T R O U B L E D C O M P A N Y R E P O R T E R Friday, November 24, 2006, Vol. 10, No. 280 Headlines ABN AMRO: Fitch Holds Low-B Ratings on Six Certificate Classes ACCU-SYSTEMS: Case Summary & 20 Largest Unsecured Creditors AUTOCAM CORP: May Not Comply with Covenants on December 2006 AUTOCAM CORP: Restructuring Cues S&P to Junk Corp. Credit Rating BANC OF AMERICA: Fitch Affirms Low-B Ratings on 32 Cert. Classes BANC OF AMERICA: S&P Holds Low-B Ratings on Six Cert. Classes BERTHEL GROWTH: Incurs $95,475 Net Loss in Quarter Ended Sept. 30 BEST BRANDS: Moody's Assigns B2 Corporate Family Rating BEXAR COUNTY: Moody's Holds Low-B Ratings on $21.9-Mil. Bonds BRICKMAN GROUP: Partners' Sale Cues Moody's Negative Review C-BASS: S&P Lowers Rating on Three Transactions CALPINE CORP: Appoints Lisa Donahue as Chief Financial Officer CALPINE CORP: Wants $100-Mil. Goldendale Bid Procedures Approved CARRAWAY METHODIST: Administrator Amends Creditors' Committee CARRAWAY METHODIST: Bradley Arant Approved as Bankruptcy Counsel CATHOLIC CHURCH: HR&A Employment Hearing Continues on Nov. 27 CATHOLIC CHURCH: Portland Wants R. Dandar's $1MM Claim Disallowed CBA COMMERCIAL: Fitch Rates $1-Mil. Class M-5 Certificates at BB+ CENTENNIAL COMMS: Selling Dominican Republic Business for $80 Mil. CENTRIX FIN'L: Court Sets January 11 Hearing on Sale of All Assets CKE RESTAURANTS: Good Performance Cues Moody's to Revise Outlook COIN BUILDERS: Judge Utschig Approves Chapter 7 Conversion COIN BUILDERS: Chapter 7 Trustee Hires Kepler & Peyton as Counsel COMPLETE RETREATS: Court OKs Increase in Patriot's Holdback Amount COMMUNICATIONS CORP: Hires CobbCorp LLC as Broker COMMUNICATIONS CORP: Hires Michael Nassif as Special Counsel COPANO ENERGY: Expands Commodity Hedging Portfolio CREDIT SUISSE: S&P Downgrades Rating on Class M-2 Certs. to BB CROWN HOLDINGS: Seeks Noteholders' OK on Additional $200-Mil. Debt DAVID DUNCAN: Case Summary & Three Largest Unsecured Creditors DELTA AIR: Bondholders to Form Group Backing US Airways Bid ENCORE ACQUISITION: Earns $42.1 Million in Quarter Ended Sept. 30 ENRON CORP: Wants Energen, Et Al. Settlement Pacts Approved ENRON CORP: Seeks Approval for T. Thorn Settlement Agreement EQUITABLE LIFE: Wants Business Moved to Canada Life Under Scheme FEDERAL-MOGUL: Judge Fitzgerald Okays DIP Credit Pact Amendment FISHER SCIENTIFIC: Releases Third Quarter 2006 Financial Results FOAMEX INTERNATIONAL: Lease Decision Period Extended to Feb. 17 FOAMEX INTERNATIONAL: Wants to Reject Chorman Employment Agreement FORD CREDIT: Fitch Rates $59-Million Class D Notes at BB+ GLEN DEVELOPMENT: Case Summary & Three Largest Unsecured Creditors GLOBAL TEL*LINK: S&P Holds Existing Corporate Credit Rating at B GMAC MORTGAGE: Fitch Assigns Low-B Ratings on Eight Cert. Classes GREATER MERIDIAN: Voluntary Chapter 11 Case Summary HERCULES INC: Earns $34.2 Million in Quarter Ended September 30 HINES HORTICULTURE: Hires KPMG as New Accountant in Lieu of PwC HINES HORTICULTURE: Unit Sells Pipersville Facility to Costa HOMETOWN COMMERCIAL: S&P Places Low-B Ratings on 6 Cert. Classes HOME EQUITY: Poor Performance Cues S&P to Chip Ratings on Debt HOME FRAGRANCE: Files Schedules of Assets and Liabilities HOME FRAGRANCE: Wants Locke Liddell as Bankruptcy Counsel IMPATH INC: Inks Litigation Settlement with Former Accountants INDYMAC ABS: Poor Performance Cues S&P to Chip Ratings on Debt INTERFACE INC: Financial Recovery Cues Moody's Rating Upgrades INTERNATIONAL PAPER: 2006 Third Qtr. Net Income Soars to $201 Mil. INTERPUBLIC GROUP: Reports $5.8 Mil. Net Income in Third Quarter INTERPUBLIC GROUP: S&P Rates Proposed Floating Rate Notes at B INTERSTATE BAKERIES: Court Alters Performance Bonus Payment Dates INTERSTATE BAKERIES: Court Okays Central States Pension Fund Pact JACK IN THE BOX: High Leverage Cues S&P to Cut Rating to BB- KIMBALL HILL: Moody's Holds Low-B Ratings on Senior Notes LAMAR MEDIA: Launches $400-Mil. Sr. Notes' Solicitation Consent LEE'S TRUCKING: Plan Confirmation Hearing Set for February 21 LEINER HEALTH: Sales Cue Moody's to Revise Outlook to Stable LEVEL HOLDING: Voluntary Chapter 11 Case Summary M. FABRIKANT & SONS: Taps Donlin Recano as Claims & Notice Agent M. FABRIKANT & SONS: Wants Until January 16 to File Schedules MASTR TRUST: Fitch Assigns Low-B Ratings on Four Cert. Classes MERRILL LYNCH: Fitch Holds Low-B Ratings $18.9MM of Certificates MERRILL LYNCH: Fitch Holds Rating on Class B-2 Issue at BB MERRILL LYNCH: Monthly Losses Cue S&P's Negative CreditWatch MEZZCAP COMMERCIAL: Fitch Holds Low-B Ratings on 3 Cert. Classes MILLENIUM SEACARRIERS: U.S. Trustee Seeks Chapter 7 Conversion MILLS CORP: Completes Restructured Financing Deal for Xanadu ML-CFC COMMERCIAL: S&P Puts Initial Ratings for $4.6-Bil Certs. MONEY STORE: Stable Performance Cues Fitch's to Lift BB Rating MOVIE GALLERY: Moody's Eyes Downgrade Due to 10-Q Filing Delay MUSICLAND HOLDING: ACE Group & ESIS Object to Disclosure Statement MUSICLAND HOLDING: Voting Tabulation Summary for Impaired Classes NAVISTAR INT'L: Finance Unit Receives $1.2 Billion Loan Waiver NEWPOWER HOLDINGS: Paying Interim Liquidation Proceeds on Dec. 14 NEXSTAR BROADCASTING: Posts $3 Mil. Loss in Quarter Ended Sept. 30 NRG ENERGY: Completes $1.35 Billion Hedge Reset Transactions NUTRAQUEST INC: Ordinary Administrative Claims Deadline is Dec. 4 O'CHARLEY'S INC: S&P Holds Corporate Credit Rating at BB- OPTI CANADA: Moody's Pares Corp. Family Rating to Ba3 from Ba2 OPTI CANADA: S&P Rates Proposed CDN$550-Mil. Facility at BB+ OWENS CORNING: Insurance Cos. Want Administrative Claims Allowed OWENS CORNING: Releases Financial Results for Third Quarter 2006 PACIFIC ENERGY: Plains Purchase Prompts Moody's Rating Upgrade PHOENIX SYSTEMS: Case Summary & 20 Largest Unsecured Creditors PIER 1 IMPORTS: Sells Pier 1 National Bank to Chase for $155 Mil. PLUM CREEK: Earns $92 Million in 2006 Third Quarter POLYMER GROUP: S&P Affirms BB- Rating with Stable Outlook PREMIER ENTERTAINMENT: U.S. Trustee Appoints Five-Member Committee RELIANT ENERGY: Credit Enhancement Cues Fitch to Revise Outlook RESIX FINANCE: S&P Lifts Low-B Ratings on Four Certificate Classes ROBERT WARD: Case Summary & Eight Largest Unsecured Creditors SAINT VINCENTS: Hires Weiser to Conduct Fund Analysis SAMSONITE CORP: Planned $175-Mil. Dividend Cues S&P's Neg. Watch SAN JOAQUIN: S&P Lifts Ratings on Senior & Junior Bonds to BB- SANTA BARBARA: Case Summary & Seven Largest Unsecured Creditors SAVVIS INC: Sept. 30 Balance Sheet Upside-Down by $141 Million SEA CONTAINERS: Court Okays Kirkland & Ellis As Special Counsel SEA CONTAINERS: Court Okays Sidley Austin as Bankruptcy Counsel SERACARE LIFE: Court Approves Mayer Hoffman as Auditors SERACARE LIFE: Hires Willkie Farr as Special Corporate Counsel SERACARE LIFE: Ct. Extends Lease Decision Period to Jan. 31, 2007 SMARTVIDEO TECH: Posts $4.1MM Net Loss in Quarter Ended Sept. 30 STEEL DYNAMICS: Good Performance Cues S&P to Lift Credit Rating STRUCTURED ASSET: Losses Cue S&P to Junk Rating on Class B Note SUMMERWIND AT THE BLUFFS: Case Summary & Eight Largest Creditors SUPERCONDUCTOR TECH: Posts $2.1MM Net Loss in 2006 Third Quarter TEXAS STATE: Defaults Prompt Moody's to Lower Ratings to C TISHMAN SPEYER: S&P Rates $545-Mil. Secured Credit Facility at BB TRIPOS INC: Selling All Discovery's Assets to Vector Capital US STEEL: Fitch Lifts Issuer Default Rating to BBB- From BB VALLEY HEALTH: Fitch's Rating on Revenue Bonds Remain at BB- VICTORY MEMORIAL: Organizational Meeting Scheduled on November 28 VILLAGEEDOCS INC: Inks Warrant Exchange Pact with Barron Partners VISTEON CAPITAL: Moody's Cuts Corp. Family Rating to B3 from B2 WALL STREET SUITES: Taps Backenroth Frankel as Bankruptcy Counsel WELLS FARGO: Fitch Rates Two Certificate Classes at Low-Bs WINN-DIXIE: Court Enters Findings and Conclusions on Join Plan WINN-DIXIE: Five Parties Appeal Confirmation in District Court WINN-DIXIE: Registers 400 Million Shares of New Common Stock WISCONSIN AVENUE: Fitch Holds Rating on $1.2-Million Certs. at B WOODWIND & BRASSWIND: Case Summary & 20 Largest Creditors * BOOK REVIEW: Trump: The Saga of America's Most Powerful Real Estate Baron ********* ABN AMRO: Fitch Holds Low-B Ratings on Six Certificate Classes -------------------------------------------------------------- Fitch Ratings has affirmed these mortgage pass-through certificates from ABN AMRO's Armor MCP 2005-1 L.P.: -- Class B-1 'AA+'; -- Class B-2 'AA'; -- Class B-3 'AA-'; -- Class B-4 'A+'; -- Class B-5 'A'; -- Class B-6 'A-'; -- Class B-7 'BBB+'; -- Class B-8 'BBB'; -- Class B-9 'BBB-'; -- Class B-10 'BB+'; -- Class B-11 'BB'; -- Class B-12 'BB-'; -- Class B-13 'B+'; -- Class B-14 'B'; and, -- Class B-15 'B-'. The affirmations reflect stable relationships of credit enhancement to future expected losses, and affect approximately $1.33 billion in outstanding certificates. The collateral on the aforementioned transactions primarily consists of jumbo, A-quality, first lien residential mortgages. As of the October 2006 distribution date, the pool factor is approximately 94%, and the transaction is 10 months seasoned. This portfolio consists of mortgage loans originated and serviced by ABN AMRO Mortgage Group, Inc. ACCU-SYSTEMS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Accu-Systems, Inc. 1810 West 5000 South Salt Lake City, UT 84118 Bankruptcy Case No.: 06-24561 Type of Business: The Debtor manufactures woodworking machinery. The Debtor's products range from small glue systems, to large double sided machines. See http://www.accu-systems.com/ Chapter 11 Petition Date: November 22, 2006 Court: District of Utah (Salt Lake City) Judge: Glen E. Clark Debtor's Counsel: Christian Burridge, Esq. Christian Burridge P.C. 8813 South Redwood Road, Suite C-2 West Jordan, UT 84088 Tel: (801) 983-4929 Fax: (801) 401-7871 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Western Technology Marketing $262,524 9193 North Flint Way Park City, UT 84098 Fischer Precision Spindles $86,681 119 White Oak Drive Berlin, CT 06037 Deseret Certified Development $62,265 2595 East 3300 South Salt Lake City, UT 84109 Aero Tech Mfg, Inc. $52,401 RSI - Robotic Systems Integrated $39,795 Pro Automation LLC $32,229 Affiliated Metals $31,355 Advance Air Products $27,744 National City Commercial Capital $24,181 Salt Lake County Assessor $24,094 Automation Devices $13,433 Utah State Tax Commission $12,375 TCF Leasing Inc. $12,226 TechnaBase Inc. $12,229 EME Mechanical & Electrical $11,915 Wells Fargo Equipment Finance $11,799 Kingdon Sheet Metal Inc. $10,429 Marmon Keystone $10,226 Royal Wholesale $10,082 Great Lakes Carbide Tool Mfg $8,819 AUTOCAM CORP: May Not Comply with Covenants on December 2006 ------------------------------------------------------------ Autocam Corporation disclosed in a regulatory filing with the Securities and Exchange Commission that based on its current projections, it might be unable to comply with the financial covenants set in its senior credit facilities and second lien credit facility as of Dec. 31, 2006. The Company however said that it was in compliance with the covenants as of Sept. 30, 2006. The Company's senior credit facilities and second lien credit facility's financial covenants are tested at each calendar quarter-end. Credit Facilities As of Sept. 30, 2006, the Company says that it borrowed $23.1 million under its revolving credit facilities to fund liquidity needs as cash generated from operations was insufficient to meet the Company's requirements. As of Sept. 30, 2006, the Company had $17.3 million remaining under its revolving credit facilities and its senior credit facilities permits the Company to factor without recourse an additional $9.5 million of trade receivables. Subsequent to Sept. 30, 2006, the Company discloses that it borrowed $15.8 million of funds available under the revolving credit facilities, and as of Nov. 13, 2006, had cash holdings of $13.1 million. The Company says that since it only had $1.2 million remaining in its revolving credit facilities as of Nov. 13, 2006, the Company's short-term liquidity needs must be met primarily from cash on hand and cash generated from operations. The Company relates that these sources could be insufficient to meet its debt service and day-to-day operating expenses during the fourth quarter. The Company discloses that the interest payments on its senior subordinated notes are due Dec. 15, 2006, while interest payments on its senior credit facility and second lien credit facility are due Dec. 29, 2006. Failure to make these payments within the applicable 30-day grace period in the case of the senior subordinated notes and the applicable five-day grace period under the senior credit facilities and second lien credit facility, the Company says, would constitute events of default under these notes and credit facilities. Options The Company discloses that in order to improve its near-term liquidity, it is exploring a variety of options, which include: * reducing investment in working capital; * selling idle equipment; and * securing other sources of capital for its operations. The Company further discloses that it intends to engage in discussion with its senior and second lien lenders to seek further amendments to its senior credit facilities and second lien credit facility to provide for covenant relief. It also intends to engage in restructuring discussion with holders of the Company's senior subordinated notes. The Company says it cannot assure that the discussions with its lenders will be successful. If the Company is not successful, then upon an event of default, the senior and second lien lenders will have the ability to exercise all of their rights, including requiring the amounts outstanding under the senior credit facilities and the second lien credit facility to become due and payable. Headquartered in Kentwood, Michigan, Autocam Corporation -- http://www.autocam.com/-- is a wholly-owned subsidiary of Titan Holdings, Inc. Autocam manufactures extremely close tolerance precision-machined, metal alloy components, sub-assemblies and assemblies, primarily for performance and safety critical automotive applications. The Company provides these products from its facilities in North America, Europe, South America and Asia to some of the world's largest suppliers to the automotive industry. These suppliers include Autoliv, Delphi Corporation, Robert Bosch GmbH, Siemens VDO, TRW Automotive, Inc. and ZF Friedrichshafen AG. AUTOCAM CORP: Restructuring Cues S&P to Junk Corp. Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Kentwood, Michigan-based Autocam to 'CC' from 'CCC+' and placed the ratings on CreditWatch with negative implications. Standard & Poor's also lowered its ratings on the company's senior secured bank facilities to 'CC' from 'CCC+' and the senior subordinated notes to 'C' from 'CCC-'. These actions came after Autocam's statements, in its recent 10-Q filing with the SEC, that it may be unable to meet its Dec. 15, 2006, interest payment on its $140 million senior subordinated notes, that it is engaged in restructuring discussions with holders of its senior subordinated notes regarding a possible equity swap, that it does not expect to be in compliance with financial covenants on its senior credit facilities and second-lien credit facility as of Dec. 31, 2006, and that it is seeking to amend its senior first-lien credit facilities and its second-lien credit facility to provide covenant relief. Autocam is exploring various options to improve liquidity, including selling assets and securing other sources of capital. The company's balance sheet debt as of Sept. 30, 2006, totaled $320 million. "We would lower the ratings further if the company fails to meet its contractual debt obligations," said Standard & Poor's credit analyst Nancy Messer. "The downgrades reflect Autocam's distressed financial situation and the increasing possibility that the company will be forced to restructure in the near term. We believe it is unlikely that the company will be able to secure alternative financing in the absence of waivers for its current covenants or incremental liquidity from its equity sponsors, because of its very high debt leverage and weak operating results." BANC OF AMERICA: Fitch Affirms Low-B Ratings on 32 Cert. Classes ---------------------------------------------------------------- Fitch has taken rating actions on these Banc of America Alternative Loan Trust mortgage pass-through certificates: * Series ALT 2003-8 Total Pools 1 & 2: -- Classes 1-CB-1, 1-CB-PO, 1-CB-WIO, 2-NC-1 to 2-NC-3, 2- NC-PO & 2-NC-WIO affirmed at 'AAA'; -- Class X-B1 affirmed at 'AA'; -- Class X-B2 affirmed at 'A'; -- Class X-B3 affirmed at 'BBB'; -- Class X-B4 affirmed at 'BB'; -- Class X-B5 affirmed at 'B'. Series ALT 2003-8 Pool 3: -- Classes 3-A-1, 3-A-WIO & 3-A-PO affirmed at 'AAA'; -- Class 3-B1 affirmed at 'AA'; -- Class 3-B2 affirmed at 'A'; -- Class 3-B3 affirmed at 'BBB'; -- Class 3-B4 affirmed at 'BB'; -- Class 3-B5 affirmed at 'B'. Series ALT 2003-9 Total Pools 1 & 2: -- Classes 1-CB-1 to 1-CB-5, 1-CB-PO, 1-CB-WIO, 2-NC-1, 2- NC-2, 2-NC-PO & 2-NC-WIO affirmed at 'AAA'; -- Class X-B1 affirmed at 'AA'; -- Class X-B2 affirmed at 'A'; -- Class X-B3 affirmed at 'BBB'; -- Class X-B4 affirmed at 'BB'; -- Class X-B5 affirmed at 'B'. Series ALT 2003-9 Pool 3: -- Classes 3-A-1, 3-A-2, 3-A-WIO & 3-A-PO affirmed at 'AAA'; -- Class 3-B1 affirmed at 'AA'; -- Class 3-B2 affirmed at 'A'; -- Class 3-B3 affirmed at 'BBB'; -- Class 3-B4 affirmed at 'BB'; -- Class 3-B5 affirmed at 'B'. Series ALT 2003-10 Total Pools 1 - 4: -- Classes 1-A-1, 1-PO, 1-IO, 2-A-1 to 2-A-4, 2-IO, 2-PO, 3-A-1, 3-IO, 3-PO, 4-A-1 to 4-A-3, 4-IO & 4-PO affirmed at 'AAA'; -- Class 30-B1 affirmed at 'AA'; -- Class 30-B2 affirmed at 'A'; -- Class 30-B3 affirmed at 'BBB'; -- Class 30-B4 affirmed at 'BB'; -- Class 30-B5 affirmed at 'B'. Series ALT 2003-10 Total Pools 5 & 6: -- Classes 5-A-1, 5-A-2, 5-IO, 5-PO, 6-A-1 to 6-A-3, 6-IO & 6-PO affirmed at 'AAA'; -- Class 15-B1 affirmed at 'AA'; -- Class 15-B2 affirmed at 'A'; -- Class 15-B3 affirmed at 'BBB'; -- Class 15-B4 affirmed at 'BB'; -- Class 15-B5 affirmed at 'B'. Series ALT 2003-11 Total Pools 1 - 3: -- Classes 1-A-1, 1-PO, 1-IO, 2-A-1, 2-IO, 2-PO, 3-A-1, 3- IO & 3-PO affirmed at 'AAA'; -- Class 30-B1 affirmed at 'AA'; -- Class 30-B2 affirmed at 'A'; -- Class 30-B3 affirmed at 'BBB'; -- Class 30-B4 affirmed at 'BB'; -- Class 30-B5 affirmed at 'B'. Series ALT 2003-11 Total Pools 4 & 5: -- Classes 4-A-1, 4-A-2, 4-IO, 4-PO, 5-A-1, 5-A-2, 5-IO & 5-PO affirmed at 'AAA'; -- Class 15-B1 affirmed at 'AA'; -- Class 15-B2 affirmed at 'A'; -- Class 15-B3 affirmed at 'BBB'; -- Class 15-B4 affirmed at 'BB'; -- Class 15-B5 affirmed at 'B'. Series ALT 2004-1 Total Pools 1 - 3: -- Classes 1-A-1, 1-PO, 1-IO, 2-A-1, 2-IO, 2-PO, 3-A-1, 3- IO & 3-PO affirmed at 'AAA'; -- Class 30-B1 affirmed at 'AA'; -- Class 30-B2 affirmed at 'A'; -- Class 30-B3 affirmed at 'BBB'; -- Class 30-B4 affirmed at 'BB'; -- Class 30-B5 affirmed at 'B'. Series ALT 2004-1 Total Pools 4 & 5: --Classes 4-A-1, 4-PO, 5-A-1, 5-A-2, 5-A-3 & 5-PO affirmed at 'AAA'; -- Class 15-B1 affirmed at 'AA'; -- Class 15-B2 affirmed at 'A'; -- Class 15-B3 affirmed at 'BBB'; -- Class 15-B4 affirmed at 'BB'; -- Class 15-B5 affirmed at 'B'. Series ALT 2004-2 Total Pools 1 - 3: -- Classes 1-A-1, 1-PO, 1-IO, 2-A-1 to 2-A-7, 2-IO, 2-PO, 3-A-1, 3-IO, 30-B-IO & 3-PO affirmed at 'AAA'; -- Class 30-B1 affirmed at 'AA'; -- Class 30-B2 affirmed at 'A'; -- Class 30-B3 affirmed at 'BBB'; -- Class 30-B4 affirmed at 'BB'; -- Class 30-B5 affirmed at 'B'. Series ALT 2004-2 Total Pools 4 & 5: -- Classes 4-A-1, 4-IO, 4-PO, 5-A-1, 5-IO & 5-PO affirmed at 'AAA'; -- Class 15-B1 affirmed at 'AA'; -- Class 15-B2 affirmed at 'A'; -- Class 15-B3 affirmed at 'BBB'; -- Class 15-B4 affirmed at 'BB'; -- Class 15-B5 affirmed at 'B'. Series ALT 2004-3 Total Pools 1 - 3: -- Classes 1-A-1, 1-PO, 1-IO, 2-A-1, 2-IO, 2-PO, 3-A-1 to 3-A-4, 3-IO, 30-B-IO & 3-PO affirmed at 'AAA'; -- Class 30-B1 affirmed at 'AA'; -- Class 30-B2 affirmed at 'A'; -- Class 30-B3 affirmed at 'BBB'; -- Class 30-B4 affirmed at 'BB'; -- Class 30-B5 affirmed at 'B'. Series ALT 2004-3 Pool 4: -- Classes 4-A-1, 4-IO & 4-PO affirmed at 'AAA'; -- Class 4-B1 affirmed at 'AA'; -- Class 4-B2 affirmed at 'A'; -- Class 4-B3 affirmed at 'BBB'; -- Class 4-B4 affirmed at 'BB'; -- Class 4-B5 affirmed at 'B'. Series ALT 2004-4 Total Pools 1 - 4: -- Classes 1-A-1, 1-PO, 1-IO, 2-A-1, 2-IO, 2-PO, 3-A-1, 3- IO, 3-PO, 30-B-IO, 4-A-1 to 4-A-5, 4-IO & 4-PO affirmed at 'AAA'; -- Class 30-B1 affirmed at 'AA'; -- Class 30-B2 affirmed at 'A'; -- Class 30-B3 affirmed at 'BBB'; -- Class 30-B4 affirmed at 'BB'; -- Class 30-B5 affirmed at 'B'. Series ALT 2004-4 Total Pools 5 & 6: -- Classes 5-A-1, 5-IO, 5-PO, 6-A-1, 6-IO & 6-PO affirmed at 'AAA'; -- Class 15-B1 affirmed at 'AA'; -- Class 15-B2 affirmed at 'A'; -- Class 15-B3 affirmed at 'BBB'; -- Class 15-B4 affirmed at 'BB'; -- Class 15-B5 affirmed at 'B'. The affirmations reflect satisfactory credit enhancement relationships to future loss expectations and affect approximately $2,035 million in outstanding certificates as of the Oct. 25, 2006 distribution date. The underlying collateral in these transactions consists of fixed- rate, conventional, fully-amortizing mortgage loans secured by first lien on one- to four-family residential properties. Bank of America, N.A., which is rated 'RPS1' by Fitch for Prime & ALT-A transactions, is the servicer for these loans. These transactions are seasoned from a range of 30 months to 37 months. The pool factors range from 56.10% to 67.52%. The cumulative losses on these transactions range from 0% to 0.12% of respective original collateral balances. As a percentage of their respective current collateral balances, the 90+ delinquencies range from 0.03%. BANC OF AMERICA: S&P Holds Low-B Ratings on Six Cert. Classes ------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on four classes of commercial mortgage pass-through certificates from Banc of America Commercial Mortgage Inc.'s series 2004-1. Concurrently, ratings are affirmed on the remaining 16 classes from the same series. The raised and affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The upgrades of several senior certificates reflect the defeasance of $77.4 million in collateral since issuance. As of the Nov. 10, 2006, remittance report, the collateral pool consisted of 112 loans with an aggregate trust balance of $1.291 billion, compared with 113 loans totaling $1.327 billion at issuance. The master servicer, Bank of America N.A., reported primarily full-year 2005 financial information for 100% of the pool. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.82x, up from 1.59x at issuance. All of the loans in the pool are current. To date, the trust has not experienced any losses. The top 10 loans secured by real estate have an aggregate outstanding balance of $537.3 million (42%) and a weighted average DSC of 2.22x, up from 1.90x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans. Two properties were characterized as "excellent," while the remaining collateral was characterized as "good." The SBC Center loan, the 10th-largest exposure, is not on the watchlist; however, the second-largest tenant's lease is expiring at the end of April 2007, and the tenant will not be renewing. The loan has an outstanding balance of $29.4 million and is secured by a 294,255-sq.-ft. office property in Troy, Michigan. Credit characteristics for two of the loans in the pool remain consistent with those of investment-grade obligations. Details of these two loans: -- The largest exposure in the pool, the Leo Burnett Building, has a loan balance of $120.0 million (9%). The interest-only loan is secured by a fee interest in a 1.1 million-sq.-ft. office property in Chicago, Ill. The property serves as the worldwide headquarters for Leo Burnett Worldwide Inc. Leo Burnett's lease extends until December 2012. Occupancy was 100% as of June 30, 2006. Standard & Poor's adjusted net cash flow is similar to its level at issuance. -- The second-largest exposure in the pool, the Hines- Sumitomo Life Office portfolio, is encumbered by a $264.6 million class A note and a $51.8 million class B note. The A note is divided into two pari passu pieces, of which $104.6 million serves as the trust collateral. The loan is secured by the fee and leasehold interests in three office properties totaling 1.2 million sq. ft. The 675,678-sq.-ft. 425 Lexington Avenue office property in midtown Manhattan is 100% occupied and occupies the entire block between East 43rd Street and East 44th Street. The 280,404-sq.-ft. 499 Park Avenue office property, also in Manhattan, was 88% occupied as of June 30, 2006. The 231,641-sq.-ft. 1200 19th Street office property in Washington, D.C., was 100% occupied as of June 30, 2006. The combined year-end 2005 DSC for all three properties was 2.34x, down from 2.66x at issuance. The decline was attributable to $11.4 million in capital expenditures for tenant improvements at the 425 Lexington Avenue property. For the six months ended June 30, 2006, the DSC was 3.86x. Standard & Poor's adjusted loan-to-value ratio is 49%. Bank of America reported a watchlist of 13 loans. MHC Portfolio - Sherwood Forest Mobile Home Park is the largest loan on the watchlist with an outstanding balance of $26.4 million (2%) and is secured by a 1,190-pad manufactured housing community in Kissimmee, Florida. The loan appears on the watchlist because the collateral property reported a year-end 2005 DSC of 1.08x. 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 Banc of America Commercial Mortgage Inc. Commercial Mortgage Pass-Through Certificates Series 2004-1 Rating ------ Class To From Credit enhancement (%) ----- -- ---- ---------------------- B AA+ AA 12.72 C AA AA- 11.69 D A+ A 9.38 E A A- 8.35 Ratings Affirmed Banc of America Commercial Mortgage Inc. Commercial Mortgage Pass-Through Certificates Series 2004-1 Class Rating Credit enhancement (%) ----- ------ --------------------- A-1 AAA 15.16 A-1A AAA 15.16 A-2 AAA 15.16 A-3 AAA 15.16 A-4 AAA 15.16 F BBB+ 6.94 G BBB 6.04 H BBB- 4.50 J BB+ 3.98 K BB 3.47 L BB- 2.83 M B+ 2.18 N B 1.93 O B- 1.67 XC AAA N/A XP AAA N/A N/A-Not applicable. BERTHEL GROWTH: Incurs $95,475 Net Loss in Quarter Ended Sept. 30 ----------------------------------------------------------------- Berthel Growth & Income Trust I incurred a net investment loss of $95,475 on $39,994 of total revenues for the quarter ended Sept. 30, 2006, compared to a net investment loss of $162,888 on revenue of $56,390 for the same period in the prior year. As of Sept. 30, 2006, total assets and liabilities of the Trust are $6,403,960 and $11,628,417, respectively. Management says the net losses and equity deficit raises substantial doubt about the ability of the Trust to continue as a going concern. Berthel SBIC, LLC, a wholly owned subsidiary of the Trust, has agreed to liquidate its portfolio assets in order to pay its indebtedness to the United States Small Business Administration. SBIC is in violation of the maximum capital impairment percentage permitted by the SBA. In August, 2002, the SBA notified the SBIC that all debentures, accrued interest and fees were immediately due and payable. The SBIC was transferred into the Liquidation Office of the SBA at that time. On September 1, 2003, management signed a loan agreement with the SBA for $8,100,000 (after paying $1,400,000 on the $9,500,000 debentures) with a term of 48 months at an interest rate of 7.49%. The loan is secured by substantially all assets of the SBIC. The loan agreement contains various covenants including establishment of a reserve account in the amount of $250,000 with excess cash paid to the SBA, limits on the amounts of expenses, other than interest expense, that can be incurred and paid. The loan agreement also contains various events of default, including a decrease in the aggregate value of the SBIC's assets of 10% or greater. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?157a Headquartered in Marion, Iowa, Berthel Fisher & Company Inc. -- http://www.berthel.com/-- provides capital market services to small and mid-sized companies, specializing in both private and public securities offerings. Berthel Fisher & Co., through a subsidiary, acts as management agent and trustee of the Berthel Growth & Income Trust I, a business development company under the Investment Company Act of 1940. Berthel Growth & Income Trust I owns a Small Business Investment Company licensed by the Small Business Administration. BEST BRANDS: Moody's Assigns B2 Corporate Family Rating ------------------------------------------------------- Moody's Investors Service assigned first time ratings to Best Brands Corporation. The rating outlook is stable. The ratings assigned are based on preliminary terms as outlined by the company, and are subject to receipt and final review of executed documents. Ratings assigned: * Best Brands Corporation: -- Corporate family rating at B2 -- Probability of default rating at B2 -- $30 million first-lien revolving credit facility due 2011 at B1, LGD3, 39% -- $170 million first-lien Term Loan B due 2012 at B1, LGD3, 39% -- $75 million second-lien Term Loan due 2013 at Caa1, LGD5, 87% The ratings were assigned in response to Best Brands' acquisition of a complementary specialty baked goods provider which manufactures a similar line of frozen baked items. The company will finance the transaction, refinance existing indebtedness, and pay related fees and expenses with proceeds from a new $30 million first lien revolving credit facility, $170 million first-lien Term Loan B, and $75 million second-lien Term Loan, as well as $25 million of new preferred equity to be issued by its parent, Value Creation Partners Inc. The ratings reflect the company's modest scale in the packaged goods industry, weak pro forma margins and debt protection measures, and aggressive financial policy due to acquisitions, which gives rise to significant integration risk. Pro forma leverage is expected to exceed 6x at inception, including Moody's standard analytic adjustments. Given the proposed terms for the company's preferred stock, Moody's views the securities as fifty percent debt for analytic purposes, and adjusts the company's financial statements accordingly. The preferred securities are expected to be perpetual and non- callable, and be prevented from receiving any cash interest or other cash distributions until such time as all senior debt has been repaid. The ratings are supported by the company's diverse product offering, strong organic growth characteristics, portfolio of strong brand names which are sold to retail and food service customers, good returns on assets, and fairly diverse customer base. The acquisition will strengthen Best Brands' position in the specialty bakery products industry, as it brings complimentary products and offers efficiency improvement opportunities. The stable outlook reflects Moody's expectation that Best Brands will steadily improve its profitability, largely offsetting historically-high sugar and fuel costs with expected cost savings and synergies related to the acquisition. While free cash flow generation is expected to be modest, financial leverage should meaningfully decline due to improved EBITDA. Upward rating pressure would result from sustained improvement in profitability and cash flows, such that EBITA margin approaches 8%, EBIT/interest exceeds 2x, and debt/EBITDA falls below 5x. Downward pressure would result from EBITA margins declining below 5.5%, or should EBIT/interest remain below 1.5x and Debt/EBITDA remain above 6x at the end of 2007. The $30 million revolving credit facility and $170 million Term Loan B are secured by a first-priority lien on all assets, including all capital stock of the borrower and its direct and indirect domestic subsidiaries and 65% of the voting and 100% of the non-voting stock of its first tier foreign subsidiaries. The $75 million second lien Term Loan benefits from a second priority lien on the same collateral. Both the revolving credit facility and the term loans will have guarantees from the parent, Value Creation Partners, Inc, and from each direct and indirect domestic subsidiary. Loss Given Default Assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock - in accordance with Moody's Loss-Given-Default rating methodology that was initially implemented in September 2006. