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/raid1/www/Hosts/bankrupt/TCR_Public/061204.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, December 4, 2006, Vol. 10, No. 288 Headlines AAR CORP: Good Financial Performance Cues Moody's Rating Upgrades ADELPHIA COMMS: Voting Results Show Support for Fifth Amended Plan ADVANCED MICRO: Gets DOJ Subpoena on Antitrust Violations Inquiry AIRTRAN HOLDINGS: Expresses Interest in USAir-Delta Assets AKSYS LTD: Sept. 30 Stockholders' Deficit Widens to $34.8 Million ALASKA AIRLINES: Posts $20.1 Million Net Loss in 2006 3rd Quarter ALBERT DOWDEN: Case Summary & 17 Largest Unsecured Creditors ALERIS INT'L: $3.4-Bil. Texas Pacific Deal Cues S&P to Pare Rating AMERICAN TOWER: Leasing Prospects Prompt S&P to Hold BB+ Rating AMERIVEST PROPERTIES: Completes Office Buildings Sale to Koll/PER ANGIOTECH PHARMA: Moody's Rates $325 Million Senior Notes at Ba3 ANGIOTECH PHARMA: S&P Rates $325 Million Senior Notes at B+ ASARCO LLC: Wants LECG LLC as Environmental Consultant ASARCO LLC: Court Okays Winters Dorsey as Special Purpose Advisor ASSET BACKED: Fitch Rates $13 Million Class M11 Certificates at BB ASSET BACKED: Fitch Rates $13.96 Million Class Certificates at BB BACH TO ROCK: Voluntary Chapter 11 Case Summary BANC OF AMERICA: Fitch Rates $1.5 Million Class Certificates at BB BON-TON STORES: Posts $10.9 Mil. Net Loss in Third Fiscal Quarter BOWATER INC: Posts $216.1 Million Net Loss in 2006 Third Quarter CAIRN MEZZ: Moody's Rates $16 Million Class E Secured Notes at Ba1 CARAUSTAR INDUSTRIES: Debt Reduction Cues Moody's to Hold Ratings CENTRAL PARKING: Retains Blackstone Group as Financial Advisor CENTRAL PARKING: Blackstone Engagement Cues S&P's Negative Watch CEP HOLDINGS: Taps McDonald Hopkins as Special Conflicts Counsel CHAPARRAL STEEL: Moody's Lifts Corp. Family Rating to Ba3 from B1 CHATEAUX FRAMING: Case Summary & 20 Largest Unsecured Creditors CHEMTURA CORP: Posts $39.9 Million Net Loss in 2006 Third Quarter CINCINNATI BELL: Carl Redfield Resigns as Director COLLINS & AIKMAN: Seeks Bridge Order Extending Plan-Filing Period COLLINS & AIKMAN: Textron Wants to Sell C&A Products' Shares COLLINS & AIKMAN: Rejects Ten Contracts and Leases COMPLETE PRODUCTION: Prices $650 Mil. Sr. Notes Private Offering COPANO ENERGY: Prices Public Offering at $59.11 per Unit CROWN CASTLE: Completes $1.55 Bil. Tower Revenue Notes Offering CROWN CASTLE: Moody's Rates $83-Mil. Class G Senior Notes at Ba2 CWABS INC: Moody's Chips Rating on Class B-1 Tranches to Ba3 DANA CORPORATION: Wants to Participate in Hicks's PI Appeal DANA CORP: Inks Pact Moving Danacq Lease Decision Date to Jan. 12 DANA CORP: Trade Creditors Sell 814 Claims Totaling $8,181,711 DETROIT PUBLIC: Moody's Cuts Rating to Ba1 with Negative Outlook DEVELOPERS DIVERSIFIED: Plans 2007 Quarterly Dividend Increase DOBSON COMMS: Improved Operations Prompt S&P's Positive Outlook DOLLAR GENERAL: Names David L. Bere' as Chief Operating Officer DURA AUTO: U.S. Trustee Appoints Seven-Member Creditors Committee E2 BROKERS: Case Summary & 20 Largest Unsecured Creditors ELMTREE HEIGHTS: Case Summary & Four Largest Unsecured Creditors EMMIS COMMS: Lowers Preferred Stock's Price to $20.495 Per Share ENRON CORP: Jeffrey Skilling Inks Pact with U.S. Labor Department ENRON CORP: Panel Wants Settlement Pact with Richard Buy Approved ENTERGY NEW ORLEANS: Objects to Creditors Panel's Avoidance Action ENTERGY NEW ORLEANS: Dist. Court Affirms Gordon Action Dismissal FERRELLGAS PARTNERS: Declares First Quarter Cash Distribution GB HOLDINGS: Committee Proposes Sale of Atlantic Coast Stock GEORGE MASSEY: Case Summary & 13 Largest Unsecured Creditors GERDAU AMERISTEEL: Moody's Lifts Corporate Rating to Ba1 from Ba2 GMAC LLC: Moody's Rates $1.9 Billion Preferred Securities at Ba3 HANESBRANDS INC: Launches Proposed $500 Senior Notes Financing HANESBRANDS INC: Moody's Rates Proposed $500 Million Notes at B2 HILLMARK FUNDING: Moody's Rates $15.2 Million Class D Notes at Ba2 HOME PRODUCTS: Failed Interest Payment Cues S&P's Default Ratings HOUSTON EXPLORATION: Provides Update on Restructuring Plans HOUSTON EXPLORATION: S&P Holds Negative Watch on BB- Credit Rating INDIAN CREEK: Section 341(a) Meeting Continued to December 6 INTEGRATED DISABILITY: Plan Confirmation Hearing Set for Dec. 7 INTERSTATE BAKERIES: Trade Creditors Sell 25 Claims Totaling $14M IPSCO INC: Near Completion of NS Group Buy Cues S&P to Up Ratings ITEN CHEVROLET: Taps Radde to Sell Harley Motorcycle & Searay Boat ITEN CHEVROLET: Court Approves Wipfli LLP as Accountants JOLAMI LLC: Voluntary Chapter 11 Case Summary LEAR CORP: Shifting North American Interior Biz to Joint Venture LEAR CORP: Net Loss Down to $74 Million in 2006 Third Quarter LONDON FOG: Court Approves Homestead Business Sale to Millwork MERRILL LYNCH: Moody's Puts Ratings on Review and May Downgrade MESABA: Unions Want District Court to Review Injunction Issues MESABA AVIATION: Wants to Assume Amendmended Spectrum Lease MILLS CORPORATION: Expects to File 2005 Annual Report Soon NANOBAC PHARMA: September 30 Balance Sheet Upside-Down by $327,957 NORTEK INC: Moody's Holds Rating on $625-Mil. Senior Notes at B3 NORTEL NETWORKS: Implements Consolidation of Common Shares NTK HOLDINGS: Moody's Holds Junk Rating on $403-Mil. Senior Notes OCEAN TRAILS: Moody's Rates $13.2 Million Class D Notes at Ba2 OCWEN RESIDENTIAL: Moody's Junks Rating on Class B5-A Certificates ON SEMICONDUCTOR: Wants Senior Secured Credit Facility Amended PACSUN LLC: Case Summary & 20 Largest Unsecured Creditors PCS EDVENTURES!.COM: Sept. 30 Working Capital Deficit Tops $1 Mil. PITTSFIELD WEAVING: Taps William Gannon as Bankruptcy Counsel PITTSFIELD WEAVING: U.S. Trustee Picks 3-Member Creditors Panel PROFESSIONAL INVESTORS: Files Plan and Disclosure Statement PUBLICARD INC: Sept. 30 Balance Sheet Upside-Down by $1.02 Million PUREBEAUTY INC: Court Okays Gilbert Kelly as Special Counsel REAL ESTATE: Sept. 30 Balance Sheet Upside-Down by $18.645 ROTECH HEALTHCARE: Posts $84 Mil. Net Loss in 2006 Third Quarter SAN RAPHAEL: Case Summary & 10 Largest