap agreements, both provided by Bear Stearns Financial Products Inc. Moody's expects collateral losses to range from 5.25% to 5.75%. Ocwen Loan Servicing, LLC will service the mortgage loans and Wells Fargo Bank, N.A. will act as master servicer. Moody's has assigned Ocwen its servicer quality rating of SQ2- as a servicer of subprime mortgage loans. Moody's has assigned Wells Fargo its servicer quality rating of SQ1 as a master servicer of mortgage loans. These are the rating actions: * MASTR Asset Backed Securities Trust 2006-AM3 * Mortgage Pass Through Certificates, Series 2006-AM3 Cl. A-1, Assigned Aaa Cl. A-2, Assigned Aaa Cl. A-3, Assigned Aaa Cl. A-4, Assigned Aaa Cl. M-1, Assigned Aa1 Cl. M-2, Assigned Aa2 Cl. M-3, Assigned Aa3 Cl. M-4, Assigned A1 Cl. M-5, Assigned A2 Cl. M-6, Assigned A3 Cl. M-7, Assigned Baa1 Cl. M-8, Assigned Baa2 Cl. M-9, Assigned Baa3 Cl. M-10,Assigned Ba1 Cl. M-11,Assigned Ba2 MAGNOLIA ENERGY: Wants Court's Approval to Use Cash Collateral -------------------------------------------------------------- Magnolia Energy L.P. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to use the cash collateral securing repayment of its obligations to a syndicate of commercial banks, through, ABN AMRO Bank N.V. and Deutsche Bank Trust Company. In October 2001, the Debtors entered into a credit agreement with ABN AMRO and Deutsche Bank that provides a maximum borrowing of up to $405 million. On Dec. 12, 2003, the parties amended and restated the agreement, allowing maximum borrowings of up to $362.3 million. As of the Debtors' bankruptcy filing, the Debtors have approximately $360 million outstanding under the agreement. The Debtors will use the cash collateral to continue operations and maintenance of their facility for the benefit of their creditors and prepetition lenders. The Debtor's obligations are secured by a lien interest on substantially all of its assets, including, deposit accounts and cash equivalents; and contract rights. A full-text copy of the Debtor's request regarding the use of cash collateral is available for free at: http://ResearchArchives.com/t/s?14af Headquartered in Ashland, Michigan, Magnolia Energy L.P., and three of its affiliates filed for chapter 11 protection on Sept. 29, 2006 (Bankr. D. Del. Case Nos. 06-11069 through 06-11072). Mark D. Collins, Esq., at Richards Layton & Finger, represents the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. MAIN STREET: Chapter 11 Trustee Hires Lewis Freeman as Accountants ------------------------------------------------------------------ Lewis B. Freeman, the chapter 11 Trustee appointed in Main Street USA Inc. and its debtor-affiliates' cases, obtained permission from the U.S. Bankruptcy Court for the Middle District of Florida to employ Lewis B. Freeman & Partners, Inc., as his forensic accountants and day-to-day management and support. Lewis Freeman will: a) provide analysis and investigation of historical transactions; b) evaluate preferences, fraudulent conveyance and litigation matters; and c) assist the Trustee in other matters. Mr. Freeman, a Lewis Freeman principal, discloses that his firm's professionals bill: Designation Hourly Rate ----------- ----------- Principals $200 - $350 Accountants & others $50 - $175 Mr. Freeman assures the Court that the firm does not hold nor represent any interest adverse to the Debtors' estates. Headquartered in Kissimmee, Florida, Main Street USA Inc. and its debtor-affiliates filed for chapter 11 protection on Sept. 29, 2006 (Bankr. M.D. Fl. Case No. 06-02582). On Oct. 13, 2006, Lewis B. Freeman was appointed as the Debtors' chapter 11 Trustee. Brian G. Rich, Esq., at Berger Singerman, P.A., represents the Trustee. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. MACDERMID INCORPORATED: 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. chemical and allied products sectors, the rating agency confirmed its Ba2 Corporate Family Rating for MacDermid Incorporated, as well as revised the rating on the company's $301.5 Million 9.125% Graduated Senior Subordinate Notes due 2011 to Ba2 from Ba3. Those debentures were assigned an LGD4 rating suggesting that noteholders will experience a 57% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Waterbury, Connecticut, MacDermid Inc. is engaged in the manufacturing and marketing specialty chemicals for the metal and plastic finishing, electronics, graphic arts and offshore oil industries. MAIN STREET: U.S. Trustee Picks 7-Member Creditors' Committee ------------------------------------------------------------- Felicia S. Turner, the U.S. Trustee for Region 21, appointed seven creditors to serve on an Official Committee of Unsecured Creditors in Main Street USA Inc. and its debtor-affiliates' chapter 11 cases: 1. Jeff & Dana Duke 11634 Audubond Lane Clermont, FL 34711 Phone: (352) 242-1129 Fax: (352) 242-1129 2. Diana Johnson 523 E. Concord Street Orlando, FL 32803 Phone: (407) 872-1381 3. Eustace & Nina Nethersole 10 Unami Ct. Somerset, NJ 08873 Phone: (732) 940-2696 Fax: (973)395-9316 4. J.E. Owens & Company, P.A. c/o Jack E. Owens 2731 Silver Star Road Orlando, FL 32808 Phone: (407) 293-2654 Fax: (407) 295-0421 5. Roland A. Miller 11202 Skyway Drive Clermont, FL 34711 Phone: (352) 394-2061 Fax: (352) 394-2061 6. Omawale Omawale 861 Glendora Road Poinciana, FL 34759 Phone: (407) 414-1577 Fax: (407) 264-8116 7. Patricia J. Storms 8619 White Rose Drive Orlando, FL 32818 Phone: (321) 229-8636 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Kissimmee, Florida, Main Street USA Inc. and its debtor-affiliates filed for chapter 11 protection on Sept. 29, 2006 (Bankr. M.D. Fl. Case No. 06-02582). On Oct. 13, 2006, Lewis B. Freeman was appointed as the Debtors' chapter 11 Trustee. Brian G. Rich, Esq., at Berger Singerman, P.A., represents the Trustee. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. MDC HOLDINGS: Earns $48.706 Million in Third Quarter of 2006 ------------------------------------------------------------ M.D.C. Holdings Inc. filed its financial statements for the third quarter ended Sept. 30, 2006, with the Securities and Exchange Commission on Nov. 7, 2006. The Company closed 2,955 and 9,529 homes, respectively, during the three and nine months ended Sept. 30, 2006, compared with 3,686 and 10,356 homes closed, respectively, during the same periods in 2005. The Company received 2,120 and 8,658 net home orders, respectively, during the third quarter and first nine months of 2006, compared with 3,551 and 12,929 net home orders, respectively, during the same periods of 2005. For the third quarter ended Sept. 30, 2006, the Company reported $48.706 million of net income on $1.082 billion of total revenues, compared with $120.990 million of net income on $1.167 billion of total revenues in the comparable quarter of 2005. Total revenue decreased by $84.9 million during the three months ended Sept. 30, 2006, compared with the same period in 2005, primarily resulting from a decline in home sales revenue in the Company's Mountain and East segments, offset in part by an increase in homes sales revenue from its West segment. At Sept. 30, 2006, the Company's balance sheet showed $3.956 billion in total assets, $1.789 billion in total liabilities, and $2.167 billion in stockholders' equity. Full-text copies of the Company's financials are available for free at http://ResearchArchives.com/t/s?14b4 Denver, Colo.-based M.D.C. Holdings Inc. (NYSE: MDC; PCX) -- http://RichmondAmerican.com/-- owns and manages companies that build and sell homes under the name "Richmond American Homes." The Company also provides mortgage financing, primarily for MDC's homebuyers, through its wholly owned subsidiary HomeAmerican Mortgage Corporation. MDC also has established operating divisions in Chicago, Dallas/Fort Worth, Houston, Philadelphia/Delaware Valley, and West Florida. * * * Moody's Investors Service revised on Dec. 12, 2001, ratings of M.D.C. Holdings Inc.'s subordinated debt at Ba2, senior subordinated debt at Ba2, and preferred stock at Ba3. METHANEX 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. chemical and allied products sectors, the rating agency confirmed its Ba1 Corporate Family Rating for Methanex Corporation. Additionally, Moody's affirmed its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $200 Million 8.75% Senior Unsecured Notes Due 2012 Ba1 Ba1 LGD4 56% $150 Million 6% Senior Unsecured Notes Due 2015 Ba1 Ba1 LGD4 56% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Vancouver, Canada, Methanex Corporation -- http://www.methanex.com/-- produces methanol. MEZZITT AGRICULTURAL: Case Summary & 8 Largest Unsec. Creditors --------------------------------------------------------------- Debtor: Mezzitt Agricultural Corp. 72 East Main Street Hopkinton, MA 01748 Bankruptcy Case No.: 06-42434 Chapter 11 Petition Date: November 8, 2006 Court: District of Massachusetts (Worcester) Debtor's Counsel: James C. Gross, Esq. Klieman, Lyons, Schindler & Gross 21 Custom House Street, Suite 920 Boston, MA 02110 Tel: (617) 443-1000 Fax: (617) 443-1010 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million Debtor's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Beals & Thomas, Inc. Services Rendered $168,000 Reservoir Corporate Center -- Engineering 144 Turnpike Road Southborough, MA 01772 Town of Hopkinton Taxes $56,887 18 Main Street Hopkinton, MA 01748 RSM McGladrey Trade Debt $34,500 7 Burlington Executive Pa. Suite 320 Burlington, MA 01803 Grounds Management, Inc. Trade Debt $4,149 P.O. Box 18 Marlborough, MA 01752 NSTAR Trade Debt $76 P.O. Box 4508 Woburn, MA 01888 Town of Ashland Taxes $23 Massachusetts Department of Taxes Unknown Revenue Internal Revenue Service Taxes Unknown MILLENNIUM CHEMICALS: 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. chemical and allied products sectors, the rating agency confirmed its Ba3 Corporate Family Rating for Millennium Chemicals Inc. Additionally, Moody's revised or affirmed its probability-of- default ratings and assigned loss-given-default ratings on these loans and bond debt obligations as well as that of its subsidiary Millennium America Inc.: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $150 Million 4.0% Graduated Convertible Debentures Due Nov. 2023 B1 B1 LGD4 66% $125 Million Graduated Senior Secured Revolving Credit Facility Due Aug. 2010 Ba2 Baa3 LGD2 12% $25 Million Graduated Senior Secured Revolving Credit Subordinate Facility (Australia) Due Aug. 2010 Ba2 Baa3 LGD2 12% $100 Million Graduated Senior Secured Term Loan (Australia) Due Aug 2010 Ba2 Baa3 LGD2 12% $9 Million 7.0% Graduated Senior Unsecured Notes Due Nov. 2006 B1 B1 LGD4 66% $98 Million 9.25% Graduated Global Unsecured Notes Due June 2008 B1 B1 LGD4 66% $275 Million 9.25% Graduated Global Unsecured Notes Due June 2008 B1 B1 LGD4 66% $249 Million 7.625% Graduated Senior Unsecured Debentures Due Nov. 2026 B1 B1 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 Greenville, Delaware, Millennium Chemicals Inc. is engaged in the production of inorganic chemicals and ethylene; its co-products and derivatives. MKHSR PROPERTIES: Case Summary & Four Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: MKHSR Properties, LLC 5987 Hunter Road Ooltewah, TN 37363 Bankruptcy Case No.: 06-13878 Type of Business: The Debtor's affiliate, Martin Kendrick Holmes, Jr., filed for chapter 11 protection on July 5, 2006 (Bankr. E.D. Tenn. Case No. 06-12068). Chapter 11 Petition Date: November 8, 2006 Court: Eastern District of Tennessee (Chattanooga) Judge: John C. Cook Debtor's Counsel: Thomas E. Ray, Esq. Samples, Jennings, Ray & Clem, PLLC 130 Jordan Drive Chattanooga, TN 37421 Tel: (423) 892-2006 Fax: (423) 892-1919 Total Assets: $1,300,000 Total Debts: $1,887,234 Debtor's Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ B B & T 5987 Hunter Road $1,753,233 P.O. Box 580002 1st on Real Estate Secured: Charlotte, NC 28258-0002 and Personal $1,100,000 Property Clifford M. and 5987 Hunter Road $100,000 Diana A. Clark 2nd Mortgage Secured: 1140A Old Peachtree Road $1,100,000 Duluth, GA 30097 Senior Lien: $1,787,233 Hamilton County Trustee 5987 Hunter Road $34,000 210 Courthouse Property Taxes Secured: Chattanooga, TN 37402 2005 & 2006 $1,100,000 Senior Lien: $1,753,233 Personal Taxes $34,000 Secured: $1,100,000 Senior Lien: $1,787,233 Discovery Point $1 Franchising/Dialex, Inc. 1140A Old Peachtree Road Duluth, GA 30097 MUSICLAND HOLDING: Inks Pact Allowing Committee to Pursue Actions ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in Musicland Holding Corp. and its debtor-affiliates' chapter 11 cases intends to file actions against various Secured Trade Creditors, including Paramount Pictures, Home Video Division; Sony Pictures Home Entertainment, Inc.; and Twentieth Century Fox Home Entertainment LLC, seeking the return of transfers that they received within 90 days prior to Jan. 12, 2006. The DIP Order provides that the Committee can, within 60 days from the date of appointment of the Committee's counsel, file certain claims against the Secured Trade Creditors. Pursuant to several Court-approved stipulations, the Committee's deadline to file the DIP STC Claims has been extended. The Debtors assert that they may have potential causes of action against Paramount, Sony Pictures and Twentieth Century -- the Turnover Defendants -- relating to goods provided by those Creditors and the Debtors' entitlement to certain deductions or chargebacks relating to the provision of those goods. After engaging in consultations, the Debtors, the Creditors' Committee and the Informal Committee of Secured Trade Vendors have determined that it is best and most cost-efficient for any and all claims and causes of action against the Turnover Defendants to be pursued in conjunction with the Creditors' Committee's pursuit of the Paramount/Sony/Twentieth Century Preference Actions. Accordingly, the parties stipulate that: (a) the Creditors' Committee is deemed to have standing and authority, as of November 1, 2006, to investigate, pursue and prosecute all actions against the Turnover Defendants, including the Debtors' Turnover Action; (b) any settlement of the Turnover Action will need consent from the Informal Committee and the Responsible Person as defined in the Debtors' Plan of Liquidation; and (c) the Debtors and the Creditors' Committee agree to mutually cooperate and share information and documents, and the Debtors agree to reasonably cooperate in making their documents available to the Creditors' Committee for its review without formal subpoena or discovery demands. Ms. Johnson asserts that the Settlement Agreement is fair and equitable, falls well within the range of reasonableness and enables the parties to avoid any further costs of negotiation and litigation. "If the Court does not approve the Settlement Agreement, the Debtors and St. Clair will likely engage in a protracted litigation under the Adversary Action." Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Musicland Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) MUSICLAND HOLDING: Wants St. Clair Settlement Agreement Approved ---------------------------------------------------------------- Musicland Holding Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to approve their Settlement Agreement with St. Clair Entertainment Group pursuant to Sections 105(a), 362 and 363(b)(1) of the Bankruptcy Code. In January 2005, the Debtors entered into a consignment agreement with St. Clair whereby the Debtors could order goods from St. Clair on consignment and later remit payment to St. Clair if and when they sold the goods. St. Clair purportedly perfected its interest in the consigned goods by filing a financing statement pursuant to the Uniform Commercial Code. St. Clair is a supplier of entertainment-related goods, including, but not limited to, digital video disks and video movies. As of Jan. 12, 2006, St. Clair asserted that the Debtors owed it approximately $230,526 generated by the Debtors' prepetition sale of certain goods that it had delivered to the Debtors. In February 2006, at St. Clair's request, the Court modified the automatic stay to allow St. Clair to proceed with an adversary proceeding against the Debtors in an attempt to gain possession of the Sale Proceeds totaling $230,526. In April 2006, St. Clair filed Claim No. 1633 against the Debtors, asserting a secured claim for $463,264 and a non-priority, general unsecured claim for $96,739. St. Clair then filed an adversary proceeding in May 2006 against the Debtors and Wachovia Bank, as agent for the Debtors' senior secured lenders, seeking to recover the Sale Proceeds, plus interest. The Debtors and Wachovia Bank have both objected to the Adversary Proceeding. In August 2006, the parties stipulated that the Informal Committee of Secured Trade Vendors is permitted to intervene in the Adversary Proceeding. Subsequently, the parties engaged in negotiations and ultimately entered into a settlement to resolve the Adversary Proceeding, Claim No. 1633 and other related disputes. The salient terms of the Settlement Agreement are: * In full and final satisfaction of the claims alleged in the Adversary Proceeding and Claim No. 1633, St. Clair will have an Allowed Secured Claim for $85,000 and an Allowed Unsecured Claim for $145,000; * St. Clair's Allowed Unsecured Claim will be treated as a Class 5 Claim under the proposed Plan of Liquidation; * The parties will mutually release and discharge all claims and liabilities against each other; and * St. Clair will dismiss the Adversary Proceeding, with prejudice. The Official Committee of Unsecured Creditors, Wachovia Bank and the Informal Committee all support the proposed settlement, Andrea L. Johnson, Esq., at Kirkland & Ellis LLP, in New York, informs the Court. Ms. Johnson asserts that the Settlement Agreement is fair and equitable, falls well within the range of reasonableness and enables the parties to avoid any further costs of negotiation and litigation. "If the Court does not approve the Settlement Agreement, the Debtors and St. Clair will likely engage in a protracted litigation under the Adversary Action." Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Musicland Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NEW CENTURY: Moody's Puts Ba2 Rating on Class B-3 Certificates -------------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by New Century Alternative Mortgage Loan Trust 2006-ALT2 and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by New Century Mortgage Corporation originated, fixed-rate, alt-a mortgage loans acquired by Goldman Sachs Mortgage Company. The ratings are based primarily on the credit quality of the loans and on protection against credit losses by subordination, excess spread, and overcollateralization. Moody's expects collateral losses to range from 0.75% to 0.95%. Wells Fargo Bank, National Association will service the mortgage loans. Moody's has assigned Wells Fargo its servicer quality rating of SQ1 as a servicer of prime mortgage loans. These are the rating actions: * New Century Alternative Mortgage Loan Trust 2006-ALT2 * Asset-Backed Certificates, Series 2006-ALT2 Cl. AV-1, Assigned Aaa Cl. AF-2, Assigned Aaa Cl. AF-3, Assigned Aaa Cl. AF-4, Assigned Aaa Cl. AF-5, Assigned Aaa Cl. AF-6A, Assigned Aaa Cl. AF-6B, Assigned Aaa Cl. M-1, Assigned Aa1 Cl. M-2, Assigned Aa2 Cl. M-3, Assigned Aa3 Cl. M-4, Assigned A2 Cl. B-1, Assigned Baa1 Cl. B-2, Assigned Baa3 Cl. B-3, Assigned Ba2 NEW YORK RACING: Wants to Hire UHY LLP as Financial Advisors ------------------------------------------------------------ The New York Racing Association, Inc. asks the U.S. Bankruptcy Court for the Southern District of New York for authority to employ UHY LLP, to provide financial, compliance, and employee benefits attest services, and UHY Advisors NY, Inc., to provide non-attest business advisory, tax accounting, and tax consulting services. UHY LLP and UHY Advisors will: a. provide financial attest services for the 401(k) Plan of NYRA, The Retirement Plan for Administrative and Racing Employees of NYRA, The Pension Plan for Employees of the Maintenance Department of NYRA, The Pension Plan for Employees of the Mutual Department of NYRA for the year ended Dec. 31, 2005 in connection with its annual reporting obligation under the Employee Retirement Income Security Act of 1974; b. serve as independent accountants to examine NYRA's compliance with the requirements of NYRA's system of accounting and internal control as filed with the New York State Racing & Wagering Board during the year ended Dec. 31, 2006; c. provide financial attest services for NYRA; d. assist NYRA with its response to the State of New York Ad Hoc Committee on the Future of Racing's Request for Proposal for the New York State Racing Franchise, dated June 13, 2006; and e. prepare the annual federal and state tax returns that NYRA is required to file, subject to the completion of an audit by the firms. Howard S. Foote, a partner at UHY LLP and a managing director at UHY Advisors NY, Inc., tells the Court that the Firms' professionals bill: Firm Professional Hourly Rate ---- ------------ ----------- UHY LLP Partners & Principals $450 Principals & Managers $300 Senior and Staff Accountants $220 UHY Advisors Managing Directors $450 Principals & Managers $300 Senior and Staff Accountants $220 Mr. Foote assures the Court that the Firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About New York Racing Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed a chapter 11 petition on November 2, 2006 (U.S. Bankr. S.D.N.Y. Case No. 06-12618) Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP represents the Debtor in its restructuring efforts. When the Debtor sought protection from its creditors, it listed more than $100 million of total assets and more than $100 million of total debts. NEW YORK RACING: Selects Dewey Ballantine as Special Corp. Counsel ------------------------------------------------------------------ The New York Racing Association Inc. asks the U.S. Bankruptcy Court for the Southern District of New York for authority to employ Dewey Ballantine LLP as special corporate, lobbying, real estate, and litigation counsel. Dewey Ballantine will perform necessary legal services in connection with: a) the Debtor's franchise to operate racing and pari-mutuel betting at the racetracks; b) issues concerning the ownership of real and personal property (including, but not limited to, intellectual property); c) issues concerning Debtor's contractual arrangements, including, but not limited to, Debtor's contract with MGM Grand (New York) LLC concerning the installation, operation, and management of video lottery terminals at the Aqueduct Racetrack; and d) efforts to obtain payment of approximately $19 million owed to the Debtor by the State of New York pursuant to a certain Memorandum of Understanding entered into on Dec. 30, 2005, between the Debtor, the Non-Profit Racing Association Oversight Board, and the New York State Division of the Budget. As compensation, Dewey will receive under a general retainer, normal hourly rates in effect when services are rendered and will be entitled to normal reimbursement of out-of-pocket expenses. From September 2005, through October 27, 2006, Dewey received from the Debtor approximately $1,030,998, which includes a monthly $15,000 retainer the Debtor pays Dewey for certain lobbying and corporate advice. Eamon O'Kelly, a member of the firm, assures the Court that Dewey Ballantine does not represent or hold any interest adverse to the Debtor or its estate with respect to the legal matters as to which the firm is to be employed by the Debtor. About New York Racing Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed a chapter 11 petition on November 2, 2006 (U.S. Bankr. S.D.N.Y. Case No. 06-12618) Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP represents the Debtor in its restructuring efforts. When the Debtor sought protection from its creditors, it listed more than $100 million of total assets and more than $100 million of total debts. NEW YORK RACING: Wants Until Jan. 2 to File Schedules & Statements ------------------------------------------------------------------ The New York Racing Association Inc. asks the U.S. Bankruptcy Court for the Southern District of New York to extend the 15-day period for filing its schedules of assets and liabilities and other financial statements for an additional 45 days, to Jan. 2, 2007. NYRA said that it is unable to complete its schedules and statements during the 15-day period due to the size and complexity of its operations and the strain exerted on the company's resources due to the bankruptcy filing. NYRA reasons that their primary focus had been on getting the case filed. NYRA filed for chapter 11 protection on Nov. 2, 2006. The company also filed, together with its petition, a list of all its creditors including creditors holding the 20 largest unsecured claims against the company. About New York Racing Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed a chapter 11 petition on November 2, 2006 (U.S. Bankr. S.D.N.Y. Case No. 06-12618) Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP represents the Debtor in its restructuring efforts. When the Debtor sought protection from its creditors, it listed more than $100 million of total assets and more than $100 million of total debts. NORTEL NETWORKS: Declares Preferred Share Dividends --------------------------------------------------- The board of directors of Nortel Networks Limited has declared a dividend on each of the outstanding Cumulative Redeemable Class A Preferred Shares Series 5 and the outstanding Non-cumulative Redeemable Class A Preferred Shares Series 7. The dividend amount for each series is calculated in accordance with the terms and conditions applicable to each respective series, as set out in the Company's articles. The annual dividend rate for each series floats in relation to changes in the average of the prime rate of Royal Bank of Canada and The Toronto-Dominion Bank during the preceding month and is adjusted upwards or downwards on a monthly basis by an adjustment factor which is based on the weighted average daily trading price of each of the series for the preceding month, respectively. The maximum monthly adjustment for changes in the weighted average daily trading price of each of the series will be plus or minus 4.0% of Prime. The annual floating dividend rate applicable for a month will in no event be less than 50% of Prime or greater than Prime. The dividend on each series is payable on January 12, 2007 to shareholders of record of such series at the close of business on December 29, 2006. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. * * * As reported in the Troubled Company Reporter on Oct. 5, 2006, Moody's Investors Service upgraded its B3 Corporate Family Rating for Nortel Networks Corp. to B2. As reported in the Troubled Company Reporter on July 10, 2006, Dominion Bond Rating Service confirmed the long-term ratings of Nortel Networks Capital Corporation, Nortel Networks Corporation, and Nortel Networks Limited at B (low) along with the preferred share ratings of Nortel Networks Limited at Pfd-5 (low). All trends are Stable. DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt; Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5 (low) Stb Class A, Non-Cumulative Redeemable Preferred Shares. Standard & Poor's also affirmed its 'B-' long-term and 'B-2' short-term corporate credit ratings on the company, and assigned its 'B-' senior unsecured debt rating to the company's proposed $2 billion notes. The outlook is stable. NORTH STREET: Fitch Affirms C Rating on Fixed-Rate Income Notes --------------------------------------------------------------- Fitch Ratings has affirmed these North Street Referenced Linked Notes listed below, effective immediately: Series 2000-1 -- $36,000,000 class A floating-rate notes 'AA-'; -- $40,000,000 class B floating-notes 'BBB-'; -- $31,000,000 class C floating-rate notes 'B/DR1'; -- $14,000,000 class D-1 floating-rate notes remain at 'CC/DR5'; -- $20,000,000 class D-2 fixed rate notes remain at 'CC/DR5'; -- Fixed-rate income notes remain at 'C/DR6'. Series 2002-1A -- $50,000,000 class A floating-rate notes 'AAA'; -- $100,000,000 class B floating-rate notes 'AAA'. North Street 2000-1, North Street 2002-1A and North Street 2000-1 Senior Credit Linked Notes are partially funded synthetic collateralized debt obligations backed by a credit default swap portfolio entered into with UBS Investment Bank, which consists of corporate bonds, asset-backed securities, and real estate investment trust securities. These affirmations are a result of stable portfolio performance. Since Fitch's latest rating action on Nov. 10, 2006, three credit events have occurred in the reference portfolio: Delphi, Calpine and AFT 3-C. However, Fitch's November 2005 review incorporated the likelihood of the aforementioned events. Calpine settled above par and no credit protection payment was made. The deal asset portfolio had relatively small exposures to Delphi and AFT 3-C, $2,500,000 and $1,500,000 respectively, and the bulk of credit protection payments were covered by accrued interest on the income notes, which have a 20% coupon. The par balance of the income notes was written down from $18,759,778 to $18,065,102 since Fitch's last rating action. Further, Fitch's Weighted Average Rating Factor has remained stable since last review. Currently there are no defaulted assets in the portfolio. Fitch also discussed the current state of the portfolio with the asset manager and its portfolio management strategy going forward as part of its review. The ratings of all classes of notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The rating of the income notes addresses the likelihood that investors will receive full and timely payments of interest, at the rated coupon of 8%, as well as the stated balance of principal by the legal final maturity date. ORTHOMETRIX INC: Sept. 30 Balance Sheet Upside Down by $1.4 Mil. ---------------------------------------------------------------- For the third quarter ended Sept. 30, 2006, Orthometrix Inc. reported a $1,042,579 net loss on $1,967,390 of revenues, compared with a $1,523,248 net loss on $1,165,445 of revenues in the comparable quarter of 2005. At Sept. 30, 2006, the Company's balance sheet showed $1,091,211 in total assets and $2,502,892 in total liabilities, resulting in a $1,411,681 stockholders' deficit. The Company's Sept. 30 balance sheet also showed strained liquidity with $989,319 in total current assets and $2,435,963 in total current liabilities. Full-text copies of the Company's third quarter financials are available for free at http://ResearchArchives.com/t/s?14b0 Orthometrix Inc. markets, sells, and services several musculoskeletal product lines used in pharmaceutical research, diagnosis, and monitoring of bone and muscle disorders, sports medicine, rehabilitative medicine, physical therapy, and pain management. OSHKOSH TRUCK: $3.2 Billion JLG Deal Cues Moody's Ba3 Debt Rating ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 first time rating to Oshkosh Truck Corporation's $3.5 billion first lien senior secured credit facility and a Ba3 corporate family rating. The purpose of the proposed credit facility is to fund Oshkosh's acquisition of JLG Industries, Inc. for an aggregate purchase price of $3.2 billion, net cash and including closing costs. The ratings reflect both the overall probability of default of the company, to which Moody's assigns a PDR of Ba3, and a loss given default of LGD 3 (47%) for the first lien senior secured credit facility. Moody's also assigned a SGL-2 Speculative Grade Liquidity Rating to Oshkosh. The rating outlook is stable. In a related action, Moody's affirmed the B2 rating for JLG's $89.5 million Subordinated Notes and lowered to B2 from Ba3 the rating for its $113.8 million Unsecured Notes. The rating outlook is stable. As part of the acquisition, JLG has commenced a tender offer and consent solicitation for these note issues. Under the terms of this offer any untendered notes will be subject to a stripping of protective covenants. The ratings have been adjusted to reflect the risk of any stub pieces that may remain outstanding following expiry of the offer. If a substantial portion of the issues are redeemed as part of the tender offer or if insufficient information is available to monitor these specific instruments within the overall Oshkosh group, the ratings could be withdrawn. The corporate family rating and probability of default ratings of JLG have been withdrawn. While recognizing the financial strength of Oshkosh before the acquisition, Moody's analyst Peter Doyle said, "the Ba3 corporate family rating reflects the reduction in credit metrics that will result from its acquisition of JLG". Oshkosh will increase balance sheet debt in excess of $3.1 billion. As a result of the increased leverage, credit metrics will erode on a projected basis for 2007: -- EBIT/interest to about 2.8x; -- FCF/Debt to 2.5%; and, -- Debt/EBITDA to about 4.6x. While meeting debt service requirements of its leveraged capital structure, Oshkosh must also contend with the ongoing cyclicality of the non-residential construction sector, JLG's primary end market, and integrating a significant acquisition. These weaknesses, however, are balanced against the potential benefits of combining Oshkosh and JLG. JLG's strong financial results are driven from the success of the North American economy, the ongoing robust non-residential construction market, and its strategic alliance with Caterpillar. Additionally, Oshkosh should benefit from the sharing of technologies, expected savings from procurement opportunities, and capitalizing on JLG's existing operating efficiencies. These strengths in addition to the company's rationalization program and a commitment to maintain ample liquidity should enable Oshkosh to strengthen debt protection measures over the intermediate term. The stable outlook for Oshkosh reflects Moody's expectations that its debt protection measures should be supportive of the Ba3 rating over the next twelve to eighteen months. Moody's anticipates that Oshkosh will improve its operations due to increasing diversification of its product lines, strong demand in most of its end-markets, and a commitment to debt reduction. The Ba3 rating of the $3.5 billion first lien senior secured credit facility reflects an LGD 3 (47%) loss given default assessment as this facility represents the company's entire debt structure and offers superior collateral position over other creditors who would have potential claims. The credit facility will have a first lien on substantially all of the company's assets excluding real estate, and where applicable, capital stock of subsidiaries. The SGL-2 Speculative Grade Liquidity Rating reflects Moody's belief that the company will maintain a good liquidity profile over the next 12-month period. The SGL rating anticipates that approximately $290 million in availability at closing under the company's proposed first lien senior secured credit facility and free cash flow should be sufficient to fund the company's capital spending and operational needs over the next 12 months. Oshkosh ratings assigned: -- Corporate family rating Ba3; -- Probability-of-default rating Ba3; -- $500 million senior secured revolving credit facility due late 2011 at Ba3, LGD3, 47%; -- $400 million senior secured Term Loan A due late 2011 at Ba3, LGD3, 47%; -- $2.6 billion senior secured Term Loan B due late 2013 at Ba3, LGD3, 47%; -- Speculative Grade Liquidity at SGL-2. JLG ratings affirmed: -- $113.8 million 8.375% Gtd. Sr. Subordinated Notes due 2012 at B2, LGD6, 97%. JLG ratings lowered: -- $89.5 million 8.25% Gtd. Sr. Unsecured Notes due 2008 at B2, LGD6, 96% from Ba3, LGD4, 56%. JLG ratings withdrawn: -- Corporate family rating Ba3; -- Probability-of-default rating Ba3. Oshkosh, headquartered in Oshkosh, WI, is a diversified heavy equipment manufacturer currently with three business segments supporting the defense, fire and emergency, and commercial end markets. JLG industries, Inc., headquartered in McConnellsburg, PA, with executive offices in Hagerstown, MD, is a manufacturer of aerial work platforms and telehandlers. OSHKOSH TRUCK: $3.2 Billion JLG Deal Cues S&P's 'BB' Credit Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB' corporate credit rating to Oshkosh, Wis.-based Oshkosh Truck Corp. At the same time, Standard & Poor's assigned its bank loan and recovery ratings to the company's proposed $3.5 billion senior secured credit facilities. The facilities are rated 'BB' with a recovery rating of '2', indicating expectation of substantial recovery of principal (80%-100%) in the event of a default. "The ratings on Oshkosh reflect the company's aggressive financial profile, which more than offsets the company's leading business positions in key segments of the specialty vehicle market, and satisfactory product and end market diversity," said Standard & Poor's credit analyst Anita Ogbara. Oshkosh is a designer, manufacturer, and marketer of a broad range of specialty commercial, fire and emergency, and military vehicles. The company maintains leadership positions in heavy- duty rescue vehicles, severe-duty tactical trucks, custom and commercial pumpers, severe-duty plow and snow removal vehicles, concrete mixers, refuse truck bodies, and tow trucks. On Oct. 15, 2006, Oshkosh signed a definitive agreement to acquire JLG Industries Inc. for a total purchase price of approximately $3.2 billion net of cash and including transaction costs. The transaction will be financed with a $3.5 billion senior secured credit facility. JLG is a manufacturer of access and material-handling equipment for construction equipment and rental markets. The company is engaged in the manufacture of aerial work platform. As a result of the JLG acquisition, Oshkosh should benefit from increased product, end market and geographic diversity, as well as procurement and cost synergies. The company expects to generate revenues and operating income by segment as follows; access equipment, defense, fire and emergency, and commercial. PACIFIC BAY: Fitch Holds BB- Rating on $17 Mil. Preference Shares ----------------------------------------------------------------- Fitch affirms five classes of rated notes issued by Pacific Bay CDO, Limited. These rating actions are effective immediately: -- $236,716,758 class A-1 first priority senior secured floating rate notes affirmed at 'AAA'; -- $64,000,000 class A-2 second priority senior secured floating rate notes affirmed at 'AAA'; -- $36,000,000 class B third priority senior secured floating rate notes affirmed at 'AA'; -- $6,688,729 class C mezzanine secured floating rate notes affirmed at 'A-'; -- $17,000,000 preference shares affirmed at 'BB-'. Pacific Bay is a collateralized debt obligation, which closed in November 2003. The portfolio is comprised of residential mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities, corporate securities and CDOs. Pacific Bay has exited reinvestment period in November 2005 and began to amortize. As of November 2006 payment date class A-1 notes have been paid down by 24.85% from the original amount. Further, due to a structural feature which caps interest distributions to the preference shares at 14% per annum and amortizes the class C notes with the excess spread, the class C notes have paid down by 60.65 % since the closing of the deal three years ago. This de- leveraging of class A-1 and C notes has increased the credit enhancement levels for all classes. The portfolio has continued to perform since last review. Fitch Weighted Average Rating Factor is stable at 3.5 and all of overcollateralization and interest coverage tests are within their corresponding covenants. Currently, there