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% - 9%) to LGD6 (loss anticipated to be 90% - 100%). Headquartered in Minnetonka, Minnesota, Best Brands Corporation is a leading manufacturer and distributor of specialty bakery products in the US, with proforma revenues for 2006 expected to exceed $500 million. BEXAR COUNTY: Moody's Holds Low-B Ratings on $21.9-Mil. Bonds ------------------------------------------------------------- Moody's Investors Service affirmed the B1 rating on the Bexar County Housing Finance Corporation $11.9 million Multifamily Housing Revenue Bonds Series 2001A and also affirmed the B3 on the $210,000 Series 2001 C. The rating affirmation is based upon Moody's review of financial statements for 2005, interim financial statements and occupancy reports from management. The negative outlook has also been affirmed, a declining occupancy forecast, and a rent growth forecasts below inflation. Legal security: -- The bonds are limited obligations payable solely from the revenues, receipts and security pledged in the Trust Indenture. Credit strengths: -- Fully funded debt service reserve funds as of Nov. 14, 2006. Credit challenges: -- Thin debt service coverage levels of 1.0x (2001A) and 0.98x (2001C) for the most recent audited fiscal year -- Physical occupancy is very low at 76.6% -- Occupancy the submarket is forecasted to decline in 2007 -- Rent growth in the submarket is forecasted at 1.6% for 2007 -- The Series 2001 C debt service fund was under funded by over $3,739 as of Nov. 14, 2006 Recent developments: Debt service coverage levels for the full year 2005 were a barely sufficient 1.0x for the 2001A and 0.98x for 2001C. Occupancy is also notably low with a physical occupancy in October 2006 of 76.6%. However, some of these units were offline due to fire damage so it is expected that occupancy will increase in the near term. The financial stress the project is facing is also evident in the debt service fund of the Series 2001C bonds being underfunded by approximately $3,739. Market data provided by Torto Wheaton Research indicate that multi-family occupancy for the subject's submarket for 2006 is 93.2%. TWR forecasts that occupancy in the submarket will decline to 91.3% in 2007 and 2008. Additionally, TWR forecast rent growth will be a slow 1.6% in 2007. Moody's believes that the thin debt service coverage for the 2001A bonds is reflected in the B1 rating and the B3 rating for the 2001C bonds is appropriate due to the under funded debt service fund. Outlook: The outlook for the bonds is negative based upon a submarket that is forecasted to have occupancy declines and slow rent growth in 2007 and under funding of the 2001C debt service fund. BRICKMAN GROUP: Partners' Sale Cues Moody's Negative Review ----------------------------------------------------------- Moody's placed the ratings of the Brickman Group, Ltd. under review for possible downgrade. The ratings placed under review include, its Ba3 corporate family rating and probability of default rating, the Baa3 rating on its senior secured bank credit facility, and the Ba3 rating on its senior subordinated notes, after the report that the Chicago-based CVIC Partners is selling its 36% stake in the company to Leonard Green Partners. The review is prompted by concerns the proposed transaction may lead to increased financial leverage at Brickman. Currently, the Brickman family owns 54% of the company, non-family members of management own 10%, and CVIC Partners, one of the original investors from 1998, owns 36%. The forthcoming review will focus on the company's pro-forma financial leverage and financial policy, and the company's operating outlook. The current Ba3 corporate family rating reflects concerns over the company's significant financial leverage that resulted from the company's last leveraged recapitalization in 2002, offset by Brickman's scale and leading position within the commercial landscape maintenance business, its robust recurring revenue stream, high customer renewal rates, and healthy growth outlook. Headquartered in Langhorne, Pennsylvania, and dating back to 1939, The Brickman Group, Ltd. is one of the providers of commercial landscape maintenance services in the United States. C-BASS: S&P Lowers Rating on Three Transactions ----------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three classes from three C-BASS transactions. The ratings remain on CreditWatch with negative implications, where they were placed on Oct. 12, 2006. In addition, the remaining classes from the three transactions are affirmed. The lowered ratings and continuing CreditWatch placements are the result of realized losses that have exceeded excess spread. The failure of excess spread to cover monthly losses has resulted in a continuous erosion of overcollateralization. Excess spread has declined due to the rise in LIBOR since the issuance of the transactions. As of the October 2006 distribution date, overcollateralization was below its target balance by approximately 60% for series 2002- CB1, 50% for series 2002-CB5, and 20% for series 2002-CB6. Serious delinquencies range from 11.07% to 29.49% of the current pool balances, and cumulative realized losses range from 2.87% to 6.02% of the original pool balances. The transactions have paid down to less than 14% of their original issuance amounts. In addition, series 2002-CB5 and 2002-CB6 have fully stepped down. Standard & Poor's will continue to monitor the performance of these transactions. If delinquencies continue to translate into realized losses that exceed monthly excess interest, further negative rating actions can be expected. Conversely, if excess interest covers monthly losses and overcollateralization levels build toward their target balances, Standard & Poor's will affirm the ratings and remove them from CreditWatch. The affirmations reflect actual and projected credit support that is sufficient to maintain the current ratings. The 2002-CB1 pool initially consisted of performing, subperforming, reperforming, conventional, subprime, fixed- and adjustable-rate mortgage loans. The 2002-CB5 and 2002-CB6 pools initially consisted of performing and subperforming, conventional, subprime, fixed- and adjustable-rate mortgage loans. The mortgage loans are secured mainly by first liens on one- to four-family residential properties. Mortgage loans secured by second liens make up a small percentage of the mortgage pools. Ratings Lowered And Remaining On Creditwatch Negative 2002-CB1 Trust C-Bass Mortgage Loan Asset-Backed Certificates Series 2002-Cb1 Rating ------ Series Class To From ------ ----- -- ---- 2002-CB1 B-2 B/Watch Neg BB/Watch Neg 2002-CB5 Trust C-Bass Mortgage Loan Asset-Backed Certificates Series 2002-Cb5 Rating ------ Series Class To From ------ ----- -- ---- 2002-CB5 B-1 BBB/Watch Neg A/Watch Neg 2002-CB6 Trust C-Bass Mortgage Loan Asset-Backed Certificates Series 2002-Cb6 Rating ------ Series Class To From ------ ----- -- ---- 2002-CB6 B-3 B/Watch Neg BB+/Watch Neg Ratings Affirmed 2002-CB1 Trust C-Bass Mortgage Loan Asset-Backed Certificates Series 2002-Cb1 Series Class Rating ------ ----- ------ 2002-CB1 M-1 AAA 2002-CB1 M-2 A+ 2002-CB1 B-1 BBB 2002-CB5 Trust C-Bass Mortgage Loan Asset-Backed Certificates Series 2002-Cb5 Series Class Rating ------ ----- ------ 2002-CB5 AF-3, AV-2, M-1, M-2 AAA 2002-CB6 Trust C-Bass Mortgage Loan Asset-Backed Certificates Series 2002-Cb6 Series Class Rating ------ ----- ------ 2002-CB6 M-1 AA 2002-CB6 M-2F, M-2V A 2002-CB6 B-1 BBB+ 2002-CB6 B-2 BBB- CALPINE CORP: Appoints Lisa Donahue as Chief Financial Officer -------------------------------------------------------------- Calpine Corporation's Board of Directors appointed Lisa J. Donahue as the company's chief financial officer effective November 2006. Ms. Donahue replaces Scott J. Davido, who will continue to serve as the company's executive vice president and chief restructuring officer. To the extent necessary, the company will seek approval of the appointment of Ms. Donahue from the U.S. Bankruptcy Court. In a regulatory filing with the Securities and Exchange Commission, the Company disclosed that Ms. Donahue will remain a managing director of each of AlixPartners and AP Services LLC, while serving as the company's Chief Financial Officer. AP Services, LLC, has been retained by the Company in connection with its Chapter 11 restructuring. Ms. Donahue's services as chief financial officer are provided to the company pursuant to an Agreement, dated Nov. 29, 2005. Under the Services Agreement, Ms. Donahue charges $650 per hour for her services as chief financial officer. Ms. Donahue will be independently compensated as a managing director of each of AP Services and its affiliate, AlixPartners, pursuant to arrangements between AP Services and AlixPartners. The Services Agreement also provides for payment of a one-time success fee to AP Services upon the company's emergence from Chapter 11. Fees and expenses incurred by the company under the Services Agreement from Nov. 29, 2005, through Sept. 30, 2006, totaled approximately $20,000,000, Calpine disclosed. 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. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CALPINE CORP: Wants $100-Mil. Goldendale Bid Procedures Approved ---------------------------------------------------------------- Calpine Corp. and its debtor-affiliates asks the U.S. Bankruptcy Court for the Southern District of New York to approve uniform bidding procedures that will govern the proposed sale of Goldendale Energy Center LLC's south-central Washington facility to Puget Sound Energy, Inc. for $100,000,000. Debtor Goldendale Energy and PSE, has entered into a membership interests purchase agreement for the sale of the 277-megawatt Goldendale Facility to PSE. Pursuant to the Purchase Agreement, PSE has agreed to purchase all of Goldendale's interests in the Facility for $100,000,000, subject to higher and better offers through an auction process. The Agreement also contemplates a creation of a limited liability company to be wholly owned by PSE, which will be formed immediately before the Closing. The New LLC will own and control all acquired assets. The Acquired Assets include: (a) All real property owned by Goldendale, together with all of its improvements, structures and fixtures; (b) All of Goldendale's rights under easements, rights of way, real property licenses and other real property entitlements related to the Goldendale real property; (c) All equipment, spare parts, machinery, furniture, fixtures and other personal property that is used exclusively in the Goldendale Facility, located on, or in transit to the Facility, and any rights to warranties and licenses relating to the Power Plant; (d) All rights under sales orders, service agreements, customer contracts, including a Rate Schedule FERC No. 2, Reactive Supply and Voltage Control from Generation Sources Services; (e) All rights under outstanding purchase orders, service agreements, transmission agreements, leases of personal property to the extent pertaining to the Goldendale Facility; A list of the Assigned Contracts and their proposed Cure Amounts is available for free at: http://ResearchArchives.com/t/s?15a6 (f) All rights under a Farm Lease, dated May 1, 2002, with Karl Enyeart, pursuant to which the Debtors lease a certain portion of their real property to Mr. Enyeart; (g) All inventories of fuel, chemical and gas, supplies and materials located at, or in transit to the Facility owned by Goldendale on the Closing Date; (h) Rights to warranties received from third parties with respect to any acquired assets, including equipment, intangible property and inventory; (i) All rights under permits and authorizations issued by any government agency; (j) Copies of all Business Records; (k) All of Goldendale's right, title and interest in and to the Power Plant; (l) Any computer software or systems, inventions, proprietary processes, patents, copyrights, trade secrets owned by Goldendale and used exclusively in the Facility, including rights to the names "Goldendale Energy Center," "Goldendale Power" and "Goldendale Power Project;" and (m) All rights to claims, refunds or adjustments, and all rights to insurance proceeds with respect to the acquired assets, to the extent relating to the assumed liabilities. The Excluded Assets consist of, among others, all of Goldendale's accounts and notes receivables as of the Closing Date, certain information technology equipment located at the Power Plant, MAXIMO computerized maintenance software, PI server software, intracompany service contracts, transportation services agreements with Northwest Pipelines Corporation, and all amounts owed by Goldendale to Bonneville Power Administration or the Public Utility District No.1 Klickitat County, Washington. The Assumed Liabilities include all of Goldendale's liabilities and obligations under the Assumed and Assigned Contracts, Permits, Transaction, and real or personal Taxes relating to the Acquired Assets. Goldendale will retain all liabilities and obligations that are not Assumed Liabilities, including those with respect to accounts payable arising in connection with the Acquired Assets in existence on the Closing Date, and liabilities solely arising in connection with Excluded Assets. PSE has deposited $3,750,000, into an escrow account. Upon entry of a sale order, PSE will deposit an additional $3,750,000 to the escrow account. The Debtors propose to pay $373,680 to the state of Washington Department of Revenue before the Closing in full and complete satisfaction of a disputed sales and use tax. A full-text copy of the 153-page PSE Agreement is available for free at http://ResearchArchives.com/t/s?15a7 Bidding Procedures To maximize the value to be realized by the Debtors' estates from the sale of the Goldendale Facility, the Debtors will subject the proposed sale of the Facility to a market test through an auction. The uniform bidding procedures that will govern the proposed Goldendale Facility Sale: (1) To be deemed a "Qualifying Bidder," each interested parties must deliver to Goldendale Energy Center, the Official Committee of Unsecured Creditors, the Official Committee of Equity Security Holders and the Unofficial Committee of Second Lien Debtholders, a written offer no later than 5:00 p.m., on Jan. 29, 2007. (2) The written offer must, among other things, state that the Bidder is financially capable to consummate the transactions contemplated by a modified APA and must state that the Bidder's offer is irrevocable until the Closing of the Sale. The written bid must not seek for the Bidder to be entitled to any transaction or break-up fee, or expense reimbursement. (3) A Qualifying Bid must be accompanied by a $7,800,000 deposit. (4) If more than one Qualifying Bids are received, Goldendale Energy will conduct an auction on Feb. 5, 2007, at the offices of Kirkland & Ellis LLP, at the Citigroup Center, at 153 East 53rd Street, in New York. (5) If Goldendale accepts an offer from a bidder other than PSE, it will pay an amount equal to 2.5% of the Purchase Price to PSE. The Break-Up Fee will constitute an allowed administrative expense claim against Goldendale. (6) For a Bid to be considered a Qualifying Bid, it must create a value to the Goldendale Facility that is more than the aggregate of the Purchase Price, the Break-Up Fee, and $1,100,000. Each overbid increment must create a value in an amount at least $500,000 higher than the previous bid. (7) If no other Qualifying Bids are timely received, a hearing to approve the proposed sale to PSE will take place on Feb. 7, 2007. Bennett L. Spiegel, Esq., at Kirkland & Ellis, LLP, in New York, asserts that the proposed Break-Up Fee is reasonable and appropriate, in light of the size and nature of the proposed sale transaction and comparable transactions, the commitments that have been made and the efforts that have been and will be expended by PSE. 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. 31; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CARRAWAY METHODIST: Administrator Amends Creditors' Committee ------------------------------------------------------------- J. Thomas Corbett, Esq., Chief Deputy Bankruptcy Administrator for the U.S. Bankruptcy Court for the Northern District of Alabama, Southern Division, amended the composition of Carraway Methodist Health Systems and its debtor-affiliates' Official Committee of Unsecured Creditors. Church and Stagg Office Supply Co. Inc. was removed from the Committee, bringing the number of members to six. The amended members of the Committee are: 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. Musculoskeletal Transplant Foundation Attn: Richard Ciaccio 125 May Street Edison, NJ 08837 Tel: (732) 661-2191 5. Medtronic USA Inc. Attn: Doug Ernst 3850 Victoria Street MSV215 Shoreview, MN 55126 Tel: (763) 514-0420 6. 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: Bradley Arant Approved as Bankruptcy Counsel ---------------------------------------------------------------- The Honorable Tamara O. Mitchell of the U.S. Bankruptcy Court for the Northern District of Alabama in Birmingham authorized Carraway Methodist Health Systems and its debtor-affiliates to employ Bradley, Arant, Rose & White as their bankruptcy counsel. As reported in the Troubled Company Reporter on Sept. 29, 2006, Bradley Arant will: a. give the Debtors legal advice with respect to their duties as debtors-in-possession in the continued operation of their businesses and management of their assets; b. prepare, on behalf of the Debtors, necessary motions, applications, answers, contracts, reports and other legal documents; c. perform any and all legal services on behalf of the Debtors arising out of or connected with the bankruptcy proceedings; d. perform other legal services for the Debtors including, but not limited to, work arising out of labor, tax, environmental, corporate, litigation and other matters involving the Debtors; e. advise and consult with the Debtors for the preparation of all necessary schedules, disclosure statements and plans of reorganization; and f. perform all other legal services required by the Debtors in connection with the Debtors' chapter 11 cases. Patrick Darby, Esq., a partner at Bradley Arant, told the Court that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $230 - $515 Associates $155 - $325 Legal Assistants $110 - $180 Mr. Darby assured the Court that the firm is disinterested pursuant to Section 101(14) of the Bankruptcy Code. 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. CATHOLIC CHURCH: HR&A Employment Hearing Continues on Nov. 27 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon approves the increase on Hamilton Rabinovitz & Alschuler, Inc.'s fee cap, from $100,000 to $135,000 in the aggregate, effective retroactively to May 21, 2006, without prejudice to additional increases. Additional increase to HR&A's fee cap is subject to further Court approval, at the firm's request. No further increase on HR&A's fee cap will be granted on a retroactive basis. The Court will continue the hearing on the Archdiocese of Portland in Oregon's request to expand the scope of HR&A's services on November 27, 2006, at 3:00 p.m. The Court will consider whether: * the scope of HR&A's appointment as an independent expert should be expanded to include services relating to the estimation and valuation of present child sexual abuse tort claims; and * HR&A's cap on fees should be increased to an amount in excess of $135,000 in the aggregate. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 73; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Portland Wants R. Dandar's $1MM Claim Disallowed ----------------------------------------------------------------- The Archdiocese of Portland in Oregon asks the U.S. Bankruptcy Court for the District of Oregon to disallow Claim No. 291 asserted by Ronald Dandar for $1,000,000. Mr. Dandar's Claim relates to a complaint for sexual abuse he filed with the Superior Court for Civil Action in the Commonwealth of Massachusetts against James Porter, a priest in the Diocese of Fall River in Massachusetts, and other defendants. Mr. Dandar obtained a judgment of default from the Massachusetts court against Fr. Porter and other defendants, including the Fall River Diocese and its bishop. Mr. Dandar, in recent court filings, has sought and obtained approval from the Bankruptcy Court to amend his Claim to include new allegations. Mr. Dandar alleges that: * he was sexually abused by a different priest -- Fr. David Hazen; and * the abuse occurred in Oregon. Tiffany A. Harris, Esq., at Schwabe, Williamson & Wyatt, P.C., in Portland, Oregon, relates that the sexual acts committed by Fr. Hazen against Mr. Dandar occurred at St. Pius X Church and Sacred Heart Catholic Church. Both St. Pius X and Sacred Heart belong to the Diocese of Baker, Ms. Harris notes. Hence, the Archbishop of Portland lacks the authority to make personnel or policy decisions or otherwise intervene in the internal management or administration of the parishes located within the jurisdictional boundaries of the Diocese of Baker or other dioceses located outside of the jurisdictional boundary of Portland, Ms. Harris contends. Portland's Archbishop has no power to supervise or discipline priests within the Diocese of Baker, Ms. Harris adds. To the extent that Fr. Hazen served in parishes within the Baker Diocese, Portland's Archbishop did not have the authority to supervise or control his activities in St. Pius X, Sacred Heart, or any other parish within the Baker Diocese, Ms. Harris asserts. Moreover, Mr. Dandar's Claim is barred not only by the total absence of legal liability for alleged abuse committed outside of Portland's jurisdiction and control, but by the statute of limitations as well, Ms. Harris argues. Mr. Dandar cannot proceed with his Amended Claim under Section 12.117 of the Oregon Revised Statutes because he knew or should have known of the existence of his claim by February 1994, when he prosecuted his case before the Massachusetts court, Ms. Harris points out. Mr. Dandar waited an additional 11 years to bring the claim against Portland. The delay was unreasonable as a matter of law, she adds. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 73; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CBA COMMERCIAL: Fitch Rates $1-Mil. Class M-5 Certificates at BB+ ----------------------------------------------------------------- Fitch rates CBA Commercial Assets Small Balance Commercial Mortgage, Series 2006-2, commercial mortgage pass-through certificates: -- $110,419,000 class A 'AAA'; -- $130,480,369 Class X-1(*) 'AAA'; -- $3,751,000 Class M-1 'AA'; -- $4,893,000 Class M-2 'A-'; -- $2,773,000 Class M-3 'BBB'; -- $2,283,000 Class M-4 'BBB-'; -- $1,142,000 Class M-5 'BB+'; -- $2,610,000 Class M-6 'NR'; -- $1,142,000 Class M-7 'NR'; and, -- $1,467,369 Class M-8 'NR'. (*)Notional Amount and Interest-only All classes are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 294 fixed- and floating-rate loans having an aggregate principal balance of approximately $130,480,369 as of the cutoff date. CENTENNIAL COMMS: Selling Dominican Republic Business for $80 Mil. ------------------------------------------------------------------ Centennial Communications Corp. has concluded its review of strategic and operational alternatives for its Dominican Republic operations and entered into a definitive agreement to sell its wholly owned subsidiary, All America Cables and Radio, Inc., to Trilogy International Partners for approximately $80 million in cash. The transaction is expected to close towards the end of the first calendar quarter of 2007, subject to the satisfaction of customary closing conditions including regulatory approval for the transfer of Centennial Dominicana's telecommunications concession. Centennial Dominicana operates an integrated wireless and broadband network that served approximately 388,900 wireless subscribers as of Aug. 31, 2006. Adjusted operating income and capital expenditures attributable to Centennial Dominicana for the fiscal year ended May 31, 2006 were both approximately $11 million. "This business has been a solid performer for Centennial during the last six years, and we continue to believe the Dominican Republic is an attractive and growing market," said Michael J. Small, Chief Executive Officer of Centennial. "Additional investment in this operation was not consistent with our renewed commitment to deleveraging, and we believe that monetizing our Dominican Republic asset at this time was the best alternative for our shareholders." "We are excited to add Centennial Dominicana to our portfolio of wireless investments," said Brad Horwitz, President and CEO of Trilogy International Partners. "We are convinced that there are significant opportunities for growth in the Dominican Republic's wireless market and we look forward to working with Centennial Dominicana's staff to support their efforts to expand the system's coverage area and to attract subscribers." Waller Capital Corporation, a telecommunications-focused investment bank, served as exclusive financial advisor to Centennial on this transaction. Trilogy International's exclusive financial adviser was Deutsche Bank Securities, Inc. About Trilogy Based in Bellevue Washington, Trilogy International Partners LLC, is a privately held company that owns controlling interests in Nuevatel (PCS de Bolivia S.A.) and Communication Cellulaire d'Haiti S.A., prominent providers of wireless fixed and mobile telephony services in Bolivia and Haiti. The members and executive management of Trilogy International include the founders of Western Wireless International Corporation, Western Wireless Corporation, and Voicestream. About Centennial Communications Headquartered in Wall, New Jersey, Centennial Communications Corporation -- http://www.centennialwireless.com/-- provides wireless communications with cellular licenses covering smaller markets in the central United States. Centennial also offers personal communications services in the Caribbean, as well as wireline and wireless broadband services. It operates as a competitive local-exchange carrier in Puerto Rico, offering traditional and Internet-based phone service. Centennial sold its Puerto Rican cable operations in 2004. Venture capital firm Welsh, Carson, Anderson & Stowe (54%) and a unit of the Blackstone Group (24%) are Centennial's controlling shareholders. At Aug. 31, 2006, Centennial's balance sheet showed $1,433,497,000 in total assets and $2,498,651,000 in total liabilities resulting in a $1,065,154,000 stockholders' deficit. * * * As reported in the Troubled Company Reporter on Jul. 3, 2006, Fitch assigned Centennial Communications Corp.'s issuer default rating at 'B-' and senior unsecured notes rating at 'CCC/RR6'. The rating outlook is stable. CENTRIX FIN'L: Court Sets January 11 Hearing on Sale of All Assets ------------------------------------------------------------------ The Honorable Elizabeth E. Brown of the U.S. Bankruptcy Court for the District of Colorado will convene a hearing at 9:00 a.m., Mountain Time, on Jan. 11, 2006, to consider the sale of substantially all of Centrix Financial LLC and its debtor- affiliates' assets. The hearing will be held at Courtroom C501, Byron Rogers Courthouse, 1929 Stout Street, in Denver, Colorado. Kendrick CF Acquisition Inc., pursuant to an Oct. 13, 2006 asset purchase agreement with the Debtors, submitted a bid, which includes a credit bid of secured indebtedness owed to Falcon Mezzanine Partners II LP plus interest at the non-default rate and reasonable costs and fees. A hearing considering challenges to Kendrick's right to the credit bid amount will be held on Dec. 8, 2006. To participate in the auction, interested parties must submit their bid no later than 5:00 p.m. on Jan. 8, 2007, providing consideration in an amount equal to: a) the amount of all Falcon Claims used as a credit bid by the Bankruptcy Court; b) any outstanding obligations of the Debtors under any debtor- in-possession financing facility approved by the Bankruptcy Court; c) the assumption of the liability of the Debtors under their key employee retention plan; d) cash sufficient to add to the Debtors' cash at closing such that $5,000,000 remains with the Debtors to pay for administrative expenses; and e) a termination fee payable to Kendrick equal to $300,000 plus Kendrick's reasonable expenses, which will not exceed $200,000. Competing bids must also accompany a $1,000,000 good faith deposit in immediately available funds and provide for payment in full and in cash of any outstanding DIP obligations and termination fee. Objections to the Sale Motion must be filed with the Court by 4:00 p.m., Eastern Time, on Jan. 4, 2007, and served upon: a) Counsel to the Debtors: Craig D. Hansen, Esq. Squire, Sanders & Dempsey LLP Suite 2700 Two Renaissance Square 40 North Central Avenue Phoenix, AZ 85004-4498 b) Counsel to Falcon: Kevin J. Burke, Esq. Cahill Gordon & Reindel LLP 80 Pine Street New York, NY 10005 c) Counsel to Everest Reinsurance Holdings Inc.: David McClain, Esq. McClain, Maney & Patchin PC Suite 3100 711 Louisiana Houston, TX 77002 d) Counsel for the Official Committee of Unsecured Creditors: Michael P. Richman, Esq. John A. Simon, Esq. Foley & Lardner LLP 90 Park Avenue New York, NY 10016 e) United States Trustee: Joanne Speirs, Esq. Office of the U.S. Trustee District of Colorado Suite 1551 999, 18th Street Denver, Colorado 80202 Any party considering submitting a competing bid and desiring to pre-qualify as an approved underwriter must submit no later than Dec. 5, 2006, all of the information and materials required in the auction protocol available on the KCC Web site to Everest National Insurance Company. Everest National will notify the Debtors and the Creditors Committee by Jan. 2, 2007, which prospective competing bidders, if any, Everest National would designate as approved underwriters for purposes of servicing the approximately $1,800,000,000 in sub- prime automobile loans currently being serviced by the Debtors. Any objections to Everest National's determination of whether a prospective competing bidder is an approved underwriter must be filed by January 5, 2007. Copies of the Asset Purchase Agreement and other related documents can be accessed at Kurtzman Carson Consultants LLC's Web site at http://kccllc.net/centrixfinancial/ About Centrix Financial Headquartered in Reno, Nevada, Centrix Financial LLC provides subprime auto loans. Centrix and its affiliates filed separate Chapter 11 petitions on Sept. 19, 2006 (Bankr. Dist. Nev. Lead Case No. 06-50631). CMGN LLC, one of the affiliates, filed its Chapter 11 petition on Sept. 4, 2006 (Bankr. Dist. Nev. Case No:06-50631). Three of Centrix Financial's creditors, IFC Credit Corporation, Suntrust Leasing, and Wells Fargo Equipment Finance, subsequently filed involuntary chapter 11 petition against the Debtors on Sept. 15, 2006 (Bankr. Dist. Colo. Case No:06-16403) The Creditors assert they are owed more than $4.6 million. Lee M. Kutner, Esq., at Kutner Miller, P.C., and David von Gunten, Esq., at Von Gunten Law LLC, represent the creditor petitioners. The Debtors' cases has been consolidated and transferred on Sept. 27, 2006 (Bankr. Dist. Colo. Case No: 06-16791) Craig D. Hansen, Esq., in Phoenix, Arizona and Elizabeth K. Flaagan, Esq., in Denver, Colorado, represent the Debtors. CKE RESTAURANTS: Good Performance Cues Moody's to Revise Outlook ---------------------------------------------------------------- Moody's Investors Service affirmed all ratings of CKE Restaurants, Inc. and changed the outlook to positive from stable. The change in outlook reflects CKE's improved operating performance and stronger credit metrics driven by the relatively stable operating performance of Carl's Jr., improved operating performance of Hardees, lower restaurant operating costs, and reduced debt levels. The ratings are also supported by the company's reasonable scale, multiple concepts, and diversified day part. However, the ratings also incorporate the challenges of continuing the turnaround at Hardees while maintaining the operating performance at Carl's, in addition to addressing the difficulties at La Salsa. Moody's also remains concerned with transaction patterns at all of CKE's concepts, which remain relatively weak. The ratings and outlook also anticipate that CKE will successfully address the near term expiration of its revolving credit facility by obtaining a secure source of alternate liquidity. Ratings affirmed: -- Corporate family rating rated B1 -- Probability of default rating rated B1 -- $230 million, graduated 1st lien senior secured term loan B, due July 2, 2008, rated Ba2, LGD2, 29% -- $150 million, graduated 1st lien senior secured revolver, due May 2007, rated Ba2, LGD2, 29% -- $105 million, 4% convertible subordinated notes, due Oct. 1, 2023, rated B3, LGD6, 95% The outlook was changed to positive from stable. Headquartered in Carpinteria, California, CKE Restaurants, Inc. owns, operates, and franchises, approximately 3,160 quick-service and fast casual restaurants. For the last twelve month period ending Aug. 2006, the company generated revenues of about $1.6 billion and operating income of approximately $108 million. COIN BUILDERS: Judge Utschig Approves Chapter 7 Conversion ---------------------------------------------------------- The Honorable Thomas S. Utschig of the U.S. Bankruptcy Court for the Western District of Wisconsin has converted the Chapter 11 case of Coin Builders, LLC, into a liquidation proceeding under Chapter 7 of the Bankruptcy Code. Michael E. Kepler was appointed as Chapter 7 Trustee. The Official Committee of Unsecured Creditors asked for the conversion of the Debtor's case pursuant to Sections 1112(b)(4)(A) and (J) of the Bankruptcy Code because: a) the Debtor's operating reports indicate a continuing loss to or diminution of the estate and the absence of a reasonable likelihood of a rehabilitation of its business; and b) the Debtor has failed to file a disclosure statement, and to file or confirm a plan. within the time provided by Section 1121(d). About Coin Builders Headquartered in Wisconsin Rapids, Wisconsin, Coin Builders, LLC -- http://www.coinbuilders.net/-- has four subsidiaries that operate in the merchandising, wholesale, restaurant, and aviation sectors. The Debtor filed for chapter 11 protection on September 26, 2005 (Bankr. W.D. Wis. Case No. 05-18109). George B. Goyke, Esq., at Goyke, Tillisch & Higgins LLP represents the Debtor in its restructuring efforts. Claire Ann Resop, Esq., at Brennan, Steil & Basting, S.C., 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 to $50 million. COIN BUILDERS: Chapter 7 Trustee Hires Kepler & Peyton as Counsel ----------------------------------------------------------------- The U.S Bankruptcy Court for the Western District of Wisconsin has authorized Michael E. Kepler, the Chapter 7 Trustee appointed in Coin Builders, LLC's bankruptcy case, to employ Kepler & Peyton as his counsel. The Chapter 7 Trustee needs a counsel who will perform legal work to recover assets and set aside avoidable preferences or fraudulent conveyances. In this engagement, Kepler & Peyton will: a) investigate fraudulent conveyances and possible sale of physical assets belonging to the Debtor; b) examine all claims made against the estate and to take steps as may be warranted to challenge inappropriate claims; c) examine the Debtor's security agreement to determine whether they may be challenged and as such recovered; and d) advise the trustee with regard to recovery of other assets and defend the estate's assets. Kepler & Peyton will charge at a rate of $225 per hour for its services. To the best of the Chapter 7 Trustee's knowledge, Kepler & Peyton does not hold any interest adverse to the Debtor's estate. Kepler & Peyton can be reached at: Kepler & Peyton Suite 202 634 West Main Street Madison, WI 53703 Phone:(608) 257-5424 About Coin Builders Headquartered in Wisconsin Rapids, Wisconsin, Coin Builders, LLC -- http://www.coinbuilders.net/-- has four subsidiaries that operate in the merchandising, wholesale, restaurant, and aviation sectors. The Debtor filed for chapter 11 protection on September 26, 2005 (Bankr. W.D. Wis. Case No. 05-18109). George B. Goyke, Esq., at Goyke, Tillisch & Higgins LLP represents the Debtor in its restructuring efforts. Claire Ann Resop, Esq., at Brennan, Steil & Basting, S.C., 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 to $50 million. COMPLETE RETREATS: Court OKs Increase in Patriot's Holdback Amount ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Connecticut authorized Complete Retreats LLC and its debtor-affiliates to further amend their debtor-in-possession financing agreement with Ableco Finance LLC, with regards to The Patriot Group LLC's holdback amount. Accordingly, the Debtors and Patriot agree to these amendments in the Ableco DIP Agreement: (1) The holdback, or the portion of the prepetition amount owed to Patriot as to which repayment will be deferred, will be increased from $2,000,000 to $3,500,000; (2) Patriot will be entitled to a Holdback Exit Fee equal to the difference between $875,000 and the interest accruing on the Holdback from the date of the Ableco DIP Facility Closing through the date of payment of the Holdback. If any portion of the Holdback is repaid to Patriot by the Debtors on or before November 30, 2006, the Holdback Exit Fee will be reduced by an amount equal to 20% of the principal portion of the Early Holdback Repayment for a maximum $700,000 potential reduction in the Holdback Exit Fee; and (3) Subject only to the Carve-out, no fees or expenses of any professionals retained by the Debtors or the Official Committee of Unsecured Creditors will be paid until the Holdback, its interest, and the Holdback Exit Fee have been paid in full. "The additional liquidity afforded by these proposed modifications to the [Ableco DIP Order] will allow [the Debtors] to finish their review of investor or purchaser proposals and to facilitate and consummate their prompt exit from bankruptcy," Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, says. "If the Ableco DIP Financing Facility were consummated without these modifications, which Ableco Finance, LLC, has not been willing to do in any event, [the Debtors] would not be able to fund their operations, including payroll, in the short run and may not be able to continue as a going concern for more than a few weeks," Mr. Daman adds. Mr. Daman points out that the proposed changes are consistent with the terms of the Ableco DIP Order, which provides that "the Holdback shall be amended to mean $2,000,000 or such greater amount as may agreed to by Patriot." Debtors File Updated Cash Flow Forecast In connection with their proposed amendment to the Ableco DIP Order, the Debtors delivered to the Court a 10-week budget ending December 29, 2006. A full-text copy of the 10-Week Budget is available for free at: http://bankrupt.com/misc/T&H_Ableco_10wkbudget.pdf Previous Ableco DIP Pact Amendment The Debtors previously obtained