Unsecured Creditors SATELITES MEXICANOS: Emerges from U.S. Bankruptcy Protection SCORPIUS CDO: Moody's Rates Class B Preferred Securities at Ba3 SEA CONTAINERS: GE Wants Relief from Stay to Pursue Arbitration SEA CONTAINERS: Wants to Sell 50% Stake in Aegean Speed Lines SHAW GROUP: S&P Holds BB Rating and Removes Negative CreditWatch SORIN CDO: Moody's Rates $6.5-Mil. Class C Secured Notes at Ba2 SPANISH BROADCASTING: Continued Losses Cue S&P to Cut Rating to B- STATION CASINOS: DOJ Says Gun Lake Land Won't be Taken into Trust STIEFEL LABS: Moody's Rates Proposed $150 Mil. Senior Loan at B3 THREE PUTT: Case Summary & Two Largest Unsecured Creditors UNIGENE LABS: Septmber 30 Equity Deficit Narrows to $11.4 Million US ENERGY: Gets Court Approval on Critical "First Day Pleadings" VARIG S.A.: Preliminary Injunction Continued Through January 11 VARIG S.A.: Judge Drain Denies Port Authority's Payment Request VERTICAL VIRGO: Moody's Rates Class I Subordinated Notes at Ba2 WHOLE AUTO: Good Performance Pormpts S&P's Positive CreditWatch WILLIAMS SCOTSMAN: Moody's Puts Ratings on Review & May Upgrade ZIM CORP: Posts $369,991 Net Loss in Second Quarter Ended Sept. 30 *Gibson Dunn Promotes 11 Lawyers to Partner * BOND PRICING: For the week of November 27 -- December 1, 2006 ********* AAR CORP: Good Financial Performance Cues Moody's Rating Upgrades ----------------------------------------------------------------- Moody's upgraded ratings of AAR Corporation, corporate family rating and senior notes to Ba3 from B1, in response to improving financial performance resulting form the strong commercial and defense aviation supply and repair environment. The ratings outlook is stable. Moody's last rating action on AAR was taken on Aug. 5, 2005, when the rating outlook was changed to stable from negative. The Ba3 corporate family rating reflects the company's relatively moderate debt levels and strong financial results that ensue from a strong current and expected near-term operating environment in the commercial aviation maintenance and repair and supply chain sector. The ratings are also supported by a substantial liquidity provided by AAR's sizeable cash balance and revolver availability. Ratings are constrained, however, by cash demand associated with growth including expenditures on inventory and equipment as well as by risk relating to the company's speculative investment program in aircraft, both for its own account as well as through joint venture agreements. Moody's is also concerned that AAR remains exposed to cyclical demand and the financial health of its customers, primarily the U.S. commercial airline sector. The stable outlook reflects Moody's expectation that the company will generate moderate free cash flow from operations over the near term, and keep inventory levels under control as demand for specialized parts remains high. Moody's further expects that AAR will maintain high levels of liquidity as it grows while carefully managing its exposure to its customer base. Both factors are considered to be important given the company's exposure to the highly cyclical airline industry. Ratings or their outlook could be revised upward if the company consistently achieves free cash flow to total debt close to 10%, retained cash flow greater than 15% to total debt, and were leverage to fall below 3.0 times for a sustained period. A further ratings upgrade would also require the demonstration that AAR can contain the negative impact of the demands on liquidity and increases in leverage that sometimes occur as a result of the high level of investment in working capital and equipment needed to support growth. Ratings could be negatively affected if AAR's free cash flow were to be negative for a prolonged period, particularly if the company's liquidity were to deteriorate as a result. A negative outlook or downgrade may ensue if leverage were to rise above 4x or if EBIT/interest were to fall below 2x. These factors are most likely to occur, in Moody's opinion, in the event of an increase in the pace of investments to support growth in its Supply Chain Management business, or if the company were to engage in large purchases in aircraft for its Sales and Leasing segment or through joint ventures. These ratings have been upgraded: -- Corporate family rating to Ba3 from B1 -- Probability of default rating to Ba3 from B1 -- Senior unsecured notes ratings to Ba3 from B1 -- Senior unsecured shelf rating to Ba3 from B1 -- Subordinated shelf rating to B2 from B3 -- Preferred shelf rating to B2 from B3 -- Convertible Preferred shelf rating to B2 from B3 AAR Corporation, headquartered in Wood Dale, Illinois, is a diversified provider of parts and services to the worldwide aviation and aerospace and defense industry. ADELPHIA COMMS: Voting Results Show Support for Fifth Amended Plan ------------------------------------------------------------------ Results of the voting on Adelphia Communications Corporation's Fifth Amended Joint Plan of Reorganization were filed on Dec. 2, 2006, with the U.S. Bankruptcy Court for the Southern District of New York. The deadline for voting on the Plan was Nov. 20, 2006, for beneficial holders holding securities through intermediaries and Nov. 27, 2006, for all other parties in interest. The voting results show broad-based support for the Plan. On an aggregate basis, 25 of the 30 classes voting on the Plan voted to accept the Plan, including the classes representing the ACC Senior Notes and the ACC Subordinated Notes. The holder of claims in the Century Bank Administrative Agent Class has been given an extension until today, Dec. 4, 2006, to vote on the Plan with respect to all of its claims. Four classes failed to accept the Plan. Of the non-accepting classes, three are classes of Bank Syndicate Claims with whom the Debtors have entered into a stipulation permitting the holders of Claims to change their votes prior to commencement of the confirmation hearing, subject to extension by the proponents. The fourth non-accepting class is the Class of FrontierVision Holdco Notes Claims. While a majority of the holders of Claims in that Class voted to accept the Plan, under applicable bankruptcy law, the Class of FrontierVision Holdco Note Claims did not accept the Plan because less than two thirds in dollar amount of the allowed claims in the Class voted to accept the Plan. The company stated that: "We are pleased at the broad support for the Plan among many different classes of creditors throughout the Company's capital structure. The Co-Proponents intend to commence the hearing to consider confirmation of the Plan as scheduled on Thursday, Dec. 7, 2006, before the Honorable Robert J. Gerber in the United States Bankruptcy Court for the Southern District of New York." The voting results are available at this website: http://www.adelphiarestructuring.com About Adelphia Communications Corp. Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. ADVANCED MICRO: Gets DOJ Subpoena on Antitrust Violations Inquiry ----------------------------------------------------------------- Advanced Micro Devices Inc. received a subpoena from the U.S. Department of Justice Antitrust Division in connection with the DOJ's investigation into potential antitrust violations related to graphics processors and cards. AMD entered the graphics processor business following the company's acquisition of ATI Technologies Inc. on Oct. 25, 2006. The DOJ has not made any specific allegations against AMD or ATI. AMD intends to cooperate with the investigation. Based in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- provides microprocessor solutions for computing, communications and consumer electronics markets. * * * As reported in the Troubled Company Reporter on Oct. 31, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. technology semiconductor and distributor sector, the rating agency affirmed its Ba3 corporate family rating on Advanced Micro Devices, Inc. As reported in the Troubled Company Reporter on Oct. 6, 2006, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on AMD. The rating agency also assigned its 'BB-' bank loan rating, one notch above the corporate credit rating, and a '1' recovery rating to the company's proposed $2.5 billion senior secured term loan, to be used as partial funding of the acquisition. S&P further raised its rating on the company's $600 million ($390 million outstanding) senior notes to 'B+' from 'B' AIRTRAN HOLDINGS: Expresses Interest in USAir-Delta Assets ---------------------------------------------------------- AirTran Holdings Inc. Chairman and CEO Joe Leonard expressed his interest in buying airport gates sold by US Airways Group Inc. or Delta Air Lines Inc., Corey Dade and Melanie Trottman writing for the Wall Street Journal. Following US Airways' and Delta's meeting, Mr. Leonard prompted to comment that if the carriers combine, the takeover battle would be considered a sign for rival airlines to have the chance to grab long-coveted assets. Mr. Leonard, in an interview with WSJ, said that AirTran would consider acquiring jettisoned shuttle operations as a road to gain access to gates at New York's LaGuardia International Airport and Washington's Reagan National Airport. Citing Mr. Leonard, WSJ states that the takeover bid would be "very good" for AirTran. According to the Journal, Mr. Leonard's comments about the US Airways-Delta deal spurred other airlines, including Southwest Airlines, showing interest in buying the assets. AirTran Airways, Inc. (NYSE: AAI) -- http://www.airtran.com/-- operates over 600 daily flights to 50 destinations. The airline's hub is at Hartsfield-Jackson Atlanta International Airport, where it is the second largest carrier. AirTran Airways recently added the fuel-efficient Boeing 737-700 aircraft to create America's youngest all-Boeing fleet. The airline is also the first carrier to install XM Satellite Radio on a commercial aircraft and the only airline with Business Class and XM Satellite Radio on every flight. * * * As reported in the Troubled Company Reporter on Nov. 23, 2006, Moody's Investors Service confirmed its B3 Corporate Family Rating for AirTran Holdings Inc. and its Caa1 rating on the company's 7.0% Guaranteed Convertible Notes Due July 1, 2023, in connection with 's implementation of its Probability-of-Default and Loss- Given-Default rating methodology for the Transportation sector. Moody's also assigned an LGD6 rating to those loans, suggesting noteholders will experience a 91% loss in the event of a default. AKSYS LTD: Sept. 30 Stockholders' Deficit Widens to $34.8 Million ----------------------------------------------------------------- Aksys, Ltd.'s total stockholders' deficit increased $31,507,784 to $34,812,507 as of Sept. 30, 2006, from $3,304,723 as of Dec. 31, 2005. The company's balance sheet at Sept. 30, 2006, showed $6,975,506 in total assets and $41,788,013 in total liabilities, compared to its Dec. 31, 2005 balance sheet, which showed $19,155,947 in total assets and $22,460,670 in total liabilities. The company's Sept. 30 balance sheet further showed negative working capital with $5,008,044 in total current assets available to pay $24,136,487 in total current liabilities. For the three months ended Sept. 30, 2006, the company incurred a $6,301,267 net loss on $431,265 of total revenues versus a $7,018,225 net loss on $822,309 of total revenues for the same period in 2005. The $700,000 decrease in net loss was mainly attributable to the increase in other income of $4.0 million offset by the impairment charge of $3.1 million. The $391,000 or 47.6% decrease in revenue relates to the company's termination of approximately seven rental contracts representing a decrease of approximately 33 patients using the personal hemodialysis system as a result of the company's restructuring. In addition, the company is not actively marketing its PHD System. Accordingly, there were no product sales in the quarter ended Sept. 30, 2006, and rental revenues and service and supplies revenues decreased approximately $158,000, or 26.8%, in the three months ended Sept. 30, 2006 as compared to the three months ended Sept. 30, 2005. Refinancing As a result of