are two defaulted securities in the portfolio which amount to 0.5% of the portfolio. The ratings of the class A-1, A-2 and B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The rating of the class C notes addresses the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The rating of the preference shares addresses the ultimate payment of a 2% yield per annum on the preference share rated balance as well as the preference share rated balance by the legal final maturity date. PANAVISION INC: AFM Acquisition Prompts Moody's to Affirm B2 CFR ---------------------------------------------------------------- Moody's Investors Service affirmed Panavision Inc.'s B2 Corporate family rating after the company's disclosure to upsize its first lien and second lien facility by $25 million and $10 million respectively to fund the acquisition of AFM Group Limited which is expected to close in the next several months. Previously, Panavision had upsized its first lien facility by $30 million to fund the acquisition of Plus 8 and repay borrowings under its revolving credit facility in Sept. 2006. The outlook is stable. The B2 Corporate family rating reflects Panavision's high debt to EBITDA leverage, uncertain asset coverage and the company's dependence on the number of film starts and scripted television programming. The ratings are supported by the company's strong brand image and industry leading market share in the feature film and episodic television segment. The ratings and stable outlook reflect Moody's expectation that the company's capital investment will yield the expected growth in asset utilization, revenues and EBITDA and that the company will start generating positive free cash flow in 2006 on a pro-forma basis, which will grow to meaningful levels over the intermediate term. Moody's has taken these rating actions: * Issuer: Panavision Inc. -- Corporate Family Rating affirmed at B2 -- Probability of Default Rating affirmed at B2 -- $35 million revolving credit facility affirmed at Ba3; LGD3, 31% -- $250 million first lien term loan affirmed at Ba3; LGD3, 31% -- $125 million second lien term loan affirmed at Caa1; LGD5, to 82% from 83% Headquartered in Woodland Hills, California, Panavision manufactures and rents camera systems and lighting equipment to motion picture and television producers worldwide. PBG AIRCRAFT: S&P Pares Rating on Class B Notes to 'B' From 'BB' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered ratings on aircraft notes issued by PBG Aircraft Trust and removed the ratings from CreditWatch, where they were placed with negative implications Aug. 16, 2002. The rating on the Class A aircraft notes was lowered to 'BB-' from 'BBB-', and the rating on the Class B aircraft notes lowered to 'B' from 'BB'. "The downgrade was based on reduced cash flows and collateral coverage available to PBG Aircraft Trust, a securitization of finance leases to U.S. airlines," said Standard & Poor's credit analyst Philip Baggaley. "The cumulative effect of bankruptcies of United Air Lines Inc. [B/Stable/--] and Northwest Airlines Inc. [rated 'D'] on the securitization, and renegotiation of leases to American Airlines Inc. [B/Stable/--] in 2003 has left PBG Aircraft Trust vulnerable to any further airline defaults. In particular, a large concentration of six MD80 series aircraft leased to American presents a risk should that airline enter bankruptcy." PBG Aircraft Trust is a Delaware trust formed in 1998 by PBG Capital Partners LLC, which was in turn owned equally by units of Pitney Bowes Credit Corp. and GATX Capital Corp. GATX's current aircraft leasing operation acts as remarketing agent for the Trust, and those duties may be assumed by Macquarie. The original 14 aircraft, owned directly or indirectly by PBG Aircraft Trust, were acquired in 1986-1989 by PBCC and were leased to five U.S. airlines, a U.S. airline holding company which subleased to a U.S. airline, and a unit of debis AirFinance N.V., which in turn leases that aircraft to a seventh U.S. airline. Of the original planes in the portfolio, two United aircraft and the Air Wisconsin plane were repossessed and sold, and obligations on a regional aircraft leased to Horizon Air Industries Inc. was fully repaid. Remaining aircraft consist of four MD83 and two MD82 planes leased to American, a B757-200 leased to Northwest, an A320-200 leased through AerCap to America West Airlines Inc., and two B737-300s leased to Southwest Airlines Co. Standard & Poor's reviewed the effect of an American bankruptcy as the potentially most damaging credit event, due to the large concentration of rentals (about 40% of the remaining total), and weak values and lease rates of those models. The most likely outcome in such a scenario would be a further negotiated reduction in rentals. In such a scenario, Class A noteholders would more likely than not be fully repaid, but the outcome would depend on the timing of the bankruptcy, recovery on unsecured claims for the amount of forgone rentals, and other factors. The Class B noteholders would have a somewhat more uncertain prospect of full recovery in that scenario. PEDRO ORTEGA: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Pedro Ortega Adela Anguiano 3625 Sorreno Avenue Modesto, CA 95356 Bankruptcy Case No.: 06-90709 Chapter 11 Petition Date: November 8, 2006 Court: Eastern District of California (Modesto) Judge: Robert S. Bardwil Debtors' Counsel: David C. Johnston, Esq. 1020 15th Street, Suite 10 Modesto, CA 95354-1132 Tel: (209) 578-9009 Fax: (209) 578-5909 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million The Debtors did not file a list of their 20 largest unsecured creditors. PENN NATIONAL: To Acquire Zia Park Racetrack for $200 Million ------------------------------------------------------------- Penn National Gaming Inc. entered into a definitive agreement to purchase Zia Partners LLC's 320 acres of land, for $200 million, which are primarily comprised of Zia Park Racetrack and its Black Gold Casino on approximately subject to standard working capital and other adjustments. The acquisition will diversify Penn National's operations into the New Mexico gaming and racing market and is expected to be immediately accretive to earnings upon closing. "We're excited to be adding Zia Park to our diverse portfolio of successful racing and gaming properties, and to be entering a market where the state has worked collectively with racing and gaming to create a favorable environment" Commenting on the acquisition, Peter M. Carlino, Chief Executive Officer of Penn National stated. "Zia Park is an attractively valued acquisition that is just two years old and does not require significant capital expenditures. The facility's success in attracting patrons from west Texas has driven revenue growth during its first two years of operations. We look forward to completing this transaction and welcoming Zia Park employees to Penn National." The transaction, which is anticipated to close mid-2007, is subject to customary closing conditions and approval by the New Mexico Gaming Control Board and New Mexico Racing Commission as well as other regulatory bodies. Penn National Gaming intends to fund the purchase with additional borrowings under its existing $750 million revolving credit facility of which $357.5 million was drawn at Sept. 30, 2006. Located in Hobbs, in eastern New Mexico, Zia Park is an integrated thoroughbred and quarterhorse racetrack and gaming facility that runs a 49-day race meet. The facility's Black Gold Casino features approximately 750 slot machines as well as the Black Gold Buffet and Black Gold Steakhouse and the Home Stretch Bar & Grill. In the twelve months ended September 30, 2006, Zia Park reported that its operations generated approximately $69.7 million in revenue and approximately $24.5 million in EBITDA. Penn National Gaming, Inc. -- http://www.pngaming.com/-- owns and operates casino and horse racing facilities with a focus on slot machine entertainment. The Company presently operates fifteen facilities in thirteen jurisdictions including Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, Ohio, Pennsylvania, West Virginia, and Ontario. In aggregate, Penn National's facilities feature over 17,500 slot machines, over 400 table games, over 2,000 hotel rooms and approximately 575,000 square feet of gaming floor space. The property statistics in this paragraph exclude two Argosy properties which the company anticipates divesting, but are inclusive of the Company's Casino Magic - Bay St. Louis, in Bay St. Louis, Mississippi and the Boomtown Biloxi casino in Biloxi, Mississippi, which remain closed following extensive damage incurred as a result of Hurricane Katrina. * * * On Oct. 5, 2006, Moody's Investors Service's confirmed Penn National Gaming Inc.'s Ba2 Corporate Family Rating. Additionally, Moody's revised its Ba3 rating on the company's 6-7/8% senior subordinated notes to B1. PILLOWTEX CORP: Disclosure Statement Hearing Set for December 18 ---------------------------------------------------------------- The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware will convene a hearing at 2:00 p.m., on Dec. 18, 2006, to consider the adequacy of the disclosure statement explaining Pillowtex Corporation and its debtor- affiliates' Joint Plan of Liquidation. The hearing will be held at the U.S. Bankruptcy Court in Delaware, B24 Market Street, Courtroom No. 2, in Wilmington, Delaware. A copy of the Disclosure statement is available for free at http://ResearchArchives.com/t/s?14b6 The Disclosure Statement supersedes and replaces the amended disclosure statement with respect to the Debtors' March 12, 2006 amended joint plan of reorganization. Objections to the approval of the Disclosure Statement must be received on or before 4:00 p.m., on Dec. 11, 2006, by: The Clerk of the Bankruptcy Court District of Delaware 824 Market Street, 3rd Avenue Wilmington, DE 19801 Office of the US Trustee Attn: David M. Klauder, Esq. 844 King Street, sutie 2207 Wilmington, DE 19801 Counsel to Debtors: Debevoise & Plimpton LLP Attn: Richard F. Hahn, Esq. 919 Third Avenue New York, NY 1002 Morris, Nichols, Arsht, & Tunnell LLP Attn: William H. Sudell, Jr., Esq. 1201 North Market Street, P.O. Box 1347 Wilmington, Delaware 19899 Counsel to the Official Committee of Unsecured Creditors: Hahn & Hessen LLP Attn: Mark Indeticato, Esq. 488 Madison Avenue New York, NY 10022 Blank Rome LLP Attn: Jason W. Staib, Esq. 1201 Market Street Wilmington, DE 19801 Plan Overview The Plan provides for the substantive consolidation of the estates of the Debtors. On the effective date, each Debtor other than Pillowtex will be deemed merged into Pillowtex and: -- all guarantees of any Debtor for the payment, performance or collection of obligation of any other Debtor will be eliminated and cancelled; -- any obligation of any Debtor and all guarantees by one or more of the other Debtors will be deemed to be a single claim against the Consolidated Debtors; -- all joint obligations of two or more of the Debtors and all multiple claims against any Debtor on account of these joint obligations will be treated and allowed only as a single claim against the Consolidated Debtors; and -- each proof of claim filed against any Debtor will be deemed filed only against the Consolidated Debtors and will be deemed a single obligation of the consolidated Debtors. Treatment of Claims Holders of Priority Claims, estimated at $150,000, will be paid the full amount of their allowed claims on the effective date. Holders of other secured claims, totaling $5.5 million, will receive the collateral securing their claim. Any excess amount of the allowed claim over the value of the collateral will be treated as a general unsecured claim. Convenience Claims are estimated to amount to $12.5 million. Each person holding a convenience claim will recover 10% of the allowed claim on the effective date. Holders of General Unsecured Claims, totaling $172.5 million, will receive a pro rata share of the beneficial interests, the initial distribution amount and interim distribution amounts. On the effective date, the Pillowtex Equity and Securities Trading Claims will be cancelled and holders will not be entitled to receive or retain any property or interest. Likewise, all subsidiary equity will be cancelled and holders will get nothing under the plan. Headquartered in Dallas, Texas, Pillowtex Corporation -- http://www.pillowtex.com/-- sold top-of-the-bed products to virtually every major retailer in the U.S. and Canada. The Company filed for Chapter 11 protection on November 14, 2000 (Bankr. Del. Case No. 00-4211), emerged from bankruptcy under a Chapters 11 plan, and filed a second time on July 30, 2003 (Bankr. Del. Case No. 03-12339). The second chapter 11 filing triggered sales of substantially all of the Company's assets. David G. Heiman, Esq., at Jones Day, and William H. Sudell, Jr., Esq., at Morris Nichols Arsht & Tunnel, represent the Debtors. Jason W. Staib, Esq., and Mark J. Packel, Esq., at Blank Rome LLP represent the Official Committee of Unsecured Creditors. On July 30, 2003, the Company listed $548,003,000 in assets and $475,859,000 in debts. PREDIWAVE CORP: Hires Allen & Overy as Hong Kong Counsel -------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California gave Prediwave Corporation authority to employ Allen & Overy as its Hong Kong Litigation Counsel. Allen & Overy is expected to represent the Debtor in its Hong Kong proceedings, effective Aug. 17, 2006. The Hong Kong proceedings relate to the Debtor's bulk purchase of memory modules in the years 2000 and 2001. Allen & Overy will also instruct Mr. Chua Guan-Hock S.C., the Debtor's senior counsel, in connection with the Hong Kong proceedings. The Debtor will pay 30% of Allen & Overy's fees in connection with the litigation while the other defendants will shoulder the remaining 70%. Angus Ross, Esq., firm's partner, assured the Court that his firm does not hold any interest adverse to the Debtors, its estate or creditors. Mr. Ross can be reached at: Allen & Overy LLP 1221 Avenue of the Americas New York, NY 10020 United States of America Tel: (212) 610-6300 Fax: (212) 610-6399 http://www.allenovery.com/ Headquartered in Fremont, Calif., PrediWave Corporation -- http://www.prediwave.com/-- provides cable and satellite operators with end-to-end digital broadcast platforms, and offers products like Video On Demand, Digital Video Recording, interactive video shopping, and subscription services. The Debtor filed for chapter 11 protection on April 14, 2006 (Bankr. N.D. California Case No. 06-40547). Robert A. Klyman, Esq., at Latham & Watkins, LLP, and Jonathan S. Shenson, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP represent the Debtor in its restructuring efforts. John D. Fiero, Esq., at Pachulski, Stang, Ziehl, Young and Jones represents the Official Committee Of Unsecured Creditors. The Debtor's Schedules of Assets and Liabilities showed $145,282,246 in total assets and $773,033,371 in total liabilities. PRIMA CAPITAL: Fitch Rates Three Note Classes at Low Bs ------------------------------------------------------- Derivative Fitch has assigned the following ratings to Prima Capital CRE Securitization 2006-1 Ltd. and Prima Capital CRE Securitization 2006-1 Corp., (collectively Prima 2006-1) as of the closing date (Nov. 6, 2006): -- $333,359,810 class A-1 fixed rate notes due December 2048 'AAA'; -- $64,031,000 class A-2 fixed rate notes due December 2048 'AAA'; -- $27,839,000 class B fixed rate notes due December 2048 'AA'; -- $22,271,000 class C fixed rate deferrable interest notes due December 2048 'A+'; -- $16,703,000 class D fixed rate notes due December 2048 'A-'; -- $18,095,000 class E fixed rate notes due December 2048 'BBB+'; -- $12,527,000 class F fixed rate notes due December 2048 'BBB'; -- $9,743,000 class G fixed rate notes due December 2048 'BBB-'; -- $13,919,000 class H fixed rate notes due December 2048 'BB'; -- $15,311,000 class J fixed rate notes due December 2048 'B'; -- $5,567,000 class K fixed rate notes due December 2048 'B-'. PSYCHIATRIC SOLUTIONS: Loan Add-On to Buy Alternative Behavioral ---------------------------------------------------------------- Psychiatric Solutions Inc. amended and restated its Senior Secured Credit Facilities. The Company plans to increase its existing term loan by $150 million and expand its revolver by $150 million. The add-on to the term loan and a portion of the revolver will be used to finance the $210 million cash purchase of Alternative Behavioral Services Inc., which is expected to occur on Dec. 1, 2006, subject to customary closing conditions. "We are pleased to increase our earnings guidance for 2007 as a result of our anticipated acquisition of ABS" Joey Jacobs, Chairman, President and Chief Executive Officer of PSI, remarked. "We not only expect the ABS facilities to be accretive to our 2007 results, but we also expect to produce further growth in revenues and profit margins at the ABS facilities in subsequent years." Citigroup Global Markets Inc. and Banc of America Securities LLC are acting as Joint Bookrunning Manager and Joint Lead Arranger on the $150 million add on to the term loan and Banc of America is acting as Sole Lead Arranger and Sole Bookrunner on the revolving credit facility. Psychiatric Solutions increased its guidance for 2007 earnings per diluted share to a range to $1.42 to $1.46 from the previous range of $1.37 to $1.41. The Company's guidance has been increased to reflect the positive impact of the ABS acquisition. This guidance does not include the impact from any other future acquisitions. Headquartered in Franklin, Tennessee, Psychiatric Solutions, Inc. -- http://www.psysolutions.com/-- offers an extensive continuum of behavioral health programs to critically ill children, adolescents and adults through its operation of 58 owned or leased freestanding psychiatric inpatient facilities with more than 6,500 beds in 27 states. PSI also manages freestanding psychiatric inpatient facilities for government agencies and psychiatric inpatient units within medical/surgical hospitals owned by others. * * * On Nov. 7, 2006, In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology for the Healthcare Service and Distribution sector, the rating agency held its B1 Corporate Family Rating for Psychiatric Solutions, Inc. Additionally, Moody's held its senior subordinated notes' rating at B3, due 2013 and 2014. PSYCHIATRIC SOLUTIONS: FHC Deal Cues Moody's to Affirm CFR at B1 ---------------------------------------------------------------- Moody's Investors Service affirmed the B1 Corporate Family Rating for Psychiatric Solutions, Inc. after the October 30, 2006 disclosure that it had amended and restated its prior purchase agreement with FHC Health Systems Inc. Psychiatric intends to acquire Alternative Behavioral Services, Inc. from FHC for a cash purchase price of $210 million. Under the new agreement, FHC will dismiss its lawsuit against Psychiatric while Psychiatric is expected to withdraw its demand for payment for termination fees and other expenses. The deal is expected to close on December 1, 2006. The outlook remains stable. On May 30, 2006, Psychiatric reported that it had signed an agreement to purchase ABS, a provider of specialty behavioral treatment for children and adults for $250 million. Subsequently, Psychiatric indicated that it has identified and has been unable to resolve certain issues with ABS, and terminated the initial agreement to acquire ABS on October 10, 2006. FHC, in response, subsequently filed a lawsuit to compel Psychiatric to complete the acquisition of ABS. The affirmation of Psychiatric's Corporate Family Rating considers the company's ability to generate high single digit revenue growth and the expansion of margins at its existing facilities, its leading market share in the markets it serves and a proven track record of successfully integrating prior