Court authority to amend its DIP Agreement with Ableco. Pursuant to that previous amendment, Ableco agreed to lend the Debtors an additional $2,000,000 so that the Ableco DIP Financing Facility would now provide up to a total loan of $82,000,000. Ableco also agreed to reduce certain required reserves on availability by approximately $4,000,000. In exchange for the additional liquidity, the Debtors agreed to modify the Ableco DIP Facility so that $5,000,000 of the DIP loan would have a higher interest rate than the remaining portion. The Honorable Alan H.W. Shiff authorized the Debtors to: -- incur postpetition indebtedness up to an aggregate principal amount of $82,000,000; -- pay interest with respect to a $5,000,000 portion of the Ableco DIP Facility term loan portion at a rate of 20% per annum; -- amend the definition of the term "Borrowing Base" and the release of certain reserves to provide the Debtors with approximately $4,000,000 of incremental liquidity; and -- amend the definition of "Holdback" to mean $2,000,000 or a greater amount as may be agreed to by Patriot. In addition, the Court permitted Ableco, in its sole discretion, to advance funds or other extensions of credit in excess of any Budget, Budget Amount, Material Deviation formulae, or other terms and conditions, provided that the principal amount of those advances will not exceed $82,000,000. The Court, as reported in the Troubled Company Reporter on Nov. 1, 2006, authorized the Debtors to borrow up to $80,000,000 from Ableco as administrative and collateral agent, and certain other lenders, on a final basis. A full-text copy of the Final DIP Order on the Ableco DIP Financing Facility is available for free at: http://researcharchives.com/t/s?143f About Complete Retreats Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor-affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed $308,000,000 in total debts. (Complete Retreats Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). COMMUNICATIONS CORP: Hires CobbCorp LLC as Broker ------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Louisiana in Shreveport has authorized Communications Corporation of America, White Knight Holdings, Inc. and their debtor-affiliates to employ CobbCorp, LLC, as their broker. CobbCorp will assist the Debtors in soliciting purchase offers for certain of their television stations. CobbCorp will hold the exclusive right to sell the TV stations for stock, assets or any other basis acceptable to the Debtors and approved by the Court. The Debtors are selling these assets in order to reduce the amount of their secured indebtedness. As compensation, CobbCorp will receive a commission rate equal to $290,000 for the first $10 million purchase amount and 1% of the balance. The minimum commission fee is $100,000. Brian E. Cobb at CobbCorp assures the Court that his firm does not hold or represent any interest adverse to their estate and is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Lafayette, Louisiana, Communications Corporation of America is a media and broadcasting company. Along with media company White Knight Holdings, Inc., it owns and operates around 23 TV stations in Indiana, Texas and Louisiana. Communications Corporation and 10 of its affiliates filed for bankruptcy protection on June 7, 2006 (Bankr. W.D. La. Case Nos. 06-50410 through 06-50421). Douglas S. Draper, Esq., William H. Patrick III, Esq., and Tristan Manthey, Esq., at Heller, Draper, Hayden, Patrick & Horn, LLC, represents Communications Corporation and its debtor-affiliates. Taylor, Porter, Brooks & Phillips LLP serves as counsel to the Official Committee of Unsecured Creditors. When Communications Corporation and its debtor-affiliates filed for protection from their creditors, they estimated assets and debts of more than $100 million. COMMUNICATIONS CORP: Hires Michael Nassif as Special Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Louisiana allows Communications Corporation of America, White Knight Holdings, Inc., and their debtor-affiliates to employ Michael P. Nassif, Esq., as their special counsel. Mr. Nassif will: a. advise and represent the Debtors with respect to all aspects of matters arising from non-compete agreements, contracts and commercial matters, including, but not limited to, the enforcement of contracts and non-compete agreements, and commercial litigation matters; b. advise and represent the Debtors with respect to related matters as they arise at the Debtors' request; c. continue representation of the Debtors for matters pending at the time of their bankruptcy filing for which Mr. Nassif was already employed and matters which the Debtors sought his legal counsel, including proceeding captioned Communications Corporations of America, Inc. v. Retention Resources, et al., Case No. 2005-25683 in the 164th Judicial District Court of Harris County, Texas; and Communications Corporation of Texas, Inc. vs. Nexstar Broadcasting, Inc. et al. which will be filed in Texas and the investigation of potential claims of certain identified entities; and d. assist the Debtors' reorganization attorneys from time to time. As reported in the Troubled Company Reporter on Sept. 26, 2006, Mr. Nassif will bill at $170 per hour for this engagement. Headquartered in Lafayette, Louisiana, Communications Corporation of America is a media and broadcasting company. Along with media company White Knight Holdings, Inc., it owns and operates around 23 TV stations in Indiana, Texas and Louisiana. Communications Corporation and 10 of its affiliates filed for bankruptcy protection on June 7, 2006 (Bankr. W.D. La. Case Nos. 06-50410 through 06-50421). Douglas S. Draper, Esq., William H. Patrick III, Esq., and Tristan Manthey, Esq., at Heller, Draper, Hayden, Patrick & Horn, LLC, represents Communications Corporation and its debtor-affiliates. Taylor, Porter, Brooks & Phillips LLP serves as counsel to the Official Committee of Unsecured Creditors. When Communications Corporation and its debtor-affiliates filed for protection from their creditors, they estimated assets and debts of more than $100 million. COPANO ENERGY: Expands Commodity Hedging Portfolio -------------------------------------------------- Copano Energy, LLC, has expanded its commodity risk management portfolio through the purchase of Houston Ship Channel Index natural gas call spread options to hedge a portion of its net operational short position in natural gas when operating in a processing mode at its Houston Central Processing Plant. The call spread options represent the purchase of natural gas call options and the concurrent sale of natural gas call options with respect to the same volumes at a higher strike price. The call spread options will be settled monthly over a five-year period beginning January 2007 and ending December 2011. The company purchased the call spread options on Nov. 21, 2006 from two investment grade counterparties in accordance with its risk management policy. These options were implemented as cash flow hedges to mitigate the impact of increases in natural gas prices on our Texas Gulf Coast Processing segment. Copano Energy paid approximately $9.2 million for the newly-acquired call spread options. "We are pleased to have acquired these hedge positions, which we regard as an extension of our ongoing risk management program," said John Eckel, Chairman and Chief Executive Officer of Copano Energy. Headquartered in Houston, Texas, Copano Energy, L.L.C. -- http://www.copanoenergy.com/-- is a midstream natural gas company with natural gas gathering, intrastate pipeline and natural gas processing assets in the Texas Gulf Coast region and in Central and Eastern Oklahoma. * * * As reported in the Troubled Company Reporter on Oct. 17, 2006, Moody's Investors Service affirmed its B1 corporate family rating on Copano Energy, LLC. At the same time, the rating agency held its B2 probability-of-default rating on the Company's 8.125% Senior Unsecured Global Notes due 2016, and attached an LGD5 rating on these notes, suggesting noteholders will experience a 72% loss in the event of a default. CREDIT SUISSE: S&P Downgrades Rating on Class M-2 Certs. to BB -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on class M-2 from CSFB ABS Trust Series 2001-HE17 to 'BB' from 'BBB'. Concurrently, the rating on class II-B-3 from loan group II of Credit Suisse First Boston Mortgage Securities Corp.'s series 2002-10 was lowered to 'B' from 'BB'. The ratings on both classes remain on CreditWatch, where they were placed with negative implications on March 10, 2006. Lastly, the ratings on 10 classes from these series were affirmed. The lowered ratings reflect the continued erosion of credit support for these classes. The overcollateralization for series 2001-HE17 has been reduced to zero because of monthly net losses that have consistently outpaced monthly excess interest, causing the default of the class B rating. Cash flow projections indicate that losses will continue to outpace excess interest, which will further reduce the credit support to class M-2. This transaction had total delinquencies of 39.40% as of the Oct. 2006 distribution period, with cumulative realized losses of 3.72%. The transaction is 61 months seasoned with a pool factor of 10.24%. Loan group II from series 2002-10 continues to incur losses, with an average of approximately $48,000 per month for the past six months. Since credit support for this loan group is provided by subordination alone, any realized loss directly reduces the credit support. In addition, classes II-B-4 and II-B-5 have already defaulted. This loan group had total delinquencies of 20.34%, with approximately three-quarters of that total in the 90-plus days, foreclosure, and REO delinquency categories as of the Oct. 2006 distribution period, with cumulative realized losses of 0.33%. The loan group is 53 months seasoned with a pool factor of 8.94%. Standard & Poor's will continue to closely monitor the performance of these transactions. If losses continue to erode the classes' credit support, further downgrades can be expected. Conversely, if losses cease to erode the credit support for these classes, the rating agency will affirm the ratings and remove them from CreditWatch negative. The collateral for these transactions consists of 30-year, fixed- or adjustable-rate, first- or second-lien mortgage loans secured by one- to four-family residential properties. Credit support is provided by subordination alone for loan group II from series 2002-10, and overcollateralization and excess interest provide additional support for series 2001-HE17. Ratings Lowered And Remaining On Creditwatch Negative CSFB ABS Trust Series 2001-HE17 Mortgage Pass-Through Certificates Series 2001-HE17 Rating ------ Class To From ----- -- ---- M-2 BB/Watch Neg BBB/Watch Neg Credit Suisse First Boston Mortgage Securities Corp. Mortgage-Backed Pass-Through Certificates Series 2002-10, Loan Group II Rating ------ Class To From ----- -- ---- II-B-3 B/Watch Neg BB/Watch Neg Ratings Affirmed ---------------- CSFB ABS Trust Series 2001-HE17 Mortgage Pass-Through Certificates Series 2001-He17 Class Rating ----- ------ A-1, A-2, A-IO AAA M-1 AA+ Credit Suisse First Boston Mortgage Securities Corp. Mortgage-Backed Pass-Through Certificates Series 2002-10, Loan Group II Class Rating ----- ------ II-A-1, II-X, II-P, II-PP AAA II-B-1 AA II-B-2 A- CROWN HOLDINGS: Seeks Noteholders' OK on Additional $200-Mil. Debt ------------------------------------------------------------------ Crown Holdings Inc. commenced a solicitation of consents from holders of 6-1/4% First Priority Senior Secured Notes due 2011 to incur an additional $200 million of pari passu first priority indebtedness. The Company also want to make certain amendments to the indenture relating to the Notes dated as of Sept. 1, 2004, among Crown European Holdings SA, a French societe anonyme, as guarantor and Wells Fargo Bank N.A. as trustee. The Proposed Amendments will amend certain provisions contained in Sections 1.01 and 4.10(b) of the Indenture: -- to increase the Company's and its subsidiaries' ability to incur indebtedness and liens, and -- to make restricted payments, including without limitation, redemption, repurchase, or other acquisition or retirement of shares of its common stock, by conforming certain terms and conditions set forth in the Indenture to the terms and conditions of its other senior debt agreements. Among other things, the Proposed Amendments will allow the Company to incur an additional $200,000,000 of Pari Passu First Priority indebtedness secured by the collateral securing the Notes and to make $100,000,000 of additional restricted payments of any type. The Consent Solicitation will expire at 5:00 p.m., New York City time, on Dec. 4, 2006. The approval of the proposed amendments requires the consent of holders of at least a majority in aggregate principal amount of the outstanding Notes. Philadelphia, Pa.-based Crown Holdings Inc. (NYSE: CCK) -- http://www.crowncork.com/-- through its affiliated companies, supplies packaging products to consumer marketing companies around the world. As reported in the Troubled Company Reporter on Nov. 6, 2006, Crown Holdings Inc.'s balance sheet at Sept. 30, 2006, showed $7.236 billion in total assets, $7.072 billion in total liabilities, and $271 million in minority interests, resulting in a $107 million shareholders' deficit. The Company had a $236 million deficit at Dec. 31, 2005. DAVID DUNCAN: Case Summary & Three Largest Unsecured Creditors -------------------------------------------------------------- Debtor: David Gregory Duncan dba Dad's Truck & Auto fdba Raceway Auto Sales fdba Kokomo Speedway 1611 East 226th Street Cicero, IN 46034 Bankruptcy Case No.: 06-07574 Chapter 11 Petition Date: November 22, 2006 Court: Southern District of Indiana (Indianapolis) Debtor's Counsel: Gary Lynn Hostetler, Esq. Hostetler & Kowalik, P.C. 101 West Ohio Street, Suite 2100 Indianapolis, IN 46204 Tel: (317) 262-1001 Fax: (317) 262-1010 Total Assets: $1,213,841 Total Debts: $963,135 Debtor's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Robin A. Duncan Liability arising $35,000 214 Ironwood Circle from property Noblesville, IN 46062 settlement agreement American General Financial Judgment $20,700 Services c/o Bleecker Brodey & Andrews 9247 N. Meridian St., #200 Indianapolis, IN 46260 MidAmerican Radio Group Judgment $9,554 P.O. Box 1970 Martinsville, IN 46151 DELTA AIR: Bondholders to Form Group Backing US Airways Bid ----------------------------------------------------------- Certain bondholders of Delta Air Lines Inc. plan to organize an informal group to support US Airways Group Inc.'s $8.9 billion merger offer, Megan Davies and Paritosh Bansal write for Reuters. Reuters discloses that smaller unsecured creditors hope to get a better say in Delta's restructuring process by forming the informal group. The group could try to compel Delta to permit US Airways to set forward an alternative plan if Delta's management continues pursuing its standalone approach. Bondholders Deutsche Bank AG and Lehman Brothers Holdings Inc. were advised to group together to pressure Delta to consider the US Airways offer and any other deals that could arise, Reuters says. Delta's management and larger creditors expressed doubts about the group's plan to pressure Delta creditors to accept the bid, according to Reuters. David Neier, Esq., at Winston and Strawn, told Reuters that if the new ad hoc committee gets enough bondholders to follow, they could submit their own plan and seek to have exclusivity terminated. 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. ENCORE ACQUISITION: Earns $42.1 Million in Quarter Ended Sept. 30 ----------------------------------------------------------------- Encore Acquisition Company reported $42.1 million of net income on $177.6 million of net revenues for the three months ended Sept. 30, 2006, compared to $20.8 million of net income on $127.5 million of net revenues for the same period in 2005. At Sept. 30, 2006, the Company's balance sheet showed $1.9 billion in total assets and $1.1 billion in total liabilities. The Company's Sept. 30 balance sheet also showed strained liquidity with $125.8 million in total current assets available to pay $171.3 million in total current liabilities. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?1595 The Company's principal source of short-term liquidity is its revolving credit facility, which matures on Dec. 29, 2010. The facility is with a bank syndicate comprised of Bank of America, N.A. and other lenders. The borrowing base is determined semi- annually and may be increased or decreased, up to a maximum of $750 million. The borrowing base as of Sept. 30, 2006 was $550 million. On Sept. 30, 2006, the Company had no amounts outstanding and $523.3 million available to borrow under the revolving credit facility. On Nov. 2, 2006, the company had $2.0 million outstanding and $520.8 million available to borrow under the revolving credit facility. At Sept. 30, 2006, long-term debt, net of discount, was $593.6 million, including $150 million of 6.25% Senior Subordinated Notes due April 15, 2014, $300 million of 6.0% Senior Subordinated Notes due July 15, 2015, and $150 million of 7.25% Senior Subordinated Notes due 2017. At that date, the Company's existing credit facility was undrawn. As of Sept. 30, 2006, the Company had $26.7 million in letters of credit. As of Nov. 2, 2006, the Company had $27.2 million of such outstanding letters of credit. Headquartered in Fort Worth, Texas, Encore Acquisition Company (NYSE: EAC) -- http://www.encoreacq.com/-- is an independent energy company engaged in the acquisition, development and exploitation of North American oil and natural gas reserves. Organized in 1998, Encore's oil and natural gas reserves are in four core areas: the Cedar Creek Anticline of Montana and North Dakota; the Permian Basin of West Texas and Southeastern New Mexico; the Mid Continent area, which includes the Arkoma and Anadarko Basins of Oklahoma, the North Louisiana Salt Basin, the East Texas Basin and the Barnett Shale; and the Rocky Mountains. * * * As reported in the Troubled Company Reporter on Sept. 25, 2006, Moody's Investors Service, in connection with its implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. and Canadian Exploration and Production sector, the rating agency confirmed its Ba3 Corporate Family Rating for Encore Acquisition Company. Encore Acquisition's $300-million senior subordinate notes due July 15, 2015, carry Moody's Investors Service's B2 rating and Standard & Poor's B rating. ENRON CORP: Wants Energen, Et Al. Settlement Pacts Approved ----------------------------------------------------------- The reorganized 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 six separate settlement agreements between these parties: Debtor Party Customer ------------ -------- Enron North America Corp. Alabama Gas Corporation & Energen Resources Corporation Enron Energy Services, Inc. Pacific Telesis Group, nka AT&T Teleholdings, Inc. EESI Bay City Flower Co., Inc. ENA Total International Limited Enron Power Marketing, Inc. Mississippi Delta Energy Agency Enron Energy Services North America, Inc. T Group America, Inc. According to Evan R. Fleck, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, the Reorganized Debtors and the Customers were parties to various prepetition contracts relating to the Debtors' supply of power and other services to the Customers. Enron Corp. issued various guarantees as credit support for the Contracts with Alabama Gas and Energen Resources. Certain disputes between the Debtors and the Customers arose under the prepetition contracts. The Debtors commenced adversary proceedings against certain of the Customers: Date Debtor Defendants Case No. ---- ------ --------- -------- 08/09/04 ENA Alabama & Energen 04-03769 05/02/06 EPMI Mississippi Delta 06-01454 07/27/06 ENA Total International 06-01674 Following negotiations regarding the Contracts, the parties entered into the settlements agreements and agree that: (1) the Customers will make a settlement payment to the applicable Reorganized Debtor or Debtor; (2) they will mutually release each other from all claims related to the Contracts; (3) all liabilities scheduled in favor of Alabama Gas and Energen Resources, Pacific Telesis, and Bay City will be deemed irrevocably withdrawn, with prejudice, and to the extent applicable expunged; and (4) the Adversary Proceedings will be dismissed. The settlement agreement with Alabama Gas and Energen Resources also provides that all claims filed by Alabama and Energen against ENA and the applicable Reorganized Debtor in connection with the Contracts will be deemed withdrawn, with prejudice, and to the extent applicable expunged, provided, however, that Claim Nos. 7276 and 7277 will each be reduced and allowed for $12,500,000. 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) ENRON CORP: Seeks Approval for T. Thorn Settlement Agreement ------------------------------------------------------------ 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 a settlement agreement between the Debtors and Terence H. Thorn, a former employee for the Debtors. On Aug. 15, 2001, Terence H. Thorn received $420,000 from Enron Corp. as severance payment for his employment term with the Debtors, recounts Jeffrey K. Milton, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York. On Oct. 15, 2002, Mr. Thorn filed three claims against Enron - - Claim No. 1800700 for $100,826, Claim No. 1800800 for $1,747, and Claim No. 1793800 for $805,560. On the same day, Mr. Thorn also filed Claim No. 1800800 for $617,464 against Enron Global Markets LLC. On Dec. 1, 2003, the Official Committee of Unsecured Creditors, on behalf of Enron and Enron Global, commenced Adversary Proceeding No. 03-93615 to recover, among other things, a transfer made by Enron to Mr. Thorn. In their 83rd and 88th Omnibus Claims Objections, the Reorganized Debtors sought to: * reduce without allowance Claim No. 1800700 to $23,540; * reclassify without allowance Claim No. 1800800 as a general unsecured claim; and * reduce without allowance Claim No. 1800900 to $394,085 and reclassify it as a general unsecured claim against Enron. On May 12, 2005, the Court sustained the 83rd Omnibus Claims Objection with respect to Claim Nos. 1800700, 1800800, and 1800900. To settle their disputes, the parties entered into a settlement, under which the parties agreed that: (1) Claim No. 1793800 will be reduced to $700,000 and allowed as a Class 4 General Unsecured Claim under the Plan; (2) Claim Nos. 1800700, 1800800, and 1800900 will be disallowed in their entirety and expunged; (3) the Adversary Proceeding will be dismissed with prejudice; and (4) the parties will mutually release each other from all claims related to the transfer payment and the Adversary Proceeding. Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, the Creditors Committee asks the Court to approve the settlement. 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) EQUITABLE LIFE: Wants Business Moved to Canada Life Under Scheme ---------------------------------------------------------------- Equitable Life Assurance Society and Canada Life Limited ask the High Court of Justice in the U.K. to sanction a scheme under Part VII of the Financial Services and Markets Act 2000. Equitable Life and Canada Life also ask the High Court to make ancillary provisions in connection with the implementation of the Scheme under Section 112 of the Act. The application will be heard before the Companies Court Judge at the Royal Court of Justice, Strand, London, on Feb. 1, 2007. Under the Scheme, Equitable Life will transfer part of its non-profit annuity pension business to Canada Life. Equitable Life will retain all liabilities in relation to its business that occurred on or before the transfer became effective. In addition, all policies that occurred before the transfer became effective will remain with Equitable Life. All policies that arose on or after the transfer became effective will be given to Canada Life. Any person, including a policyholder or employee, who alleges to be affected by the scheme may appear at the hearing. Objections to the Scheme, if any, must be in writing and served on: a. Solicitors for Equitable Life Assurance Society Lovells Atlantic House Holborn Viaduct London EC1A 2FG Tel: +44 (0) 20-7296-2000 Fax: +44 (0) 20-7296-2001 b. Solicitors for Canada Life Limited Slaughter and May One Bunhill Row London EC1Y 8YY Tel: +44 (0) 20-7600-1200 Fax: +44 (0) 20-7090-6000 Copies of the Scheme is available free of charge at Equitable Life's Web site http://www.equitable.co.uk/and from Canada Life's Web site http://canadalife.co.uk/ The Scheme is also available by writing to: Equitable Life Assurance Society Walton Street, Aylesbury Bucks HP21 7QW Tel: 0845-1202-512 +44 1296-386242 -- or -- Canada Life Limited Canada Life Place High Street, Potters Bar Hertfordshire EN6 5BA Tel: 0845-6060-708 +44 1707-422022 Equitable Life Assurance Society -- http://www.equitable.co.uk/-- is a closed life insurer. * * * Standard & Poor's Ratings Services raised in May 2006 the long- term counterparty credit rating on U.K.-based life insurer The Equitable Life Assurance Society to 'BB' from 'B+'. FEDERAL-MOGUL: Judge Fitzgerald Okays DIP Credit Pact Amendment --------------------------------------------------------------- The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware approved an amendment to Federal- Mogul Corporation and its debtor affiliates' Final DIP Order, to permit the Debtors to pledge up to an additional $15,000,000 to secure obligations under various hedging agreements. The Court also authorized the Debtors to file the Fee Letter under seal. The Fee Letter will remain under seal and confidential, and will not be made available to anyone other than the Court, the U.S. Trustee, certain parties to whom the Debtors have provided copies of the Fee Letter, and the Plan Proponents' counsel. Subject to Citigroup USA Inc.'s consent, a redacted copy of the Fee Letter will be made available to any party who requests for the copy. Debtors Want to Pledge Another $15-Mil. to Secure Hedging Obligations The Bankruptcy Court issued an order in November 2005 authorizing the Debtors to enter into and perform obligations under an amended debtor-in-possession credit agreement, and continue to use cash collateral and provide adequate protection. Pursuant to the Final DIP Order, the Debtors were permitted to grant pari passu liens and superpriority claims to Citicorp USA Inc. and certain lenders party to a 2004 Credit Agreement in respect of the Debtors' obligations under postpetition hedge agreements with respect to ordinary course hedging transactions, in an aggregate notional amount of up to $30,000,000. The $30,000,000 limitation on Postpetition Hedging Agreements had also been included in a prior DIP order issued in 2004. Scotta E. McFarland, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., in Wilmington, Delaware, relates that the Debtors utilize the Postpetition Hedging Agreements to manage, among other things, their exposure to fluctuating commodities prices. By doing so, the Debtors are able to limit the volatility of the prices of raw materials necessary for their manufacturing businesses. That, in turn, allows for greater certainty in managing the Debtors' finances and improved financial forecasting, as well as guarding against the prospect that a radical increase in the price of necessary materials could reduce the Debtors' profitability. In addition, the Debtors' management believes that utilizing the Postpetition Hedging Agreements has resulted in a net cost savings to the Debtors' estates. Since the entry of the 2004 DIP Order, the Debtors have managed to enter into and secure their obligations under various Postpetition Hedging Agreements while remaining within the $30,000,000 limit imposed by the Final DIP Order. However, Ms. McFarland notes, the prices of many of the Debtors' raw materials have risen sharply in the last several months, and the prices for new hedging agreements relating to those materials have risen accordingly. As a result, while the $30,000,000 limit was previously adequate to accommodate all of the Debtors' needs to secure obligations under the Postpetition Hedging Agreements, that limit now prevents the Debtors from hedging the quantity of raw materials on which they had previously been able to hedge their price exposure, Ms. McFarland says. Within the week of Sept. 18, 2006, the agent for the postpetition lenders advised the Debtors that they had nearly exhausted their ability to enter into new Postpetition Hedging Agreements. The Debtors intend to continue entering into Postpetition Hedging Agreements with respect to roughly the same level of raw materials as the Debtors have been hedging their exposure on previously. Accordingly, the Debtors ask the Court to modify the Final DIP Order to permit them to pledge up to an additional $15,000,000 to secure obligations under various hedging agreements. The Debtors are not seeking to modify the Amended DIP Agreement, Ms. McFarland explains. The Debtors are seeking to take advantage of the Agreement's existing provision, which permits them to incur as "[l]iens consisting of deposits with derivative traders as may be required pursuant to the terms of the International Swap Dealers Association Master Agreements in connection with the Borrowers' foreign exchange, commodities and interest hedging programs in an aggregate amount not to exceed at any time $15,000,000." Consistent with the carve-out for Permitted Liens, the Debtors also want the modified Final DIP Order to confirm that the liens on the cash collateral deposited to secure the Hedging Deposit Transactions will have priority over the liens granted to secure other obligations. The Debtors assert that modification of the Final DIP Order will allow them to further control the impact of raw materials pricing on their businesses, resulting in greater predictability of future performance results. The Debtors assure the Court that their request will not prejudice their creditors but will, instead, benefit all parties-in-interest by providing opportunity to enhance the Debtors' ability to manage risk and price volatility before expiration of their current DIP financing facility. Moreover, the Debtors have conferred with representatives of the agents for both the prepetition and postpetition lenders and understand that the agents have no objection to their Motion. Before the commitments under the Final DIP Order expires on Dec. 9, 2006, the Debtors will seek approval of further amendments to the Amended DIP Agreement to incorporate relief similar to the Motion. The Motion only seeks temporary relief in that it will be superseded by the Amended DIP Agreement in the next few months, Ms. McFarland says. FMO Wants DIP Facility Extended to July 2007 The Debtors also want to modify certain terms under their existing $775,000,000 postpetition debtor-in-possession facility, to: (a) extend its expiry date from Dec. 9, 2006, through the earlier of: (1) the substantial consummation of the Debtors' Plan of Reorganization; and (2) July 1, 2007; (b) effect amendments necessary to permit the Debtors to implement the Company Voluntary Arrangements for certain of the U.K. Debtors and position themselves for a successful emergence from Chapter 11; and (c) accommodate changes in the Debtors' business since the time they entered into the Existing DIP Agreement. Scotta E. McFarland, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in Wilmington, Delaware, relates that the Debtors and Citicorp USA, Inc., the administrative agent under the Existing DIP Facility, negotiated and agreed to the proposed amendments. Pursuant to a Commitment Letter dated Oct. 23, 2006, CUSA will use its best efforts to arrange a syndicate of lenders for: -- an amended $500,000,000 superpriority senior secured DIP revolving credit facility; and -- an amended $275,000,000 superpriority senior secured DIP term loan facility. CUSA also commits to provide up to $55,000,000 of the Revolving Credit Facility. Citigroup Global Markets, Inc., will serve as sole lead arranger and bookrunner for the Modified DIP Facility. CUSA will act as sole administrative agent and sole collateral agent for the Modified DIP facility. CUSA's commitment and CGMI's undertakings will terminate on Dec. 11, 2006. In return for the Commitment, the Debtors will pay CUSA undisclosed amounts as arrangement and other fees, as well as other expenses incurred in connection with the negotiation, documentation, approval and closing of the transactions contemplated by the Commitment Letter. Specific terms with respect to CUSA's fees are included in a Fee Letter. The Debtors, therefore, seek the Court's authority to enter into a Commitment and Fee letters with CUSA and CGMI. In a separate filing, the Debtors sought and got permission from the Court to file the Fee Letter under seal. Proceeds of the Modified DIP Facility will be used, among others, to fund: * the Debtors' working capital needs and other general corporate services; and * the retention of certain intercompany loan notes pursuant to a Settlement Agreement dated September 26, 2005, among Federal-Mogul Corporation; T&N Limited; the U.K. Administrators; the U.K. Plan Proponents; High River Limited Partnership; and the U.K. Pension Protection Fund. Ms. McFarland explains that the extension of the Existing DIP Facility's expiry date will give the Debtors access to financing while they are under Chapter 11 protection. Ms. McFarland says amendments to certain terms of the Existing DIP Facility are necessary to: -- address certain tax-related restructurings and take advantage of certain tax efficiencies; -- permit the Debtors to perform any remaining obligation under the Company Voluntary Arrangements, which became effective on October 11, 2006; and -- allow the Debtors to progress toward their successful emergence from Chapter 11 protection. If the terms of the Existing DIP Facility are modified, the Debtors will be able to use their financing more effectively and in a manner that more accurately tracks their present strategic business plan, Ms. McFarland adds. CUSA and the Debtors have not yet agreed to the precise terms of the amendments, Ms. McFarland notes. Among other amendments, the Debtors propose to increase the permitted amount for first priority liens and superpriority claims granted to certain Hedging Parties. The increase in Permitted Liens will help the Debtors in managing their exposure to fluctuations in raw materials pricing and interest rate risk, Ms. McFarland says. Ms. McFarland also notes that substantially all of the other material terms of the Debtors' postpetition financing will remain unchanged. Ms. McFarland adds that the Debtors will also seek the Court's permission to enter into any ancillary documents that may be necessary to effect the terms of the Modified DIP Agreement, including an amended security and pledge agreement. Each Plan Proponent either does not object to the request at present, or is anticipated by the Debtors to not object to the request, Ms. McFarland further relates. Judge Fitzgerald will conduct a hearing on the Debtors' request on Nov. 28, 2006, at 1:30 p.m. in Pittsburgh, Pennsylvania. Deadline to file objections will be on Nov. 9. A full-text copy of CUSA and CGMI's Commitment Letter is available for free at http://ResearchArchives.com/t/s?1585 Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is an automotive parts company with worldwide revenue of some $6 billion. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. (Federal-Mogul Bankruptcy News, Issue No. 119; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). FISHER SCIENTIFIC: Releases Third Quarter 2006 Financial Results ---------------------------------------------------------------- Fisher Scientific International Inc. has reported record sales and earnings in its financial statements for the third quarter ended Sept. 30, 2006, reflecting strong results in both the core scientific-research and healthcare segments. "We reported a record quarter, with sales, earnings and operating income reaching new highs," said Paul M. Montrone, chairman and chief executive officer. "Our financial results reflect the continued strength of our company and the successful execution of our strategy." On May 8, Fisher Scientific and Thermo Electron Corporation (NYSE: TMO) announced a definitive agreement to merge the two companies. The U.S. Federal Trade Commission had granted the companies early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act for the merger. Assuming that the European Commission clears the transaction on Nov. 9, the company expects to complete the merger on that date. Third-Quarter Reported Results Sales for the third quarter increased 10.8 percent to $1,508.1 million compared with $1,361.3 million in the corresponding period of 2005. Excluding the effect of foreign exchange, sales totaled $1,492.4 million in the third quarter, a 9.6 percent increase over the same quarter in 2005. Organic growth in the core scientific- research and healthcare markets accelerated from the prior quarter to 8.6 percent. Including the forecasted effect of reduced demand for safety-related products, organic growth was 6.4 percent. In European markets, organic growth was in the high single digits, outpacing market growth, as a result of customer-specific initiatives and programs to expand the company's life science product portfolio. Double-digit growth in Asia was driven primarily by the increased pace of research activity in China. Third-quarter net income was $151.8 million compared with $93.5 million in the prior-year period. Income from continuing operations for the third quarter increased to $149.3 million from $94.3 million in the same period of 2005. Net income and income from continuing operations include $2.0 million, net of tax ($3.3 million pre-tax) of acquisition and integration costs, $0.7 million, net of tax ($1.2 million pre-tax) of restructuring expense, $7.8 million, net of tax ($12.5 million pre-tax) of gain on the sale of investments, and $8.3 million, net of tax ($12.8 million pre-tax) of equity-based compensation expense related to FAS 123R. For the nine months ended Sept. 30, 2006, sales totaled $4,386.3 million, a 9.4 percent increase over sales of $4,011.2 million in the corresponding period last year. In the first nine months of 2006, foreign exchange translation had a minimal effect on sales compared with the corresponding period in the prior year. Net income in the first nine months was $377.0 million compared with $271.9 million in the same period of 2005. Income from continuing operations for the first nine months was $376.9 million compared with $255.9 million in the prior-year period. During the first nine months of 2006, Fisher generated $423.7 million in cash from operations, primarily reflecting growth in operating earnings. Capital expenditures during the same period were $115.4 million, representing maintenance capital expenditures, investments in the company's life science and managed-services businesses, expansion of distribution capabilities in Europe and the ongoing integration of Apogent manufacturing facilities. In the first nine months, free cash flow, defined as cash from operations less capital expenditures, was $308.3 million, compared with a full-year estimate of $525 million to $550 million. Adjusted Financial Results Operating income for the third quarter was $226.9 million, an increase of 21.6 percent, compared with $186.6 million in the same quarter of 2005, reflecting increased sales volume, recent higher- margin acquisitions, productivity initiatives, and incremental synergies from the Apogent merger. Third-quarter income from continuing operations increased 27.6 percent to $152.5 million compared with $119.5 million in the corresponding period of 2005. The increase primarily reflects growth in operating income and a lower tax rate. Diluted earnings per share from continuing operations increased 23.7 percent to $1.15 in the third quarter compared with 93 cents in the same period of 2005. Diluted EPS from continuing operations excluding intangible asset amortization, net of tax, totaled $1.24, a 24.0 percent increase compared with $1.00 in the third quarter last year. Equity-based compensation expense related to FAS 123R was 6 cents per diluted share in the third quarter of 2006. Operating income for the nine-month period increased 15.9 percent to $628.9 million compared with $542.7 million during the same period in the prior year. Income from continuing operations for the first nine months of 2006 increased 24.4 percent to $415.9 million compared with $334.4 million in the same period of 2005. Year-to-date diluted EPS from continuing operations was $3.16, an increase of 20.6 percent, compared with $2.62 in the corresponding period of 2005. Diluted EPS from continuing operations excluding intangible asset amortization, net of tax, totaled $3.41, a 21.4 percent increase compared with $2.81 in the same period last year. Equity-based compensation expense was 19 cents per diluted share in the first nine months of 2006. Business-Segment Results Sales of scientific products and services in the third quarter increased to $1,165.3 million, a 9.9 percent increase compared with the prior-year period. Excluding the effect of foreign exchange, third-quarter sales in this segment rose 8.5 percent to $1,150.3 million. Organic sales growth in the core scientific research market accelerated from the prior quarter to 8.8 percent reflecting strength across all of the company's core customer segments. Including the effect of safety-related products, organic growth in the segment was 6.0 percent. Mid-teens growth from pharma customers reflected strong demand for the company's proprietary product and service offering. Continuing strong market conditions and the company's recent investments in sales and marketing initiatives resulted in more than 20 percent growth from biotech customers. Growth in the academic markets was in the mid single digits, reflecting consistent growth across colleges and universities as well as medical research institutes. Fisher realized mid single-digit growth in the industrial markets driven by customer-specific sales initiatives and the ongoing strength of the U.S. economy. Excluding safety-related products, which continue to be affected by the forecasted slowdown in demand for domestic-preparedness products, sales to government customers increased in the mid-teens, fueled by strong demand from federal government agencies. In the scientific products and services segment, operating income increased 19.9 percent to $173.8 million from $144.9 million in the corresponding period of 2005, primarily reflecting the benefit of fixed-cost leverage, the sales benefit of investments in R&D and sales and marketing initiatives, contributions from recently completed higher-margin acquisitions and synergies from the Apogent merger. For the nine months ended Sept. 30, 2006, sales of scientific products and services increased 9.6 percent to $3,368.2 million compared with $3,074.3 million in the comparable period of 2005. Foreign exchange translation had minimal effect on sales of scientific products and services in the first nine months of 2006 compared with the corresponding period in the prior year. For the first nine months, operating income in the scientific products and services segment was $476.4 million, representing an increase of 14.4 percent from $416.5 million in the same period in 2005. Third-quarter sales of healthcare products and services totaled $362.1 million, an increase of 14.0 percent compared with the prior-year period. Excluding the effect of foreign exchange, sales totaled $361.2 million, a 13.8 percent increase from the corresponding period in the prior year. Organic sales growth, excluding foreign exchange, was 8.6 percent in the third quarter compared with the same period last year, representing the third consecutive quarter of accelerating growth. This growth was fueled by increased sales of proprietary diagnostic tests and an increase in outsourcing trends at life science and diagnostic companies. Operating income increased 27.3 percent to $53.1 million from $41.7 million in the third quarter last year, reflecting fixed- cost leverage, increased productivity and incremental synergies related to the Apogent merger. For the first nine months, sales of healthcare products and services increased 9.3 percent to $1,072.0 million compared with the first nine months of 2005. Excluding the effect of foreign exchange, sales totaled $1,072.9 million, a 9.4 percent increase compared with the first nine months of 2005. Year-to-date operating income increased 20.8 percent to $152.6 million from $126.3 million in the corresponding period last year. Company Outlook Consistent with the company's prior practice, Fisher is providing guidance for its 2006 financial results. For 2006, Fisher Scientific expects total sales growth, excluding the translation effect of foreign exchange, of approximately 10 percent, with organic growth in the core scientific research and healthcare markets of approximately 8 percent. Including the effect of safety-related products, the company expects organic growth to be approximately 6 percent. The company is raising its guidance for operating income margin to a range of 14.4 percent to 14.5 percent for the full year, compared with the previous guidance of 14.1 percent to 14.3 percent. The company is raising its full-year earnings guidance to $4.30 to $4.35 per share, reflecting continued strong operating results and a reduced long-term tax rate of approximately 24 percent for the full year. Diluted EPS excluding intangible asset amortization, net of tax, is expected to be in the range of $4.65 to $4.70. The company's guidance for operating income and earnings excludes discontinued operations, nonrecurring and special items, and the effect of equity-based compensation expense related to FAS 123R, which is expected to be approximately 28 cents per share. Fisher is maintaining its guidance for 2006 cash from operations in the range of $675 million to $700 million, and free cash flow in the range of $525 million to $550 million. In light of the pending merger with Thermo Electron, Fisher Scientific will not be hosting an earnings conference call. Fisher Scientific International Inc. (NYSE: FSH) -- http://www.fisherscientific.com/-- is a Fortune 500 company that provides products and services to the scientific community. Fisher facilitates discovery by supplying researchers and clinicians in labs around the world with the tools they need. The company serves pharmaceutical and biotech companies, colleges and universities, medical-research institutions, hospitals, reference, quality-control, process-control and R&D labs in various industries, and as well as government agencies. From biochemicals, cell-culture media and proprietary RNAi technology to rapid-diagnostic tests, safety products and other consumable supplies, the company provides more than 600,000 products and services. * * * As reported in the Troubled Company Reporter on Nov. 16, 2006, Standard & Poor's Ratings Services raised its ratings on the debt of Fisher Scientific International Inc. in light of the completion of its merger with Thermo Electron Corp. to create Thermo Fisher Scientific Inc. The rating on Fisher Scientific's senior unsecured debt was raised to 'BBB+' from 'BBB-' and the rating on the company's subordinated debt was raised to 'BBB' from 'BB+'. The 'BBB-' corporate credit rating on Fisher Scientific was withdrawn, as was the 'BBB' senior secured rating assigned to a bank facility that has been repaid. FOAMEX INTERNATIONAL: Lease Decision Period Extended to Feb. 17 --------------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware extends the period within which Foamex International Inc. and its debtor-affiliates may assume or reject all their unexpired non-residential real property leases through and including Feb. 17, 2007. As reported in the Troubled Company Reporter on Oct. 25, 2006, Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, maintained that the Debtors need additional time to complete their analysis on whether to assume or reject the Unexpired Leases. Ms. Morgan asserted that it would be premature for the Debtors to make a determination whether to assume or reject the remaining Unexpired Leases as of the current deadline given the current and ongoing development of a plan of reorganization. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FOAMEX INTERNATIONAL: Wants to Reject Chorman Employment Agreement ------------------------------------------------------------------ Foamex International Inc. and its debtor-affiliates seek the U.S. Bankruptcy Court for the District of Delaware's authority to reject their Amended and Restated Employment Agreement dated Jan. 27, 2004, with Mr. Chorman. Thomas E. Chorman has previously resigned as Foamex International Inc.'s president, chief executive officer and board member. Foamex's board of directors accepted Mr. Chorman's resignation on June 7, 2006. In accordance with the terms of the Court-approved key employee retention program and severance plan, the Debtors offered a severance agreement and release that, among others, would provide Mr. Chorman with the equivalent of one year's salary and payments. In exchange for the severance payments, Mr. Chorman would be bound to a one-year restriction on his ability to: (a) work in a foam industry; and (b) solicit Foamex's customers, suppliers, vendors, representatives, agents or employees. Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, tells the Court that as of Nov. 16, 2006, Mr. Chorman has not elected to sign the Severance Agreement. On Sept. 13, 2006, Mr. Chorman commenced an adversary proceeding seeking a declaratory, injunctive and monetary relief against Foamex International, and its officers Raymond E. Mabus and Gregory J. Christian. The Debtors assert that the allegations in the complaint are without merit. On Sept. 27, 2006, Mr. Chorman filed Claim No. 1328 for $2,486,897. Ms. Morgan asserts that the Debtors' business judgment supports rejection of the Employment Contract: (a) the Debtors no longer employ Mr. Chorman; (b) Mr. Chorman recently initiated a litigation against the Debtors and two of their officers regarding the circumstances surrounding his resignation, and has refused to sign the Severance Agreement; and (c) the Debtors believe that Claim No. 1328 was filed in anticipation of the rejection of the Employment Contract. The Debtors also ask the Court to direct Mr. Chorman to amend his Claim No. 1328 or to file any additional claims in their Chapter 11 cases, 30 days after the Court approves their request, with respect to any rejection damages related to the rejection of the Employment Contract. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FORD CREDIT: Fitch Rates $59-Million Class D Notes at BB+ --------------------------------------------------------- Fitch rates the Ford Credit Auto Owner Trust 2006-C asset backed notes: -- $664,000,000 class A-1 5.3574% 'F1+'; -- $205,000,000 class A-2a 5.29% 'AAA'; -- $856,441,000 class A-2b floating-rate 'AAA'; -- $509,551,000 class A-3 5.16% 'AAA'; -- $325,000,000 class A-4a 5.15% 'AAA'; -- $251,838,000 class A-4b floating-rate 'AAA'; -- $88,795,000 class B 5.3% 'A'; -- $59,196,000 class C 5.47% 'BBB+'; -- $59,196,000 class D 6.89% 'BB+'. The ratings on the notes are based upon their respective levels of subordination, the specified credit enhancement amount, and the yield supplement overcollateralization amount. All ratings reflect the transaction's sound legal structure, the high quality of the retail auto receivables originated by Ford Motor Credit Company, and the strength of Ford Credit as servicer. The weighted average APR in the 2006-C transaction is 4.401%. As with previous deals, the 2006-C transaction incorporates a YSOC feature to compensate for receivables with interest rates below 8.50%. The YSOC is subtracted from the pool balance to calculate bond balances and the first priority, second priority, and regular principal distribution amounts, resulting in the creation of 'synthetic' excess spread. These amounts enhance the receivables' yield and are available to cover losses and turbo the class of securities then entitled to receive principal payments. Initial enhancement for the class A notes as a percentage of the adjusted collateral balance is 5.5%. Initial enhancement for the class B notes is 2.5%. Initial enhancement for the class C notes is 0.50% provided by the reserve account. On the closing date, the aggregate principal balance of the notes will be 102% of the initial pool balance less the YSOC. The class D notes represent the undercollateralized 2%. During amortization, both excess spread and principal collections are available to reduce the bond balance. Hence, if excess spread is positive, the bonds will amortize more quickly than the collateral. It is this mechanism that ensures that the class D notes are collateralized and the specified credit enhancement level is achieved. Furthermore, the 2006-C transaction provides significant structural protection through a shifting payment priority mechanism. In each distribution period, a test will be performed to calculate the amount of desired collateralization for the notes versus the actual collateralization. If the actual level of collateralization is less than the desired level, then payments of interest to subordinate classes may be suspended and made available as principal to higher rated classes. Based on the loss statistics of Ford Credit's prior securitizations and Ford's U.S. retail portfolio performance, Fitch expects consistent performance from the pool of receivables in the 2006-C pool. For the nine months ending Sept. 30, 2006, average net portfolio outstanding totaled approximately $57.7 billion, total delinquencies were 2.10%, and net losses were 0.63% of the average net portfolio outstanding. GLEN DEVELOPMENT: Case Summary & Three Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Glen Development Group LLC c/o Darrell Powell 7015 48th Avenue South Seattle, WA 98118 Bankruptcy Case No.: 06-14178 Chapter 11 Petition Date: November 22, 2006 Court: Western District of Washington (Seattle) Debtor's Counsel: Michael M. Feinberg, Esq. Karr Tuttle Campbell 1201 3rd Avenue #2900 Seattle, WA 98101-3028 Tel: (206) 223-1313 Fax: 206-682-7100 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ WDC, Inc. Trade debt $39,350 1825 South Jackson, Suite 102 Seattle, WA 98144 Advanced Fire Protection Inc. Trade debt $8,021 P.O. Box 1543 Woodinville, WA 98072 Biami and Holmberg Inc. Trade debt $2,500 100 Front Street South Issaquah, WA 98027-3817 GLOBAL TEL*LINK: S&P Holds Existing Corporate Credit Rating at B ---------------------------------------------------------------- Standard & Poor's Rating Services revised its outlook on Mobile, Ala.-based Global Tel*Link Corp to positive from stable, and affirmed the existing 'B' corporate credit rating. The outlook revision acknowledges the progress made integrating the NPM acquisition over the past year, and recognizes the potential long term benefits from the pending acquisition of the former MCI corrections division, including increased scale. "The ratings on Global Tel*Link Corp. reflect its small cash flow base, narrow focus within a competitive and evolving marketplace, and limited liquidity," said Standard & Poor's credit analyst Stephanie Crane. These factors are partially offset by a largely recurring revenue base, supported by long-term customer contracts and a diverse customer base, and by expectations for improved operating margins. GTL is the second-largest independent provider of inmate telecommunications services in the U.S. After the acquisition of the MCI corrections division, which is expected to close in mid- 2007, it will be the largest in the industry. The company provides services to correctional facilities operated by city, county, state, and federal authorities in the U.S. and Canada. In addition to competing with other independent providers in this narrow, approximately $2 billion market, GTL competes with regional Bell operating companies, local exchange carriers, and inter-exchange carriers, many of which possess greater financial resources and broader brand recognition. Some of these carriers also are customers of GTL's nondirect, or partner, business. This is a higher-margin business in which GTL provides equipment to the larger telecommunications companies in addition to installing and supporting the product. GMAC MORTGAGE: Fitch Assigns Low-B Ratings on Eight Cert. Classes ----------------------------------------------------------------- Fitch Ratings has taken action on these GMAC mortgage-pass through certificates: * GMAC Mortgage, Series 2003-J2 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 upgraded to 'AA-' from 'A+'; -- Class M-3 affirmed at 'BBB+'; -- Class B-1 affirmed at 'BB+'; -- Class B-2 affirmed at 'B'. * GMAC Mortgage, Series 2003-J3 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 upgraded to 'A+' from 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. * GMAC Mortgage, Series 2003-J4 -- Class A affirmed at 'AAA'. * GMAC Mortgage, Series 2003-J5 -- Class A affirmed at 'AAA'. * GMAC Mortgage, Series 2003-J6 -- Class A affirmed at 'AAA'. * GMAC Mortgage, Series 2003-J7 -- Class A affirmed at 'AAA'. * GMAC Mortgage, Series 2003-J8 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. * GMAC Mortgage, Series 2003-J9 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class B-1 affirmed at 'BB'; -- Class B-2 affirmed at 'B'. * GMAC Mortgage, Series 2003-J10 -- Class A affirmed at 'AAA'; The affirmations reflect satisfactory credit enhancement relationships to future loss expectations and affect approximately $1.8 billion outstanding certificates. The upgrades reflect an improvement in the relationship of CE to future loss expectations and affect approximately $3.6 million of certificates. The percentage of loans over 90 days delinquent ranges from 0.0% to 0.44%. The cumulative loss as a percentage of the initial pool balance ranges from 0.0% to only 0.04%. The mortgage loans in the aforementioned transactions consist of both 30-year fixed-rate and 15-year fixed-rate mortgages extended to Prime borrowers and are secured by first liens on one- to four- family residential properties. As of the Oct. 2006 distribution date, the transactions are seasoned from a range of 34 to 43 months and the pool factors ranges from approximately 24% to 72%. The master servicer for all of aforementioned GMAC transactions is GMAC RFC which is rated 'RMS1'; Rating Watch Evolving by Fitch. Fitch will continue to monitor these deals. GREATER MERIDIAN: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Greater Meridian Health Clinic, Inc. 2701 Davis Street Meridian, MS 39301 Bankruptcy Case No.: 06-51313 Type of Business: The Debtor provides care to the medically- underserved population including uninsured underinsured and Medicaid/Medicare eligible. See http://www.gmhcinc.org/ Chapter 11 Petition Date: November 21, 2006 Court: Southern District of Mississippi (Gulfport) Judge: Neil P. Olack Debtor's Counsel: Craig M. Geno, Esq. Harris & Geno, PLLC 587 Highland Colony Parkway P.O. Box 3380 Ridgeland, MS 39157 Tel: (601) 427-0048 Fax: (601) 427-0050 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. HERCULES INC: Earns $34.2 Million in Quarter Ended September 30 --------------------------------------------------------------- Hercules Inc. reported a net income of $34.2 million for the quarterly period ended Sept. 30, 2006, compared to net income of $24 million for the third quarter of 2005. A net loss of $3.4 million was reported for the nine months ended Sept. 30, 2006 as compared to net income of $38.1 million for the same period in 2005. Net income from ongoing operations for the third quarter of 2006 was $40.9 million as compared to net income from ongoing operations of $24.6 million in the third quarter of 2005. Net income from ongoing operations for the nine months ended Sept. 30, 2006 was $102.5 million. Cash flow from operations for the nine months ended Sept. 30, 2006 was $107.0 million, an increase of $31.2 million as compared to the same period last year. Net sales in the third quarter of 2006 were $513.1 million, a decrease of 1% from the same period last year. Excluding the impact of the sale of our majority interest in FiberVisions, sales increased 14% from the same period of last year. Volume and pricing increased by 15% and 2%, respectively. Rates of exchange also increased sales by 2%, while product mix was 5% unfavorable during the quarter. Net sales for the nine months ended Sept. 30, 2006 were $1.541 billion, an increase of 10% as compared to the same period in 2005, excluding the impact of the FiberVisions transaction. "Our people continue to deliver excellent results with strong growth in sales, earnings and cash flow," commented Craig A. Rogerson, President and Chief Executive Officer. "We continue to drive results through innovation, geographic expansion, a disciplined approach to capital and investment deployment and a focus on cash generation." Excluding the impact of the FiberVisions transaction, net sales in the third quarter of 2006 increased in all regions of the world. Sales increased 21% in North America, 10% in Europe, 5% in Latin America and 6% in Asia Pacific as compared to the same period last year. Reported profit from operations in the third quarter of 2006 was $72.4 million, an increase of 45% compared with $50.0 million for the same period in 2005. Profit from ongoing operations in the third quarter of 2006 was $76.4 million, an increase of 25% compared with $61.0 million in the third quarter of 2005. Severance, restructuring and other exit costs were $4.1 million in the third quarter of 2006 as compared to $9.6 million in the same period last year. Interest and debt expense was $16.7 million in the third quarter of 2006, down $5.8 million, or 26%, compared with the third quarter of 2005, reflecting lower outstanding debt balances and improved debt mix, partially offset by increased variable short term rates. Interest expense for the nine months ended Sept. 30, 2006 was $54.1 million, a decrease of $13.4 million, or 20%, from the same period of last year. Net debt, total debt less cash and cash equivalents, was $882.7 million at Sept. 30, 2006, a decrease of $149.0 million from year- end 2005. Capital spending was $26.3 million in the third quarter and $49.2 million year to date. This compares to $19.8 million and $45.7 million in the third quarter and year to date periods last year, respectively. Cash outflows for severance, restructuring and other exit costs were $7.4 million in the quarter and $20.8 million year to date. Outlook "We remain confident in our growth strategy and optimistic about both earnings and cash flow growth for the balance of the year and as we look to 2007," said Mr. Rogerson. "Aqualon's volumes should continue to be strong across its markets and pricing should show steady improvement. Paper Technologies' volumes are expected to improve, driven by our new product pipeline, and continued pricing discipline should maintain gross margins." Hercules Inc. (NYSE:HPC) -- http://www.herc.com/-- manufactures and markets chemical specialties globally for making a variety of products for home, office and industrial markets. * * * As reported in the Troubled Company Reporter on Nov. 9, 2006, Moody's Investors Service confirmed Hercules Inc.'s Ba2 Corporate Family Rating, in connection with Moody's implementation of its Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Chemicals and Allied Products sectors. HINES HORTICULTURE: Hires KPMG as New Accountant in Lieu of PwC --------------------------------------------------------------- Hines Horticulture Inc.'s Audit Committee approved the appointment of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2006. The Company says that during the fiscal years ended Dec. 31, 2005, and 2004 and through Nov. 16, 2006, it has not consulted with KPMG LLP on any matters described in Regulation S-K Item 304(a)(2)(i) or (ii). On Nov. 16, 2006, the Company dismissed PricewaterhouseCoopers LLP as its independent registered public accounting firm. The Company's Audit Committee participated in and approved the decision to change the Company's independent registered public accounting firm. Hines Horticulture also said that the reports of PwC on the financial statements of the Company for the fiscal years ended Dec. 31, 2005, and 2004 contained no adverse opinion or disclaimer of opinion and that, during the fiscal years ended Dec. 31, 2005, and 2004 and through Nov. 16, 2006, there have been no disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. Headquartered in Irvine, California, Hines Horticulture Inc. (NASDAQ: HORT) -- http://www.hineshorticulture.com/-- operates commercial nurseries in North America, producing a broad assortment of container grown plants. Hines Horticulture sells nursery products primarily to the retail segment, which includes premium independent garden centers, as well as leading home centers and mass merchandisers, such as Home Depot, Lowe's and Wal-Mart. * * * Hines Horticulture Inc.'s 10-1/4% Bonds carry Moody's Investors Service's B3 rating and Standard & Poor's Ratings Services' CCC+ rating. HINES HORTICULTURE: Unit Sells Pipersville Facility to Costa ------------------------------------------------------------ Hines Horticulture Inc.'s subsidiary Hines Nurseries Inc. entered into an asset purchase agreement with Costa Penn Farms LLC and Costa Penn Land Holdings LLC. Hines Nurseries is selling to Costa certain real property, inventory, and other assets located at the nursery facility in Pipersville, Pa., for approximately $5.3 million. Approximately $1.1 million of the purchase price was deferred and is contingent upon Hines Nurseries or Costa obtaining certain entitlements for the construction of additional greenhouses on the Option Property. If the entitlements are not obtained within 12 months, the Company may receive none or only a portion of the Deferred Purchase Price. The purchased assets included Hines Nurseries' interest in an option to purchase certain real property leased by Hines Nurseries for its Pipersville, Pa., facility and Hines Nurseries' lease on the Option Property. The Company disclosed that it has ceased active operations in the Pipersville, Pa., area. Hines Horticulture also disclosed that it has no material relationship, other than the agreement, with Costa. A full text-copy of the Asset Purchase Agreement may be viewed at no charge at http://ResearchArchives.com/t/s?1596 Headquartered in Irvine, California, Hines Horticulture Inc. (NASDAQ: HORT) -- http://www.hineshorticulture.com/-- operates commercial nurseries in North America, producing a broad assortment of container grown plants. Hines Horticulture sells nursery products primarily to the retail segment, which includes premium independent garden centers, as well as leading home centers and mass merchandisers, such as Home Depot, Lowe's and Wal-Mart. * * * Hines Horticulture Inc.'s 10-1/4% Bonds carry Moody's Investors Service's B3 rating and Standard & Poor's Ratings Services' CCC+ rating. HOMETOWN COMMERCIAL: S&P Places Low-B Ratings on 6 Cert. Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Hometown Commercial Trust 2006-1's $149.192 million commercial mortgage pass-through certificates series 2006-1. The preliminary ratings are based on information as of Nov. 22, 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. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.11x, a beginning LTV of 105.5%, and an ending LTV of 96.1%. The pool includes six loans that consist of related loans that are cross-defaulted and cross-collateralized with each other. For the purposes of this report, crossed loans are considered to be one loan. Preliminary Ratings Assigned Hometown Commercial Trust 2006-1 Class Rating Preliminary Approximate amount credit support(%) ----- ------ ----------- ----------- A AAA $125,694,000 15.75 B AA $3,357,000 13.50 C AA- $1,679,000 12.38 D A $3,170,000 10.25 E BBB+ $4,289,000 7.38 F BBB $1,492,000 6.38 G BBB- $1,865,000 5.13 X AAA $141,546,000 N/A H BB+ $1,119,000 4.38 J BB $560,000 4.00 K BB- $746,000 3.50 L B+ $372,000 3.25 M B $560,000 2.88 N B- $559,000 2.50 O NR $3,730,752 0.00 N/A--Not applicable. NR--Not rated. HOME EQUITY: Poor Performance Cues S&P to Chip Ratings on Debt ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three classes from three series issued by Home Equity Mortgage Loan Asset-Backed Trust. Concurrently, the ratings on two of the downgraded classes remain on CreditWatch with negative implications. At the same time, the remaining classes from the three IndyMac ABS Inc. transactions are affirmed. The lowered ratings and continued CreditWatch placements reflect: -- Continued erosion of credit support due to adverse collateral performance; -- Monthly net losses that, on average, have outpaced excess interest cash flow; -- Complete depletion of overcollateralization for the SPMD 2000-A fixed-rate group and the SPMD 2000-B fixed-rate group, and a decline in o/c to at least 45% below its respective target for the SPMD 2000-C adjustable-rate group; and, -- Serious delinquencies of 18.89%, 30.48%, and 40.42%. Due to the high percentage of loans that are seriously delinquent, credit enhancement is insufficient to support the current ratings on the downgraded classes. In the case of the series SPMD 2000-B fixed-rate group, the complete erosion of o/c has resulted in a cumulative principal write-down of $352,184 to the class MF-2 certificates. For the SPMD 2000-A fixed-rate group and the SPMD 2000-C adjustable-rate group, loss projections indicate that the current performance trend may result in principal write-downs to the class MF-2 and MV-2 certificates, respectively, within 12 to 15 months. If the credit support continues to erode, further negative rating actions can be expected. Conversely, if pool performance improves and credit support is not further compromised, Standard & Poor's will affirm the ratings and remove them from CreditWatch negative. The affirmations reflect sufficient levels of credit support to maintain the current ratings, despite the high level of delinquencies. Cumulative realized losses, as a percentage of the original pool balances, totaled 4.55%, 6.43%, and 3.70%, for the SPMD 2000-A fixed-rate group, the SPMD 2000-B fixed-rate group, and the SPMD 2000-C adjustable-rate group, respectively. The collateral for these transactions consists of either fixed- or adjustable-rate home equity first- and second-lien loans secured primarily by one- to four-family residential properties. Ratings Lowered And Remaining On Creditwatch Negative Home Equity Mortgage Loan Asset-Backed Trust (IndyMac ABS Inc.) Rating ------ Series Class To From ------ ----- -- ---- SPMD 2000-A MF-2 BBB/Watch Neg A/Watch Neg SPMD 2000-C MV-2 BB/Watch Neg BBB-/Watch Neg Rating Lowered Home Equity Mortgage Loan Asset-Backed Trust (IndyMac ABS Inc.) Rating ------ Series Class To From ------ ----- -- ---- SPMD 2000-B MF-2 D CCC Ratings Affirmed Home Equity Mortgage Loan Asset-Backed Trust (IndyMac ABS Inc.) Series Class Rating ------ ----- ------ SPMD 2000-A AF-3, AV-1 AAA SPMD 2000-A MF-1, MV-1 AA+ SPMD 2000-A MV-2 A SPMD 2000-A BV BBB SPMD 2000-B AF-1, AV-1 AAA SPMD 2000-B MV-1 AA+ SPMD 2000-B MF-1 AA SPMD 2000-B MV-2 A SPMD 2000-B BV CCC SPMD 2000-C AF-5, AF-6, AV, MV-1 AAA SPMD 2000-C MF-1 AA HOME FRAGRANCE: Files Schedules of Assets and Liabilities --------------------------------------------------------- Home Fragrance Holdings Inc. delivered its schedules of assets and liabilities to the U.S. Bankruptcy Court for the Southern District of Texas in Houston, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $7,000,000 B. Personal Property $12,272,009 C. Property Claimed as Exempt D. Creditors Holding $11,988,486 Secured Claims E. Creditors Holding $155,927 Unsecured Priority Claims F. Creditors Holding $5,189,433 Unsecured Nonpriority Claims ------------- ------------ Total $19,272,009 $17,333,846 A full-text copy of the Debtor's 243-page list of its schedules is available for a fee at: http://www.researcharchives.com/bin/download?id=061122231536 Headquartered in Houston, Texas, Home Fragrance Holdings Inc. -- http://www.hfh.cc/-- designs, manufactures and sells candles. The Company filed for chapter 11 protection on Oct. 23, 2006 (Bankr. S.D. Tex. Case No. 06-35661). Thomas H. Grace, Esq. at Locke Liddell & Sapp LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $1 million and $100 million. HOME FRAGRANCE: Wants Locke Liddell as Bankruptcy Counsel -------------------------------------------------------- Home Fragrance Holdings Inc. asks the U.S. Bankruptcy Court for the Southern District of Texas for permission to employ Locke Liddell & Sapp LLP as its bankruptcy counsel. Locke Liddell will: a) advise the Debtor with respect to its powers and duties; b) advise the Debtor with respect to the rights and remedies of the estate's creditors and other parties-in-interest; c) conduct appropriate examinations of witnesses, claimants, and other parties-in-interest; d) prepare all appropriate pleadings and other legal instruments required to be filed in this bankruptcy case; e) represent the Debtor in all proceedings before the Court and in any other judicial or administrative proceeding in which the rights of the Debtor or estate may be affected; f) represent and advise the the Debtor in the liquidation of its assets through the Bankruptcy Court; g) advise the Debtor in connection with the formulation, solicitation, confirmation and consummation of any plan of reorganization, which the Debtor may propose; and h) perform any other legal services that may be appropriate in connection with the continued operations of the Debtor's businesses. The Debtor also wants Locke Liddell to undertake specific matters beyond the Firm's agreed scope of responsibilities without further Court order. Thomas H. Grace, Esq., a partner at the firm, will be the lead counsel in this engagement. He will bill at $540 per hour. He discloses the firm's other professionals' billing rate: Professionals Designation Hourly Rate ------------- --------------- ----------- Elizabeth C. Freeman, Esq. Associate $360 W. Steven Bryant, Esq. Associate $320 Ella Goettle Legal Assistant $160 Mr. Grace also disclosed that the Firm received a $100,000 retainer. As of the Debtor's bankruptcy filing date, the firm holds a retainer balance of $27,254.87 in its trust account. Mr. Grace assures the Court that his firm does not hold any interest adverse to the Debtor and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Grace can be reached at: Thomas H. Grace, Esq. Locke Liddell & Sapp LLP 100 Congress, Suite 300 Austin, TX 78701 Tel: (512) 305-4700 Fax: (512) 305-4800 http://www.lockeliddell.com/ Headquartered in Houston, Texas, Home Fragrance Holdings Inc. -- http://www.hfh.cc/-- designs, manufactures, and sells candles. The Company filed for chapter 11 protection on Oct. 23, 2006 (Bankr. S.D. Tex. Case No. 06-35661). Thomas H. Grace, Esq. at Locke Liddell & Sapp LLP, represents the Debtor in its restructuring efforts. In its schedules of assets and liabilities, the Debtor disclosed that it has $19,272,009 in total assets and $17,333,846 in total liabilities. IMPATH INC: Inks Litigation Settlement with Former Accountants -------------------------------------------------------------- IMPATH Bankruptcy Liquidating Trust and IMPATH Inc.'s former accountants have reached a settlement regarding pending litigation claims, which arose in connection with the issuance of fraudulent financial statements by the Debtors while the accountants were providing auditing and other services to the Debtors. Application for approval of the settlement was filed on Nov. 18, 2006, with the U.S. Bankruptcy Court for the Southern District of New York. Notice of the filing of the Application has been mailed to Class A Beneficial Interest holders of record. The Court has scheduled a hearing on approval of the Application on Dec. 12, 2006. The settlement will expire on Dec. 29, 2006 unless approved by the Court. If the Court approves the settlement and no appeal is taken, it is anticipated that the Liquidating Trust will make cash distribution of approximately $1 per unit of Class A Beneficial Interests to holders of such units on or about Jan. 10, 2007. The record date for determining holders of units for this distribution will be Dec. 29, 2006. Full-text copies of the Notice and Application for the Approval of Settlement of Litigation between the Debtors & former Accountants are available for free at http://ResearchArchives.com/t/s?15a0 Headquartered in New York, New York, Impath Inc., together with its subsidiaries, is in the business of improving outcomes for cancer patients by providing patient-specific diagnostic and prognostic services to pathologists and oncologists, providing products and services to biotechnology and pharmaceutical companies, and licensing software to hospitals, laboratories, and academic medical centers. The Company and its affiliates filed for chapter 11 protection on Sept. 28, 2003 (Bankr. S.D.N.Y. Case No. 03-16113). George A. Davis, Esq., at Weil, Gotshal & Manges, LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $192,883,742 in total assets and $127,335,423 in total debts. INDYMAC ABS: Poor Performance Cues S&P to Chip Ratings on Debt -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three classes from three series issued by Home Equity Mortgage Loan Asset-Backed Trust. Concurrently, the ratings on two of the downgraded classes remain on CreditWatch with negative implications. At the same time, the remaining classes from the three IndyMac ABS Inc. transactions are affirmed. The lowered ratings and continued CreditWatch placements reflect: -- Continued erosion of credit support due to adverse collateral performance; -- Monthly net losses that, on average, have outpaced excess interest cash flow; -- Complete depletion of overcollateralization for the SPMD 2000-A fixed-rate group and the SPMD 2000-B fixed-rate group, and a decline in o/c to at least 45% below its respective target for the SPMD 2000-C adjustable-rate group; and, -- Serious delinquencies of 18.89%, 30.48%, and 40.42%. Due to the high percentage of loans that are seriously delinquent, credit enhancement is insufficient to support the current ratings on the downgraded classes. In the case of the series SPMD 2000-B fixed-rate group, the complete erosion of o/c has resulted in a cumulative principal write-down of $352,184 to the class MF-2 certificates. For the SPMD 2000-A fixed-rate group and the SPMD 2000-C adjustable-rate group, loss projections indicate that the current performance trend may result in principal write-downs to the class MF-2 and MV-2 certificates, respectively, within 12 to 15 months. If the credit support continues to erode, further negative rating actions can be expected. Conversely, if pool performance improves and credit support is not further compromised, Standard & Poor's will affirm the ratings and remove them from CreditWatch negative. The affirmations reflect sufficient levels of credit support to maintain the current ratings, despite the high level of delinquencies. Cumulative realized losses, as a percentage of the original pool balances, totaled 4.55%, 6.43%, and 3.70%, for the SPMD 2000-A fixed-rate group, the SPMD 2000-B fixed-rate group, and the SPMD 2000-C adjustable-rate group, respectively. The collateral for these transactions consists of either fixed- or adjustable-rate home equity first- and second-lien loans secured primarily by one- to four-family residential properties. Ratings Lowered And Remaining On Creditwatch Negative Home Equity Mortgage Loan Asset-Backed Trust (IndyMac ABS Inc.) Rating ------ Series Class To From ------ ----- -- ---- SPMD 2000-A MF-2 BBB/Watch Neg A/Watch Neg SPMD 2000-C MV-2 BB/Watch Neg BBB-/Watch Neg Rating Lowered Home Equity Mortgage Loan Asset-Backed Trust (IndyMac ABS Inc.) Rating ------ Series Class To From ------ ----- -- ---- SPMD 2000-B MF-2 D CCC Ratings Affirmed Home Equity Mortgage Loan Asset-Backed Trust (IndyMac ABS Inc.) Series Class Rating ------ ----- ------ SPMD 2000-A AF-3, AV-1 AAA SPMD 2000-A MF-1, MV-1 AA+ SPMD 2000-A MV-2 A SPMD 2000-A BV BBB SPMD 2000-B AF-1, AV-1 AAA SPMD 2000-B MV-1 AA+ SPMD 2000-B MF-1 AA SPMD 2000-B MV-2 A SPMD 2000-B BV CCC SPMD 2000-C AF-5, AF-6, AV, MV-1 AAA SPMD 2000-C MF-1 AA INTERFACE INC: Financial Recovery Cues Moody's Rating Upgrades -------------------------------------------------------------- Moody's Investors Service upgraded the long-term ratings of Interface, Inc., which had been on positive outlook since April 17, 2006. The upgrade reflects the company's sustained improvement in operating margin and free cash flow generation; it also further acknowledges Interface's financial and operating recovery following a severe slowdown in the corporate interiors market in the period from 2001 through 2003. The upgrade also reflects the company's issuance of 5.75 million shares at $14.65 per share, resulting in net proceeds of approximately $79 million on Nov. 10, 2006 and the company's intention to use the proceeds to repay outstanding debt. These are the rating actions: -- Upgraded the original $150 million 7.3% guaranteed senior unsecured notes due 2008 to B1, LGD3, 48% from B2, LDG3, 49%; -- Upgraded the $175 million 10.375% guaranteed senior unsecured notes due 2010 to B1, LGD3, 48% from B2, LDG3, 49%; -- Upgraded the $135 million 9.5% guaranteed senior subordinated notes due 2014 to B3, LGD5, 88% from Caa1, LDG5, 89%; -- Upgraded the Corporate Family Rating to B1 from B2; -- Upgraded the Probability of Default Rating to B1 from B2. The outlook for the ratings is stable. Further improvements in diversification efforts, sustainable adjusted free cash flow to debt ratios of about 10%, EBIT to interest coverage comfortably above two times and continuing delevering below adjusted debt to EBITDA of 3x would provide a certain degree of financial flexibility to manage what remains a cyclical business and could lead to a positive outlook. Lack of progress with the company's segmentation strategy or indications of slowdown in core markets resulting in a decline in adjusted free cash flow to debt below 5%, EBIT to interest coverage below 1.5x could result in downward pressure on the ratings. Cash or debt-financed acquisitions or the assumption of additional indebtedness could result in a downgrade. Interface, Inc., based in Atlanta, Georgia, is a manufacturer of modular carpet under the Interface, InterfaceFLOR, Heuga, Bentley and Prince Street brands, and, through its Bentley Mills and Prince Street brands, enjoys a leading position in the high quality, designer-oriented segment of the broadloom carpet market. The company is a also a producer of interior fabrics and upholstery products, which it markets under the Guilford of Maine and Chatham brands, and provides specialized fabric services through its TekSolutions business. Revenues for the twelve months ended October 1, 2006 were about $1.0 billion. INTERNATIONAL PAPER: 2006 Third Qtr. Net Income Soars to $201 Mil. ------------------------------------------------------------------ International Paper Company earned $201 million of net income on $5.8 billion of net revenues for the three months ended Sept. 30, 2006, compared to $1 billion of net income on $5.9 billion of net revenues for the same period in 2005. At Sept. 30, 2006, the Company's balance sheet showed $24.6 billion in total assets and $18.8 billion in total liabilities. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?1597 On Oct. 25, 2006, the Company amended its existing receivables securitization program that provided up to $1.2 billion of commercial paper-based financings with a facility fee of 0.20% and an expiration date in November 2007, to provide up to $1 billion of available commercial paper-based financings with a facility fee of 0.10% and an expiration date in October 2009. Acquisition On Oct. 30, 2006, the Company completed its previously announced sale of approximately 900,000 acres of forestlands in Louisiana, Texas and Arkansas to an investor group led by TimberStar, a subsidiary of iStar Financial Inc. The purchase price for this transaction was approximately $1.13 billion, approximately $330 million was paid in cash and $800 million in promissory notes. In addition, the Company, on Nov. 3, 2006, completed its previously announced sale of approximately 4.2 million acres of forestlands located across the southern U.S. and Michigan to an investor group led by Resource Management Service, LLC. The purchase price is approximately $4.96 billion, approximately $1.04 billion was paid in cash and $3.92 billion in promissory notes. About International Paper Based in Stamford, Connecticut, International Paper Company (NYSE: IP) -- http://www.internationalpaper.com/-- is in the forest products industry for more than 100 years. The company is currently transforming its operations to focus on its global uncoated papers and packaging businesses, which operate and serve customers in the U.S., Europe, South America and Asia. These businesses are complemented by an extensive North American merchant distribution system. International Paper is committed to environmental, economic and social sustainability, and has a long- standing policy of using no wood from endangered forests. * * * Moody's Investors Service assigned a Ba1 senior subordinate rating and Ba2 Preferred Stock rating on International Paper Company on Dec. 5, 2005. INTERPUBLIC GROUP: Reports $5.8 Mil. Net Income in Third Quarter ---------------------------------------------------------------- For the three months ended Sept. 30, 2006, Interpublic Group of Companies Inc. recorded $5.8 million of net income on $1.4 billion of net revenues, in contrast to a $102.8 million net loss on $1.4 billion of net revenues for the same period in 2005. At Sept. 30, 2006, the Company's balance sheet showed $1.9 billion in total assets and $1.1 billion in total liabilities. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?1599 At a regularly scheduled meeting on Oct. 26, 2006, the Board of Directors of the company elected William T. Kerr as a non- management director. Mr. Kerr was also appointed to serve as a member of the Audit Committee and the Compensation Committee. Material Weakness The company has identified numerous material weaknesses in its internal control over financial reporting, Management's Assessment on Internal Control Over Financial Reporting, and Item 9A., Controls and Procedures, of its 2005 Annual Report on Form 10-K. As a result, the company has determined that its internal control over financial reporting was not effective as of Dec. 31, 2005. The Company is in the process of implementing remedial measures to address the material weaknesses in its internal control over financial reporting. However, because of its decentralized structure and its many disparate accounting systems of varying quality and sophistication, the company has extensive work remaining to remedy these material weaknesses. The Company has developed a comprehensive plan to remedy its material weaknesses, which was presented to the Audit Committee in July of 2006 and is in the process of being implemented. The plan provides for remediation of all the identified material weaknesses by Dec. 31, 2007. Until its remediation is completed, the company will continue to incur the expenses and management burdens associated with the manual procedures and additional resources required to prepare its Consolidated Financial Statements. About Interpublic Group Interpublic Group of Companies Inc. (NYSE:IPG) -- http://www.interpublic.com/-- is one of the world's leading organizations of advertising agencies and marketing services companies. Major global brands include Draft FCB Group, FutureBrand, GolinHarris International, Initiative, Jack Morton Worldwide, Lowe Worldwide, MAGNA Global, McCann Erickson, Momentum, MRM, Octagon, Universal McCann and Weber Shandwick. Leading domestic brands include Campbell-Ewald, Carmichael Lynch, Deutsch, Hill Holliday, Mullen, The Martin Agency and R/GA. * * * As reported in the Troubled Company Reporter on Nov. 17, 2006, Moody's Investors Service assigned a Ba3 senior unsecured debt rating to Interpublic Group Of Companies, Inc.'s (Ba3 Corporate Family Rating) new 4.25% convertible senior notes due 2023. The Ba3 rating reflects a loss given default of about 66% given the company's all-bond debt capital structure. As reported in the Troubled Company Reporter on Nov. 16, 2006, Fitch Ratings has assigned a rating of 'B/RR4' to Interpublic Group's $400 million 4.25% convertible senior unsecured notes due March 15, 2023. The new notes rank pari passu with other senior unsecured indebtedness of the company. The Outlook remains Negative. INTERPUBLIC GROUP: S&P Rates Proposed Floating Rate Notes at B -------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'B' rating to floating-rate notes due 2010 proposed by Interpublic Group of Cos. Inc., to be issued in exchange for the same principal amount of its old floating-rate notes due 2008. At the same time, Standard & Poor's placed the rating on these notes on CreditWatch with negative implications. The new notes differ from the old notes principally in the lower interest rate and an extension of the maturity date. The ratings on the outstanding debt of Interpublic remain on CreditWatch with negative implications, where they were placed on March 22, 2006, as a result of declines in Interpublic's core business and the rating agency's reduced confidence in the company's prospects for cash flow generation. "We expect to evaluate Interpublic's operating outlook and business strategies within the next several weeks in order to complete our CreditWatch review," said Standard & Poor's credit analyst Deborah Kinzer. "Rating downside is currently limited to one notch," Kinzer added. Ratings List: * Ratings Remaining On CreditWatch * Interpublic Group of Cos. Inc. -- Corporate Credit Rating at B/Watch Neg/B-3 -- Short-Term Credit Rating at B-3/Watch Neg -- Senior Unsecured Debt at B/Watch Neg New Rating: * CreditWatch/Outlook Action * Interpublic Group of Cos. Inc. -- $250 Million Floating-Rate Notes at B/Watch Neg INTERSTATE BAKERIES: Court Alters Performance Bonus Payment Dates ----------------------------------------------------------------- The Honorable Jerry Venters of the U.S. Bankruptcy Court for the Western District of Missouri modifies the payment dates of the 2005 Restructuring Performance Bonuses. Judge Venters authorizes Interstate Bakeries Corporation and its debtor-affiliates to pay the first half of the Performance Bonuses on Dec. 15, 2006, and the rest will be paid off on April 30, 2007. As reported in the Troubled Company Reporter on Nov. 8, 2006, the Debtors' Key Employee Retention Plan provides for restructuring performance bonuses in lieu of the Debtors' 2005 annual incentive bonus plan. The Restructuring Performance Bonuses were based on the Debtors achieving a target EBITDAR of $50,000,000 for fiscal year 2005. The first 50% of a Restructuring Performance Bonus is payable on the date that was the earlier of (i) the date on which the Debtors' fiscal 2005 financial statements are complete, or (ii) Aug. 15, 2005. The remaining 50% of a Restructuring Performance Bonus is payable on the date that is the later of (i) 30 days after the Effective Date, or (ii) the Statements Completion Date. As of Oct. 19, 2006, the Debtors have paid approximately $3,000,000 in Restructuring Performance Bonuses. The KERP further provided that: (i) no Restructuring Performance Bonuses would be payable if the Actual EBITDAR is less than 80% of the target EBITDAR; and (ii) the aggregate amount of the Restructuring Performance Bonuses was capped at approximately $6,200,000, payable only if the actual EBITDAR was 125% of the target EBITDAR. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Court Okays Central States Pension Fund Pact ----------------------------------------------------------------- The Honorable Jerry Venters of the U.S. Bankruptcy Court for the Western District of Missouri authorizes Interstate Bakeries Corporation and its debtor-affiliates to enter into a Settlement Agreement with the Central States Southeast and Southwest Areas Health and Welfare Fund, and the Central States Southeast and Southwest Areas Pension Fund. Judge Venters also authorizes the Debtors to pay $1,076,872 to Central States in full satisfaction of the Central States Claims. Upon payment of the Claim Payment, the 2004 Partial Withdrawal Liability Claim and 2001 Partial Withdrawal Liability Claim will be deemed withdrawn with prejudice. The Routine Audit Claims, the Kentucky Retro Invoice Claim and the Local 215 Retro Invoice Claim will be deemed disallowed. If language of the Settlement Agreement is included in a plan of reorganization that may be confirmed in the Debtors' Chapter 11 cases, the Central States Pension Fund will have no right to receive any distribution on account of the Complete Withdrawal Claim and will not be permitted to vote on or object to a plan of reorganization on account of the contingent claim. If language in Settlement Agreement is not included in the Plan, the terms of the Settlement Agreement will govern the treatment of the Complete Withdrawal Claim. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) JACK IN THE BOX: High Leverage Cues S&P to Cut Rating to BB- ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on San Diego, Calif.-based Jack in the Box Inc., including the corporate credit rating to 'BB-' from 'BB'. "The downgrade reflects leverage that remains high for the rating category, estimated at 4.4x as of Oct. 1, 2006, and expected to increase further, to about 5x, if its Dutch tender offer for stock is fully successful," said Standard & Poor's credit analyst Jackie Oberoi. The company's financial policy has become increasingly aggressive as evidenced by the company's Nov. 21, 2006, disclosure of a $335 million Dutch tender share repurchase that is expected to be partially funded with additional debt. The outlook is negative. The ratings on Jack in the Box Inc. reflect the company's participation in the intensely competitive quick-service segment of the restaurant industry, and its leveraged capital structure. These weaknesses are partially offset by the company's good regional presence and generally good operating performance. Jack in the Box's same-store sales have been positive for the past 13 quarters, including a 5.9% increase in the quarter ended Oct. 1, 2006. Jack in the Box is implementing initiatives aimed at improving the quality of its food and customer service, its facilities, and increasing the number of premium items offered. Initial results from these strategies have been good. However, the company's progress could be uneven because of the intensely competitive nature of the mature quick-service sector of the restaurant industry. Despite good sales growth, Jack in the Box's operating margin fell to about 15% in fiscal 2006, from about 16% a year ago. "We expect that the company's margin will remain under pressure in fiscal 2007 due to higher utility costs and intense competition, but in the intermediate term, financial measures should improve if the company's food and service initiatives are successful," said Ms. Oberoi. KIMBALL HILL: Moody's Holds Low-B Ratings on Senior Notes --------------------------------------------------------- Moody's Investors Service affirmed all of the ratings of Kimball Hill, Inc., including the B1 corporate family rating and the B3 rating on its senior subordinated notes. The ratings outlook is changed to stable from positive. The change in outlook reflects in large part two considerations: (1) Moody's concern that Kimball Hill's remaining in compliance with financial covenants, particularly the interest coverage covenant, will be a challenge in fiscal 2007; and, (2) that a difficult overall market for housing would tend to rule out any upgrades in the near-to-intermediate term. The now stable ratings outlook reflects Moody's expectations that Kimball Hill will comply with its financial covenants with some room to spare, will maintain debt leverage at or below 55%, and will be cash flow positive in fiscal 2007. The ratings recognize Kimball Hill's relatively smaller size and scale than the typical homebuilder in the Ba category, proportion of spec building, and the cyclical nature of the homebuilding industry. At the same time, the ratings acknowledge the significant strides that the company has made in reducing debt leverage and its acceptable to strong scores on certain of the key metrics in the Moody's homebuilding methodology. These ratings were affirmed: -- B1 corporate family rating -- B1 probability of default rating -- B3 rating on $203 million of senior subordinated notes due Dec. 2012 -- Loss-Given Default assessment of LGD5, 90% Going forward, the ratings and outlook would benefit from a continued buildup in the company's tangible equity base to well above $500 million, a permanent decrease in the company's adjusted debt leverage metric to between 50% - 55%, and coming through the downturn with positive earnings and headroom in its financial covenants. The ratings and outlook could be stressed by a releveraging of the balance sheet either through substantial additional borrowings or from one or more major impairment charges, generating negative cash flow in fiscal 2007, or by having difficulty in complying with its financial covenants. Founded in Chicago in 1969, Kimball Hill, Inc. is one of the private homebuilders in the U.S. Revenues and net income for the fiscal year ended Sept. 30, 2005 were approximately $1.15 billion and $87 million, respectively. LAMAR MEDIA: Launches $400-Mil. Sr. Notes' Solicitation Consent --------------------------------------------------------------- Lamar Media Corp. commenced solicitation of consents from holders of record as of Nov. 17, 2006 of its outstanding $400 million 6-5/8% Senior Subordinated Notes due 2015 for an amendment to the indenture governing the Notes. The Company's 6-5/8% Senior Subordinated Notes due 2015-Series B issued in August 2006 are a separate class of securities from the Notes and are not subject to this consent solicitation. The purpose of the proposed amendment is to allow foreign Restricted Subsidiaries of the Company that are not guarantors of the Notes to incur or guarantee certain types of indebtedness under the general leverage ratio based incurrence test and under the Company's senior credit facility in an aggregate amount at any one time outstanding not to exceed $50 million without becoming guarantors of the Notes. The proposed amendment to the Indenture requires the consent of both the holders of at least a majority in aggregate principal amount of all the Notes outstanding and the consent of the lenders representing a majority of the loans, letters of credit and commitments outstanding under the Company's senior credit facility. The consent solicitation will expire at 5:00 p.m., New York City time, on December 8, 2006 unless extended by the Company. Subject to (i) obtaining the Requisite Consents and the Senior Lenders Consents, and (ii) execution of a supplemental indenture by the Company, the guarantors of the Notes and the trustee for the Notes reflecting the proposed amendment, the Company will pay to each holder from whom the Company receives a valid and timely consent that is not revoked a consent fee equal to $1.25 per $1,000 in principal amount of Notes owned by such consenting holder as of the Record Date for which consents are given and not revoked. Headquartered in Baton Rouge, Louisiana Lamar Media Corp. -- http://www.lamar.com/-- is one of the largest owners and operators of outdoor advertising structures in the United States. On Oct. 4, 2006, Moody's held its ratings on Lamar Media Corporation's 7-1/4% Senior Subordinated Notes at Ba3: LEE'S TRUCKING: Plan Confirmation Hearing Set for February 21 ------------------------------------------------------------- Judge James G. Mixon of the U.S. Bankruptcy Court for the Western District of Arkansas will convene a hearing at 10:00 a.m., on Feb. 21, 2007, to consider confirmation of Lee's Trucking, Inc.'s Amended Chapter 11 Plan of Reorganization. The hearing will be held at the U.S. Post Office and Courthouse, 101 S. Jackson Ave. in El Dorado, Arkansas. As reported in the Troubled Company Reporter on Aug. 16, 2006, Judge Mixon approved the Disclosure Statement explaining the Debtor's original reorganization plan after First Capital Corporation withdrew its objection. First Capital's withdrawal was conditioned on a modification of the Debtor's plan. Consequently, Judge Mixon asked the Debtor to file an amended plan and notice the documents for vote by its creditors. In summary, the amended plan proposes to pay 100% of the money owed to creditors. To obtain funds necessary to make the payments under its plan, the Debtor will continue to engage in its business of transporting goods and continue to utilize the services of First Capital. First Capital advances monies for the Debtor's receivables. Jimmy D. Lee will remain as president of the Reorganized Debtor and sole owner of its stock after confirmation of the Plan. Treatment of Claims First Capital will be paid in full consistent with its contract with the Debtor. No terms of the contract shall be modified. All liens held by First Capital will continue to the extent that First Capital continues advancing money on receivables. First National Bank of Crossett, BancorpSouth, Bank of the West, Center Capital, CitiCapital, Financial Federal, PACCAR and Wells Fargo will be paid pursuant to the terms of their contract with the Debtor as it existed prior to the Debtor's bankruptcy filing, with three exceptions: 1) during a course of a year, because of changes and expenses in operating its business, increased fuel prices or decrease in customer base, the Debtor may find the need to forego two monthly payments on an annual basis to these creditors. In the event that in a preceding six-month period fuel prices should increase 20% or the Debtor's customer base should reduce 5%, then the Debtor can opt to forego making monthly payments to these creditors for two months during the next six-month period. 2) unless the contract with the secured creditor is already longer than five years from the effective date of the plan, the contract will be extended to a five-year pay out from the effective date of the plan. Payments will be made on a monthly basis. If the current contract has a pay out longer than five years from the effective date of the plan, the contract with these creditors as to the length of the pay out will not be reduced. 