the refinancing transaction that occurred in June 2006, Durus has the option to invest additional funds in the company in exchange for preferred stock and warrants. The fair value of this option on the date of the transaction was approximately $16.3 million and is classified as a current liability. Since it is a liability, the fair value is remeasured and the liability is adjusted for changes in fair value each period. As of Sept. 30, 2006, the fair value of the liability had decreased to approximately $17.0 million from the fair value at June 30, 2006 of $21.4 million. The decrease in the fair value of the option is related to the decrease in the price of the company's common stock from June 30, 2006 to Sept. 30, 2006. Full-text copies of the company's financial statements for the third quarter 2006 are available for free at: http://researcharchives.com/t/s?1631 Based in Lincolnshire, Ill., Aksys Ltd. -- http://www.aksys.com/ -- Aksys, Ltd. provides hemodialysis products and services for patients suffering from end-stage renal disease, known as chronic kidney failure. The company offers an automated personal hemodialysis system, known as the Aksys PHD, a Personal Hemodialysis System (PHD System), which is designed to enable patients to perform frequent hemodialysis at alternate sites, such as their own homes. ALASKA AIRLINES: Posts $20.1 Million Net Loss in 2006 3rd Quarter ----------------------------------------------------------------- Alaska Airlines Inc. reported a $20.1 million net loss on $759.9 million of total revenues for the quarter ended Sept. 30, 2006, compared with an $82.3 million net income on $689.3 million of total revenues for the same period in 2005. At Sept. 30, 2006, the company's consolidated balance sheet showed $3.78 billion in total assets, $3.03 billion in total liabilities, and $746.4 million in total stockholders' equity. The net loss for the third quarter of 2006 was driven principally by fleet transition costs, restructuring charges, and the downward mark-to-market adjustment of the fuel hedge portfolio as a result of declining oil prices. In addition, the strong revenue recorded in the third quarter of 2006 was offset by significantly higher economic fuel costs and a small increase in other operating expenses. The company recorded a $58.4 million charge in the third quarter for the impairment, including the write-off of $1.8 million of leasehold improvements related to the purchase of five of the leased MD-80s which the company plans to retire by the end of 2008 and replacing these with an all Boeing 737 fleet. The charge was offset by the reduction of $7.5 million of deferred rent associated with the acquired aircraft. During the third quarter incurred total restructuring charges and adjustments of $28.6 million, as a result of new four-year agreements with the company's employees, all represented by the International Association of Machinists which included a signing bonus of $1.9 million in July 2006, an immediate 2% wage increase, and a severance package based on years of service, one year of medical coverage after the severance date, and continued travel privileges for a period of time. Because of the recent decline in world oil prices, the company recorded a mark-to-market fuel hedging loss of $56.2 million, which is included in aircraft fuel costs, compared to $19.9 million of gain in the third quarter of 2005. In the third quarters of 2006 and 2005, the company also recorded gains from settled fuel hedges totaling $23.6 million and $37.8 million, respectively, which are also recorded in aircraft fuel. Alaska Air Group, Inc. -- http://www.alaskaair.com/ -- is the holding company for Alaska Airlines and Horizon Air, Seattle-based carriers that collectively serve more than 70 destinations in the Western U.S., Canada, and Mexico. Alaska Air Group was organized as a Delaware corporation in 1985. Horizon Air Industries, Inc. provides air transportation to more than 40 destinations in Washington, Oregon, Idaho, Montana, California, Arizona, Colorado, British Columbia, and Alberta. Alaska Airlines, Inc., an Alaska corporation founded in 1932, which accounts for about 80% of Air Group revenues, provides scheduled air service to 38 cities in Alaska, Washington, Oregon, California, Nevada, Arizona, and British Columbia, plus Chicago and five destinations in Mexico. Alaska Airlines Inc.'s 9.5% Series A Certificates due April 12, 2010 carry Standard & Poor's B+ and Moody's B1 ratings. ALBERT DOWDEN: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Albert Dowden and Juanita Dowden 1440 Williams Road Columbus, OH 43207 Bankruptcy Case No.: 06-56925 Chapter 11 Petition Date: November 29, 2006 Court: Southern District of Ohio (Columbus) Judge: C. Kathryn Preston Debtors' Counsel: Matthew J. Thompson, Esq. Nobile, Needleman & Thompson 4511 Cemetery Road Suite B Hilliard, OH 43026 Tel: (614) 529-8600 Fax: (614) 529-8656 Total Assets: $1,348,710 Total Debts: $862,173 Debtors' 17 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Internal Revenue Service $12,000 ATTN: Special Procedures 550 Main Street, Room 3525 Cincinnati, OH 45201 Chase $9,222 P.O. Box 15298 Wilmington, DE 19850-5298 Advanta $8,184 P.O. Box 530715 Salt Lake City, UT 84130-0715 US Bank $7,086 SST Card Services $6,272 Providian $5,622 Chase $5,533 Chase $3,962 Royal Bank of Scotland $3,962 Chase $3,156 Discover $2,594 Chase $2,500 BMI $1,631 Columbia Gas $1,250 Buckeye Rural Electric $990 Nextel $855 American Express $794 ALERIS INT'L: $3.4-Bil. Texas Pacific Deal Cues S&P to Pare Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Beachwood, Ohio-based Aleris International Inc. to 'B+' from 'BB-'and removed it from CreditWatch, where it was placed with negative implications on Aug. 9, 2006. The CreditWatch placement comes after the report that Texas Pacific Group had agreed to acquire Aleris' outstanding stock for nearly $3.4 billion, consisting of $1.7 billion in cash plus assumed debt, representing a 6.8x trailing-12-months EBITDA multiple. The outlook is stable. At the same time, Standard & Poor's assigned