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/raid1/www/Hosts/bankrupt/TCR_Public/061121.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, November 21, 2006, Vol. 10, No. 277 Headlines ADVOCACY & RESOURCES: DIP Financing Hearing Scheduled Today ADVOCACY & RESOURCES: Chapter 11 Trustee Hires Manier as Counsel ALLIED HOLDINGS: Court OKs Amendments to SunTrust Lease Agreement AMERICANA FOODS: Sr. Lenders' Claims Acquired by 2118769 Ontario AMERICAN AIRLINES: Moody's Assigns Loss-Given-Default Ratings AMERICAN COMMERCIAL: Moody's Assigns Loss-Given-Default Ratings AMERICAN INVESTORS: Aviva Buyout Prompts Moody's Ratings Upgrade AMERUS GROUP: Aviva Buyout Prompts Moody's Ratings Upgrade AMSTED INDUSTRIES: Moody's Assigns Loss-Given-Default Ratings ANCHOR GLASS: Appeals $5.5-Million Plant Value Assessment ARMSTRONG WORLD: 7 Directors Own 8,183 Phantom Stock Units Each ARMSTRONG WORLD: 2006 Third Quarter Earnings Down to $39.2 Mil. ATHENA NEUROSCIENCES: Moody's Holds B3 Rating on $613MM Sr. Notes ATLANTIC EXPRESS: Moody's Assigns Loss-Given-Default Ratings AVIVA PLC: AmerUs Purchase Prompts Moody's Ratings Upgrade BANC OF AMERICA: Moody's Rates Class T2-B-1 Certificates at Ba2 BANC OF AMERICA: S&P Assigns Low-B Ratings on 6 Certificates BEAR CANADIAN: Moody's Rates $15.2MM Class D 6.5% Notes at Ba3 BEAR STEARNS: Credit Enhancement Cues Fitch to Hold Junk Ratings BEAR STEARNS: Fitch Holds Low-B Ratings on Six Cert Classes BEAR STEARNS: Fitch Lifts Rating on $5.3-Mil. Certificates to BB+ BECKMAN COULTER: Earns $47.4 Million in 2006 3rd Fiscal Quarter BENNINGTON COLLEGE: Moody's Holds Ba1 rating on $7.8-Mil. Bonds BIOVAIL CORPORATION: Event Risk Cues Moody's Negative Outlook BLOCKBUSTER INC: Credit Concerns Cue Fitch to Hold Junk Ratings BLOCK COMMUNICATIONS: Weak Performance Cues S&P's CreditWatch BOMBARDIER INC: Prices New EUR1.9 Billion Issue of Senior Notes BROOK MAYS: Asks Court to Extend Cash Collateral Use Until Feb. 15 BUILDING MATERIALS: Earns $17.1 Million in Quarter Ended October 1 CABLEVISION SYSTEMS: Posts $59.1 Million Net Loss in Third Quarter CALPINE CORP: Court Approves Miller Buckfire as Sale Advisor CALPINE CORP: Wants to Refinance Blue Spruce Loan with Beal Bank CANADA MORTGAGE: Moody's Rates $2-Mil. Class F Certificates at B2 CARRAWAY METHODIST: Administrator Appoints Seven-Member Committee CARRAWAY METHODIST: Court OKs Greenberg Traurig as Panel's Counsel CITIGROUP COMMERCIAL: Fitch Rates Three Cert Classes at Low-Bs CLEARWATER FUNDING: Fitch Cuts Rating on $31.5-Mil. Notes to BB- COMPANHIA SIDERURGICA: Wheeling Shareholders Reject Firm's Offer COMPLETE PRODUCTION: S&P Rates Proposed $600MM Sr. Notes at 'B' CONTINENTAL AIRLINES: Moody's Assigns Loss-Given-Default Ratings COPELANDS' ENT: Assigns Leasehold Rights to Sports Authority COVENTRY HEALTH: Earns $147.5 Million in 2006 Third Quarter CREDIT SUISSE: Fitch Holds Low-B Ratings on 3 Certificate Classes CREDIT SUISSE: Fitch Lifts Rating on $13.6-Mil. Certs. to BB DATALOGIC INT'L: Expects to Issue $2.45MM of 10% Promissory Notes DELPHI CORP: Seeks to Recover Receivables from NYCH LLC DELTA AIR: Comair Pilots to Conduct Informational Picketing Today DLJ COMMERCIAL: Fitch Holds B Rating on $6.3-Million Certificates DLJ COMMERCIAL: Fitch Lifts Rating on $6.6-Mil. Certificates to BB DOUGLAS DYNAMICS: Declining Results Prompt S&P's Neg. Outlook ENRON CORP: Wants $300,000 Electroimpact Settlement Approved ESCHELON TELECOM: Moody's Affirms Corporate Family Rating at B3 EVERGREEN INT'L: Moody's Assigns Loss-Given-Default Ratings FIDELITY NATIONAL: Fitch Rates $200 Million Senior Notes at BB+ TIAA CMBS: Fitch Holds Low-B Rating on Four Certificate Classes FOUNDATION RE: S&P Rates $67.5-Million Class G Notes at B FOUR SEASONS: S&P Pares Corp. Credit Rating to 'BB+' from 'BBB-' FRASER PAPERS: S&P Downgrades Corp. Credit Ratings to B- GAP INC: Disappointing Sales Cue S&P's Ratings Downgrade GE CAPITAL: Fitch Holds Low-B Rating on Three Certificate Classes GENERAL NUTRITION: Parent Corporation Prices Senior Notes GENEVA STEEL: Court Confirms Chapter 11 Liquidation Plan GMAC COMMERCIAL: Fitch Holds Junk Ratings on Class N & O Certs. GOODYEAR TIRE: S&P Rates $1 Billion Debentures at 'B-' GOODYEAR TIRE: Fitch Rates New Private Placement Notes at CCC+ GREAT LAKES: Moody's Assigns Loss-Given-Default Ratings GREENBRIER COMPANIES: Moody's Assigns Loss-Given-Default Ratings GS MORTGAGE: S&P Assigns Initial Low-B Ratings to 2 Cert Classes HARTMAN COMMERCIAL: KeyBank Waives Covenant Defaults Under LOC H-LINES FINANCE: Moody's Assigns Loss-Given-Default Ratings HOLLINGER INC: Ct. Rejects Injunction Continuance against Radler INFOUSA INC: Planned Opinion Deal Cues Moody's to Hold Ba3 Rating IRIDIUM SATELLITE: Reports Subscriber Growth as of September 30 ISTAR FINANCIAL: Declares Preferred Stock Dividends J.P. MORGAN: Expected Losses Cue Fitch to Junk Ratings KANSAS CITY: Fitch Rates $175 Million 7.625% Senior Notes at 'B+' KANSAS CITY SOUTHERN: Moody's Assigns Loss-Given-Default Ratings KIDDER PEABODY: Fitch Holds BB+ Rating on Class B-1 Certificates KLEROS REAL: Moody's Rates $5 Mil. Class C Notes Due 2046 at Ba2 LIFECARE HOLDINGS: S$P Lowers Corp. Credit Rating to B- from B MERRILL LYNCH: S&P Holds Low-B Ratings on Six Cert Classes MORGAN STANLEY: Fitch Holds Junk Rating on 3 Certificate Classes MORGAN STANLEY: Fitch Holds Low-B Ratings on Six Cert Classes MORTGAGE ASSET: Fitch Holds Low-B Ratings on 2 Certificate Classes MWAM CBO: Moody's Puts Ba2-Rated Notes on Watch for Downgrade NORTHWEST PARKWAY: Fitch Junks Rating on $420-Mil. Sr. Bonds NVIDIA CORP: Shareholders File Derivative Lawsuit NVF CO: Committee Wants Flaster/Greenberg as Conflicts Counsel NVF COMPANY: Wants Richardson Properties' Employment Extended ONEIDA LTD: Challenges Termination Fees Sought by PBGC ORIUS CORP: Court Confirms 2nd Amended Joint Plan of Liquidation PENNANT CBO: Moody's Affirms Ca Rating on $15-Mil. Class D Notes PERFORMANCE TRANSPORTATION: Court OKs Yucaipa DIP Loan Stipulation PERFORMANCE TRANSPORTATION: Wants Until Feb. 28 to Remove Actions PHELPS DODGE: Inks $25.9 Billion Merger Pact with Freeport-McMoRan POLYMER GROUP: Poor Performance Cues Moody's Negative Outlook PORTRAIT CORP: Court Gives Final Consent to Berenson's Employment PORTRAIT CORP: Panel Taps Halperin Battaglia as Conflicts Counsel RADIATION THERAPY: S&P Downgrades Corp. Credit Rating to BB- RADNOR HOLDINGS: Files Schedules of Assets and Liabilities RADNOR HOLDINGS: Panel Wants Stevens & Lee's Work Scope Expanded RAILAMERICA INC: Fortress Merger Cues S&P's Negative Watch REFCO INC: Wants to Sell FXA'a Customer Lists to Saxo Bank SAINT VINCENTS: Court Issues Final Order Allowing CIT's Retention SAINT VINCENTS: LENNOX NEDD Agrees to Withdraw Lawsuit SEA CONTAINERS: U.K. Regulator May Issue Financial Directions SEA CONTAINERS: Wind-Up Petition Hearing Scheduled on December 1 SIENA TECHNOLOGIES: Closes $1 Million Financing SIERRA PACIFIC: Launches Tender Offers for $100MM Debt Securities STRUCTURED ASSET: Fitch Holds Junk Rating on Five Cert. Classes STRUCTURED ASSET: Fitch Holds Junk Ratings on Three Issues TARRANT COUNTY: Moody's Withdraws C Rating on $80 Mil. Debt Issue TATER TIME: Wash. Labor Department Seeks Case Dismissal TOLEDO EDISON: Fitch Rates $300-Mil 6.15% Sr. Notes at BB+ TOWER AUTOMOTIVE: Excl. Plan-Filing Period Intact Until Nov. 30 TOWER AUTOMOTIVE: Delays Form 10-Q Filing for Qtr. Ended Sept. 30 TRIBUNE CO: Earns $164 Million in 3rd Quarter Ended September 24 TRUE NORTH: Closes Acquisition of C3 Online Marketing TRUE TEMPER: Weak Performance Cues S&P's Negative CreditWatch UNIVERSITY HEIGHTS: Hires Girvin & Ferlazzo as Special Counsel UNITED CUTLERY: Hires Ragsdale & Waters as Special Counsel UNIVERSITY HEIGHTS: Files Schedules of Assets and Liabilities US AIRWAYS: Fitch Holds CCC Issuer Default Rating USA COMMERCIAL: Excl. Solicitation Period Intact Until Dec. 31 VESTA INSURANCE: Court OKs Second Amended Disclosure Statement VESTA INSURANCE: Wants Panel to Vote on Gaines' Liquidation Plan VULCAN ENERGY: Merger Cues Moody's to Hold Senior Ratings at Ba2 WASTE CONNECTIONS: Buying Waste Management's Southeast Operations WENDY'S INT'L: Gets Tenders for 27,887,000 Common Shares WERNER LADDER: Wants to Expand PwC's Scope of Duties as Auditor WESTERN MEDICAL: Asks Court's Nod for Apria Contracts Assumption * Large Companies with Insolvent Balance Sheets ********* ADVOCACY & RESOURCES: DIP Financing Hearing Scheduled Today ----------------------------------------------------------- The Honorable Keith M. Lundin of the U.S. Bankruptcy Court for the Middle District of Tennessee will convene a hearing at 9:00 a.m. today, Nov. 21, 2006, to consider Advocacy and Resources Corporation's request to obtain up to $1 million in debtor-in- possession loans. The DIP financing hearing will be held at Courtroom 2 of the U.S. Bankruptcy Court, Customs House, 701 Broadway in Nashville, Tennessee. An unidentified lender has extended a $1 million funding commitment to the Debtor. The funding will be used to resume the Debtor's operations and support continuing operations, acquire raw materials and inventory, and pay for related operational costs. The lender will provide funds to the Debtor in the form of a revolving credit loan in the initial amount of $750,000; with a maximum amount of $1 million. The loan will bear interest at a rate of 20% per annum and is payable in full on the earlier of Dec. 31, 2007, the effective date of a Plan of reorganization, the conversion of the Debtors' bankruptcy case to a Chapter 7 liquidation proceeding, or the closing of the sale of the Debtor's Gould Drive property. Borrowings under the DIP credit facility will be secured by a lien on all post-petition inventory and receivables acquired and generated as a result of the loan proceeds. However, these liens will have no effect on any liens asserted by AmSouth Bank, N.A. The Debtor is seeking emergency approval of the DIP financing agreement in order to: -- qualify to bid for a contract under the U.S Department Agriculture's Javits-Wagner-O'Day Program. The Debtor is required to submit a bid no later than Nov. 28, 2006; -- bring a number of the employees that were laid off back to work on a full-time status and avoid the possible negative impact of its bankruptcy on these employees; and -- minimize the risk of losing potential contracts that have been placed on hold because of the bankruptcy filing. Headquartered in Cookeville, Tennessee, Advocacy and Resources Corporation is a non-profit corporation that manufactures food products for feeding programs operated by the U.S. Government. Customers include the U.S. Department of Agriculture, the Department of Defense, and other private distribution firms. The Company filed for chapter 11 protection on June 20, 2006 (Bankr. M.D. Tenn. Case No. 06-03067). John Hayden Rowland, Esq., at Baker Donelson Bearman Caldwell and Berkowitz, P.C., represents the Debtor. When the Debtor filed for chapter 11 protection, it estimated assets and debts between $10 million and $50 million. ADVOCACY & RESOURCES: Chapter 11 Trustee Hires Manier as Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Tennessee in Cookeville has authorized Michael E. Collins, Esq., the Chapter 11 Trustee for Advocacy and Resources Corporation's estate, to employ Manier & Herod, PC, as his bankruptcy counsel, nunc pro tunc to July 13, 2006. Manier & Herod will: a. prepare and file appropriate pleadings, including without limitation, applications, complaints, answers, motions, orders, and other documents; b. represent the Trustee at hearings, proceedings, meetings and other appearances in court and before other tribunals and administrative agencies on behalf of Trustee related to the collection action; c. review and analyze financial data; d. negotiate with certain creditors and their counsel, if any; and e. provide other services as are necessary or appropriate in representation of the Trustee in connection with the administration of the Debtor's estate. Mr. Collins is a member at Manier & Herod. He will serve as the primary counsel for this engagement and will bill $300 per hour. The firm's other professionals bill: Professional Hourly Rate ------------ ----------- Principals $265 - $375 Associates $150 - $225 Paralegals $90 - $120 Mr. Collins assures the Court that his firm does not represent any adverse interest to the Debtor or its estate Headquartered in Cookeville, Tennessee, Advocacy and Resources Corporation is a non-profit corporation that manufactures food products for feeding programs operated by the U.S. Government. Customers include the U.S. Department of Agriculture, the Department of Defense, and other private distribution firms. The Company filed for chapter 11 protection on June 20, 2006 (Bankr. M.D. Tenn. Case No. 06-03067). John Hayden Rowland, Esq., at Baker Donelson Bearman Caldwell and Berkowitz, P.C., represents the Debtor. When the Debtor filed for chapter 11 protection, it estimated assets and debts between $10 million and $50 million. ALLIED HOLDINGS: Court OKs Amendments to SunTrust Lease Agreement ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia has authorized Allied Holdings, Inc., and its debtor-affiliates to amend and assume certain lease agreements with SunTrust Leasing Corporation. As reported in the Troubled Company Reporter on Nov. 9, 2006, BancBoston Leasing, Inc., leased certain truck tractors and car- haul trailers to Allied Systems, Ltd. (L.P.) pursuant to: * a master equipment lease dated June 30, 1998; and * lease supplements nos. 6 and 7, each dated May 17, 1999. Allied Holdings, Inc., agreed to be liable for the payment and performance of all Allied Systems' Lease obligations pursuant to an equipment lease guaranty dated June 29, 1998. The Lease Supplements were later assigned to SunTrust Leasing. The Master Lease and Lease Supplements provide for, among other things: -- the lessee's option to purchase the equipment at the end of the seven-year term for a purchase price equal to 25% of the lessor's acquisition cost; -- the return of the Equipment to the Lessor at the conclusion of the seven-year term if the Lessee does not exercise its purchase option; -- the Lessor's sale of the Equipment if it is returned at the end of the lease term; and -- a "terminal rental adjustment clause", which states that if the equipment is returned to the Lessor and sold, a one- time lump-sum adjustment will be due based on the amount of the net sales proceeds for the Equipment. The Lease Supplements expired on May 31, 2006. The parties subsequently entered into a third amendment with respect to the Lease Supplements, the terms of which include: (1) the Lessee will cure any rent defaults, including those arising prepetition; (2) the term of the lease will be extended for one year; (3) during the Extended Term, Lessee will pay monthly rent at the pre-expiry rate set forth in the Lease Supplements; (4) the Lessee's obligation to pay rent and any TRAC Amount will be an administrative expense; and (5) the TRAC Amount will be reduced by 87.5% of the rent paid during the Extended Term. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/ or 215/945-7000) AMERICANA FOODS: Sr. Lenders' Claims Acquired by 2118769 Ontario ---------------------------------------------------------------- 2118769 Ontario Inc., a company controlled by CoolBrands International Inc.'s acting President & CEO Michael Serruya, entered into an agreement to acquire, at par, all of the indebtedness of the senior lenders under the credit facility provided to Americana Foods, L.P., which is guaranteed by CoolBrands. Americana is CoolBrands' 50.1% owned joint venture facility based in Dallas, Texas, which is currently in U.S. bankruptcy proceedings and is in default of its obligations to the senior lenders. In connection with the purchase, 2118769 has entered into a forbearance agreement with CoolBrands pursuant to which 2118769 has agreed for a period of six months not to take any action to demand repayment of the indebtedness on account of existing defaults under the Americana credit facility. The terms of the Americana credit facility remain unchanged and JPMorgan Chase Bank N.A. continues in its capacity as administrative agent under the credit facility. In addition, as part of this transaction, the senior lenders have provided a forbearance agreement relating to the remaining debt of CoolBrands that they hold, pursuant to which they agree for a period of six months not to take any action to demand repayment of the indebtedness on account of existing defaults under the CoolBrands credit facility. The total debt of CoolBrands is approximately US$25 million of which approximately US$21.7 million is debt of Americana and was acquired by 2118769. CoolBrands' credit facility continues to be held by JPMorgan Chase Bank N.A. and the other senior lenders. JPMorgan Chase Bank N.A. and the other senior lenders have also agreed to continue to make available to CoolBrands a US$8 million revolving line of credit. In connection therewith, 2118769 has provided a US$5 million letter of credit from which the senior lenders can draw in the event that CoolBrands does not repay such revolving line of credit. The debt acquired by 2118769 is subordinated to this revolving line of credit. Effective Nov. 17, 2006, CoolBrands' independent directors were replaced by Romeo DeGasperis, Garry Macdonald and Ronald W. Binns. Each of the audit committee, the corporate governance committee and the compensation committee were also reconstituted and are now comprised of the three new independent directors. At the request of 2118769, CoolBrands' four current independent directors and the current Co-Chairman, President and Chief Executive Officer, David J. Stein, have resigned as directors to facilitate the agreement by the lenders to forbear from exercising their rights under the credit facilities. CoolBrands thanks the directors for their services. Michael Serruya has agreed to assume the positions of President and Chief Executive Officer of CoolBrands, on an interim basis, replacing Mr. Stein who will continue as Head of Strategic Planning of CoolBrands. In consideration of 2118769 agreeing to enter into the forbearance arrangement with CoolBrands and providing the line of credit to the senior lenders, the newly reconstituted board of directors of CoolBrands has authorized the issuance by CoolBrands to 2118769 of warrants to purchase 5,500,000 subordinate voting shares of CoolBrands, which represents approximately 9.8% of the shares currently outstanding. The exercise price of the warrants is CDN$0.50, and the term of the warrants is five years from the date of grant. CoolBrands has received conditional approval from the TSX for the listing of the 5,500,000 shares that may be issued to 2118769 upon exercise of the warrants. Although the transaction is considered to be a "related party transaction", CoolBrands is relying on the financial hardship exemption contained in section 604(e) of the TSX Company Manual in connection with the issuance of these warrants at an exercise price that is below market price. The newly constituted board of directors of CoolBrands believes that these transactions should provide CoolBrands with sufficient time to restructure its financial affairs and address its liquidity issues. In deciding to approve the transactions, the new independent directors of CoolBrands and the board of directors as a whole determined that CoolBrands is in serious financial difficulty, the transactions are designed to improve the financial position of CoolBrands, and the terms of the transactions are reasonable in the circumstances. A Background Summary of New Directors Romeo DeGasperis is the CEO and a Vice-President of Con-Drain Company Limited, a private company operating in Ontario. He is also a director of Futureway Communications, a full service provider of local and long distance telephone, high-speed Internet and data center service to homes and businesses in the Greater Toronto Area. Mr. DeGasperis was also an independent director of CoolBrands from February 2000 to August 2006. Garry Macdonald is currently the President and Principal of Maccess Management Inc., a private company providing strategic planning, business development and consultancy services. From 1998 to 2002, he served as President and CEO of Country Style Food Services Inc. Between 1989 and 1998, Mr. Macdonald was the President and CEO of the Franchise Operations Division of Maple Leaf Foods Inc. Ronald W. Binns is currently the CFO of Nevada Capital Corporation Ltd. From 1989 to 2002, he served as the CFO of Franco-Nevada Mining Corporation Ltd. Mr. Binns obtained his Chartered Accountancy with Coopers & Lybrand in 1984, has lectured extensively for the B.C. Institute of Chartered Accountants and "Big Four" accounting firms and has been a director of several public and private companies. About Americana Foods Based in Dallas, Texas, Americana Foods Limited Partnership aka Americana Foods I Limited Partnership, a subsidiary of CoolBrands International Inc. (TSX: COB.A), manufactures soft serve mixes, packaged ice cream, frozen snacks and other food products for CoolBrands and for well known national retailers, food companies and restaurant chains. CB Americana LLC filed an involuntary chapter 7 Case against the Company on Oct. 11, 2006 (Bankr. N.D. Tex. Case No. 06-34387). CB Americana is represented in the case by Jason S. Brookner, Esq., at Andrews Kurth LLP. AMERICAN AIRLINES: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its Probability-of-Default and Loss-Given-Default rating methodology for the Transportation sector, the rating agency confirmed its B3 Corporate Family Rating for AMR Corp. and its subsidiary, American Airlines Inc. In addition, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these debentures: Issuer: AMR Corp. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Senior Unsecured Notes, Debentures Caa2 Caa2 LGD5 81% Shelf Unsecured Caa2 Caa2 LGD5 81% Issuer: American Airlines Inc. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Guaranteed Senior Secured Revolving Credit Facility B2 B1 LGD2 27% Guaranteed Senior Secured Term Loan B2 B1 LGD2 27% IRB's Caa2 Caa2 LGD5 81% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). American Airlines, Inc., American Eagle, and the AmericanConnection regional airlines -- http://www.AA.com/-- serve more than 250 cities in over 40 countries with more than 3,800 daily flights. The combined network fleet numbers more than 1,000 aircraft. American Airlines, Inc. and American Eagle are subsidiaries of AMR Corporation. AMERICAN COMMERCIAL: Moody's Assigns Loss-Given-Default Ratings --------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Transportation sector, the rating agency confirmed its B1 Corporate Family Rating for American Commercial Lines LLC, and held its rating on the company's 9.5% Senior Notes Due 2015. In addition, Moody's assigned an LGD5 rating to those bonds, suggesting noteholders will experience an 80% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Jeffersonville, Indiana, American Commercial Lines LLC -- http://www.aclines.com/-- is a fully integrated network of marine transportation companies, operating approximately 3,375 barges and 140 towboats on the inland waterways of North and South America and transporting more than 45 million tons of freight annually. In addition, ACL operates marine construction, repair and ancillary service facilities, and river terminals. At the end of 2004, ACL employed approximately 2,660 individuals. AMERICAN INVESTORS: Aviva Buyout Prompts Moody's Ratings Upgrade ---------------------------------------------------------------- Moody's Investors Service upgraded the credit ratings of AmerUs Group Co. after the company's acquisition by Aviva PLC on Nov. 15, 2006. American Investors Life Insurance Company, AmerUs Life Insurance Company, and Indianapolis Life Insurance Company are all wholly- owned subsidiaries of AmerUs Group Co. The insurance financial strength ratings of the company's three principal operating companies-AmerUs Life Insurance Company, American Investors Life Insurance Company, and Indianapolis Life Insurance Company were also upgraded to A1 from A3. The rating action concludes the review for possible upgrade initiated on July 13, 2006, after the signing of a definitive acquisition agreement between AmerUs and Aviva. The outlook on all of the ratings is stable. Moody's said that the upgrade of AmerUs' ratings is based on the new ownership and implied support from Aviva--one of the largest insurance groups in Europe--whose major subsidiaries are rated Aa3 for insurance financial strength. "Now that AmerUs is the flagship for Aviva's U.S. operations, we expect AmerUs to benefit from being part of a larger and stronger insurance group with substantial resources and capital available, if necessary," says Moody's Vice President-Senior Credit Officer, Robert P. Donohue. Moody's said that the three-notch upgrade for the senior debt rating of the AmerUs holding company relative to the two-notch upgrade for the AmerUs operating companies' insurance financial strength ratings was based on the view that the holding company now benefited not only from the earnings and cash flows from the AmerUs operating companies, but also from the potential support directly from parent company Aviva. The rating agency commented that AmerUs' strengths include its good quality investment portfolio, ample capital adequacy, and relatively high margins on its core equity-indexed product offering. Mitigating credit challenges include the company's heavy sales concentration in equity-indexed products, a high level of intangible assets on its balance sheet, and modest consolidated statutory profitability and earnings growth. These ratings were upgraded: * AmerUs Group Co. -- senior unsecured debt to A3 from Baa3; -- provisional senior debt to (P)A3 from (P)Baa3; -- provisional subordinated debt to (P)Baa1 from (P)Ba1; and, -- provisional preferred stock to (P)Baa2 from (P)Ba2 * AmerUs Life Insurance Company -- insurance financial strength to A1 from A3 * American Investors Life Insurance Company -- insurance financial strength to A1 from A3 * Indianapolis Life Insurance Company -- insurance financial strength to A1 from A3; -- surplus notes to A3 from Baa2 * AmerUs Capital I -- preferred stock to Baa1 from Ba1 * AmerUs Capital II, III, IV, and V: -- provisional preferred stock to (P)Baa1 from (P)Ba1 AmerUs Group Co., based in Des Moines, Iowa, is the holding company for Aviva's U.S. life insurance operations. As of Sept. 30, 2006, the company reported consolidated GAAP assets of approximately $26 billion and consolidated GAAP shareholders' equity of about $1.7 billion. AMERUS GROUP: Aviva Buyout Prompts Moody's Ratings Upgrade ---------------------------------------------------------- Moody's Investors Service upgraded the credit ratings of AmerUs Group Co. after the company's acquisition by Aviva PLC on Nov. 15, 2006. The insurance financial strength ratings of the company's three principal operating companies-AmerUs Life Insurance Company, American Investors Life Insurance Company, and Indianapolis Life Insurance Company were also upgraded to A1 from A3. The rating action concludes the review for possible upgrade initiated on July 13, 2006, after the signing of a definitive acquisition agreement between AmerUs and Aviva. The outlook on all of the ratings is stable. Moody's said that the upgrade of AmerUs' ratings is based on the new ownership and implied support from Aviva--one of the largest insurance groups in Europe--whose major subsidiaries are rated Aa3 for insurance financial strength. "Now that AmerUs is the flagship for Aviva's U.S. operations, we expect AmerUs to benefit from being part of a larger and stronger insurance group with substantial resources and capital available, if necessary," says Moody's Vice President-Senior Credit Officer, Robert P. Donohue. Moody's said that the three-notch upgrade for the senior debt rating of the AmerUs holding company relative to the two-notch upgrade for the AmerUs operating companies' insurance financial strength ratings was based on the view that the holding company now benefited not only from the earnings and cash flows from the AmerUs operating companies, but also from the potential support directly from parent company Aviva. The rating agency commented that AmerUs' strengths include its good quality investment portfolio, ample capital adequacy, and relatively high margins on its core equity-indexed product offering. Mitigating credit challenges include the company's heavy sales concentration in equity-indexed products, a high level of intangible assets on its balance sheet, and modest consolidated statutory profitability and earnings growth. These ratings were upgraded: * AmerUs Group Co. -- senior unsecured debt to A3 from Baa3; -- provisional senior debt to (P)A3 from (P)Baa3; -- provisional subordinated debt to (P)Baa1 from (P)Ba1; and, -- provisional preferred stock to (P)Baa2 from (P)Ba2 * AmerUs Life Insurance Company -- insurance financial strength to A1 from A3 * American Investors Life Insurance Company -- insurance financial strength to A1 from A3 * Indianapolis Life Insurance Company -- insurance financial strength to A1 from A3; -- surplus notes to A3 from Baa2 * AmerUs Capital I -- preferred stock to Baa1 from Ba1 * AmerUs Capital II, III, IV, and V: -- provisional preferred stock to (P)Baa1 from (P)Ba1 AmerUs Group Co., based in Des Moines, Iowa, is the holding company for Aviva's U.S. life insurance operations. As of Sept. 30, 2006, the company reported consolidated GAAP assets of approximately $26 billion and consolidated GAAP shareholders' equity of about $1.7 billion. American Investors Life Insurance Company, AmerUs Life Insurance Company, and Indianapolis Life Insurance Company are all wholly-owned subsidiaries of AmerUs Group Co. AMSTED INDUSTRIES: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its Probability-of-Default and Loss-Given-Default rating methodology for the Transportation sector, the rating agency confirmed its B2 Corporate Family Rating for Amsted Industries Inc. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Senior Secured Revolver Due 2011 B1 Ba3 LGD3 30% Senior Secured Term Loan Due 2013 B1 Ba3 LGD3 30% Senior Secured Delayed Draw Term Loan Due 2013 B1 Ba3 LGD3 30% 10.25% Guaranteed Senior Global Notes Due 2011 B3 Caa1 LGD5 80% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Chicago, Illinois, Amsted Industries, Inc. -- http://www.amsted.com/-- is a diversified manufacturer of industrial components serving primarily the railroad, vehicular, and construction and building markets. Amsted currently designs, manufactures and markets products primarily for the North American marketplace where 85% of their revenues are derived. The company has 47 manufacturing facilities located in 11 countries with approximately 9,200 employees worldwide. ANCHOR GLASS: Appeals $5.5-Million Plant Value Assessment --------------------------------------------------------- Anchor Glass Container Corporation disagrees with the Fayette County Assessor's determination that Anchor Hocking's South Connellsville glass plant has a combined assessed value of $5,590,000, Amy Zalar of The Herald Standard reports. The Company has appealed the County Assessor's estimate before the Fayette County Tax Assessment Appeals Board. Jeffrey Bloom, Esq., Anchor Glass' counsel, has presented to the Appeals Board a $1,870,000 appraisal for the deserted glass plant, according to The Herald Standard. The $1.8 million assessment was prepared by an Illinois company in April 2006. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents Anchor Glass in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When Anchor Glass filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. The Court confirmed Anchor Glass' second Amended Plan of Reorganization on April 18, 2006. Anchor Glass emerged from Chapter 11 protection on May 3, 2006. (Anchor Glass Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ARMSTRONG WORLD: 7 Directors Own 8,183 Phantom Stock Units Each --------------------------------------------------------------- In separate Form 4 filings with the Securities and Exchange Commission, seven directors of Armstrong World Industries, Inc., disclosed that each of them directly owns 8,183 units of Phantom Stock pursuant to AWI's 2006 Phantom Stock Unit Plan. The Directors are James J. Gaffney, Robert C. Garland, Judith R. Haberkorn, Russell F. Peppet, Arthur J. Pergament, John Joseph Roberts, and Alexander M. Sanders, Jr. Of the 8,183 Phantom Stock Units, 2,183 units will vest on the earlier date of the award's one-year anniversary or the date of any change in control, while the other 6,000 units will vest in one-thirds on the first, second and third anniversaries of the award or if earlier, upon the date of any change in control. The Phantom Stock Units will expire on the earlier of (i) the six- month anniversary of the director's separation from service for any reason other than removal for cause or (ii) the date of any change in control. Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world. The company and its affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). StephenKarotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The company and its affiliates tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. The company's "Fourth Amended Plan of Reorganization, as Modified," has become effective and AWI has emerged from Chapter 11. * * * As reported in the Troubled Company Reporter on Oct. 9, 2006, Standard & Poor's Ratings Services raised its corporate credit rating on Armstrong World Industries Inc. to 'BB' from 'D', following the Company's emergence from bankruptcy on Oct. 2, 2006. The outlook is stable. ARMSTRONG WORLD: 2006 Third Quarter Earnings Down to $39.2 Mil. --------------------------------------------------------------- Armstrong World Industries Inc. reported third quarter 2006 net sales of $973.6 million, higher by 4% than third quarter net sales of $937 million in 2005, which includes a $13 million favorable impact from foreign exchange rates. Net earnings for the quarter were reported at $39.2 million versus $46.1 million for the comparable quarter in the prior year. Operating income for the quarter increased to $67.4 million from $66.5 million in the third quarter of 2005. Adjusted operating income for the quarter of $82.5 million increased 27% compared with adjusted operating income of $65.2 million in the prior year quarter. The year-over-year growth in third quarter 2006 adjusted operating income benefited from price increases in excess of manufacturing cost inflation, improved product mix in European businesses, improved direct manufacturing costs in all businesses, and lower manufacturing period expense in our floor businesses. Increased earnings in its WAVE joint venture also contributed to the growth. Notably, the growth was achieved despite significant volume declines in North American resilient business where vinyl declines offset laminate growth. Segment Highlights Resilient Flooring net sales were $304.8 million in the third quarter of 2006 and $311.5 million in the same period of 2005. Excluding the favorable impact of foreign exchange rates, net sales decreased 4%. The decline was primarily due to decreased volume for vinyl products in North America. The Company reported operating loss of $2.9 million in the quarter compared with reported income in the third quarter of 2005 of $7.7 million. Adjusted operating income of $4.5 million compared with $5.9 million on the same basis in the prior year period. The decline is primarily attributable to lower sales. The benefits of increased manufacturing efficiency were greater than the impact of cost inflation in the period. Wood Flooring net sales of $217.2 million in the current quarter declined 1% from $220.2 million in the prior year as weakness in the U.S. housing markets drove volume declines in both engineered and solid wood floors. Reported operating income of $16.5 million in the quarter was below the $25.7 million reported in the third quarter of 2005. The reduction in operating income was due to the sales volume decline combined with higher lumber prices and increased promotional spending. Production costs improved during the period. Textiles and Sports Flooring net sales in the third quarter of 2006 increased to $86.3 million from $79.7 million. Excluding the effects of favorable foreign exchange rates of $3.9 million, sales grew 3% primarily on higher volume in carpet tiles and better price realization in broadloom carpet. Reported operating income of $4.2 million in 2006 increased from $3.2 million in 2005 on the growth in sales. Building Products net sales of $304.5 million in the current quarter increased from $268.2 million in the prior year. Excluding the effects of favorable foreign exchange rates of $5 million, sales increased by 12% primarily due to price increases made to offset inflationary pressures, and improved product mix in both the U.S. and European markets. Volume increased in North America and the Pacific Rim. Reported operating income increased to $59.7 million from operating income of $43.1 million in the third quarter of 2005. The growth was driven by improved price realization, better product mix and increased equity earnings in WAVE. Cabinet net sales in the third quarter of 2006 of $60.8 million increased 6% from $57.4 million in 2005 on higher selling prices and improved product mix. Volume decreased slightly. Reported operating income for the third quarter of $3.8 million improved from the prior year's $300,000 operating loss, primarily driven by the sales growth, and lower SG&A spending. Year-to-Date Results For the nine-month period ending Sept. 30, 2006, net sales were $2.795 billion compared with $2.696 billion reported for the first nine months of 2005. Excluding the $10.4 million impact from unfavorable foreign exchange rates, net sales increased by 4%. The sales growth was due to improved price and product mix on flat volume, and all segments grew sales except Resilient Flooring. Operating income in the first nine months of 2006 was $188.1 million compared with operating income of $110.2 million for the same period in 2005. Adjusted operating income of $209.9 million increased 59% compared with adjusted operating income of $131.9 million in the prior year period. The improvement in operating income was primarily due to higher sales, improved manufacturing productivity and reduced SG&A expenses. Outlook For the fourth quarter of 2006, the Company expects commercial markets are expected to remain strong, while the decline in the U.S. housing market will continue to reduce volumes in its residential businesses. On a consolidated basis, improved prices are anticipated to continue to offset cost inflation, and reductions in direct manufacturing costs are expected to be sustained. The Company disclosed that due to fresh start reporting adjustments associated with its Oct. 2, 2006, emergence from Chapter 11, reported fourth quarter operating income will not be comparable to prior periods. A full-text copy of AWI's Third Quarter 2006 Financial Report may be viewed at no charge at http://ResearchArchives.com/t/s?148d Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world. The company and its affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). StephenKarotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The company and its affiliates tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. The company's "Fourth Amended Plan of Reorganization, as Modified," has become effective and AWI has emerged from Chapter 11. * * * As reported in the Troubled Company Reporter on Oct. 9, 2006, Standard & Poor's Ratings Services raised its corporate credit rating on Armstrong World Industries Inc. to 'BB' from 'D', following the Company's emergence from bankruptcy on Oct. 2, 2006. The outlook is stable. ATHENA NEUROSCIENCES: Moody's Holds B3 Rating on $613MM Sr. Notes ----------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to the proposed new senior unsecured notes of Elan Finance PLC reflecting a guarantee from Elan Corporation PLC and material subsidiaries. At the same time, Moody's affirmed Elan's existing ratings and the stable rating outlook. Athena Neurosciences is a wholly owned subsidiary of Elan. Moody's affirmed its B3 rating on Athena's $613 million senior notes due 2008, which are guaranteed by Elan Corporation. The last prior rating action was an outlook revision to stable from negative on June 14, 2006 following the FDA's approval of resumed marketing for Tysabri in multiple sclerosis. The new senior notes are being sold in a privately negotiated transaction 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. Elan's B3 Corporate Family Rating reflects the criteria outlined in Moody's Global Pharmaceutical Rating Outlook including size and scale, cash flow relative to debt, and cash coverage of debt. Elan's rate of cash use is significant, and Elan faces $613 million of debt maturities in early 2008. Consummation of the pending debt issuance would alleviate concerns about near-term debt maturities, and would help solidify Elan's position within the B3 rating category. The rating outlook is stable. "Despite an improvement in refinancing risk, Moody's believes that the market acceptance of Tysabri remains uncertain and will be a critical factor driving any future changes in Elan's credit rating," stated Michael Levesque, Vice President and Senior Credit Officer. Upward rating pressure could result from a very successful re- launch of Tysabri, leading Moody's to conclude that Elan is on a clear path to generating positive free cash flow. Negative rating pressure could develop if Moody's believes that Elan is unlikely to achieve positive earnings and cash flow by year-end 2008. Rating assigned: * Elan Finance, PLC -- B3 fixed rate senior notes due 2013 (guaranteed by Elan Corporation, PLC and subsidiaries) -- B3 floating rate senior notes due 2013 (guaranteed by Elan Corporation, PLC and subsidiaries) Ratings affirmed: * Elan Corporation, PLC -- B3 corporate family rating * Elan Finance, PLC -- B3 fixed rate senior notes of $850 million due 2011 (guaranteed by Elan Corporation, PLC and subsidiaries) -- B3 floating rate senior notes of $300 million due 2011 (guaranteed by Elan Corporation, PLC and subsidiaries) * Athena Neurosciences Finance, LLC -- B3 senior notes of $613 million due 2008 (guaranteed by Elan Corporation, PLC and subsidiaries) ATLANTIC EXPRESS: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its Probability-of-Default and Loss-Given-Default rating methodology for the Transportation sector, the rating agency held its Caa2 Corporate Family Rating for Atlantic Express Transportation Corp., and held its rating on the company's Guaranteed Senior Secured Notes due on 2008. Additionally, Moody's assigned an LGD4 rating to those notes, suggesting noteholders will experience a 52% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Staten Island, NY, Atlantic Express Transportation Corp. -- http://www.atlanticexpress.com/-- provides school bus transportation in the United States. The Company has contracts to provide school bus transportation in 111 school districts in New York, Missouri, Massachusetts, California, Pennsylvania, New Jersey and Illinois. The Company has a fleet of approximately 6,000 vehicles to service its school bus operations, consisting of school buses, minivans and cars, lift and ramp-equipped vehicles, coaches and service and support vehicles. AVIVA PLC: AmerUs Purchase Prompts Moody's Ratings Upgrade ---------------------------------------------------------- Moody's Investors Service upgraded the credit ratings of AmerUs Group Co. after the company's acquisition by Aviva PLC on Nov. 15, 2006. AmerUs Group Co., based in Des Moines, Iowa, is the holding company for Aviva's U.S. life insurance operations. The insurance financial strength ratings of the company's three principal operating companies-AmerUs Life Insurance Company, American Investors Life Insurance Company, and Indianapolis Life Insurance Company were also upgraded to A1 from A3. The rating action concludes the review for possible upgrade initiated on July 13, 2006, after the signing of a definitive acquisition agreement between AmerUs and Aviva. The outlook on all of the ratings is stable. Moody's said that the upgrade of AmerUs' ratings is based on the new ownership and implied support from Aviva -- one of the largest insurance groups in Europe -- whose major subsidiaries are rated Aa3 for insurance financial strength. "Now that AmerUs is the flagship for Aviva's U.S. operations, we expect AmerUs to benefit from being part of a larger and stronger insurance group with substantial resources and capital available, if necessary," says Moody's Vice President-Senior Credit Officer, Robert P. Donohue. Moody's said that the three-notch upgrade for the senior debt rating of the AmerUs holding company relative to the two-notch upgrade for the AmerUs operating companies' insurance financial strength ratings was based on the view that the holding company now benefited not only from the earnings and cash flows from the AmerUs operating companies, but also from the potential support directly from parent company Aviva. The rating agency commented that AmerUs' strengths include its good quality investment portfolio, ample capital adequacy, and relatively high margins on its core equity-indexed product offering. Mitigating credit challenges include the company's heavy sales concentration in equity-indexed products, a high level of intangible assets on its balance sheet, and modest consolidated statutory profitability and earnings growth. These ratings were upgraded: * AmerUs Group Co. -- senior unsecured debt to A3 from Baa3; -- provisional senior debt to (P)A3 from (P)Baa3; -- provisional subordinated debt to (P)Baa1 from (P)Ba1; and, -- provisional preferred stock to (P)Baa2 from (P)Ba2 * AmerUs Life Insurance Company -- insurance financial strength to A1 from A3 * American Investors Life Insurance Company -- insurance financial strength to A1 from A3 * Indianapolis Life Insurance Company -- insurance financial strength to A1 from A3; -- surplus notes to A3 from Baa2 * AmerUs Capital I -- preferred stock to Baa1 from Ba1 * AmerUs Capital II, III, IV, and V: -- provisional preferred stock to (P)Baa1 from (P)Ba1 As of Sept. 30, 2006, the company reported consolidated GAAP assets of approximately $26 billion and consolidated GAAP shareholders' equity of about $1.7 billion. American Investors Life Insurance Company, AmerUs Life Insurance Company, and Indianapolis Life Insurance Company are all wholly-owned subsidiaries of AmerUs Group Co. BANC OF AMERICA: Moody's Rates Class T2-B-1 Certificates at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by Banc of America Funding 2006-7 Trust, and ratings ranging from Aa1 to Ba2 to the mezzanine and subordinate certificates in the deal. Two segregated sets of certificates were issued by the trust, the "Shifting Interest Certificates" and the "Overcollateralized Certificates", each backed by a separate collateral group. The securitization is backed by SunTrust Mortgage, Inc., Bank of America, N.A., MortgageIT, Inc. and various originators originated fixed-rate Alt A mortgage loans. The ratings are based primarily on the credit quality of the loans and on the protection from subordination. The ratings on the Overcollateralized Certificates are also based on the protection from overcollateralization and excess spread. Moody's expects losses on the collateral backing the Shifting Interest Certificates to range from 0.3% to 0.5%, and it expects losses on the collateral backing the Overcollateralized Certificates to range from 1.1% to 1.3%. SunTrust Mortgage, Inc., Bank of America, N.A., and Wells Fargo Bank, N.A. will service the loans. Wells Fargo Bank, N.A. will act as master servicer. Moody's has assigned SunTrust Mortgage, Inc., its servicer quality rating of SQ2+ as a primary servicer of prime residential mortgage loans and Bank of America, N.A. its top servicer quality rating of SQ1 as a primary servicer of prime residential mortgage loans. Furthermore, Moody's has assigned Wells Fargo Bank, N.A. its top servicer quality rating of SQ1 as a master servicer of residential mortgage loans. These are the rating actions: * Banc of America Funding 2006-7 Trust * Mortgage Pass-Through Certificates, Series 2006-7 Cl. 1-A-1, Assigned Aaa Cl. 1-A-2, Assigned Aaa Cl. 1-A-3, Assigned Aaa Cl. 1-A-4, Assigned Aaa Cl. 1-A-5, Assigned Aaa Cl. 1-A-6, Assigned Aaa Cl. 1-A-7, Assigned Aaa Cl. 1-A-8, Assigned Aaa Cl. 1-A-9, Assigned Aaa Cl. 1-A-10, Assigned Aaa Cl. 1-A-11, Assigned Aaa Cl. 1-A-12, Assigned Aaa Cl. 30-IO, Assigned Aaa Cl. 30-PO, Assigned Aaa Cl. T2-A-1, Assigned Aaa Cl. T2-A-2, Assigned Aaa Cl. T2-A-3, Assigned Aaa Cl. T2-A-4, Assigned Aaa Cl. T2-A-5, Assigned Aaa Cl. T2-A-6, Assigned Aaa Cl. T2-A-7, Assigned Aaa Cl. T2-A-8, Assigned Aaa Cl. T2-A-A, Assigned Aa1 Cl. T2-A-B, Assigned Aaa Cl. T2-M-1, Assigned Aa1 Cl. T2-M-2, Assigned Aa2 Cl. T2-M-3, Assigned Aa3 Cl. T2-M-4, Assigned A1 Cl. T2-M-5, Assigned A2 Cl. T2-M-6, Assigned A3 Cl. T2-M-7, Assigned Baa2 Cl. T2-M-8, Assigned Baa3 Cl. T2-B-1, Assigned Ba2 BANC OF AMERICA: S&P Assigns Low-B Ratings on 6 Certificates ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary ratings to Banc of America Commercial Mortgage Trust 2006-6's $2.46 billion commercial mortgage pass-through certificates series 2006-6. The preliminary ratings are based on information as of Nov. 16, 2006. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Class A-1, A-2, A-3, A- SB, A-4, A-1A, XP, A-M, A-J, B, and C are currently being offered publicly. The remaining classes will be offered privately. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.3, a beginning LTV of 107.3%, and an ending LTV of 102.9%. The rated final maturity date for these certificates is October 2045. Preliminary Ratings Assigned Banc of America Commercial Mortgage Trust 2006-6 Class Rating Preliminary Recommended amount* credit support (%) ---- ------ ------------ -------------- A-1 AAA $40,000,000 30.000 A-2 AAA $481,700,000 30.000 A-3 AAA $285,000,000 30.000 A-SB AAA $56,830,000 30.000 A-4 AAA $430,105,000 30.000 A-1A AAA $429,910,000 30.000 XP** AAA TBD N/A A-M AAA $246,220,000 20.000 A-J AAA $193,900,000 12.125 B AA $49,244,000 10.125 C AA- $24,622,000 9.125 D A $30,778,000 7.875 E A- $30,777,000 6.625 F BBB+ $27,700,000 5.500 G BBB $27,700,000 4.375 H BBB- $30,778,000 3.125 J BB+ $6,155,000 2.875 K BB $9,233,000 2.500 L BB- $9,234,000 2.125 M B+ $3,078,000 2.000 N B $9,233,000 1.625 O B- $9,233,000 1.250 P NR $30,778,204 0.000 XC** AAA $2,462,208,204 N/A BEAR CANADIAN: Moody's Rates $15.2MM Class D 6.5% Notes at Ba3 -------------------------------------------------------------- Moody's Investors Service assigned definitive ratings of Aaa, A2, Baa2 and Ba3 to the Class A through D notes issued in the term securitization of prime automobile loans by Bear Canadian Auto Trust 2006-1. The ratings are based on: -- the quality of the underlying automobile loans and their expected performance; -- the strength of the transaction structure; -- the enhancement provided by subordination, overcollateralization and available excess spread; and, -- the ability of the parties performing servicing functions. This is the first transaction to be executed by Max Recovery Canada Company, securitizing a portfolio of prime auto retail installment sale contracts that was acquired on a whole loan sale, servicing retained basis. These are the rating actions: -- Issuer: Bear Canadian Auto Trust 2006-1 -- $314,000,000 Class A-1 4.37% Asset Backed Notes, rated Aaa -- $269,000,000 Class A-2 4.32% Asset Backed Notes, rated Aaa -- $245,000,000 Class A-3 4.28% Asset Backed Notes, rated Aaa -- $53,387,000 Class A-4 4.32% Asset Backed Notes, rated Aaa -- $16,993,000 Class B 4.66% Asset Backed Notes, rated A2 -- $6,797,000 Class C 4.92% Asset Backed Notes, rated Baa2 -- $15,181,000 Class D 6.50% Asset Backed Notes, rated Ba3 BearCAT 2006-1 was formed in October 2006 by Montreal Trust Company of Canada as trustee. The servicer of record of the BearCAT 2006-1 receivables is Max Recovery Canada Company. While the actual servicing of the receivables may be subcontracted, the servicer of record will perform various data administration obligations. BEAR STEARNS: Credit Enhancement Cues Fitch to Hold Junk Ratings ---------------------------------------------------------------- Fitch has taken rating actions on these Bear Stearns ARM Trust mortgage-backed certificates: * Series 2000-2 -- 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 'BBB+'; and, -- Class B-5 affirmed at 'BB+'. * Series 2001-4 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 upgraded to 'AA+' from 'AA'; -- Class B3 affirmed at 'A'; -- Class B4 remains at 'CC/DR3'; -- Class B5 remains at 'C/DR6'. * Series 2001-7 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AA+'; -- Class B3 affirmed at 'A+'; -- Class B4 affirmed at 'BBB'; -- Class B5 affirmed at 'BB'. The underlying collateral for the Bear Stearns transactions consists of 30-year adjustable-rate mortgages extended to prime borrowers. The transactions are primarily secured by first liens on one- to four-family residential properties. As of the Oct. 2006 distribution date, the seasoning ranges between 60 to 71 months and the pool factors range from approximately 8% to 13%. Series 2001-4 and 2001-7 are master serviced by Wells Fargo Bank N.A., and series 2000-2 is master serviced by First Republic Bank. The affirmations reflect satisfactory relationships of credit enhancement to future expected losses, and affect approximately $68.5 million in outstanding certificates. The upgrade reflects an improvement in the relationship between CE and future expected losses, and affects $419,982. The upgraded class has experienced a threefold increase in CE levels since issuance. Additionally, the class is well-protected by a high level of subordination. Fitch's Distressed Recovery ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. BEAR STEARNS: Fitch Holds Low-B Ratings on Six Cert Classes ----------------------------------------------------------- Fitch Ratings affirms Bear Stearns Commercial Mortgage Securities Trust's commercial mortgage pass-through certificates, series 2005-PWR7: -- $36.9 million class A-1 at 'AAA'; -- $188 million class A-2 at 'AAA'; -- $106 million class A-AB at 'AAA'; -- $527.7 million class A-3 at 'AAA'; -- $85.7 million class A-J at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $33.7 million class B at 'AA'; -- $8.4 million class C at 'AA-'; -- $15.5 million class D at 'A'; -- $11.2 million class E at 'A-'; -- $11.2 million class F at 'BBB+'; -- $9.8 million class G at 'BBB'; -- $12.7 million class H at 'BBB-'; -- $4.2 million class J at 'BB+'; -- $4.2 million class K at 'BB'; -- $5.6 million class L at 'BB-'; -- $4.2 million class M at 'B+'; -- $1.4 million class N at 'B'; -- $2.8 million class P at 'B-'. BEAR STEARNS: Fitch Lifts Rating on $5.3-Mil. Certificates to BB+ ----------------------------------------------------------------- Fitch Ratings upgrades four classes of Bear Stearns Commercial Mortgage Securities Corporation's commercial mortgage pass-through certificates, series 1998-C1: -- $32.2 million class D to 'AA+' from 'AA'; -- $8.9 million class E to 'AA-' from 'A+'; -- $12.5 million class F to 'A-' from 'BBB+'; -- $5.3 million class H to 'BB+' from 'BB'. In addition, Fitch affirms the ratings on these classes: -- $22.8 million class A-1 at 'AAA'; -- $417.2 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $35.7 million class B at 'AAA'; -- $32.2 million class C at 'AAA'; Fitch does not rate classes G, I or J. Class K has been reduced to zero due to realized losses. The upgrades reflect increased credit enhancement levels due to scheduled amortization as well as defeasance since the last Fitch ratings action. An additional 10 loans (9.1%) have defeased. In total, 46 loans (32.5%) have defeased to date. As of the October 2006 distribution date, the pool has paid down 16.4% to $597.5 million from $714.7 million at issuance. Currently, two assets (.8%) are in special servicing. The first specially serviced asset (0.4%) is a hotel located in Ocean City, Maryland. A forbearance agreement is in place until the end of 2006. Current appraisal value indicates substantial equity in the property and no losses are expected. The other specially serviced asset (0.4%) is a real estate owned parking garage located in St. Paul, Minnesota. The property is marketed for sale and losses are expected. However, the non-rated classes are sufficient to absorb the expected losses. BECKMAN COULTER: Earns $47.4 Million in 2006 3rd Fiscal Quarter --------------------------------------------------------------- Beckman Coulter, Inc., filed its third quarter financial statements for the quarterly period ended Sept. 30, 2006, with the Securities and Exchange Commission on Nov. 3, 2006. The company reported $47,400,000 of net income on $631,200,000 of revenues for the quarterly period ended Sept. 30, 2006. The company had a gross profit of $297,700,000, or 47.2% of total revenue for the quarter ended Sept. 30, 2006, compared to $275,800,000 of gross profit or 46.5% of total revenue for the three months ended Sept. 30, 2005. Gross margin was impacted by: -- improved product mix as a result of increased revenue from higher margin consumable sales; -- foreign currency; and -- lower costs associated with service. These factors were offset by higher costs associated with freight and new products. Selling, general and administrative expenses increased $16,000,000 to $175,000,000 or 27.7% of total revenue for the three months ended Sept. 30, 2006, from $159,000,000 or 26.8% of revenue for the quarterly period ended Sept. 30, 2005. The increase in SG&A spending for the periods was primarily due to: -- the impact of share-based compensation expense as required by SFAS No. 123(R), incremental operating expenses from the Agencourt and DSL acquisitions; -- changes in the non-sales management incentive plan that impacted the timing of expense accruals; -- moving the expense from the fourth quarter in prior years to each quarter throughout the year in 2006; -- a $4 million curtailment charge recorded in the third quarter, associated with changes to our pension plans in the U.S.; and -- approximately $3 million of costs incurred during the second quarter, in connection with an inquiry directed by the Audit and Finance Committee of the Board of Directors. Research and development expenses increased $29,300,000 to $80,900,000 or 12.8% of revenue for the three months ended Sept. 30, 2006, when compared to the three months ended Sept. 30, 2005. This increase in R&D spending is due primarily to the impact of $27,500,000 in R&D costs incurred during the quarter in connection with the clinical diagnostic license to real time PCR thermalcycling technologies acquired from Roche Diagnostics, and $18,900,000 R&D charge recorded in the second quarter of 2006 for license rights in the diagnostic market for certain real time PCR thermalcycling technologies acquired from Applera. At Sept. 30, 2006, the Company's balance sheet showed $3,185,000,000 in total assets, $1,895,500,000 in total liabilities, and $1,289,500,000 in stockholders' equity. A full-text copy of the Company's financial statements for the quarterly period ended Sept. 30, 2006 are available for free at: http://researcharchives.com/t/s?1501 Headquartered in Fullerton, California, Beckman Coulter, Inc. -- http://www.beckmancoulter.com/-- manufactures biomedical testing instrument systems, tests and supplies that simplify and automate laboratory processes. * * * As reported in the Troubled Company Reporter on Oct. 19, 2006, Moody's Investors Service affirmed Beckman Coulter's ratings on its $500 Million Universal Shelf Registration (Senior and Subordinate) -- (P) Baa3/(P) Ba1. The outlook on Beckman's ratings remains stable. BENNINGTON COLLEGE: Moody's Holds Ba1 rating on $7.8-Mil. Bonds --------------------------------------------------------------- Moody's Investors Service affirmed the Ba1 rating on Bennington College's $7.8 million of Series 1999 bonds which were issued through the Vermont Educational and Health Buildings Financing Agency. The College's rating outlook remains stable. Legal security: Payments under the Loan Agreement are a general obligation of the College. The Series 1999 bonds are further secured by a debt service reserve fund, a mortgage pledge of certain campus property, and a security interest in the College's Gross Receipts. Debt-related derivatives: None. Strengths * Improved levels of financial reserves ($26.1 million of total financial resources in FY 2006; expendable financial resources cushioning debt 1.1x and operations 0.5x). * Strengthened fundraising ($10.9 million of average annual gift revenue), partly as a result of several individual multi-million dollar gifts received during the past few years; the College is in the early stages of planning its next capital campaign which could result in further balance sheet strengthening. * Healthy growth of net tuition per student ($19,071 in FY 2006), although management reports plans to slow the pace of future tuition increases and modestly increase the tuition discount rate. Challenges: * Challenging student market position as highlighted by enrollment declines in fall 2005 and 2006 (648 full-time equivalent enrollment in fall 2006, compared to 754 FTE in fall 2004); management expects that changes in admissions staffing and investment in marketing could result in future enrollment growth and is budgeting for a larger fall 2007 freshmen entering class. * Thin level of unrestricted resources ($4.9 million in FY 2006) which provides only a modest cushion for the College's operations; in light of the smaller entering class in fall 2006, Bennington will have to rely on unrestricted gifts and reserves to balance the FY 2007 budget. * High levels of deferred maintenance as evidenced by the College's relatively old age of plant of 18.6 years; Moody's expects that the College will have to invest in its facilities in the future in order to continue to attract students and this could result in additional borrowing longer-term; the College recently borrowed $3 million for building renovations, but does not anticipate any additional borrowing in the next two to three years. Outlook The stable outlook reflects Moody's expectation that the College's investment in its admissions department will help reverse recent trends of declining enrollment. An inability to meet budgeted enrollment targets and resulting pressure on operating performance and balance sheet resources could pressure the rating or outlook in the future. What could change the rating-up * Growth of liquid balance sheet resources coupled with increased enrollment levels; and, * Improved operating performance. What could change the rating-down * Additional borrowing without commensurate growth of expendable financial resources; and, * Further enrollment declines negatively impacting the College's operating performance and balance sheet cushion Key indicators (FY 2006 audited financial data and fall 2006 enrollment data): -- Full-time equivalent enrollment: 648 FTE -- Freshmen selectivity: 65.9% -- Freshmen matriculation: 24.5% -- Total financial resources: $26.1 million -- Pro-Forma Direct debt: $11.9 million -- Expendable financial resources-to-direct debt: 1.1x -- Expendable financial resources-to-operations: 0.5x -- Reliance on Student Charges: 57.6% Rated debt: -- Series 1999 Bonds: Ba1 BIOVAIL CORPORATION: Event Risk Cues Moody's Negative Outlook ------------------------------------------------------------- Moody's Investors Service revised Biovail Corporation's rating outlook to stable from negative and affirmed all existing ratings, including the Ba3 Corporate Family Rating. Moody's acknowledges significant event risk associated with the potential near-term launch of a generic version of Wellbutrin XL into the U.S. market. This event would result in a significant decline in Biovail's cash flow. Even under this scenario, however, Moody's believes that a stable outlook is supported by: -- significant progress on the risk factors outlined in June 2004 when Moody's first assigned the negative rating outlook; -- the recent decision to keep rather than spin-off the legacy products business, which generates good cash flow; -- the recent launch of Johnson & Johnson's Ultram ER, using Biovail's drug delivery technology; -- significant balance sheet flexibility based on low debt levels and over $600 million of unrestricted cash; and, -- Moody's anticipation that if the company increases leverage in order to make acquisitions, Debt/EBITDA is unlikely to exceed 2x over a prolonged period of time. As of Sept. 30, 2006, Biovail's Debt/EBITDA was approximately 0.7x. Overall, Moody's believes that the combination of these factors makes it less likely that Biovail's Corporate Family Rating may move into the single-B category in the near term. To consider positive rating pressure, Moody's would prefer to see greater resolution of the Wellbutrin XL patent situation. If a generic is launched, Moody's could still consider positive rating action in the future under these circumstances: -- success in the Ultram ER launch; -- a launch of bupropion salt in 2007; and, -- evidence that Biovail can achieve its growth strategy within the leverage parameters outlined above. Conversely, downward rating pressure could result under these scenarios: -- very large cash-financed acquisitions such that Debt/EBITDA materially exceeds 2x; -- large litigation payments significantly in excess of Moody's $300 million estimate; or, -- a much more pronounced decline in cash flow from a launch of generic Wellbutrin XL than Moody's current estimate. These are the rating actions: * Biovail Corporation * Ratings affirmed: -- Corporate Family Rating at Ba3 -- Senior Subordinated Notes at B1, LGD4, 67% -- Outlook revised to stable from negative Biovail Corporation is a specialty pharmaceutical and drug delivery company involved in the development, manufacturing and commercialization of pharmaceutical products. The company reported approximately $763 million in net revenue for the first nine months of 2006. BLOCKBUSTER INC: Credit Concerns Cue Fitch to Hold Junk Ratings --------------------------------------------------------------- Fitch Ratings has affirmed these ratings for Blockbuster Inc.: -- Issuer default rating IDR 'CCC'; -- Senior secured credit facility 'CCC/RR4'; and -- Senior subordinated notes of 'CC/RR6'. Fitch has also revised Blockbuster's Rating Outlook to stable from negative. Approximately $1.2 billion of debt is affected by the action. The ratings continue to reflect ongoing credit concerns which include weak financial performance driven by pricing pressures which continue to limit margin expansion, difficult industry conditions, and intense competition from mass merchants, pay-per- view suppliers, and online retailers. The Stable Outlook reflects Blockbuster's improved financial flexibility, stronger liquidity position, and the company's cost cutting efforts that have enabled Blockbuster to improve Free Cash Flow despite ongoing revenue declines, and the Company's leading position in the rental entertainment industry. Importantly, Blockbuster's improved financial flexibility includes covenant relief over 2006 and 2007, a stronger liquidity position that has been aided by a $150 million preferred stock offering and LTM free cash flow of approximately $165 million. The stable outlook also reflects Fitch's belief that the Company will be able to meet its amended 2006 minimum EBITDA covenant of $210 million. However, Blockbuster's revenue generation continues to be negatively affected from structural changes in the industry, competitive factors, and the company's strategic decision to eliminate late fees in 2005. Blockbuster's online movie rental business, which is subscription based and was launched in 2004, has not yet grown in size to offset competitive and industry factors. Despite these challenges, Blockbuster's operating margin and operating EBITDA showed some improvement through the first three quarters of 2006 as the company has significantly reduced its advertising budget and overhead spend. For the quarter ending Sept. 30, 2006, Blockbuster's operating margin was 0.1% versus - 25.3% for third quarter-2005 (3Q'05). Operating EBITDA of $64 million in the third quarter of 2006 reflected growth of 14% over $56 million in 3Q'05. These positive variances reflect cost containment related to corporate overhead, lower store level compensation, and reduced advertising expenses. Fitch notes that the cost cutting strategy has driven better results however ongoing reduction of expenses like advertising may be disadvantageous in the long run as it does not help grow top line revenue. Nevertheless, Fitch expects margin and operating EBITDA improvement to continue in the historically strong fourth quarter Overall, Fitch remains concerned about Blockbuster's operational policies, which have included major changes to its business model in response to weakening market conditions. These changes include replacing lost revenue from the elimination of high margin late rental fees in 2005. Fitch views the elimination of late fees as particularly risky and challenging given that Blockbuster is now required to offset this source of operating profit with substantial increases in rental and merchandise revenues. This may continue to be difficult for Blockbuster due to price discounting employed by the company's online division and strong competition in the home video/DVD market from mass merchants. While Fitch recognizes that Blockbuster's online initiative has grown, Fitch notes that these revenues typically carry a lower gross margin, as do other areas such as video sales and game sales. This is important given Blockbuster's large fixed-cost base due to its real estate leases, especially if the online revenues cannibalize existing rental revenues. Blockbuster generated meaningful discretionary free cash flow over the last twelve months Sept. 30, 2006 due to the aforementioned cost cuts as well as lower capital expenditures offset by moderate working capital usage. As such, Blockbuster's free cash flow to total adjusted debt improved to 2.7% for LTM Sept. 30, 2006 from - 3.4% for fiscal year 2005. Blockbuster improved its financial flexibility in the last twelve months by securing $150 million in private equity funding and using the proceeds to pay off the balance on its revolving credit facility. Importantly, Blockbuster has had no borrowings on its facility for the last two quarters. Leverage as measured by total adjusted debt to operating EBITDAR strengthened from 7.8x as of fiscal year 2005 to 6.7x as of LTM Sept. 30, 2006. Total debt to operating EBITDA also improved from 7x in fiscal year 2005 to 3.9x in LTM Sept. 30, 2006. Blockbuster's liquidity is improved and supported by cash balances of $255 million at third quarter end and availability of $293 million on its $500 million secured revolving credit facility, which matures 2011. The secured credit facility has a covenant package with amendments related to minimum EBITDA levels, restricted payments, and future fixed charge coverage and leverage tests. Blockbuster has been in compliance with its amended covenants. In addition, Fitch notes that Blockbuster must continue to generate strong operating EBITDA in the coming year in order to meet the fixed charge covenant of 1.35x for any four consecutive fiscal quarters ending after Dec. 31, 2007. Fitch expects Blockbuster to continue reducing its fixed cost base and meet this covenant. BLOCK COMMUNICATIONS: Weak Performance Cues S&P's CreditWatch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' corporate credit rating, 'BB-' bank loan rating, and 'B-' senior unsecured rating on Sylvania, Ohio-based Block Communications Inc. on CreditWatch with negative implications. The '1' recovery rating on the $190 million senior secured credit facility is affirmed. "The CreditWatch action is due to a continued decline in the performance of the company's newspaper publishing business segment, including costs related to the labor dispute with the newspaper labor union in Toledo," said Standard & Poor's credit analyst Naveen Sarma. At Sept. 30, 2006, Block had about $275 million in outstanding debt. While Block's two newspapers suffer from advertising weakness and subscriber erosion in their relatively stagnant local economies, high fixed labor costs are responsible for the segment's well- below-industry-average, low-single-digit historical EBITDA margin. The company reported consolidated year-to-date EBITDA of $32.3 million at the close of the third quarter of 2006, a decrease of $9.5 million from a year earlier. Cable segment EBITDA increased by $5.1 million in the same period, but was more than offset by a decline of $13.3 million in the newspaper publishing segment. While both newspaper publishing revenue and operating costs declined for this period, selling, general and administrative expenses rose 15.3%, largely due to increased employee benefit costs in addition to $3.2 million in onetime legal and labor negotiation expenses. As a result, debt to last-12-month EBITDA, before adjustments for unfunded pensions and other postemployment benefits, weakened to 5.8x in the third quarter, from 4.3x a year earlier. The labor contracts for Block's Toledo, Ohio-based newspaper expired in March 2006 and the labor contracts for the Pittsburgh, Pa.-based newspaper expire on Dec. 31, 2006. Negotiations to renew contracts at both papers are currently under way. In August, the company locked out several of its unions at its Toledo operations and brought in replacement workers. Management has indicated that a resolution of its labor contracts negotiations would need to include meaningful labor expense reductions. Management has also indicated that it would consider rationalizing its newspaper operations if its cost objectives were not achieved in the labor negotiations or, even with a successful resolution of the labor dispute, if continued weak advertising and circulation trends were to overwhelm any potential cost savings. Even if the labor disputes are settled in a manner favorable to the company, in resolving the CreditWatch action, the rating agency will evaluate the longer-term operating and financial prospects for the newspaper business segment and its ability to generate positive levels of net cash flow. BOMBARDIER INC: Prices New EUR1.9 Billion Issue of Senior Notes --------------------------------------------------------------- Bombardier Inc. priced a new EUR1.9 billion issue of Senior Notes. The offering, made principally in Europe and the United States, will consist of a EUR800 million aggregate principal amount of floating rate senior notes due 2013 based on EUROLIBOR +3.125%, a US$385 million (EUR300 million) aggregate principal amount of 8% Senior Notes due 2014 and a EUR800 million aggregate principal amount of 7.25% Senior Notes due 2016. This offering of Senior Notes is part of a refinancing plan to provide Bombardier with increased financial and operating flexibility. The refinancing plan also contemplates the entering into a new EUR4.3 billion-syndicated letter of credit facility, within a few weeks, to replace existing facilities prior to their maturity. The net proceeds of the offering of the Senior Notes will be used to repurchase all of the outstanding EUR500 million 6.125% Notes due 2007 issued in Europe by Bombardier Capital Funding LP and a principal amount to be determined of the EUR500 million 5.75% Notes due 2008 issued in Europe by Bombardier Inc., which will have been duly tendered pursuant to tender offers launched on Oct. 23, 2006. Each tender offer is made upon the terms and subject to the conditions (including the jurisdictional limitations) set out in the Invitation Memorandum dated Oct. 23, 2006 relating thereto. The proceeds of the offering will also be used to retire all of the outstanding US$220 million 7.09% Notes due 2007 issued by Bombardier Capital Inc. and to support the new syndicated letter of credit facility. "The purpose of our refinancing initiative is to take advantage of current favourable conditions in the debt capital markets and to extend Bombardier's debt maturity profile," said Francois Lemarchand, Senior Vice President and Treasurer, Bombardier Inc. "This transaction, one of the largest euro denominated corporate issue ever, was significantly oversubscribed which reflects the confidence of the European and U.S. capital markets in the Corporation's ability to execute its business plan." About Bombardier Headquartered in Valcourt, Quebec, Bombardier Inc. (TSX: BBD) -- http://www.bombardier.com/-- manufactures transportation solutions, from regional aircraft and business jets to rail transportation equipment. * * * As reported in the Troubled Company Reporter on Nov. 1, 2006, Dominion Bond Rating Service confirmed the ratings of Bombardier Inc. and Bombardier Capital Ltd. The Senior Unsecured Debentures of both Bombardier Inc. and Bombardier Capital Ltd. are confirmed at BB, and Preferred Shares of Bombardier Inc. at Pfd-4. All trends are Negative. As reported in the Troubled Company Reporter on Oct. 31, 2006, Fitch Ratings has downgraded the debt and Issuer Default Ratings for both Bombardier Inc. The Company's issuer default rating was downgraded from BB to BB-. Other rating actions include, Senior unsecured debt revised to 'BB-' from 'BB'; Credit facilities revised to 'BB-' from 'BB' and Preferred stock revised to 'B' from 'B+'. The Rating Outlook is Stable. As reported in the Troubled Company Reporter on Oct. 31, 2006, Standard & Poor's Ratings Services affirmed its 'BB' long-term corporate credit rating on Bombardier. At the same time, Standard & Poor's assigned its 'BB' issue rating to Bombardier's proposed issuance of up to EUR1.8 billion seven-to-ten-year multi-tranche senior unsecured notes. Moody's Investors Service also assigned its Ba2 rating to Bombardier Incorporated's proposed EUR1.8 billion in new senior unsecured notes and affirms all current ratings. BROOK MAYS: Asks Court to Extend Cash Collateral Use Until Feb. 15 ------------------------------------------------------------------ Brook Mays Music Company asks permission from the U.S. Bankruptcy Court for the Northern District of Texas for continued use of the cash collateral securing repayment of its obligations to a group of lenders with J.P. Morgan Chase Banks, N.A., as administrative agent. Submitted court documents did not disclose reasons for the extended use of the funds. The Debtor wants to access the Cash Collateral from Dec. 1, 2006, through Feb. 15, 2007, in accordance with a 13-week budget, a full-text copy of which is available for free at: http://researcharchives.com/t/s?155e The Court, in a Sept. 8, 2006 final order, allowed the Debtor to access up to $12,645,000 of the Cash Collateral. The Debtor's authority to use the Cash Collateral will expire on Nov. 30, 2006. The Court will convene a hearing on Nov. 29, 2006, at 1:30 p.m., to consider the Debtor's request. Objections to the Cash Collateral Motion are due by Nov. 28, 2006. Headquartered in Dallas, Texas, Brook Mays Music Company -- http://www.brookmays.com/-- is a full-line musical instrument retailer in the U.S. It offers a broad range of educational services, complete instrument repair and overhaul facilities and operates a rental program for musical instruments. The Company filed for chapter 11 protection on July 11, 2006 (Bankr. N.D. Tex. Case No. 06-32816). Marcus Alan Helt, Esq., and Michael S. Haynes, Esq., at Gardere Wynne Sewell LLP, represent the Debtor. The Recovery Group, Inc., serves as the Debtor's financial advisor while Houlihan Lokey Howard and Zukin Capital, Inc., acts as restructuring advisor. Kurtzman Carson Consultants LLC is the Debtor's notice, claims and balloting agent. Joseph A. Friedman, Esq., at Kane, Russell, Coleman & Logan, represents the Official Committee of Unsecured Creditors. When it filed for bankruptcy, the Debtor estimated its assets at $10 million to $50 million and its debts at $50 million to $100 million. BUILDING MATERIALS: Earns $17.1 Million in Quarter Ended October 1 ------------------------------------------------------------------ Building Materials Corporation of America disclosed third quarter 2006 net income of $17.1 million compared to net income of $21 million in the third quarter of 2005. The decrease in third quarter 2006 net income was primarily attributable to lower income before interest expense and income taxes and slightly higher interest expense. Income before interest expense and income taxes in the third quarter of 2006 was $43.3 million compared to $48.9 million in the third quarter of 2005. Income before interest expense and income taxes in the third quarter of 2006 was positively affected by increased net sales of both residential and commercial roofing products, which was more than offset by higher raw material costs, including asphalt, and higher selling, general and administrative expenses mostly due to higher distribution costs, primarily resulting from a rise in fuel prices. Interest expense for the third quarter of 2006 increased to $15.8 million from $15.0 million for the third quarter of 2005 primarily due to higher average borrowings and a higher average interest rate. Net sales for the third quarter of 2006 reached $530.3 million, a 6.9% increase over third quarter of 2005 net sales of $496.3 million, with the increase due to higher net sales of both residential and commercial roofing products. The increase in net sales of residential roofing products primarily resulted from higher average selling prices, partially offset by lower unit volumes, while the increase in net sales of commercial roofing products was driven by higher unit volumes and higher average selling prices. For the first nine months of 2006, BMCA reported net income of $47.6 million compared to net income of $52.4 million for the first nine months of 2005. The decrease in the net income for the first nine months of 2006 was primarily attributable to lower income before interest expense and income taxes, partially offset by lower interest expense. Income before interest expense and income taxes for the first nine months of 2006 was $123.2 million compared to $132.0 million for the first nine months of 2005. Income before interest expense and income taxes for the first nine months of 2006 was positively affected by increased net sales of both residential and commercial roofing products and a decline in other expense, net, which was more than offset by higher raw material costs, including asphalt, higher energy costs and higher selling, general and administrative expenses mostly due to higher distribution costs, primarily resulting from a rise in fuel prices. Interest expense for the first nine months of 2006 decreased to $46.4 million from $47.5 million for the first nine months of 2005, primarily due to lower average borrowings. Net sales for the first nine months of 2006 reached $1,571.2 million, a 6.7% increase over the first nine months of 2005 net sales of $1,472.8 million, with the increase due to higher net sales of both residential and commercial roofing products. The increase in net sales of residential roofing products primarily resulted from higher average selling prices, and the increase in net sales of commercial roofing products was driven by higher average selling prices and higher unit volumes. Credit Facility On Sept. 28, 2006, the Company entered into an Amended and Restated $450 million Senior Secured Revolving Credit Facility, replacing its $350 million Senior Secured Revolving Credit Facility, which was set to expire in November 2006. The Amended and Restated $450 million Senior Secured Revolving Credit Facility has a final maturity date of Sept. 28, 2011. The Company filed a Form 8-K with the Securities and Exchange Commission on Oct. 4, 2006, announcing the Amended and Restated $450 million Senior Secured Revolving Credit Facility. At Oct. 1, 2006, cash and cash equivalents amounting to $6.1 million were on hand, and long-term debt including current maturities was $702.2 million, which amount includes $168.0 million outstanding under the Company's $450 million Senior Secured Revolving Credit Facility. About Building Materials Based in Wayne, New Jersey, Building Materials Corporation of America -- http://www.gaf.com/-- which operates under the name of GAF Materials Corporation, is an indirect subsidiary of G-I Holdings Inc. With annual sales in 2005 approximating $2.0 billion, BMCA manufactures residential and commercial roofing products and specialty building products. * * * As reported in the Troubled Company Reporter on Oct. 20, 2006, Standard & Poor's Rating Services affirmed its 'BB' corporate credit rating on San Francisco, California-based Building Materials Holding Corp. At the same time, Standard & Poor's assigned its 'BB' bank loan rating and '2' recovery rating to BMHC's proposed $500 million revolving credit facility due 2011 and $350 million term loan B due 2013, based on preliminary terms and conditions. The recovery rating indicates expectations for substantial recovery of principal in the event of a payment default. CABLEVISION SYSTEMS: Posts $59.1 Million Net Loss in Third Quarter ------------------------------------------------------------------ Cablevision Systems Corporation incurred a $59.1 million net loss on $1.4 billion of net revenues for the three months ended Sept. 30, 2006, compared to a $62.9 million net loss on $1.2 billion of net revenues for the same period in 2005. At Sept. 30, 2006, the Company's balance sheet showed $9.7 billion in total assets and $15.2 billion in total liabilities, resulting in a $5.4 billion stockholders' deficit. The Company's Sept. 30 balance sheet also showed strained liquidity with $1.6 billion in total current assets available to pay $2 billion in total current liabilities. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?1565 Headquartered in Bethpage, New York, Cablevision Systems Corporation, is a domestic cable multiple system operator serving more than 3 million subscribers in and around the metropolitan New York area. Rainbow National Services LLC, headquartered in Jericho, New York, supplies television programming to cable television and direct broadcast service providers throughout the United States. * * * As reported in the Troubled Company Reporter on Oct 11, 2006 Moody's Investors Service placed all ratings for Cablevision Systems Corporation, CSC Holdings, Inc., a wholly owned subsidiary of CVC, and Rainbow National Services LLC on review for downgrade following the Dolan family's announcement of a proposal to acquire Cablevision. The ratings on Cablevision Systems Corporation that are under review are: Corporate Family Rating, Placed on Review for Possible Downgrade, currently B1; Probability of Default Rating, Placed on Review for Possible Downgrade, currently B1; and Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently B3,LGD6, 93%. CALPINE CORP: Court Approves Miller Buckfire as Sale Advisor ------------------------------------------------------------ The Hon. Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York authorized Calpine Corp. and its debtor-affiliates to employ Miller Buckfire & Co., LLC, as their financial advisors and investment bankers, with respect of the sale of Power Systems Mfg., LLC, and the Specified Assets. Judge Lifland ruled that Miller Buckfire is not required to act as investment banker to the Debtors in respect of the Sale of any Specified Asset for which Miller Buckfire is not entitled to a Specified Asset Sale Fee. Judge Lifland authorized the Debtors to pay to Miller Buckfire: -- a $14,000,000 Completion Fee; -- a 2% Transaction Fee if a sale and consummation of a sale of PSM happens during its term of engagement, provided that the Transaction Fee will not exceed $2,000,000; and -- a minimum fee of $750,000 for the sale of each Specified Asset. If any Specified Assets are sold as a group, then the percentage used to calculate the Specified Asset Sale Fee will be determined based on the Aggregate Consideration of all Specified Assets included in the grouping. Judge Lifland further ruled that 50% of the first $10,000,000 of Specified Asset Sale Fees paid to Miller Buckfire will be credited against the Completion Fee; and 75% of all Specified Asset Sale Fees paid to Miller Buckfire in excess of $10,000,000 will be credited against the Completion Fee. As reported in the Troubled Company Reporter on Oct. 4, 2006, the Debtors asked the Court for authority to expand Miller Buckfire & Co., LLC's responsibilities to include: (a) identifying potential purchasers for certain assets, companies or businesses; (b) assisting with due diligence for potential purchasers, including setting up and managing online data rooms, and facilitating management meetings; (c) evaluating indications of interest and analyzing economic and other provisions of bids received from potential purchasers; (d) negotiating definitive asset purchase agreements; (e) assisting the Debtors and their counsel in executing auctions, as necessary, pursuant to Section 363 of the Bankruptcy Code; and (f) assisting with raising, structuring and negotiating stapled financing products, as needed. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, assured the Court that Miller Buckfire is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not hold or represent any interest adverse to the Debtors' estates. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company previously produced a portion of its fuel consumption requirements from its own natural gas reserves. However, in July 2005, the company sold substantially all of its remaining domestic oil and gas assets to Rosetta Resources Inc. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CALPINE CORP: Wants to Refinance Blue Spruce Loan with Beal Bank ---------------------------------------------------------------- Calpine Corp. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to take all actions necessary to effectuate a Refinancing Transaction of Blue Spruce LLc's term loan with Beal Bank by CoBank and GMAC Commercial Finance. The Debtors also seek the Court's authority to: (a) use non-debtor funds not exceeding $250,000 at Blue Spruce LLC to pay certain of the Lenders' prepetition claims for the payment of advisory expenses against the Debtors relating to the Refinancing Transaction; (b) assume the Operating and Maintenance Agreement Agreement; (c) consent to the collateral assignment of the O&M Agreement by Blue Spruce LLC to the Lenders; and (d) agree to a mutual termination of a power purchase agreement with Debtor Calpine Energy Services, Inc. Blue Spruce Energy, LLC, a non-debtor, wholly owned subsidiary of Calpine Corporation, owns and operates a 285-megawatt, natural gas-fired power plant located in Aurora, Colorado. The Blue Spruce Plant has been operational since June 2003, David R. Seligman, Esq., at Kirkland & Ellis LLP, in New York, relates. The operation and maintenance of the Bruce Spruce Plant is governed by an Operating and Maintenance Agreement, dated Aug. 22, 2002, between Blue Spruce LLC and Debtor Calpine Operating Services Company, Inc. The Plant's output is 100% contracted under a power purchase agreement with Public Service Company of Colorado that will continue until April 2013. As security for Blue Spruce's obligations under the PSCC PPA, Public Service Company is the beneficiary of a $14 million letter of credit collateralized with Calpine's corporate funds. In addition, Public Service Company is the beneficiary of a $19.6 million Calpine guarantee of Blue Spruce's obligations under the PSCC PPA. After the expiration of the PPA or if PSCC is unable to comply with the PPA, the Plant's output will be contracted under a power purchase agreement with Debtor Calpine Energy Services, Inc., dated Nov. 1, 2003. Currently, Blue Spruce LLC has approximately $60.5 million outstanding under an amortizing term loan with Beal Bank, maturing in 2018. Blue Spruce LLC's assets serve as the only source of security for the Beal Loan. The Refinancing Transaction In an effort to increase the Plant's long-term profitability, Blue Spruce LLC sought to, among other things, refinance the Beal Loan. After several months of arm's-length negotiations, CoBank and GMAC Commercial Finance have proposed a refinancing of the existing Beal Loan with a credit facility of up to $101.6 million, which will be secured solely by Blue Spruce LLC's assets. The Refinancing Transaction includes, among other things: (a) an amortizing loan of up to $68 million, which includes all transaction costs and prepayment penalties of the existing Beal Loan; (b) a $14 million letter of credit required under the PSCC PPA; and (c) a standby letter of credit facility of $19.6 million to backstop Calpine's guarantee of Blue Spruce LLC's obligations under the PSCC PPA. The Debtors and Blue Spruce LLC will recognize significant benefits from the Refinancing Transaction, Mr. Seligman asserts. "Not only does the Refinancing Transaction immediately generate significant interest savings, it results in the return of $14 million of cash to Calpine that currently collateralizes the letter of credit posted in favor of the PSCC." "Moreover, the Refinancing Transaction does not require any cash infusions from the Debtors," Mr. Seligman emphasizes. Furthermore, Mr. Seligman says, the principal outstanding under the term loan at maturity in April 2013 will be approximately $16 million less than it would have been under the Beal Loan, which negates significant refinancing risks associated with a merchant environment. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company previously produced a portion of its fuel consumption requirements from its own natural gas reserves. However, in July 2005, the company sold substantially all of its remaining domestic oil and gas assets to Rosetta Resources Inc. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CANADA MORTGAGE: Moody's Rates $2-Mil. Class F Certificates at B2 ----------------------------------------------------------------- Moody's Investors Service assigned provisional ratings, as described below, to the Mortgage Pass-Through Certificates, Series 2006-C5. These are the rating actions: * CMAC Mortgage Pass-Through Certificates, Series 2006-C5 -- Class A-1 Certificates, (P)Aaa -- Class A-2 Certificates, (P)Aaa -- Floating Rate Initial Class VFC Certificates, (P)Aaa -- $18,700,000 Class B Certificates, (P)Aa2 -- $14,025,000 Class C Certificates, (P)A2 -- $9,610,000 Class D Certificates, (P)Baa2 -- $5,454,000 Class E Certificates, (P)Ba2 -- $2,077,000 Class F Certificates, (P)B2 -- Floating Rate Class IO-P, (P)Aaa -- $519,470,295* Floating Rate Class IO-C, (P)Aaa *Initial notional amount The ratings on the Certificates are based on the quality of the underlying collateral -- a pool of residential mortgage loans secured by residential properties located in Canada; the credit enhancement furnished by the subordinate tranches and on the structural and legal integrity of the transaction. The transaction uses a "bullet" structure that permits the payment of principal to Class A-1 and A-2 certificate holders on specified targeted final payment dates. On the closing date, the Issuer will issue, in addition to the two Class A certificates, an initial variable funding certificate. The VFC, which will be sold into an asset-backed commercial paper conduit, is used to make principal payments on the targeted final payment dates, and absorb prepayments on the underlying mortgage loans. All available principal amounts will be allocated to the VFC until the targeted final distribution date of each successive Class A certificate. If the VFC is paid down before the targeted final distribution date of the Class A certificates, then principal is accumulated in a principal accumulation account. At the specified targeted final distribution date for each of the Class A-1 and Class A-2 certificates, CMAC will use reasonable efforts to issue additional VFC's, the proceeds of which will be used to repay the related Class A certificates. On closing, a swap will be put in place with the Toronto-Dominion Bank as counterparty to offset the interest rate mismatch between the floating rate on the VFC and the fixed interest rates on the mortgage loans in the collateral pool. Concurrently, a swap will also be put in place to mitigate any risk of negative carry on cash, if any, accumulating in the principal accumulation account for the Class A Certificates. The Mortgage Pool, as of Nov. 1, 2006, consists of 2,743 fixed rate mortgage loans that amounted to an aggregate balance of $519,470,296. Each mortgage loan constitutes a first lien on a one to four family residential property located in Canada and are partially-amortizing, first mortgage loans with original terms to maturity ranging from 14 to 64 months in length. The credit quality of the Mortgage Pool, overall, is weaker than the previous CMAC pool (2006-C5) primarily because this pool does not contain any 'A' or conforming mortgages, which is reflected by the increased credit enhancement for the Class A and Class VFC Certificates. The previous pool had a 26.6% portion that was either insured or was below 75% LTV. The pool also contains a much higher portion of the ideclareT product, a product that provides mortgages to debtors that have not provided full documentation of income sources. Approximately 69.4% of this pool consists of ideclareT mortgages, whereas the previous transaction had 43.2% of this product type. This pool also has a lower concentration of iresolveT products this time around, as only 1.8% of the pool consists of this type of product. The profile of the iresolveT borrowers is riskier than those of the other loan products. The i95/i107T portion of this pool is also lower in this deal relative to the previous transaction. This loan product offers mortgages with higher leverage points than other product groups in the GMAC offering group. These high leverage loans comprise approximately 6.4% of the total deal pool, compared to 9.7% in the previous transaction. Therefore, while the absence of any isecure products in this pool weakens the overall credit quality of this pool, the other product types provide for slightly stronger pool characteristics than the CMAC transactions brought to the market prior to 2006. The characteristics of the various subpools have remained relatively consistent with previous transactions. The overall leverage is slightly lower, at 83.1% for this transaction as compared to 85.2% last time. GMAC Residential Funding of Canada is a wholly-owned subsidiary of Residential Funding Company LLC, which is in turn a wholly-owned subsidiary of Residential Capital, LLC. Residential Capital, LLC is an indirect wholly-owned subsidiary of General Motors Acceptance Corporation (Ba1 - under review for possible downgrade). As of Sept. 30, 2006, RFC was responsible for servicing residential mortgage loans in the U.S. totaling approximately US$161 billion. While RFOC is ultimately responsible for servicing, it will rely on the services of MCAP Service Corporation as Sub-Servicer to service the Mortgage Loans. As of Dec. 31, 2005, MCAP was responsible for servicing residential mortgage assets for various customers, including RFOC, with an aggregate outstanding principal balance of approximately $18.6 billion. CARRAWAY METHODIST: Administrator Appoints Seven-Member Committee ----------------------------------------------------------------- J. Thomas Corbett, Esq., Chief Deputy Bankruptcy Administrator for the U.S. Bankruptcy Court for the Northern District of Alabama, Southern Division, appointed seven creditors to serve on an Official Committee of Unsecured Creditors in Carraway Methodist Health Systems and its debtor-affiliates' chapter 11 cases: 1. Bio-Medical Applications of Alabama, Inc. Attn: Alan D. Halperin, Esq. 555 Madison Ave., 9th Floor New York, NY 10022 Tel: (212) 765-9100 2. The Board of Trustees of the University of Alabama for University of Alabama Hospital Attn: Mary Beth Briscoe Health System Corporate Office 500 22nd Street South, (35233) 1530 3rd Avenue South, JNWB (408) Birmingham, AL 35294-0500 Tel: (205) 934-2620 3. Medline Ind Inc. Attn: Hank Haegerich One Medline Place Mundelein, IL 60060 Tel: (847) 949-2427 4. Church and Stagg Office Supply Co. Inc. Attn: Larry Church 3421 6th Avenue South Birmingham, AL 35222 Tel: (205) 251-2951 5. Musculoskeletal Transplant Foundation Attn: Richard Ciaccio 125 May Street Edison, NJ 08837 Tel: (732) 661-2191 6. Medtronic USA Inc. Attn: Doug Ernst 3850 Victoria Street MSV215 Shoreview, MN 55126 Tel: (763) 514-0420 7. Sodexho Attn: Teri Gigliano Mock 1850 Parkway Place, Suite 500 Atlanta, GA 30067 Tel: (770) 331-0593 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Based in Birmingham, Alabama, Carraway Methodist Health Systems, dba Carraway Methodist Medical Center -- http://www.carraway.org/ -- is a teaching hospital, referral center and acute care hospital that serves Birmingham and north central Alabama. The Company and its affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bankr. N.D. Ala. Case No. 06-03501). Christopher L. Hawkins, Esq., Helen D. Ball, Esq., and Patrick Darby, Esq., at Bradley Arant Rose & White LLP, represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets between $10 million and $50 million and estimated debts of more that $100 million. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 16, 2007. CARRAWAY METHODIST: Court OKs Greenberg Traurig as Panel's Counsel ------------------------------------------------------------------ The Honorable Tamara O. Mitchell of the U.S Bankruptcy Court for the Northern District of Alabama has authorized the Official Committee of Unsecured Creditors appointed in Carraway Methodist Health Systems and its debtor-affiliates' chapter 11 cases to retain Greenberg Traurig LLP as its bankruptcy counsel, nunc pro tunc to Oct. 4, 2006. Greenberg Traurig will: a. give legal advice with respect to the Committee's duties and powers in the Debtors' cases; b. assist the Committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' businesses, investigation of claims and causes of action and any other matter relevant to the Debtors' cases; c. participate in the formulation of a plan of reorganization, if necessary; and d. perform any other legal services as may be required and in the interest of the Committee. James R. Sacca, Esq., a partner at Greenberg Traurig LLP, disclosed that the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $400 - $500 Associates $225 - $290 Paralegals $165 - $185 Mr. Sacca will bill at $470 per hour. David B. Kurzweil, Esq., a partner will also bill at $470 per hour. John Elrod, Esq., an associate, will bill at $245 per hour. Mr. Sacca assured the Court that Greenberg Traurig LLP is disinterested pursuant to Section 101(14) of the Bankruptcy Court. Based in Birmingham, Alabama, Carraway Methodist Health Systems, dba Carraway Methodist Medical Center -- http://www.carraway.org/ -- is a major teaching hospital, referral center and acute care hospital that serves Birmingham and north central Alabama. The Company and its affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bankr. N.D. Ala. Case No. 06-03501). Christopher L. Hawkins, Esq., Helen D. Ball, Esq., and Patrick Darby, Esq., at Bradley Arant Rose & White LLP, represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets between $10 million and $50 million and estimated debts of more that $100 million. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 16, 2007. CITIGROUP COMMERCIAL: Fitch Rates Three Cert Classes at Low-Bs -------------------------------------------------------------- Fitch rates Citigroup Commercial Mortgage Trust, Series 2006-FL2, commercial mortgage pass-through certificates as: -- $711,655,000 Class A-1 'AAA'; -- $237,218,000 Class A-2 'AAA'; -- $1,193,552,082 Class X-1 'AAA'; -- $0 Class X-2 'AAA'; -- $1,193,552,082 Class X-3 'AAA'; -- $17,904,000 Class B 'AA+'; -- $20,887,000 Class C 'AA+'; -- $38,790,000 Class D 'AA'; -- $26,855,000 Class E 'AA-'; -- $26,855,000 Class F 'A+'; -- $23,871,000 Class G 'A'; -- $20,887,000 Class H 'A-'. -- $22,379,000 Class J 'BBB+'; -- $22,380,000 Class K 'BBB'; -- $23,871,082 Class L 'BBB-'. These classes are rated by Fitch and are nonpooled components of the related trust assets. -- $978,603 Class CAC-1 'BBB+'; -- $670,418 Class CAC-2 'BBB'; -- $779,549 Class CAC-3 'BBB-'; -- $2,564,349 Class CAN-1 'BBB+'; -- $3,802,021 Class CAN-2 'BBB'; -- $7,455,660 Class CAN-3 'BBB-'; -- $10,600,000 Class CNP-1 'BBB-'. -- $20,117,692 Class CNP-2 'BBB-'; -- $5,182,308 Class CNP-3 'BB+'; -- $1,000,000 Class DSG-1 'BBB-'; -- $1,200,000 Class HFL 'BBB-'; -- $4,000,000 Class HGI-1 'BBB'; -- $8,500,000 Class HGI-2 'BBB-'. -- $2,800,000 Class HMP-1 'BBB'. -- $3,300,000 Class HMP-2 'BBB-'; -- $2,700,000 Class HMP-3 'BBB-'; -- $6,971,100 Class MVP 'BBB-'; -- $2,000,000 Class RAM-1 'BBB-'; -- $2,400,000 Class RAM-2 'BB+'; -- $6,000,000 Class WBD-1 'BBB-'; -- $4,000,000 Class WBD-2 'BB+'. All classes are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 16 floating rate loans having an aggregate principal balance of approximately $1,318,173,786, as of the cutoff date. CLEARWATER FUNDING: Fitch Cuts Rating on $31.5-Mil. Notes to BB- ---------------------------------------------------------------- Fitch downgrades one class and affirms three classes of notes issued by Clearwater Funding CBO 98-A LLC. These rating actions are effective immediately: -- $89,056,037 class A-1, Series A notes affirmed at 'AAA'; -- $28,361,795 class A-1, Series B notes affirmed at 'AAA'; -- $10,936 class A-2 accreted notes affirmed at 'AAA'; -- $31,500,000 class B notes downgraded to 'BB-' from 'BBB-'. Clearwater 98-A is a collateralized debt obligation (CDO) that closed July 24, 1998 and is managed by Tiber Asset Management, LLC. Clearwater 98-A is composed of fixed-rate emerging market corporate and sovereign bonds as well as fixed-rate non-emerging market high-grade and high-yield corporate bonds. The reinvestment period ended in August 2002. As part of this review, Fitch discussed the current state of the portfolio with the asset manager and its portfolio management strategy going forward. In addition, Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the minimum cumulative default rates required for the rated liabilities. The affirmations of the class A-1 and A-2 notes are the result of deleveraging in the structure. To date, the class A-1 notes have received approximately 43% of their original balance from normal amortization and coverage test failures. The amount of class A-2 accreting notes outstanding has decreased by over 99% due to coverage test failures as well. The class A and A/B overcollateralization tests increased due to the reduction in the liabilities and are now both in compliance. The downgrade of the class B notes is the result of decreased credit enhancement and reduced excess spread in the transaction. Credit enhancement has decreased despite the OC tests improving because the OC tests include interest proceeds in their calculation. Comparing just collateral and principal cash versus outstanding liabilities shows that there is less credit enhancement than at last review. Since the last rating action on February 16, 2005, one asset with a par value of $4 million defaulted. The weighted average coupon has decreased to 8.06% from 8.12% and continues to fail its covenant of 8.15%. The rating of the class A-1 notes addresses the likelihood that investors will receive full and timely payments of interest, as well as the stated balance of principal by the legal final maturity date. The rating of the class B notes addresses the likelihood that investors will receive ultimate and compensating interest payments, as well as the stated balance of principal by the legal final maturity date. The rating of the class A-2 accreted notes addresses the likelihood that investors will receive the accreted investment amount by the legal final maturity. Fitch will continue to monitor and review this transaction for future rating adjustments. COMPANHIA SIDERURGICA: Wheeling Shareholders Reject Firm's Offer ---------------------------------------------------------------- Shareholders of Wheeling-Pittsburgh Corp. have rejected Companhia Siderurgica Nacional's proposal to merge its North American assets with the former, the Associated Press reports. AP relates that the shareholders preferred Esmark Inc.'s proposal and have ousted its board of directors on Nov. 17. Shareholders had a choice of supporting the incumbent board -- which favored a merger offer from Companhia Siderurgica -- or Esmark's slate of directors, which will now assume control and combine the companies. James G. Bradley, chairperson and chief executive officer of Esmark, told AP, "Based on preliminary figures available, we expect the Esmark slate will be certified as the new board." According to AP, Esmark had claimed victory over Companhia Siderurgica. James Bouchard, Esmark chief executive officer, told AP that h is ready to move into the Wheeling-Pittsburgh headquarters within weeks. He said he is eager to start rebuilding the firm with the help of the United Steelworkers Union. AP underscores that the United Steelworkers had been against Wheeling-Pittsburgh's merger with Companhia Siderurgica. Its contract at Wheeling-Pittsburgh lasts until September 2008. Esmark is already considering the purchase of a beleaguered mill to the north. The mill is the former Weirton Steel Corp. and it could become Esmark's 12th acquisition in three years. Mr. Bouchard said that he and his brother Craig -- who is the president of Chicago Heights, Illinois-based Esmark -- have toured the Weirton operations, which is owned by Mittal Steel Co., AP notes. Mr. Bouchard told AP, "If Mittal elects to sell Weirton, Esmark stands ready to make a cash offer." According to the report, Mittal Steel may have to sell one of its US assets -- either Weirton or its much larger mill in Sparrows Point -- to settle antitrust issues over its proposed acquisition of Arcelor SA. The report says that Mittal Steel has not made a final decision. However, the firm previously disclosed that its first choice would be Weirton. Weirton workers have already suggested ideas like the restart of some equipment and the launch of a new paint line and cold mill, AP states, citing John Goodwin, who will become chief executive officer of the combined Esmark-Wheeling. Mr. Bouchard told AP, "There's a lot of healing that needs to be done inside the company. It's time for us to sit down and work together." An independent inspector still has to certify the results, AP says, citing Mr. Bradley. About Wheeling-Pittsburgh Wheeling-Pittsburgh operates solely in the United States, producing hot rolled, cold rolled, galvanized, pre-painted and tin mill sheet products. About Companhia Siderurgica Companhia Siderurgica Nacional is one of the lowest-cost steel producers in the world, which is a result of its access to proprietary, high-quality iron ore (at the Casa de Pedra mine); self-sufficiency in energy; streamlined facilities; and logistics advantages. This is in addition to the group's strong market position in the fairly concentrated steel industry in Brazil. * * * Standard & Poor's Ratings Services affirmed on Aug. 4, 2006, its 'BB' long-term corporate credit rating on Brazil-based steel maker Companhia Siderurgica Nacional after the announcement of its association with US-based steel maker Wheeling-Pittsburgh Corp. in the US. S&P said the outlook is stable. Fitch Ratings viewed the proposed merger of Companhia Siderurgica Nacional's or CSN North American operations with those of Wheeling-Pittsburgh Corporation or WPSC to be neutral to CSN's credit quality. Fitch's ratings of CSN include 'BB+' foreign currency issuer default rating, and 'BB+' senior unsecured notes rating. COMPLETE PRODUCTION: S&P Rates Proposed $600MM Sr. Notes at 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' rating to oilfield services company Complete Production Service's proposed $600 million unsecured senior notes due 2016. The corporate credit rating on Complete is 'B+'. The outlook is stable. On Nov. 14, 2006, the company disclosed plans to commence a private placement of the $600 million unsecured senior notes. The proceeds will be used to retire $416 million outstanding under Term Loan B, $30 million of term loans assumed in connection due to the Pumpco Services Inc. acquisition, and to repay part of the revolving credit facility. Houston, Texas-based Complete will have about $737 million of debt on a pro forma basis after the transaction. The pro forma debt to EBITDA ratio is expected to be 1.9x. The ratings on Complete reflect the company's weak business position as an oilfield services provider, with an aggressive growth strategy in the cyclical, capital-intensive, and highly competitive oilfield services industry. Slightly mitigating these weaknesses are the company's adequate, near-term liquidity for meeting capital spending and diversified product lines in the currently favorable well-servicing environment. Nevertheless, financial performance is exposed to the overall cyclicality of the oil and gas industry. "The stable outlook reflects the expectation that the company will continue to benefit from favorable, near-term market conditions strengthening through early 2007, continue its acquisitive growth strategy, and maintain adequate liquidity," noted Standard & Poor's credit analyst Aniki Saha-Yannopoulos. A cyclical downturn and/or an aggressive debt-financed acquisition resulting in the deterioration of the company's financial profile and liquidity could warrant lower ratings. "However, a meaningful, sustained improvement in credit metrics could lead to a rating upgrade, or positive outlook over the intermediate term," she continued. CONTINENTAL AIRLINES: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its Probability-of-Default and Loss-Given-Default rating methodology for the Transportation sector, the rating agency held its B3 Corporate Family Rating for Continental Airlines Inc, Calair LLC, and Continental Airlines Finance Trust II. In addition, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these debentures: Issuer: Continental Airlines Inc. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 5.0% Convertible Senior Notes Due June 15, 2023 Caa2 Caa1 LGD5 74% 4.5% Convertible Notes Due Feb. 1, 2007 Caa2 Caa1 LGD5 74% IRB's Caa2 Caa1 LGD5 74% Issuer: Calair LLC Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 8.125% Guaranteed Senior Notes Due July 1, 2008 Caa2 Caa1 LGD5 74% Issuer: Continental Airlines Finance Trust II Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 6% Guaranteed Convertible Preferred Securities Due Nov. 15, 2030 C Caa2 LGD6 93% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). 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. COPELANDS' ENT: Assigns Leasehold Rights to Sports Authority ------------------------------------------------------------ Copelands' Enterprises, Inc. assigned the leasehold interests in eight former Copeland Sports retail store locations to a subsidiary of The Sports Authority, Inc. The transaction, which was approved by the bankruptcy court, is expected to be followed by the assignment of leasehold rights in additional sites within the next several weeks. The Company expects that the sites will be remodeled and rebranded under The Sports Authority name for reopening in Spring 2007. The Company believes that The Sports Authority plans to retain many of the current employees working at the Copeland Sports retail stores that it has assumed. On Nov. 1, 2006, the Company entered into a purchase agreement with a joint venture composed of a subsidiary of The Sports Authority, Inc., Hilco Real Estate, LLC and Hilco Merchant Resources, LLC for certain of the Copeland Sports assets. Hilco Real Estate, which has acquired certain lease designation rights, is expected to acquire or remarket the Copeland Sports remaining leases. Together with The Sports Authority, Hilco Merchant Resources and Hilco Real Estate collectively structured, financed and facilitated the strategic transaction, and will also manage the disposition of unwanted assets. About Sports Authority Headquartered in Englewood, Colorado, The Sports Authority, Inc., operates approximately 400 stores in 45 states under "The Sports Authority" name. The Sports Authority, Inc.'s e-tailing website, located at thesportsauthority.com is operated by GSI Commerce, Inc. under license and e-commerce agreements. About Hilco Real Estate Hilco Real Estate, LLC is headquartered in Northbrook, Illinois. It provides real estate disposition, lease negotiation, real estate appraisal and property disposition services. About Hilco Merchant Resources Hilco Merchant Resources -- http://www.hilcomerchantresources.com/ -- provides high yield strategic retail inventory disposition and store closing services. Over the years, Hilco principals have disposed of assets valued in excess of $35 billion. Hilco Merchant Resources and Hilco Real Estate are part of the Hilco Organization, a provider of asset valuation, acquisition, disposition and financial services to an international marketplace through 19 specialized business units, 400 employees and nearly 200 qualified field consultants. About Copelands' Enterprises Based in San Luis Obispo, California, Copelands' Enterprises Inc. dba Copelands' Sports -- http://www.copelandsports.com/-- operates specialty sporting goods stores. The Company filed for chapter 11 protection on Aug. 14, 2006 (Bankr. D. Del. Case No. 06-10853). Laura Davis Jones, Esq., Marc A. Berlinson, Esq., and Ira A. Kharasch, Esq., at Pachulski, Stang, Ziehl, Young, Jones, & Weintraub LLP, in Los Angeles, California, represent the Debtor. Clear Thinking Group serves as the Debtor's financial advisor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $50 million and $100 million COVENTRY HEALTH: Earns $147.5 Million in 2006 Third Quarter ----------------------------------------------------------- Coventry Health Care Inc. disclosed its third quarter financial statements for the three months ended Sept. 30, 2006, to the Securities and Exchange Commission. For the three months ended Sept. 30, 2006, the Company earned $147.5 million of net income on $1.9 billion of net revenues compared to $133 million of net income on $1.6 million of net revenues for the same period in 2005. The Company's cash and investments, consisting of cash and cash equivalents and short-term and long-term investments, but excluding deposits of $54.8 million restricted under state regulations, increased $446.9 million to $2.5 billion at Sept. 30, 2006 from $2.0 billion at Dec. 31, 2005. In 2007, the Company expects a relatively modest 1% increase in its commercial risk membership and growth in its Health Plan based non-risk membership of approximately 5%. In addition, the Company expects its Medicare HMO membership to grow in the range of 5% to 10% and its Medicaid membership to grow in the range of 3% to 5%. For its Part D business, the Company expects overall membership to be consistent with or slightly favorable to 2006 results. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?1569 About Coventry Based in Bethesda, Maryland, Coventry Health Care, Inc. (NYSE: CVH) -- http://www.cvty.com/-- is a national managed health care company operating health plans, insurance companies, network rental/managed care and workers' compensation services companies. Coventry provides a full range of risk and fee-based managed care products and services, including HMO, PPO, POS, Medicare Advantage, Medicare Prescription Drug Plans, Medicaid, Workers' Compensation services and Network Rental to a broad cross section of individuals, employer and government-funded groups, government agencies, and other insurance carriers and administrators in all 50 states as well as the District of Columbia and Puerto Rico. * * * As reported in the Troubled Company Reporter on Oct. 10, 2006, Moody's Investors Service affirmed Coventry Health Care, Inc.'s senior unsecured debt and corporate family ratings at Ba1 and changed the outlook to positive from stable. CREDIT SUISSE: Fitch Holds Low-B Ratings on 3 Certificate Classes ----------------------------------------------------------------- Fitch Ratings upgrades these Credit Suisse First Boston commercial mortgage pass-through certificates, series 2001-CF2: -- $16.4 million class E to 'AAA' from 'AA'; -- $18.9 million class F to 'AA-' from 'A'; -- $14 million class G to 'A' from 'A-'; and -- $16.4 million class H to 'BBB+' from 'BBB'. Fitch also affirms the ratings on these classes: -- $96.8 million class A-3 at 'AAA'; -- $523.2 million class A-4 at 'AAA'; -- Interest only classes A-CP and A-X at 'AAA'; -- $43.8 million class B at 'AAA'; -- $49.3 million class C at 'AAA'; -- $10.9 million class D at 'AAA'; -- $21.9 million class J at 'BB'; -- $8.2 million class K at 'BB-'; and -- $9.3 million class L at 'B+'. Classes M and N remain at 'CCC/DR3' and 'C/DR6', respectively. Fitch does not rate the $4.2 million class O or the $1 million class RA certificates. Classes A-1 and A-2 have been paid in full. The upgrades to the senior classes reflect increased credit enhancement due to loan payoffs and scheduled amortization, as well as the additional defeasance of six loans (5.4%) since the last Fitch rating action. As of the October 2006 distribution date, the pool's aggregate collateral balance has been reduced 24.7%, to $849.6 million from $1.128 billion at issuance. Seventeen loans (20.7%) have defeased to date. Currently, four assets (3.1%) are in special servicing, with Fitch-expected losses on all four. The largest loan in special servicing (1.7%) is secured by an office property located in Minneapolis, Minesotta. The special servicer has negotiated a discounted payoff on this loan, which is expected to close in the fourth quarter of 2006. Fitch projects significant losses upon the resolution of this loan. The second largest specially serviced asset (1.1%) is an office property located in Olivette, Missouri and is real estate owned. The special servicer is marketing the asset for sale. Fitch-projected losses on the specially serviced assets are expected to deplete class N and significantly impact class M. Fitch has designated 24 loans (13%) as Fitch Loans of Concern; these include the specially serviced loans and loans exhibiting declines in cash flow and occupancy. F itch continues to monitor the second largest loan (5.2%), a 194,399 square foot (sf) office property located in Brisbane, California. This loan was recently assumed in May 2006, and the new borrower has been able to raise occupancy at the property to 100% as of August 2006. Cash flow at the property continues to be impacted, though, by weak rental rates in the market. As a result, the master servicer is drawing down upon the loan's letter of credit to fund operating shortfalls at the property. Property cash flow is expected to improve in 2007. CREDIT SUISSE: Fitch Lifts Rating on $13.6-Mil. Certs. to BB ------------------------------------------------------------ Fitch upgrades the ratings on Credit Suisse First Boston's commercial mortgage pass-through certificates, series 2003-CK2: -- $12.4 million class F to 'AAA' from 'AA'; -- $19.8 million class G to 'AA' from 'A+'; -- $14.8 million class H to 'A+' from 'A'; -- $17.3 million class J to 'A' from 'BBB+'. -- $17.3 million class K to 'BBB+' from 'BBB'; -- $4.9 million class L to 'BBB' from 'BBB-'; -- $13.6 million class M to 'BB' from 'BB-'; -- $6.2 million class N to 'B+' from 'B'; -- $4.9 million class O to 'B' from 'B-'. Fitch also affirms the ratings on these classes: -- $58.4 million class A-1 at 'AAA'; -- $196 million class A-2 at 'AAA'; -- $109 million class A-3 at 'AAA'; -- $364.3 million class A-4 at 'AAA'; -- Interest-only class A-X at 'AAA'; -- Interest-only class A-SP at 'AAA'; -- $32.1 million class B at 'AAA'; -- $12.4 million class C at 'AAA'; -- $29.6 million class D at 'AAA'; -- $12.4 million class E at 'AAA'; -- $3.4 million class GLC at 'BBB+'. Fitch does not rate the $17.1 million class P or $14.4 million class RCKB certificates. The GLC rake class represents the non- pooled B-note for Great Lakes Crossing (A-note: 8.8%). The RCKB certificate represents the non-pooled B-note for the Ritz Carlton Key Biscayne (6.6%), which defeased in May 2006. The rating upgrades reflect increased credit enhancement due to loan payoffs and scheduled loan amortization, as well as the additional defeasance of three loans (7.8%) since the last Fitch rating action. Nine loans (16.3%) have defeased to date, including two top 10 loans (10.2%) in the pool. As of the October 2006 distribution date, the pool's aggregate certificate balance has decreased 4.6% to $942.5 million from $1.0 billion at issuance. Fitch reviewed the performance of the largest loan in the pool, Great Lakes Crossing (8.8%). The loan is secured by a 1,142,827 square foot anchored-retail center and maintains an investment grade credit assessment. The year-end 2005 Fitch stressed DSCR is 1.62 times (x), in line with the Fitch stressed DSCR at issuance of 1.58x. Occupancy as of June 2006 declined to 84.9% from 88.2% in October 2005 due to four tenants vacating prior to lease end. Currently, there is one loan (0.3%) in special servicing. The loan is a 45,702-sf industrial property in Scottsdale, Arizona, and is in foreclosure. The foreclosure sale is scheduled for December 2006. Based on the most recent appraisal value, Fitch does not project any losses upon the liquidation of this loan. DATALOGIC INT'L: Expects to Issue $2.45MM of 10% Promissory Notes ----------------------------------------------------------------- DataLogic International, Inc., has completed a $412,500 private placement with four private investors and a restructuring of the terms of its senior secured debt held by Laurus Master Fund, Ltd. 10% Secured Convertible Promissory Note Financing Pursuant to the private financing, DataLogic sold $412,500 principal amount of its 10% secured convertible promissory notes together with warrants to purchase 20,625,000 shares of DataLogic common stock at an exercise price of $0.04 per share. The convertible notes are due Oct. 31 2008, begin amortization of principal on Feb. 15, 2007, are secured by all of the assets of DataLogic and are convertible into DataLogic common stock at an initial conversion price of $.02 per share. The warrants will be exercisable for a three-year period beginning on the date a resale registration statement for the shares underlying the convertible notes and warrants is declared effective by the Securities and Exchange Commission. As a result of the financing and pursuant to the terms of "most favored nations" rights granted to investors in DataLogic's May 2006 private placement, DataLogic expects to issue up to an additional $2,450,000 principal amount of its 10% secured convertible promissory notes and warrants to purchase 122,500,000 shares of common stock at an exercise price of $0.04 per share to its May 2006 private placement investors in exchange for up to 8,125,000 shares of DataLogic common stock issued in the May 2006 private placement. DataLogic will receive no additional proceeds from the exchange. In the transaction, an officer and director of DataLogic also agreed to exchange a $300,000 promissory note payable by a DataLogic subsidiary for $300,000 principal amount of its 10% secured convertible promissory notes and warrants to purchase 15,000,000 shares of DataLogic common stock at an exercise price of $0.04 per share. DataLogic will receive no additional proceeds from the exchange. Under the terms of the financing, DataLogic has agreed to use best efforts to obtain stockholder approval to: (i) increase DataLogic's authorized shares of common stock to a number that is not less than 100% of the maximum number of shares of common stock which would be issuable upon conversion of the convertible notes and exercise of the warrants, and (ii) effect a reverse stock split so that its common stock is quoted on the OTC Bulletin Board at a price per share of not less than $1.00 immediately following the reverse stock split. DataLogic has also agreed to prepare and file a resale registration statement with the Securities and Exchange Commission for the shares underlying the convertible notes and warrants. Midtown Partners & Co., LLC acted as sole placement agent in this transaction. Restructuring of Senior Secured Debt Concurrently with completion of the convertible note and warrant financing, DataLogic completed a restructuring of its payment obligations under its Secured Term Note held by Laurus Master Fund, Ltd. As restructured, DataLogic will be obligated to make monthly principal payments of $25,000 per month beginning Jan. 1, 2007 and increasing to $50,000 per month beginning July 1, 2007 through maturity at Dec. 31, 2008. As of Oct. 31, 2006, DataLogic had $1,364,976 principal amount outstanding under the Secured Term Note. In connection with the restructuring of the Secured Term Note, Laurus withdrew its notice of default by DataLogic and released the hold it had placed on DataLogic's accounts receivable "lockbox" account. About DataLogic Int'l DataLogic International, Inc. -- http://www.dlgi.com/-- is a technology and professional services company providing a wide range of consulting services and communication solutions like GPS based mobile asset tracking, secured mobile communications and VoIP. The Company also provides Information Technology outsourcing and private label communication solutions. DataLogic's customers include U.S. and international governmental agencies as well as a variety of international commercial organizations. Going Concern Doubt As reported in the Troubled Company Reporter on May 17, 2006, Corbin & Company, LLP, in Irvine, California, raised substantial doubt about DataLogic's ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses and need to establish profitable operations. DELPHI CORP: Seeks to Recover Receivables from NYCH LLC ------------------------------------------------------- Prior to the Petition Date, Delphi Corporation sold and delivered $349,615 worth of goods to NYCH, LLC, Neil Berger, Esq., at Togut, Segal & Segal, LLP, in New York, informs the Court. Delphi subsequently mailed and transmitted invoices to NYCH on account of the Goods. NYCH has made payments to Delphi and received credits worth $95,508 on account of the Invoices, Mr. Berger notes. The Invoices, totaling $257,106, are past due and are payable to Delphi. NYCH now refuses to pay or turn over the Receivable to Delphi, despite Delphi's repeated demands, Mr. Berger tells the Court. Accordingly, Delphi asks the U.S. Bankruptcy Court for the Southern District of New York to: (a) direct NYCH to pay the Receivable, plus interest and the costs and expenses of the adversary proceeding, including, without limitation, attorneys' fees; and (b) disallow any claims filed by or scheduled in favor of NYCH against one or more of the Debtors unless and until NYCH pays the Judgment Amount. The Receivable is property of the estate, Mr. Berger asserts. Thus, pursuant to Section 542 of the Bankruptcy Code, NYCH is required to turn over and pay the Receivable to Delphi. Moreover, pursuant to Section 502(d) of the Bankruptcy Code, any claims filed by NYCH against the Debtors must be disallowed unless and until NYCH turns over and satisfies the Receivable, plus all accrued interest. Troy, Mich.-based Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELTA AIR: Comair Pilots to Conduct Informational Picketing Today ----------------------------------------------------------------- The pilots of Comair, represented by the Air Line Pilots Association, International, will conduct informational picketing at the Cincinnati Airport. Comair operates under the "Delta Connection" livery and is a wholly owned subsidiary of Delta Air Lines, Inc. Why: The pilots are picketing to demonstrate their frustration with management's efforts to sidestep the negotiating process by filing an 1113(c) motion with the bankruptcy court. If approved, this motion could repudiate and breach the pilots' labor contract and allow Comair management to unilaterally impose terms of employment. When: Today, Nov. 21, 2006 10:30 a.m. - 12:00 noon, EST Where: Cincinnati/Northern Kentucky International Airport, Terminal 3, west side of the central entrance In 2005, the Comair pilots agreed to concessions to help their airline better manage its finances. Later that year, Comair and parent company Delta filed for Chapter 11 bankruptcy. In more recent contract talks, Comair management has taken an unreasonable position concerning the level of additional concessions the pilots must provide. The pilots want Comair to demonstrate that the concessions sought are necessary for the company's recovery, and not simply a means of applying pressure to other Delta Connection pilot groups to lower their compensation and work rules. In contrast, the pilots have been flexible, submitting numerous proposals that offer substantial contract relief. Finally, the Comair pilots would like something in exchange for this sacrifice, such as job security and wage snap-back provisions in later years, especially since the airline has already returned to profitability. Unfortunately, Comair management appears to prefer to litigate in bankruptcy court rather than seriously negotiate with its pilots. Founded in 1931, ALPA is a pilot union, representing more than 60,000 pilots at 39 airlines in the United States and Canada. Visit the ALPA website at http://www.alpa.org/ Headquartered in Atlanta, Georgia, Delta Air Lines (Other OTC: DALRQ) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. DLJ COMMERCIAL: Fitch Holds B Rating on $6.3-Million Certificates ----------------------------------------------------------------- Fitch upgrades the ratings on DLJ Commercial Mortgage Corp.'s commercial mortgage pass-through certificates, series 1998-CF1 as: -- $10 million class B-3 certificates to 'AAA' from 'AA-'; -- $27.1 million class B-4 certificates to 'A' from 'A-'. In addition, the ratings on these classes are affirmed by Fitch: -- $391.2 million class A-1B at 'AAA'; -- Interest-only classes CP and S at 'AAA'; -- $50.4 million class A-2 at 'AAA'; -- $50.3 million class A-3 at 'AAA'; -- $41.9 million class B-1 at 'AAA'; -- $6.3 million class B-7 at 'B-'. Fitch does not rate the $14.7 million class B-2, $15 million class B-5, $15 million class B-6 or $10.2 million class C certificates. Class A-1A paid in full. The upgrades reflect increased credit enhancement as a result of additional paydown and defeasance, since Fitch's last rating action. In total, thirty loans (22.7%), including the second largest loan, have defeased. As of the November 2006 distribution date, the pool's aggregate certificate balance has been reduced 24.6% to $632.2 million from $838.8 million at issuance. The largest loan in the pool, the Showboat loan (14.1%), maintains its investment grade credit assessment by Fitch. The debt service coverage ratio, based on annualized ground lease payments provided as of September 30, 2006 is 1.25 times (x) compared to 1.14x at issuance. The pool has a 16.7% exposure to three hotel properties. The risk of this property type concentration is mitigated by the credit quality of the Showboat loan. There are currently no delinquent or specially serviced loans in the transaction. DLJ COMMERCIAL: Fitch Lifts Rating on $6.6-Mil. Certificates to BB ------------------------------------------------------------------ Fitch Ratings upgrades six classes of DLJ Commercial Mortgage Corp.'s commercial mortgage pass-through certificates, series 2000-CF1: -- $31 million class B-1 to 'AAA' from 'AA-'; -- $11.1 million class B-2 to 'AA' from 'A'; -- $31 million class B-3 to 'BBB+' from 'BBB'; -- $8.9 million class B-4 to 'BBB' from 'BBB-'; -- $2.2 million class B-5 to 'BBB-' from 'BB+'; -- $6.6 million class B-6 to 'BB' from 'BB-'. In addition, Fitch affirms the following classes: -- $1.4 million class A-1A at 'AAA'; -- $566.4 million class A-1B at 'AAA'; -- Interest-only class S at 'AAA'; -- $44.3 million class A-2 at 'AAA'; -- $37.7 million class A-3 at 'AAA'; -- $13.3 million class A-4 at 'AAA'; -- $8.9 million class B-7 at 'B'; -- $8.9 million class B-8 at 'B-'. Fitch does not rate the $8.1 million class C certificates. Class D has been reduced to zero due to realized losses. The upgrades reflect increased credit enhancement levels due to loan payoffs, scheduled amortization and the additional defeasance of nine loans (15.3%) since Fitch's last rating action. In total, 27 loans (27.8%) have defeased, including three of the top ten loans (11.4%). As of the November 2006 distribution date, the pool has paid down 12% to $779 million from $886.2 million at issuance. There is one loan (.14%) in special servicing. The loan is current and the special servicer intends to return the loan to the master servicer. No losses are expected. DOUGLAS DYNAMICS: Declining Results Prompt S&P's Neg. Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Douglas Dynamics LLC to negative from stable. All ratings, including the 'B+' corporate credit rating, have been affirmed. "The outlook revision reflects a decline in recent operating results, which will likely stretch credit metrics at the current ratings," said Standard & Poor's analyst Robert Wilson. Recent sales have been negatively impacted by below-average snowfall, resulting in lower profits and cash flow generation. Debt to EBITDA will likely remain near 6.0x through the end of 2006, compared with the 4-5x expected at the current rating. The speculative-grade ratings on Milwaukee, Wisconsin-based Douglas Dynamics, a maker of snow- and ice-control products, reflect the company's vulnerable business risk profile. The company operates in highly seasonal niche markets that are affected by weather conditions. The company also has a highly leveraged financial profile, a result of very aggressive financial policies. ENRON CORP: Wants $300,000 Electroimpact Settlement Approved ------------------------------------------------------------ Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, Enron Corp. and its debtor-affiliates ask the Honorable Arthur Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York to approve its settlement agreement with Electroimpact, Inc. Prior to Dec. 2, 2001, Enron issued unsecured commercial paper to various entities. The commercial paper had maturities of up to 270 days. In a series of transfers starting on Oct. 26, 2001, and concluding on Nov. 6, 2001, Enron transferred over $1,000,000,000 to various entities for the purpose of prepaying or redeeming, prior to its stated maturity date, commercial paper that Enron had previously issued. By complaint dated Nov. 6, 2003, and later amended, styled Enron Corp. v. J.P. Morgan Securities Inc., et al., Adversary Proceeding No. 03-92677, Enron commenced litigation against Electroimpact and other defendants, asserting claims for the avoidance and recovery of preferential or fraudulent transfers in connection with the Early Redemption Transfers, and disallowance of defendants' claims against Enron. Enron sought to recover from Electroimpact $747,525 in connection with one of the commercial paper debt prepayments identified in the Complaint. On Feb. 19, 2004, Electroimpact moved to dismiss the Complaint in the Adversary Proceeding. Enron opposed the motion to dismiss. The motion to dismiss was subsequently denied by the Bankruptcy Court. On Aug. 1, 2005, Electroimpact filed an answer in the Adversary Proceeding denying the material allegations of the Complaint and asserting various affirmative defenses thereto. Following discussions between Enron and Electroimpact, the parties have negotiated the Settlement Agreement under which, subject to approval by the Court, Electroimpact will pay Enron $300,000, and Electroimpact will forfeit, waive and release any claim pursuant to Section 502(h) of the Bankruptcy Code against Enron based upon the Settlement Payment. The Settlement Agreement also contemplates that Enron will execute a stipulation and order dismissing claims against Electroimpact in the Commercial Paper Action which, once filed with the Bankruptcy Court, will effectively serve to dismiss with prejudice the claims against Electroimpact in the Adversary Proceeding. About Enron Corp. Headquartered in Houston, Texas, Enron Corporation filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtor. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. (Enron Bankruptcy News, Issue No. 182; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ESCHELON TELECOM: Moody's Affirms Corporate Family Rating at B3 --------------------------------------------------------------- Moody's Investors Service affirmed Eschelon Operating Company's ratings and changed the ratings Outlook to Positive from Stable. Moody's has taken these rating actions: * Issuer: Eschelon Operating Co. -- Corporate family rating affirmed at B3 -- Probability of Default rating affirmed at B2 -- $140 million 8 3/8% Senior 2nd Lien Notes maturing in 2010 affirmed at B3, LGD4-64% -- $150 million (approximately $62 million remaining) Shelf Registration affirmed at (P) B3, LGD4-64% -- Outlook -- Changed to Positive from Stable -- Liquidity Rating -- Affirmed SGL-3 The Positive Outlook reflects Eschelon's improving operating fundamentals leading to an improving credit profile. The Outlook also incorporates the company's steady progress towards generating modest free cash flow in 2007. Although the improved fundamentals have generated sufficient positive pressure on the ratings, the ratings are constrained by the uncertainties arising from Eschelon's acquisition strategy and its continuing high capital expenditures. Eschelon has expressed the intention to acquire another $50 million of revenue in the coming 2 to 3 years, which follows the acquisition of ATI in 2004, and about $50 million in revenues from the three acquisitions completed in 2006. Moody's notes that Eschelon's operating fundamentals, such as revenue and EBITDA growth, and low churn, have improved and will continue the upward trend in 2007 as the company realizes synergies from its recently closed acquisitions of OTI, MTI and OneEighty. However Moody's believes that Eschelon's high costs of integrating the acquisitions and network upgrades will continue to erode the growth in operating cash flows. The ratings are also constrained by the potential use of debt in its future acquisitions, which could adversely impact the leverage profile. The B3 rating of the second lien notes reflects an LGD4, 64% loss given default assessment, as the notes are secured by substantially all of the company's assets on a 2nd priority basis, and as the notes will represent nearly all of the debt in the capital structure. Eschelon is a competitive local exchange carrier servicing over 514,000 access lines in 45 markets in the western United States. The company maintains its headquarters in Minneapolis, Minnesota. EVERGREEN INT'L: Moody's Assigns Loss-Given-Default Ratings ----------------------------------------------------------- In connection with Moody's Investors Service's implementation of its Probability-of-Default and Loss-Given-Default rating methodology for the Transportation sector, the rating agency confirmed its B2 Corporate Family Rating for Evergreen International Aviation Inc. Additionally, Moody's confirmed its probability-of-default ratings and assigned loss-given-default ratings on these bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Guaranteed Senior Secured 1st Lien Term Loan, Due Aug. 10, 2011 B1 B1 LGD3 33% Guaranteed Senior Secured 1st Lien Revolver Due Aug. 10, 2011 B1 B1 LGD3 33% Guaranteed Senior Secured 2nd Lien Term Loan Due Feb. 10, 2013 Caa1 Caa1 LGD5 79% 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 McMinnville, Oregon, Evergreen International Aviation, Inc. -- http://www.evergreenaviation.com/-- is a privately held global aviation services company that is active through several subsidiary companies. FIDELITY NATIONAL: Fitch Rates $200 Million Senior Notes at BB+ --------------------------------------------------------------- Fitch has upgraded Fidelity National Information Services Inc.'s outstanding ratings as: -- Issuer Default Rating to 'BB+' from 'BB-'; -- Senior secured facilities to 'BB+' from 'BB-'; Fitch also assigns this rating to Fidelity National Information Services Inc.'s outstanding notes: -- $200 million 4.75% senior unsecured notes due 2008 'BB+'. Approximately $2.8 billion in debt outstanding at Sept. 30, 2006 is affected by this action. The Rating Outlook is Stable. In addition, Fitch expects to rate the company's proposed $3.1 billion senior unsecured five-year credit facilities 'BB+'. FIS plans to use the proceeds to refinance its existing $3.2 billion senior secured credit facilities. The ratings recognize the company's ability to generate strong free cash flow, its strong market position in core businesses, diversified product offering, solid client retention, and counter- cyclical revenue streams and recurring revenue base from long-term processing agreements. The ratings also recognize the benefits realized by FIS from its acquisition of Certegy Inc. in early 2006. Fitch believes the strong performance of FIS as a standalone company, the operating strength and business diversification brought from Certegy, sound liquidity, and improved leverage also support the ratings. Credit concerns include the company's history of debt-financed acquisitions, well- capitalized significant industry competitors, the ongoing consolidation of its financial institution customer base, and event risk associated with two private equity firms that have a combined equity stake of approximately 15%. Fitch believes that potential acquisitions also remain a risk but expects the company will have the flexibility and capacity to manage its leverage accordingly. Ongoing developments in lender processing platforms and software as well as new enhancements to transaction processing are key areas where competitors are distinguishing themselves. Fitch expects FIS to continue investment in these areas of development in order to maintain its market position. The rating recognizes that FIS has attained recurring revenues of more than 80% on a consistent basis from long-term customer contracts. FIS also has consistently achieved EBITDA margins in the mid-20% range, prior and subsequent to the Certegy acquisition. Operating performance in the third quarter of 2006 was solid with 10% consolidated revenue growth and 10.5% operating EBITDA growth. Steady growth in the transaction processing segment was bolstered by 9.8% growth in integrated financial solutions, 10% growth in enterprise banking services, and approximately 37% growth in international revenues. The lender processing services segment generated approximately 5% growth driven by appraisal and default management services. Operating EBITDA of $281 million for the quarter generated strong 26% margin and compared well to third- quarter pro forma 2005 EBITDA of $259 million. Fitch expects the company's public guidance of solid EBITDA growth can be attainable. The rating also incorporates the company's ongoing efforts to achieve cost synergies from its acquisitions. FIS is currently on track to have approximately $50 million in annualized cost synergies from the Certegy acquisition by the end of 2006. The company also continues to grow its international presence and has recently made a few strategic investments in Brazil through tuck- in acquisitions and joint ventures. These efforts should help its competitive position and improve its global reach. Also, Fitch expects FIS to continue to search for small tuck-in acquisitions that will allow it to grow its cash flow and achieve additional synergies with its existing business lines. Leverage, as measured by total debt to operating EBITDA strengthened from 3.3 times (x) in 2005 to 2.7x on an annualized basis as of June 30, 2006. Incorporating incremental EBITDA from Certegy, pro forma leverage is expected to be 2.5x for 2006, which is comfortably within the financial covenants of the new unsecured credit facilities. Historically, liquidity has been adequate and supported by cash balances of $130 million-$190 million at fiscal year-end 2004 and 2005 as well as $270 million-$400 million of availability under its revolving credit facilities. For 2006, liquidity is expected to remain adequate with cash balances and free cash flow similar to historical levels and availability under the new unsecured credit facilities of $450 million. Debt is approximately $2.8 billion and management has stated its plans to reduce debt over the next few years. Free cash flow is planned to be used for share repurchases, and FIS announced this month that a new $200 million share repurchase program was approved. Fitch believes approximately $100 million will likely be repurchased in 2007. The existing FIS senior unsecured notes due 2008 have no substantial covenant protection in the indenture. Indebtedness under the new unsecured credit facility will have a guarantee by FIS, financial covenants for leverage and interest coverage, and some restrictions related to additional debt, dividends, and stock repurchases. The leverage covenant calls for a maximum of 3.50x through 2008 with a step-down to 3.25x in 2009, and 3.0x thereafter. The covenant for interest coverage calls for a minimum of 3.5x through 2008 and a minimum of 4.0x thereafter. TIAA CMBS: Fitch Holds Low-B Rating on Four Certificate Classes --------------------------------------------------------------- Fitch upgrades the ratings on TIAA CMBS I Trust's commercial mortgage pass-through certificates, series 2001-C1, as: -- $14.7 million class E to 'AAA' from 'AA+'; -- $18.3 million class F to 'AA+' from 'AA-'; -- $14.7 million class G to 'AA' from 'A'; -- $33 million class H to 'A-" from 'BBB+'; In addition, Fitch affirms the ratings on these classes: -- $73.3 million class A-2 at 'AAA'; -- $146.6 million class A-3 at 'AAA'; -- $400 million class A-4 at 'AAA'; -- $1.4 million class A-5 at 'AAA'; -- Interest only class X at 'AAA'; -- $58.6 million class B at 'AAA'; -- $51.3 million class C at 'AAA'; -- $22 million class D at 'AAA'; -- $14.7 million class J at 'BBB'; -- $11 million class K at 'BB+' -- $14.7 million class L at 'B+'; -- $7.3 million class M at 'B'; -- $7.3 million class N at 'B-'. Fitch does not rate the $17.5 million class O. The upgrades reflect increased credit enhancement levels due to loan payoffs, scheduled amortization and the additional defeasance of six loans (8.4%) since Fitch's last rating action. In total, seventeen loans (20.7%) have defeased. As of the October 2006 distribution date, the pool's aggregate certificate balance has decreased 37.4%, to $906 million from $1.46 billion at issuance. Of the original 252 loans, 169 remain outstanding in the pool. There are currently no delinquent or specially serviced loans. The pool's property type concentrations include retail (28.7%), multifamily (22.7%), industrial (11.5%), healthcare (9.2%) and office 96.4%). Geographic concentrations include California (11.6%), New York (8.6%), New Jersey (6.4%), and Colorado (5.0%). FOUNDATION RE: S&P Rates $67.5-Million Class G Notes at B --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' senior secured debt rating to Foundation Re II Ltd.'s $180 million Class A, Series 2006-1 variable-rate notes issue due Nov. 26, 2010, and its 'B' senior secured debt rating to Foundation Re II's $67.5 million Class G, Series 2006-1 variable-rate notes issue due Jan. 8, 2009. The two series of notes are the initial offerings under Foundation Re II's $750 million variable-rate note program. Foundation Re II is a Cayman Islands exempted company licensed as a Class B insurer in the Cayman Islands. "The rating on each series is based on the modeled probability of attachment," explained Standard & Poor's credit analyst Gary Martucci. "Risk Management Solutions Inc.'s RiskLink 6.0 was used to determine the probability of attachment of each series. The annual probability of attachment for the Class A notes is 106 basis points (bps), and the annual probability for the Class G notes is 462 bps," added Martucci. The Class A notes are exposed to certain first and subsequent U.S. hurricane events on a per occurrence basis and will cover 45% of losses between the initial index attachment point of $1.85 billion and the initial index exhaustion point of $2.25 billion. The payment mechanism for the Class A notes is based on a customized index structure computed as Property Claim Services personal and commercial insured property loss estimates by state and line of business multiplied by the applicable payout factor by state/line of business multiplied by the factor for automobile damages. The Class G notes are exposed to losses from U.S. hurricanes, U.S. earthquakes, and U.S. tornadoes/hailstorms on an annual aggregate basis and will cover 45% of losses between the initial index attachment point of $462 million and the initial index exhaustion point of $612 million. Losses are based on a customized index structure computed as PCS personal and commercial insured property loss estimates by state and line of business multiplied by the applicable payout factor by state/line of business multiplied by the factor for automobile damages. For the Class G notes, covered events with PCS estimated insured industry losses below $100 million and greater than or equal to $29.5 billion are excluded from coverage. In addition, all qualifying loss events are subject to a maximum per event loss contribution limit of $150 million. The risk period will begin at 12:00 a.m. the day after closing and end on Nov. 17, 2010, for the Class A notes and begin at 12:00 a.m. on Jan. 1, 2007, and end on Dec. 31, 2008, for the Class G notes. The delay between the closing and the start of the risk period of the Class G notes results in an annualized attachment probability of 436 bps. The reinsurance agreement, which is effectively supported by the proceeds from the issuance of the notes, will provide Hartford Fire Insurance Co. with a source of index-based catastrophe coverage for hurricane, earthquake, and tornado/hailstorm events in the covered area. For a hurricane event, the covered area is the U.S. Gulf Coast, states that border the Atlantic Ocean, and West Virginia, Vermont, and D.C. For earthquake and tornado and hailstorm events, the covered area is D.C. and all contiguous states constituting the continental United States. Hartford Fire Insurance Co. and Foundation Re II will enter into a reinsurance agreement that will establish the index-based coverage. Upon the sale of the notes, the proceeds will be invested in high- quality permitted investments within collateral accounts. There will be a separate collateral account for each series of notes. Foundation Re II will swap the total return of each collateral account with BNP Paribas in exchange for quarterly LIBOR-based payments minus 12 bps. The premium received by Foundation Re II pursuant to the reinsurance agreement--combined with the payments received under the swap -- will be used to make the scheduled interest payments to the noteholders. If there is a trigger event, assets will be sold from the related collateral account with the proceeds being distributed to Hartford Fire Insurance Co. Principal on the notes will be paid at maturity unless any covered event occurs. FOUR SEASONS: S&P Pares Corp. Credit Rating to 'BB+' from 'BBB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Four Seasons Hotels, Inc. to 'BB+' from 'BBB-'. The ratings remain on CreditWatch with negative implications, where they were placed on Nov. 6, 2006. At the same time, we affirmed our 'BBB-' rating on the company's senior unsecured convertible notes and removed it from CreditWatch. The rating agency expects that these notes will be refinanced upon the issuance of new debt financing if the proposed transaction closes. In the event the proposed transaction does not close, and the proposed refinancing does not occur, Standard & Poor's would lower the rating on these notes to a level in line with Four Season's corporate credit rating. The downgrade was after the company's filing of a proposed capital structure related to the Nov. 6, 2006, offer to take Four Seasons private at $82 per share, or an enterprise value of $3.7 billion. The proposed capital structure includes $750 million in debt financing and the contribution of new equity into the company, net of the company's existing cash balances. The proposed capital structure helps to clarify previous uncertainties around the amount of equity that would be contributed in financing the proposed acquisition. If the deal is accepted by the board, and financing is structured in the manner specified in the filing, the rating agency would expect that debt leverage, as measured by total lease adjusted debt to EBITDA, would exceed 8x. This would likely result in ratings being lowered to the single 'B' category in the absence of additional support being provided by equity owners. Even if the deal does not close, ratings have historically incorporated the expectation that management would maintain a conservative financial policy, including maintenance of a meaningful level of cash balances. With this proposed transaction, management has demonstrated an appetite for a higher level of risk, thus our financial policy expectations have changed, warranting a lower corporate credit rating. The offer to purchase Four Seasons was received from CEO Isador Sharp and Triples Holdings Limited, the controlling shareholder in Four Seasons, together with Kingdom Hotels International, which is owned by Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, and Cascade Invesment LLC, which is owned by Bill Gates. Four Seasons' board has established a committee of directors to consider the proposed transaction. FRASER PAPERS: S&P Downgrades Corp. Credit Ratings to B- -------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Fraser Papers Inc., including the long-term corporate credit rating, to 'B-' from 'B'. The outlook is negative. "Fraser Papers continues to generate negative free cash flow amid difficult industry conditions, and is increasingly dependent on improved market conditions to preserve its currently adequate liquidity," said Standard & Poor's credit analyst Donald Marleau. In the past 12 months, the company has generated negative EBITDA and negative free operating cash flow and, more recently, has temporarily shut down its two New Brunswick lumber operations because of weak market prices. "With the sharp decline in U.S. housing starts, the company's earnings and cash flow in the next several quarters will rely more heavily on higher prices and cost improvements in its pulp and paper segment," added Mr. Marleau. The ratings on Fraser Papers reflect its below-average cost position, limited product diversity, exposure to volatile paper and lumber prices, and some foreign exchange risk. These risks are only partially offset by the company's liquidity and reduced debt. Fraser Papers focuses on specialty paper sales, prices for which are less volatile than straight commodity grades. About 65% of Fraser Papers' current production consists of technical and specialty printing papers, and the company believes it has leading positions in pharmaceutical inserts, financial print, and various technical specialties including consumer packaging grades. The company's strategy to focus its product mix on more specialized, higher value-added paper grades is necessary, as its paper machines are smaller and not competitive in commodity grades because they do not benefit from the economies of scale provided by newer, faster, and larger paper machines. Fraser Papers' margins and returns on capital are weak and the company must address its cost structure. In the past several years, the company's profitability has been hit by a longer-than- expected cyclical downturn, escalating costs in fiber and energy, softwood lumber duties, and the appreciation of the Canadian dollar. The resolution of the Canada-U.S. softwood lumber dispute should result in pretax duty refunds but a sharp decline in lumber prices has caused downtime at the company's Canadian sawmills, while continuing cost pressures have constrained the benefits of higher pulp and paper prices. The outlook is negative. The combination of a higher Canadian dollar, weak lumber prices, and high fiber and energy costs have more than offset higher paper prices, contributing to continued weak near-term earnings and cash flow. Although the company's cash position, credit line availability, and other liquid assets provide sufficient financial flexibility through 2007, Fraser Papers must improve the profitability of its core paper operations in the long term to ensure its viability. GAP INC: Disappointing Sales Cue S&P's Ratings Downgrade -------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured ratings on San Francisco-based The Gap Inc. to 'BB+' from 'BBB-'. The outlook is stable. "The downgrade reflects our view that the company's business no longer possesses investment-grade characteristics," said Standard & Poor's credit analyst Diane Shand. "The Gap has a protracted record of disappointing sales, and profits have fallen for the past two years." Its poor operating performance has caused cash flow protection measures to weaken. Credit measures dropped sharply in the third quarter of 2006, indicating that ratios for the full year will not meet the rating agency's previous expectations. As management faces significant challenges in turning around the performance of each of The Gap's brands, Standard & Poor's does not expect a reversal of negative trends in the near term. The ratings on The Gap reflect management's challenge in improving business fundamentals in its three brands in an industry that will continue to experience intense competition, and in strengthening credit protection measures. These factors are partially offset by the company's good market position in casual apparel, its geographic diversity, and strong cash flow. The Gap's operating performance has been on a decline for the past two years. Operating margins declined to 18.3% in the 12 months ended Oct. 28, 2006, from 21% a year earlier. In 2005, the margin fell to 20.8% from 22.4% in 2004 due to lack of sales leverage, lower merchandise margins, higher advertising, and investments in growth strategies and store experience. Management's revised merchandise and marketing initiatives have not resonated with the consumer. Same-store sales trends have been negative since June 2004. The rating agency expect the company's operating performance to remain under pressure as sales trends at Old Navy, its largest concept, are the weakest in the company and it faces more competition than The Gap's other brands. GE CAPITAL: Fitch Holds Low-B Rating on Three Certificate Classes ----------------------------------------------------------------- Fitch Ratings upgrades these ratings on GE Capital Commercial Mortgage Corp.'s commercial mortgage pass-through certificates, series 2002-3: -- $14.6 million class E to 'AAA' from 'AA+'; -- $10.2 million class F to 'AAA' from 'AA'; -- $17.6 million class G to 'AA' from 'A+'; -- $11.7 million class H to 'A+' from 'A'; -- $27.8 million class J to 'BBB+' from 'BBB'; -- $10.2 million class K to 'BBB' from 'BBB-'; -- $8.8 million class L to 'BBB-' from 'BB+'. In addition, Fitch affirms the ratings on these classes: -- $327.4 million class A-1 at 'AAA'; -- $553.8 million class A-2 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $46.8 million class B at 'AAA'; -- $16.1 million class C at 'AAA'; -- $26.3 million class D at 'AAA'; -- $10.2 million class M at 'BB'; -- $8.8 million class N at 'B+'; -- $5.9 million class O at 'B-'. Fitch does not rate the $17.6 million class P certificates. The rating upgrades are due to defeasance combined with stable performance and amortization. Fifteen loans (17.3%) have defeased, including three of the top 10 loans (8.6%). As of the November 2006 distribution date, the pool has paid down 4.8% to $1.11 billion from $1.17 billion at issuance. Fitch reviewed the performance of the deal's credit assessed loans and their underlying collateral. The largest loan, the Westfield Shoppingtowns Portfolio (8.3%), is secured by two regional shopping malls consisting of 911,194 square feet of in-line space located in Santa Ana and Roseville, California. Servicer reported net operating income has increased 16.7% since issuance at these properties. In addition, the second largest loan, Colonie Center (3.5%), fully defeased in February 2005. Both loans maintain investment grade credit assessments. Ten loans (9.0%) are considered Fitch Loans of Concern due to decreases in debt service coverage ratio and occupancy or other performance issues. This includes the fifth (2.6%) and eleventh (1.7%) largest loans in the pool, which are two cross- collateralized and cross-defaulted loans secured by three multifamily apartment buildings located in downtown Denver, CO. Occupancy at these properties has declined from 95.4% at issuance to 84% at year-end (YE) 2005. As a result, the year end 2005 DSCR was .88 and .84, respectively. However, an improving Denver economy and leasing incentives have increased occupancy to 93% as of November 2006. These loans' higher likelihood of default was incorporated into Fitch's analysis and Fitch will continue to closely monitor the performance of these loans. There have been no delinquent or specially serviced loans and no losses since issuance. GENERAL NUTRITION: Parent Corporation Prices Senior Notes --------------------------------------------------------- GNC Parent Corporation has priced its offering of $425 million in aggregate principal amount of floating rate senior PIK notes due 2011. The Notes will bear interest, payable and reset semiannually, at a rate per annum equal to six- month LIBOR plus 6.75%. Interest will be payable in the form of additional notes. The Notes will be senior unsecured obligations of GNC. The proceeds from the sale of the Notes, together with cash on hand, will be used to redeem the outstanding Series A preferred stock of GNC Corporation, a wholly owned subsidiary of GNC; to repay a portion of the indebtedness of General Nutrition Centers, Inc., a wholly owned subsidiary of GNC Corporation, under Centers' senior term loan facility; to pay a dividend to the common stockholders of GNC; and to pay transaction-related fees and expenses. The Notes offering will be made solely by means of a private placement either to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, or to persons outside the United States under Regulation S of the Securities Act and to an entity that is an accredited investor. Headquartered in Pittsburgh, Pa., GNC -- http://www.gnc.com/--is a specialty retailer of nutritional products; including vitamin, mineral, herbal and other specialty supplements and sports nutrition, diet and energy products. GNC has more than 4,800 retail locations throughout the United States (including more than 1,000 franchise and more than 1,200 Rite Aid store-within-a-store locations) and franchise operations in 46 international markets. * * * As reported in the Troubled Company Reporter on Nov. 20, 2006, Moody's Investors Service downgraded the corporate family rating of GNC Parent Corporation to B3 and the $425 million holding company note issue to Caa2. GNC Parent Corp. ultimately owns General Nutrition Centers, Inc. Proceeds from the new debt principally will be used to retire its PIK preferred stock for $149 million and to pay a $287 million dividend. As reported in the Troubled Company Reporter on Nov. 8, 2006, Standard & Poor's Ratings Services placed ratings on General Nutrition Centers Inc., including the 'B' corporate credit rating, on CreditWatch with developing implications. GENEVA STEEL: Court Confirms Chapter 11 Liquidation Plan -------------------------------------------------------- The Hon. Glen E. Clark of the U.S. Bankruptcy Court for the District of Utah, Central Division, has confirmed Geneva Steel LLC and its debtor-affiliates' joint chapter 11 plan of liquidation. The Court determined that the Plan satisfies the 13 standards for Confirmation under Section 1129(a) of the Bankruptcy Code. Plan Overview As reported in the Troubled Company Reporter on July 11, 2006, the Plan calls for the assignment of all of the Debtor's assets, including claims and causes of action, to Liquidating Trusts. The Liquidating Trusts will make all the distributions required under the Plan. Chapter 11 Trustee James T. Markus reports that substantially all of the Debtor's assets have been reduced to cash. Administrative claims and secured claims will be paid in full. Holders of General Unsecured Claims are expected to receive approximately 15% of the allowed amount of their claims. Additional funds may be paid to general unsecured creditors as a result of recoveries from avoidance actions and other litigation initiated by the Trustee. The Trustee anticipates that as a result of litigation recoveries, allowed unsecured claim holders may recover, over time, an aggregate of 15% to 40% of their claims. Unsecured creditors making convenience class elections will get a one-time distribution equal to 25% of their clams, up to $1,250. A copy of the Debtor's Disclosure Statement is available for a fee at http://www.researcharchives.com/bin/download?id=060710210312 Headquartered in Provo, Utah, Geneva Steel LLC owns and operates an integrated steel mill. The Company filed for chapter 11 protection on January 25, 2002 (Bankr. Utah Case No. 02-21455). Andrew A. Kress, Esq., Keith R. Murphy, Esq., and Stephen E. Garcia, Esq., at Kaye Scholer LLP, represent the Debtor in its chapter 11 proceeding. James T. Markus was appointed as the chapter 11 Trustee for the Debtor's estate on June 22, 2005. John F. Young, Esq., at Block Markus & Williams, LLC represents the chapter 11 Trustee. Dianna M. Gibson, Esq., and J. Thomas Beckett, Esq., at Parsons Behle & Latimer, represent the Official Committee of Unsecured Creditors. When the Company filed for protection from its creditors, it listed $262 million in total assets and $192 million in total debts. GMAC COMMERCIAL: Fitch Holds Junk Ratings on Class N & O Certs. --------------------------------------------------------------- Fitch Ratings upgrades the ratings on GMAC Commercial Mortgage Securities, Inc.'s mortgage pass-through certificates, series 2001-C1, as: -- $41 million class B to 'AAA' from 'AA+'; -- $32.4 million class C to 'AAA' from 'A+'; -- $13 million class D to 'AAA' from 'A'; -- $17.3 million class E to 'AA' from 'BBB+'; -- $13 million class F to 'A' from 'BBB'; -- $13 million class G to 'BBB+' from 'BBB-'. In addition, Fitch affirms the ratings on these classes: -- $14.3 million class A-1 at 'AAA'; -- $546.8 million class A-2 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $25.9 million class H at 'BB+'; -- $6.5 million class J at 'BB'; -- $6.5 million class K at 'BB-'; -- $13 million class L at 'B+'; -- $4.3 million class M at 'B-'. Classes N and O remain at 'CCC/DR1' and 'C/DR5', respectively. The upgrades reflect increased subordination levels due primarily to the defeasance of 11 loans (14%) since the last Fitch rating action. As of the November 2006 distribution date, the pool's aggregate principal balance has been reduced 12.9%, to $752.7 million from $864.1 million at issuance. Eighteen loans (22.5%) have defeased to date, including the largest loan (5.8%) in the pool. Currently, one asset (0.4%) is in special servicing. The asset is a 142-unit multifamily property located in Irving, Texas and is real estate-owned. The special servicer continues to market the asset for sale. Fitch-projected losses on the specially serviced asset are expected to be absorbed by class O. Fitch has identified 23 loans (24.5%) as Fitch Loans of Concern, including the specially serviced assets and loans exhibiting low debt service coverage ratios or low occupancy. Fitch continues to monitor the performance of the second largest loan (5.1%) in the pool, which is secured by a multifamily property in Phoenix, Arizona. The Phoenix multifamily sector is currently experiencing a downturn due to oversupply and the borrower has offered high concessions to maintain occupancy levels. The borrower continues to market the property heavily, and first-half 2006 financials indicate some improvement over year-end 2005. GOODYEAR TIRE: S&P Rates $1 Billion Debentures at 'B-' ------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' ratings to Goodyear Tire & Rubber Co.'s $500 million floating rate senior notes due 2009 and its $500 million fixed rate senior notes due 2011, and placed the ratings on CreditWatch with negative implications. Goodyear's 'B+' corporate credit and other ratings remain on CreditWatch with negative implications where they were placed Oct. 16, 2006, because of the potential for business disruptions and earnings pressures that could result from the ongoing labor dispute at most of the company's North American tire plants. Pro forma for the new debt issues, Goodyear will have total debt of about $14 billion. Proceeds from the new debt issues will be used to refinance $515 million of debt coming due in the next six months, and for general corporate purposes. The new capital will raise Goodyear's already high debt levels, but will improve liquidity by increasing the company's current $2.3 billion cash position, while its U.S. salaried workforce remains on strike. Goodyear is ramping up production at the striking plants using salaried and replacement workers. But the company's accounts receivable and inventory balances may shrink in the coming months, which could force a partial reduction in borrowings outstanding under its fully utilized $1.5 billion asset-based revolving credit facility. A portion of the debt proceeds could also be used to partially fund a proposed $660 million VEBA trust to provide retiree health care benefits for its U.S. unionized workforce. GOODYEAR TIRE: Fitch Rates New Private Placement Notes at CCC+ -------------------------------------------------------------- Fitch Ratings has assigned debt and Recovery Ratings of 'CCC+/RR6' to $1 billion of new private placement notes issued by The Goodyear Tire & Rubber Company. All ratings remain on Rating Watch Negative. The new debt includes $500 million of three-year floating rate notes and $500 million of five-year 8.625% notes. Proceeds will be used to refinance $515 million of debt scheduled to mature by March 2007 and for general corporate purposes, including addressing the ongoing strike by the United Steelworkers union. These are the rating actions on Goodyear's existing debt and recovery: -- Issuer Default Rating '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'; and, -- Senior unsecured debt 'CCC+/RR6'. * Goodyear Dunlop Tires Europe B.V. (GDTE) -- EUR505 million European secured credit facilities 'BB/RR1'. Fitch placed Goodyear's ratings on Rating Watch Negative on Oct. 18, 2006 following the company's $975 million drawdown of its $1.5 billion revolver, effectively using the remaining capacity under the revolver. The net addition of nearly $500 million of debt, excluding debt to be refinanced, further supports GT's liquidity during the strike which began Oct. 5. The Rating Watch Negative reflects business risks posed by the strike as well as concerns about GT's evolving financial position and liquidity as the strike continues. Demands on GT's cash include pension contributions, debt service requirements, potential cash requirements related to the resolution of the strike, uncertain access to any additional financing, and continued operating challenges with respect to the company's cost structure and raw material costs. The eventual outcome of the strike will be an important factor in resolving the rating watch. GREAT LAKES: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------- In connection with Moody's Investors Service's implementation of its Probability-of-Default and Loss-Given-Default rating methodology for the Transportation sector, the rating agency confirmed its B3 Corporate Family Rating for Great Lakes Dredge & Dock Corporation. In addition, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Guaranteed Senior Secured Revolving Credit Facility Due 2008 B2 Ba3 LGD2 17% Guaranteed Senior Secured Term Loan B Due 2010 B2 Ba3 LGD2 17% 7.75% Senior Subordinated Notes Due 2013 Caa2 Caa1 LGD5 78% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Oak Brook, Illinois, Great Lakes Dredge & Dock Corporation -- http://www.gldd.com/-- offers dredging services, such as deepening and maintaining waterways, shipping channels, and ports, creating and maintaining beaches, excavating harbors and building docks, terminals and piers, and reclaiming land. Great Lakes is a significant contractor for the U.S. Army Corps of Engineers, the agency responsible for navigable waterways in the U.S. In addition, the firm performs many projects internationally, in Europe, Africa, the Middle East, and Central and South America. GREENBRIER COMPANIES: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its Probability-of-Default and Loss-Given-Default rating methodology for the Transportation sector, the rating agency confirmed its Ba3 Corporate Family Rating for The Greenbrier Companies, 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 ---------- ------- ------- ------ ---------- 8.375% Senior Unsecured Notes Due 2015 B1 B1 LGD4 64% 2.375% Convertible Senior Notes Due 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%). Based in Lake Oswego, Oregon, The Greenbrier Companies [NYSE:GBX] -- http://www.gbrx.com/-- is an international supplier of transportation equipment and services to the railroad industry. The company builds, leases, repairs and refurbishes freight railcars for a variety of customers in North America. It also manufactures and refurbishes freight wagons in the European market. Greenbrier owns a lease fleet of approximately 9,000 railcars, and performs management services for approximately 136,000 railcars. The company also is a leading supplier of ocean-going barges for the American maritime industry. GS MORTGAGE: S&P Assigns Initial Low-B Ratings to 2 Cert Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to GS Mortgage Securities Corp. II's $727.8 million commercial mortgage-backed securities pass-through certificates series 2006-RR3. The preliminary ratings are based on information as of Nov. 17, 2006. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of securities and the geographic and property type diversity of the mortgaged properties securing the underlying CMBS collateral. The collateral pool consists of 58 classes of pass-through certificates taken from 34 CMBS transactions. Preliminary Ratings Assigned GS Mortgage Securities Corp. II Class Rating Preliminary Recommended amount credit support (%) ----- ------ ------------ -------------- A-1 AAA $509,488,000 30.000 A-2 AAA $131,012,000 12.000 B AA+ $18,196,000 9.500 C AA $9,098,000 8.250 D AA- $7,278,000 7.250 E A+ $9,098,000 6.000 F A $4,549,000 5.375 G A- $3,639,000 4.875 H A- $5,459,000 4.125 J BBB+ $10,918,000 2.625 K BBB $2,729,000 2.250 L BBB- $4,549,000 1.625 M BB+ $5,459,000 0.875 N BB $1,819,000 0.625 O NR $4,550,000 0.000 X AAA $727,841,000 N/A NR--Not rated. N/A--Not applicable. HARTMAN COMMERCIAL: KeyBank Waives Covenant Defaults Under LOC -------------------------------------------------------------- Hartman Commercial Properties REIT disclosed that its syndicate of lenders led by KeyBank has temporarily waived, on an expedited basis, covenant defaults under its line of credit. The covenant defaults, which were non-financial in nature, occurred when the independent trustees terminated HCP REIT's management and advisory relationship with Hartman Management LP, and removed Allen Hartman as chairman and CEO. On Oct. 2, 2006, HCP REIT filed suit against Allen Hartman and Hartman Management for breach of fiduciary duty and breach of contract, among other matters, citing conflicts of interests and other unresolved issues. In granting the waiver, KeyBank cited its long-time relationship with HCP REIT's new chairman and interim CEO, James C. Mastandrea, beginning soon after Mr. Mastandrea was appointed as CEO/Chairman to First Union Real Estate Investment Trust REIT in 1994. "We have a long time relationship with Jim," KeyBank Senior Vice President Bob Avil said. "His vast experience in commercial real estate, financial markets and running a public real estate company enhances our comfort with the leadership at and our relationship with HCP REIT." Mr. Avil added, "At First Union, Jim strategically utilized the company's credit facility, in which we participated, to improve its asset base and profitability." Mr. Mastandrea strengthened First Union's capital position with the credit facility and through multiple public offerings, including offerings of convertible preferred and common stock. Within five years, First Union's portfolio of properties had grown in value to more than $1 billion from less than $300 million. First Union's stock price rose simultaneously from $6 in 1994, with approximately 19 million common shares outstanding, to $16.75 per share, by December 1997, with 40 million common shares. Mr. Avil said: "Jim did a great job at First Union calling on all sources of capital to present a well structured balance sheet, and a platform to execute a business plan. We look forward to continuing our relationship with Jim at HCP REIT and working with him to execute the REIT's plan to transform into a self-managed platform, reposition its assets, and profitably grow its portfolio." KeyBank, the 15th largest bank in the country, has branches in 13 states, including Texas. About HCP REIT Hartman Commercial Properties REIT -- http://www.hcpreit.com/-- is a "value added" public, non-traded REIT, which is internally managed, and owns, leases, and manages 37 commercial properties in Texas. Its mission is to create value by buying "C" and "B" class commercial properties and/or underdeveloped properties and capitalizing on their potential through redevelopment strategies, responsive to local market conditions, with its leasing, managing and developing expertise. H-LINES FINANCE: Moody's Assigns Loss-Given-Default Ratings ----------------------------------------------------------- In connection with Moody's Investors Service's implementation of its Probability-of-Default and Loss-Given-Default rating methodology for the Transportation sector, the rating agency confirmed its B2 Corporate Family Rating for H-Lines Finance Holdings Corp. and Horizon Lines LLC. In addition, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on the companies' loans and bond debt obligations: Issuer: H-Lines Finance Holdings Corp. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Senior Discount Notes Due 2013 Caa2 Caa1 LGD6 94% Issuer: Horizon Lines LLC Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Senior Secured Revolver Due 2009 B2 Ba2 LGD2 20% Senior Secured Term Loan Due 2011 B2 Ba2 LGD2 20% 9% Guaranteed Senior Unsecured Notes Due 2012 B3 B3 LGD4 69% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). H-Lines Finance Holding Corp is based in Charlotte, North Carolina. Through its wholly-owned operating subsidiary, Horizon Lines, LLC, the company employs a fleet of 16 U.S.-flag container ships providing liner service between the continental U.S. and Alaska, Hawaii, Guam, and Puerto Rico. HOLLINGER INC: Ct. Rejects Injunction Continuance against Radler ---------------------------------------------------------------- The British Columbia Supreme Court declined, on Nov. 14, 2006, to continue a temporary Mareva Injunction Order against David Radler and F.D. Radler Ltd. pursuant to a motion brought, without notice, by Hollinger Inc. As reported in the Troubled Company Reporter on Nov. 2, 2006, Hollinger disclosed that on Oct. 25, 2006, the British Columbia Supreme Court granted a Mareva Injunction Order against David Radler and F.D. Radler Ltd. The Company previously filed an action against Mr. Radler and F.D. Radler Ltd., among a number of other parties, for breach of fiduciary duty, oppressive conduct, and a variety of causes of action. The Company said that the Mareva Injunction Order, applicable worldwide, prevents Mr. Radler and F.D. Radler Ltd. from disposing of, mortgaging or transferring their assets, and freezes their bank accounts while the claim filed by the Company is pending before the courts. The Court declined to continue the Order until the conclusion of the proceedings previously brought by Hollinger against Mr. Radler and F.D. Radler Ltd. in Ontario, but did issue a two-week limited injunction, at Hollinger's request, to allow Hollinger to consider appealing the decision to the British Columbia Court of Appeal. Hollinger has since determined to appeal the decision. On Nov. 17, 2006, the British Columbia Supreme Court declined to continue the two-week limited injunction it had previously issued. About Hollinger Inc. The principal asset of Hollinger Inc. (TSX: HLG.C)(TSX: HLG.PR.B) -- http://www.hollingerinc.com/-- is its approximately 70.1% voting and 19.7% equity interest in Sun-Times Media Group Inc. (formerly Hollinger International Inc.), a newspaper publisher with assets which include the Chicago Sun-Times and a large number of community newspapers in the Chicago area. Hollinger also owns a portfolio of commercial real estate in Canada. Litigation Risks Hollinger Inc. faces various court cases and investigations: (1) a consolidated class action complaint filed in Chicago, Illinois; (2) a class action lawsuit that was filed in the Saskatchewan Court of Queen's Bench on Sept. 7, 2004; (3) a $425,000,000 fraud and damage suit filed in the State of Illinois by International; (4) a lawsuit seeking enforcement of a Nov. 15, 2003, restructuring proposal to uphold a Shareholders' Rights Plan, a declaration that corporate by-laws were invalid and to prevent the closing of a certain transaction; (5) a lawsuit filed by International seeking injunctive relief for the return of documents of which it claims ownership; (6) a $5,000,000 damage action commenced by a lessor of an aircraft lease, in which Hollinger was the guarantor; (7) an action commenced by the United States Securities and Exchange Commission on Nov. 15, 2004, seeking injunctive, monetary and other equitable relief; and (8) investigation by the enforcement division of the OSC. INFOUSA INC: Planned Opinion Deal Cues Moody's to Hold Ba3 Rating ----------------------------------------------------------------- Moody's affirmed the Ba2 rating on $275 million in first lien credit facilities of InfoUSA Inc. Concurrently, Moody's has affirmed the corporate family rating of InfoUSA at Ba3 and the outlook as stable. The rating actions follow InfoUSA's report that it plans to acquire Opinion Research Corporation, a provider of market research services to government and corporate clients in North America, Europe, and Asia, for $12 per share in an all-cash transaction valued at approximately $134 million. While Moody's has some concerns with respect to the financial policies and corporate governance issues surrounding this issuer as well as integration risk and prospective revenue synergies to be derived from the acquisition, the company's key financial metrics, including free cash flow, leverage and interest coverage are expected to remain strong for the rating category. Moody's affirmed these ratings: -- $175 million senior secured revolving credit facility, due 2011, rated Ba2, LGD2, 24% to LGD2, 23% -- $100 million senior secured term loan B, due 2012, rated Ba2, LGD2, 24% to LGD2, 23% -- Corporate Family Rating, rated Ba3 -- Probability of Default Rating, rated B1 The ratings outlook is stable The affirmation of the ratings reflect the fact that while the Opinion Research acquisition is sizeable, will entail a material leveraging of the company's balance sheet, and relies on revenue synergies for incremental cash flows, the company's key financial metrics, including free cash flow, leverage and interest coverage are expected to remain strong. The ratings also reflect other continuing strengths, which include: -- the company's annuity-like revenues stream; -- the high quality of its data; -- its diverse customer base; -- its sizeable contract backlog; -- strong and stable industry growth trends; and, -- a business with significant barriers to entry over the near to medium-term. Downward pressure on the ratings is provided by the company's aggressive acquisition profile, corporate governance issues, its relatively small size and the lack of a clearly delineated financial policy. The stable outlook reflects Moody's expectation that while the Opinion Research acquisition is a material one, the company will successfully assimilate the operation and realize incremental cash flows over the forthcoming year. It is also anticipated that the company will utilize free cash flow to rapidly reduce debt acquired in support of the Opinion Research and that it will continue to exhibit strong free cash flow and interest coverage metrics. The ratings could move downward if the company undertakes another major acquisition during the upcoming year or if it experiences difficulty in assimilating the Opinion Research and other, recent acquisitions. Ratings could also be pressured if sales synergies and incremental cash flows forecast with respect to the Opinion Research acquisition do not materialize. The ratings could also move downward if adjusted free cash flow to debt deteriorates to a level within a range of 5% to 10% on a sustained basis. The ratings could come under upward pressure if the company is able to realize targeted cross-selling benefits from the Opinion Research acquisition, resulting in material, incremental cash flows from the combination and if InfoUSA management takes steps to materially tighten controls with respect to corporate governance. Headquartered in Omaha, Nebraska, InfoUSA Inc. is a leading provider of business and consumer information, data processing and database marketing services. For the twelve months ended Sept. 30, 2006, the company recognized revenue of approximately $409 million. IRIDIUM SATELLITE: Reports Subscriber Growth as of September 30 --------------------------------------------------------------- Iridium Satellite LLC disclosed that it now has approximately 169,000 subscribers worldwide as of Sept. 30, 2006 versus approximately 137,500 subscribers at the same time last year. For the nine months ended Sept. 30, 2006, Iridium posted total revenue of $159.3 million. Iridium's total revenue in the third quarter was $54.7 million. Third quarter 2006 EBITDA was $14 million. EBITDA through nine months was $39.9 million. Iridium results show considerable momentum, particularly from increased demand for voice and data services from commercial customers. Commercial Service revenue continued to grow, and it now comprises approximately 70 percent of total revenue. "With seven consecutive quarters of profitability, Iridium is in a strong position to move forward with its next generation constellation and service plans," said Matt Desch, who was appointed as Chairman and CEO of Iridium Satellite LLC in September. "We're running the world's largest commercial mobile satellite communications network, and providing the highest quality and most reliable voice and data communications service in the industry. Since independent studies indicate we can expect full network operations into the next decade, we have ample time to ensure a smooth transition to our next generation constellation." Iridium is working with leading innovators inside and outside the industry to design a new constellation that will be an IP-based, end-to-end system. It will maintain the security and global coverage customers count while increasing the bandwidth available to users, supporting multiple devices, and driving down costs. Iridium is planning its new network to be operational until at least 2030, providing new offerings such as portable and fixed broadband communications, and wide area broadcast services. The new system will be backward compatible with its current services. "At the same time, we're investing in our current constellation to develop capabilities in ways never thought possible," Mr. Desch said. "We're developing new services and working with partners to foster many new Iridium applications." Third Quarter Highlights Growth In Data Business Demand for Iridium data services increased 44 percent over the same period last year. In the first quarter of this year, Iridium began delivering its new, lower-cost satellite data modem, the 9601 Short-Burst Data transceiver. The company designed the 9601 to optimize two-way data links. "Many Iridium customers are realizing that the compact size and low latency of the 9601 make it the industry's most ideal solution for small package, time-sensitive data communications applications," Mr. Desch said. "We're way ahead of plan in delivering 9601 units for applications in supply chain management, field force automation and remote asset tracking. High demand is coming from markets such as heavy equipment, homeland security, supply chain logistics, maritime, automotive, industrial equipment, trucking, railroads, oil and gas, utilities and government. I continue to be impressed by the way our exceptional partner base has broadened awareness in the market about the critical, embedded data communications needs only Iridium can address," Mr. Desch added. Corporate News Iridium enhanced its leadership team and financial strategy in the third quarter, as well. Matt Desch joined in September as Chairman and CEO. Mr. Desch was most recently CEO of New Jersey- based Telcordia Technologies, Inc. and has spent the last 15 years in the mobile communications industry. Alvin B. Krongard joined the Iridium Board of Directors. Mr. Krongard is the former Chief Executive Officer and Chairman of the Board of Alex.Brown Incorporated, and served with U.S. Central Intelligence Agency first as Counselor to the Director, and then as Executive Director. The company also announced the completion of $210 million senior secured credit facilities to repay existing credit facilities, provide cash collateral for a letter of credit, return capital to the company's equity investors, and general corporate purposes. About Iridium Iridium Satellite LLC -- http://www.iridium.com/-- is the only provider of truly global satellite voice and data solutions with complete coverage of the earth (including oceans, airways and Polar Regions). Iridium delivers essential communications services to and from remote areas where no other form of communication is available. The Iridium constellation consists of 66 low-earth orbiting, cross-linked satellites and has multiple in-orbit spares. The constellation operates as a fully meshed network and is the largest commercial satellite constellation in the world. The company also designs, builds and sells its services, products and solutions through a worldwide network of more than 100 partners. * * * As reported in the Troubled Company Reporter on July 31, 2006, Standard & Poor's Ratings Services assigned its bank loan and recovery ratings to the $210 million secured bank financing of Iridium (B-/Negative/--). The Company's $170 million first-lien loan is rated 'B-', the same as the corporate credit rating on Iridium, with a recovery rating of '3', indicating an expectation for meaningful (50%-80%) recovery of principal following a payment default. The $40 million second-lien term loan is rated 'CCC', with a recovery rating of '5', indicating the expectation for negligible (0%-25%) recovery of principal following a payment default. As reported in the Troubled Company Reporter on June 22, 2006, Moody's Investors Service assigned a B3 Corporate Family Rating and SGL-2 speculative grade liquidity to Iridium Satellite. As well, Moody's assigned a B3 first priority senior secured and a Caa1 second priority senior secured rating to the company's prospective bank facility, subject to review of final documentation. This is the first time ratings have been assigned to Iridium. The outlook is stable. ISTAR FINANCIAL: Declares Preferred Stock Dividends --------------------------------------------------- iStar Financial Inc.'s Board of Directors has declared dividends on the Company's Series D, Series E, Series F, Series G, and Series I Preferred Stock. For all five series of Preferred Stock, dividends are payable on Dec. 15, 2006 to holders of record on Dec. 1, 2006. A dividend of $0.50 per share will be paid on the 8.00% Series D Preferred Stock; a dividend of $0.492188 per share will be paid on the 7.875% Series E Preferred Stock; a dividend of $0.4875 per share will be paid on the 7.80% Series F Preferred Stock; a dividend of $0.478125 per share will be paid on the 7.65% Series G Preferred Stock; and a dividend of $0.46875 per share will be paid on the 7.50% Series I Preferred Stock. iStar Financial (NYSE: SFI) -- http://www.istarfinancial.com/-- is a publicly traded finance company focused on the commercial real estate industry. The Company provides custom- tailored financing to high-end private and corporate owners of real estate nationwide, including senior and junior mortgage debt, senior and mezzanine corporate capital, and corporate net lease financing. The Company, which is taxed as a real estate investment trust, seeks to deliver a strong dividend and superior risk-adjusted returns on equity to shareholders by providing the highest quality financing solutions to its customers. * * * iStar Financial Inc.'s preferred stock carry Moody's Investors Service's Ba1 rating with a stable outlook. Fitch Ratings also raised the Company's preferred stock rating to 'BB+' from 'BB' in January 2006. Fitch said the Rating Outlook is Stable. J.P. MORGAN: Expected Losses Cue Fitch to Junk Ratings ------------------------------------------------------ Fitch Ratings downgrades the ratings on J.P. Morgan Chase Commercial Mortgage Securities Corp.'s commercial mortgage pass- through certificates, series 2001-CIBC1: -- $12.7 million class K to 'B-' from 'B+'; -- $5.1 million class L to 'CC/DR4' from 'B'; -- $5.1 million class M to 'C/DR6' from 'CCC/DR4'. These classes are affirmed by Fitch: -- $607 million class A-3 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $43.1 million class B at 'AAA'; -- $40.6 million class C at 'AAA'. -- $12.7 million class D at 'AAA'. -- $25.4 million class E at 'AA'; -- $14 million class F at 'A+'; -- $29.2 million class G at 'BBB' -- $10.1 million class H at 'BB+'; -- $7.6 million class J at 'BB'. The $6.2 million class NR certificates are not rated by Fitch. Classes A-1 and A-2 have been paid in full. The downgrades are the result of increased Fitch expected losses on the specially serviced assets. Fitch-projected losses are expected to fully deplete class M and negatively impact classes L and K. Four loans have defeased (2.1%) since the last Fitch rating action. Since issuance, 19 loans (22.9%) have defeased, including the three largest loans (12.4%) in the pool. As of the October 2006 distribution date, the transaction has paid down 19.3% to $818.7 million from $1.01 billion at issuance. Currently, six assets (2.6%) are in special servicing and all are real estate owned. Fitch anticipates losses on all six assets. The largest specially serviced asset (1.0%) is a multifamily property in Greece, NY that became REO in June 2006. The special servicer will list this asset for sale in fourth quarter 2006. The second largest specially serviced asset (1.2%) is a multifamily property in Irving, TX that became REO in September 2004. The asset sustained hurricane damage and is currently 89% vacant. The special servicer is developing an asset disposition strategy for this property. The next largest specially serviced asset (0.4%) is a hotel in La Porte, Indiana that became REO in September 2005. The special servicer is currently reviewing the business plan for the hotel. Fitch has designated 15 loans (9.6%) as Fitch Loans of Concern in the pool. These include the specially serviced loans and loans with low DSCR and occupancies. The largest Fitch Loan of Concern (2.7%) is a retail shopping center in Wallkill, New York and is current. The performance decline is due to a slight drop in effective gross income accompanied by an increase in operating expenses. The occupancy at the center is 87.5% as of September 2006. Fitch will continue to monitor the performance of the collateral. KANSAS CITY: Fitch Rates $175 Million 7.625% Senior Notes at 'B+' ----------------------------------------------------------------- Fitch Ratings assigned a 'B+' foreign currency rating and an 'RR4' recovery rating to the $175 million 7.625% senior notes due 2013 to be issued by Kansas City Southern de Mexico, S.A. de C.V.. Fitch also maintains 'B+' foreign currency ratings and 'RR4' recovery ratings on KCSM's $178 million 12.50% senior notes due 2012 and the US$460 million 9.375% senior notes due 2012. The proceeds of the proposed new issuance will be used to pay off the company's outstanding $150 million 10.25% notes due 2007 and other existing debt. As a result, Fitch simultaneously affirms and withdraws its 'B+' foreign currency rating of the notes due in 2007. Fitch also maintains a 'B+' foreign and local currency Issuer Default Rating for KCSM. The Rating Outlook for these ratings is Stable. The ratings for KCSM are supported by the company's solid business position as a leading provider of railway transportation services in Mexico with a diversified revenue base consisting of five main industrial sectors. Although operating earnings have improved in 2006, the ratings continue to reflect KCSM's weak financial profile due to its high leverage and tight liquidity. Over the past several years, KCSM has operated in a challenging environment characterized by fierce competition, higher fuel costs, a depreciating Mexican peso versus the U.S. dollar, and a general shift in manufacturing to China from several countries, including Mexico. KCSM's capital structure remains highly levered. As of Sept. 30, 2006, KSCM had approximately $1.4 billion in total debt consisting primarily of $788 million in unsecured notes due in 2007 and 2012 and an estimated $494 million of off-balance debt associated with lease obligations. KCSM's EBITDAR, defined as operating EBITDA plus the company's locomotive and railcar lease payments, was $236 million in the first nine months of 2006 and the ratio of total debt-to-EBITDAR was 4.4x, an improvement compared with 6.1x in 2005 and 5.3x in 2004. EBITDAR covered fixed expenses, defined as interest expense plus lease payments, by about 2x in the first nine months of 2006 compared with 1.4x in 2005 and 1.5x in 2004. KCSM's liquidity has improved throughout 2006 with $41.6 million of cash as of Sept. 30, 2006 compared with $7.1 million at Dec. 31, 2005. Fitch views the transaction completed on April 1, 2005 in which Grupo TMM sold its 51% voting interest in Grupo KCSM to Kansas City Southern as being mildly positive for KCSM. The transaction replaced KCSM's financially distressed controlling shareholder, Grupo TMM, with KCS, a U.S. entity that has a stronger financial profile but one that is also highly leveraged. On Sept. 12, 2005, KCS and other parties entered into an agreement to resolve a dispute with the Mexican government concerning the refund of value added taxes. The result of the settlement involved the cashless exchange of the government's 20% stake in KCSM for the VAT refund such that KCS now owns 100% of the common stock of KCSM via Grupo KCSM, the holding company for KCSM. Despite the acquisition, the KCS railway group continues to be a small operation with about 60% of consolidated earnings generated by the Mexican railroad, KCSM. KCSM is well positioned to continue to benefit from the growth in the Mexican economy and cross-border trade as a result of the North American Free Trade Agreement. The company's revenues are derived predominantly from cross-border freight transportation with the U.S. KCS is now focusing on integrating KCSM into its U.S. rail network, increasing the company's traffic volumes via truck-to-rail conversion efforts, improving efficiencies, adding infrastructure, and developing an international inter-modal corridor to link the port of Lazaro Cardenas on Mexico's south Pacific coast and important commercial cities such as San Luis Potosi and Monterrey with the southeastern U.S. via Jackson, Miss. The route covers major distribution markets such as Mexico City and Laredo, Texas. KCSM is one of three main railroad networks in Mexico, transporting approximately 40% of the country's railway freight volumes. The company's main tracks cover 2,600 miles throughout commercial and industrial areas in the northeastern and central region of the country and serve three of Mexico's main seaports. KSCM operates a strategically significant route connecting Mexico City with Nuevo Laredo-Laredo, Texas, the largest freight exchange point between the U.S. and Mexico. In 2005, revenues were generated from diverse sectors such as agro-industrial (23%), cement, metals and minerals (20%), chemical and petrochemical (18%), automotive (16%), manufacturing and industrial (14%), and intermodal (8%). Kansas City Southern of the U.S. owns 100% of KSCM via its wholly owned subsidiary, Grupo KCSM. KANSAS CITY SOUTHERN: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its Probability-of-Default and Loss-Given-Default rating methodology for the Transportation sector, the rating agency confirmed its B2 Corporate Family Rating for Kansas City Southern, and its subsidiary, The Kansas City Southern Railway Company. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these debentures: Issuer: Kansas City Southern Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Preferred Stk. Caa2 Caa1 LGD6 100% Guaranteed Senior Unsecured Shelf B3 B3 LGD4 69% Guaranteed Subordinated Shelf Caa1 Caa1 LGD6 97% Issuer: The Kansas City Southern Railway Company Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Senior Secured Guaranteed Revolving Credit Facility, Due 2011 B1 Ba2 LGD2 21% Senior Secured Guaranteed Term Loan Facility Due 2011 B1 Ba2 LGD2 21% 7-1/2% Guaranteed Senior Notes Due 2009 B3 B3 LGD4 69% 9-1/2% Guaranteed Senior Notes Due 2008 B3 B3 LGD4 69% Senior Unsecured Shelf B3 B3 LGD4 69% Subordinated Shelf Caa1 Caa1 LGD6 97% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Kansas City, Missouri, Kansas City Southern (NYSE: KSU) - http://www.kcsi.com/-- is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is The Kansas City Southern Railway Company, serving the central and south central U.S. Its international holdings include KCSM, serving northeastern and central Mexico and the port cities of L zaro Cardenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS' North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the U.S., Canada and Mexico. KIDDER PEABODY: Fitch Holds BB+ Rating on Class B-1 Certificates ---------------------------------------------------------------- Fitch Ratings has affirmed the ratings of six classes of Kidder Peabody Acceptance Corporation residential mortgage-backed certificates, series 1993-1: -- Classes A-5, A-6, P affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'A'; -- Class B-1 affirmed at 'BB+'. The affirmations on the above classes reflect adequate relationships of credit enhancement to future loss expectations and affect $430,775 of certificates. The CE levels have increased by more than two times the original levels since the closing date. Cumulative losses as a percent of the original collateral balance are 0.09%. The pool factor (i.e. current mortgage loans outstanding as a percentage of initial pool) is less than 1% with only three loans left in the pool. The underlying collateral consists of conventional, fixed-rate, fully amortizing residential mortgage loans extended to prime borrowers. The mortgage loans are serviced by PHH Mortgage Corp, which is rated 'RPS1-' by Fitch. KLEROS REAL: Moody's Rates $5 Mil. Class C Notes Due 2046 at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Kleros Real Estate CDO III, Ltd.: -- Aaa to $815,000,000 Million Class A-1A First Priority Senior Secured Floating Rate Delayed Draw Notes due 2046; -- Aaa to $60,000,000 Million Class A-1B Second Priority Senior Secured Floating Rate Notes due 2046; -- Aa2 to $70,000,000 Million Class A-2 Third Priority Senior Secured Floating Rate Notes due 2046; -- A2 to $15,000,000 Million Class A-3 Fourth Priority B Senior Secured Deferrable Floating Rate Notes due 2046; -- A3 to $10,000,000 Class A-4 Fifth Priority Secured Deferrable Floating Rate Notes due 2046; -- Baa3 to $11,000,000 Million Class B Sixth Priority Mezzanine Deferrable Floating Rate Notes due 2046 and -- Ba2 to $5,000,000 Class C Seventh Priority Mezzanine Deferrable Floating Rate Notes due 2046. Strategos Capital Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. Moody's ratings of the Notes address the ultimate cash receipt of all interest and principal payments required by the Notes' governing documents, and are based on the expected loss posed to holders of the Notes relative to the promise of receiving the present value of such payments. The ratings are also based upon the transaction's legal structure and the characteristics of the underlying assets. LIFECARE HOLDINGS: S$P Lowers Corp. Credit Rating to B- from B -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Plano, Texas-based LifeCare Holdings Inc. The corporate credit rating was lowered to 'B-' from 'B', and the rating outlook is negative. "The rating downgrade reflects the company's weak earnings, unfavorable reimbursement outlook, likelihood of eroding liquidity, and strong prospects for bank covenant violations within the next six months," said Standard & Poor's credit analyst David Peknay. The low-speculative-grade rating on this operator of long-term acute care hospitals reflects LifeCare's narrow focus in a competitive business, substantial reimbursement risk, weak cash flow protection measures, and high debt levels. Despite favorable demographics that, in theory, should benefit LifeCare, Medicare's apparent unfavorable sentiment regarding the rates it pays LTACHs is a large concern. Based on Standard & Poor's earnings expectations, the company's leverage will increase from its present level of 6.10x to above its 6.75x maximum debt leverage covenant within the next two quarters. In addition, prospects for profit improvement appear limited, as cost-saving initiatives will have to overcome both the lack of a Medicare market basket increase in 2007 and normal inflationary increases in expenses. MERRILL LYNCH: S&P Holds Low-B Ratings on Six Cert Classes ---------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on three classes of commercial mortgage pass-through certificates from Merrill Lynch Mortgage Trust 2003-KEY1. Concurrently, ratings are affirmed on the remaining 21 classes from the same transaction. The raised and affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The affirmations on the raked certificates follow Standard & Poor's analysis of the collateral property securing the 77 West Wacker Drive loan. As of the Nov. 13, 2006, remittance report, the collateral pool consisted of 78 loans with an aggregate trust balance of $1.047 billion, compared with 79 loans totaling $1.077 billion at issuance. The master servicer, KeyBank Real Estate Capital, reported primarily full-year 2005 financial information for 100% of the pool, excluding the loans for defeased collateral. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.97x, up from 1.89x at issuance. All of the loans in the pool are current, and none are with the special servicer. To date, the trust has not experienced any losses. The top 10 loans have an aggregate outstanding balance of $630.5 million and a weighted average DSC of 2.27x, up from 1.87x at issuance. This calculation excludes the eighth-largest loan, which is secured by a leasehold interest in a cooperative in Manhattan. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans, and all of the properties were characterized as "good." Credit characteristics for four of the loans in the pool continue to be consistent with those of investment-grade obligations. These are the details of these loans: -- The largest exposure in the pool, the 77 West Wacker Drive loan, is encumbered by a $143.2 million class A note and a $20.7 million junior participation. The junior participation provides 100% of the cash flow to the raked certificates noted with a "WW" prefix. The loan is secured by the fee interest in a 944,556-sq.-ft. office property in Chicago. Occupancy at the property was 69% as of Sept. 30, 2006, down from 93% at year-end 2005. The loan is on the watchlist because the former largest tenant, RR Donnelley & Sons Co., terminated its lease before its May 2007 expiration date. RR Donnelley paid a $2.9 million lease termination fee, which KeyBank has deposited in the rollover reserve account. The property reported a year-end 2005 DSC of 2.63x. Standard & Poor's analysis used a stabilized value that considered various current market conditions for this asset. -- The second-largest exposure in the pool, the Solomon Pond Mall loan, has a loan balance of $113.5 million (11%). The loan is secured by 427,439 sq. ft. of a 911,959-sq.-ft. regional mall in Marlborough, Mass. The manager of the property is Simon Property Group Inc. For the six months ended June 30, 2006, the DSC was 2.88x. Standard & Poor's adjusted net cash flow is up 5% from its level at issuance. -- The third-largest exposure in the pool, the Miami International Mall loan, has a loan balance of $97.4 million (3%). The loan is secured by a fee interest in 292,509 sq. ft. of a 1.1 million-sq.-ft. regional mall in Miami. Occupancy at the collateral property was 80% as of June 30, 2006. Standard & Poor's adjusted NCF is 4% above its level at issuance. -- The 10th-largest exposure in the pool, the Mall at Fairfield Commons loan, has a trust balance of $27.3 million and a whole-loan balance of $109.4 million. An $82 million pari passu portion that is not included in the trust serves as collateral for another transaction. The loan is secured by 856,780 sq. ft. of a 1 million-sq.-ft. enclosed regional mall built in 1993 in Beavercreek, Ohio. Occupancy was 100% as of year-end 2005. Standard & Poor's adjusted NCF is similar to its level at issuance. In addition to the 77 West Wacker Drive loan, seven other loans totaling $96.2 million are on the watchlist. The Circa Capital portfolio is the fifth-largest exposure in the pool, with an outstanding loan balance of $42.7 million. This loan is composed of two cross-collateralized and cross- defaulted loans. Each loan is secured by three Holiday Inn lodging properties in various states. The Circa Capital East loan appears on the watchlist because the collateral properties reported a combined year-end 2005 DSC of 1x. Anchor Bay is the sixth-largest loan in the pool, with an outstanding balance of $40.6 million, and is secured by a 1,384-pad manufactured housing property in Fair Haven, Michigan. This loan is on the watchlist because the collateral property reported a DSC of 1.14x for the six months ended June 30, 2006, down from a year-end 2005 DSC of 1.54x. The decline in DSC is primarily attributable to the fact that the interest-only period of the loan has ended. Standard & Poor's stressed the loans on the watchlist and other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised Merrill Lynch Mortgage Trust 2003-KEY1 Commercial Mortgage Pass-Through Certificates Series 2003-Key1 Rating ------- Class To From Credit enhancement (%) ----- -- ---- ---------------------- B AA+ AA 11.57 C AA AA- 10.03 D A+ A 7.59 Ratings Affirmed Merrill Lynch Mortgage Trust 2003-KEY1 Commercial Mortgage Pass-Through Certificates Series 2003-Key1 Class Rating Credit enhancement (%) ----- ------ ---------------------- A-1 AAA 14.92 A-1A AAA 14.92 A-2 AAA 14.92 A-3 AAA 14.92 A-4 AAA 14.92 E A- 6.56 F BBB+ 5.40 G BBB 4.63 H BBB- 3.60 J BB+ 3.09 K BB 2.57 L BB- 2.19 M B+ 1.54 N B 1.29 P B- 1.16 XC AAA N/A XP AAA N/A N/A-Not applicable. Ratings Affirmed Merrill Lynch Mortgage Trust Commercial Mortgage Pass-Through Certificates Series 2003-KEY1 Class Rating Credit enhancement (%) ----- ------ ---------------------- WW-1 BBB+ N/A WW-2 BBB N/A WW-3 BBB- N/A WW-X BBB+ N/A N/A-Not applicable. MORGAN STANLEY: Fitch Holds Junk Rating on 3 Certificate Classes ---------------------------------------------------------------- Fitch Ratings upgrades the rating on Morgan Stanley Capital 1 Inc., commercial mortgage pass-through certificates, series 1999- FNV1 as: -- $20.5 million class G to 'A-' from 'BBB+. Fitch also affirms the ratings on these classes: -- $333.3 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $33.2 million class B at 'AAA'; -- $26.9 million class C at 'AAA'; -- $12.6 million class D at 'AAA'; -- $30 million class E at 'AAA'; -- $14.2 million class F at 'AA+'; -- $7.9 million class H to 'BBB'; -- $9.5 million class J at 'BB-'; -- $7.9 million class K at 'B'. Fitch maintains the ratings of these classes: -- $6.3 million class L at 'CCC/DR3'; -- $6.3 million class M at 'C/DR6'; -- $785,000 class N at 'C/DR6'. The balance of class O has been reduced to zero by realized losses. Realized losses total $14.8 million to date. Class A-1 paid in full. The upgrades reflect increased credit enhancement due to paydown and additional defeasance (4%) since the last Fitch rating action. Thirty-two loans (22.3%) have fully defeased since issuance. As of the November 2006 distribution date, the pool's aggregate certificate balance has been reduced 19.4% to $509.5 million from $632.1 million at issuance. Currently, two assets (3.3%) are in special servicing. The largest specially serviced asset (1.6%) is a retail center located in Sevierville, Tennessee, and is currently real-estate owned (REO). The special servicer continues with leasing efforts at the mall before placing it on the market for sale. The second specially serviced asset (1.7%) is secured by an industrial property located in San Jose, CA and is REO. The major tenant filed for bankruptcy and vacated the property in August 2006. The property is currently 11% occupied. The special servicer is in the process of obtaining a broker to market the property for sale. Based on the most recent appraisal value, significant losses are expected upon liquidation. Fitch projected losses on the specially serviced assets are expected to deplete classes M and N. MORGAN STANLEY: Fitch Holds Low-B Ratings on Six Cert Classes ------------------------------------------------------------- Fitch upgrades the ratings on Morgan Stanley Dean Witter Capital Inc. commercial mortgage pass-through certificates, series 2003- TOP9: -- $32.3 million class B to 'AAA' from 'AA'; -- $35.0 million class C to 'AA-' from 'A'; -- $12.1 million class D to 'A' from 'A-'. Fitch affirms the ratings on these classes: -- $227.4 million class A-1 at 'AAA'; -- $610.8 million class A-2 at 'AAA'; -- Interest-only (I/O) classes X-1 and X-2 at 'AAA'; -- $14.8 million class E at 'BBB+'; -- $6.7 million class F at 'BBB'; -- $5.4 million class G at 'BBB-'; -- $10.8 million class H at 'BB+'; -- $4.0 million class J at 'BB'; -- $5.4 million class K at 'BB-'; -- $5.4 million class L at 'B+'; -- $2.7 million class M at 'B'; -- $2.7 million class N at 'B-'. Fitch does not rate the $10.8 million class O. The upgrades are due to defeasance, stable pool performance and scheduled amortization. As of the November 2006 distribution date, the pool's aggregate principal balance has decreased 8.5% to $986.5 million from $1.08 billion at issuance. Currently, one asset (0.4% of the pool) is in special servicing. The REO asset is a 104,184 sf industrial/warehouse property located in Yakima, Washington. The special servicer is actively marketing the property through a broker. Fitch expects losses on the asset which will minimally reduce the principal balance of the non-rated class O. The six credit assessed loans (28.4% of the pool) remain investment grade. Fitch reviewed operating statement analysis reports and other performance information provided by Wells Fargo, the master servicer. The Fitch stressed debt service coverage ratio for the loans is calculated based on a Fitch adjusted net cash flow and a stressed debt service based on the current loan balance and a hypothetical mortgage constant. 1290 Avenue of the Americas (7.1%) %) is secured by a 43-story class A office building totaling 2 million sf, located in midtown Manhattan, New York. The whole loan was divided into four pari passu notes and a subordinate B-note. Only the $70.0 million A-1 note serves as collateral in the subject transaction. As of year end 2005, the Fitch stressed DSCR increased to 1.59 times (x) from 1.46x at issuance. Occupancy as of April 2006 is 97.9% compared to 98.7% at issuance. Oakbrook Center (6.7%) is secured by the fee interest in 942,039 square feet of owned retail space, 240,223 sf of office space in three buildings, and the ground leases for a 172-room Renaissance Hotel, Nordstrom, Neiman Marcus, and a Bloomingdale's Home Store in Oak Brook, Illinois. The whole loan as of November 2006 has an outstanding principal balance of $225.4 million and is divided into four pari passu notes. Only the $66.7 million A-1 note serves as collateral in the subject transaction. The Fitch stressed DSCR as of YE 2005 was 1.81x compared to 1.49x at issuance. The remaining four credit assessed loans, 601 New Jersey Avenue (4.4%), Inland Portfolio (4.2%), 10 G Street, NE (4.1%), and Parc East Tower (1.9%), have remained stable since issuance. MORTGAGE ASSET: Fitch Holds Low-B Ratings on 2 Certificate Classes ------------------------------------------------------------------ Fitch Ratings has affirmed the ratings on these Mortgage Asset Securitization Transactions, Inc. mortgage pass-through certificates: Series 2003-12 -- Class A affirmed at 'AAA'. Series 2004-5 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. The affirmations, affecting approximately $592 million of the outstanding certificates, reflect a stable relationship between credit enhancement and expected loss. In addition, both of the above transactions have experienced growth in credit enhancement of 1.4 times (x) the original CE and have not suffered any losses to date. The collateral for the above transactions consists of conventional, fully amortizing, jumbo-prime, 10-year to 30-year fixed-rate mortgage loans secured by first liens on one- to four- family residential properties. The loans were acquired by UBS from various originators and are master serviced by Wells Fargo Bank Minnesota, N.A., which is rated 'RMS1' by Fitch. As of the October 2006 distribution date, the pool factor (i.e., current mortgage loans outstanding as a percentage of the initial pool) for series 2003-12 is 68% and series 2004-5 is 66%. In addition, series 2003-12 is seasoned 34 months and series 2004-5 is seasoned 30 months. MWAM CBO: Moody's Puts Ba2-Rated Notes on Watch for Downgrade ------------------------------------------------------------- Moody's Investors Service placed this class of notes issued by MWAM CBO 2001-1, a collateralized debt obligation issuer, on watch for possible downgrade: -- The $21,875,000 Million Class B Floating Rate Notes Due January 30, 2031 Prior Rating: Ba2 Current Rating: Ba2, on watch for possible downgrade The rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool as well as the occurrence of asset defaults and par loss, according to Moody's. NORTHWEST PARKWAY: Fitch Junks Rating on $420-Mil. Sr. Bonds ------------------------------------------------------------ Fitch Ratings downgraded the Northwest Parkway Public Highway Authority, CO's $420.4 million in outstanding senior revenue bonds, series 2001A, 2001B and 2001C to 'CCC+' from 'BB-'. The Rating Outlook is Negative. A 'CCC' category rating means that default is a real possibility and capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic conditions. Fitch expects Northwest Parkway's resources provide about three to four years before it encounters debt service payment problems on the senior revenue bonds. The senior revenue bonds are insured by Ambac Assurance Corporation and Financial Security Assurance, Inc. Fitch does not rate the $52.5 million in outstanding first tier subordinate revenue bonds. Fitch's downgrade to 'CCC+' and Negative Outlook reflect an increasingly constrained financial environment where, despite growing traffic levels and the Jan 1, 2006 main line toll increase, toll revenues remain insufficient to pay the escalating debt service profile. As a result, Northwest Parkway is drawing down its internal liquidity to meet its obligations. Fitch's rating also recognizes Northwest Parkway's demonstrated base level of traffic demand and a moderate level of economic rate making ability that combined with available internal liquidity provides the authority with some time before it encounters debt service payment problems on the senior revenue bonds. Potential resistance to toll increases remains a risk. Although Northwest Parkway is evaluating a leasing strategy that would involve a payment from a concessionaire that would be used in part to repay the outstanding bonds, this is not factored into Fitch's rating on the outstanding bonds given this repayment is not currently part of the bonds' legal security and is subject to successful negotiation and execution of a concession arrangement that meets the mutual needs of the authority and a concessionaire. While traffic and revenue continue to exhibit strong growth, the gap between actual toll revenues and the 2001 forecast developed at the time the bonds were sold is also widening. Toll revenues equaled 67% of forecast in 2004 and while increasing by 33% in 2005 to $5.6 million represented 54% of the 2001 estimate. Although the authority raised the main line toll rate this year to $2.00 from $1.75, an increasing share of traffic is using the Sheridan Interchange where the toll is set at the lower rate of 50 cents. This has muted the effects of the rate adjustment. Therefore, based on year to date data through Oct. 2006, an expected 17% increase in toll revenues to $6.6 million for the full year primarily reflects underlying traffic growth and represents 38% of Northwest Parkway's forecast. Fitch estimates that traffic and toll revenues will be about 25-30% of the 2001 forecast through the near term. Internal liquidity at the start of 2007 consisting of about $12 million in remaining and uncommitted construction funds, $36.2 million in the senior debt service reserve fund and $5.1 million in the first tier subordinate bonds debt service reserve fund provide an offset to lower than projected traffic and revenue and are expected to be tapped to pay debt service in the near term. Given expected traffic and revenue growth and available internal liquidity, Fitch estimates the authority's resources will not be sufficient to meet senior debt service obligations beyond 2009- 2010, while the first tier bonds would encounter payment problems as early as 2008-2009. Debt service payment problems may be deferred with higher levels of traffic growth and the authority's need to raise tolls to meet the rate covenant requirement where net revenues provide at least 1.3x senior debt service and 1.15x debt service due on senior and first tier subordinate bonds. Nevertheless, the 53% increase in debt service expenses next year poses a significant financial challenge given current toll revenue levels and will likely require the authority to draw down most of the remaining construction funds to meet this obligation. At present, the authority has identified 11 firms to submit proposals for a long term lease of the Northwest Parkway. In exchange for the winning concessionaire's payment that would be used in part to repay the outstanding bonds, the concessionaire is expected to have the right to operate, maintain, set rates and collect toll revenues on the Northwest Parkway for a period of at least 50 years based on the parameters negotiated under a concession agreement between the authority and the concessionaire. Fitch notes that although the Northwest Parkway is experiencing significant near term financial challenges, the number of bidders recognizes the potential growing long