3) the interest charged on this contract will be reduced to 6% per annum. If, however, the contract has an interest rate of less than 6% per annum, the rate will not be changed. All liens currently held by Crossett against the Debtor will remain in full force and effect until its claim is fully paid. The Unsecured Priority claim of the Internal Revenue Service, the States of Arkansas and Mississippi will be paid in monthly installments. The obligation will bear interest at 6% per annum. No penalty will be assessed against the prepetition debt as of May 13, 2005. The Debtor will pay $35,352 per month to the IRS, beginning on the effective date of the plan, on account of its secured claim. The Debt will bear interest at 6% annum. No penalty shall be assessed against the debt after May 13, 2005. The claim of the Internal Revenue Service, State of Arkansas and State of Mississippi shall retain its character as a tax debt even after confirmation of the plan. However, if the Reorganized Debtor should default on plan payments to the IRS or on future tax debt, then the remaining balance of the tax debt owed under the plan will become due and payable immediately and the Internal Revenue Service or the State of Arkansas or Mississippi may collect these unpaid tax liabilities through the normal collection process of the Internal Revenue Code or the Arkansas Tax Laws or the tax laws of Mississippi. All unsecured creditors will recover the full amount of their claims. Payment will be made in monthly installments on a pro-rata basis. The total amount the debtor will pay on a monthly basis to unsecured creditors will be $2,637.00. The payments shall begin two years after the effective date of the plan. The debt will not carry interest. The Debtor will pay G.E. Capital pursuant to the terms of the promissory notes and security agreements that existed between On Time Freight and General Electric Capital Corporation. All liens currently held by G.E. will remain in full force and effect until its claim is paid in full. Headquartered in El Dorado, Arkansas, Lee's Trucking, Inc. -- http://www.leestrucking.com/-- transports bulk chemicals, non- hazardous materials, hazardous materials, and hazardous waste. The Company filed for chapter 11 protection on May 13, 2005 (Bankr. W.D. Ark. Case No. 05-73565). Robert L. Depper, Jr., Esq., at Depper Law Firm represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. LEINER HEALTH: Sales Cue Moody's to Revise Outlook to Stable ------------------------------------------------------------ Moody's Investors Service revised the rating outlook of Leiner Health Products, Inc. to stable from negative. Moody's also affirmed all ratings at existing levels, including the bank loan at Ba3, the senior subordinated notes at Caa1, and the Speculative Grade Liquidity rating at SGL-3. The outlook revision is prompted by the substantial recovery in sales and operating margins since the end of the March 2006 fiscal year, and the associated improvement in cash flow, credit metrics, and liquidity. These rating actions are affirmed: -- $50.0 million secured revolving credit facility at Ba3, LGD3, 30%; -- $235.8 million secured term loan at Ba3, LGD3, 30%; -- $150.0 million 11% senior subordinated notes (2012) at Caa1, LGD5, 83%; -- Speculative Grade Liquidity Ratings at SGL-3; -- Corporate family rating at B2; -- Probability-of-default rating at B2. The corporate family rating assignment of B2 and the stable outlook reflect the balance of important quantitative and qualitative attributes, most of which are solidly noninvestment grade. In particular, holding down the rating with B attributes are key credit metrics such as relatively high leverage, relatively low coverage of cash interest, and small free cash flow to debt. Also constraining the rating with a B characteristic is the relative weakness of Leiner relative to its retail customers given that 86% of sales go to the company's top 10 customers. However, supporting the assigned ratings are the much improved operating performance, the wide geography of the company's distribution network across the U.S. and Canada, and the solid market position as an important manufacturer of certain VMS and OTC products. The Speculative Grade Liquidity Rating of SGL-3 reflects Moody's opinion that operating cash flow will modestly cover capital and working capital investment, as well as mandatory debt service, if operating results remain at current levels. Over the next four quarters, Moody's does not expect permanent incremental revolving credit facility borrowings and believes that the company will remain in compliance with the maximum leverage and minimum interest coverage bank loan covenants. The stable outlook reflects that credit metrics and operating performance have progressed to levels that solidly position the company at the B2 corporate family rating. For an eventual upgrade, Moody's will monitor the company's ability to maintain the higher sales level and improved margins. Leverage must sustainably fall below 5 times, interest coverage improve towards 2x, and free cash flow to debt approach 7%. Inability to maintain improving sales and operating profitability trends or weak debt protection measures such as debt to EBITDA above 6 times, EBIT to interest expense near 1 time, or low free cash flow to debt could pressure the ratings. Leiner Health Products, Inc, with headquarters in Carson, California, manufactures private-label vitamins, minerals, and nutritional supplements and over-the-counter pharmaceuticals. It also provides contract manufacturing services. Revenue for the twelve months ending Sept. 2006 was $717 million. LEVEL HOLDING: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Level Holding Company, LLC 1561 Francisco Street San Francisco, CA 94123 Bankruptcy Case No.: 06-03644 Chapter 11 Petition Date: November 22, 2006 Court: Southern District of California (San Diego) Judge: John J. Hargrove Debtor's Counsel: K. Todd Curry, Esq. Nugent, Weinman, et al., APC 1010 Second Avenue, Suite 2200 San Diego, CA 92101 Tel: (619) 236-1323 Fax: (619) 238-0465 Total Assets: $2,046,703 Total Debts: $1,218,936 The Debtor's petition discloses that all its debts are secured. M. FABRIKANT & SONS: Taps Donlin Recano as Claims & Notice Agent ---------------------------------------------------------------- M. Fabrikant & Sons, Inc., and its debtor-affiliates, Fabrikant- Leer International, Ltd., ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Donlin, Recano & Company, Inc., as their claims, noticing and balloting agent. Donlin Recano will: (a) notify all potential creditors of the filing of the Debtors' bankruptcy petitions and of the setting of the first meeting of creditors, pursuant to Section 341 of the Bankruptcy Code, under the proper provisions of the Bankruptcy Code and the Bankruptcy Rules; (b) maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs listing the Debtors' known creditors and the amounts owed; (c) notify all potential creditors of the existence and amount of their respective claims, as evidenced by the Debtors' books and records and as set forth in their Schedules; (d) furnish a notice of the last day for the filing of proofs of claim and a form for the filing of a proof of claim, after such notice and form are approved by the Court; (e) file with the Clerk an affidavit or certificate of service which includes a copy of the notice, a list of persons to whom it was mailed, in alphabetical order, and the date the notice was mailed, within 10 days of service; (f) docket all claims received, maintain the official claims registers for each of the Debtors on behalf of the Clerk, and provide the Clerk with certified duplicate unofficial Claims Registers on a monthly basis, unless otherwise directed; (g) specify, in the applicable Claims Register, these information for each claim docketed: (i) the claim number assigned, (ii) the date received, (iii) the name and address of the claimant and agent, if applicable, who filed the claim, (iv) the filed amount of the claim, if liquidated, and (v) the classification or classifications of the claim, e.g. secured, unsecured, priority, etc., according to the proof of claim; (h) relocate, by messenger, all of the actual proofs of claim filed to Donlin Recano, not less than weekly; (i) record all transfers of claims and provide any notices of such transfers required by Bankruptcy Rule 3001; (j) make changes in the Claims Register pursuant to Court Order; (k) upon completion of the docketing process for all claims received to date by the Clerk's office, turn over to the Clerk copies of the Claims Registers for the Clerk's review; (l) maintain the Claims Register for public examination without charge during regular business hours; (m) maintain the official mailing list for each Debtor of all entities that have filed a proof of claim, which list shall be available upon request by a party-in-interest or the Clerk; (n) assist with, among other things, solicitation, calculation, and tabulation of votes and distribution, as required in furtherance of confirmation of a Plan: (o) provide and maintain a website where parties can view claims filed, status of claims, and pleadings or other documents filed with the Court by the Debtors; (p) 30 days prior to the close of these cases, an order dismissing Donlin Recano would be submitted terminating its services upon completion of its duties and responsibilities and upon the closing of these cases; and (q) at the close of the case, box and transport all original documents in proper format, as provided by the Clerk's oft-ice, to the Federal Records Center. Louis A. Recano, principal at Donlin Recano, tells the Court that the firm will waive any amount due and owing for services performed or expenses incurred prior to the Debtors' bankruptcy filing. Mr. Recano discloses that the firm received a $10,000 retainer from the Debtors. The firm's professionals bill: Claims Administration Services Hourly Rate ------------------------------ ----------- Case Administrators $65 Data Input $35 Consulting Services ------------------- Principals/Senior Consultants/Attorneys $185 Bankruptcy Consultants/Attorneys $170 - $200 Bankruptcy Analysts $130 - $155 Programming Consultants $135 Mr. Recano 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 New York City, M. Fabrikant & Sons, Inc. -- http://www.fabrikant.com/-- sells diamonds and jewelries. The Company and its affiliates, Fabrikant-Leer International, Ltd., filed for chapter 11 protection on Nov. 17, 2006 (Bankr. S.D.N.Y. Case Nos. 06-12737 & 06-12739). Mitchel H. Perkiel, Esq., at Troutman Sanders LLP, represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Mar. 17, 2007. M. FABRIKANT & SONS: Wants Until January 16 to File Schedules ------------------------------------------------------------- M. Fabrikant & Sons, Inc., and its debtor-affiliates, Fabrikant- Leer International, Ltd., ask the U.S. Bankruptcy Court for the Southern District of New York to extend by an additional 45 days, or until Jan. 16, 2007, the time within which they may file their schedules of assets and liabilities and statement of financial affairs. The Debtors tell the Court that due to the size, complexity and geographic reach of their operations, they will be unable to file the necessary documents within the 15 day period alloted in the Bankruptcy Code. The Debtors contend that they need additional time in order to collect, review and assemble the information needed in the schedules and statement. The additional time will also help them ensure that the documents are as accurate as possible. Headquartered in New York City, M. Fabrikant & Sons, Inc. -- http://www.fabrikant.com/-- sells diamonds and jewelries. The Company and its affiliates, Fabrikant-Leer International, Ltd., filed for chapter 11 protection on Nov. 17, 2006 (Bankr. S.D.N.Y. Case Nos. 06-12737 & 06-12739). Mitchel H. Perkiel, Esq., at Troutman Sanders LLP, represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Mar. 17, 2007. MASTR TRUST: Fitch Assigns Low-B Ratings on Four Cert. Classes -------------------------------------------------------------- Fitch has taken these rating actions on the MASTR Second Lien Trust 2005-1 mortgage pass-through certificates: -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+'; -- Class M-5 affirmed at 'BBB'; -- Class M-6 affirmed at 'BBB-'; -- Class M-7 affirmed at 'BB+'; -- Class M-8 downgraded to 'B+' from 'BB'; -- Class M-9 downgraded to 'B' from 'BB'; -- Class M-10 downgraded to 'C' from 'B' and assigned 'DR5'. The affirmations affect approximately $135.3 million of the outstanding certificates. The downgrades affect approximately $9.6 million of the outstanding certificates. Fitch previously took negative rating action on the above transaction in July 2006 by downgrading class M-10 and placing classes M-8 and M-9 on Rating Watch Negative. The above transaction was structured to have growing overcollateralization after a three-month OC holiday. The OC has not reached its targeted level of $8.4 million as of the Oct. 2006 distribution date. In addition, monthly losses have exceeded excess spread in four of the last five months causing the OC to deteriorate from $1 million to $145,235. The decline in OC is a result of deterioration in the dollar amount of excess spread due to much faster-than-expected prepayments and rising interest rates. The lifetime conditional prepayment rate of the mortgage pool is 38.2%. Based on the performance to date, Fitch expects the OC to be completely depleted within the next few months. The deteriorating OC increases the credit risk of the subordinate bonds, which is indicated by the downgrade of classes M-8 through M-10. The collateral of the above transaction consists of fixed-rate loans secured by second liens on residential properties. The loans were originated by various originators and are serviced by Irwin Home Equity Corp. The transaction is master serviced by Wells Fargo Bank, N.A. The cumulative loss is $7.3 million or 3% of the original collateral balance. The above transaction is seasoned 13 months and has a pool factor of 59%. Fitch will continue to closely monitor the above transaction. MERRILL LYNCH: Fitch Holds Low-B Ratings $18.9MM of Certificates ---------------------------------------------------------------- Fitch Ratings affirms these certificates of Merrill Lynch Mortgage Investors, Inc.'s series 1997-C2: -- $57 million class A-2 at 'AAA'; -- Interest-only class IO at 'AAA'; -- $27.5 million class B at 'AAA'; -- $41.2 million class C at 'AAA'; -- $34.3 million class D at 'AAA'; -- $37.7 million class F at 'BBB+'; -- $6.9 million class G at 'BB+'; -- $12 million class H at 'B-'. The $1.8 million class J remains at 'C/DR5'. Class A-1 has paid in full. The affirmations reflect increased paydown and amortization, offsetting the increasing concentrations and the adverse selection in the pool since Fitch's last rating action. As of the Nov. 2006 distribution date, the pool's aggregate principal balance has been reduced 66.4% to $230.3 million from $686.3 million at issuance. Currently, three asset are in special servicing, with losses expected on one asset. The largest specially serviced loan is secured by a 51,791 square foot retail property in Albuquerque, New Mexico and is current. The loan transferred to the special servicer in Feb. 2003 due to monetary default. The borrower continues to perform under the forbearance agreement executed in Feb. 2006. The second largest specially serviced loan is a 58,705sf retail property in Hickory, North Carolina and is current. The loan transferred to the special servicer in June 2004 due to monetary default. The special servicer is negotiating a forbearance agreement with the borrower. The third largest specially serviced asset is a 142-unit multifamily property in Dumas, Texas and is real estate owned. The asset was auctioned by the Trust in October 2006, and the sale is scheduled to close in late fourth-quarter 2006. Fitch projected losses on this specially serviced asset are expected to be absorbed by class J. Fitch is monitoring the performance of the second largest loan in the pool, a multifamily property located in Fort Worth,Texas. Although the property has underperformed in the past, the market has seen signs of improvement and the property is leased to 97% as of Oct. 2006. MERRILL LYNCH: Fitch Holds Rating on Class B-2 Issue at BB ---------------------------------------------------------- Fitch has taken rating actions on these Merrill Lynch Bank issue: MLB USA Series 2001-A: -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+' -- Class M-2 affirmed at 'AA-' -- Class B-1 affirmed at 'BBB'; -- Class B-2 affirmed at 'BB'. These affirmations, representing approximately $136.8 million of outstanding principal, reflect collateral performance and credit enhancement consistent with expectations. The pool is 67 months seasoned. The pool factor is approximately 21%. The collateral consists of high balance, adjustable rate mortgage loans secured by first liens on one- to four-family residential properties, condominiums and shares issued by private non-profit housing corporations and related proprietary leases or occupancy agreements. Merrill Lynch Credit Corporation originated or acquired all of the mortgage loans. The loans are currently being serviced by PHH Mortgage Corp., rated 'RPS1-' by Fitch. At issuance, the mortgage loans had a weighted average FICO of 692 and a weighted average loan-to-value ratio of 85%. All of the loans have stated maturities of 25 years. MERRILL LYNCH: Monthly Losses Cue S&P's Negative CreditWatch ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on four classes from three Merrill Lynch Mortgage Investors Inc. transactions. Concurrently, three of these ratings are placed on CreditWatch with negative implications, and one remains on CreditWatch negative, where it was placed Aug. 22, 2006. In addition, one other rating is placed on CreditWatch negative. Lastly, the remaining ratings from these transactions are affirmed. The lowered ratings and CreditWatch placements reflect monthly losses that have continually exceeded excess interest. During the previous six remittance periods, monthly losses exceeded excess interest by approximately 1.60x for series 2002-NC1, 3.20x for series 2003-HE1, and 3.50x for series 2003-WMC1. As of the October 2006 distribution date, serious delinquencies ranged from 7.77% to 23.65% of the current pool principal balances. Cumulative realized losses ranged from 1.16% to 1.39% of the original pool principal balances. Standard & Poor's will continue to monitor the performance of these transactions. If delinquencies continue to translate into realized losses that outpace excess spread, negative rating actions can be expected. Conversely, if excess spread covers losses and overcollateralization levels build toward their target balances, the rating agency will affirm the ratings and remove them from CreditWatch. The affirmations reflect actual and projected credit support that is sufficient to maintain the current ratings. The collateral supporting these transactions consists of 30-year fixed- and/or adjustable-rate mortgage loans secured by first and/or second liens on one- to four-family residential properties. Ratings Lowered And Placed On Creditwatch Negative Merrill Lynch Mortgage Investors Inc. Rating ------ Series Class To From ------ ----- -- ---- 2002-NC1 B-1 AA/Watch Neg AAA 2002-NC1 B-2 BBB+/Watch Neg A+ 2003-HE1 B-3 BB/Watch Neg BBB- Rating Lowered And Remaining On Creditwatch Negative Merrill Lynch Mortgage Investors Inc. Rating ------ Series Class To From ------ ----- -- ---- 2003-WMC1 B-2 BBB-/Watch Neg A/Watch Neg Rating Placed On Creditwatch Negative Merrill Lynch Mortgage Investors Inc. Rating ------ Series Class To From ------ ----- -- ---- 2003-WMC1 B-1 AA+/Watch Neg AA+ Ratings Affirmed Merrill Lynch Mortgage Investors Trust Series Class Rating ------ ----- ------ 2002-NC1 M-1 AAA 2002-NC1 M-2 AAA 2003-HE1 A-1, A-2B, S AAA 2003-HE1 M-1 AA+ 2003-HE1 M-2 A+ 2003-HE1 M-3 A 2003-HE1 B-1 BBB+ 2003-HE1 B-2 BBB 2003-WMC1 M-2 AAA MEZZCAP COMMERCIAL: Fitch Holds Low-B Ratings on 3 Cert. Classes ---------------------------------------------------------------- Fitch affirms MezzCap's commercial mortgage pass-through certificates, series 2005-C3: -- $42.0 million class A at 'AAA'; -- Interest only class X at 'AAA'; -- $1.8 million class B at 'AA'; -- $1.9 million class C at 'A'; -- $3.2 million class D at 'BBB'; -- $1.8 million class E at 'BBB-'; -- $1.6 million class F at 'BBB-'; -- $1.7 million class G at 'BB'; -- $4.9 million class H at 'B'; -- $0.6 million class J at 'B-'. Fitch does not rate the $3.9 million class K certificates. The affirmations reflect stable performance and minimal paydown since issuance. As of the October 2006 remittance report, the pool's aggregate certificate balance has decreased 0.1% to $63.39 million from $63.44 million at issuance. The mortgage loans consist of two notes -- the A note, or senior component, which is not included in this trust's mortgage assets, and the B note. The B notes in this pool consist of subordinate interests in the first mortgage loans. All loans are secured by traditional commercial real estate property types and are subject to standard intercreditor agreements that limit the rights and remedies of the B note holder in the event of default and upon refinancing. In a default, the B notes are likely to suffer higher losses due to their subordinate positions. One asset is currently specially serviced and is 90 days delinquent. The property, a 164-unit multifamily property located in Middletown, Ohio, is suffering from a weak local multifamily market. The special servicer is negotiating with the borrower to bring the loan current. Fitch will continue to monitor the loan's performance. MILLENIUM SEACARRIERS: U.S. Trustee Seeks Chapter 7 Conversion -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing at 10:00 a.m., on Nov. 29, 2006, to consider the U.S. Trustee for Region 2's request to convert Millenium Seacarriers, Inc., and its debtor-affiliates' Chapter 11 cases into liquidation proceedings under Chapter 7 of the Bankruptcy Code. Alternatively, the U.S. Trustee seeks the dismissal of the Debtors' bankruptcy cases. According to the U.S. Trustee, the Debtors' apparent administrative insolvency and inability to continue their business operations and reorganize constitute cause for a Chapter 7 conversion of their cases. The U.S Trustee further opposes the Debtors' plan to sell substantially all of their assets because the Debtors have allegedly failed to show that such a sale will lead to a confirmable plan. According to the U.S. Trustee, the sale proposal fixes the rights of administrative creditors and unsecured creditors without the attendant protections associated with the plan process. Asset Sale The Debtors are seeking to sell their assets for a minimum bid price of $106 million, the same amount as the total claims of Wayland Investment Fund, LLC. Wayland has offered to acquire the assets for the value of its claim. As of March 2002, the Debtors received only one other offer of approximately $400,000 for a single vessel. No other offers have been received to date. The U.S. Trustee argues that the sale would permit only a partial payment of the Debtors' total secured debt and, in essence, benefits only Wayland. The U.S. Trustee says that if Wayland wants to gain the benefits of a sale under the aegis of the Bankruptcy Court, it must explain why the purchase price is reasonable in light of the fact that other secured creditors exist and the sale price is inadequate to fund a plan for unsecured creditors. About Millenium Seacarriers Millenium Seacarriers, Inc., is a holding company of international shipping company subsidiaries engaged in the transportation of cargo around the world on vessels acquired and operated through its subsidiaries. The Company and its affiliates filed for chapter 11 protection on Jan. 15, 2002 (Bankr. S.D. N.Y. Case No. 02-10180) Christopher F. Graham, Esq., at Thacher Proffitt & Wood represent the Debtors in their restructuring effort. The United States Trustee appointed a committee of unsecured creditors in these cases; however, the committee has been unable to organize and has not retained counsel. When the Company filed for protection from its creditors, it listed $85,078,831 in assets and $112,874,053 in liabilities. MILLS CORP: Completes Restructured Financing Deal for Xanadu ------------------------------------------------------------ The Mills Corporation has completed a restructured transaction with Colony Capital Acquisitions, LLC and KanAm USA Management XXII Limited Partnership regarding Meadowlands Xanadu. This transaction eliminates future financial obligations of The Mills to the Project, releases the Company from any obligations to contractors, the New Jersey Sports and Exposition Authority, the State of New Jersey, ends any guarantees and preferences and indemnifies The Mills with respect to all pre-closing obligations to third parties. The Company also disclosed that, as anticipated, Laurence C. Siegel is resigning as non-executive Chairman and that The Mills' Board of Directors will shortly appoint a new Chairman. Under the terms of the restructured transaction, The Mills has issued to Colony subordinated notes with a face value of $175 million, $87.5 million maturing on September 30, 2007 and $87.5 million maturing on September 30, 2008. Under the terms of the revised agreement, The Mills will have a subordinated capital account of approximately $500 million which may, in a possible future liquidity event for the partnership, provide some financial return to The Mills. Mark S. Ordan, the Company's Chief Executive Officer and President, stated, "We believe from our strategic alternative process that the completion of this transaction will facilitate this very important process. We are also pleased that this transaction will further reduce our corporate overhead and obligations and allow the Company to continue to focus on its core assets." The Mills expects to record an impairment charge for GAAP purposes that equals its entire capital account including the capital contributed over the balance of this year and the full amount of the subordinated debt issued as a part of the revised transaction. Headquartered in Chevy Chase, Maryland, The Mills Corporation (NYSE:MLS) -- http://www.themills.com/-- develops, owns, manages retail destinations including regional shopping malls, market dominant retail and entertainment centers, and international retail and leisure destinations. The Company owns 42 properties in the U.S., Canada and Europe, totaling 51 million square feet. In addition, The Mills has various projects in development, redevelopment or under construction around the world. * * * As reported in the Troubled Company Reporter on March 24, 2006, The Mills Corporation disclosed that the Securities and Exchange Commission has commenced a formal investigation. The SEC initiated an informal inquiry in January after the Company reported the restatement of its prior period financials. Mills is restating its financial results from 2000 through 2004 and its unaudited quarterly results for 2005 to correct accounting errors related primarily to certain investments by a wholly owned taxable REIT subsidiary, Mills Enterprises, Inc., and changes in the accrual of the compensation expense related to its Long-Term Incentive Plan. As reported in the Troubled Company Reporter on April 17, 2006, The Mills Limited Partnership entered into an Amendment No. 3 and Waiver to its Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of Dec. 17, 2004, among Mills Limited, JPMorgan Chase Bank, N.A., as lender and administrative agent, and the other lenders. The agreement provides a conditional waiver through Dec. 31, 2006, of events of default under the facility that are associated, among other things, with: the pending restatement of the financial statements of Mills Corporation and Mills Limited, and the delay in the filing of the 2005 Form 10-K of Mills Corp. and Mills Limited. ML-CFC COMMERCIAL: S&P Puts Initial Ratings for $4.6-Bil Certs. --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to ML-CFC Commercial Mortgage Trust 2006-4's $4.618 billion commercial mortgage pass-through certificates series 2006-4. The preliminary ratings are based on information as of Nov. 22, 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-2FL, A-SB, A-3, A-3FL, A1A, AM, AM-FL, AJ, AJ-FL, B, C, D, and XP 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 1.28x, a beginning LTV of 106.3%, and an ending LTV of 100.4%. Preliminary Ratings Assigned ML-CFC Commercial Mortgage Trust 2006-4 Class Rating Preliminary Recommended amount credit support (%) ----- ------ ------------ -------------- A-1 AAA $75,421,000 30.0000 A-2 AAA $902,288,000 30.0000 A-2FL* AAA - 30.0000 A-SB AAA $124,765,000 30.0000 A-3 AAA $1,340,601,000 30.0000 A-3FL* AAA - 30.0000 A1A AAA $789,833,000 30.0000 AM AAA $461,844,000 20.0000 AM-FL* AAA - 20.0000 AJ AAA $86,794,000 11.6250 AJ-FL* AAA - 11.6250 B AA+ $11,546,000 11.3750 C AA $0,823,000 9.6250 D AA- $4,638,000 8.8750 E A $69,277,000 7.3750 F A- $40,411,000 6.5000 G BBB+ $51,957,000 5.3750 H BBB $46,185,000 4.3750 J BBB- $63,503,000 3.0000 K BB+ $17,320,000 2.6250 L BB $5,773,000 2.5000 M BB- $23,092,000 2.0000 N B+ $5,773,000 1.8750 P B $17,319,000 1.5000 Q B- $5,773,000 1.3750 S NR $63,504,110 0.0000 XP** AAA $4,519,760,000 N/A XC** AAA $4,618,440,110 N/A * Floating-rate class. Ongoing ratings of floating-rate classes will be partially dependent upon the rating of the swap counterparty. ** Interest-only class with a notional amount. NR--Not rated. N/A--Not applicable. MONEY STORE: Stable Performance Cues Fitch's to Lift BB Rating -------------------------------------------------------------- Fitch Ratings has taken these rating actions of The Money Store Business Loan Backed Certificates, series 1997-1: -- Class A affirmed at 'AA'; -- Class B affirmed at 'AA-'; -- Class M to 'BBB' from 'BB'. The rating actions reflect continued stable performance within the transaction and increased credit enhancement available to the certificates. Overall, the transaction is performing within expectations. No new losses or delinquencies have occurred. The class M certificates are provided enhancement by the subordinate class B certificate and a growing reserve account. Due to the increased loss protection, the class M certificates are upgraded to 'BBB'. The affirmed classes are performing within expectations and have not experienced any significant changes since Fitch's last rating actions. Furthermore, the Class B certificates are affirmed based on the limited guarantee provided by Wachovia Corporation. Fitch will continue to closely monitor these transactions and may take additional rating action in the event of changes in performance and credit enhancement measures. MOVIE GALLERY: Moody's Eyes Downgrade Due to 10-Q Filing Delay -------------------------------------------------------------- Moody's Investors Service placed the long term ratings of Movie Gallery Inc. on review for possible downgrade following the company's announcement that it would not be able to file it third quarter 10-Q with the SEC on a timely basis. The on review for downgrade reflects the risk that the company could be served with a notice of default under its bond indenture as a result of the delayed filing. The speculative grade liquidity rating is affirmed at SGL-4. These ratings are placed on review for possible downgrade: -- Corporate family rating at Caa1; -- Probability of default rating at B3; -- Senior secured credit facilities at B3, LGD-3-41%; -- Senior unsecured guaranteed notes at Caa2, LGD5-88%. This rating is affirmed: -- Speculative grade liquidity rating at SGL-4. On Nov. 14, 2006 the company announced that it is postponing the filing of its third quarter report on form 10-Q with the SEC as a result of a review by its independent auditor into its accounting treatment for end of term store lease obligations to ensure compliance with SFAS 143. The five day grace period for the quarterly filing with the SEC expired on November 20, 2006. As a result, the company is at risk for receiving notice of an Event of Default by either the trustee of 25% of the bondholders. The company has 45 days to cure such default. Should the company not be able to cure the Default within the 45 day grace period it will trigger the company's cross default provisions in its bank credit agreement resulting in all the debt becoming due and payable. Moody's review will focus on the outcome of the independent auditors review, the timing of the company's filing of its 10Q, and whether the trustee of 25% of the bondholders under the indenture issues a notice of default. Movie Gallery, headquartered in Dothan, Alabama, is a provider of in-home movie and game entertainment in the United States. It operates over 4,650 stores in the United States, Canada, and Mexico under the Movie Gallery, Hollywood Entertainment, Grame Crazy, and VHQ banners. Pro forma revenues for fiscal year 2005 were $2.6 billion. MUSICLAND HOLDING: ACE Group & ESIS Object to Disclosure Statement ------------------------------------------------------------------ Pacific Employers Insurance Company, ACE American Insurance Company and other members of the ACE group of companies provided insurance coverage to Musicland Holding Corp. and its debtor- affiliates under various insurance policies from July 1, 2000, through March 1, 2004. The Policies were issued pursuant to high deductible program agreements, which required the insureds' obligations under the Policies to be secured by the collateral. The Insurance Policies and Program Agreements required the Debtors to retain a third-party claims administrator, ESIS, Inc., to administer, investigate, settle or defend claims. Karel S. Karpe, Esq., at White & Williams LLP, in New York, contends that the Second Amended Plan of Liquidation does not explain how the Debtors' ongoing obligations, including any cure payments, under their Agreements will be satisfied. ACE Group and ESIS oppose the Plan to the extent that: (a) it does not clearly indicate whether or not their Insurance Policies and related Agreements will be assumed or rejected; (b) there are no provisions, which preserve their rights under the Insurance Policies, the related Agreements and applicable law; (c) the proposed Dispute Resolution Procedures violate their duties and the right to defend claims against the Debtors and to arbitrate disputes with the Debtors; (d) the Plan may prevent them from investigating, administering, settling and defending claims that may be covered under the Insurance Policies; (e) the claim estimation under the Plan may allow estimated claim amount under Section 502(c) of the Bankruptcy Code to resolve claims under the Insurance Policies, of which the Insurance Policies do not provide for; and (f) the Plan does not include the language set forth in the Disclosure Statement that nothing in the Proposed Plan should be deemed to alter or amend the terms and conditions of the Insurance Policies. The Plan should clearly state that ACE Group and ESIS could perform the related Agreements without violating the release and discharge injunction provisions, Ms. Karpe asserts. Thus, ACE Group and ESIS ask the Court to deny the Plan unless the objections raised are resolved. Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Musicland Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) MUSICLAND HOLDING: Voting Tabulation Summary for Impaired Classes ----------------------------------------------------------------- James A. Stempel, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, filed with the U.S. Bankruptcy Court for the Southern District of New York a certification regarding the solicitation and tabulation of votes in connection with Musicland Holding Corp. and its debtor-affiliates' Second Amended Joint Plan of Liquidation. Upon review of the Ballot Tabulation Report submitted by BMC Group, Inc., with regard to the tabulation of votes to accept or reject the Plan, Mr. Stempel presents a summary of the voting tabulation for impaired classes entitled to vote on the Plan: Accept Reject --------------------- ------------------- Impaired Class Votes Votes and Description Counted Amount Counted Amount --------------- ------- ------------ ------- --------- Class 3 Secured 10 $142,483,707 0 $0 Trade Claim (100%) (100%) (0%) (0%) ------- ------------ ------- ---------- Class 4 General 552 $60,311,250 23 $1,071,255 Unsecured Claim (96%) (98%) (4%) (2%) ======= ============ ======= ========== Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Musicland Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NAVISTAR INT'L: Finance Unit Receives $1.2 Billion Loan Waiver -------------------------------------------------------------- Navistar Financial Corporation, a wholly owned finance subsidiary of Navistar International Corporation, has received a waiver and consent from the participants in its $1.2 billion credit agreement dated July 1, 2005. This waiver covers a default or event of default created by NFC's and Navistar's failure to file their annual reports on Form 10-K with the Securities and Exchange Commission by the filing deadline. "We are continuing to evaluate strategies for enhancing the stability of our capital structure and reducing overall interest expense," said Bill Caton, Navistar executive vice president and chief financial officer. "This waiver from our lenders, which extends through the end of current fiscal year ending October 31, 2007, is a sign of their confidence in our company and its future." Mr. Caton noted that 2006 has turned out to be an outstanding year for the trucking industry. "Our company fully participated in the strong market and met internal targets for cash flow generation," Mr. Caton said. "Our fiscal fourth quarter ended Oct. 31, 2006, was one of the strongest quarters ever for cash flow generation at Navistar." Mr. Caton noted that even after the significant investments in engine inventory of approximately $150 million, the preliminary year-end unaudited manufacturing cash and marketable securities was approximately $1.2 billion, as anticipated. He added that it is the company's intention to use cash to pay down between $200 million and $400 million of debt by the end of the calendar year. About Navistar Based in Warrenville, Illinois, Navistar International Corporation (NYSE: NAV) -- http://www.nav-international.com/-- is the parent company of Navistar Financial Corp. and International Truck and Engine Corp. The company produces International(R) brand commercial trucks, mid-range diesel engines and IC brand school buses, Workhorse brand chassis for motor homes and step vans, and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service sold under the International(R) brand. A wholly owned subsidiary offers financing services. * * * As reported in the Troubled Company Reporter on Aug. 8, 2006, Standard & Poor's Ratings Services held its 'BB-' corporate credit ratings on North American heavy-duty and medium-duty truck producer Navistar International Corp., and Navistar's subsidiary, Navistar Financial Corp., on CreditWatch with negative implications where they were placed on Jan. 17, 2006. At the same time, Standard & Poor's withdrew the ratings on several of the company's individual issue ratings, following the completion of the company's tender offers. The company's $190 million 2.5% senior convertible notes (maturing in 2007) remain outstanding and remain on CreditWatch. The ratings were originally placed on CreditWatch on Jan. 17, 2006. NEWPOWER HOLDINGS: Paying Interim Liquidation Proceeds on Dec. 14 ----------------------------------------------------------------- NewPower Holdings Inc. reported that the order by the United States Bankruptcy Court for the Northern District of Georgia, Newnan Division, of an interim distribution of liquidation proceeds equal to $0.07 per share to registered holders of the Company's common stock, plus an additional distribution equal to $0.08 per share to the registered holders other than Enron Corp. and certain of its affiliates, became effective as of Nov. 19, 2006. The Company disclosed that the mandatory objection period to the Bankruptcy Court's order approving the interim distribution has expired. The interim distribution will be paid to holders of record of the Company's common stock as of Nov. 30, 2006, on or about Dec. 14, 2006. NewPower Holdings Inc. and its debtor-affiliates filed for chapter 11 protection on June 11, 2002 (Bankr. N.D. Ga. 02-10836). Paul K. Ferdinands, Esq., at King & Spalding and William M. Goldman, Esq., at Sidley Austin Brown & Wood LLP represent the Debtors. When the Debtors filed for chapter 11 protection, they reported $231,837,000 in assets and $87,936,000 in debts. On Aug. 15, 2003, the United States Bankruptcy Court for the Northern District of Georgia, Newnan Division, confirmed the Second Amended Chapter 11 Plan with respect to NewPower Holdings Inc. and TNPC Holdings Inc., a wholly owned subsidiary of the Company. That Plan became effective on Oct. 9, 2003, with respect to the Company and TNPC. On Feb. 28, 2003, the Bankruptcy Court confirmed The New Power Company's Plan, and that Plan has been effective as of March 11, 2003 with respect to New Power. The New Power Company is a wholly owned subsidiary of the Company. NEXSTAR BROADCASTING: Posts $3 Mil. Loss in Quarter Ended Sept. 30 ------------------------------------------------------------------ Nexstar Broadcasting Group Inc. submitted to the Securities and Exchange Commission its quarterly report on Form 10-Q for the quarter ended Sept. 30, 2006. Nexstar Broadcasting Group Inc.'s balance sheet at Sept. 30, 2006, showed total assets of $679 million and total liabilities of $757 million, resulting in a total stockholders' deficit of $78 million. For the three months ended Sept. 30, 2006, the Company reported a net loss of $3 million and income from operations of $9 million on net revenue of $63 million, compared with a net loss of $8 million and income from operations of $3 million on net revenue of $54 million for the same quarter in 2005. Gross local advertising revenue was $38.7 million for the three months ended Sept. 30, 2006, compared with $36.2 million for the same period in 2005, an increase of $2.5 million, or 6.7%. Gross national advertising revenue was $17.8 million for the three months ended Sept. 30, 2006, compared with $17.2 million for the same period in 2005, an increase of 3.4%. The combined increase in gross local and national advertising revenue of $3.1 million was primarily the result of an outsourcing agreement that commenced in September 2005 between Nexstar and WUHF, the Fox affiliate in Rochester, New York; advertising revenue generated from the retransmission consent agreements, which increased by approximately $1.2 million compared with the same period in 2005; and advertising revenue from new local customers which increased by approximately $900,000 compared with the same period in 2005. Gross political advertising revenue was $6.3 million for the three months ended Sept. 30, 2006, compared with $200,000 for the same period in 2005. The increase was attributed to statewide and local races, primarily in Pennsylvania, Missouri, Illinois, New York, and Indiana. Retransmission compensation was $2.3 million for the three months ended Sept. 30, 2006, compared with $700,000 for the same period in 2005, an increase of $1.6 million, or 238.8%, primarily due to the significant increase in retransmission consent agreements, the majority of which were completed in late 2005. For the nine months ended Sept. 30, 2006, the Company reported a net loss of $13 million and an income from operations of $26 million on net revenue of $187 million, versus a net loss $42 million and an income from operations of $11 million on net revenue of $166 million for the comparable period in 2005. Loss on Extinguishment of Debt Loss on extinguishment of debt of $15.7 million for the nine months ended Sept. 30, 2005, consisted of: -- $9.6 million in call premium related to the redemption of the 12% Notes in April 2005; -- accelerated amortization of $3.4 million of unamortized discount on the 12% Notes, -- the write off of approximately $3.6 million of certain debt financing costs previously capitalized on the 12% Notes, -- the write off of $400,000 of previously capitalized debt financing costs, and -- $1 million of transaction costs related to the refinancing of the senior secured credit facilities for Nexstar and Mission in April 2005, -- net of a gain of $2.3 million from the write off of a SFAS No. 133 fair value hedge adjustment of the carrying amount of the 12% Notes. The Company disclosed that as of Sept. 30, 2006, Nexstar and Mission Broadcasting Inc., an independently owned subsidiary, had total combined debt of $640.8 million, representing 113.9% of Nexstar and Mission's combined capitalization. Cash Requirements for Digital TV Conversion The Company also disclosed that all of the television stations that it and Mission own and operate are broadcasting at least a low-power digital television signal. The Company's conversion to a low-power DTV signal required an average initial capital expenditure of approximately $200,000 per station. The FCC established dates by which all television stations were required to be broadcasting with a full-power DTV signal. As of Sept. 30, 2006, only Mission's stations WUTR, WTVO, and WYOU and Nexstar's stations WBRE, WROC, KARK, KNWA, and KFTA are broadcasting with full-power DTV signals. The Company and Mission have filed requests for extension of time to construct full-power DTV facilities for their remaining stations. The FCC has not yet acted on these requests for extension. DTV conversion expenditures were $9.5 million and $4.3 million, respectively, for the nine months ended Sept. 30, 2006, and 2005. The Company estimates an average capital expenditure of approximately $1.5 million per station, for 34 stations to modify the remaining stations' DTV transmitting equipment for full-power DTV operations. The expenditures are expected to be funded through available cash on hand and cash generated from operations. Cash Requirements for Pending Acquisition The Company entered into a purchase agreement to acquire substantially all of the assets of WTAJ, the CBS affiliate serving the Altoona-Johnstown, Pa., market for $56 million in cash. Part of the purchase consideration is the acquisition of the FCC license and certain assets and contracts of WLYH, The CW affiliate serving the Harrisburg-Lancaster-Lebanon-York, Pennsylvania market. The Company intends to finance the acquisition through cash on hand and borrowings under its senior secured credit facility. The acquisition is expected to close in either the fourth quarter of 2006 or first quarter of 2007, subject to FCC consent. A full text-copy of the Nexstar Broadcasting' quarterly report may be viewed at no charge at http://ResearchArchives.com/t/s?1593 Nexstar Broadcasting Group Inc. owns, operates, programs, or provides sales and other services to 47 television stations in 27 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama and New York. Nexstar's television station group includes affiliates of NBC, CBS, ABC, FOX and MyNetworkTV, and reaches approximately 8% of all U.S. television households. NRG ENERGY: Completes $1.35 Billion Hedge Reset Transactions ------------------------------------------------------------ NRG Energy Inc. completed its Hedge Reset transactions reported on Nov. 3, 2006. These transactions included approximately $1.35 billion in payments made to hedge counterparties to reset the price levels to current market prices of certain legacy hedges acquired in February 2006. "We received a very favorable response from our senior credit facility holders and the high yield note market," commented Robert Flexon, NRG Executive Vice President and Chief Financial Officer. "Completing these transactions provides the Company with a more appropriate level of flexibility to execute our capital allocation plans," added Flexon. The payments were funded with $250 million from existing cash balances and the proceeds of today's closing of a public offering of $1,100 million in aggregate principal amount of 7.375% senior notes due 2017. NRG also disclosed the approval and closing of an amendment to its existing senior credit facilities. The amendments, among other things: -- permit the incurrence of the debt to fund the hedge resets described above; -- increase the amount of the synthetic letter of credit facility from $1,000 million to $1,500 million to support incremental hedging activity; -- increase to $500 million the amount immediately available for unrestricted use by the Company, which may be used among other things for share repurchases; and -- provide additional flexibility to NRG with respect to certain covenants governing or restricting the use of excess cash flow, new investments, new indebtedness and permitted liens. Headquartered in Princeton, New Jersey, NRG Energy, Inc. (NYSE: NRG) -- http://www.nrgenergy.com/-- presently owns and operates a diverse portfolio of power-generating facilities, primarily in Texas and the Northeast, South Central and Western regions of the United States. Its operations include baseload, intermediate, peaking, and cogeneration facilities, thermal energy production and energy resource recovery facilities. NRG also has ownership interests in generating facilities in Australia and Germany. * * * As reported in the Troubled Company Reporter on Nov. 7, 2006, Fitch affirmed NRG Energy's Senior secured term loan B at 'BB'/'RR1'; Senior secured revolving credit facility at 'BB'/'RR1'; Senior notes to 'B+'/'RR3'; Convertible preferred stock at 'CCC+'/'RR6'; Issuer default rating (IDR) at 'B' ratings of following the company's announced hedge reset and capital allocation program. The Rating Outlook is Stable. NUTRAQUEST INC: Ordinary Administrative Claims Deadline is Dec. 4 ----------------------------------------------------------------- All holders of ordinary course administrative expense claims in Nutraquest Inc.'s chapter 11 case, unpaid as of Nov. 3, 2006, must submit their written proofs of claim on or before Dec. 3, 2006, to: a) Judith Moor, Esq. Nurtaquest Inc. 2231 Landmark Place Manasquan, NJ 08736 b) Simon Kimmerman, Esq. Sterns & Weinworth PC P.O Box 1298 50 West State Street, Suite 1400 Trenton, NJ 08607 -- and -- c) Natalie Ramsey, Esq. Montgomery McCracken Walker & Rhoads LLP 123 South Broad Street Philadelphia, PA 19109 Holders of special administrative expense claims, unpaid as of the effective date of the Debtor's plan of reorganization, must file their written proofs of claims on or before the 30th day after that Plan's effective date, with the Clerk of New Jersey District Court at this address: Office of the Clerk United States District Court District of New Jersey 402 East State Street Trenton, NJ 08625 Copies of special administrative expense proofs of claim must also be served upon: a) Simon Kimmerman, Esq. Sterns & Weinworth PC P.O Box 1298 50 West State Street, Suite 1400 Trenton, NJ 08607 b) Fran B. Steele, Esq. The Office of the U.S. Trustee One Newark Center Newark, NJ 07102 -- and -- c) Natalie Ramsey, Esq. Montgomery McCracken Walker & Rhoads LLP 123 South Broad Street Philadelphia, PA 19109 Special administrative expense claims include applications for final allowances of compensation and reimbursement of expenses for professional services. Objections to ordinary course administrative expense claims, if any, must be filed by 4:00 p.m. on Jan. 2, 2007, with the New Jersey District Court. Objections to special administrative expense claims, if any, must be filed with the New Jersey District Court by 4:00 p.m., 30 days after the effective date of the Debtor's Plan. Headquartered in Manasquan, New Jersey, Nutraquest Inc. markets ephedra-based weight loss supplement, Xenadrine RFA-1. The Company filed for chapter 11 protection on October 16, 2003 (Bankr. N.J. Case No. 03-44147). Andrea Dobin, Esq., and Simon Kimmelman, Esq., at Sterns & Weinroth, P.C. represent the Debtor in its restructuring efforts. David D. Langfitt, Esq., and Gregory M. Harvey, Esq., at Montgomery, McCracken, Walker & Rhoads represent the Official Committee of Unsecured Creditors. When the Company filed for protection from its creditors, it listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. O'CHARLEY'S INC: S&P Holds Corporate Credit Rating at BB- --------------------------------------------------------- Standard & Poor's Ratings Services has affirmed its 'BB-' corporate credit rating on Nashville, Tennessee-based O'Charley's Inc. The outlook is stable. At the same time, Standard & Poor's assigned a 'BB' rating to O'Charley's $125 million revolving credit facility due 2011. This and a recovery rating of '1' indicate lenders can expect full recovery of principal in the event of a payment default. Proceeds from the loan will be used primarily to refinance the existing revolver and for working capital, capital expenditures, and general corporate purposes. "The ratings on O'Charley's reflect the company's relatively small market position in the highly competitive casual dining sector of the restaurant industry, weak operating trends, and a highly leveraged capital structure," said Standard & Poor's credit analyst Diane Shand. These factors are partly offset by favorable growth prospects for casual dining. The company operates O'Charley's, Ninety Nine, and Stoney River restaurants. Although the O'Charley's chain has a large presence in its markets, it maintains a relatively small market share among casual dining chains, compared with Applebee's, Chili's, Outback, and Red Lobster. Many of these competitors have substantially greater financial and marketing resources and continue to expand rapidly. Still, prospects for the varied-menu casual dining sector are favorable, with the dining-out trend in the U.S. driving growth. The sector grew 8% in 2005. OPTI CANADA: Moody's Pares Corp. Family Rating to Ba3 from Ba2 -------------------------------------------------------------- Moody's Investors Service downgraded OPTI Canada Inc.'s Corporate Family rating to Ba3 from Ba2 due to higher leverage and project costs. Moody's assigned a Ba3 rating to OPTI's pending senior CDN$500 million first lien secured 5-year revolving credit facility, a B1 rating to its pending senior $1 billion second lien secured 8-year note offering, and affirmed OPTI's Ba3 $450 million senior 7-year Term Loan B rating. The notes and revolver would replace OPTI's unrated first secured CDN$900 million Project Debt facility. The second secured TLB would then convert to first secured status, ranking pari-passu with the new revolver. The rating outlook is stable, though the ratings are assigned subject to final terms and conditions reasonably matching expectations built into the ratings. OPTI is a 50/50 working interest partner with Nexen Inc. in a four phase development of three oil sands leases in the Athabasca oil sands region of Alberta, Canada. OPTI and Nexen are deep in Phase I development of an integrated project involving: (a) steam assisted gravity drainage production of bitumen; (b) bitumen upgrading into light sweet synthetic crude oil; and, (c) cogeneration. The JV has also begun spending for the nearly identical Phase II. Moody's analyst Andrew Oram noted that Long Lake has incurred significant cost increases, similar to all oil sands projects in the region, with Phase I now estimated to cost $4.6 billion, or 20% more than $3.8 billion as of April 20 2006 when OPTI was first rated. The Corporate Family rating downgrade reflects: -- substantially higher consolidated pro-forma debt and leverage; -- a reduced degree of creditor control over project outlays with the pending Project Debt facility cancellation; -- the 20% project cost increase, and a currently modest delay in project completion and start-up dates. Though the project is nearing 90% construction completion of the upstream segment and 60% completion of the downstream, or, upgrader segment, the project still faces the possibility of further material cost overruns or delays, particularly for the bitumen upgrader. Due to large project cost increases, to gain continued access to its Project Debt facility OPTI doubled its back-up cost overrun funding by arranging a CDN$200 million unrated bridge loan to augment its existing CDN$200 million in contingent equity funding cushion. By reestablishing at least CDN$200 million of back-up funding in excess of estimated costs, OPTI met the Project Debt facility's requirement for that amount of cost overrun cushion to be available before each new drawdown of the facility. The bridge loan allows borrowings for a period of up to 120 days. Because the Project Debt facility would be cancelled upon the note offering, project lenders consented to OPTI's use of a debt bridge facility to augment the back-up equity cushion. Note proceeds would fund a significant interest reserve account with remaining proceeds and the revolver funding: (a) repayment of approximately C$341 million in Project Debt facility borrowings; (b) future Phase I development costs and a portion of Phase II costs; and, (c) resource delineation and evaluation across all of OPTI's oil sands leases. To facilitate OPTI's ability to fund future project phase development costs, we believe the note indenture would contain liberal carveouts for additional and secured debt as well as for restricted payments. As well, TLB permits OPTI to add another CDN$250 million of debt pari passu to TLB and the new revolver, under certain conditions. Amended TLB and the new revolving credit facility are rated at the Corporate Family Rating. That reflects their senior first secured standing in the capital structure of an evolving project asset base whose first substantial cash flow will not be until 2008. The B1 rated notes are notched below the Corporate Family Rating to reflect their comparatively junior position in the capital structure. The bonds hold a second lien on all the project leases and assets, subordinated to the TLB and revolving credit facility. The ratings are supported by: (a) roughly C$1.4 billion of first-in cash common equity; (b) a very large world scale resource base engineered by a major third-party engineering firm; (c) the deep pockets, managerial, operational, and technical depth, services sector influence, and synthetic crude oil marketing capacity of investment grade partner Nexen; (d) a narrowing of the reservoir risk band through evaluation of drilling and subsurface information derived from a large number of drilled Phase I horizontal steam injection and production well pairs, many delineation wells in the Leismer and Cottonwood leases; and, (e) surface project technology and design that is deemed to not encompass inordinate or insurmountable risk to completion or ongoing performance of the project. The ratings are also supported by: (a) a 2 1/2 year TLB interest reserve account; (b) OPTI's call on $C200 million of contingent equity from certain private investors; (c) a third party technical evaluation of OPTI's drilling program, including well pair location, well string architecture and drilling procedures, and indicating reasonably low drilling risk across a large established reserve base; and, (d) SAGD technology is more than 7 years into commercial status after 20 years of pilot project experience in the region. The ratings are restrained by: (a) very high front-end capital costs, substantial front-end leverage, and inherent project risk of completing Phases I and II on time without further cost increases; (b) the complexity of integrated oil sands and upgrader projects; (c) characteristic project start-up risks upon completion and the challenge of keeping all mutually dependent upstream and downstream units online once in commercial operations; (d) inherent uncertainty about the pivotal ultimate sustainable steam/oil ratio in the upstream segment; (e) a risk of much higher SAGD production costs if the upgrader's innovative asphaltene gasification unit is down; and, (f) the inability of the upgrader to run if that unit is down. Demonstration that the project can reasonably perform in accordance with design specifications would largely mitigate operating risks. In return for a first lien on Long Lake's assets and contracts upon retirement of the Project Debt facility, TLB would permit the new C$500 million revolver, the $1 billion note offering, and C$200 million bridge facility. The revolver will be first secured on Long Lake and, except for a shorter 5-year maturity, will be pari passu with TLB through an intercreditor agreement. The revolver would have a cash flow sweep that rises with EBITDA leverage and its principal covenants include maximum Debt/EBITDA of 4 and EBITDA/Interest expense of 2. With TLB, the revolver will exist at the parent OPTI, both TLB and the revolver will receive their senior first secured status by means of a first secured senior guarantee from the project subsidiary. The notes will also be located at parent and receive a senior second secured guarantee from the project subsidiary. OPTI's 50% share of Phase I proven undeveloped and probable bitumen reserves is approximately 455 million barrels. Moody's believes that, in light of the fact that Phases II, III, and IV will be nearly identical to Phase I, and given Phase I's current cost estimates, Moody's believes that Phase II, III, and IV costs will exceed CDN$4.6 billion (50% OPTI). The future scale of bitumen production, and operating and capital costs of that production, face the inherent risk across the areal extent of OPTI/Nexen's acreage of: -- inconsistent reservoir rock homogeneity, quality, and reservoir thickness; -- existence of permeability barriers that can impede steaming and production; and, -- amount of steam needed per barrel of produced bitumen. Also, the upgrader's sustainable synthetic crude yield per bitumen barrel, unit production costs, and unscheduled downtime pattern will not be clear until it has been operating for several quarters. Bitumen is a high density, extremely viscous, high sulfur hydrocarbon that, in the deeper Athabasca oil sands deposits, is heated downhole to separate it from the oil sands and flow to the surface where the bitumen is then diluted with light condensate, syncrude, or other diluent to flow through pipelines. After completing heavy investment in the upgrader, Long Lake will upgrade inherently low value bitumen into much higher value synthetic crude oil that Moody's believes will sell in the range of, but at a discount to, conventional light sweet crude oil. The assay of synthetic crude oil prevents it from being a full one- for-one substitute for conventional light sweet crude though OPTI believes its synthetic crude will close some of that assay gap. However, synthetic crude oil production is also rising faster than regional demand and the sector's ability pipeline it to the large West Coast refining market or deliver it at all the very large Gulf Coast market. However, reported pipeline projects should considerably improve the regional syncrude demand and supply equation over the next few years. OPTI Canada Inc. is headquartered in Calgary, Alberta, Canada. OPTI CANADA: S&P Rates Proposed CDN$550-Mil. Facility at BB+ ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB+' rating, with a recovery rating of '1', on OPTI Canada Inc.'s proposed five-year CDN$500 million senior secured revolving credit facility. The '1' recovery rating indicates a high expectation of recovery in principal in the event of payment default. In addition, Standard & Poor's assigned its 'BB' rating, with a recovery rating of '2', to OPTI's $1 billion secured notes. The '2' recovery rating indicates the expectation of substantial recovery of principal in the event of payment default. At the same time, Standard & Poor's affirmed its 'BB' long-term corporate credit rating and its 'BB+' bank loan rating, with a recovery rating of '1', on OPTI's seven-year US$450 million secured term loan B. The outlook is stable. OPTI will use the new debt facilities to revise its capital structure. The $1 billion secured notes will be used to repay the amount drawn under OPTI's existing CDN $900 million project facility and to fund construction of Phase 1 of its Long Lake project. The revolving credit facility will be used for general corporate purposes, including project costs associated with the construction of Phase 1 of its Long Lake project, initial engineering costs for Phase 2, land lease acquisitions, and prefunding of interest payable until Dec. 2008. With the removal of the CDN$900 million project facility, the security pledged to the existing term loan B will substantially improve in value. Although the new revolving credit facility will rank pari passu with the term loan B, the security continues to support full recovery of the first-lien facilities under Standard & Poor's default scenario. As such, Standard & Poor's views the pro forma capital structure as neutral to OPTI's credit profile. "We view the changes to the company's capital structure, with the new debt facilities and retirement of the project facility, as neutral to the company's financial risk profile, despite the moderate increase in balance sheet leverage under the assumption that the CDN$500 million credit facility is fully drawn," said Standard & Poor's credit analyst Jamie Koutsoukis. "The new revolving credit facility will improve OPTI's financial flexibility, as it provides the company with contingency funds to ensure the completion of Phase 1 of the Long Lake project, as well as provide for some initial Phase 2 spending," Ms Koutsoukis added. The stable outlook reflects the rating agency's expectation that OPTI will complete Phase 1 of its Long Lake project and will generate sufficient positive operating cash flow in 2009 to meet its debt and maintenance capital expenditure commitments. The stable outlook also incorporates Standard & Poor's expectation that the company will manage the risks associated with its multi- stage oil sands development project to their existing rating level without any material deterioration to its financial profile. If OPTI encounters any further cost overruns on Phase 1 of its Long Lake project in excess of CDN$150 million, or if leverage exceeds 60% as it proceeds with expansion phases, a negative rating action could occur. OWENS CORNING: Insurance Cos. Want Administrative Claims Allowed ---------------------------------------------------------------- Several insurance companies that provided coverage or other services to Owens Corning and its debtor-affiliates ask the Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware to allow their administrative expense claims: (1) American Home Assurance Company; (2) American Home Assurance Company-Canada; (3) American International Specialty Lines Insurance Company; (4) AIU Insurance Company; (5) AIU North America, Inc.; (6) Commerce and Industry Insurance Company; (7) Illinois National Insurance Company; (8) Lexington Insurance Union Fire Insurance Company of Pittsburgh, PA; (9) New Hampshire Insurance Company; (10) Starr Excess Liability Insurance International Limited- United Kingdom; and (11) certain other affiliates of American International Group, Inc. Frederick B. Rosner, Esq., Duane Morris LLP, in Wilmington, Delaware, says the Administrative Expense Claims relate to Owens Corning's unpaid obligations under certain policies issued by the Insurers. The unpaid obligations consist of premiums, certain deductibles, self-insured retentions, reimbursement obligations, any additional premium, fees, expenses and related costs. Mr. Rosner notes the Insurers continue to provide accident & health, aviation, fidelity, general liability, inland marine, property, and workers' compensation insurance coverages, among others. The Policies cover various periods commencing in August 1998 and ending Dec. 31, 2049. A list of the postpetition policies issued to the Debtors is available for free at: http://researcharchives.com/t/s?156e The Insurers and the Debtors may have entered or may in the future enter into additional policies during the pendency of the bankruptcy cases, Mr. Rosner notes. Mr. Rosner asserts that it is well settled that: * insurance is a recognized means of protecting and preserving the estate, thus providing a benefit to the estate; and * the insurance provider is to be awarded administrative expense priority for the pro rata share of the premium during the postpetition period in which the estate received benefits from the insurance contract. The Insurers, therefore, are entitled to administrative expense status pursuant to Section 503(b) of the Bankruptcy Code for all amounts, liquidated, unliquidated, contingent or otherwise, for insurance and other services provided to the Debtors after the Petition Date. If any amounts become liquidated and due, the Insurers want to be paid in the ordinary course of business, Mr. Rosner tells the Court. The Insurers' request is not intended to waive any right to arbitration, Mr. Rosner notes. The Insurers reserve the right to seek arbitration of any dispute arising in connection with the Motion. To the extent of any pre-existing arbitration agreement, the Court's jurisdiction to resolve disputes should be limited to referring those disputes to arbitration and enforcing any arbitration award, Mr. Rosner adds. In pursuing payment of their administrative expense claim, Mr. Rosner says, the Insurers: (i) do not submit to the jurisdiction of the Court for any purpose other than with respect to the Motion; (ii) do not waive their rights against any other persons liable for all or part of the request for payment; (iii) reserve their rights to: * amend or supplement their Motion; * assert all claims, causes of action, defenses, offsets or counterclaims; and * cancel or rescind any and all of the agreements, which are the subject of the Administrative Expense Claims. About Owens Corning Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 146; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) OWENS CORNING: Releases Financial Results for Third Quarter 2006 ---------------------------------------------------------------- Owens Corning and its debtor-affiliates have reported consolidated net sales and operating results for the third quarter and the first nine months of 2006. The company reported record third- quarter consolidated net sales of $1.661 billion, compared with $1.618 billion in the third quarter of 2005, representing a 2.7 percent increase from the prior year. "Third-quarter results were in-line with our expectations," said Dave Brown, president and chief executive officer. "Although we experienced significant increases in energy, transportation and raw material costs, we are pleased that we delivered record financial results through the first nine months of 2006." "The strong demand for our products and services that we experienced in the first half of the year softened in the third quarter due to the slowing U.S. housing market," said Mr. Brown. "While our Insulating Systems segment continued to perform at a high level, the results of our Roofing and Asphalt segment were affected by diminished storm-related demand. Our Composite Solutions segment experienced strong demand globally. "We anticipate that the continued decline in housing starts will translate into weaker demand for our building materials products in the fourth quarter of 2006. However, as we have in the past, we're aggressively managing our business to anticipate and meet the changing demands of the marketplace." Owens Corning also announced today that shares of its common stock that will be issued at the time of emergence from Chapter 11 have been approved for listing on the New York Stock Exchange under the ticker symbol "OC." In anticipation of emergence, currently scheduled for Oct. 31, 2006, such common shares began trading on a "when-issued" basis on Monday, Oct. 23, 2006. "Regular-way" trading is anticipated to begin on or about Nov. 1, 2006. Highlights of Consolidated 2006 Third-Quarter and Nine-Month Results: * Third-quarter reported income from operations was $159 million, compared with $139 million for the same period of 2005, an increase of 14.4 percent. For the first nine months of 2006, income from operations was $442 million, compared with a loss from operations of $3.973 billion for the same period of 2005. The loss from operations for the first nine months of 2005 was primarily a result of an additional $4.342 billion provision for asbestos liability, which the company recognized in the first quarter of 2005. When communicating the operating performance of the company to its Board of Directors and employees, management excludes certain items, including those related to the company's Chapter 11 proceedings, asbestos liabilities, restructuring and other activities, so as to improve comparability over time. In the third quarter of 2006, such items amounted to a net credit of $5 million of additional income, compared with a net charge of $7 million during the same period of 2005. After excluding items affecting comparability, adjusted income from operations for the third quarter was $154 million, compared with $146 million in 2005. In the first nine months of 2006, such items amounted to a net credit of $16 million of additional income, compared with a net charge of $4.368 billion. After excluding items affecting comparability, adjusted income from operations for the first nine months was $426 million, compared with $395 million in 2005. * Net sales for the first nine months were a record $4.984 billion, compared with $4.610 billion in the first nine months of 2005, representing an 8.1 percent increase from the prior year. The increase was primarily the result of favorable pricing actions offsetting inflation in the Insulating Systems and Roofing and Asphalt segments, combined with revenue from a recent Composite Solutions acquisition in Japan. * For the first nine months, the company's continued focus on employee safety resulted in a nine percent reduction in injuries compared with the same period last year. * Owens Corning completed its acquisition of the Modulo/ParMur Group in September 2006. The acquisition expands the global reach of Owens Corning's manufactured stone veneer business in the European building products market. * On July 27, 2006, Owens Corning announced its intent to merge its glass fiber reinforcements business with Saint-Gobain's Reinforcement and Composites businesses into a new company to be called Owens Corning-Vetrotex Reinforcements. The new company would be majority-owned by Owens Corning and would accelerate the company's ability to serve a broader range of customers with an expanded product range and greater geographic reach. Subject to reaching a definitive agreement between the parties and obtaining regulatory approvals, the transaction is expected to close in the first half of 2007. Gross margin as a percentage of consolidated net sales for the third quarter decreased 1.1 percentage point, compared with the same period of 2005. The Insulating Systems segment gross margin improved as a result of demand in the U.S. housing and remodeling markets, offset by lower margins in Roofing and Asphalt and Composite Solutions. Selling, General and Administrative (SG&A) expenses, as a percentage of consolidated net sales for the third quarter, were 8.5 percent, compared