its 'B+' and '2' recovery ratings to the company's proposed $1.1 billion senior secured term loan. The '2' recovery rating indicates the expectation of a substantial recovery of principal in the event of a payment default. Aleris International Inc., a U.S. corporation, and Aleris Deutschland Holding GmbH, its German subsidiary, will be co-borrowers under the term loan facility. The company contemplates that Aleris International will borrow $700 million, with the remaining $400 million borrowed in a combination of euros and dollars by Aleris Deutschland. Standard & Poor's also assigned its 'B-' ratings to Aleris' proposed $500 million senior subordinated notes and proposed $600 million senior unsecured notes. The senior unsecured notes carry a payment-in-kind "toggle" feature. The ratings are based on preliminary terms and conditions and are predicated on the completion of the TPG transaction and related financings substantially in the form currently anticipated. The proceeds from the issues, along with proceeds from a revolving credit facility, will primarily be used to refinance existing debt, finance the acquisition, and fund working capital and transactions costs. "The downgrade reflects the company's substantial increase in debt leverage stemming from the TPG transaction and weakened credit protection measures," said Standard & Poor's credit analyst Marie Shmurak. "We remain concerned that management will continue to opportunistically make cash-financed acquisitions and that economic weakness will cause credit metrics to decline. However, we expect Aleris' markets to remain relatively healthy in the intermediate term, which should enable the company to reduce leverage. "We could change the outlook to positive if management reaches and maintains more moderate debt levels. We could change the outlook to negative and ratings on Aleris could be pressured if the company's debt levels remain high and performance weakens materially because of intensified competition or market conditions deteriorate." AMERICAN TOWER: Leasing Prospects Prompt S&P to Hold BB+ Rating --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed the ratings on Boston- based wireless communications tower operator American Tower Corp. and its related entities, including the 'BB+' corporate credit rating. At the same time, the ratings were removed from CreditWatch. The outlook is stable. The ratings had been placed on CreditWatch with negative implications on May 19, 2006, after the company's disclosure that it might have to restate some of its financial statements due to issues surrounding its stock option practices and related accounting. Since then the company had to obtain waivers from its lenders due to delays in filing its second and third quarter 10- Qs. However, on Nov. 29, 2006, American Tower company filed its amended financial statements for the 2005 10-K and for the first quarter of 2006. It also filed its 10-Qs for the second and third quarter of 2006, incorporating the adjustments made in the previously filed statements. The cumulative adjustment to net income for the period 2003 through the first quarter of 2006 was about $21 million. "The ratings on American Tower reflect the promising prospects of its wireless tower leasing business, which is expected to generate increasingly stronger levels of net free cash flow after capital expenditures," said Standard & Poor's credit analyst Catherine Cosentino. Despite these very favorable business risk characteristics, American Tower maintains an aggressive financial policy and is expected to engage in share repurchases over the next few years now that it has completed its review of its accounting practices related to stock options and is current on its financial statement filings. AMERIVEST PROPERTIES: Completes Office Buildings Sale to Koll/PER ----------------------------------------------------------------- AmeriVest Properties Inc. completed the sale of its Centerra office building in Denver, Colorado, its Parkway Centre II office building in Dallas, Texas; and Southwest Gas office building in Phoenix, Arizona, to Koll/PER, LLC The company reported that Centerra was sold for $24,675,000 and Parkway Centre II was sold for $24,860,000. The Southwest Gas building was sold for $19,200,000. The estimated cash proceeds of approximately $32 million, after assignment of the mortgage encumbering the three properties, closing costs and adjustments, will be accumulated with other proceeds and made available, subject to the expenses and other costs of AmeriVest, for distribution to shareholders under the plan of liquidation approved by AmeriVest shareholders. The Company did not incur the $1 million purchase contingency that had been reserved at Sept. 30, 2006 in connection with the remaining sales. This is the eighth and final closing under the July 17, 2006 purchase and sale agreement with Koll/PER. The Company has completed the liquidation of its entire real estate portfolio. The Board of Directors of AmeriVest reported a $3.50 per share initial liquidating distribution payable on Nov. 16, 2006 to shareholders of record as of Nov. 10, 2006, but has not yet established any dates for the payment of subsequent liquidating distributions. There can be no assurance with respect to the timing or amount of any distribution or distributions to be made by AmeriVest. Headquartered in Denver, Colorado, AmeriVest Properties Inc. (AMEX: AMV) -- http://www.amvproperties.com/-- provides Smart Space for Small Business(TM) in Denver, Phoenix, and Dallas through the acquisition, repositioning and operation of multi- tenant office buildings in those markets. * * * As reported in the Troubled Company Reporter on June 5, 2006, AmeriVest Properties Inc.'s stockholders approved a Plan of Liquidation at its annual meeting. Under the Plan, the Company's remaining 12 office properties will be sold on an orderly basis and proceeds distributed to stockholders. All 12 properties are listed with Trammell Crow Company and the sales process is being managed through Trammell Crow's Denver office. Detailed information