term economic value of the toll road. Northwest Parkway expects to identify a preferred a bidder in Feb. 2007 and complete negotiations and close the transaction by May 2007. The senior bonds are secured by toll revenues after payment of operations and maintenance expenses. The Northwest Parkway is a westward extension of the Denver region's beltway and consists of the two-mile Interlocken Loop between State Highway 128 and Tape Drive and a nine-mile limited access toll road between Tape Drive and I-25 with a connection to E-470. Northwest Parkway, which is a subdivision of the State of Colorado as authorized by the public highway authority law and was established in 1999 by the City and County of Broomfield, Weld County, and the City of Lafayette, is responsible for the financing, design, construction, and operation of the Northwest Parkway. NVIDIA CORP: Shareholders File Derivative Lawsuit ------------------------------------------------- Keller Rohrback L.L.P. disclosed that a shareholder derivative complaint has been filed in the United States District Court, Northern District of California, on behalf of nominal defendant Nvidia Corp. (Nasdaq:NVDA) and against certain past and present executive officers and directors of Nvidia. On Aug. 10, 2006, Nvidia disclosed that its Audit Committee, with the assistance of outside legal counsel, commenced a voluntary review of the Company's stock option grant practices from its initial public offering in 1999 through the current fiscal year 2006, that ended January 29, 2006. On Sept. 11, 2006, Nvidia reported that the Securities and Exchange Commission requested that the Company provide them with certain information relating to its historical stock option practices. On Nov. 1, 2006, the Company disclosed that it expects to restate its previously issued financial statements for certain periods to correct errors related to accounting for stock-based compensation expense, but estimates that the net impact of the restatement will be combined non-cash charges of less than $150 million. Keller Rohrback's investigation focuses on the extent that the Company's stock option grant dates and exercise prices of stock options were manipulated by Nvidia's executive officers and directors in order to boost their value to those who received them. Specifically, Keller Rohrback is looking at whether potential defendants have breached their fiduciary duties and colluded with one another to: (1) improperly backdate grants of Nvidia's stock options to various executive officers and directors in violation of the Company's shareholder-approved stock option plans; (2) improperly record and account for the backdated stock options in violation of GAAP; (3) improperly take tax deductions based on the backdated stock options in violation of the Tax Code; and (4) produce and disseminate to the Company's shareholders false financial statements and other SEC filings that improperly recorded and accounted for the backdated option grants thereby concealing the improper backdating of stock options. For information concerning shareholder derivative claims being investigated, contact paralegal Jennifer Tuato'o or Elizabeth Leland, Esq., Cari Campen Laufenberg, Esq., Lynn Sarko, Esq. or Gary Gotto at toll-free 1-800-776-6044. Keller Rohrback L.L.P. is a law firm headquartered in Seattle that has successfully represented shareholders and consumers in class action cases for over two decades. About nVidia Corp. Headquartered in Santa Clara, California, NVIDIA Corporation (Nasdaq: NVDA) -- http://www.nvidia.com/-- creates innovative, industry-changing products for computing, consumer electronics, and mobile devices. The NVIDIA(R) graphics processing unit and media and communications processor brands include NVIDIA GeForce(R), NVIDIA GoForce(R), NVIDIA Quadro(R), and NVIDIA nForce(R). These product families are transforming visually-rich applications such as video games, film production, broadcasting, industrial design, space exploration, and medical imaging. * * * As reported in the Troubled Company Reporter on Aug. 17, 2006, Standard & Poor's Ratings Services placed its 'BB-' corporate credit on Santa Clara, California-based Nvidia Corp. on CreditWatch with negative implications following the Company's announcement that it will be unable to file its July 2006 10-Q financial statements by the extended deadline of Sept. 13, 2006. NVF CO: Committee Wants Flaster/Greenberg as Conflicts Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors of NVF Company and its debtor-affiliates asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain Flaster/Greenberg P.C. as its special conflicts counsel, nunc pro tunc to Oct. 6, 2006. Flaster/Greenberg will work on a contested matter in connection with the Debtors' use of proceeds from the sale of their Wilmington property in which the proceeds constitute cash collateral of New Castle County. Flaster/Greenberg will: a) give the Committee legal advice with respect to the contested matter; b) prepare necessary applications, answers, orders, reports and other legal papers; c) pursue any claims or matters as the Committee shall desire; and d) provide any and all other legal services for the Committee, which may be necessary or desirable in connection with this case. William J. Burnett, Esq., a shareholder at the Firm, will bill at $325 per hour for this engagement. Also rendering her services, Maris J. Finnegan, Esq., will bill at $195 per hour. The firm's other professionals and their hourly rates are: Designation Hourly Rate ----------- ----------- Shareholder $255 - $420 Associates $165 - $265 Paralegals $105 - $170 Mr. Burnett assures the Court that his firm does not hold any interest adverse to the Debtors' estate and creditors. Mr. Burnett can be reached at: William J. Burnett, Esq. Flaster/Greenberg P.C. 913 Market Street, Suite 1001 Wilmington, Delaware 19801 Tel: (302) 351-1910 Fax: (302) 351-1919 www.flastergreenberg.com/ Based in Yorklyn, Delaware, NVF Company -- http://www.nvf.com/-- manufactures thermoset composites (glass, Kevlar), vulcanized fiber, custom containers, circuitry materials, custom fabrication, and welding products. The Company along with its wholly owned subsidiary, Parsons Paper Company, Inc., filed for chapter 11 protection on June 20, 2005 (Bankr. D. Del. Case Nos. 05-11727 and 05-11728). Rebecca L. Booth, Esq., at Richards, Layton & Finger, P.A., represents the Debtors in their restructuring efforts. Elizabeth A. Wilburn, Esq., and Jason W. Staib, Esq., at Blank Rome LLP represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets between $10 million to $50 million and estimated debts of more than $100 million. NVF COMPANY: Wants Richardson Properties' Employment Extended ------------------------------------------------------------- NVF Company and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to further extend their employment of Richardson Properties Corporation as real estate broker for an additional six months; through and including May 21, 2007. The Debtors also request the Court to further extend Richardson's engagement for consecutive three-month terms beyond May 21, 2007, without further Court order, upon the written agreement of Richardson, the Debtors, and the Committee. The Debtors want the Firm to continue to market its Kennett Square Facility, its remaining facility in Kennett Square, Pennsylvania. Due to an unexpected five-month delay in the start of Richardson's marketing efforts, Richardson and the Debtors have been unable to fully realize the Firm's engagement objectives. Richardson Properties will continue to develop and execute a marketing program for the Kennett Square Facility, including: a. listing the property in the commercial real estate database and the internet; b. working with the necessary authorities to discuss re-zoning of the property; and c. contacting and negotiating with potential purchasers on behalf of the Debtors. The firm will be compensated through: a) sale as industrial facility -- The Firm will get 5% of the selling price and would apply to the sale of all parcels. b) sale of main parcel for residential development -- The Firm will get 6% of the selling price on the main parcel, and 5% of the selling price on the other two parcels, if sold separately. Additionally, the firm will shoulder all marketing expenses and will not be reimbursed. To the best of the Debtors' knowledge the firm does not hold any interest adverse to the Debtors' estates or creditors. Based in Yorklyn, Delaware, NVF Company -- http://www.nvf.com/-- manufactures thermoset composites (glass, Kevlar), vulcanized fiber, custom containers, circuitry materials, custom fabrication, and welding products. The Company along with its wholly owned subsidiary, Parsons Paper Company, Inc., filed for chapter 11 protection on June 20, 2005 (Bankr. D. Del. Case Nos. 05-11727 and 05-11728). Rebecca L. Booth, Esq., at Richards, Layton & Finger, P.A., represents the Debtors in their restructuring efforts. Elizabeth A. Wilburn, Esq., and Jason W. Staib, Esq., at Blank Rome LLP represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets between $10 million to $50 million and estimated debts of more than $100 million. ONEIDA LTD: Challenges Termination Fees Sought by PBGC ------------------------------------------------------ Oneida Ltd. has challenged a new federal law that requires it to pay millions of dollars in termination fees to the Pension Benefit Guaranty Corp. The Company argues that the agency's fees were part of PBGC's pre- bankruptcy claims and were, therefore, dismissed under its approved reorganization plan, Patrick Fitzgerald of Dow Jones Newswire reports. As reported in the Troubled Company Reporter on May 15, 2006, Onedia Ltd. and its debtor-affiliates entered into a settlement agreement with the Official Committee of Unsecured Creditors and the Pension Benefit Guaranty Corporation. The Debtors said that although all of the legal and factual requirements for termination of the Pension Plans are satisfied, litigation involving the Pension Termination Motion is potentially costly and time consuming; and its outcome uncertain. The Debtors believed that by entering into the Settlement Agreement, they would be able to eliminate the possibility of a protracted litigation with the Committee or the PBGC that could delay, or ultimately even prevent, the confirmation of their Plan of Reorganization. The Oneida Retirement Plan The PBGC said that it has assumed responsibility in September 2006 for the pensions of nearly 1,900 workers and retirees of Oneida Ltd. and that the court has ruled that Oneida and each of its eight bankrupt affiliates satisfy the legal test for terminating the plan. The PBGC has also determined that the company met all criteria under federal law to transfer the plan's liabilities to the pension insurance program. The Retirement Plan for Employees of Oneida Ltd. ended on May 31, 2006, the PBGC said. The plan is 31% funded, with $21.6 million in assets to cover $72 million in promised benefits. The PBGC estimated that it would be responsible for $48.3 million of the $50.4 million shortfall. Oneida's two other pension plans, the Buffalo China Salaried Plan and the Buffalo China Union Plan, will remain ongoing under the company's sponsorship. Workers covered by the Retirement Plan for employees of Oneida Ltd. will receive their pension benefits from the PBGC, up to the limits set by law. Retirees will continue to receive monthly benefit checks and other workers will receive their pensions when eligible to retire. About PBGC The Pension Benefit Guaranty Corporation -- http://www.pbgc.gov/ -- is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 30,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns. About Oneida Ltd. Headquartered in Oneida, New York, Oneida Ltd. (OTC: ONEI) -- http://www.oneida.com/-- manufactures stainless steel and silverplated flatware for both the Consumer and Foodservice industries, and supplies dinnerware to the foodservice industry. Oneida also supplies a variety of crystal, glassware and metal serveware for the tabletop industries. The Company has operations in the United States, Canada, Mexico, the United Kingdom, and Australia. The Company and its eight affiliates filed for Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case No. 06-10489). On May 12, 2006, Judge Gropper approved the Debtors' disclosure statement. Their pre-negotiated plan of reorganization was confirmed on Aug. 31, 2006. The Company emerged from Chapter 11 on Sept. 15, 2006, as a privately held company. * * * At July 29, 2006, the Company's balance sheet showed $296.5 million in total assets and $355 million in total debts resulting in a $58.5 million stockholders' deficit. ORIUS CORP: Court Confirms 2nd Amended Joint Plan of Liquidation ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois in Chicago confirmed last week Orius Corp. and its debtor-affiliates' Second Amended Joint Plan of Liquidation. The Court determined that the Modified Plan satisfies the 13 standards for confirmation under Section 1129(a) of the Bankruptcy Code. Under the Modified Plan, a Liquidation Trust will be created to liquidate and distribute assets. Treatment of Claims Holders of Allowed Administrative Claim will be paid in full in cash without interest. The remaining unpaid Allowed Administrative Claim for professionals on the effective date will not exceed the carve-out for professionals as stated in the cash collateral order. Holders of Allowed Priority Tax Claims and Priority Claims will receive cash or other treatment as agreed between the Debtors and the holder of claim. Holders of Class 1 Lender Secured Claims will received their pro rata share of Excess Cash and the net proceeds available for distribution from time to time from all Trust Assets, except funds for distribution pursuant to Article 2 of the Debtors' Plan. Distribution to this class will be made to Deutsche Bank Trust Company Americas, as agent for lenders under the Credit Agreement, pursuant to the intercreditor priorities set forth in the Credit Agreement. Excess Cash refers to the Debtors' cash on the Effective Date, net of an amount, to be determined by the Debtors, with the express written consent of Deutsche Bank, as agent, equal to: (a) the amount to be reserved on the Effective Date for payment of Administrative Claims, Priority Claims, and Priority Tax Claims, (b) the amount to be deposited on the Effective Date in the Operating Reserve, and (c) $75,000 to be paid to the Liquidation Trust for Distribution to Holders of Allowed Class 3 Claims pursuant to Section 4.4 of the Debtors' Plan. Holders of Class 2 Miscellaneous Secured Claims will receive the property securing the claim or other treatment agreed between the Debtors and the holder of claim. Holders of Class 3 General Unsecured Claims will receive, from time to time, available for distribution in accordance with the Debtors' Plan and the Trust Agreement and after making the payments required by the Plan's Sections 2.2(b)(ii) and 8.3(iv), their pro rata share of: (a) $75,000; (b) the first $250,000 of aggregate Net Proceeds from Avoidance Actions; (c) 50% of aggregate Net Proceeds between $250,000 and $550,000 from Avoidance Actions; (d) 20% of aggregate Net Proceeds in excess of $550,000 from Avoidance Actions; (e) 10% of aggregate Net Proceeds from Miscellaneous Causes of Action; (f) 50% of aggregate Net Proceeds from Miscellaneous Accounts Receivable, and (g) 7.5% of aggregate Net Proceeds in excess of $3,500,000 from the Santa Rosa Litigation. The Santa Rosa Litigation means all causes of action of Copenhagen Utilities and Construction Inc. against the City of Santa Rosa, including Case No. FCS026324 pending in the Superior Court of the State of California in and for the County of Solano. Holders of Class 4 Lender Deficiency Claims will receive, from time to time available for distribution in accordance with the Debtors' Plan and the Trust Agreement, their pro rata share of: (a) 50% of aggregate Net Proceeds between $250,000 and $550,000 from Avoidance Actions; and (b) 80% of aggregate Net Proceeds in excess of $550,000 from Avoidance Actions. Holders of Class 5 Intercompany Claims, Class 6 Subsidiary Debtor Interests, and Class 7 Orius Interests will not receive anything under the Debtors' Plan. A full-text copy of the restated amendment to the Debtors' Second Amended Joint Plan of Liquidation is available for a fee at: http://www.researcharchives.com/bin/download?id=061119214318 A full-text copy of the Debtors' Second Amended Joint Plan of Liquidation is available for a fee at: http://www.researcharchives.com/bin/download?id=061119214451 Headquartered in Barrington, Illinois, Orius Corp. -- http://www.oriuscorp.com/-- is a nationwide provider of construction, deployment and maintenance services to customers operating within the telecommunications; broadband; gas and electric utilities; and government industries. The Company and its affiliates filed for chapter 11 protection on Dec. 12, 2005 (Bankr. N.D. Ill. Case No. 05-63876). Aaron C. Smith, Esq., and Folarin S. Dosunmu, Esq., at Lord, Bissell & Brook LLP represent the Debtors in their restructuring efforts. Aaron L. Hammer, Esq., Joji Takada, Esq., Thomas R. Fawkes, Esq., at Freeborn & Peters LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets between $10 million to $50 million and estimated debts between $50 million to $100 million. PENNANT CBO: Moody's Affirms Ca Rating on $15-Mil. Class D Notes ---------------------------------------------------------------- Moody's Investors Service confirmed and removed from watch for possible downgrade the ratings on the notes issued in 1999 by Pennant CBO Limited, a collateralized bond obligation issuer: -- The $156,000,000 Million Class A Floating Rate Notes due 2011 -- Prior Rating: Aa1, on watch for possible downgrade -- Current Rating: Aa1 -- The $20,000,000 Million Class B Floating Rate Notes due 2011 -- Prior Rating: Baa3, on watch for possible downgrade -- Current Rating: Baa3 -- The $6,500,000 Million Class C-1 Floating Rate Notes due 2011 -- Prior Rating: B2, on watch for possible downgrade -- Current Rating: B2 -- The $5,000,000 Million Class C-2 Floating Rate Notes due 2011 -- Prior Rating: B2, on watch for possible downgrade -- Current Rating: B2 -- The $15,000,000 Million Class D Floating Rate Notes due 2011 -- Prior Rating: Ca, on watch for possible downgrade -- Current Rating: Ca According to Moody's, the ratings are being confirmed due to material improvement in the principal coverage due to the delevering of the notes. As reported in the Oct. 2006 trustee report versus the levels at time the notes were placed on watch for downgrade, the Class A Par Value Test was 179.39% versus 156.12%, the Class B Par Value Test was 133.86% versus 124.58% and the Class C Par Value Test was 116.82% versus 111.62%. PERFORMANCE TRANSPORTATION: Court OKs Yucaipa DIP Loan Stipulation ------------------------------------------------------------------ Judge Michael Kaplan of the U.S. Bankruptcy Court for the Western District of New York approves in its entirety, on a permanent and final basis, a stipulation governing Performance Transportation Services, Inc., and its debtor-affiliates' $7,000,000 postpetition financing agreement with Yucaipa American Alliance Fund I, LP, and Yucaipa American Alliance (Parallel) Fund I, LP. The Court approves the Debtors' request for a $7,000,000 DIP Facility with Yucaipa subject to the terms, conditions, restrictions and limitations of the Junior DIP Facility Stipulation. Judge Kaplan overrules the Official Committee of Unsecured Creditors' objection to the Debtors' request and to the Stipulation. Subject to the terms of the Stipulation: * the Court also approves the Junior DIP Liens and Junior DIP Superpriority Claim granted to the Secured Parties; * the Junior DIP Superpriority Claim will be payable from and have recourse to all of the Debtors' property and all of the property's proceeds, including the Lenders' Avoidance Action Proceeds and the Estate Avoidance Action Proceeds. The Order and the Stipulation will be binding on all parties-in- interest in the Debtors' Chapter 11 cases, including the Chapter 7 or Chapter 11 trustee appointed or elected for the Debtors' estates. The Junior DIP Secured Parties will, however, have no obligation to extend any financing to any Chapter 7 trustee or similar responsible person appointed for the Debtors' estates. A full-text copy of the Order Authorizing Postpetition Financing and Granting Security Interests and Superpriority Claims is available for free at http://researcharchives.com/t/s?1558 Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PERFORMANCE TRANSPORTATION: Wants Until Feb. 28 to Remove Actions ----------------------------------------------------------------- Performance Transportation Services, Inc., and its debtor- affiliates ask the U.S. Bankruptcy Court for the Western District of New York to extend the period within which they may remove certain actions to and including the later to occur of: (i) Feb. 28, 2007; or (ii) 30 days after the entry of an order terminating the automatic stay with respect to the particular action sought to be removed. Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York, says extension of the Removal Period will help the Debtors: * to concentrate on negotiations with principal creditor constituencies and customers. The outcome of those negotiations is crucial to finalizing the terms of the Debtors' business plan and their successful emergence from bankruptcy; * to make fully informed decisions on the potential removal of all Actions; * not to forfeit valuable rights under Section 1452 of the Judiciary Code. Mr. Graber notes that the Debtors delivered to the Court their Joint Plan of Reorganization on Oct. 27, 2006. The Debtors amended their Plan on Nov. 10, 2006. The Debtors have been engaged in productive discussions with their principal customers regarding concessions to help strengthen their business operations, Mr. Graber relates. Until those discussions are concluded, however, the Debtors' business plan remains subject to change, he adds. In addition, the Debtors have not completed a thorough analysis of the Actions or developed a strategy, as that strategy is largely dependent on those negotiations and the resulting business plan, Mr. Graber explains. Mr. Graber assures the Court that the rights of the Debtors' adversaries will not be prejudiced by the extension because they may seek to have their Actions remanded. Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PHELPS DODGE: Inks $25.9 Billion Merger Pact with Freeport-McMoRan ------------------------------------------------------------------ Phelps Dodge Corporation and Freeport-McMoRan Copper & Gold Inc. have signed a definitive merger agreement under which FCX will acquire Phelps Dodge for approximately $25.9 billion in cash and stock, creating the world's largest publicly traded copper company. The combined company will be a new industry leader with large, long-lived, geographically diverse assets and significant proven and probable reserves of copper, gold, and molybdenum. The company's increased scale of operations, management depth, and strengthened cash flow will provide an improved platform to capitalize on growth opportunities in the global market. The combined company will be the largest North American-based mining company. The company will enjoy an excellent cost position, long reserve life, a diversified geographic footprint, and an attractive growth profile. FCX currently operates the world-class Grasberg mine, located in Papua, Indonesia, which is the world's largest copper and gold mine in terms of reserves. Phelps Dodge has mines in operation or under development in North and South America, and Africa, including the world-class Tenke Fungurume development project in the Democratic Republic of the Congo. The combined company will represent one of the most geographically diversified portfolios of operating, expansion and growth projects in the copper mining industry. James R. Moffett, chairman of the board of FCX, said: "This transaction combines two leading mining companies to form a strong industry leader at a time when we see significant long-term opportunities in our industry. FCX has been built through our exploration and development capabilities, and we will focus on aggressively pursuing opportunities in the extensive Phelps Dodge asset portfolio." Richard C. Adkerson, FCX's president and chief executive officer, said: "This acquisition is financially compelling for FCX shareholders, who will benefit from significant cash flow accretion, lower cost of capital, and improved geographic and asset diversification. The new FCX will continue to invest in future growth opportunities with high rates of return and will aggressively seek to reduce debt incurred in the acquisition using the substantial free cash flow generated from the combined business." Adkerson continued: "Together, FCX and Phelps Dodge will have the size, management depth and financial strength to optimize existing operations and accelerate our growth by aggressively pursuing promising new development projects, exploration and acquisitions. We are enthusiastic about the addition of Phelps Dodge's highly regarded mining team, which will complement our existing organization, and are delighted to welcome Phelps Dodge's talented team to the FCX family." J. Steven Whisler, chairman and chief executive officer of Phelps Dodge, said: "This transaction provides Phelps Dodge shareholders a significant premium for their shares and gives them the opportunity to participate in the upside potential of a geographically diversified industry leader possessing the scale and asset quality to compete on the global stage successfully. I believe our management team, with its industry-recognized reputation for operational excellence and technological innovation, possesses the skills in open pit and underground mining and mineral processing to add value to FCX's operations. We look forward to working with FCX to realize all of the benefits of this combination, and its exciting portfolio of growth and expansion projects, for our shareholders, customers, employees and suppliers." Terms of the Transaction Under the terms of the transaction, FCX will acquire all of the outstanding common shares of Phelps Dodge for a combination of cash and common shares of FCX for a total consideration of $126.46 per Phelps Dodge share, based on the closing price of FCX stock on Nov. 17, 2006. Each Phelps Dodge shareholder would receive $88.00 per share in cash plus 0.67 common shares of FCX. This represents a premium of 33% to Phelps Dodge's closing price on Nov. 17, 2006, and 29% to its one-month average price at that date. The cash portion of $18 billion represents approximately 70% of the total consideration. In addition, FCX would deliver a total of 137 million shares to Phelps Dodge shareholders, resulting in Phelps Dodge shareholders owning approximately 38% of the combined company on a fully diluted basis. The boards of directors of FCX and Phelps Dodge have each unanimously approved the terms of the agreement and have recommended that their shareholders approve the transaction. The transaction is subject to the approval of the shareholders of FCX and Phelps Dodge, receipt of regulatory approvals and customary closing conditions. The transaction is expected to close at the end of the first quarter of 2007. FCX has received financing commitments from JPMorgan and Merrill Lynch to fund the cash required to complete the transaction. After giving effect to the transaction, estimated pro forma total debt at Dec. 31, 2006, would be approximately $17.6 billion, or approximately $15 billion net of cash. Combined Financials and Production For the 12-month period ending Sept. 30, 2006, the companies had combined revenues of $16.6 billion, EBITDA (operating income before depreciation, depletion and amortization) of $7.0 billion, and operating cash flows of $5.5 billion. For the year 2006, the combined company's estimated EBITDA would approximate $7.9 billion and operating cash flows would approximate $6.5 billion. On a pro forma basis for 2006, the combined company's production would approximate 3.7 billion pounds of copper (3.1 billion pounds net of minority interests), 1.8 million ounces of gold (1.7 million ounces net of minority interests) and 69 million pounds of molybdenum. Combined proven and probable reserves at Dec. 31, 2005, would approximate 75 billion pounds of copper, 41 million ounces of gold and 1.9 billion pounds of molybdenum, net of minority interests. Benefits Of The Transaction * The combined company is well positioned to benefit from the positive copper market at a time when there is a scarcity of large-scale copper development projects combined with strong global demand for copper. The combined company's copper production growth is expected to be approximately 25% over the next three years. * The combined company will benefit from long-lived reserves totaling 75 billion pounds of copper, 41 million ounces of gold and 1.9 billion pounds of molybdenum, net of minority interests. * The combined company is expected to generate strong cash flows, enabling significant debt reduction. For the year 2006, the two companies are expected to generate estimated combined operating cash flows totaling $6.5 billion. * FCX expects the transaction to be immediately accretive to FCX's earnings and cash flow. * The combined company's project pipeline will support industry-leading growth by delivering nearly 1 billion pounds of additional copper production capacity over the next three years. Projects include Phelps Dodge's recent commissioning of the $850 million expansion of the Cerro Verde mine in Peru; the development of the new $550 million Safford mine in Arizona; a potential project to extend the life of El Abra through sulfide leaching; the exciting Tenke Fungurume copper/cobalt project in the Democratic Republic of the Congo, which is expected to begin production by 2009; the expansion of FCX's DOZ underground mine in Indonesia; and other developments of FCX's large-scale, high-grade underground ore bodies in the Grasberg district in Indonesia. * The combined company is expected to generate strong cash flows, enabling significant debt reduction. For the year 2006, the two companies are expected to generate estimated combined operating cash flows totaling $6.5 billion. * FCX expects the transaction to be immediately accretive to FCX's earnings and cash flow. * The combined company will have significant high potential exploration rights in copper regions around the world, including FCX's existing prospective acreage in Papua, Indonesia, and Phelps Dodge's opportunities at its Tenke concession, the U.S. and South America, as well as Phelps Dodge's portfolio of exciting exploration targets. FCX will continue its longstanding focus on adding value through exploration. * The combination of FCX's and Phelps Dodge's proven management and best practices in open pit and underground mining will facilitate the sharing of expertise to optimize operations across the asset base. Phelps Dodge's unique mining and processing technology provides opportunities to be applied to optimize metal production at Grasberg. Management Team and Board of Directors James R. Moffett, chairman of FCX, will continue as chairman. Richard C. Adkerson, chief executive officer of FCX, will serve as chief executive officer of the combined company. Upon completion of the transaction, J. Steven Whisler, chairman and chief executive officer of Phelps Dodge, is expected to retire after more than 30 years of service to Phelps Dodge. Timothy R. Snider will be chief operating officer of the combined company, Ramiro G. Peru will be chief financial officer and Kathleen L. Quirk will be chief investment officer. Mark J. Johnson will continue as chief operating officer of FCX's Indonesian operations and Michael J. Arnold will continue in his executive management role, including serving as chief financial and administrative officer of FCX's Indonesian operations. At closing, FCX will add to its board of directors three independent members from Phelps Dodge's board, increasing the size of the board to sixteen directors in total. The parent company will retain the Freeport-McMoRan Copper & Gold Inc. name and trade on the New York Stock Exchange under the symbol "FCX." The Phelps Dodge name will continue to be used in its existing operations. The corporate headquarters of the combined company will be located in Phoenix, Arizona, and FCX will maintain its New Orleans, Louisiana, office for accounting and administrative functions for its Indonesian operations. Financial Policy FCX has an established financial policy of maintaining a strong financial position and returning excess cash to shareholders through dividends and share purchases. The continuation of positive copper markets would provide substantial cash flows to enable the combined company to achieve significant near-term debt reductions. In addition, FCX intends to consider opportunities over time to reduce debt further through issuances of equity and equity-linked securities and possibly through asset sales. FCX expects to continue its regular annual common dividend of $1.25 per share. FCX is committed to its long-standing tradition of maximizing value for shareholders. Advisors and Counsel J.P. Morgan Securities Inc. and Merrill Lynch & Co. are the financial advisors of FCX. Davis Polk & Wardwell and Jones, Walker, Waechter, Poitevent, Carrere & Denegre L.L.P. are the legal counsel of FCX. Citigroup Corporate and Investment Banking and Morgan Stanley & Co. Incorporated are the financial advisors of Phelps Dodge. Debevoise & Plimpton LLP is the legal counsel of Phelps Dodge. About Freeport-McMoRan Copper & Gold Headquartered in New Orleans, Louisiana, Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) -- http://www.fcx.com/-- explores for, develops, mines, and processes ore containing copper, gold, and silver in Indonesia, and smelts and refines copper concentrates in Spain and Indonesia. About Phelps Dodge Phelps Dodge Corporation (NYSE: PD) http://www.phelpsdodge.com/-- is one of the world's leading producers of copper and molybdenum and is the largest producer of molybdenum-based chemicals and continuous-cast copper rod. The company employs 15,000 people worldwide. * * * In September 2006, Moody's Investors Service confirmed Phelps Dodge's Preferred Stock 2 Shelf at (P)Ba1. POLYMER GROUP: Poor Performance Cues Moody's Negative Outlook ------------------------------------------------------------- Moody's Investors Service changed the rating outlook of Polymer Group, Inc. to negative from stable. The change in outlook reflects the company's performance at levels which are below Moody's expectations from the time of Moody's prior review in Nov. 2005. Specifically, the change in outlook expresses concern regarding negative cash flow generation, potentially narrow cushions under financial covenants, weakness in demand in certain segments and the effect of lags in passing on increases to converters in a rising raw material price environment, which resulted in substantive reductions in gross margins in 2006. Moody's is also concerned that such challenges will be harder to manage at a time when top management is in transition. Notwithstanding high financial leverage, weak interest coverage and weaker than expected cash flow generation in 2006 for the rating category, the B1 ratings remain supported by PGI's competitive strengths, multi-year contracts, long-standing customer relationships and Moody's assessment of overall enterprise value in relation to debt levels. The ratings are further supported by the successful completion of several capital projects, including the expansion of the company's manufacturing capacity in Suzhou, China and North Carolina, US in 2006 and the potential contribution from these assets in 2007 and beyond. The ratings reflect pricing and volume constraints imposed by intense competition in both nonwovens and oriented polymers from often larger and financially stronger companies. The ratings are further constrained by business requirements for substantial and ongoing capital expenditures to maintain, improve and expand manufacturing facilities, as well as weak interest coverage for the rating category. Continuing negative or weak cash flow metrics, significant debt- financed acquisitions and lack of progress toward improved total leverage metrics could result in a downgrade. If the company is able to execute on existing investments in emerging markets thereby improving free cash flow to debt ratios to about 5% on a sustainable basis, this could stabilize the ratings outlook. Meaningful steps toward debt reduction resulting in adjusted debt to EBITDA ratios below 4x and improved EBIT to interest coverage above 1.5x could result in improvements in rating outlook or eventually to an upgrade. The negative outlook applies to these ratings: -- The B1, LGD3, 33% rated $45 million senior secured revolver due 2010; -- The B1, LGD3, 33% rated $410 million senior secured term loan B due 2012; -- The B1 Corporate Family Rating; -- The B2 Probability of Default Rating; The outlook for the ratings was changed to negative from stable. Headquartered in Charlotte, North Carolina, Polymer Group, Inc., is a producer of nonwovens and produces and markets engineered materials. PGI is a global supplier to leading consumer and industrial product manufacturers, including Procter & Gamble and Johnson & Johnson. Net revenues for the twelve months ended Sept. 30, 2006 were about $1.0 billion. PORTRAIT CORP: Court Gives Final Consent to Berenson's Employment ----------------------------------------------------------------- The Honorable Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court for the Southern District of New York has issued a final order allowing Portrait Corporation of America, Inc., and its debtor- affiliates to employ Berenson & Company, LLC, as their financial advisor and investment banker. Judge Hardin ruled, among other things, that the Debtors' employment of Berenson under the terms of their Amended Engagement Letter and the Indemnification Agreement is necessary and in the best interests of the Debtors' estates. As reported in the Troubled Company Reporter on Sept. 20, 2006, Berenson & Co will: a) review and analyze the Debtors' business operations and financial projections; b) evaluate the Debtors' potential debt capacity in light of their projected cash flows; c) assist in the determination of an appropriate capital structure for the Debtors; d) provide financial advice and assistance to the Debtors in developing and obtaining confirmation of a plan of reorganization; e) advise the Debtors on tactics and strategies for negotiating with various groups of the holders of the Debtors' bank debt or debt securities or other claims against the Debtors; f) advise the Debtors on the timing, nature and terms of any new securities, other consideration or other inducements to be offered to their Creditors in connection with any Restructuring Transaction; g) assess the possibilities of bringing in new lenders and investors to replace, repay or settle with any of the creditors; h) provide expert testimony and related litigation support services customarily provided by financial advisors with respect to any litigation that may arise in connection with any Restructuring Transaction; i) assist in arranging debtor-in-possession financing or a Financing Transaction for the Debtors; j) advise the Debtors with respect to the structure of any "Transaction", participate in any meetings or negotiations relating to a Transaction and advise and attend meetings of the Debtors' Board of Directors and its committees with respect thereto; k) assist the Debtors in preparing any documentation required in connection with the implementation of any Transaction; l) provide testimony in any proceeding before the Bankruptcy Court, as necessary, with respect to matters which Berenson has been engaged to advise the Debtors; and m) provide all other advisory services as customarily in connection with the analysis, negotiation and implementation of a restructuring transaction similar to the Restructuring Transaction and as reasonably requested by the Debtors. The Debtors propose to pay Berenson & Co. a fee of $125,000 per month plus applicable Sale Transaction, Restructuring Transaction and Financing Transaction fees, if there are any. A copy of the engagement agreement outlining the payment terms for the firm's services is available for free at: http://researcharchives.com/t/s?11e6 As part of the overall compensation payable to Berenson under the terms of the Engagement Letter, the Debtors have agreed to certain indemnification and contribution obligations as described in an Indemnification Agreement. A copy of the Indemnification Agreement is available for free at: http://researcharchives.com/t/s?11e7 The Indemnification Agreement provides that the Debtors will indemnify and hold harmless Berenson and its affiliates from any losses, claims, demands, other than for willful misconduct and gross negligence, which arise out of: * actions taken or omitted to be taken by the Debtors or actions taken or omitted to be taken by an the firm with the Debtors' consent or in conformity with the Debtors' actions or omissions; or * Berenson's activities on the Debtors' behalf under the Engagement Letter. About Portrait Corp Portrait Corporation of America, Inc. -- http://pcaintl.com/-- provides professional portrait photography products and services in North America. The Company operates portrait studios within Wal-Mart stores and Supercenters in the United States, Canada, Mexico, Germany and the United Kingdom. The Company also operates a modular traveling business providing portrait photography services in additional retail locations and to church congregations and other institutions. Portrait Corporation and its debtor-affiliates filed for Chapter 11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft LLP, represents the Debtors in their restructuring efforts. Berenson & Company LLC serves as the Debtors' Financial Advisor and Investment Banker. Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP represents the Official Committee of Unsecured Creditors. Peter J. Solomon Company serves as financial advisor for the Committee. At June 30, 2006, the Debtor had total assets of $153,205,000 and liabilities of $372,124,000. PORTRAIT CORP: Panel Taps Halperin Battaglia as Conflicts Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Portrait Corporation of America, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to retain Halperin Battaglia Raicht, LLP, as its conflicts counsel under a general retainer, nunc pro tunc, to Oct. 16, 2006. Halperin Battaglia will represent the Committee in the event that its primary counsel, Stroock & Stroock & Lavan LLP, will have potential or actual conflicts of interest on matters arising in the Debtors' bankruptcy cases. The regular hourly rates for Halperin Battaglia's professionals ranged from $395 to $175 per hour for attorneys, $125 per hour for law clerks, and $100 to $75 per hour for paraprofessionals. Alan D. Halperin, Esq., a member at Halperin Battaglia, assures the Court that his firm does not hold nor represent any interest adverse to the Debtors' estate and is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. Halperin Battaglia can be reached at: Halperin Battaglia Raicht, LLP Attn: Alan D. Halperin, Esq. 555 Madison Avenue, 9th Floor New York, NY 10022 Phone: (212) 765-9100 About Portrait Corp Portrait Corporation of America, Inc. -- http://pcaintl.com/-- provides professional portrait photography products and services in North America. The Company operates portrait studios within Wal-Mart stores and Supercenters in the United States, Canada, Mexico, Germany and the United Kingdom. The Company also operates a modular traveling business providing portrait photography services in additional retail locations and to church congregations and other institutions. Portrait Corporation and its debtor-affiliates filed for Chapter 11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft LLP, represents the Debtors in their restructuring efforts. Berenson & Company LLC serves as the Debtors' Financial Advisor and Investment Banker. Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP represents the Official Committee of Unsecured Creditors. Peter J. Solomon Company serves as financial advisor for the Committee. At June 30, 2006, the Debtor had total assets of $153,205,000 and liabilities of $372,124,000. RADIATION THERAPY: S&P Downgrades Corp. Credit Rating to BB- ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Fort Myers, Florida-based Radiation Therapy Services Inc. The corporate credit rating was lowered to 'BB-' from 'BB', and the rating outlook is stable. "The ratings downgrade reflects the largely debt-financed $46 million acquisition of MIRO Cancer Centers and Michigan Comprehensive Cancer Institute (MIRO/MCCI)," explained Standard & Poor's credit analyst Cheryl Richer. "While Radiation Therapy's aggressive acquisition strategy has strengthened its regional positions and provided geographic expansion, it has also been steadily increasing the company's leverage." Adjusted for operating leases, debt to EBITDA was 3.0x for the 12 months ended Sept. 30, 2006. The seven-center acquisition will increase leverage to about 3.4x. Given the company's long-term growth strategy, the rating agency believe that it will operate with a higher level of debt and operating leases than Standard & Poor's had previously anticipated. The rating on outpatient radiation oncology services provider Radiation Therapy reflects the competitive and fragmented oncology market, some geographic concentration, technology risk, and reimbursement risk. These risks are somewhat offset by the essential nature of the company's services and favorable demographics, its dominant position in the markets it serves, its early adoption of cutting-edge technologies, and its moderate financial policies. The MIRO/MCCI acquisition provides a footprint around the Detroit, Michigan area. Radiation Therapy has had strong revenue and profitability growth over the past several years as a result of organic growth and facility additions. Increased utilization has driven up its operating margin to almost 30%, from 24% in 2002. Although the company's aggressive expansion strategy poses financing and integration challenges, Radiation Therapy has demonstrated an ability to successfully expand its business while maintaining a moderate financial profile. However, leverage adjusted for operating leases (about $80 million), as measured by debt to EBITDA, has risen to almost 3.5x as a result of the MIRO/MCCI acquisition, and may not return to levels commensurate with the prior rating over the intermediate term. Unadjusted, the company's target leverage is 2x-2.5x, and the credit facility permits leverage of up to 3x. However, operating leases increase leverage by about 1x from reported figures. Capital expenditures and acquisitions have exceeded operating cash flow for the year to date period. As a result, debt reduction has not occurred per Standard & Poor's expectations. RADNOR HOLDINGS: Files Schedules of Assets and Liabilities ---------------------------------------------------------- Radnor Holdings Corporation and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware their schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property Unknown B. Personal Property Unknown C. Property Claimed as Exempt D. Creditors Holding Secured Claims $217,402,699 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Nonpriority Claims $205,638,958 ------- ------------ Total Unknown $423,041,657 Although the Debtors have values recorded for assets owned on their books, they believe that those book values would not accurately reflect the market value of those properties. So, the Debtors listed the value as unknown. A full-text copy of the Debtors' Schedules Assets and Liabilities is available for free at http://ResearchArchives.com/t/s?1564 Headquartered in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/ -- manufactures and distributes a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher, represent the Debtors. Donald J. Detweiler, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, serves the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. RADNOR HOLDINGS: Panel Wants Stevens & Lee's Work Scope Expanded ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Radnor Holdings Corporation and its debtor-affiliates asks the Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware to expand the retention of Stevens & Lee PC as its special conflicts counsel, nunc pro tunc to Oct. 30, 2006. Stevens & Lee will: a) participate in the adversary captioned Official Committee of Unsecured Creditors of Radnor Holdings Corp., et. al., Plaintiffs v. Tennenbaum Capital Partners, LLC; Special Value Expansion Fund, LLC; Special Value Opportunities Fund, LLC; and Jose E. Feliciano, as Defendants in the Adversary Case No. 06-50909, pending before the Bankruptcy Court to address any issues relating to Lehman Brothers Inc., including without limitation, questioning any witnesses concerning Lehman Brothers' connections with Tennenbaum Capital Partners LLC or its affiliates and Lehman Brothers' involvement in the process, which culminated in the proposed sale of substantially all of the Debtors' assets to Tennenbaum, to the extent necessary; and b) represent the Committee in any matter in which Lehman Brothers seeks payment of a fee in the Debtors' cases. As part of the Tennenbaum Trial, the Defendants have designated the Debtors' prepetition advisor Mark Shapiro of Lehman Brothers as their potential witness. Furthermore, Lehman Brothers has filed a limited objection to the Debtors' retention of Lazard Freres as financial advisor to replace it in the Debtors' cases, asserting that it has a right to an administrative claim for services rendered in the sale process. Lehman Brother's counsel made numerous statements during a hearing before the Court suggesting that Lehman Brothers does not have a conflict and suggesting that it was a victim of the Committee's "litigation tactics." The Committee disagreed with Lehman Brothers' assertions and believed that Lehman Brothers does have a conflict barring its employment in the Debtors' cases. Furthermore, the Debtors informed the Committee that they were not pursuing the retention of Lehman Brothers due to concerns raised by the U.S. Trustee. The Committee said that they require the representation of Stevens & Lee because of the many factual disputes. The current standard hourly rates for principal attorneys and paralegal expected to represent the Committee are: Professional Designation Hourly Rate ------------ ----------- ----------- Joseph H. Houston, Jr., Esq. Shareholder $445 Thomas G. Whalen, Jr., Esq. Associate $280 Valerie A. Frew Paralegal $150 Stephanie L. Foster Legal Assistant $115 Stevens & Lee's other professionals charge: Designation Hourly Rate ----------- ----------- Shareholders $325 - $650 Associates $180 - $325 Legal Asst./Paralegals $95 - $175 Mr. Houston assures the Court that his firm does not hold or represent any interest adverse to the Debtors' estates. Headquartered in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactures and distributes a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher, represent the Debtors. Donald J. Detweiler, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, serves the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. RAILAMERICA INC: Fortress Merger Cues S&P's Negative Watch ---------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'BB-' corporate credit rating, on RailAmerica Inc. on CreditWatch with negative implications. The rating action comes after the disclosure that RailAmerica has reached a definitive merger agreement with an affiliate of Fortress Investment Group LLC. The total value of the transaction, including the refinancing of RailAmerica's existing debt, is approximately $1.1 billion. Standard & Poor's expects to withdraw RailAmerica's 'BB' secured bank loan rating upon completion of the transaction. "We will likely withdraw our corporate credit rating on RailAmerica or reevaluate it in conjunction with the transaction," said Standard & Poor's credit analyst Lisa Jenkins. "Should the corporate credit rating remain outstanding, we will evaluate the post transaction financial profile of the company as well as the strategic and financial policies of the new owners and would likely lower the rating if it appears that financial measures will weaken materially from current levels." REFCO INC: Wants to Sell FXA'a Customer Lists to Saxo Bank ---------------------------------------------------------- Refco, Inc., and its debtor-affiliates had previously sought, in June 2006, the U.S. Bankruptcy Court for the Southern District of New York's permission for Refco F/X Associates, LLC, to sell its customer lists to GAIN Capital Group, subject to higher and better offers. Notwithstanding their efforts, the Debtors and GAIN decided not to pursue further discussions because they could not agree on workable terms for a definitive purchase agreement. The Debtors withdrew their request in July 2006, and the Court subsequently approved a mutual settlement agreement and release between FXA and GAIN terminating a proposed sale term sheet and all of their obligations. Richard Levin, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that while FXA and GAIN were attempting to negotiate a definitive purchase agreement, Saxo Bank A/S, who had previously expressed an interest in the FXA Customer Lists, re- emerged as a potential transaction partner. As the GAIN transaction was collapsing, FXA and Saxo Bank commenced negotiations for a sale of the Customer Lists. Acknowledging that the transaction was only feasible if the structure was simplified, the Debtors and Saxo Bank entered into an asset purchase agreement. The Debtors ask the Court to authorize FXA to sell its Customer List and Marketing List to Saxo Bank, free and clear of all liens, claims and encumbrances within the meaning of Section 363 of the Bankruptcy Code, subject to higher and better offers. Mr. Levin tells Judge Drain that the Customer List and Marketing List are "deteriorating assets," given that the one-year anniversary of commencement of the Debtors' Petition Date has recently passed. He adds that FXA ceased opening new accounts or accepting customer deposits on the Petition Date, and all trading activity by FXA customers was frozen by July 2006. "[T]he Customer List and Marketing List are quickly approaching the point at which customer information will be stale and of little value to potential purchasers," Mr. Levin says. Purchase Agreement The Debtors believe that their Purchase Agreement with Saxo Bank represents a last chance to salvage value for the benefit of FXA's estate. The principal terms of the Purchase Agreement are: (1) FXA will sell the Customer and Marketing Lists to Saxo for an initial fixed amount of $500,000. (2) For each individual that opens an online FX trading account with Saxo or one of its affiliates by the second anniversary of a closing date, FXA will pay a $100 activation fee for each additional New Customer Account, except for the first 5,000 New Customer Accounts, for which Saxo will pay no Activation Fee. (3) For each New Customer Account, Saxo will pay FXA an annual maintenance fee of 1% of average balance of the New Customer Account on the first anniversary of the Closing Date, and an additional annual maintenance fee of 1% of the Average Balance on the second anniversary of the Closing Date. (4) Saxo will adopt FXA's privacy policy or demonstrate to the Court that the policy is consistent with the policy as required by Section 363(b)(1)(A). (5) The order approving the sale to Saxo or another winning bidder will provide that Forex Capital Markets, Ltd., will not interfere with the Sale consummation, and will be prohibited from soliciting the Debtors' customers in violation of FXCM's Facilities Management Agreement with Refco Group Ltd., LLC. (6) In the event that (i) FXA consummates a sale of the Purchased Assets to a party other than Saxo or any of its affiliate within one year after entry into the Purchase Agreement, and (ii) Saxo is not in default of its obligations, Saxo will be entitled to a $15,000 break-up fee and expense reimbursement. Bidding Procedures To properly value certain bids, the Debtors require any person who desires to make a competing proposal to satisfy all requirements with respect to proponent, form, and terms of a competing proposal. The consideration to the Debtors' estates under any Proposal must be at least $555,000. A Qualified Competing Proposal will be considered only if it exceeds Saxo's bid by a minimum of: * the amount that would be owed if the Debtors were required to pay the Break-Up Fee and the Expense Reimbursement; and * consideration in an amount not less that $25,000. If any consideration to be provided is not cash, the Proposal must include the Qualified Competing Bidders' valuation of that consideration. Irrevocable Qualified Competing Proposals containing all material terms of the proposed were due on Nov. 7, 2006. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. On Oct. 6, 2006, the Debtors filed their Amended Plan and Disclosure Statement. On Oct. 16, 2006, the gave its tentative approval on the Disclosure Statement and on Oct. 20, 2006, the Court Clerk entered the written disclosure statement order. The hearing to consider confirmation of Refco, Inc., and its debtor-affiliates' plan is set for Dec. 15, 2006. Objections to the plan, if any, must be in by Dec. 1, 2006. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). RCMI's exclusive period to file a chapter 11 plan expires on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SAINT VINCENTS: Court Issues Final Order Allowing CIT's Retention ----------------------------------------------------------------- The Honorable Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court for the Southern District of New York approved, on a final basis, Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates' request to employ CIT Capital USA, Inc., as their real estate advisors. As reported in the Troubled Company Reporter on Oct. 19, 2006, the Debtors have commenced a strategic analysis of their real estate assets, businesses and operations on their Manhattan Campus as part of their reorganization efforts. To assist with the design and implementation of the Debtors' plan of reorganization, CIT Capital will identify and advise on potential options concerning the Debtors' Manhattan real estates assets. Among others, CIT Capital will: (a) review and analyze real estate studies performed by or for the Debtors; (b) review and recommend third-party consultants to complete due diligence; (c) evaluate the third-party professionals currently engaged or consulted to perform due diligence; (d) work with the Debtors' staff and architectural, engineering and legal teams to identify potential issues or considerations relevant to Debtors' options relating to the Properties; (e) develop an in-depth understanding of the Debtors' financial, operational and emergence objectives and subsequently, devise scenarios to maximize the value of the Properties in connection with those objectives and timing requirements; (f) prepare an analysis of potential Transaction structures; (g) conduct market research and valuation analysis; (h) assist the Debtors in narrowing the range of options and determining the optional real estate strategy to meet the Debtors' goals and which supports the plan of reorganization; (i) provide project management services; (j) work under the sole direction of Mr. Sansone and make itself available to consult and report to the Joint Real Estate Advisor Committee -- a committee comprised of an equal number of the Creditors Committee members and the Debtors' representatives who would serve as voting members of the search committee for the selection of a real estate advisor; and (k) provide other services relating to the Properties, as requested by the Debtors' management and Board. Dennis R. Irwin, head of CIT Commercial Real Estate, will lead the CIT Capital Team. CIT Commercial Real Estate is a business unit of parent company CIT Group, Inc. The Debtors propose to pay CIT Capital monthly and transaction fees: (1) Effective July 5, 2006, the Debtors will pay CIT Capital a $75,000 monthly fee, payable in cash for the remainder of the term of the Agreement. (2) For each property for which a Transaction is consummated, CIT will receive a fee equal to: * 1.50% of Gross Aggregate Transaction Proceeds up to $50,000,000; plus * 1.00% of Gross Aggregate Transaction Proceeds in excess of $50,000,000 up to $100,000,000; plus * 0.75% of Gross Aggregate Transaction Proceeds in excess of $100,000,000 up to $150,000,000; plus * 0.67% of Gross Aggregate Transaction Proceeds in excess of $150,000,000 up to $200,000,000; plus * 0.50% of Gross Aggregate Transaction Proceeds in excess of $200,000,000 up to $250,000,000; plus * 0.40% of Gross Aggregate Transaction Proceeds of more than $250,000,000. CIT Capital will be entitled to Transaction Fees in connection with the disposition of Properties during the term or within one year after the date of termination of the Agreement. The combined amount of the aggregate Transaction Fees, however, will not exceed $2,000,000. In the event a Transaction with respect to certain properties is consummated, CIT Capital will be paid 50% of its Transaction Fees upon the closing of that Transaction as long as it has provided notice of the proposed Transaction Fee, including the basis of the calculation to the Creditors Committee, the U.S. Trustee and the Court. 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. 37 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SAINT VINCENTS: LENNOX NEDD Agrees to Withdraw Lawsuit ------------------------------------------------------ Saint Vincents Catholic Medical Centers of New York, its debtor- affiliates and LENNOX NEDD agree to modify the automatic stay to permit LENNOX to discontinue an action filed in the Supreme Court of the state of New York, King County, against Mary Immaculate Hospital, Queens, and Catholic Medical Center of Brooklyn and Queens, Inc., with prejudice. Any proofs of claim filed by LENNOX against the Debtors in their Chapter 11 cases will be expunged effective on the date the stipulation is Court-approved. LENNOX forever releases the Debtors from all claims, demands, obligations, causes of actions, or damages. 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) SEA CONTAINERS: U.K. Regulator May Issue Financial Directions ------------------------------------------------------------- The United Kingdom Government Pensions Regulator has warned Sea Containers Ltd. and its debtor-affiliates that it is considering the exercise of its power to issue financial support directions to the Company, Ian C. Durant, vice president for finance and chief financial officer of Sea Containers, Ltd., disclosed in a regulatory filing with the Securities and Exchange Commission dated Oct. 30, 2006. Mr. Durant said the FSDs will be under relevant UK pensions legislation, in respect of the Sea Containers 1983 Pension Scheme and the Sea Containers 1990 Pension Scheme, which are multi- employer defined benefit pension plans of Sea Containers Services Ltd. According to Mr. Durant, if FSDs are issued, SCL may be liable to make a financial contribution to the Schemes that may be greater than the sum payable by SCL under the terms of a 1989 support agreement with Sea Containers Services. Pursuant to the Support Agreement, Sea Containers Services provides administrative services to SCL and other subsidiaries, and is indemnified by SCL for the cost of its services. Mr. Durant said the trustees of the Schemes or their actuary advised SCL that their current estimates of the cost of winding up the Schemes, including the cost of purchasing annuities to pay projected benefit obligations to Scheme participants, would be $201,000,000 for the 1983 Scheme and $51,000,000 for the 1990 Scheme. Because the Schemes are multi-employer plans, the liabilities under them are shared among the participating companies, Mr. Durant added. SCL Disputes Warning Tom Burroughes of Reuters reports that SCL believes there was no need for the UK Regulator's warning as the Company is currently in talks with the UK Pension Funds. "They (pension fund members) will be ranked on an equal footing with bondholders and other creditors. We are keen to let these discussions play out," an Sea Containers spokeswoman told Reuters. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Wind-Up Petition Hearing Scheduled on December 1 ---------------------------------------------------------------- The Supreme Court of Bermuda will hear on Dec. 1, 2006, a petition to wind-up the business of Sea Containers Ltd., that was presented by the Company on October 16. Any creditor or shareholder of Sea Containers desiring to support or oppose the making of an order on the petition may appear at the time of the hearing in person or by counsel for that purpose. A copy of the petition will be sent to all creditors and shareholders of the company. Parties-in-interest who want to attend the hearing must inform Sea Containers' counsel of their intention to do so at: Appleby Hunter Bailhache Canon's Court, 22 Victoria Street Hamilton, HM 12, Bermuda Those who intend to appear at the hearing must serve notice not later than 4:00 p.m. on Nov. 30, 2006. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SIENA TECHNOLOGIES: Closes $1 Million Financing ----------------------------------------------- Siena Technologies, fka Network Installation Corp., has closed on a $1 million round of financing, chief executive officer Jeff Hultman announced. The funds will be used for working capital. Mr. Hultman disclosed that the company recorded revenues of $4.1 million for the third quarter, bringing year-to-date revenues to $15.9 million, an increase from $5.9 million for the year ended Dec. 31, 2005. "This round of financing was brought to fruition by several accredited investors who are existing stockholders of Siena Technologies," Mr. Hultman said. "We believe this signals a strong endorsement and continued support of our new direction, the financial restructuring and continued revenue growth which are underscored by our recent third quarter performance." Mr. Hultman also disclosed that Siena has completed numerous deliveries of its systems for some of Las Vegas' nightspots as well as its patent-pending Race & Sports Book technology systems at top gaming properties. He says the company is also currently servicing customers on contracts with substantial backlog with the continued trend of higher gross margins. The company has also undergone a restructuring of its marketing and sales functions and a corporate name change that better reflects its future strategies, Mr. Haltman further disclosed. Headquartered in Irvine, California, Siena Technologies (OTC BB: SIEN), formerly known as Network Installation Corp., through its wholly-owned subsidiary Kelley Technologies, is a technology company which designs, develops, and integrates communication technology and system networks for the resort and gaming industry as well as luxury high-rise condo developments. Going Concern Doubt Jasper + Hall PC expressed substantial doubt about Network Installation Corp.'s ability to continue as a going concern after auditing the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's accumulated deficit of $25,168,968 and its generation of losses from operations. SIERRA PACIFIC: Launches Tender Offers for $100MM Debt Securities ----------------------------------------------------------------- Sierra Pacific Resources commenced tender offers for up to $110 million aggregate principal amount of certain series of its outstanding notes. CUSIP Security Principal Principal Tender Early Total No. Description Amount Purchase Offer Tender Conside- Outstanding1 Amount Conside- Premium2 ration2 ration2 ------ --------- ------------ ----------- -------- -------- -- ---- 826428 7.803% $99,142,000 $30,000,000 $1,035 $30 $1,065 AJ 3 Senior Notes due 2012 826428 8.625% $335,000,000 $50,000,000 $1,055 $30 $1,085 AH 7 Senior Notes due 2014 826428 6.75% $225,000,000 $30,000,000 $980 $30 $1,010 AN 4 Senior Notes due 2017 1. Aggregate principal amount outstanding as of Nov. 15, 2006. 2. Per $1,000 principal amount of tendered Notes that are accepted for purchase. The terms and conditions of the Offers are set forth in an Offer to Purchase and a Letter of Transmittal, each dated Nov. 15, 2006. The Company is offering to purchase the aggregate principal amount set forth in the table above in the column captioned "Principal Purchase Amount" of each series of Notes for the Tender Offer Consideration, subject to certain conditions precedent described in the Offer to Purchase. Holders of Notes that validly tender Notes prior to 5:00 p.m., New York City time, on Wednesday, Nov. 29, 2006, unless such time is extended or earlier terminated, will be entitled to receive the Total Consideration, which includes the Tender Offer Consideration plus an early tender premium payment of $30.00 per $1,000 principal amount of Notes tendered. Holders that validly tender Notes after the Early Tender Time but at or prior to 12:00 midnight, New York City time, on Thursday, Dec. 14, 2006, unless such time is extended or earlier terminated, will be entitled to receive the Tender Offer Consideration. Tendered Notes may be withdrawn prior to the Early Tender Time. After the Early Tender Time, tendered Notes may not be withdrawn. All holders that tender Notes that are accepted for payment will also receive accrued and unpaid interest up to, but excluding, the Settlement Date, which is expected to occur on or promptly after the Expiration Time. If acceptance of all the Notes validly tendered in the Offers with respect to one or more series would require the Company to purchase more than $110 million principal amount of the Notes, the Company currently intends to terminate the Offer with respect to one or more series of the Notes. The Company, however, is not obligated to terminate any such Offer. In the event of a termination of the Offer with respect to any series of Notes, all Notes of such series tendered will be promptly returned to the tendering holders. The Company may increase or decrease the Principal Purchase Amount of any or all series of Notes, provided that the aggregate principal amount of the Notes purchased shall not exceed $110 million, without extending the Early Tender Time. If the aggregate principal amount of Notes of any series validly tendered at the Expiration Time exceeds the applicable Principal Purchase Amount of such series, the Company, subject to the terms and conditions of the Offers and provided it accepts tenders for Notes in any such series, will accept Notes of such series for purchase on a pro rata basis. In the Offer to Purchase, the Company states that it will use cash on hand to fund the purchase of the Notes accepted in the Offers. In addition, the Company states in the Offer to Purchase that it intends to use a substantial portion of the proceeds from the previously announced $100 million sale by one of its subsidiaries, Tuscarora Gas Pipeline Company, of the subsidiary's 50% interest in the Tuscarora Gas Transmission Company to make a capital contribution to one or both of its utility subsidiaries, Nevada Power Company and Sierra Pacific Power Company. Headquartered in Las Vegas, Nevada, Sierra Pacific Resources (NYSE: SRP) -- http://www.sierrapacificresources.com/ -- is a holding company whose principal subsidiaries, Nevada Power Company and Sierra Pacific Power Company, are electric and electric and gas utilities, respectively. Sierra Pacific Resources also holds relatively modest non-utility investments through other subsidiaries. * * * As reported in the Troubled Company Reporter on Oct. 16, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency downgraded its Ba2 Corporate Family Rating for Sierra Pacific Resources to Ba3. STRUCTURED ASSET: Fitch Holds Junk Rating on Five Cert. Classes --------------------------------------------------------------- Fitch Ratings has affirmed the ratings of 38 and upgraded 3 classes of Structured Asset Securities Corp. residential mortgage- backed certificates: Series 1995-2 Group 1 -- Class 1-B1 affirmed at 'AAA'; -- Class 1-B2 affirmed at 'BB'; -- Class 1-B3 remains at 'CC/DR2'. Series 1995-2 Group 2 -- Class 2A affirmed at 'AAA'; -- Class 2-B1 affirmed at 'AAA'; -- Class 2-B2 affirmed at 'AAA'; -- Class 2-B3 affirmed at 'AA'. Series 1996-4 -- Classes A, R affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AA'; -- Class B3 affirmed at 'BB'; -- Class B4 remains at 'C/DR3'. Series 1997-2 -- Class 2A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 remains at 'CCC/DR2'; -- Class B4 remains at 'CCC/DR3'; -- Class B5 remains at 'CCC/DR6'. Series 1999-ALS3 -- Classes 1PO, 2PO affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AAA'; -- Class B3 upgraded to 'AA' from 'A'. Series 2000-5 -- Class 2AP affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AAA'; -- Class B3 affirmed at 'AA'; -- Class B4 affirmed at 'BBB'; -- Class B5 affirmed at 'B'. Series 2001-11 -- Class A affirmed at 'AAA'. Series 2001-15A -- Class A affirmed at 'AAA'. Series 2002-5A -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AA'; -- Class B3 upgraded to 'A+' from 'A'; -- Class B4 upgraded to 'BBB+' from 'BBB'; -- Class B5 affirmed at 'BB'. Series 2002-15 -- Class A affirmed at 'AAA'. Series 2002-27A -- Class A affirmed at 'AAA'. Series 2003-4 -- Class A affirmed at 'AAA'. Series 2003-14 -- Class A affirmed at 'AAA'. Series 2003-16 -- Class A affirmed at 'AAA'. Series 2003-21 -- Class A affirmed at 'AAA'. Series 2003-29 -- Class A affirmed at 'AAA'. Series 2003-30 -- Class A affirmed at 'AAA'. The affirmations reflect adequate relationships of credit enhancement to future loss expectations and affect approximately $1.96 billion of outstanding certificates. The distressed ratings of series 1995-2 Group 1 class 1-B3, series 1996-4 class B4, and series 1997-2 classes B3, B4 and B5 is due to either a default or sufficient credit deterioration to raise the possibility that the rated security might be at risk of loss of principal or interest. The upgrades reflect improvements in the relationships between CE and future loss expectations and affect approximately $3.29 million of outstanding certificates. The CE levels for the upgraded classes of series 2002-5A and 1999-ALS3 have increased by more than four times the original levels since the closing date. The above transactions have pool factors (i.e. current mortgage loans outstanding as a percentage of initial pool) ranging from only 1% to 68% and are seasoned from a range of 37 to 135 months. The underlying collateral consists of conventional, fixed-rate and adjustable, fully amortizing residential mortgage loans extended to prime/AltA borrowers. The mortgage loans are master serviced by Aurora Loan Services, Inc., which is rated 'RMS1-' by Fitch. STRUCTURED ASSET: Fitch Holds Junk Ratings on Three Issues ---------------------------------------------------------- Fitch Ratings has taken rating actions on these Structured Asset Mortgage Investments Inc. issues: SAMI, Series 1999-1 Group 2 -- Class 2A affirmed at 'AAA'; -- Class 2B-1 affirmed at 'AAA'; -- Class 2B-2 affirmed at 'AA'; -- Class 2B-3 affirmed at 'BBB+'; -- Class 2B-4 affirmed 'B'; -- Class 2B-5 remains at 'CC/DR4'. SAMI, Series 1999-2 Group 3 -- Class 3A affirmed at 'AAA'; -- Class 3B-1 affirmed at 'AAA'; -- Class 3B-2 affirmed at 'AA-'; -- Class 3B-3 affirmed at 'BB'; -- Class 3B-4 remains at 'CC/DR4'; -- Class 3B-5 remains at 'C/DR6'. These affirmations reflect satisfactory credit enhancement relationships to future loss expectations and affect approximately $10.75 million in outstanding certificates. The CE levels have increased by more than two times the original levels since the closing date. Cumulative losses as a percent of the original collateral balance are 0.21% for series 1999-1 Group 2 and 0.62% for series 1999-2 Group 3. The distressed ratings of series 1999-1 Group 2 class 2-B5 and series 1997-2 Group 3 classes 3B-4 and 3B-5 are due to either a default or sufficient credit deterioration to raise the possibility that the rated security might be at risk of loss of principal or interest. As of the Oct. 25, 2006 distribution date, series 1999-1 Group 2 has a pool factor (current mortgage loans outstanding as a percentage of the initial pool) of 5%. The underlying collateral consists of 30-year fixed-rate mortgage loans extended to Alt-A borrowers. The servicer is Wells Fargo Bank Minnesota, NA, which is rated 'RPS1' by Fitch. Series 1999-2 Group 3 has a current pool factor of 7%. The underlying collateral consists of 30-year fixed-rate mortgage loans extended to Alt-A borrowers. The servicer is PHH Mortgage Corporation, which is rated 'RPS1-' by Fitch. TARRANT COUNTY: Moody's Withdraws C Rating on $80 Mil. Debt Issue ----------------------------------------------------------------- Moody's Investors Service has withdrawn the C underlying rating assigned to approximately $80 million of debt issued through the Tarrant County Health Facilities Development Corporation, including the Series 1997, Series 1996 and 1993 bonds. With the exception of $7.1 million of the Series 1993 bonds, the bonds were insured by MBIA. The hospital has ceased operations as an acute care hospital and the bonds were accelerated and paid in April 2005. Uninsured bondholder received less than par on their investment. TATER TIME: Wash. Labor Department Seeks Case Dismissal ------------------------------------------------------- The State of Washington, Department of Labor & Industries, asks the U.S. Bankruptcy Court for the Eastern District of Washington in Spokane and Yakima to dismiss Tater Time Potato Company LLC and its debtor-affiliates' chapter 11 cases due to the Debtors' failure to pay postpetition taxes. Brenda Cothary, the State's revenue officer, tells the Court that under Section 959(b) of the Judiciary Code, a debtor is required to comply with state law during its possession and operation of the estate. Ms. Cothary points out that the Debtors failed to pay postpetition taxes to the Department for the fourth quarter of 2005 and the first and second quarters of 2006. The total postpetition debt owed the Department is approximately $10,192 plus penalties, Ms. Cothary noted. The Court will convene a hearing on Jan. 8, 2007, at 10:30 a.m. to consider the State's request. Headquartered in Warden, Washington, Tater Time Potato Company LLC packs and ships potatoes. The Company and its debtor-affiliates filed for chapter 11 protection on January 24, 2005 (Bankr. E.D. Wash. Case No. 05-00509). J. Gregory Lockwood, Esq., and his firm, The Law Office of J. Gregory Lockwood, PLLC, replaced Dan O'Rourke, Esq., at Southwell & O'Rourke, P.S., as the Debtors' bankruptcy counsel. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for protection from their creditors, it reported total assets of $11,312,000 and total debts of $7,639,184. TOLEDO EDISON: Fitch Rates $300-Mil 6.15% Sr. Notes at BB+ ---------------------------------------------------------- Fitch Ratings assigned a 'BB+' rating to Toledo Edison Company's $300 million 6.15% senior unsecured notes due 2037. The Rating Outlook is Positive. Proceeds from the debt offering are expected to be used to redeem all of TE's outstanding preferred stock, a portion of TE's common stock from its corporate parent, FirstEnergy Corp, and for general corporate purposes. The ratings and Positive Outlook reflect TE's relatively stable operating cash flows, a balanced Ohio regulatory environment and assumes that the utility's credit metrics will remain supportive of current or higher credit ratings upon completion of the financial restructuring currently underway at the FE family of companies. In addition, the ratings consider the Jan. 2006 approval of TE's rate certainty plan by the Public Utilities Commission of Ohio. Fitch also considers the effect of certain joint and several obligations with affiliate Cleveland Electric Illuminating Company and anticipates continued reasonable regulatory outcomes in Ohio. TE's rate certainty plan and supply contract with FES substantially mitigates its power supply cost exposure, in Fitch's opinion. The primary concern for TE fixed income investors is the uncertain outlook for development of effective post-2008 Ohio power supply markets and the potential erosion of political support for recovery of prudently incurred costs in a high and rising commodity cost environment. TOWER AUTOMOTIVE: Excl. Plan-Filing Period Intact Until Nov. 30 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended Tower Automotive Inc. and its debtor-affiliates' exclusive periods to: (a) file a plan of reorganization to Nov. 30, 2006; and (b) solicit acceptances of that plan to Jan. 25, 2007. Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, notes that despite having negotiated and distributed, on a confidential basis, a draft plan of reorganization and accompanying disclosure statement, the Debtors continue to engage in good faith discussions with the Official Committee of Unsecured Creditors and other interested parties regarding the terms of the plan. Specifically, Mr. Sathy says, the Debtors have concluded that their ability to successfully reorganize hinges on being able to obtain a substantial equity investment, possibly implemented though a rights offering. The terms of the equity raise, considered a critical aspect of the Draft Plan, are currently being negotiated. The Debtors and the Creditors Committee are working closely on all aspects of the equity raise process. According to Mr. Sathy, the extension is warranted because the Debtors are making good faith progress towards emergence from bankruptcy. Particularly, prior to commencing the trial on their request to reject collective bargaining agreements and modify retiree benefits pursuant to Section 1113/1114 of the Bankruptcy Code, the Debtors announced and obtained a Court order approving: * Retiree Settlements with the Milwaukee Unions and the the Official Committee of Retired Employees; * a Section 1114 Settlement with the United Automobile, Aerospace and Agricultural Implement Workers of America, and the IUE, the Industrial Division of the Communication Workers of America AFL-CIO; and * a Section 1113 Settlement with their active unions. The Debtors have also negotiated and obtained a Court ruling approving a transition agreement regarding the closure of their production facility located in Greenville, Michigan, Mr. Sathy explains. The Greenville Facility employed approximately 200 hourly workers, and the transition agreement resolved a wide variety of issues related to the plant closure. Moreover, the Debtors have: a. negotiated several claim settlements and set-off stipulations with their vendors and customers, as well as obtained valuable trade term concessions and agreements on both the customer and vendor level. As a result, the Debtors have secured their customer's support for their restructuring efforts and have successfully secured or reconfirmed numerous awards for new business awarded since the Petition Date and are in the process of launching a substantial amount of previously-awaited business; b. identified contracts and leases which are beneficial in their estates, and have filed seven different motions requesting authority to assume key contracts, all of which the Court has granted. The Debtors have also rejected over 25 unfavorable leases; c. conducted a preliminary ongoing analysis as to the validity of the claims in connection with the Debtors' preparation and filing of their omnibus claims objections. As of Oct. 12, 2006, the Debtors have filed 22 omnibus claims objections, which are integral to the plan development process; and d. evaluated their entire business model to rationalize and enhance the efficiencies of the businesses. The Debtors have substantially completed the business plan that they expect will serve as the foundation for their Chapter 11 plan. As of Oct. 12, 2006, the Debtors have had sufficient resources to meet, and have generally met, all required postpetition payment obligations. The Debtors do not expect any change in their ability to meet their postpetition payment obligations in the near future, Mr. Sathy relates. In light of this progress, the Debtors believe that they deserve the opportunity to continue to pursue their restructuring objectives without the distraction of allowing third parties the opportunity to file and solicit acceptances of a competing plan of reorganization. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000). TOWER AUTOMOTIVE: Delays Form 10-Q Filing for Qtr. Ended Sept. 30 ----------------------------------------------------------------- Tower Automotive Inc. was unable to file its Form 10-Q for the three and nine months ended Sept. 30, 2006, on Nov. 14, James A. Mallak, Tower Automotive Inc.'s chief financial officer, notifies the Securities and Exchange Commission. Mr. Mallak notes that the Company has not had an opportunity to gather all of the information required in the Form 10-Q. Specifically, Mr. Mallak says, Tower filed its Form 10-K for the year ended Dec. 31, 2005; Form 10-Q for the three months ended March 31, 2006; and Form 10-Q for the six months ended June 30, 2006, on June 27, August 4, and Sept. 15, 2006. As a result, the necessary work associated with the Company's Form 10-Q for the three and nine months ended Sept. 30, 2006, will not be completed within the extended time frame permitted under Rule 12b-25 of the Securities Exchange Act of 1934. The Company intends to file its Form 10-Q as soon as all information necessary to complete the report is available to the Company, Mr. Mallak informs the SEC. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). TRIBUNE CO: Earns $164 Million in 3rd Quarter Ended September 24 ---------------------------------------------------------------- Tribune Company's net income for the third quarter ended Sept. 24, 2006, increased to $164,340,000 from net income of $24,011,000 for the third quarter ended Sept. 25, 2005. Total operating revenues for the current quarter decreased to $1,349,035,000 from $1,383,703,000 for the same period last year. According to the company, the 3% decline was due to lower publishing and broadcasting and entertainment revenues. As of Sept. 24, 2006, the company's balance sheet showed total assets of $14,182,581,000 and total liabilities of $9,731,346,000, resulting in a total shareholders' equity of $4,451,235,000, which is 51% lower than the $6,725,551,000 total shareholders' equity at Dec. 25, 2005. The company's Sept. 24 balance sheet also showed strained liquidity with $1,500,322,000 in total current assets available to pay $2,826,945,000 in total current liabilities. Credit Agreements On June 19, 2006, the company entered into a five-year credit agreement and a 364-day bridge credit agreement, both of which were amended and restated on June 27, 2006. The five-year credit agreement provides for a $1.5 billion unsecured term facility, of which $250 million was available and used to refinance the medium- term notes that matured on Nov. 1, 2006, and a $750 million unsecured revolving facility. The 364-day bridge credit agreement provides for a $2.15 billion unsecured bridge facility. The company entered into the agreements to finance its tender offer initiated on May 30, 2006; to repurchase shares of the company's common stock from the McCormick Tribune Foundation and Cantigny Foundation; to repurchase shares of the company's common stock pursuant to open market or privately negotiated transactions; to refinance certain indebtedness; and to pay fees and expenses incurred in connection with the repurchases. In addition, the revolving facility is available for working capital and general corporate purposes, including acquisitions. As of Sept. 24, 2006, the company had outstanding borrowings of $1.25 billion and $1.6 billion under the term facility and the bridge facility, respectively, and the company had no borrowings under the revolving facility. As of Sept. 24, 2006, the applicable interest rate on both the term facility and the bridge facility was 6.2%. The credit agreements contain certain restrictive covenants, including financial covenants that require the company to maintain a maximum total leverage ratio and a minimum interest coverage ratio. At Sept. 24, 2006, the company was in compliance with the covenants. Medium-Term Notes At Sept. 24, 2006, the company had $513 million of medium-term notes outstanding at an average interest rate of 6.2%. The company refinanced $250 million of the medium-term notes on Nov. 1, 2006, through the five-year unsecured term loan facility. Accordingly, these notes have been classified as long-term. A full-text copy of the company's financial report for the quarter ended Sept. 24, 2006, is available for free at: http://researcharchives.com/t/s?1563 About Tribune Headquartered in Chicago, Illinois, Tribune Company (NYSE: TRB) -- http://www.tribune.com/-- is a media company, operating businesses in publishing and broadcasting. In publishing, Tribune operates 11 leading daily newspapers including the Los Angeles Times, Chicago Tribune and Newsday, plus a wide range of targeted publications. The company's broadcasting group operates 26 television stations, Superstation WGN on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. * * * On Oct. 5, 2006, Standard & Poor's Ratings Services lowered its ratings on the class A and B units from the $75.795 million Structured Asset Trust Unit Repackaging Tribune Co. Debenture Backed Series 2006-1 to 'BB+' from 'BBB-'. Concurrently, the ratings were placed on CreditWatch with negative implications. In September 2006, Fitch Ratings downgraded its ratings for Tribune Co.'s $3.1 billion of outstanding senior unsecured and subordinated debt as of June 25, 2006, and subsequently placed them on Rating Watch Negative. Affected ratings include the company's Issuer Default Rating lowered to 'BB+' from 'BBB-', and Senior unsecured revolving credit facility lowered to 'BB+'from 'BBB-'. TRUE NORTH: Closes Acquisition of C3 Online Marketing ----------------------------------------------------- True North Corporation completed its acquisition of C3 Online Marketing Inc. The proposed Acquisition was disclosed on June 8 and June 20, 2006. As reported in the Troubled Company Reporter on Oct. 24, 2006, True North received conditional approval of its proposed acquisition of C3 from the TSX Venture Exchange. The listing of the common shares of True North issued and issuable in connection with the Acquisition is subject to final approval from TSX-V, which approval is expected following the filing with TSX-V of certain documents required by the TSX-V in connection with the closing of the Acquisition. True North obtained approval for the Acquisition by written consent of the holders of a majority of the outstanding common shares of True North in accordance with TSX-V policies. Management of True North believes that the Acquisition will significantly enhance True North's product offering and depth of management and will result in increased revenues and profits. Pursuant to the Acquisition True North acquired all of the outstanding shares of C3 in exchange for the issuance of 15,910,366 common shares of True North issued from treasury at a deemed price of $0.13 per share. In connection with the acquisition True North assumed an aggregate of $2,721,001 of debt owed by C3, comprised of $2,500,000 principal amount of debt evidenced by two convertible secured debentures previously issued by C3 to an arm's length lender, as well as an aggregate of $221,001 of debt owed by C3 to officers of C3. True North also issued an aggregate of 7,678,578 common shares from treasury at $0.14 per share in settlement of an aggregate of $1,075,001 of debt owed by True North, approximately 38% ($406,186) of which was comprised of the C3 debt assumed by True North. Following the Acquisition and the debt settlement, there are an aggregate of 49,393,912 common shares of True North outstanding. Pursuant to the assumption of the C3 debt and following the debt settlement True North issued two convertible secured debentures, one to Quorum Investment Pool Limited Partnership in the principal amount of $1,388,889 and the other to Ontario SME Capital Corporation in the principal amount of $1,225,926. The QIP Debenture and SME Debenture issued by True North replaced and superseded the two convertible secured debentures previously issued by C3 in the aggregate principal amount of $2,500,000. The QIP Debenture bears interest at 8% per annum, calculated monthly and payable quarterly in arrears, matures on March 17, 2011, and the principal is convertible in whole or in part at any time into common shares of True North at the rate of $0.2319 per share, subject to adjustment. The SME Debenture bears interest at 8% per annum, matures on Feb. 28, 2008, and the principal is convertible in whole or in part at any time into common shares of True North at the rate of $0.2319 per share in respect of $1,000,000 of principal and at $0.4630 per share in respect of $225,926 of principal, subject to adjustment. Following the Debt Settlement True North also issued a convertible secured debenture in the principal amount of $1,435,185 to Quorum Secured Equity Trust in replacement of two convertible secured debentures previously issued by True North to Quorum Secured Equity Trust in the aggregate principal amount of $1,550,000. The QSET Debenture bears interest at 8% per annum, matures on Dec. 15, 2009 and the principal is convertible in whole or in part at any time into common shares of True North at the rate of $0.35 per share until Nov. 10, 2007, at $0.385 per share from Nov. 11, 2007 to November 10, 2008, at $0.4235 per share from Nov. 11, 2008 to Nov. 10, 2009 and at $0.46585 from Nov. 11, 2009 to Dec. 15, 2009, subject to adjustment. The three holders of True North debentures are affiliated entities, one of which, Quorum Secured Equity Trust, pursuant to a prior agreement with True North has the right to appoint a director to the Board of True North. True North's subsidiaries, including C3, provided secured guarantees of True North's indebtedness to the debentureholders. All 15,910,366 common shares of True North issued pursuant to the Acquisition, all 7,678,578 common shares of True North issued pursuant to the settlement of debt, and all common shares of True North which may be issued pursuant to the conversion of the debentures are subject to transfer restrictions prohibiting their transfer prior to March 11, 2007. As required by the TSX-V 15,425,396 common shares of True North issued to the principals of C3 are held pursuant to an Escrow Agreement under which they will be released as to 10% upon issuance of the TSX-V Bulletin granting final approval of the Acquisition and the remaining shares in 6 equal tranches, on a pro-rata basis, every 6 months thereafter. The principals of True North have also voluntarily agreed to transfer restrictions in respect of an aggregate of 9,504,000 common shares of True North owned by them with the same release provisions as those in the Escrow Agreement. An additional 1,908,605 common of True North shares issued to non-principal shareholders of C3 will be subject to the same transfer restrictions as the shares governed by the Escrow Agreement as described above. Director Resigns The management of True North disclosed the resignation of James Williamson as a Director of the Corporation, and thank him for his years serving True North and its shareholders. The Board of directors of True North is comprised of Mark Anthony, Frank Peri and Michael Goffin. Michael Goffin is the nominee director of Quorum Secured Equity Trust. The officers of True North are Rick Camilleri, CEO; Mark Anthony, President; and Marie Peri, Vice- President, Finance. It is expected that Rick Camilleri will shortly be appointed to the Board of True North. Terry Ham, one of the principals of C3 will not be assuming the role of Chief Operating Officer as indicated in the Filing Statement but will continue to work with True North in a management capacity. A final decision has not yet been made as to whether Wanda Dorosz, President and CEO of the Quorum Group of Companies, will be joining the Board of True North as indicated in the Filing Statement. About C3 Online Marketing Headquartered in Toronto, Canada, C3 Online Marketing Inc. -- http://www.c3onlinemarketing.com/-- provides online solutions for marketers designed to attract and retain online relationships. About True North Headquartered in Mississauga, Ontario, True North Corporation (TSX: TN) -- http://www.truenorthcorp.ca/-- is an integrated marketing services company. TNC delivers services through two focus areas: Marketing Services & Sales Channel Support. At June 30, 2006, the Company's balance sheet showed a stockholders' deficit of $2,248,230, compared to deficit of $763,583 at Dec. 31, 2005. TRUE TEMPER: Weak Performance Cues S&P's Negative CreditWatch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings for Memphis, Tennessee-based golf club shaft manufacturer True Temper Sports Inc., including the 'B' corporate credit rating, on CreditWatch with negative implications. Approximately $235.7 million of total debt was outstanding at the company as of Oct. 1, 2006. "The CreditWatch placement follows the company's weaker-than- expected operating performance, which has weakened credit measures to levels below our expectations," explained Standard & Poor's credit analyst Mark Salierno. Through the first nine months of 2006, sales have declined by about 7.1%. In addition, operating margins continue to be pressured by higher energy-related and raw material costs, as well as a less favorable product mix, primarily attributed to lower sales volumes of the company's premium steel golf shafts. TTSI's financial performance has been fairly volatile since 2004, and the company remains highly leveraged. Standard & Poor's now estimates 2006 lease-adjusted total debt to EBITDA to be in the 7.0x area, compared to about 6.3x at the end of 2005. Given the company's highly leveraged capital structure, the rating agency are concerned that a continued weakness in operating performance and reduction in free operating cash flow would likely delay debt-reduction efforts. Although TTSI was in compliance with its bank covenants at Oct. 1, 2006, Standard & Poor's would expect covenants to tighten further in the event of a prolonged decline in performance, which could limit the company's near-term financial flexibility and adversely impact liquidity. Standard & Poor's will continue to monitor developments. Before resolving the CreditWatch listing, the rating agency will meet with company management to discuss its strategic plans to improve performance in 2007 and review its financial policy. UNIVERSITY HEIGHTS: Hires Girvin & Ferlazzo as Special Counsel -------------------------------------------------------------- University Heights Association Inc. obtained authority from the U.S. Bankruptcy Court for the Northern District of New York to employ Girvin & Ferlazzo, P.C., as its special litigation counsel. Girvin & Ferlazzo will: a) provide legal advice with respect to the Debtor's duties, responsibilities and powers in this chapter 11 case; b) assist in preparation of schedules and statement of affairs and other necessary filings; c) assist in its investigation of the Debtor's acts, conduct, assets and liabilities and financial condition. d) provide legal advice with respect to the Debtor's proposed plans of reorganization, its proposed plans with respect to prosecution of claims against various third parties, and any other matters relevant to the case, or to the formulation of a plan in this case; e) assist regarding meeting of creditors, defense of motions to lift stay, protection of leasehold interests and other contracts, utility deposit negotiations with the creditor's committees, formulation of a disclosure statement and plan of reorganization, assumption or rejection of executory contracts and leases, sale of property, if necessary, and other matters as may be relevant in the Debtor's continued operation of its business; and f) perform other legal services as may be required by the Debtor. The Debtor has paid the firm a $125,000 retainer. Patrick J. Fitzgerald, Esq., a Girvin & Ferlazzo principal, discloses the firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $200 - $275 Associates $150 - $195 Paraprofessionals $85 Mr. Fitzgerald assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Albany, New York, University Heights Association Inc. -- http://www.universityheights.org/-- is composed of four educational institutions that aim to enhance the economic vitality and quality of life of its immediate community. The company filed for chapter 11 protection on Feb 13, 2006 (Bankr. N.D.N.Y. Case No. 06-10226). Judge Littlefield dismissed the Debtor's chapter 11 case due to bad faith filing. On Oct. 12, 2006, the Debtor filed a chapter 22 petition. Francis J. Smith, Esq., at McNamee, Lochner, Titus & Williams, PC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and liabilities between $10 million and $50 million. UNITED CUTLERY: Hires Ragsdale & Waters as Special Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Tennessee allowed United Cutlery Corp. and its debtor-affiliates to employ Ragsdale & Waters, P.C., as their special counsel. Ragsdale & Waters will represent the Debtors in connection with the negotiations and preparation of a contract for the sale of real property and the closing of that sale. The property consists of a $4.9-acre tract, located in Sevier County, Tennessee, owned by Hall Partners, L.P., which is the site of the Debtors' business. In addition, the sale will include a 1.3-acre tract owned by the Debtors, contiguous to the property owned by Hall Partners. John B. Walters, III, Esq, a Ragsdale & Waters member, discloses the firm's professionals bill: Position Hourly Rate -------- ----------- Attorneys $175 - $225 Non-attorneys $70 Mr. Walters assures the Court that the firm does not hold nor represent any interest adverse to the Debtors' estate. Headquartered in Sevierville, Tennessee, United Cutlery Corp. -- http://www.unitedcutlery.com/-- manufactures hunting, camping, fishing, military, utility, collectible, and fantasy knives. The Debtors also market fantasy-based swords, weapons and armor under license from movie studios. The Company and two of its affiliates filed for chapter 11 protection on Oct. 2, 2006 (Bankr. E.D. Tenn. Case No. 06-50884). Maurice K. Guinn, Esq., at Gentry, Tipton & McLemore P.C., represents the Debtors. When the Debtors filed for protection from their creditors, they listed total assets of $9,964,288 and total debts of $26,361,930. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 30, 2007. UNIVERSITY HEIGHTS: Files Schedules of Assets and Liabilities ------------------------------------------------------------- University Heights Association Inc. delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Northern District of New York disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $15,500,000 B. Personal Property $5,442,470 C. Property Claimed as Exempt D. Creditors Holding $8,112,957 Secured Claims E. Creditors Holding $0 Unsecured Priority Claims F. Creditors Holding $28,710,328 Unsecured Nonpriority Claims ----------- ----------- Total $20,942,470 $36,823,285 Headquartered in Albany, New York, University Heights Association Inc. -- http://www.universityheights.org/-- is composed of four educational institutions that aim to enhance the economic vitality and quality of life of its immediate community. The company filed for chapter 11 protection on Feb 13, 2006 (Bankr. N.D.N.Y. Case No. 06-10226). Judge Littlefield dismissed the Debtor's chapter 11 case due to bad faith filing. On Oct. 12, 2006, the Debtor filed a chapter 22 petition. Francis J. Smith, Esq., at McNamee, Lochner, Titus & Williams, PC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and liabilities between $10 million and $50 million. US AIRWAYS: Fitch Holds CCC Issuer Default Rating ------------------------------------------------- Fitch Ratings has affirmed its ratings of US Airways Group, Inc., as: -- Issuer Default Rating (IDR) at 'CCC'; -- Secured Term Loan Rating at 'B/RR1'; -- Senior Unsecured Rating at 'CC/RR6'. Fitch's ratings apply to approximately $1.4 billion in debt obligations. The Rating Outlook has been revised to Stable from Positive. The revision in Fitch's outlook on US Airways reflects the airline's announcement that it has made an unsolicited offer to merge with Delta Air Lines, Inc., which has been operating in Chapter 11 bankruptcy protection since September 2005. US Airways' offer totals $8 billion and consists of $4 billion in cash and 78.5 million shares of US Airways common stock, valued at $4 billion. US Airways has arranged $7.2 billion in committed financing from Citigroup to fund the cash portion of the transaction, as well as to refinance $1.25 billion in outstanding term loan obligations at US Airways and $1.9 billion in debtor-in- possession financing currently outstanding at Delta. US Airways estimates that the merger will produce $1.65 billion in annual synergies, primarily through network optimization initiatives valued at $935 million, as well as cost savings of $710 million. The combined carrier would operate under the Delta brand and would add Delta's extensive international presence to US Airways' existing low-cost domestic operations. Although achievement of synergy benefits has historically been difficult in airline mergers, the relative success of the US Airways/America West merger lends credence to the synergy estimates and to management's ability to successfully combine the Delta and US Airways operations. The merged company would be highly levered, however, carrying over $20 billion of lease-adjusted debt. As with all airline mergers, challenges include the merging of labor groups and fleet types. Approval from the Department of Justice could also require the sale of Delta's shuttle operation on the East Coast, which competes with US Airways' shuttle operation. Labor integration could be somewhat easier than with most other airline mergers, as most of Delta's labor force is non- union, the primary exception being its pilots. US Airways is still working through labor discussions with most of its own labor groups as a result of the AWA merger, however, and those discussions could be complicated by the announcement. In terms of fleet, US Airways has recently tended to favor Airbus for its new aircraft, while Delta has favored Boeing. However, both carriers operate Boeing 737s, 757s and 767s, so there is some commonality between fleets. As US Airways' offer was unsolicited, it is possible that other, competing offers for Delta could be made, either from another airline or from private equity. Although no other potential airline suitor has a strong balance sheet, United has been vocal about its desire to take part in airline consolidation and has hired Goldman Sachs as an advisor. It is unclear how US Airways would respond to a competing offer. Prior to the announcement, US Airways had shown good progress on attaining the synergies anticipated from its merger with AWA. As a result of the positive trends in its credit profile, Fitch's previous Rating Outlook on the airline was Positive. With the announcement, the Rating Outlook has been revised to Stable, as the proposed transaction adds a level of risk to US Airways credit profile that lessens the likelihood of an upgrade in the near term. Fitch does not believe that the transaction, if successfully completed as envisioned today, would result in a downgrade of US Airways' ratings. The recovery rating of 'RR6' on US Airways' senior unsecured debt obligations reflects the very low level of recovery expected in a default scenario. Likewise, the recovery rating of 'RR1' on US Airways' term loan facility reflects the facility's strong collateral backing and outstanding recovery prospects in a default. It is important to note that the term loan facility would be refinanced with proceeds from the Citigroup term loan if the Delta merger is successful. USA COMMERCIAL: Excl. Solicitation Period Intact Until Dec. 31 -------------------------------------------------------------- The Honorable Linda B. Riegle of the U.S. Bankruptcy Court for the District of Nevada extends until Dec. 31, 2006, USA Commercial Mortgage Company and its debtor-affiliates' exclusive period to solicit acceptances for their Joint Plan of Reorganization. The Court has previously issued a bridge order extending the Debtors' solicitation period until Oct. 19, 2006. The Dec. 31 extension is conditioned upon the Debtors success at obtaining approval of their Disclosure Statement by Nov. 30, 2006. As reported in the Troubled Company Reporter on Oct. 11, 2006, the Debtors asked for a short continuance of exclusivity in order to gain time to prepare a joint plan in consultation with the four official committees appointed in their cases -- the Official Committee of Equity Security Holders of USA Capital First Trust Deed Fund, LLC, the Official Committee of Executory Contract Holders of USA Commercial Mortgage Company, the Official Committee of Equity Security Holders of USA Capital Diversified Trust Deed Fund, LLC, and the Official Committee of Unsecured Creditors for USA Commercial Mortgage Company. About USA Commercial Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba USA Capital -- http://www.usacapitalcorp.com/-- provides more than $1 billion in short-term and permanent financing to homebuilders, commercial developers, apartment owners and institutions nationwide. The Company and its debtor-affiliates filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev. Case Nos. 06-10725 to 06-10729). Lenard E. Schwartzer, Esq., at Schwartzer & Mcpherson Law Firm, and Annette W. Jarvis, Esq., at Ray Quinney & Nebeker, P.C., represent the Debtors in their restructuring efforts. Thomas J. Allison, a senior managing director at Mesirow Financial Interim Management LLC, has been employed as Chief Restructuring Officer for the Debtors. Susan M. Freeman, Esq., and Rob Charles, Esq., at Lewis and Roca LLP represent the Official Committee of Unsecured Creditors of USA Commercial Mortgage Company. Edward M. Burr at Sierra Consulting Group, LLC, gives financial advice to the Creditors Committee of USA Mortgage. Marc A. Levinson, Esq., and Jeffery D. Hermann, Esq., at Orrick, Herrington & Sutcliffe LLP, and Bob L. Olson, Esq., and Anne M. Loraditch, Esq., at Beckley Singleton, Chartered, represent the Official Committee of Equity Security Holders of USA Capital Diversified Trust Deed Fund, LLC. FTI Consulting, Inc., gives financial advice to the Equity Committee of USA Diversified. Candace C. Carlyon, Esq., and Shawn w. Miller, Esq., at Shea & Carlyon, Ltd., and Jeffrey H. Davidson, Esq., Frank A. Merola, Esq., and Eve H. Karasik, Esq., at Stutman, Treister & Glatt, PC, represent the Official Committee of Equity Security Holders of USA Capital First Trust Deed Fund, LLC. Matthew A. Kvarda, at Alvarez & Marsal, LLC, gives financial advise to the Equity Committee of USA First. When the Debtors filed for protection from their creditors, they estimated assets of more than $100 million and debts between $10 million and $50 million. VESTA INSURANCE: Court OKs Second Amended Disclosure Statement ---------------------------------------------------------------- Vesta Insurance Group Inc. delivered a Second Amended Plan of Liquidation and Disclosure Statement to the U.S. Bankruptcy Court for the Northern District of Alabama on Nov. 10, 2006, reflecting the record of the Nov. 9 Disclosure Statement Hearing and agreements, if any, reached with objecting parties. The Court finds that the Second Amended Disclosure Statement contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. The Court approves the Second Amended Disclosure Statement and authorizes Vesta to send copies of the Disclosure Statement together with other materials to solicit creditor votes on the Debtor's Second Amended Plan. All objections to the Disclosure Statement, to the extent not withdrawn or resolved, are overruled. Disclosure Amendments Vesta's Second Amended Plan is not available on the Court docket. Pursuant to the Second Amended Disclosure Statement, Vesta clarifies that some or all of these claims have been listed in its Schedules of Assets and Liabilities as disputed, contingent, or unliquidated: Claimant Claim Amount -------- ------------ Senior Debenture Holders $69,080,000 Junior Debenture Holders 15,252,000 Vesta Fire Insurance Corporation 33,882,000 J. Gordon Gaines, Inc. 94,926,029 BDO Seidman, LLP 470,984 Crowe Chizek and Company, LLC 138,014 Houlihan Lokey 118,004 PricewaterhouseCoopers, LLP 190,137 Vesta says it may have defenses, set-offs, or counterclaims that would reduce or eliminate its liability to some or all of the claimants. Vesta reserves the right to object to any of the Claims before the effective date of its Liquidation Plan. The trustee to be appointed under Vesta's Plan may also object to any claims asserted against the Debtor or estate property. Before its bankruptcy filing, Vesta purchased Directors and Officers' liability insurance for the purpose of covering any costs incurred by the Debtor in connection with its obligations to indemnify its current and former officers and directors for certain liabilities arising from their employment with or service to the Debtor. The D&O Policy provides for a $35,000,000 aggregate policy limit. Vesta extended the Primary Policy for a one-year period ending Dec. 31, 2007, and paid a $1,250,000 premium for the extension. The extension contains a provision that allows XL Specialty Insurance Company, as insurer, to cancel the Policy and return the extension premium to Vesta. In that event, the Insurer will have no liability whatsoever for the extension period. Vesta discloses that the Official Committee of Unsecured Creditors appointed in its case has advised that the panel intends to petition the Court to compel the Debtor to cancel the extension of the D&O Policy. Court Approves Voting Guidelines Judge Bennett sets Nov. 10, 2006, as the Record Holder Date to determine the holders of claims and interests entitled to receive solicitation package and to vote on Vesta's Plan. All Ballots and Master Ballots will be mailed to the voting agent, Parker, Hudson, Rainer & Dobbs LLP, no later than Dec. 18, 2006, at 4:00 p.m. The "Voting Classes" will include holders of allowed Senior Note/Debenture Claims, allowed Junior Debenture Claims, allowed General Unsecured Claims, allowed Subordinated Claims, and allowed Shareholder Interests in accordance with Vesta's Plan. Judge Bennett rules that only these holders of claims against and interests in the Voting Classes will be entitled to vote with regard to those claims and interests: (i) holders of filed proofs of claim as reflected, as of the close of business on the Record Holder Date, on the official claims register that have not been disallowed, disqualified or suspended prior to the computation of the vote on the Plan; (ii) holders of scheduled claims that are listed in the Debtor's Schedules of Assets and Liabilities as not contingent, unliquidated, or disputed claims; (iii) holder of interests reflected on the list of street holders maintained by Automatic Data Processing, Inc., and the list of registered holders maintained by Vesta's stock transfer agent -- Computershare Investor Services -- that have not been disallowed, disqualified or suspended before the computation of votes on the Plan; and (iv) holder of a claim for which a proof of claim has been filed with the Court and entered on the Official Claims Register on or before the Voting Deadline. However, the assignee of a transferred and assigned claim will be permitted to vote a claim only if the transfer and assignment has been noted by the Court as of the close of business on the Record Holder Date. With respect to holders of Class E General Unsecured Claims and Class F Subordinated Claims: (a) Vesta mailed by Nov. 13, 2006, a sealed solicitation package to each Voting Holder, which included: * notice of the Plan confirmation hearing and related matters; * a copy of the Disclosure Statement, including the Plan); * a ballot; * a copy of a letter from the Official Committee of Unsecured Creditors in Vesta's case endorsing the Plan; and * a copy of the order approving the Disclosure Statement. (b) With respect to a claimholder for which a proof of claim is filed after the Solicitation Package Mailing Date but before the Voting Deadline, the Debtor mailed a Solicitation Package to that holder on or before one business day after that proof of claim is entered on the official claims register. (c) All Voting Holders will mail their Ballots to the Voting Agent. With respect to voting by holders of Class G Shareholder Interests, Vesta will mail to Computershare on Nov. 16, 2006, a sufficient number of copies of the Solicitation Package, including Master Ballots, for Computershare to mail a Solicitation Package to each Voting Holder on the Computershare List. By Nov. 20, 2006, Computershare will deposit a sealed Solicitation Package to each Voting Holder identified on the Computershare List. Each Voting Holder on the Computershare List will mail his Ballot to Computershare on or before Dec. 14, 2006. Vesta will mail copies of the Solicitation Package to ADP on Nov. 16, 2006. Each Voting Holder on the ADP Shareholder List will mail his Ballot to ADP no later than Dec. 14, 2006. In connection with the solicitation of votes from the holders of Class C Senior Note/Debenture Claims and Class D Junior Debenture Claims, the Court authorizes the Voting Agent to send a letter to the Depository Trust Company. Judge Bennett authorizes Vesta to rely on the lists maintained by ADP and DCT of holders of Senior Note/Debenture Claims and of holders of Junior Debenture Claims, in effect as of Nov. 10, 2006. With respect to voting by holders of Class C Senior Note/ Debenture Claims and Class D Junior Debenture Claims, Vesta will send on or before the Solicitation Package Mailing Date a copy of the Solicitation Package, together with Master Ballot and the DTC Cover Letter. DTC will post by Nov. 15, 2006, a copy of each document in the Solicitation Package, plus copies of the Master Ballot, the notice issued by the Court of the bar date for proofs of claim, and the DTC Cover Letter, and send an alert to each banker, broker, or other agent, intermediary or nominee identified on its participation list. Each Voting Holder will mail his Ballot to the DTC Nominee on or before December 6, 2006. ADP will deposit by November 20, 2006, a sealed Solicitation Package to each Voting Holder identified on the Debt Holder List. Confirmation Hearing on Dec. 21 A hearing on Vesta's Plan confirmation is set for Dec. 21, 2006, at 9:30 a.m. Confirmation objections to Vesta's Plan must be served on or before Dec. 18, 2006, at 4:00 p.m. A full-text copy of Vesta's Second Amended Disclosure Statement is available for free at http://ResearchArchives.com/t/s?156b Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III L.P. filed an involuntary chapter 7 petition against the Company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines Inc. is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered the Order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. (Vesta Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). VESTA INSURANCE: Wants Panel to Vote on Gaines' Liquidation Plan ---------------------------------------------------------------- Vesta Insurance Group Inc. asks the U.S. Bankruptcy Court for the Northern District of Alabama, to authorize, on its behalf, the Official Committee of Unsecured Creditors appointed in its case to: -- cast any ballot in J. Gordon Gaines Inc.'s Chapter 11 case, and -- file any objection, if any, to Gaines' Plan of Liquidation. Each of the Debtors and their counsel, Parker, Hudson, Rainer & Dobbs LLP, believe that the Liquidation Plans meet the needs of each Debtor and its estate. Furthermore, the Plans and Disclosure Statements have been modified in consultation with various parties-in-interest in each case. However, each of the Debtors has a claim or interest that it asserts against or in the other and, therefore, must cast a ballot in the other Debtor's case and take other action deemed appropriate, if any, in connection with confirmation of the other Debtor's Plan. In recognition of those cross-company claims and interests, each of the Debtors wants to assure that complete and independent consideration of the potential impact of each Debtor's plan on the other Debtor's claims or interests has occurred. Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III, L.P., filed an involuntary chapter 7 petition against the Company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines, Inc., is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered the Order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. (Vesta Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). VULCAN ENERGY: Merger Cues Moody's to Hold Senior Ratings at Ba2 ---------------------------------------------------------------- Moody's Investors Service upgraded Pacific Energy Partners, L.P senior unsecured ratings to Baa3 and withdrew general partner LB Pacific, L.P.'s ratings, completing a review begun June 13, 2006 upon PPX's reported agreement to be acquired by Vulcan Energy Corporation's wholly-owned subsidiary Plains All American Pipeline L.P. LBP's debt was retired. These actions coincide with the completion of that merger. PAA's existing Baa3 senior unsecured and Vulcan Energy Corporations' Ba2 senior secured ratings were affirmed, as was Vulcan's Ba1 Corporate Family Rating which encompasses the Vulcan/PAA group, now pro-forma for PPX. The rating outlook is stable. Using the Loss Given Default methodology, Moody's affirms Vulcan's Ba1 Probability of Default Rating, Ba2 senior secured Term Loan rating, and Ba2 secured revolving credit facility rating, with the methodology also assessing the secured facilities at LGD 6. While the rating outlook for the merged group is stable, pro-forma leverage on EBITDA exceeds the range Moody's deems compatible with PAA's Baa3 rating. PAA's ability to retain its stable outlook depends upon a significant equity offering by first quarter 2007 to both fulfill its stated intention for 50% equity funding for the PPX acquisition and to reduce leverage on expected EBITDA. At PAA's long-term leverage target of 50% Debt/Capital, its leverage tendencies are generally not conservative for the ratings. The outlook and potentially the ratings are also dependent on PAA not materially expanding its credit intensive merchant marketing and trading activity and its proprietary hedged contango trading activity before core leverage reduction. PAA acquired LB Pacific's interests in PPX for $700 million in cash, including its 2% general partnership interest, incentive distribution rights, 2.6 million of PPX common units, and 7.8 million PPX subordinated units. PAA acquired PPX's remaining equity units in a tax free unit-for-unit exchange, in which PPX unit holders received 0.77 PAA common units in exchange for each PPX unit. PAA also assumed PPX's approximately $425 million of senior notes and repaid PPX's outstanding revolving credit debt. All PAA subsidiaries and PPX's non-regulated subsidiaries will guarantee the PAA and PPX notes. Moody's views the PAA/PPX merger to be favorable strategic moves for each firm. It also reduces the proportion of PAA's assets and cash flow in the merchant segment. However, the acquisition was also comparatively expensive, neither the scale nor the timing of merger synergies is assured, and each firm faces substantial growth capital spending. Coupled with the constant heavy cash distributions that are basic to master limited partnerships, this reduces the likelihood of organically reduced leverage during 2007. To partly reduce the burden of distributions, PAA's general partner has agreed to forego $20 million of incentive distributions in 2007 and a total of $65 in incentive distributions through 2011. Over time, Moody's has found PAA's general partner to have been consistently supportive of sound long-term business and financial policies. PAA's investment grade ratings reflect that its funding strategy has historically included pre-funding a portion of its equity requirements for acquisitions. At today's closing, the PPX acquisition has been roughly 42% equity funded. However, PAA considers roughly 50% of its $163 million direct equity placement in July and Aug. 2006 to also be pre-funding for the PPX acquisition. To issue the remaining equity needed to bring the funding total to 50%, PAA has stated its intention to issue significant equity before the end of first quarter 2007. PAA's pro-forma long-term debt to total capital would be roughly 49% and pro-forma total debt to total capital would be roughly 59%. Total pro-forma long-term debt would be roughly $2.6 billion. Pro-forma June 30, 2006 LTM EBITDA approximated $586 million. Moody's expect pro-forma LTM interest expense to be roughly $175 million and 2006 pro-forma capital spending to be roughly $460 million including portions of the $64 million phase II St. James Terminal expansion and $48 million phase VI Cushing terminal expansion. In addition to roughly $30 million of available cash, PAA has adequate funding capability for the remaining portion of its roughly $535 million 2006-7 proforma capital program. Though PAA has successfully controlled its large merchant marketing and trading business this decade, Moody's views such credit intensive cash flows to have limited long-term debt capacity and that a higher proportion of fee and tariff income would be ratings supportive. Since PPX conducted a small level of such activity, the merger substantially boosts the fee and tariff component of PAA's pro-forma cash flow mix to almost 70%. Greater visibility on any durable fee-based gathering cash flows within the merchant and gathering segment of PAA's business would enable a more specific dimensioning of its total more durable core cash flows. PPX's principal assets are 4,000 miles of crude oil pipelines, 550 miles of refined products pipelines, 13.5 million barrels of crude oil storage capacity, and 7.5 million barrels of refined products storage capacity. PAA will benefit from several forms of strategic advantages and diversification with the PPX merger, as well as from the larger pro-forma capitalization and business scale. PAA will be a major participant in the growing crude oil import markets along the West Coast, Gulf Coast, and the north-to-south movement of conventional and synthetic crude oil from Canada to the U.S. PPX also provides PAA with immediate scale entry into the West and East Coast refined products market via its refined product storage and terminal assets in the San Francisco Bay Area and Philadelphia areas, with the latter injecting PAA into to the major Atlantic Basin refined products market. PPX's Long Beach Harbor storage and terminal assets give PAA direct access to growing Southern California crude oil imports that are replacing falling California and Alaskan production. PAA also gains PPX's pending Port of Los Angeles Pier 400 deepwater terminal project, awaiting final review, environmental, and project approvals from the Port and City of Los Angeles. PPX intensifies PAA's system taking imported Canadian crude oil to Rocky Mountain and Midwest markets and integrates imported Canadian crude oil with the strategic Cushing storage hub where PAA is a major player. Plains All-American Pipeline, L.P. is headquartered in Houston, Texas. WASTE CONNECTIONS: Buying Waste Management's Southeast Operations ----------------------------------------------------------------- Waste Connections Inc. signed an agreement to acquire collection, transfer, and disposal operations in the Southeast from a subsidiary of Waste Management Inc. The completion of the acquisition is subject to local consents, which are expected to be obtained within 60 days. The Company has also completed the refinancing of its senior credit facility, which reduces its revolving credit facility from $850 million to $750 million, lowers its current interest rates on the facility, extends the revolving credit facility's maturity to January 2012, and includes pre-approval to increase the facility size by an additional $250 million in the future. The Company currently has approximately $450 million utilized and an additional $550 million of either available or pre-approved capacity under its revolving credit facility. Ronald J. Mittelstaedt, chairman and chief executive officer, said, "The reduction in borrowing costs to near investment grade pricing is a result of both the continuing improvement in our financial profile and the strong support of our lending group. We decreased the size of the credit facility to eliminate a portion of excess capacity put in place earlier this year for additional flexibility in redeeming our convertible notes, which we completed in the second quarter. We also are pleased to announce the Waste Management acquisition. This acquisition brings the year-to-date acquired annualized revenue either signed or closed to approximately $50 million." Based in Folsom, California, Waste Connections, Inc., -- http://www.wasteconnections.com/--is a regional, integrated solid waste services company. Through its operating subsidiaries, it provides solid waste collection, transfer, disposal and recycling services to residential, industrial and commercial clients in secondary markets of the Western and Southern US. * * * As reported in the Troubled Company Reporter on March 20, 2006 Moody's Investors Service affirmed its B1 subordinated debt rating on Waste Connections Inc.'s $175 million of floating rate convertible subordinated notes due 2022 and the Ba2 Corporate Family Rating on the Company. The outlook is positive. WENDY'S INT'L: Gets Tenders for 27,887,000 Common Shares -------------------------------------------------------- Wendy's International Inc. announced that based on a preliminary count by American Stock Transfer & Trust Company, the depositary for tender offer, a total of approximately 27,887,000 common shares were properly tendered and not withdrawn in the "Dutch Auction" tender offer. The Company disclosed that 22,418,000 common shares were properly tendered and not withdrawn at prices at or below the purchase price. The tender offer expired at 5:00 p.m., Eastern Time, on Nov. 16, 2006. The Company also disclosed that it expects to accept for purchase approximately 22,418,000 of its common shares, including approximately 4,644,000 shares tendered through guaranteed delivery procedures and 90,000 shares tendered subject to conditions, at a purchase price of $35.75 per share, for a total cost of approximately $800 million. Shareholders who deposited common shares in the tender offer at or below the purchase price will have all of their tendered common shares purchased, subject to certain limited exceptions. The number of shares to be purchased and the purchase price per share are preliminary, the Company disclosed. Final results for the tender offer will be determined subject to confirmation by the depositary of the proper delivery of the shares validly tendered and not withdrawn. Payment for the shares accepted for purchase will occur after the completion of the confirmation process. The number of shares the Company expects to purchase in the tender offer represents approximately 19% of its currently outstanding common shares. In the tender offer, the Company offered to purchase up to approximately 22.2 million of its common shares at a price between $33 and $36 per share, for a maximum aggregate repurchase price of up to $800 million. The Company also had the right to purchase up to an additional 2% of its shares outstanding in the event more than 22.2 million shares were tendered without extending the offer. All inquiries about the tender offer are to be directed to the information agent, Georgeson Inc., at 1-866-277-0928. Headquartered in Dublin, Ohio, Wendy's International Inc. -- http://www.wendysintl.com/-- and its subsidiaries operate, develop, and franchise 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. WERNER LADDER: Wants to Expand PwC's Scope of Duties as Auditor --------------------------------------------------------------- Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to expand the scope of employment of PricewaterhouseCoopers LLP as their tax advisors and auditors, subject to the terms and conditions of the two engagement letters dated Sept. 7, 2006, between the Debtors and PwC. PwC has agreed to provide these additional services: (1) audit the Werner Holding Co. (DE), Inc., Employee Savings Plan as required by the Employees Retirement Income Security Act of 1974, as subsequently amended; (2) audit the Retirement Plan for Employees of Werner Holding (DE), as required by ERISA; and (3) perform all other tax and auditing services as may be requested by the Debtors in their Chapter 11 cases. Under the supplement application, the Debtors will pay for the Additional Services based on the hourly rates of PwC's personnel: Designation Hourly Rate ----------- ----------- Partner $600 Manager $280 Senior Associate $200 Associate $130 Intern $100 Administrative Staff $80 The Debtors will also reimburse PwC for its reasonable expenses incurred in connection with the provision of the Additional Services. Brian W. Smith, a partner at PwC, reiterates that the firm is a disinterested person as the term is defined Sections 101(14) and 1107(b) of the Bankruptcy Code, and that the firm represents no interest adverse to the Debtors and their estates. About Werner Ladder Headquartered in Greenville, Pennsylvania, Werner Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The firm of Willkie Farr & Gallagher LLP serves as the Debtors' counsel. Kara Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S. Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors as its co-counsel. The Debtors have retained Rothschild Inc. as their financial advisor. Greenberg Traurig LLP is counsel to the Official Committee of Unsecured Creditors. Jefferies & Co serves as the Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WESTERN MEDICAL: Asks Court's Nod for Apria Contracts Assumption ---------------------------------------------------------------- Western Medical Inc. asks the U.S. Bankruptcy Court for the District of Arizona to approve the assumption of provider contracts between the Debtor, the Area Agency on Aging and Las Fuentes Care Center. The Debtor further seeks consent on the contemporaneous assignment of the contracts to Apria Healthcare, Inc., the designated purchaser of the Debtor's assets. In addition, Debtor moves to reject those remaining contracts and leases not assumed. Under an Asset Purchase Agreement, Apria was given 60 days from the closing of the asset sale on Aug. 25, 2006, to designate the contracts and leases it wanted to assume. Because Apria was to be responsible for all accruing costs associated with the contracts and leases during the 60-day period, it provided a list of those contracts and leases it was initially interested in, and advised the Debtor that all contracts and leases not on the list could be rejected. Subject to Court approval, Apria has elected to receive an assignment from the Debtor of two provider contracts, the Area Agency on Aging contract and the Las Fuentes Care Center contract. Computers Unlimited Objection Computers Unlimited, a hardware and software distributor, questions the inclusion of the Software License and Equipment Purchase Agreement between Western Medical, Apria Healthcare and Computers Unltd. on the list of contracts being rejected. A full-text copy of the List of Contracts for Rejection is available for free at http://ResearchArchives.com/t/s?1550 A full-text copy of the Software License Purchase Agreement is available for free at http://ResearchArchives.com/t/s?1551 Headquartered in Phoenix, Arizona, Western Medical, Inc. -- http://www.westernmedicalinc.net/-- sells and distributes medical and hospital equipment. The company filed for chapter 11 protection on June 15, 2006 (Bankr. D. Ariz. Case No. 06-01784). Brenda K. Martin, Esq., at Osborn Maledon, P.A., represents the Debtor. Pachulski Stang Ziehl Jones and Weintraub LLP, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $1 million to $10 million and debts between $10 million and $50 million. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- AMR Corp. AMR (514) 30,128 (1,202) Clorox Co. CLX (55) 3,539 (20) ********* 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 ***