acquisitions. The company also benefits from these positive industry trends: -- a strong and growing demand for inpatient psychiatric services; -- increased occupancy and a stable length of stay; -- improving private and Medicare reimbursement rates; and, -- a reduction in supply of beds and facilities. Moody's notes, however, that Psychiatric's ratings are constrained by the company's use of debt to finance its acquisitions of other psychiatric facilities. Moody's notes that long-term debt has increased from $154 million at the end of 2004 to $485 million as of June 30, 2006. Moody's expects that Psychiatric will finance this acquisition by increasing its existing revolving credit facility capacity from $150 million to $250 million, $80 million of which is expected to be drawn to fund the acquisition. In addition, Moody's anticipates that the company will add $150 million to its current Term Loan, bringing the total balance to $350 million. Based on the increase in long-term debt under the company's existing senior secured credit facility, Moody's downgraded the rating of the senior secured credit facility to Ba3 from Ba2, reflecting an LGD-3 loss given default assessment between 30% and 49% as this facility is secured by a pledge of substantially all of the company's domestic assets. The debt is guaranteed by all of domestic subsidiaries of the borrower excluding the HUD Financing Subsidiary and PSI Surety, Inc. The rating also reflects how the facility benefits from the structural subordination of the senior subordinated notes, which make up a significant amount of the company's capital structure, and is not expected to change even with the acquisition. These ratings were downgraded: -- Senior Secured Term Loan B due 2012, downgraded to Ba3, LGD3, 31%, from Ba2, LGD2, 24% -- Senior Secured Guaranteed Revolver due 2009, downgraded to Ba3, LGD3, 31%, from Ba2, LGD2, 24% These ratings were affirmed: -- Corporate Family Rating, B1 -- Probability of Default Rating, B1 -- Senior Subordinated Notes, due 2014, B3, LGD5, 87% -- Senior Subordinated Notes, due 2013, B3, LGD5, 87% The outlook is stable. Psychiatric Solutions, Inc., headquartered in Franklin, Tennessee, provides a continuum of behavioral health programs to critically ill children, adolescents and adults through its operation of 59 owned or leased freestanding psychiatric inpatient facilities. Psychiatric also manages free-standing psychiatric inpatient facilities for government agencies and psychiatric inpatient units within medical and surgical hospitals owned by others. The company reported approximately $730 million in total revenue during 2005. QUEEN ANNE: Case Summary & Largest Unsecured Creditor ----------------------------------------------------- Debtor: Queen Anne Courts #1, LLC 839 Main Street, Studio 100 Lafayette, IN 47901 Bankruptcy Case No.: 06-40388 Chapter 11 Petition Date: November 7, 2006 Court: Northern District of Indiana (Hammond Division at Lafayette) Judge: Robert E. Grant Debtor's Counsel: David A. Rosenthal, Esq. 410 Main Street P.O. Box 349 Lafayette, IN 47902 Tel: (765) 423-5375 Fax: (765) 423-2597 Total Assets: $3,000,000 Total Debts: $3,980,000 Debtor's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ TLC, LLC $980,000 c/o Harry L. Mohler 630 South Street Lafayette, IN 47901 REVLON INC: Posts $100.5 Million Net Loss in 2006 Third Quarter --------------------------------------------------------------- Revlon, Inc., generated $306 million of net sales for the third quarter ended Sept. 30, 2006, compared with net sales of $275 million in the third quarter 2005. Operating loss in third quarter 2006 was approximately $57 million, after giving effect to significant expenses during the quarter related to restructuring, discontinuing Vital Radiance and executive severance. In the United States, net sales for the quarter advanced 13% to $160 million, compared with net sales of $142 million in the third quarter of 2005. This performance largely reflected the net sales reduction in the current quarter due to Vital Radiance and the Almay returns and allowances provisions in the 2005-quarter. Excluding these factors, net sales in the U.S. were essentially even with the prior year. In International, net sales for the quarter advanced 9% to $146 million, versus net sales of $134 million in the third quarter of 2005. Excluding the impact of foreign currency translation, this performance was driven by strength in each of the Company's three geographic regions, particularly Europe and Latin America. Favorable foreign currency translation added less than one percentage point to the International growth in the quarter. Net loss in the third quarter of 2006 was $100.5 million compared with net loss of $65.4 million in the third quarter of 2005, largely driven by the same factors that impacted operating profitability in the quarter, as well as higher interest expense. Cash flow used for operating activities in the third quarter of 2006 was $29.3 million, compared with cash flow used for operating activities of $69.1 million in the third quarter of 2005. This performance largely reflected the significant use of working capital in the 2005 quarter related to Vital Radiance and the restage of Almay, partially offset by the increase in net loss in the current quarter. During the quarter, the Company began the implementation of its organizational streamlining, as well as the discontinuance of Vital Radiance, which did not maintain an economically feasible retail platform for future growth. In addition, the Company incurred executive severance during the quarter related to a change in leadership at the Company. Revlon reiterated its belief that its restructuring actions taken in the first and third quarters of 2006, the total impact of Vital Radiance and executive severance, while negatively impacting its operating profitability in the third quarter by some $72 million and the full year 2006 by an estimated $140 million, will accelerate the Company's path to becoming net income and cash flow positive. Commenting on the results for the quarter, Revlon President and Chief Executive Officer David Kennedy stated, "Our results in the quarter reflect the important, and admittedly costly, decisions we have made to position Revlon for future success. We are fortunate to have such a strong portfolio of brands, and we intend to leverage the tremendous equity of these brands--particularly Revlon--as we move forward. Importantly, our go-forward approach will continue to focus on bringing innovation and excitement to the market in a way that is intensely focused on driving our profitability and cash flow." Organizational Streamlining During the quarter the Company initiated an organizational streamlining to eliminate redundancy, reduce layers of management and overhead costs and improve profit margins. This restructuring will reduce the Company's U.S. workforce by approximately 250 positions and result in estimated ongoing annualized savings of approximately $34 million. The Company expects the total cost of the program to be approximately $29 million, which it expects to incur over the 2006 and 2007 period. In this regard, the Company incurred restructuring and related charges during the third quarter totaling approximately $14 million related to severance and other termination benefits and expects to incur an additional $7 million in charges related to this program in the fourth quarter of 2006. The Company incurred charges totaling approximately $49 million during the third quarter related to its decision to discontinue the Vital Radiance brand. The charges include a provision for returns and allowances of approximately $31 million, as well as approximately $15 million for the write-off of inventories and selling and promotional materials, and approximately $3 million for the write-off and accelerated amortization of displays. The Company indicated that, including the cost to discontinue the brand, Vital Radiance is expected to negatively impact its full year operating profitability by approximately $100 million, including the impact of approximately $92 million incurred through the first nine months of 2006. Commenting on the Company's financial performance, Mr. Kennedy stated, "Our performance in the third quarter was significantly impacted by the costs of the decisions we announced in September. We continue to expect net sales for the full year 2006 to be approximately $1,340 million, including the impact of Vital Radiance returns and allowances provisions taken during the year. In addition, we continue to expect Adjusted EBITDA for the year to be approximately $75 million to $85 million, after giving effect to the impacts of the restructuring charges taken during the year, the expected full-year impact of Vital Radiance, and executive severance, which collectively are expected to negatively impact Adjusted EBITDA by approximately $125 million. As we look ahead, we are confident in our ability to achieve Adjusted EBITDA of approximately $210 million in 2007." Nine-Month Results Net sales in the first nine months of 2006 advanced approximately 6% to $953 million, compared with net sales of $895 million in the first nine months of 2005. In the United States, net sales advanced 7% to $538 million for the first nine months of 2006, versus net sales of $502 million in the same period last year. International net sales of $415 million in the first nine months of 2006 advanced approximately 6% versus net sales of $393 million in the year-ago period. Excluding the favorable impact of foreign currency translation, International net sales grew approximately 5% in the nine-month period. Net loss in the first nine months of 2006, after giving effect to restructuring, discontinuing Vital Radiance and executive severance, was $245.8 million, compared with a net loss in the first nine months of 2005 of $148.0 million. Cash flow used for operating activities in the first nine months of 2006 was $124.8 million, compared with cash flow used for operating activities of $115.9 million in the first nine months of 2005. About Revlon Revlon, Inc. -- http://www.revloninc.com/-- is a worldwide cosmetics, skin care, fragrance, and personal care products company. The Company's vision is to deliver the promise of beauty through creating and developing the most consumer preferred brands. The Company's brands include Revlon(R), Almay(R), Vital Radiance(R), Ultima(R), Charlie(R), Flex(R), and Mitchum(R). * * * As reported in the Troubled Company Reporter on Oct. 2, 2006, Moody's Investors Service reported that it lowered Revlon Consumer Products Corporation's long-term ratings, including the corporate family rating to Caa1 from B3. Moody's affirmed the company's speculative grade liquidity rating of SGL-4. These rating actions reflect the higher risk of future debt restructurings that may be unfavorable to current bondholders, as well as the significant liquidity and financial challenges that Revlon faces in the next 6-12 months. The outlook remains negative. RONALD SERAFIN: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Ronald Serafin dba The Serafin Group 15205 Wolf Lake Forest Jackson, MI 49201 Bankruptcy Case No.: 06-56441 Chapter 11 Petition Date: November 8, 2006 Court: Eastern District of Michigan (Detroit) Judge: Marci B. McIvor Debtor's Counsel: Kurt A. O'Keefe Woods and O'Keefe 645 Griswold Street, Suite 3156 Detroit, MI 48226 Tel: (313) 962-4630 Fax: (313) 962-9847 Total Assets: $1,964,474 Total Debts: $2,227,997 Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ America Servicing Company Four Unit Apartment $124,000 P.O. Box 10388 Building, 521 Elm Secured: Des Moines, IA 50306-0388 Toledo, OH $70,000 Four Unit Apartment $133,000 Building, 612 Elm Secured: Toledo, OH $110,000 Chase Home at 234 $51,933 P.O. Box 52130 Damon Jackson, MI Secured: Phoenix, AZ 85072-2130 $25,000 Home at 515 $63,928 22nd Jackson, MI Secured: $40,000 Home at 806 $57,915 Second Secured: Jackson, MI $25,000 Chase Manhattan Home at 126 $55,491 P.O. Box 509011 Hollis Jackson, MI Secured: San Diego, CA 92150-9011 $45,000 Home at 128 $57,907 Hollis Jackson, MI Secured: $50,000 Citizens Bank 906 Burr Jackson, MI $48,172 P.O. Box 59720 Secured: Schaumburg, IL 60159-0720 $40,000 Key Bank Five Unit Apartment $125,000 P.O. Box 10099 Building, 529 Elm Secured: Toledo, OH 43699 Toledo, OH $100,000 Lucas County Treasurer Four Unit Apartment $33,540 One Government Center Building, 517 Elm Secured: Suite 500 Toledo, OH $60,000 Toledo, OH 43604-2253 Senior Lien: $97,000 Option One Home at 158 $49,459 Payment Processing Hollis Jackson, MI Secured: Department 7821 $39,500 Los Angeles, CA 90084-7821 Four Unit Apartment $97,000 Building, 517 Elm Secured: Toledo, OH $60,000 Three Unit Apartment $81,000 Apartment Building Secured: 1012 North Huron $55,000 Toledo, OH Washington Mutual Home at 1230 $53,767 9451 Corbin Avenue Woodbridge Secured: No. 10204 Jackson, MI $45,000 Northridge, CA 91324 Home at 138 $35,639 Rockwell Secured: Jackson, MI $20,000 Home at 1207 $52,976 South Jackson Secured: Jackson, MI $40,000 Internal Revenue Service Income Tax $36,902 John R. Wanick Services $22,756 M & M Construction Services $20,000 Atlas Paving Services $14,500 SAI HOLDINGS: Case Summary & 46 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: SAI Holdings Ltd. P.O. Box 105 Butner, NC 27509 Tel: (919) 575-6523 Fax: (919) 575-9344 Bankruptcy Case No.: 06-33227 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Athol Manufacturing Corp. 06-33228 Sandusky, Ltd. 06-33229 Type of Business: The Debtors manufacture and retail vinyl-coated upholstery fabrics. Chapter 11 Petition Date: November 8, 2006 Court: Northern District of Ohio (Toledo) Judge: Mary Ann Whipple Debtors' Counsel: Ronald E. Gold, Esq. Frost Brown Todd LLC 2200 PNC Center 201 East Fifth Street Cincinnati, OH 45202-4182 Tel: (513) 651-6156 Fax: (513) 651-6981 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million A. SAI Holdings Ltd.'s Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cardmember Trade Debt $10,315 824 North 11th Street St. Louis, MO 63101-1016 Travel Gallery Trade Debt $1,653 231 East Market Street Sandusky, OH 44870 Heller Associates Trade Debt $989 2755 Bristol Street Costa Mesa, CA 92626 ADP, Inc. Trade Debt $408 7007 East Pleasant Valley Road Cleveland, OH 44131 United Way of Erie City Trade Debt $122 416 Columbus Avenue Sandusky, OH 44870 Pension Benefit Guaranty Corp. Guaranty Unknown 1200 K Street Northwest, Suite 270 Washington, D.C. 20005 B. Athol Manufacturing Corp.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Exxonmobil Chemical Trade Debt $694,531 c/o Bill McGuire 388 South Main Street Akron, OH 44311 Tel: (330) 849-5757 GMAC Commercial Finance Trade Debt $678,127 c/o Malcolm Heald Mill Lane Kingsley Cheshire England, WA68IA 011-44-1606-354-380 Polyone Corporation Trade Debt $576,904 c/o Candy Poissant 33587 Walker Road Avon Lake, OH 44012 Tel: (866) 765-9663 Georgia Gulf Corp. Trade Debt $548,799 c/o Verette Polk 2600 Highway 405 South Plaquemine, LA 70764 Tel: (225) 685-2544 Vinnolit GmbH & Co. KG Trade Debt $537,151 c/o Tony Ryan Carl-Zeiss-Ring 25 D-85737 Ismaning, Germany 011-49-89-96103-273 The CIT Group/Commerce Trade Debt $448,528 c/o Eric Williams 134 Wooding Avenue Danville, VA 24541 Tel: (434) 791-6491 STAHL USA Inc. Trade Debt $408,056 c/o Ramon Marte 13 Corwin Street Peabody, MA 01960 Tel: (978) 968-1395 Northeastern Nonwoven Trade Debt $338,878 c/o Brian Jeffrey 7 Amarosa Drive Rochester, NH 03868 Tel: (603) 332-5900 Favini Spa Trade Debt $248,920 Ferro Chemical Trade Debt $177,725 Penn Color, Inc. Trade Debt $131,862 Toray Plastics Trade Debt $116,759 Great American Insurance Trade Debt $104,973 Tex Tech Industries Trade Debt $95,545 Cromption Corp. Trade Debt $64,754 Glatfelter Trade Debt $63,752 BP Energy Company Trade Debt $61,660 Industrial Packaging Group Trade Debt $60,689 Headway Corp. Staffing Trade Debt $57,316 Pension Benefit Guaranty Corp. Guaranty Unknown C. Sandusky, Ltd.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ BASF Corporation Trade Debt $879,550 c/o Dick Webber 100 Campus Drive Florham, NJ 07932 Tel: (973) 245-6576 Exxonmobil Chemical Company Trade Debt $864,290 c/o Bill McGuire 388 South Main Street Akron, OH 44311 Tel: (330) 849-5757 American Colors, Inc. Trade Debt $818,817 c/o Robert Bourne 1110 Edgewater Drive Sandusky, OH 44870 Tel: (419) 621-4000 Polyone Corp. Trade Debt $698,041 c/o Laura Kovach 24651 Center Ridge Road Westlake, OH 41445 Tel: (630) 904-3707 Toray Plastics (America) Trade Debt $675,157 c/o Jeff Butler PEF Division 500 Toray Drive Front Royal, VA 22630 Tel: (540) 631-2594 Favini Spa Trade Debt $532,382 c/o Ed Allen Via IV November 27628882 Crusinallo VB Italy Tel: (828) 645-7243 Formosa Plastics Corporation Trade Debt $366,320 c/o Judy Chen 9 Peach Tree Hill Road Livingston, NJ 07039 Tel: (973) 422-7765 Highland Industries, Inc. Trade Debt $272,772 c/o Bret Kelly Suite 300 629 Green Valley Road Greensboro, NC 27408 Tel: (336) 547-1685 Mellon Bank Trade Debt $190,131 Sekisui Products LLC Trade Debt $176,625 Oxy Vinyls, LP Trade Debt $174,640 Vinnolit GmbH & Co. KG Trade Debt $170,099 BWC State Insurance Fund Worker's $164,854 Compensation Chemcentral Credit Group LLC Trade Debt $155,165 Stahl USA, Inc. Trade Debt $153,376 GMAC Commercial Finance LLC Trade Debt $129,180 Colorite Specialty Resins Trade Debt $94,275 Penn Color, Inc. Trade Debt $90,149 Hess Corp. Trade Debt $88,806 Pension Benefit Guaranty Corp. Guaranty Unknown SAINT VINCENTS: Court Issues Revised Caronia Retention Order ------------------------------------------------------------ The Honorable Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court for the Southern District of New York has issued an amended order authorizing the employment and retention of Caronia Corporation as Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates' estimation consultant. Judge Hardin clarifies that the scope of Caronia's engagement, the treatment of information in connection with its retention, the disclosure of any information, and the continued privileged nature of that information will be governed by an amended Court- approved protocol and protective order. A full-text copy of the Approved Protocol and Protective Order, as amended, is available for free at: http://researcharchives.com/t/s?14aa Judge Hardin says no insurer may seek to deny insurance coverage based on the Order, the Protection and Protocol Order, and the production of documents and other information to Caronia. As reported in the Troubled Company Reporter on Sept. 27, 2006, the Debtors, together with their Official Committee of Unsecured Creditors, and the Official Committee of Tort Creditors, jointly sought permission from the Court to employ and retain Caronia as their consultant in connection with the estimation of medical malpractice claims filed prior to the bar date. As Estimation Consultant, Caronia is tasked to: (1) prepare an expert estimation report based on an analysis of the Debtors' potential aggregate liability arising out of the Medical Malpractice Claims; and (2) provide expert testimony relating to the Medical Malpractice Estimation, including, consulting with the Parties and their counsel and others in connection with the preparation of the Estimation Report, all pursuant to the terms and conditions set forth in a stipulation and agreed protocol and protective order executed by the Parties and Caronia on September 21, 2006. As set forth in the Protocol and Protective Order, the Parties expressly agree that the Estimation Report will include: * a description of Caronia's credentials and experience in performing a valuation of medical malpractice claims generally and in New York, the background of each of the firm's professionals working on the Estimation Report, and a list of expert retentions in the last 10 years; * a list of the general categories of documents that Caronia has relied on while preparing the Estimation Report, including a detailed list of any documents that are not confidential; * an explanation of Caronia's methodology in reaching individual claim values; * the Debtors' total estimated aggregate potential medical malpractice liability for each region; * a comparison of the Aggregate Potential Liability against the Debtors' actuarial estimates; and * a "sensitivity" analysis providing a "confidence range" based on the addition or subtraction of certain assumptions employed by Caronia in the Medical Malpractice Estimation. If a Party withdraws from the joint retention of Caronia and disclaims the firm as its expert, the Debtors will have the right to continue to employ Caronia for purposes of the Medical Malpractice Estimation, subject to Caronia's compliance with the Protocol and Protective Order. Caronia will be paid: -- $250 per file/claim reviewed in preparation of the Estimation Report; and -- $100-$200 per hour depending on the professional or paraprofessional working on the engagement for time spent drafting the Estimation Report, preparing testimony or actually testifying. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 38 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SAINT VINCENTS: Inks Assignment Pact with Kingsbrook and BBC ------------------------------------------------------------ Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for authority to enter into an Assignment Agreement with Kingsbrook Jewish Medical Center and BBC Realty, Inc. Following the closure of St. Mary's Hospital in Brooklyn, Saint Vincent Catholic Medical Center transferred five outpatient family health centers, including St. Peter Claver Clinic, to Kingsbrook. Peter Claver Clinic is located at 1061-1063 Liberty Avenue, in Brooklyn, New York. Pursuant to a lease dated September 1, 1991, SVCMC, as successor- in-interest to St. Mary's, leases the real property on which the Peter Claver Clinic is located from BBC Realty. SVCMC has not assumed or rejected the Liberty Avenue Lease. In 2005, SVCMC and Kingsbrook entered into an agreement granting Kingsbrook a revocable license to use the Clinic's premises for its operation until April 2006. SVCMC and Kingsbrook extended the license agreement's expiration date until August 2006, and after that, on a month-to-month basis. Kingsbrook and BBC Realty then executed a letter agreement under which BBC Realty consented to Kingsbrook's use of the Premises and certain amendments to the Liberty Avenue Lease with respect to Kingsbrook's tenancy. Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New York, discloses that under the Lease, SVCMC is obliged to pay $12,909 per month to BBC Realty as base rent, plus $5,300 for utilities and taxes. Pursuant to the License Agreement, Kingsbrook reimburses SVCMC on a monthly basis for rent and other expenses. Mr. Troop relates that SVCMC, Kingsbrook, and BBC Realty determined that SVCMC's assumption and assignment of the Liberty Avenue Lease to Kingsbrook is the most effective way of substituting Kingsbrook for SVCMC as tenant of the Premises. Accordingly, the parties agree to enter into an assumption and assignment agreement, which provides for SVCMC's transfer of its right, title, and interest as tenant in the Liberty Avenue Lease to Kingsbrook. SVCMC will have no further obligations under the Lease, other than to: (1) pay prepetition rent due to BBC Realty for the period July 1 to 5, 2005, for $1,700; (2) pay rent, if any, due to BBC Realty for the period July 6, 2005, through the Assignment Agreement's effective date; and (3) remedy any outstanding violation for failure to file a completed facility inventory form that has been assessed against the Premises for $5,200 and other regulatory violations. Kingsbrook will assume all Liberty Avenue Lease' obligations and will pay rent reserved by the Lease from and after the date of the Assignment Agreement until the termination of the Lease. Immediately after the Agreement's Effective Date, BBC Realty will pay SVCMC $21,500, which represents the security deposit pursuant to the Liberty Avenue Lease. Kingsbrook will continue to reimburse SVCMC for any rent and operating expenses through the Effective Date. Mr. Troop tells the Court that the Assignment Agreement is beneficial to the Debtors because it: -- releases SVCMC from all future obligations under the Lease; -- avoids the potentially significant prepetition claim that could be asserted by BBC Realty against SVCMC if the Lease were rejected; -- provides for the return of the Security Deposit to SVCMC; and -- facilitates operation of the Peter Claver Clinic and the provision of ambulatory healthcare services to the local community in furtherance of the Debtors' mission. The statutory prerequisites of the Assignment Agreement have also been satisfied, Mr. Troop adds. SVCMC does not believe that it could derive greater benefit from the Lease by retaining it or assigning the Lease to a party other than Kingsbrook, Mr. Troop further notes. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 38 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SAINT VINCENTS: Court Allows A. Forger to Conduct Rule 2004 Probe ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Alexander D. Forger, as guardian of the property of Eliza L. Moore, to examine Saint Vincent Catholic Medical Centers pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure. SVCMC, through St. Vincent's Manhattan Hospital, was a named defendant in a medical malpractice lawsuit involving Mr. Forger pending in the Supreme Court of the County of New York. In 2006, Mr. Forger filed Claim No. 478 for $50,000,000. Sarah J. Eagen, Esq., at Clark, Gagliardi & Miller P.C., in White Plains, New York, explained that Mr. Forger wants to know if there is available Hospital Professional Liability insurance coverage, as well as polices, funds, assets and monies available to fund the self-insured layer of coverage, that would be used to satisfy his medical malpractice claim. Ms. Eagen said the evaluation will help Mr. Forger determine whether he should: (i) seek relief from the automatic stay to proceed with discovery; or (ii) submit his Claim into mediation as proposed by SVCMC. According to Ms. Eagen, Mr. Forger is one of eight claimants asserting medical malpractice claims against St. Vincent's Manhattan Hospital. The primary layer of hospital liability insurance for these claims is reportedly exhausted. SVCMC has self-insurance, which also appears to have been partially expended, and excess coverages, Ms. Eagen noted. Ms. Eagen added that the examination is necessary to clarify insurance limit discrepancies. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 38 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SAMUEL BURROW: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Samuel Burrow, Jr. 11600 West Winchester Lane Ellicott City, MD 21042 Bankruptcy Case No.: 06-17002 Chapter 11 Petition Date: November 6, 2006 Court: District of Maryland (Baltimore) Judge: Nancy V. Alquist Debtor's Counsel: Adam M. Freiman, Esq. Sirody, Freiman & Feldman, P.C. 1777 Reisterstown Road, Suite 360 East Baltimore, MD 21208 Tel: (410) 415-0445 Fax: (410) 415-0744 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Martin Sheet Metal Services $15,616 4000 Gill Avenue Hampstead, MD BGE Services $11,652 P.O. Box 1475 Baltimore, MD 21203 Able Electric Services $10,000 7522 Connelly Drive, Suite B Hanover, MD 21076 DeVeer Insulation Services $7,155 7501 Resource Court Curtis Bay, MD 21226 Adam M. Freiman, P.A. Legal Fees - Balance $2,500 1777 Reisterstown Road Suite 360 Pikesville, MD 21208 Blue Dot Services $2,500 Household Bank MasterCard Credit $1,525 Nuvell Credit Corp. 2000 Chevy Venture $6,988 Secured: $6,200 TC Excalibur Co., LLC Miscellaneous $700 Home Depot Credit $682 SASKATCHEWAN WHEAT: S&P Puts 'B+' Credit Rating on CreditWatch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Regina- based Saskatchewan Wheat Pool on CreditWatch with positive implications, including the 'B+' long-term corporate credit rating. At the same time, Standard & Poor's placed its ratings on Winnipeg, Man.-based grain handler Agricore United on CreditWatch with developing implications, including the 'BB' long-term corporate credit rating. These CreditWatch placements was after the report of SWP's intention to make a hostile bid for AU's common shares, convertible preferred shares, and subordinated convertible debentures. The all-equity transaction would be valued at about C$550 million, with the exception of about CDN$26.5 million that SWP would pay for AU's convertible preferred shares. "The new company would have a strengthened business profile, with a combined market share of about 57% of western Canada grain shipments based on the most recent quarter end. This enhanced business profile would provide upside support to the rating on the new company," said Standard & Poor's credit analyst Don Povilaitis. "If the bid is successful, this would be positive for both companies in terms of market share, synergies, and pricing power, and the combined entity would have revenues of about CDN$4.4 billion and lease-adjusted EBITDA of about C$217 million on a trailing 12-month basis based on each company's previous quarter end," added Mr. Povilaitis. As proposed, Standard & Poor's would likely regard the new company's capital structure as aggressive, with pro forma total lease-adjusted debt to EBITDA of about 3.2x, but this would improve to less than 3x in 2007 given that about CDN$60 million in synergies would be derived from this merger. Both companies' credit profiles had been on an improving trend, with SWP's lease-adjusted total debt to EBITDA of about 2x on a TTM basis and AU's expected to decline to below 4x in fiscal 2007 in light of its intention to convert its convertible debentures into equity in fiscal 2007. Standard & Poor's believes that it is premature to determine the various responses and their financial impact on the credit profiles of either SWP or AU, due to the uncertainty of such a bid succeeding given the value of the current bid, the likelihood of competing cash bids, and the potential response by both AU and its 23% shareholder, Archer Daniels Midland Co. (A/Stable/A-1). In addition, we believe there are serious anticompetitive hurdles to overcome. Standard & Poor's will monitor developments as they unfold. SCOTT BERGER: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Scott Aaron Berger 28 South Garfield Street Denver, CO 80209 Bankruptcy Case No.: 06-18120 Chapter 11 Petition Date: November 6, 2006 Court: District of Colorado (Denver) Judge: Howard R. Tallman Debtor's Counsel: Stephen C. Nicholls, Esq. Nicholls Nicholls Biles & Bower, LLC 1725 Gaylord Street, Suite 100 Denver, CO 80206 Tel: (303) 329-9700 Fax: (303) 329-6950 Total Assets: $1,457,486 Total Debts: $1,658,192 Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ EMC Mortgage Corp. 28 South $287,405 P.O. Box 141358 Garfield Street Secured: Irving, TX 75014-1358 Denver, CO 80209 $1,060,000 Senior Lien: $287,405 MNBA America Credit Card $88,084 P.O. Box 15102 Purchases Wilmington, DE 19886-5102 Vectra Bank Colorado Vehicles $43,302 717 - 17th Street, Suite 300 Secured: Denver, CO 80202 $18,000 Wells Fargo Business Direct Business Line $29,072 P.O. Box 54349 of Credit Los Angeles, CA 90054-0349 Business Credit $6,921 Card Purchases Citi Cards Credit Card $13,306 P.O. Box 6414 Purchases The Lakes, NV 88901-6414 Chase Credit Card $12,960 Purchases Wells Fargo Card Services Credit Card $11,794 Purchases Beneficial Finance Line of Credit $7,077 American Express - Texas Business Credit $7,027 Card Purchases American Express - Florida Business Credit $3,181 Card Purchases Wells Fargo Financial Personal Loan $1,120 American Family Insurance Prime Comm. $413 Trade Debt SEITEL INC: Inks $780 Million Merger Pact With ValueAct Capital --------------------------------------------------------------- Seitel Inc. has signed a definitive merger agreement with ValueAct Capital and its affiliates. Under the terms of the agreement, each share of the Company's common stock, other than shares held by ValueAct Capital, will be converted into the right to receive $3.70 in cash, without interest. The transaction is valued at approximately $780 million, including the assumption or repayment of approximately $189 million of debt and the anticipated payment of approximately $50 million associated with the early retirement of the company's senior notes. ValueAct Capital currently owns beneficially about 39% of Seitel's outstanding common stock on a fully diluted basis. The Company disclosed that the price of $3.70 in cash for each share of its common stock represents a premium of approximately 6% over the closing price of the common stock on the last trading day before ValueAct Capital made its proposal, approximately 48% over the closing price 180 days prior to that announcement, and approximately 120% over the closing price 360 days prior to the announcement. On the unanimous recommendation of its special committee comprised entirely of independent directors, the board of directors of Seitel, without Peter Kamin, Gregory Spivy, and Robert Monson participating in the deliberations or the vote, unanimously approved the agreement and recommend that Seitel's stockholders approve the merger, the Company also disclosed. William Blair & Company, acting as financial advisor to the special committee, has delivered an opinion to the special committee and the board of directors of Seitel that, as of the date of the opinion, the merger consideration was fair, from a financial point of view, to the Company's stockholders. The transaction is expected to be completed by early 2007, subject to receipt of stockholder approval, including the approval of a majority of the stockholders not affiliated with ValueAct Capital voting at the special meeting, and regulatory approvals, as well as the satisfaction of other customary closing conditions. The obligation of ValueAct Capital to consummate the transaction is conditioned upon the receipt of debt financing. ValueAct Capital expects to finance the transaction through a combination of equity contributed by ValueAct Capital and debt financing that has been committed by Morgan Stanley, Deutsche Bank and UBS, subject to customary conditions. The Company further disclosed that, although no agreements have yet been entered into with its management, it is anticipated that its president and chief executive officer, Robert D. Monson, together with certain other members of senior management, will negotiate and enter into agreements to continue their employment with the surviving company after the merger and contribute a portion of their proceeds from the merger to acquire equity in the sole stockholder of Seitel following the merger. About ValueAct Capital ValueAct Capital sources investments in companies it believes is fundamentally undervalued, and then working with management and/or the company's board to implement strategies that generate superior returns on invested capital. ValueAct Capital acquires significant ownership stakes in publicly traded companies, along with a select number of control investments through open-market purchases and negotiated transactions. About Seitel Houston, Tex.-based Seitel Inc. (OTC BB: SELA) -- http://www.seitel-inc.com/-- provides seismic data and related geophysical services to the oil and gas industry in North America. Its products and services are used by oil and gas companies to assist in the exploration, development, and management of oil and gas reserves. TALECRIS BIOTHERAPEUTICS: Moody's Rates New $1.2 Bil. Loan at B2 ---------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Talecris Biotherapeutics, Inc.'s new $1.2 Billion First Priority Term Loan, due 2013. Talecris' corporate family rating is B2 and the rating outlook is stable. The ratings are subject to review for final documentation. Ratings assigned: -- Corporate family rating at B2 -- First priority term loan at B2, LGD4, 57% -- PDR at B2 Talecris manufactures and markets plasma-derived, protein-based products for individuals suffering from life-threatening diseases and currently ranks number three in global sales of plasma-derived products, behind Baxter and CSL Limited. As the largest "pure play" plasma products manufacturer and one of five major global players, Talecris is larger than most companies with a B2 corporate family rating. Talecris began operations on April 1, 2005, when the US assets of Bayer AG's worldwide plasma derived products business were acquired by financial sponsors -- Cerberus Capital Management and Ampersand Ventures. Talecris' ratings are adversely affected by the aggressive financial policies of the company. The company is assuming a significant amount of debt, which is being used to finance a large, one-time dividend payment to their equity sponsors as well as an acquisition of plasma collection centers from International BioResources, LLC. Moody's believes that despite the improving fundamentals in the US plasma protein market - as well as the high barriers to entry in the market - the company's limited operating history as a standalone company is a significant credit concern. In addition, high reliance on raw plasma and the early integration of plasma collection with manufacturing are key operating risks. Finally, the company's high leverage and weak financial strength and financial policy ratios - some of which are positioned at the low end of the Caa category -- are key rating factors. As a result of these concerns, Moody's believes that the B2 corporate family rating is appropriate despite a B1 indicated rating under the Global Methodology for the Medical Products and Device Industry. The ratings are prospective and assume the company will achieve stronger operating results over the forecast period. Moody's expect the company to generate negative free cash flow during FY 2007 and 2008 due to IBR earn-outs, which could be settled in stock, as well as increased capital spending associated with both plasma collection and production facilities. The stable outlook assumes that the company will be able to generate stronger operating and free cash flow by 2009, and as a result, will be able to begin reducing debt. In addition, the stable outlook assumes that borrowings associated with higher capital spending will only occur if the company is on track with its transition to a standalone company and its vertical integration strategy. Given the company's limited history as a standalone entity and the likelihood that financial strength and financial policy ratios may not materially improve until plasma levels increase, a rating upgrade is not likely in the near to intermediate term. Over time, a combination of demonstrating sustained success as a standalone company, execution of its vertical integration, as well as stronger financial strength and financial policy ratios could result in a rating upgrade. The bank term loan rating is highly sensitive to any incremental increase in the first lien revolver borrowings because the revolver is backed by a stronger group of assets. In addition, Moody's believes that adequate liquidity is critical to maintain these ratings. Therefore, if revolver borrowings materially exceed the $90 million level currently anticipated by Moody's, it could create ratings pressure. Moody's believes that lower than expected operating cash flow could result in higher borrowing needs. If financial strength ratios -- including cash flow from operations to total debt, free cash flow to total debt and EBIT/interest drop below anticipated levels, the ratings could face pressure. Talecris Biotherapeutics, Inc. is a manufacturer of plasma- derived, protein-based products for individuals suffering from life-threatening diseases. TEEKAY SHIPPING: Appoints Peter Evensen as CSO & Vince Lok as CFO ----------------------------------------------------------------- Teekay Shipping Corporation has appointed Peter Evensen, current executive vice president and chief financial officer, to a newly created position of executive vice president and chief strategy officer. The company also appointed Vince Lok, senior vice president and treasurer, to the position of senior vice resident and chief financial officer. Both appointments are effective immediately. Bjorn Moller, president and chief executive officer, commented, "Peter Evensen and Vince Lok have been important contributors to Teekay's success. I am pleased to announce these well-deserved promotions which directly support our ambitious growth plans, and ensure we have the leadership structure to continue our progress," Mr. Moller continued, "In his new role, Mr. Evensen will work closely with me to support the development of our existing business segments, as well as identify and pursue new opportunities for Teekay. He will also continue to contribute to Teekay's financial strategy." The Company disclosed that as new chief financial officer, Mr. Lok will assume leadership of the Company's financial operations. Mr. Lok has been with the Company for over 13 years and during that time has held a number of senior finance and accounting positions, including Controller from 1997 until his promotion to the position of vice president, Finance in March 2002. Most recently, Mr. Lok has served as senior vice president and Treasurer. Prior to joining Teekay, Mr. Lok worked at Deloitte & Touche. Headquartered in Nassau, Bahamas, Teekay Shipping Corporation (NYSE: TK) is a Marshall Islands corporation that transports seaborne oil and has expanded into the liquefied natural gas shipping sector through its publicly-listed subsidiary, Teekay LNG Partners L.P. (NYSE: TGP). With a fleet of over 145 tankers, offices in 17 countries and 5,100 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to oil and gas companies. * * * As reported in the Troubled Company Reporter on Sept. 7, 2006 Moody's Investors Service placed all debt ratings of Teekay Shipping Corporation under review for possible downgrade -- including its senior unsecured rating at Ba2. The review was prompted by Teekay's announcement that is has acquired more than 40% of Petrojarl ASA, and of its intent to make an offer for all of the remaining Petrojarl shares. Moody's changed the outlook to rating under review from stable. TOWER RECORDS: Selects Bryan Cave as Bankruptcy Counsel ------------------------------------------------------- Dana B. Rosenfeld, Esq., the consumer privacy ombudsman appointed for MTS Inc. dba Tower Records and its debtor-affiliates' chapter 11 cases, asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Bryan Cave LLP, as her bankruptcy Counsel. Bryan Cave will provide legal services in connection with Ms. Rosenfeld's services, including, without limitation to: a) investigate any proposed sale or lease of personally identifiable information by the Debtors; b) report to the Court in the information described in Section 332(b) of the Bankruptcy Code; c) appear, if necessary and appropriate, before the Court in connection with foregoing; d) provide advice to Ms. Rosenfeld on issues of bankruptcy l law and procedure, including issues relating to sales under Section 363 of the Bankruptcy Code; and e) represent the Ombudsman in any other matter that may arise in connection with Ms. Rosenfeld's service as consumer privacy ombudsman. The firm's professionals and their current hourly rates are: Professional Designation Hourly Rate ----------- ----------- ----------- Dana B. Rosenfeld, Esq. Attorney $365 Joseph W. Sanscrainte, Esq. Associate $297 Brian C. Walsh, Esq. Partner $293 David A. Zetoony, Esq. Associate $259 Eileen Weiss Paralegal $170 Ms. Rosenfeld assures the Court that Bryan Cave does not hold any interest adverse to the Debtors and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Ms. Rosenfeld can be reached at: Dana B. Rosenfeld, Esq. Bryan Cave LLP 700 Thirteenth Street N.W. Washington, DC 20005-3960 Tel: (202) 508-6000 Fax: (202) 508-6200 http://www.bryancave.com/ Headquartered in West Sacramento, California, MTS, Inc., dba Tower Records -- http://www.towerrecords.com/-- is a retailer of music in the U.S., with nearly 100 company-owned music, book, and video stores. The Company and its affiliates previously filed for chapter 11 protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No. 04-10394). The Court confirmed the Debtors' plan on March 15, 2004. The Company and seven of its affiliates filed their second voluntary chapter 11 petition on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886 through 06-10893). Richards, Layton & Finger, P.A. and O'Melveny & Myers LLP represent the Debtors. The Official Committee of Unsecured Creditors is represented by McGuirewoods LLP and Cozen O'Connor. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Dec. 18, 2006. TRAPEZA CDO: Fitch Rates $10 Million Class F Notes at BB -------------------------------------------------------- Fitch assigns these ratings to Trapeza CDO XI, Ltd. and Trapeza CDO XI, Inc. (collectively Trapeza XI): -- $281,000,000 class A-1 first priority senior secured floating rate notes due 2041 'AAA'; -- $53,000,000 class A-2 second priority senior secured floating rate notes due 2041 'AAA'; -- $20,000,000 class A-3 third priority senior secured floating rate notes due 2041 'AAA'; -- $25,000,000 class B fourth priority secured deferrable floating rate notes due 2041 'AA'; -- $33,000,000 class C fifth priority secured deferrable floating rate notes due 2041 'A'; -- $22,500,000 class D-1 sixth priority secured deferrable floating rate notes due 2041 'A-'; -- $18,500,000 class D-2 sixth priority secured deferrable fixed/floating rate notes due 2041 'A-'; -- $13,000,000 class E-1 seventh priority secured deferrable floating rate notes due 2041 'BBB'; -- $5,000,000 class E-2 seventh priority secured deferrable fixed/floating rate notes due 2041 'BBB'; -- $10,000,000 class F eighth priority secured deferrable fixed/floating rate notes due 2041 'BB'. TRUSTREET PROPERTIES: Purchase Offer Cues Fitch's Positive Watch ---------------------------------------------------------------- Fitch Ratings has placed Trustreet Properties, Inc., on Rating Watch Positive following the announcement that a division of General Electric Company, GE Capital Solutions, intends to purchase Trustreet's outstanding common shares for $17.05 per share with cash. The acquisition is expected to close by the end of the first quarter of 2007. Affected ratings are: -- Issuer Default Rating (IDR) 'BB-'; -- Revolving bank credit facility and term loan 'BB+'; -- Senior unsecured debt 'BB-'; -- Preferred stock 'B+'. The Positive Rating Watch on Trustreet acknowledges that the company's acquisition by GECS has the ability to significantly improve the credit profile of Trustreet's securities. Neither Trustreet nor GECS has commented in regards to specific plans related to Trustreet's outstanding debt, including Trustreet's senior unsecured notes, post-closing. At this time, Fitch anticipates that GECS is likely to assume or refinance Trustreet's outstanding debt. It is difficult to estimate how much information there will be to specifically rate the senior unsecured debt once Trustreet is absorbed into GECS. However, Trustreet should contribute favorably in expanding the presence of GECS, which intends to establish an east coast office in Orlando. Fitch will continue to monitor the situation and will adjust the ratings as appropriate. Trustreet Properties Inc. is an equity real estate investment trust headquartered in Orlando, Florida, that specializes in all aspects of the financing the restaurant industry through ownership of over 2,200 properties in 49 states. As of Sept. 30, 2006, Trustreet had approximately $2.7 billion of total assets. TSG INC: Case Summary & 174 Largest Unsecured Creditors ------------------------------------------------------- Debtor: TSG, Inc. 3555 Northwest, 58th St. Oklahoma City, OK 73112 Tel: (405) 917-0300 Bankruptcy Case No.: 06-80899 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- TSG Rural, LLC 06-80900 Seminole Health Center, LLC 06-80901 Johnston County Hospital, LLC 06-80902 TSG Holdings-Tishomingo, LLC 06-80903 Stroud Regional Medical Center, LLC 06-80904 TSG Holdings-Prague, LLC 06-80905 TSG Physicians Group, LLC 06-80906 Apex Practice Management, LLC 06-80907 Emergency Medical Transport Team for 06-80908 Rural Oklahoma LLC TSG Equipment, LLC 06-80909 TSG Holdings, LLC 06-80910 Medical Business Services, Inc. 06-80911 Provincial Home Care, LLC 06-80912 TSG Physical Therapy, LLC 06-80913 Healthcare 2000 Ltd. Co. 06-80914 TSG-Anadarko, LLC 06-80915 Type of Business: The Debtors are private health care companies operating under the name, The Schuster Group. See http://www.tsgincorporated.com/ Chapter 11 Petition Date: November 8, 2006 Court: Eastern District of Oklahoma (Okmulgee) Judge: Tom R. Cornish Debtors' Counsel: Judy Hamilton Morse, Esq. Crowe & Dunlevy 20 North Broadway, Suite 1800 Oklahoma City, OK 73102 Tel: (405) 235-7700 Fax: (405) 235-6651 Entity Estimated Assets Estimated Debts ------ ---------------- --------------- TSG Rural, LLC $1 Million to $1 Million to $100 Million $100 Million Seminole Health $1 Million to $1 Million to Center, LLC $100 Million $100 Million Johnston County $1 Million to $1 Million to Hospital, LLC $100 Million $100 Million TSG Holdings- Less than $10,000 $1 Million to Tishomingo, LLC $100 Million Stroud Regional $1 Million to $1 Million to Medical Center, LLC $100 Million $100 Million TSG Holdings- $100,000 to $1 Million to Prague, LLC $1 Million $100 Million TSG Physicians Less than $10,000 $1 Million to Group, LLC $100 Million Apex Practice $100,000 to $1 Million to Management, LLC $1 Million $100 Million Emergency Medical $100,000 to $1 Million to Transport Team for $1 Million $100 Million Rural Oklahoma LLC TSG Equipment, LLC $100,000 to $1 Million to $1 Million $100 Million TSG Holdings, LLC Less than $10,000 $1 Million to $100 Million Medical Business Less than $10,000 $1 Million to Services, Inc. $100 Million Provincial Home $100,000 to $1 Million to Care, LLC $1 Million $100 Million TSG Physical $10,000 to $1 Million to Therapy, LLC $100,000 $100 Million Healthcare 2000 Less than $10,000 $1 Million to Ltd. Co. $100 Million TSG-Anadarko, LLC Less than $10,000 $1 Million to $100 Million A. TSG, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Rose Rock Bank Trade Debt $4,600,000 10900 Hefner Point Drive Oklahoma City, OK 73120 Jardine Lloyd Thompson, LLC Trade Debt $159,077 Bank of America Lockbox Lockbox 849035 Dallas, TX 75202 Phillips, McFall, McCaffrey Trade Debt $134,635 McVay, & Murrah, P.C. 12 Floor, 211 North Robinson Oklahoma City, OK 73102 XTRIA Trade Debt $77,407 West Asset Management, Inc. Trade Debt $73,734 Zones Inc. Trade Debt $68,023 Winthrop Resources Corp. Trade Debt $32,340 Value Management Group Trade Debt $25,979 PC Connection Trade Debt $21,950 Citi Cards Trade Debt $20,945 Xactimed Trade Debt $20,388 Xerox-TSG Trade Debt $18,794 SBC Long Distance Trade Debt $16,622 KW Architects Trade Debt $16,514 Omnicell Trade Debt $14,126 Med Finance Trade Debt $12,500 IBC Bank Trade Debt $12,275 Corporate Express Trade Debt $11,407 AIG Trade Debt $11,007 CNA Insurance Trade Debt $10,737 B. TSG Rural, LLC and TSG Holdings, LLC's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Local Oklahoma Bank, N.A. **This financing $772,954 P.O. Box 26020 statement relates Oklahoma City, OK 73115 to a previous financing statement 2003007108324 filed June 11, 2003 with Oklahoma County, OK** Stroud National Bank Kodak M-6 Unknown P.O. Box 450, 300 West Main Refurbished Stroud, OK 74079 Processor C. Seminole Health Center, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ International Bank of Commerce $772,954 P.O. Box 26020 Oklahoma City, OK 73126-0200 Oklahoma Management Group Trade Debt $265,834 P.O. Box 22777 Oklahoma City, OK 73123-1777 HMFIC#1 Rent $243,000 c/o James Williams, Trustee 4700 Gallardia Parkway, Suite 100 Oklahoma City, OK 73142 Oklahoma Blood Institute Trade Debt $148,218 GE Medical Systems Trade Debt $97,352 Ortho Development Corp. Trade Debt $83,250 GE Healthcare Financial Services Trade Debt $78,326 Robinson Medical Resource Group Trade Debt $44,884 McKesson General Medical Trade Debt $36,087 LFC Capital, Inc. Trade Debt $31,140 Cardinal Health Pharmaceutical Trade Debt $28,227 CPSI Trade Debt $28,107 Cardinal Health Medical Trade Debt $23,727 Foundation Radiology Group P.C. Trade Debt $23,285 Precision Lens Trade Debt $21,086 J & J Health Care Systems, Inc. Trade Debt $20,938 Oklahoma Eye Instruments Trade Debt $19,200 Oklahoma Cardiovascular Assoc. Trade Debt $18,404 Stryker Orthopedics Trade Debt $18,038 Omnicell Trade Debt $16,839 D. Johnston County Hospital, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Mercy Health System of OK Trade Debt $140,287 P.O. Box 269010 Oklahoma City, OK 73126-9010 Oklahoma Blood Institute Trade Debt $52,701 Department 96-0115 Oklahoma City, OK 73196-0115 Shared Imaging Trade Debt $20,827 2186 Paysphere Circle Chicago, IL 60674 Cardinal Health Pharmaceutical Trade Debt $19,483 GE Healthcare Financial Services Trade Debt $13,750 Advanced Ultrasound Diagnositc Trade Debt $12,950 Beckman Coulter Inc. Trade Debt $11,236 MMS Trade Debt $11,172 Ramsey Ward Electric Trade Debt $8,232 Dade Behring Inc. Trade Debt $7,761 Gecpac Trade Debt $7,030 Mercy Memorial Health Center Trade Debt $6,735 Foundation Radiology Group Trade Debt $5,952 Mallinckrodt Inc. Trade Debt $5,230 Angelica Textile Services Trade Debt $5,125 Xerox Corp. Trade Debt $5,122 Baxter Trade Debt $4,991 Moore Wallace Trade Debt $4,359 Osteoporosis Services Trade Debt $3,910 Corporate Express #13752114 Trade Debt $3,849 E. TSG Holdings-Tishomingo, LLC does not have any creditors who are not insiders. F. Stroud Regional Medical Center, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Robinson Medical Resource Group Trade Debt $127,035 P.O. Box 849 Oologah, OK 74053 Mass Development Rent $105,000 4700 Gallardia Parkway, Suite 100 Oklahoma City, OK 73142 Oklahoma Cardiovascular Assoc. Trade Debt $80,642 4050 West Memorial Road, 3rd Level Oklahoma City, OK 73120 OK Blood Institute Trade Debt $59,893 Cardinal Health Pharmaceutical Trade Debt $30,319 Fisher Healthcare Trade Debt $28,695 Ahr, Inc. Trade Debt $26,762 BKD Trade Debt $21,165 Diagnostic Laboratory of OK Trade Debt $19,791 Standard Register Trade Debt $19,040 Source One Healthcare Trade Debt $16,886 Mobile Eyes LLC Trade Debt $15,825 Ortho Clinical Diagnostics Trade Debt $10,177 Dimensional Concepts Trade Debt $9,750 Foundation Radiology Group Trade Debt $9,051 City of Stroud Trade Debt $8,874 Plaza Medical Group P.C. Trade Debt $8,029 GE Healthcare Financial Services Trade Debt $7,810 Baxter Healthcare Trade Debt $7,307 Abbott Laboratories Trade Debt $3,928 G. TSG Holdings-Prague, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ City of Prague Trade Debt $43,797 1116 North Broadway Prague, OK 74864 Morris & Dickson Co. Trade Debt $34,146 P.O. Box 51367 Shreveport, LA 71145 Foundation Radiology Group P.C. Trade Debt $14,131 120 North Bryant Avenue Edmond, OK 73034 Cardinal Health (Allegiance) Trade Debt $13,601 North American Group Trade Debt $10,640 AT&T Trade Debt $4,379 Drugs of Abuse Testing Trade Debt $3,640 Southwest Medical Corp. Trade Debt $2,985 Sysco Food Service of OK Trade Debt $2,543 Diagnostic Health Service, Inc. Trade Debt $2,525 American Diagnostic Medicine Trade Debt $2,295 Airgas Trade Debt $2,118 Professional Software, Inc. Trade Debt $1,930 Ortho Clinical Diagnostics Trade Debt $1,660 Dade International Inc. Trade Debt $1,487 Pitney Bowes Trade Debt $1,442 T-System Trade Debt $1,096 Prague IGA Trade Debt $1,083 Redwood Biotech, Inc. Trade Debt $1,020 Radiographic Equipment Service Trade Debt $979 H. TSG Physicians Group, LLC's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ American International Group Trade Debt $2,049 22427 Network Place Chicago, IL 60673 I. Apex Practice Management, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Misys Healthcare Systems Trade Debt $24,246 P.O. Box 751585 Charlotte, NC 28275 Oklahoma Business Forms Trade Debt $17,054 P.O. Box 272128 Oklahoma City, OK 73137-2128 Clinical Pathology Labs. Trade Debt $14,882 P.O. Box 141669 Austin, TX 78714 Stroud Hospital Authority Trade Debt $7,500 Xerox - Corp. #667878060 Trade Debt $7,084 PSS-7054141 Trade Debt $6,271 DHL Express Trade Debt $4,508 Hite Drug Trade Debt $3,745 Gregory Blair Trade Debt $3,000 SBC Internet #1031769 Trade Debt $2,515 Xerox #705746097 Trade Debt $2,322 American Medical Association Trade Debt $2,019 Cardinal Health Medical Products Trade Debt $1,990 And Services McKesson General Medical Corp. Trade Debt $1,607 Xerox - #700208069 Trade Debt $1,496 Standley Systems #OC1042 Trade Debt $1,492 Friese X-Ray Services Trade Debt $1,455 Office Depot Trade Debt $1,250 T System Inc. Trade Debt $1,250 STAT Technologies, Inc. Trade Debt $1,117 J. Emergency Medical Transport Team for Rural Oklahoma LLC's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Medicus Trade Debt $5,269 P.O. Box 1906 Seminole, OK 74818 Taylor Ford, Inc. Trade Debt $2,937 105 North Price P.O. Box 8 Chandler, OK 74834 Accufile, Inc. Trade Debt $2,571 302 West Maple Enid, OK 73701 Fuelcor Technologies Trade Debt $1,973 Chandler Tire Center Trade Debt $1,780 McKesson Medical Trade Debt $1,730 Airgas Mid South, Inc. Trade Debt $1,191 LBB Management Trade Debt $894 City of Prague Trade Debt $543 Simek Auto Supply Trade Debt $205 Windstream Trade Debt $170 Pike Pass Customer Service Trade Debt $100 Crowder Communications Trade Debt $94 Prague Wrecker Service Trade Debt $84 Cardinal Health Pharmaceutical Trade Debt $55 Parks Brothers Trade Debt $45 Charter Communications Trade Debt $40 Corporate Express Trade Debt $9 K. TSG Equipment, LLC's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Valliance Bank Purchase Money $600,220 1601 Northwest Expressway security Senior Lien: Suite 100 interest in all $600,220 Oklahoma City, OK 73118 medical equipment Xtria LLC Healthcare Mgt. Unknown 2435 North Central Expressway Systems Software Suite 700 Richardson, TX 75080 L. Medical Business Services, Inc.'s Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ International Bank of Commerce Lawsuit $772,954 P.O. Box 26020 Oklahoma City, OK 73126-0200 Local Oklahoma Bank, N.A. **This financing $772,954 P.O. Box 26020 statement relates Oklahoma City, OK 73115 to a previous financing statement 2003007108324 filed June 11, 2003 with Oklahoma County, OK** De Lage Landen Financial Leased Equipment Unknown Services Inc. 1111 Old Eagle School Road Wayne, PA 19087 Finger Furniture Office furniture Unknown Internal Revenue Service Tax Lien Unknown Marlin Leasing Corp. Music System Unknown Security Alarm, System Security Video System, Replacements, Leased Accounts, Equipment, Accessions, Proceeds Orix Credit Alliance Inc. Lease No. C4826595 Unknown proceeds and products Union Bank and Trust Co. 1-Canon Fax Model Unknown 9000L M. Provincial Home Care, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ ACE USA Workers Comp. $442,606 ACE Complete Premium 1 Beaver Valley Road Wilmington, DE 19803 Pro Source Medical Equipment Trade Debt $6,678 1108 Southeast 59th Street Oklahoma City, OK 73129-7304 Central Health Services Trade Debt $5,995 P.O. Box 904 Prague, OK 74864 Pulmo Dose Pharmacy Trade Debt $3,265 T.V. Discount Drug Trade Debt $2,936 SBC Yellow Pages Trade Debt $2,830 Medical Staffing Network Trade Debt $2,447 Transwestern Publishing Trade Debt $2,291 Cingular Wireless Trade Debt $1,399 Norman Regional Hospital Trade Debt $1,292 Amy Taylor, CPA, P.C. Trade Debt $1,250 Odyssey Health Care Trade Debt $1,152 Answer Pro's, Inc. Trade Debt $1,040 OK State Department of Health Trade Debt $1,000 Enid News and Eagle