regarding the properties was released to over 4,000 prospective purchasers on May 1, 2006. ANGIOTECH PHARMA: Moody's Rates $325 Million Senior Notes at Ba3 ---------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating of Angiotech Pharmaceuticals, Inc to B1 from Ba3 and changed the ratings outlook to negative from stable, reflecting weaker than anticipated projected revenue and cash flow. Moody's also lowered the speculative grade liquidity rating to SGL-3 from SGL-2, due to the lack of external liquidity and lower operating cash flow. Moody's also assigned a rating of Ba3 to the company's proposed $325 million senior unsecured notes and affirmed the B2 rating on the existing senior subordinated notes. Moody's expects that proceeds from the senior unsecured notes will be used to repay the outstanding principal amount under its senior secured term loan facility and the company will terminate its current revolving credit facility. The downgrade of Angiotech's Corporate Family Rating to B1 reflects the following factors: -- weaker than anticipated results than anticipated when Moody's initially rated the company in March 2006; -- a decline in EBITDA related to lower royalties from the Taxus drug-eluting stent, a high margin product that accounts for almost 50% of the company's revenues; -- higher than anticipated sales and marketing expenses; -- a slowdown in orders from original equipment manufacturers; and, -- a more pessimistic view of the drug-eluting stent market. Moody's notes that Angiotech recently lowered guidance for 2006 revenues and earnings, based on lower than expected stent sales by its partner, Boston Scientific, higher operating expenses and lower sales of medical devices to original equipment manufacturer. Due to weaker operating trends, Moody's lowered its cash flow estimates for fiscal 2006 through fiscal 2008. As a result of these new cash flow projections, Moody's believes that cash flow coverage of debt and other financial metrics are no longer indicative of a Ba3 rating but are more indicative of a weakly positioned B1 rated company. The negative outlook reflects the potential for additional downward revisions to Moody's current projections given weak operating trends. Moody's pessimistic view of the drug-eluting stent market, the threat of additional competitors in the stent market and potential disruptions to AMI business may all serve as future catalysts to lower existing projections for revenues, operating margins, and cash flow, causing negative pressure on the ratings. The downgrade in the speculative grade liquidity rating to SGL-3 from SGL-2 reflects the absence of access to external liquidity, lower cash flow guidance and deteriorating operating trends. The company has almost $100 million of cash on hand which serves as adequate cushion against unforeseen events. However, if the cash balance were to decline to below $50 million, the company's financial flexibility and liquidity would be materially reduced, thus pressuring the rating. New ratings assigned to Angiotech Pharmaceuticals, Inc.: -- $325 million guaranteed senior unsecured notes, due 2013, Ba3, LGD3, 46% -- Corporate Family Rating, downgraded to B1 from Ba3 -- PDR Rating, affirmed Ba3 -- $250 million senior subordinated notes, due 2014, affirmed B2 rating LGD assessment changed to LGD-6, 91% from LGD-5, 82% -- Speculative Grade Liquidity Rating, downgraded to SGL-3 from SGL-2 -- Family LGD assessment now LGD-4, 65% versus LGD-4, 50% The rating outlook is negative. These ratings will be withdrawn: -- Senior Secured Revolver, due 2011, Ba1, LGD2, 27% -- Senior Secured Term Loan B, due 2013, Ba1, LGD2, 27% Angiotech Pharmaceuticals, Inc., founded in 1992, based in Vancouver, Canada, is a specialty pharmaceutical company that focuses on drug-device combinations and drug-loaded surgical biomaterial implants. The company reported $222 million in total revenue for the nine months ended Sept. 30, 2006. ANGIOTECH PHARMA: S&P Rates $325 Million Senior Notes at B+ ----------------------------------------------------------- Standard & Poor's lowered the corporate credit rating on Angiotech Pharmaceuticals Inc. to 'B+' from 'BB-', and the subordinated debt rating to 'B-' from 'B'. Standard & Poor's also assigned a 'B+' senior unsecured debt rating to Angiotech's proposed seven-year $325 million senior unsecured notes, proceeds from which, along with cash balances, will be used to repay the company's existing $320 million secured Term Loan B. Angiotech will also retire the $75 million revolving credit facilities of its subsidiary, Angiotech Pharmaceuticals Inc. As a result, the 'BB-' secured bank loan rating with a '2' recovery rating will be withdrawn. The outlook is stable. "The downgrade reflects Angiotech's weaker-than-anticipated financial profile as evidenced by credit metrics that have deteriorated since the American Medical Instruments Inc. acquisition, and a capital structure with high debt that will amortize more slowly than under the previous financial structure implemented for the AMI acquisition," said Standard & Poor's credit analyst Don Povilaitis. Weaker-than-expected cash flow in fiscal 2006 is primarily due to lower Taxus drug-eluting related royalties and, to a lesser extent, from lower equipment manufacturer orders. Vancouver, British Columbia-based Angiotech is a Canadian specialty pharmaceutical company whose core strength is adding pharmaceutical compounds to medical devices and targeting interventions with high failure rates that can result in costly corrective surgeries. Angiotech receives royalty payments under a licensing agreement with marketing partner Boston Scientific Corp. for the drugs applied to coat the Taxus DES. This is Angiotech's most important source of revenue. These royalty payments, which accounted for about half of 2006 revenues, are the company's most important source of revenue. Thus, product concentration remains a concern. The success of Angiotech's Taxus DES has permitted for strong free cash flow generation since 2004. Still, Standard & Poor's had expected Angiotech's 