with 8.9 percent in the same period of 2005. For the first nine months of 2006, SG&A expenses were 8.3 percent compared with 8.9 percent in the prior year period. This improvement in productivity was primarily due to increased net sales. Third-Quarter 2006 Business Segment Highlights: Insulating Systems * Sales were $529 million, compared with $502 million in the third quarter of 2005, representing a 5.4 percent increase from the prior year. The increase was driven by favorable pricing which offset lower volumes in most major product categories. * Income from operations increased 17.9 percent to $125 million, compared with $106 million in the prior year period. Favorable pricing and improved productivity offset cost inflation and lower volumes in most major product categories. Roofing and Asphalt * Sales were $458 million, compared with $453 million in the third quarter of 2005, representing a 1.1 percent increase from the prior year. The increase was primarily the result of price increases, generally reflecting the pass through of higher raw material and transportation costs, which slightly offset volume declines. * Income from operations decreased 52.4 percent to $20 million, compared with $42 million in the prior year period. The decrease was primarily due to a significant increase in asphalt costs and lower volumes versus the prior period, which was positively impacted by significant storm-related demand. Other Building Materials and Services * Sales were $328 million, compared with $341 million in the third quarter of 2005, representing a 3.8 percent decrease from the prior year. The decline was primarily the result of volume declines in vinyl siding products, partially offset by growth in manufactured stone veneer products. * Income from operations decreased 42.9 percent to $8 million, compared with $14 million in the prior year period. The decrease was due to lower margins in the construction services business combined with decreased vinyl siding and other building materials product volumes, partially offset by improved volumes in manufactured stone veneer products. Composite Solutions * Sales were $393 million, compared with $371 million in the third quarter of 2005, representing a 5.9 percent increase from the prior year. The acquisition of a manufacturing facility in Japan from the Asahi Glass Co. Ltd. on May 1, 2006 was the primary contributor to the increase in sales. * Income from operations for the quarter ended Sept. 30, 2006, was $45 million, a 45.2% increase from the 2005 level of $31 million. The improvement was primarily the result of a $12 million gain related to insurance recoveries associated with the July 2005 flood of the Taloja, India manufacturing facility and $10 million related to gains on the sale of metals used in certain production tooling in the third quarter of 2006. * Without the gains related to insurance recoveries and the sale of metals, income from operations for the third quarter would have declined due to lower prices and inflation in raw materials, energy and transportation, partially offset by improved manufacturing productivity, compared to the prior year period. In addition, the third quarter of 2005 included approximately $2 million in flood-related cost associated with our manufacturing facility in Taloja, India. Business Outlook The reported slowing of housing starts from record highs and recent increases in U.S. housing inventory are beginning to weaken demand for some of our building materials products. These factors could impact our capacity utilization and selling prices for certain products in the fourth quarter of 2006. Partially offsetting the recent softening of housing start- related demand, the Energy Policy Act of 2005 may stimulate demand for qualifying insulation products. Owens Corning is also launching marketing programs that are intended to expand the use of Owens Corning products in residential and commercial applications. Owens Corning will continue to focus on managing capacity, introducing product offerings, and eliminating inefficiencies in our business and manufacturing processes to offset the effects of any softening demand. For the year 2006, Owens Corning remains confident that income from operations, excluding items impacting comparability, will exceed the comparable adjusted income from operations of $544 million in 2005. Progress Toward Emergence The U.S. Bankruptcy Court for the District of Delaware approved Owens Corning's Plan of Reorganization on Sept. 26, 2006. The U.S. District Court affirmed the company's confirmation order on Sept. 28, 2006. These court approvals pave the way for Owens Corning to emerge from Chapter 11 on or about Oct. 31. Owens Corning's creditors and shareholders overwhelmingly supported the plan, which fairly compensates individuals who were harmed by exposure to asbestos-containing products produced through 1972, and will permanently resolve the company's asbestos liability. A full-text copy of Owens Corning's Form 10-Q Report is available for free at the Securities and Exchange Commission at: http://researcharchives.com/t/s?146d Owens Corning and Subsidiaries Consolidated Balance Sheets As of September 30, 2006 (In millions) ASSETS CURRENT Cash and cash equivalents $1,465 Receivables, less allowance of $19 million 771 Inventories 612 Other current assets 218 ----------- Total current $3,066 ----------- OTHER Restricted cash - asbestos & insurance related 206 Restricted cash, securities & other - Fibreboard 1,500 Deferred income taxes 1,630 Pension-related assets 427 Goodwill 245 Investment in affiliates 83 Other non-current assets 218 ----------- Total other 4,309 ----------- PLANT & EQUIPMENT, at cost Land 86 Buildings & leasehold improvements 809 Machinery & equipment 3,417 Construction in progress 159 ----------- 4,471 Accumulated depreciation (2,372) ----------- Net plant and equipment 2,099 ----------- TOTAL ASSETS $9,474 =========== LIABILITIES & STOCKHOLDERS' DEFICIT CURRENT Accounts payable & accrued liabilities $1,112 Accrued postpetition interest 963 Short-term debt 6 Long-term debt - current portion 13 ----------- Total current 2,094 ----------- Long-Term Debt 46 ----------- OTHER Pension plan liability 702 Other employee benefits liability 403 Other 212 ----------- Total other 1,317 ----------- LIABILITIES SUBJECT TO COMPROMISE 13,539 ----------- COMPANY OBLIGATED SECURITIES OF ENTITIES HOLDING SOLELY PARENT DEBENTURES - SUBJECT TO COMPROMISE 200 ----------- MINORITY INTEREST 50 ----------- STOCKHOLDERS' DEFICIT Preferred stock, no par value 8,000,000 shares authorized, none issued or outstanding - Common stock, part value $0.10 per share, 100,000,000 shares authorized, 55.3 issued and outstanding 6 Additional paid in capital 692 Accumulated deficit (8,169) Accumulated other comprehensive loss (300) Other (1) ----------- Total stockholders' deficit (7,772) ----------- TOTAL LIABILITIES & STOCKHOLDER'S EQUITY $9,474 =========== Owens Corning and Subsidiaries Consolidated Statement of Operations For the Quarter Ended September 30, 2006 (In millions) NET SALES $1,661 COST OF SALES 1,368 ----------- Gross Margin 293 OPERATING EXPENSES Marketing & administrative expenses 141 Science & technology expenses 14 Restructuring costs 10 Chapter 11-related reorganization items 1 Provision for asbestos litigation claims, Owens 3 Provision for asbestos litigation claims, Fibreboard (13) Gain on sale of fixed assets and other (22) ----------- Total operating expenses 134 ----------- INCOME FROM OPERATIONS 159 Interest expense, net 71 ----------- INCOME BEFORE INCOME TAX BENEFIT 88 Income tax benefit 25 ----------- INCOME BEFORE MINORITY INTEREST & EQUITY IN NET EARNINGS OF AFFILIATES 63 Minority interest & equity in net earnings of affiliates (1) ----------- NET INCOME $62 =========== Owens Corning and Subsidiaries Consolidated Statement of Cash Flows Nine Months Ended September 30, 2006 (In millions) NET CASH FLOW FROM OPERATIONS Net income $376 Reconciliation of net cash used for operations Non-cash items: Provision for asbestos litigation claims 21 Depreciation and amortization 184 Gain on sale of fixed assets (49) Impairment of fixed assets 2 Change in deferred income taxes (164) Provision for pension and other employee benefits 74 Provision for postpetition interest/fees 228 Increase in receivables (99) Increase in inventories (118) Increase in prepaid and other assets (41) Decrease in accounts payable & accrued liabilities (68) Proceeds from insurance for asbestos litigation claims excluding Fibreboard 18 Pension fund contribution (14) Payments for other employee benefits liabilities (20) Increase in restricted cash - asbestos and insurance related (17) Increase in restricted cash, securities, and other - Fibreboard (67) Other (2) ---------- Net cash flow from operations 244 NET CASH FLOW FROM INVESTING Additions to plant and equipment (270) Investment in subsidiaries & affiliates, net of cash acquired (47) Proceeds from the sale of assets or affiliate 65 ---------- Net cash used for investing (252) ---------- NET CASH FLOW FROM FINANCING Payment of equity commitment agreement fee (100) Proceeds from issuing long-term debt 17 Payments on long-term debt (7) Net decrease in short-term debt (1) Net decrease in subject to compromise - Other - ---------- Net cash used for financing (91) ---------- Effect of exchange rate changes on cash 5 ---------- Net increase in cash and cash equivalents (94) Cash and cash equivalents at beginning of year 1,559 ---------- Cash and equivalents at end of period $1,465 ========== About Owens Corning Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 146; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PACIFIC ENERGY: Plains Purchase Prompts Moody's Rating Upgrade -------------------------------------------------------------- Standard & Poor's Ratings Services noted that Pacific Energy Partners L.P. was acquired by Plains All American Pipeline L.P. on Nov. 15, 2006. As a result of the acquisition, Standard & Poor's upgraded the two senior notes issued by Pacific to 'BBB-' from 'BB-', because they were assumed by Plains at the time of the acquisition. The Pacific notes rank pari-passu with Plains' existing senior notes. With the acquisition, the corporate credit rating on Pacific is being withdrawn. Pro forma for the notes assumed from Pacific and for its senior notes issuance in October, Houston-based Plains had $2.6 billion in debt as of Sept. 30, 2006. The ratings on Plains reflect a satisfactory business risk profile, with stable cash flow provided by the company's network of pipelines and terminals, as well as a moderately leveraged financial risk profile. Offsetting these factors are the risks presented by Plains' acquisitive growth strategy, its continuing need to access capital markets to fuel growth and refinance debt maturities, and the potential strain that volatile crude oil prices can place on its liquidity. The negative outlook on Plains is tied to the company's need to realize cost reductions and other synergies, in connection with the Pacific purchase to preserve its credit quality. The outlook also reflects the challenges Plains will face in managing a much larger and diverse enterprise. "If the company integrates Pacific according to plan and continues to operate its existing assets well, cash flow measures and financial leverage statistics should improve, allowing us to revise the outlook to stable," said Standard & Poor's credit analyst David Lundberg. "If, however, operational performance suffers and the company does not show progress in deleveraging, company ratings could be lowered," he continued. PHOENIX SYSTEMS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Phoenix Systems & Components, Inc. 1215 Golden Gate Drive Papillion, NE 68046 Bankruptcy Case No.: 06-81911 Type of Business: The Debtor manufactures concrete insulating blocks. Chapter 11 Petition Date: November 21, 2006 Court: Nebraska U.S. Bankruptcy Court (Omaha) Debtor's Counsel: Howard T. Duncan, Esq. Duncan Law Office 1910 South 72nd Street, Suite 304 Omaha, NE 68124-1734 Tel: (402) 391-4904 Fax: (402) 391-0088 Total Assets: $2,397,000 Total Debts: $2,585,578 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Jay Williamson $510,732 P.O. Box 460817 Papillion, NE 68046 Mark Hanson $218,000 3975 East Dillons Drive Eagle Mountain, UT 84043 Intercompany Balances $213,850 c/o Phoenix Systems P.O. Box 460967 Papillion, NE 68046 Desert Mountain Holdings $204,000 3638 North Rancho Drive Las Vegas, NV 89130 Grove Ventures $74,172 ICF of WI $65,236 SCA Packaging North America $58,058 Vencore Solutions $46,176 Internal Revenue Service Payroll Taxes $46,114 Jay Williamson Credit Card $44,629 Jay Williamson $40,000 Richardson and Associates $38,592 Marko Foam $29,945 RW Nielsen Company $29,121 Dave Henney Salary $28,000 Quinn Construction $27,000 Schneider National $26,365 Ricky Demartino $21,945 Pitney Bowes $19,211 Nic Bobiney $16,062 PIER 1 IMPORTS: Sells Pier 1 National Bank to Chase for $155 Mil. ----------------------------------------------------------------- Pier 1 Imports Inc., through its subsidiaries, has completed the sale of its private-label credit card operations to Chase Bank U.S.A. N.A. for approximately $155 million. Under the terms of the purchase and sale agreement, Chase acquired Pier 1 National Bank and its private-label credit card accounts in addition to the outstanding balances associated with the accounts. The Company received approximately $155 million in cash at closing. Pier 1's private-label credit card portfolio includes receivables of approximately $140 million and nearly one million active accounts. The Pier 1 Preferred Card will continue to be offered through Chase under the Pier 1 brand. In addition, the two companies entered into a long-term agreement in which Chase will provide credit and customer service benefits to Pier 1 cardholders and will offer special financing terms to Pier 1 customers. The Company will receive future ongoing payments based on credit card sales, new account generation and other credit and account related activities. Pier 1 and Chase will work together on various marketing initiatives designed to increase Pier 1's sales and further enhance credit growth and profitability. Based in Fort Worth, Texas, Pier 1 Imports Inc. (NYSE:PIR) -- http://www.pier1.com/-- is a specialty retailer of imported decorative home furnishings and gifts with Pier 1 Imports(R) stores in 49 states, Puerto Rico, Canada, and Mexico, and Pier 1 kids(R) stores in the United States. * * * As reported in the Troubled Company Reporter on Sept. 26, 2006, Moody's Investors Service downgraded Pier 1's corporate family rating to B3 from B1 following continued degradation in same store sales, which have resulted in modest operating results and negative free cash flow. The rating outlook is stable. PLUM CREEK: Earns $92 Million in 2006 Third Quarter --------------------------------------------------- Plum Creek Timber Company, Inc. reported its financial results for the third quarter of 2006. The company earned $92 million of net income on revenues of $454 million, compared to earnings for the third quarter of 2005 which was $96 million on revenues of $427 million. Third quarter 2005 earnings included a $2 million expense related to timber destroyed by Hurricane Katrina and a tax-benefit of approximately $5 million resulting from lower estimated tax liabilities. Earnings for the first nine months of 2006 were $248 million on revenues of $1.2 billion. Earnings for the first nine months of 2005 were $287 million on revenues of $1.2 billion. Results for the first nine months of 2006 include a $2 million after-tax cumulative benefit from accounting changes. As a result, income from continuing operations for the first nine months of 2006 was $246 million. Results for the first nine months of 2005 include a $20 million after-tax gain on the sale of coal assets. As a result, income from continuing operations for the first nine months of 2005 was $267 million. Cash provided by operating activities during the third quarter of 2006 totaled $168 million. The company ended the third quarter of 2006 with $389 million in cash and cash equivalents. "During the third quarter our real estate segment continued to grow revenue and earnings," said Rick Holley, president and chief executive officer. "Strong interest in rural properties continued throughout the quarter, and the prices we've received for these timberlands continue to outpace those of 2005. These positive results were offset by lower profits in our Resources and Manufacturing segments as lumber demand slowed from the record high levels of 2005. We believe the strong results of our real estate segment and, to a lesser extent, improving pulpwood markets will result in continued strong cash flow generation and good financial performance in the fourth quarter. We expect sawlog markets to be challenging in the fourth quarter and we will defer harvests in markets where pricing does not meet our expectations." Review of Operations The Northern Resources segment reported third quarter operating profit of $25 million, unchanged from the same period of 2005. The segment's third quarter harvest was 24 percent higher than the same period of 2005 due primarily to harvests from Michigan timberlands acquired during the fourth quarter of 2005. The Michigan operations added approximately $5 million to the segment's operating profit during the third quarter of 2006. However, 2 percent lower softwood sawlog prices and higher log and haul costs offset the positive impact of the Michigan operations. Average pulpwood prices were slightly lower when compared to the same period of 2005. Operating profit in the Southern Resources segment was $38 million for the third quarter, down $6 million from the same period of 2005. The decline in segment profits is primarily the result of lower sawlog prices. Timberland accessibility, and therefore timber supply, remained excellent as moderate-to-severe drought conditions persisted across the South. At the same time, sawlog demand decreased somewhat as regional lumber production slowed from the record pace it set in 2005. As a result of this combination of abundant supply and reduced demand, average softwood sawlog prices were approximately 7 percent lower during the third quarter of 2006 compared to the third quarter of 2005. The harvest of higher valued sawlogs was deferred in several markets and resulted in a weaker harvest mix and a slight decline in sawlog harvests when compared to the same period of last year. A planned increase in pulpwood thinnings to serve increased pulpwood demand resulted in a 7 percent increase in total harvest volume during the third quarter of 2006 compared to the same period of 2005. The Real Estate segment reported third quarter revenue of $129 million compared to $116 million in the third quarter of 2005. The segment operating profit was $72 million for the third quarter of 2006, up from $50 million for the same period of 2005. During the third quarter of 2006, the company continued to capture higher per-acre prices for its timberlands when compared to the same period of 2005. As planned, the company continued to increase its sales of recreation and higher and better use timberlands. The company sold approximately 19,000 acres of small, non-strategic timberlands at average prices approaching $1,800 per acre. These lands are generally small tracts of lower productivity timberlands. The sale of 4,600 acres of conservation properties captured nearly $3,900 per acre while 7,900 acres of recreation property were sold at an average price of approximately $3,800 per acre. In addition, the company completed the sale of a 1,900-acre development property in a growing area of King County, Washington for approximately $43 million. The Manufacturing segment reported operating profit of $6 million for the third quarter of 2006, down from the $9 million reported for the third quarter of 2005. The company's medium density fiberboard business continued to benefit from operational efficiencies and strong demand. Higher profits in the MDF business offset some of the decline in lumber profits, the result of lower lumber demand and prices when compared to the same period of 2005. Compared to the same period of 2005, average third quarter MDF prices were up 17 percent, average plywood prices were up 3 percent, and average lumber prices declined 7 percent. Share Repurchase During the quarter the company repurchased approximately 2.3 million shares of common stock at an average price of $33.87 per share. Combined with the second quarter repurchases of approximately 5.1 million shares, the company has repurchased over 7.4 million shares of common stock for the year. This represents a 4 percent reduction in shares outstanding since the beginning of 2006. As of Sept. 30, 2006, the company had 177.0 million shares of common stock outstanding. "Disciplined capital allocation is a crucial component of long- term shareholder value delivery," continued Holley. "We are constantly reviewing our capital allocation alternatives and seeking the best long-term return for our shareholders. Through these share repurchases, we've effectively bought our own timberlands at a significant discount to their intrinsic value. We will continue to evaluate all our capital allocation alternatives, including the acquisition of financially attractive timberlands, high-return investments in forest productivity, and continued opportunistic acquisition of our stock." Outlook Fourth quarter income from continuing operations is expected to be between $0.30 and $0.35 per share, resulting in full-year reported income from operations between $1.66 and $1.71 per share. During the third quarter the United States and Canada reached a negotiated settlement to the softwood lumber trade dispute. The new agreement took effect on October 13. During the fourth quarter the company expects to receive an estimated $15 million payment as a result of the negotiated settlement. The guidance above does not include the earnings impact of this payment. The company expects that a combination of temporarily high lumber inventories in distribution channels, seasonal construction slowing, and poor cash returns at lumber mills will limit lumber production during the fourth quarter and help to stabilize lumber prices. These conditions are expected to translate into lower spot sawlog prices in certain markets. In Northern markets, the company expects its sawlog prices to return to levels similar to the fourth quarter of 2005 as Pacific Northwest sawlog markets react to mill production curtailments. In the South, the company expects average sawlog prices in most markets to hold at current levels. While some markets may experience modest price erosion in response to lower lumber production, timberland owners have begun to pull timber from the market, choosing to allow the trees to grow rather than sell into lower-priced markets. The company will continue to adjust harvest decisions on a market-by-market basis across its ownership. Demand from new oriented strand board mills and tightening wood chip supplies in many regions are translating into increased demand for pulpwood, particularly in the South and Northwest. Pulpwood prices are firm and increasing in these markets. During the second half of 2006 the company increased its thinning activity, particularly in the Southern Resources segment, to serve the increased demand. The company has increased its outlook for Real Estate segment revenue as the result of the continuing strength in demand for rural real estate properties. The company now expects this segment's revenues to be between $305 million and $315 million for the year. Fourth quarter revenues are expected to be between $63 million and $73 million, with development property sales accounting for approximately $7 million of the fourth quarter revenue. Manufacturing profits are expected to continue to moderate. Lumber markets are expected to remain weak in the face of high lumber inventories and seasonally slower lumber demand. MDF profitability is expected to seasonally soften as prices moderate from the record levels experienced during the third quarter. The lower manufacturing profits and lower level of real estate development sales is expected to reduce the company's tax expense when compared to the third quarter. "We expect to end the year with good fourth quarter performance. Our Real Estate segment continues to perform well and we are building future value through the entitlement of select high value development properties. Our timber business will face some challenging business conditions in the short term as lumber customers work to achieve balance in their end markets. We view this as a temporary situation. We are well aware of the strong demographic underpinnings of demand for our business segments and will continue to focus on maximizing the long term value of all our land and timber assets," concluded Holley. About Plum Creek Based in Seattle, Washington, Plum Creek Timber Company, Inc. (NYSE:PCL) -- http://www.plumcreek.com/-- is a private timberland owner in the nation, with over eight million acres of timberlands in major timber producing regions of the United States and ten wood products manufacturing facilities in the Pacific Northwest. * * * As reported in the Troubled Company Reporter on Apr. 27, 2006, Moody's Investors Service affirmed the Baa3 senior unsecured rating of Plum Creek Timberlands, L.P., the operating partnership of Plum Creek Timber Company, Inc. The Baa3 rating also applies to the recent $200 million reopening of the 5.875% notes due 2015. The rating outlook is stable. POLYMER GROUP: S&P Affirms BB- Rating with Stable Outlook --------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Polymer Group Inc. to negative from stable. All ratings, including the 'BB-' corporate credit rating, were affirmed. The outlook revision follows several quarters of weaker-than- expected performance and somewhat higher-than-expected debt primarily due to raw material cost escalation and some product mix shifts. Also contributing to the disappointing results were several one-time items such as costs related to technical problems associated with new equipment, an acquisition that was not consummated, the closing of manufacturing capacity, and moving the company's headquarters. "Despite signs that operating results have stabilized, and the potential benefits of new plant investments, we are concerned about the company's ability to return financial measures to levels appropriate for the ratings, particularly given less favorable economic prospects," said Standard & Poor's credit analyst Cynthia Werneth. The ratings on Polymer reflect the company's weak business position as a producer of nonwoven and oriented polyolefin products and its aggressive financial profile. The narrow focus of Polymer's business operations is a limiting factor but is partially offset by the company's leading positions in its niche markets, good geographic sales and manufacturing diversity, favorable long-term growth prospects in certain end markets, and opportunities to increase sales and earnings following several recently completed capacity expansions. With annual revenues of nearly $1 billion, Charlotte, North Carolina-based Polymer manufactures products that are used in a wide range of disposable consumer applications, including baby diapers, feminine hygiene products, household and consumer wipes, disposable medical products, and various industrial applications, including automotive, filtration, and protective apparel. The company's nonwovens are used by leading global manufacturers of consumer, medical, and industrial products. Long-term industry growth rates are favorable and are driven by new applications for nonwovens in developed countries and volume increases in existing products as income levels increase in developing countries. However, recent weakness in auto and housing end markets, as well as lower hygiene product sales in connection with retailer destocking, have caused the company to fill capacity with lower- margin products. Although the retail issue appears to be temporary, auto and housing market weakness are likely to extend into the foreseeable future. PREMIER ENTERTAINMENT: U.S. Trustee Appoints Five-Member Committee ------------------------------------------------------------------ The U.S. Trustee for Region 5 appointed five creditors to serve on an Official Committee of Unsecured Creditors in Premier Entertainment Biloxi LLC and its debtor-affiliate, Premier Finance Biloxi Corp.'s chapter 11 case: 1. Steve Horlock Associated Food Equipment & Supplies 10381 Express Drive Gulfport, MS 39505 Tel: (228) 896-0043 Fax: (228) 896-9032 2. Reginald A. Greene Bellsouth Telecommunications Inc. 675 West Peachtree Street, Suite 4300 Atlanta, GA 30375 Tel: (404) 835-0761 Fax: (404) 614-4054 3. Gent K. Culver International Game Technology 9295 Prototype Drive Reno, NV 89521 Tel: (775) 448-0130 Fax: (775) 448-0401 4. Kerry Rotolo Rotolo Consultants Incorporated 894 Robert Boulevard Slidell, LA 70458 Tel: (985) 960-3374 Fax: (960) 643-2691 5. Randy Clark Young Electric Sign Company 5119 South Cameron Street Las Vegas, NV 89118-1512 Tel: (702) 944-4526 Fax: (702) 944-4513 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 Biloxi, Mississippi, Premier Entertainment Biloxi LLC dba Hard Rock Hotel & Casino Biloxi -- http://www.hardrockbiloxi.com/ -- owns and operates hotels. The Company filed for chapter 11 protection on Sept. 19, 2006 (Bankr. S.D. Ms. Case No. 06-50975). When the Debtor filed for protection from its creditors, it listed $252,862,215 in assets and $226,069,921 in debts. RELIANT ENERGY: Credit Enhancement Cues Fitch to Revise Outlook --------------------------------------------------------------- Fitch Ratings has revised the Rating Outlook assigned to Reliant Energy, Inc.'s outstanding debt obligations to Stable from Negative. Fitch current ratings are: -- Issuer Default Rating (IDR) 'B'; -- Senior secured debt 'BB-/RR2'; -- Senior subordinated convertible notes 'B/RR4'. In addition, Fitch expects to rate RRI's $400 million secured term loan due 2010, $700 million secured revolving credit facility due 2009 and $300 million pre-funded letter of credit facility due 2010 'BB-/RR2'. The revised Rating Outlook reflects the implementation of a credit enhancement transaction to support the company's retail energy business in Electric Reliability Council of Texas. Collateral postings to support Retail have been a significant use of liquidity for the company. As of Sept. 30, 2006, collateral postings associated with the retail operations totaled $1.1 billion. Pursuant to the credit sleeve, Merrill Lynch will guarantee Retail's supply transactions and certain of Retail's power sales agreements. Merrill will be paid a one-time fee on closing plus a fee per mega-watt hour Retail delivers to its customers. In addition, Merrill will provide a $300 million working capital facility to support the retail operations, which will be secured by the assets and stock of those operations. RRI will be obligated to reimburse Merrill to the extent that any guarantees are called upon or any collateral posted is foreclosed upon. In addition to the return of the collateral currently posted to support the retail business, management expects the credit sleeve to substantially reduce annual collateral-related costs should there be another dramatic rise in natural gas prices as was the case during the period following Hurricane Katrina. In conjunction with the Credit Sleeve, RRI is reducing the size of its secured revolving credit facility, reducing the size of its secured term loan and entering into a new pre-funded secured letter of credit facility. Fitch views the implementation of the Credit Sleeve as a significant improvement to RRI's credit profile. It will significantly reduce the company's liquidity needs and return cash, which can be deployed to debt reduction. Offsetting in part this benefit is the amendment of the security package for RRI's secured debt holders. Specifically, as part of the Credit Sleeve transaction and associated financing, RRI's secured debt holders have released the lien on the assets and equity of the retail operations. However, the bulk of the assets of Retail consisted of accounts receivable which were previously pledged to Retail's $450 million secured debt facility and a $250 million second lien collateral trust agreement. Fitch is of the view that the replacement of the $450 million secured debt facility and the $250 million collateral trust with a $300 million secured accounts working capital facility results in less structural subordination for RRI's secured debt and largely offsets the loss of the lien on the stock and assets of Retail. While the credit profile of RRI has improved as a result of the Credit Sleeve, the challenge to Retail continues to be demonstrating a consistent track record of margin stability as the Houston market moves to full competition commencing on Jan. 1, 2007. This will ultimately be determined by customer retention rates, retail margins, the pricing behavior of market competitors, and RRI's ability to manage fuel and power procurement requirements in a less restrictive post-Price to Beat world. RESIX FINANCE: S&P Lifts Low-B Ratings on Four Certificate Classes ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on 10 classes of credit-linked notes from RESIX Finance Ltd.'s series 2003-A, 2003-B, and 2003-CB1. In addition, the ratings on the remaining classes from series 2003-B and 2003-CB1 and on all other RESIX transactions are affirmed. Each note is linked to a class from a specific real estate synthetic investment security issued by RESI Finance L.P. The underlying transaction for each RESI deal is a synthetic securitization of jumbo, A-quality, fixed-rate, first-lien residential mortgage loans, which constitute the reference portfolios. Unlike traditional mortgage-backed securitizations, the actual cash flow from each RESI reference portfolio is not paid to the holders of the securities. Rather, the proceeds from the issuance of the securities are invested in eligible investments. Interest payable to the securityholders is paid from income earned on the eligible investments and payments from Bank of America under a financial guarantee contract. The raised ratings on the classes in the RESIX deals reflect the higher ratings on the corresponding classes from the underlying RESI securities. Bank of America uses the RESIX structure to fully hedge its exposure to the underlying reference asset by entering into a total return swap with a Cayman Islands-based corporation that simultaneously issues credit-linked notes corresponding to the risk level of each underlying asset. All of the underlying assets have experienced minimal delinquencies and few or no realized losses. The remaining credit support for the underlying assets securing all of the series should be sufficient to support the current ratings on the underlying certificates, which in turn support the ratings on the RESIX securities. Ratings Raised Resix Finance Ltd. Credit-Linked Notes Rating ------ Series Class To From ------ ----- -- ---- 2003-A B8 B8 AA BBB+ 2003-A B9 B9 AA- BBB- 2003-A B10 B10 A- BB 2003-A B10-S B10-S A- BB 2003-A B11 B11 BB+ B 2003-B B7 B7 BBB BB+ 2003-B B9 B9 BB B+ 2003-B B10 B10 BB- B 2003-CB1 B7 B7 BBB- BB+ 2003-CB1 B8 B8 BB+ BB Ratings Affirmed RESIX Finance Ltd. Credit-Linked Notes Series Classes Rating ------ ------- ------ 2003-B B11 B11 B- 2003-C B7 B7 BB 2003-C B8 B8 BB- 2003-C B9 B9 B+ 2003-C B10 B10 B 2003-C B11 B11 B- 2003-CB1 B9 B9 BB- 2003-CB1 B10 B10 B+ 2003-CB1 B11 B11 B 2003-D B7 B7 BB 2003-D B8 B8 BB- 2003-D B9 B9 B+ 2003-D B10 &n