Trade Debt $624 Corrine Long Trade Debt $600 Dysphagia Services, Inc. Trade Debt $471 Xerox #667759427 Trade Debt $449 Shannon Casteel Trade Debt $433 Cushing Daily Citizen Trade Debt $400 N. TSG Physical Therapy, LLC's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ AT&T Trade Debt $57 P.O. Box 630047 Dallas, TX 75263-0047 Tel: (405) 844-5535 Tru-Care Health Systems Trade Debt $216 5004 North Portland Oklahoma City, OK 73112 O. Healthcare 2000 Ltd. Co. does not have any creditors who are not insiders. P. TSG-Anadarko, LLC's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bridge Finance Group, LLC All Property $11,518,872 c/o Chief Credit Officer 233 South Wacker Drive Suite 5350 Chicago, IL 60606 UNITEDHEALTH GROUP: Provides Past Option Grants Accounting Update ----------------------------------------------------------------- UnitedHealth Group Inc. has provided updates on a series of steps taken by its Board of Directors as it continues to take action following an internal analysis report on the company's stock option programs by an independent committee of the Board of Directors and its independent counsel on Oct. 15, 2006. Among its actions, the Board: * Entered into a new, four-year employment agreement with Stephen J. Hemsley, currently president and chief operating officer of UnitedHealth Group, effective when he becomes chief executive officer on or before December 1, 2006; * Welcomed Mr. Hemsley's actions to voluntarily remove all personal benefit from any past option grants to him questioned in the WilmerHale report. This will be achieved by repricing options granted to him through 2002 and his commitment to relinquish the value of the grants that were suspended and then reinstituted in August 2000. These actions will reduce the current value of Mr. Hemsley's past equity compensation by approximately $190 million; * Elected G. Mike Mikan as executive vice president, chief financial officer; * Designated Forrest Burke as acting general counsel; * Received voluntary written agreements from senior Company executives, to ensure that there is no potential for financial gain from the misdating of any option, by resetting the exercise prices of all applicable exercised and unexercised options with recorded grant dates between 1994 and 2002; * Received voluntary written agreement from William W. McGuire, M.D., chief executive officer, to have the exercise prices of all of his options with recorded grant dates between 1994 and 2002, reset to the highest share price during the recorded grant year for each particular option. For options suspended in 1999 and reinstituted in 2000, the exercise prices will be reset to the highest share price in 2000; * Strengthened director independence requirements to exceed the standards of the SEC and the New York Stock Exchange; * Formed a Nominating Advisory Committee to provide the Board with recommendations and input into its search for new directors. The Committee will be composed of representatives from the shareholder and medical communities; and * Retained the firm Heidrick & Struggles to assist its search for new directors and retained the firm Russell Reynolds Associates to assist its search for executives for several new positions. Additional firms may be engaged as the Company proceeds to strengthen its administrative capabilities. The Company has substantially completed its internal analysis of the WilmerHale report findings and is working expeditiously to complete its final review of accounting adjustments based on the determination of the applicable accounting measurement dates, the impact of variable accounting treatment for certain stock options (which principally relates to stock options granted in and prior to 2000) and the resulting tax implications. As a result, the Company expects to recognize non-cash charges for stock-based compensation expense that are likely to be material for certain periods covered in the review. Although the Company is not yet able to determine the final amount of the non-cash compensation charges and additional cash charges resulting from potential tax liabilities, the Company anticipates that it will be significantly greater than the estimate contained in its Form 10-Q for the quarter ended March 31, 2006. Accordingly, the Company has concluded that, due solely to the stock option matter, its financial statements and similar communications for the years ended 1994 to 2005 and the interim quarters through September 30, 2006, should no longer be relied upon and the Company will delay filing its Form 10-Q for third quarter 2006. The Company will review its analysis and proposed restatement adjustments with the SEC prior to completing its restatement and is working as quickly as possible to return to current filing status. Additionally, the Company announced that it has substantially remediated a material weakness in its internal controls relating to stock option plan administration that it has now concluded existed as of December 31, 2005. Hemsley Reaches New Agreement, Also Acts to Remove Any Unintended Personal Benefit of Past Option Grants to Him Under the terms of the new, four-year employment agreement, Mr. Hemsley, as chief executive officer and president, will only be assured of receiving his base salary each year. The agreement does not set any minimum or target level for any bonus or other incentive compensation for Mr. Hemsley. All bonus and incentive compensation is solely at the discretion of the Compensation Committee and ultimately the independent members of the Board of Directors. On May 1, 2006, the Company announced that Mr. Hemsley and certain other senior, long-tenured executives would not receive any additional equity awards. In addition, as previously announced, Mr. Hemsley has agreed to have the exercise prices of all of his options with recorded grant dates between 1997, the year he commenced employment at the Company, and 2002, reset to the highest share price during the recorded grant year for each particular option. In the case of certain options described below, the exercise prices will be reset to the highest share price in 2000. Further, Mr. Hemsley has acted to relinquish any personal benefit from option grants that were suspended in 1999 and reinstituted in August 2000. Mr. Hemsley said, "My decision is in keeping with my personal goal of avoiding even the appearance of any unintended benefit from any past option grants to me." Taken together, these actions reduce the current value of Mr. Hemsley's past equity compensation by approximately $190 million. Mikan Elected Executive Vice President, Chief Financial Officer G. Mike Mikan was elected executive vice president, chief financial officer, effective immediately, reporting to Mr. Hemsley. Mr. Hemsley said, "Mike is an exceptionally talented executive who brings a compelling combination of technical financial expertise and experience, as well as a strategic perspective and leadership skills, that will serve us extremely well as we continue to advance the Company." Mr. Mikan was senior vice president of Finance of the Company from February 2006 to November 2006. He served as the CFO for the Company's UnitedHealthcare division, a $35 billion operation, and as president of UnitedHealth Networks from June 2004 to February 2006. He was CFO of the Specialized Care Services division from 2001-2004, prior to which he was an executive in the Company's corporate development group, which is responsible for its merger and acquisition activities. Mr. Mikan succeeds Patrick Erlandson, who resigned as CFO and, as previously planned, will be assuming operational duties within the Company. Mr. Erlandson was named CFO in 2001. Burke Designated as Acting General Counsel Forrest Burke was designated acting general counsel, effective immediately, reporting to Mr. Hemsley. Mr. Hemsley said, "We appreciate Forrest stepping into this new role and taking on additional responsibilities. We greatly value the experience and judgment he brings at this important time for our company." Mr. Burke has been general counsel for UnitedHealthcare, Uniprise and Specialized Care Services and joined the company in 2005 after 17 years at the law firm Dorsey & Whitney, LLP. At Dorsey & Whitney, he served on the Management Committee and chaired the Business Services group, and was responsible for the management and oversight of more than 200 lawyers in seven departments. He has a J.D. magna cum laude from the University of Pennsylvania Law School. As announced by the Board on October 15, the company is launching a national search for a permanent general counsel. Mr. Burke is not related to Company Chairman Richard Burke. Human Resources Leader Retiring Robert Dapper, the Company's senior human resources leader, is retiring, as previously planned. He will assist in an orderly transition over the balance of the year while a new human resources leader is recruited. He has been in this position since 2001. Resetting of Option Prices for Senior Executives Senior executives, including the Company's Section 16 officers and business segment CEOs, and former general counsel David J. Lubben will increase the exercise prices of all of their options with recorded grant dates between 1994 and 2002 to the closing price of the Company's common stock on the accounting measurement date for each grant when finally determined pursuant to the final restatement process. These executives also agreed to a formula to account for the value of affected options previously exercised. The effect of these changes is to remove any potential whatsoever for these individuals to have financially benefited from any option misdating. Enhanced Director Independence The Board significantly strengthened its requirements for director independence. The requirements are available in the Company's Web site, http://www.unitedhealthgroup.com/and will hereafter preclude a finding of independence if: * A director received any direct compensation from the Company (other than for board service) in the past three years, thus extending the heightened New York Stock Exchange requirements for Audit Committee members to all independent directors; * Charitable contributions from the Company to any tax exempt institution of which a director or his or her immediate family member is a current executive officer exceed the lesser of $1 million or 2% of the institution's consolidated gross revenue; or * A director falls into one of several new categories involving a business relationship with management, including any business relationship in which the director or an affiliated entity receives compensation from an executive officer. Nominating Advisory Committee Formed The Board has formed a new Nominating Advisory Committee, with two main functions: * Suggesting additional director candidates for consideration by the Nominating Committee and Board; and * Providing feedback about specific director candidates under consideration by the Nominating Committee and Board. Recognized leaders from the shareholder and medical communities will constitute the Committee's membership. Chairman, President Comment on Actions Richard T. Burke, chairman of the Board of Directors, said, "We are pleased to have reached a new, four-year employment agreement with Steve Hemsley. The Board is confident that, as CEO, Steve's strong leadership, innovation and strategic approach, combined with the cultural reform he is driving, will continue our record of delivering excellent performance for our customers and our investors." "The Board is moving quickly to establish UnitedHealth Group as a leader in corporate governance. Forming a Nominating Advisory Committee and strengthening our requirements for independent directors beyond regulatory standards demonstrate our intentions. Additionally, our senior executives have acted to eliminate any potential gain from stock options dating practices. We are gratified that our senior executives volunteered to make the changes to ensure the value of their options is attributable entirely to the performance of our share price." Mr. Hemsley said, "The senior leaders of UnitedHealth Group are clearly aligned with our Board in striving for the highest standards of governance and business practices, even as they continue to deliver operational excellence throughout the Company." "I am especially pleased to have reached a new agreement that allows me to continue working with the finest group of employees anywhere. As a team, we will continue to make substantial contributions to advancing American health care by improving access to high quality and affordable care for individuals and families." About UnitedHealth Group Minneapolis, Minn.-based UnitedHealth Group Inc. (NYSE: UNH) -- http://www.unitedhealthgroup.com/-- offers a broad spectrum of products and services through six operating businesses: UnitedHealthcare, Ovations, AmeriChoice, Uniprise, Specialized Care Services and Ingenix. Through its family of businesses, UnitedHealth Group serves approximately 70 million individuals nationwide. * * * As reported in the Troubled Company Reporter on Aug. 31, 2006, UnitedHealth received a purported notice of default on Aug. 28, 2006, from persons claiming to hold certain of its debt securities alleging a violation of the Company's indenture governing its debt securities. The notice came following the Company's failure to file its quarterly report on Form 10-Q for the quarter ended June 30, 2006, with the U.S. Securities and Exchange Commission. The Company asserted it is not in default. The Company's indenture requires it to provide to the trustee copies of the reports the Company is required to file with the SEC, such as its quarterly reports, within 15 days of filing those reports with the SEC. The Company has delayed the filing of its financial results in light of an independent review of the company's stock option programs from 1994 to present. UNITEDHEALTH GROUP: Fitch Maintains Rating Watch Negative --------------------------------------------------------- Fitch is currently maintaining all ratings of UnitedHealth Group on Rating Watch Negative. UNH filed a Form 8-K with the Securities and Exchange Commission on November 8 disclosing several new developments related to ongoing issues involving its stock option granting practices. The disclosures included: -- The company expects to recognize non-cash charges for stock-based compensation expense that are likely to be material, and significantly greater than the estimate contained in its 10-Q for the first quarter of 2006. The company will also incur higher than previously estimated additional cash charges resulting from potential tax liabilities associated with improper accounting for the stock-based compensation. -- The company has determined that it had a material weakness in internal control over financial reporting relating to stock option plan administration and accounting for and disclosure of stock option grants as of December 31, 2005. -- Patrick Erlandson, the company's former Chief Financial Officer, had resigned effective yesterday, and was replaced by G. Mike Mikan, who has performed various roles within the company and its subsidiaries, most recently Senior Vice President of Finance at UNH. Despite the company's disclosure that the restatement of earnings will be material, Fitch notes that this is a non-cash charge that does not affect overall shareholder capital or the company's ability to service its debt obligations. Although the additional taxes, interest and penalties related to the accounting adjustment will certainly have cash flow implications, given management estimates, Fitch does not consider the amount to be sufficient to significantly impede the company's ability to meet its obligations. Fitch continues to consider UNH's cash flow coverage, although adversely affected by issues surrounding the company's stock option granting practices, to be more than sufficient to justify the company's current ratings given its financial leverage. Fitch considers the company's disclosure of a material weakness under Sarbanes-Oxley 404 to be troubling. Clearly, such weaknesses in governance can tarnish a company's image, sometimes adversely affecting the company's ability to attract and retain business, and often lead to difficulties similar to those being faced by UNH's management today. However, although too late to aid the company in heading off its current difficulties, Fitch views recent and ongoing changes within the company's governance practices as important in bolstering the company's governance going forward. Fitch originally placed UNH's ratings on Rating Watch Negative on August 30, 2006, following the company's announcement that it had received a notice of default from a group of persons claiming to hold certain of its debt securities alleging a violation of UNH's indenture governing its debt securities. The company has stated that it believes it is not in default. The company received a purported notice of acceleration on November 2, 2006, from the holders who previously sent the notice of default that purports to declare an acceleration of the Company's 5.80% Notes due March 15, 2036 as a result of the Company's not filing its quarterly report on Form 10-Q for the quarter ended June 30, 2006. Given developments to date, Fitch is working under the assumption that this issue will be tied up in litigation for some time. Despite the recent departure of several senior executives and board members, Fitch continues to view UNH's management team as being strong in breadth and depth. In addition, Fitch acknowledges that UNH's operating fundamentals remain very strong, and does not believe that the developments announced in recent weeks significantly diminish the company's ability to meet its debt and policyholder obligations. Fitch will continue to closely monitor UNH's operating performance and other issues that have developed since questions surrounding the company's options granting practices were disclosed, and will take appropriate rating action as conditions warrant. Fitch's ratings on UnitedHealth reflect the inherent strength and diversity of the company's health services operations, good balance sheet fundamentals, very strong earnings track record, and excellent cash flow. UnitedHealth has a balanced mix of risk- based and fee-based businesses, which have contributed significantly to the stability of the company's financial performance. The ratings also consider the competitive pressures in several of the company's markets driven by price competition, increasing medical cost trends, and the evolving regulatory and political environment affecting the health insurance and managed care industry. Fitch's existing ratings on UnitedHealth and its operating subsidiaries are listed below: UnitedHealth Group, Inc. -- Long-term Issuer Default Rating (IDR) 'A+' -- Floating-Rate Senior notes due 2009 at 'A'; -- 5.250% Senior notes due Mar. 15, 2011 at 'A'; -- 5.375% Senior notes due Mar. 15, 2016 at 'A'; -- 5.800% Senior notes due Mar. 15, 2036 at 'A'. -- 3.375% senior notes due Aug. 15, 2007 at 'A'; -- 5.200% senior notes due Jan. 17, 2007 at 'A'; -- 3.300% senior notes due Jan. 30, 2008 at 'A'; -- 3.750% senior notes due Feb. 10, 2009 at 'A'; -- 4.125% senior notes due Aug. 15, 2009 at 'A'; -- 4.875% senior notes due April 1, 2013 at 'A'; -- 4.750% senior notes due Feb. 10, 2014 at 'A'; -- 5.000% senior notes due Aug. 15, 2014 at 'A'; -- 4.875% Senior notes due March 15, 2015 at 'A' -- Commercial Paper at 'F1'. United HealthCare Insurance Company United HealthCare Insurance Company of Illinois United HealthCare Insurance Company of Ohio United HealthCare Insurance Company of New York -- Insurer financial strength at 'AA-'. United HealthCare of Florida, Inc. United HealthCare of Ohio, Inc. United HealthCare of the Midwest, Inc. UnitedHealthcare of North Carolina, Inc. UnitedHealthcare of New England, Inc. UnitedHealthcare of