2006 pro forma lease-adjusted EBITDA to reach about $150 million, but several material issues have surfaced thus far in 2006 that will preclude the company from reaching this level. Profitability metrics have also been affected as a result of the lower-than-expected Taxus royalties, as well as the lower demand for Angiotech's wound closure products. While the company's margins were expected to decline slightly in 2006 due to clinical trials and increased its R&D expenses, the erosion in cash flow is greater than anticipated. Without meaningful improvement in Taxus revenues or from the company's pipeline, operating margins are likely to be relatively flat in the next few years. The stable outlook reflects Standard & Poor's expectation that credit metrics will gradually strengthen in the medium term. Should, however, Taxus-related revenues become adversely affected by competitive, legal, or safety factors, thereby depressing cash flow, the outlook could be revised to negative. If BSX is able to successfully deal with the onset of stent competition in the U.S., expected by 2008, and Angiotech is able concurrently to strengthen its capital structure, then the outlook could be revised to positive. ASARCO LLC: Wants LECG LLC as Environmental Consultant ------------------------------------------------------ ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to employ LECG LLC as its environmental consultants, nunc pro tunc to Sept. 5, 2006, to assist it in connection with its environmental liabilities and other related matters. ASARCO LLC has been engaged in the mining, smelting, and refining businesses for more than 100 years and as a result, has acquired responsibility for environmental claims asserted by federal and states governments, Indian tribes, and private parties at almost 100 sites. Tony M. Davis, Esq., at Baker Botts L.L.P., in Houston, Texas, relates that ASARCO is still in the process of establishing an accurate tally of the total asserted amount of environmental claims against it. As of Nov. 15, 2006, several entities have filed environmental claims against ASARCO, including: Claimant Claim Amount -------- ------------ United States $3,600,000,000 to $4,000,000,000 16 States $3,800,000,000 to $4,000,000,000 2 Tribes Approximately $800,000,000 Private Parties Almost $2,000,000,000 According to Mr. Davis, after eliminating duplication on the asserted claims, they still total more than $6,000,000,000. Thus, no one can seriously dispute that the unsecured class in ASARCO's Chapter 11 case will be too ill defined to achieve confirmation of a plan of reorganization unless and until the vast majority of the environmental claims have been estimated by the Court or resolved through settlement, Mr. Davis says. ASARCO's first option has been to negotiate a consensual settlement of the environmental claims to avoid the need for estimation. Towards that end, ASARCO provided its estimates for remediation costs to the U.S. government in May 2006, and thereafter sought to meet with the government to get a response regarding the estimates. If a settlement is not possible, Mr. Davis says ASARCO will need to obtain an estimate of the environmental claims before it can formulate and obtain approval of a plan. A hearing on the estimation of derivative asbestos claims is currently set for March 2007. ASARCO would like to be ready by then to proceed with an estimation of the environmental claims so that its ability to file a plan of reorganization is not delayed. As environmental consultants, LECG will: -- testify as an expert; -- provide expert services relating to the estimation of ASARCO's potential environmental liabilities; and -- evaluate natural resource damages claim matters and other related matters. ASARCO will pay LECG according to the firm's customary hourly rates. ASARCO expects these LECG professionals to take the lead in providing consulting services: Professional Hourly Rates ------------ ------------ J. Zelikson, expert $425 T. Devitt, director $410 R. White, director $410 N. Brody, director $325 A.J. Gravel, director $325 L.Walsh, principal $325 Other LECG professionals who may render their services to ASARCO will also be paid in their customary hourly rates: Professional Hourly Rates ------------ ------------ Senior Professional Staff $175 to $300 Professional Staff $100 to $175 Case Associates $65 to $95 Marvin Tenenbaum, Esq., general counsel of LECG, assures the Court that his firm does not represent any interest adverse to ASARCO and its estate. Mr. Tenenbaum discloses that: * LECG performs work for other clients related to the Jasper County, Missouri; Ottawa County, Missouri; and Cherokee County, Kansas and the Tar Creek Superfund Sites. LECG and ASARCO agreed to limit LECG's work on the estimation of the Tri-States and Tar Creek environmental claims. LECG will also ensure that other employees who have performed work on the Tri-States and Tar Creek Sites for other clients will not provide services to ASARCO in connection with the estimation of the Tri-States and Tar Creek environmental claims. * LECG is providing environmental consulting services to one of the environmental claimants in connection with a site in Coeur d'Alene, Idaho, at which ASARCO is involved. The LECG experts working on the Coeur d'Alene matter will not perform any work for ASARCO. * LECG has been engaged as environmental consultants on behalf of one or more claimants in ASARCO's bankruptcy with respect to sites unrelated to the sites at issue in ASARCO's case. In addition, LECG has performed services to ASARCO in September and October 2006 and has incurred fees and expenses totaling $244,621. About ASARCO LLC Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). ASARCO LLC: Court Okays Winters Dorsey as Special Purpose Advisor ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi authorized ASARCO LLC to employ Winters, Dorsey & Company LLC as special purpose consulting experts to Baker Botts LLP, nunc pro tunc to Sept. 1, 2006. As reported in the Troubled Company Reporter on Nov. 3, 2006, ASARCO has previously commenced