Illinois, Inc. UnitedHealthcare of Wisconsin, Inc. United HealthCare of Alabama, Inc. United HealthCare of Kentucky, Ltd. UnitedHealthcare of New York, Inc. United HealthCare of Georgia, Inc. UnitedHealthcare of New Jersey, Inc. United HealthCare of the Midlands, Inc. United HealthCare of Arkansas, Inc. United HealthCare of Mississippi, Inc. MAMSI Life and Health Insurance Company AmeriChoice of New York, Inc. Optimum Choice, Inc. MD-Individual Practice Association, Inc. Oxford Health Insurance, Inc. Oxford Health Plans of Connecticut, Inc. Oxford Health Plans of New Jersey, Inc. Oxford Health Plans of New York, Inc. -- Insurer financial strength (IFS) at 'A+'. United HealthCare of Texas, Inc. United HealthCare of Arizona, Inc. UnitedHealthcare of the Mid-Atlantic, Inc. United HealthCare of Utah, Inc. United HealthCare of Tennessee, Inc. United HealthCare of Louisiana, Inc. United HealthCare of Colorado, Inc. AmeriChoice of New Jersey, Inc. AmeriChoice of Pennsylvania, Inc. Great Lakes Health Plan, Inc. -- IFS at 'A'. WASHINGTON MUTUAL: Moody's Rates Class B Certificates at Ba1 ------------------------------------------------------------ Moody's Investors Service assigned a Aaa rating to the senior certificates issued by Washington Mutual Asset-Backed Certificates, WMABS Series 2006-HE4 Trust, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by CIT Group/Consumer Finance, Inc., Meritage Mortgage Corporation, LIME Financial Services, LTD, Sebring Capital Partners, Limited Partnership (13.2%), and other originators' originated adjustable-rate and fixed-rate subprime mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, excess spread and an interest rate swap agreement provided by The Bank of New York. Moody's expects collateral losses to range from 5.20% to 5.70%. Washington Mutual Bank will service the loans. Moody's has assigned Washington Mutual Bank its servicer quality rating of SQ2 as a servicer of subprime mortgage loans. These are the rating actions: * Washington Mutual Asset-Backed Certificates, WMABS Series 2006-HE4 Trust Class I-A, Assigned Aaa Class II-A-1, Assigned Aaa Class II-A-2, Assigned Aaa Class M-1, Assigned Aa1 Class M-2, Assigned Aa2 Class M-3, Assigned Aa3 Class M-4, Assigned A1 Class M-5, Assigned A2 Class M-6, Assigned A3 Class M-7, Assigned Baa1 Class M-8, Assigned Baa2 Class M-9, Assigned Baa3 Class B, Assigned Ba1 The Class B certificates were sold in privately negotiated transactions without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A. WAVE WIRELESS: Asks Court to Move Schedules Filing Date to Dec. 30 ------------------------------------------------------------------ Wave Wireless Corporation asks the U.S. Bankruptcy Court for the District of Delaware to extend the time within which it can file its schedules of assets and liabilities and statement of financial affairs until Dec. 30, 2006, without prejudice to its ability to request for further extensions. In an effort to minimize the expenses associated with its ongoing business operations, the Debtor has dramatically reduced the number of its employees. Moreover, the Debtor is in the process of relocating its offices and records to minimize its rent costs. For these reasons, the Debtor's "skeleton" staff is unable to timely prepare the Schedules and Statements. The Debtor tells the Court that during the infancy of its bankruptcy case, the efforts of its employees are most effectively utilized in protecting and maximizing the Debtor's assets. The Debtor has commenced the task of gathering the necessary information to prepare and finalize its Schedules and Statements; however, the Debtor does not believe that it can finalize the Schedule and Statements within fifteen days from the date it filed for bankruptcy. Headquartered in San Jose, California, Wave Wireless Corporation fka PCom Inc. is a wireless broadband developer. The company filed a chapter 11 petition on October 31, 2006 (U.S. Bankr. Del. Case No. 06-11267) Anthony M. Saccullo, Esq. and Neal J. Levitsky, Esq., at Fox Rothschild LLP represent the Debtor. When the Debtor sought protection from its creditors, it listed $1,000,000 in total assets and $5,000,000 in total debts. WAVE WIRELESS: Wants to Sell Repair Business Assets for $150,000 ---------------------------------------------------------------- Wave Wireless Corporation asks the U.S. Bankruptcy Court for the District of Delaware for authority to sell substantially all of its assets in its repair and maintenance business to United Repair Services Ltd. for $150,000 in cash and the assumption of certain liabilities. The Debtor's repair and maintenance business line provided repair and maintenance services to microwave cellular phone towers and systems. The services were performed through pre-earned revenue contract, whereby the Debtor would be paid at the beginning of a fiscal quarter for services to be performed through that time period. The Debtor tells the Court that technology the repair and maintenance business services is several generations old, and increasingly, customers were simply replacing the systems as they fail with more modern technology. Accordingly, the Debtor views the repair and maintenance business line as a rapidly decreasing source of revenues. Headquartered in San Jose, California, Wave Wireless Corporation fka PCom Inc. is a wireless broadband developer. The company filed a chapter 11 petition on October 31, 2006 (U.S. Bankr. Del. Case No. 06-11267) Anthony M. Saccullo, Esq. and Neal J. Levitsky, Esq., at Fox Rothschild LLP represent the Debtor. When the Debtor sought protection from its creditors, it listed $1,000,000 in total assets and $5,000,000 in total debts. WELLS FARGO: Fitch Affirms Low-B Ratings on 12 Certificate Classes ------------------------------------------------------------------ Fitch Ratings has taken rating these actions on Wells Fargo Mortgage Backed Securities: Series 2002-10 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 affirmed at 'AA+'; -- Class B-4 upgraded from 'A+' to 'AA'; -- Class B-5 affirmed at 'A'. Series 2002-14 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 affirmed at 'AAA'; -- Class B-4 upgraded from 'AA' to 'AA+'; -- Class B-5 affirmed at 'A'. Series 2002-18 -- Class A affirmed at 'AAA'. Series 2002-20 -- Class A affirmed at 'AAA'. Series 2003-3 -- Class A affirmed at 'AAA'. Series 2003-4 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA+'; -- Class B-2 affirmed at 'AA'; -- Class B-3 affirmed at 'A'; -- Class B-4 affirmed at 'BBB'; -- Class B-5 affirmed at 'BB'. Series 2003-5 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AA+'; -- Class B-3 affirmed at 'AA-'; -- Class B-4 affirmed at 'BBB+'; -- Class B-5 affirmed at 'BB'. Series 2003-9 -- Class A affirmed at 'AAA'; -- Class I-B-1 affirmed at 'AA'; -- Class I-B-2 affirmed at 'A+'; -- Class I-B-3 affirmed at 'BBB+'; -- Class I-B-4 affirmed at 'BB'; -- Class I-B-5 affirmed at 'B'; -- Class II-B-1 affirmed at 'AA+'; -- Class II-B-2 affirmed at 'AA-'; -- Class II-B-3 affirmed at 'A-'; -- Class II-B-4 affirmed at 'BBB-'; -- Class II-B-5 affirmed at 'BB-'. Series 2003-10 -- Class A affirmed at 'AAA'. Series 2003-12 -- Class A affirmed at 'AAA'. Series 2003-13 -- Class A affirmed at 'AAA'. Series 2003-14 -- Class A affirmed at 'AAA'. Series 2003-16 -- Class A affirmed at 'AAA'; -- Class B-2 affirmed at 'A'; -- Class B-5 affirmed at 'B'. Series 2003-17 -- Class A affirmed at 'AAA'. Series 2003-18 -- Class A affirmed at 'AAA'. Series 2003-19 -- Class A affirmed at 'AAA'. Series 2003-B -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AA'; -- Class B-3 affirmed at 'A'; -- Class B-4 affirmed at 'BB+'; -- Class B-5 affirmed at 'B+'. Series 2003-I -- 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+'. Series 2003-K -- Class A affirmed at 'AAA'. Series 2003-M -- Class A affirmed at 'AAA'. Series 2003-O -- Class A affirmed at 'AAA'. Series 2004-4 -- 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'. Series 2004-7 -- Class A affirmed at 'AAA'. Series 2004-8 -- Class A affirmed at 'AAA'. The mortgage loans consist of fixed- and adjustable-rate, 15- and 30-year mortgages extended to prime borrowers and are secured by first and second liens, primarily on one- to four-family residential properties. As of the October 2006 distribution date, the transactions are seasoned from a range of 26 to 52 months and the pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from 10.30% (2002-18) to 76.20% (2004-8). All of the loans are serviced by Wells Fargo Home Mortgage, which is rated 'RPS1' by Fitch. The affirmations reflect a stable relationship between credit enhancement and future loss expectations and affect approximately $7.325 billion of outstanding certificates. The upgrades reflect an increased amount of credit support and lower-than-expected delinquencies and affect approximately $1.037 million. The credit enhancement for the upgraded bonds has risen to more than 7 times the original levels. WENDY'S INTERNATIONAL: Names Kerrii Anderson as CEO and President ----------------------------------------------------------------- Wendy's International, Inc.'s Board of Directors has named Kerrii Anderson as Chief Executive Officer and President of the Company. The decision by the Board was unanimous. Ms. Anderson was interim CEO and President since April 2006, and was previously Chief Financial Officer. She is also a member of the Board of Directors. "Following a national search over the past six months, we have decided that Kerrii is our best choice for CEO," said Chairman Jim Pickett. "Kerrii has demonstrated excellent leadership skills. As interim CEO, she began a transformation of the Company, improved Wendy's performance, developed a new strategic plan and executed several transactions that will continue to create value for shareholders. The Board knows that Kerrii has a passion for the Wendy'sr business. She is committed to building strong relationships with our franchisees, and has the respect and support of Wendy's management team. Our entire Board supports Kerrii, and we look forward to working with her in the future." Ms. Anderson joined Wendy's in September 2000 as Executive Vice President and CFO, and was appointed to the Board in November 2000. In addition to her accounting and finance responsibilities, she has managed key areas of the corporation, including Strategic Planning, Human Resources, Supply Chain, Information Technology and Wendy's bakery. "I look forward to continuing to lead this great brand and consider it a privilege to work with the entire Wendy's system," said Anderson. "We have a talented management team, dedicated employees, and outstanding franchisees that have supported me and the management team. Over the past six months we have restructured the Company and we will continue to aggressively manage our brand for success. Our highest priority is to build on our positive momentum and significantly improve profits in every Wendy's restaurant in the system," Ms. Anderson said. The Company will begin a search for a new Chief Financial Officer, and will consider both internal and external candidates. Focus on Driving Sales and Profits "I am pleased with the progress we are making on the initiatives we announced in October to revitalize the Wendy's brand, streamline and improve restaurant operations, reclaim innovation leadership and enhance store economics," said Ms. Anderson. "As CEO, I will focus on maximizing the performance of this Company. "In my first 100 days, working with our team and our Board, I will further analyze every facet of the business to identify additional core growth and profit opportunities for every restaurant in our system, beyond those already announced, for both the short term and the long term," Ms. Anderson said. "Once this work is completed, targets will be established for management's short-term and long-term incentive compensation." "Our store-level profit performance has been unacceptable over the past few years and we are committed to producing profit margins that are similar to the best restaurant companies that focus on superior operations and financial performance for both company and franchised restaurants," Ms. Anderson said. "We will do this by driving same-store sales and creating more efficiency in the restaurants." Management Continues to Transform Wendy's Over the past six months, the current management team has transformed the Company and is focused on driving the Wendy's brand with a new strategic plan. Significant accomplishments since mid-April include: * Ms. Anderson hired Dave Near as Chief Operations Officer. Mr. Near has been instrumental in building support and unity throughout the franchisee community. * Mr. Near named Ed Choe as Executive Vice President of Restaurant Services. Messrs. Near and Choe are focused on driving significant improvement in Wendy's operations. * Ms. Anderson, Chief Marketing Officer Ian Rowden and the Company's marketing team are transforming Wendy's brand with marketing that emphasizes Wendy's quality position with targeted advertising, improved creative, new products and menu management. * The management team, operators and franchisees drove positive same-store sales at Wendy's in each month from June through October, and third quarter same-store sales were the best quarterly results in two years. * Store-level operating margins have improved significantly and food costs improved by 110 basis points at U.S. company restaurants in the third quarter versus a year ago. * Management completed an initial public offering of Tim Hortons in March, and a spin-off of the business in September. * The Company reached an agreement to sell the Baja Fresh Mexican Grill business. * Management announced plans to reduce G&A and overhead costs by $100 million, and is on track with its restructuring. * The Company has commenced a modified "Dutch Auction" tender offer to purchase up to 22.2 million of its common shares in a price range of $33.00 to $36.00 per share, for a maximum aggregate repurchase price of up to $800 million. The shares sought represent approximately 19% of the Company's shares outstanding as of Oct. 12, 2006. The tender is scheduled to expire, unless extended by the Company, at 5 p.m., Eastern Time, on Nov. 16, 2006. 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. * BOOK REVIEW: Legal Aspects of Health Care Reimbursement --------------------------------------------------------- Author: Robert J. Buchanan and James Minor Publisher: Beard Books Paperback: 304 pages List Price: $34.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1587980932/internetbankrupt With Legal Aspects of Health Care Reimbursement, Buchanan, a professor in the School of Public Health at Texas A&M, and Minor, an attorney, have come up with an invaluable resource for lawyers and anyone else seeking an introduction to the legal and social issues related to Medicare and Medicaid. The administrative costs of Medicare and Medicaid reimbursement have been a heated topic of debate among public officials and administrators of provider healthcare organizations, especially health maintenance organizations. Although inflation and the use of costly medical technology are key factors in the rise in Medicare and Medicaid costs, some control can be gained through appropriate compliance, using more efficient procedures and better detection of fraud. This work is a major guide on how to go about doing this. Though mostly a legal treatise, Legal Aspects of Health Care Reimbursement, first published in 1985, also offers commentary through legislative and regulatory analyses, thereby explaining how healthcare reimbursement policies affect the solvency and effectiveness of the Medicare and Medicaid programs. In discussing how legislation and regulations affect the solvency and effectiveness of government-provided healthcare, the authors offer insight into the much-publicized and much-discussed issue of runaway healthcare costs. Buchanan and Minor do not deny that healthcare costs are out of control and are onerous for the government and ruinous for many individuals. But healthcare reimbursement policies are not the cause of this, the authors argue. To make their case, they explain how the laws and regulations in different areas of the Medicare and Medicaid programs create processes that are largely invisible to the public, but make the programs difficult to manage financially. The processes are not well thought out nor subject to much quality control, with the result that fraud is chronic and considerable. The areas of Medicare covered in the book are inpatient hospital reimbursement, long-term care, hospice care, and end-stage renal disease. The areas of Medicaid covered are inpatient hospital and long-term care plus abortion and family planning services. For each of these areas, the authors discuss the conditions for receiving reimbursement, the legislation and regulations regarding reimbursement, the procedures for being reimbursed, the major areas of reimbursement (for example, capital-related costs, dietetic services, rental expenses); and court cases, including appeals. Reimbursement practices of selected states are covered. For each of the major areas of interest, the chapters are organized in a manner that is similar to that found in reference books and professional journals for attorneys and accountants. Laws and regulations are summarized and occasionally quoted with expert background and commentary supplied by the authors. With regard to court cases and rulings pertaining to Medicare and Medicaid, passages from court papers are quoted, references to legal records are supplied, and analysis is provided. Though the text delves into legal issues, it is accessible to administrators and other lay readers who have an interest in the subject matter. Clear chapter and subchapter titles, a table of cases following the text, and a detailed index enable readers to use this work as a reference. The value of this book is reflected in the authors' ability to distill great amounts of data down to one readable text. It condenses libraries of government and legal documents into a single work. Answers to questions of fundamental importance to healthcare providers -- those dealing with qualifications, compliance, reimbursable costs, and appeals -- can be found in one place. Timely reimbursement depends on proper application of the rules, which is necessary for a provider's sound financial standing. But the authors specify other reasons for writing this book, to wit: "Providers should have a general knowledge of the law and should not rely on manuals and regulations exclusively." By summarizing, commenting on, and citing cases relating to principal provisions of Medicare and Medicaid, the authors accomplish this objective. The authors also cover the topic of fraud with respect to both Medicare and Medicaid, offering both a legal treatment and commentary. At the end of each chapter is a section titled "Outlook," which contains a discussion of government studies, changes in healthcare policy, or other developments that could affect reimbursement. Although this work was published over two decades ago, much of this discussion is still relevant today. Finally, the book is a call for change. The authors remark in their closing paragraph: "Given the increasing for-profit orientation of the major segments of the health care industry, proprietary providers should be particularly responsive to new efficiency incentives" in reimbursement. In relation to this, "policymakers [should] develop reimbursement methods that will encourage providers to become more efficient." Robert J. Buchanan is currently a professor in the Department of Health Policy and Management in the School of Rural Public Health at the Texas A&M University System Health Sciences Center. James D. Minor, a former law professor at the University of Mississippi, has his own law practice. ********* 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 ***