a complaint against Mineral Park Inc. in connection with the sale of the South Mill Assets a month before it filed for bankruptcy. ASARCO asserted that it failed to receive reasonably equivalent value in exchange for the transfer of the South Mill Assets. James R. Prince, Esq., at Baker Botts, in Dallas, Texas, related that ASARCO needed to employ professionals who can provide valuation services in connection with the Adversary Proceeding. Mr. Prince told the Court that WDC has already prepared a preliminary valuation report in connection with the Adversary Proceeding. Aside from the preliminary report, WDC will prepare a final report for trial and more reports as needed. WDC will also provide other expert consulting services to Baker Botts. Mr. Prince said WDC has accrued approximately $100,000 in fees and expenses for the preparation of the preliminary expert report. For additional work, ASARCO will pay WDC in its customary hourly rates. Harry Winters, Jr., president of WDC, will be paid $350 per hour. Other professionals from WDC who may provide services to ASARCO will be paid from $150 to $250 per hour. ASARCO estimated that professional fees for WDC will range from $95,000 to $116,000. ASARCO will also reimburse WDC for its reasonable out-of-pocket expenses. Mr. Winters assured the Court that WDC is disinterested pursuant to Section 101(14) of the Bankruptcy Code and does not represent any other entity having adverse interests to ASARCO and its estate. About ASARCO LLC Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). ASSET BACKED: Fitch Rates $13 Million Class M11 Certificates at BB ------------------------------------------------------------------ Asset Backed Securities Corporation Home Equity Loan Trust, $946.9 million Asset-Backed Pass-Through Certificates, Series MO 2006-HE6, are rated by Fitch Ratings as: -- $731.92 million classes A1 through A5 'AAA'; -- $50.72 million class M1 'AA+'; -- $42.04 million class M2 'AA'; -- $15.95 million class M3 'AA-'; -- $18.84 million class M4 'A+'; -- $16.91 million class M5 'A'; -- $11.11 million class M6 'A-'; -- $11.6 million class M7 'A-'; -- $8.7 million class M8 'BBB+'; -- $11.6 million class M9 'BBB'; -- $14.49 million privately offered class M10 'BB+'; -- $13.04 million privately offered class M11 'BB'. The 'AAA' rating on the senior certificates reflects the 24.25% total credit enhancement provided by the 5.25% class M1, the 4.35% class M2, the 1.65% class M3, the 1.95% class M4, the 1.75% class M5, the 1.15% class M6, the 1.2% class M7, the 0.9% class M8, the 1.2% class M9, 1.50% privately offered class M10, 1.35% privately offered class M-11 and the initial and target overcollateralizationof 2%. All certificates have the benefit of monthly excess cash flow to absorb losses. In addition, the ratings reflect the quality of the loans, the integrity of the transaction's legal structure as well as the capabilities of Nationstar Mortgage LLC and Select Portfolio Servicing, Inc. as servicers, and Wells Fargo Bank, N.A. as Master Servicer. Trustee will be U.S Bank National Association. The certificates are supported by two collateral groups. Group I will consist of 1,331 mortgage loans that have original principal balances that conform to Fannie Mae or Freddie Mac guidelines. The Group I mortgage pool consists of first lien, second lien, fixed-rate, and adjustable-rate mortgage loans that have a cut-off date pool balance of $235,311,139. Approximately 25% of the mortgage loans are fixed rate mortgage loans and 75% are adjustable-rate mortgage loans. The weighted average current loan rate is approximately 8.417%. The weighted average remaining term to maturity is 356 months. The average principal balance of the loans is $176,793. The weighted average original combined loan-to-value ratio is 81%. The weighted average FICO score is 608. The properties are primarily located in California, Florida, and Illinois. Group II will consist of 3,612 mortgage loans that have original balances that may or may not conform to Fannie Mae or Freddie Mac guidelines. The Group II mortgage pool consists of first and second lien, adjustable-rate and fixed-rate mortgage loans that have a cut-off date pool balance of $732,405,754. Approximately 21.96% of the mortgage loans are fixed rate mortgage loans and 78.04% are adjustable-rate mortgage loans. The second lien amount is 0.64%. The weighted average current loan rate is approximately 8.486%. The weighted average remaining term to maturity is 355 months. The average principal balance of the loans equals $202,359. The weighted average original combined loan-to-value ratio is 82%. The weighted average FICO score is 614. The properties are primarily located in California, Florida, and Texas. For federal income tax purposes, multiple real estate mortgage investment conduit elections will be made with respect to the trust estate. The mortgage loans were originated or acquired by Nationstar Mortgage, LLC, Argent Mortgage Company, LLC or Ameriquest Mortgage Company. Nationstar Mortgage, LLC, is a sub-prime mortgage lender formed in 1994 and originates primarily non-conforming mortgage loans. Argent Mortgage Company, LLC is a subsidiary of Ameriquest Mortgage Company. Ameriquest Mortgage Company is a specialty finance company engaged in the business of originating, purchasing and selling retail and wholesale sub prime mortgage loans. ASSET BACKED: Fitch Rates $13.96 Million Class Certificates at BB ----------------------------------------------------------------- Asset Backed Securities Corporation Home Equity Loan Trust, $1.016 billion Asset-Backed Pass-Through Certificates, Series AMQ 2006-HE7, are rated by Fitch Ratings as: -- $788.44 million classes A1 through A5 'AAA'; -- $55.84 million class M1 'AA+'; -- $47.57 million class M2 'AA'; -- $13.44 million class M3 'AA-'; -- $22.23 million class M4 'A+'; -- $18.61 million class M5 'A'; -- $9.82 million class M6 'A-'; -- $11.37 million class M7 'BBB+'; -- $9.31 million class M8 'BBB'; -- $11.89 million class M9 'BBB-'; -- $13.44 million class M10 'BB+'; -- $13.96 million privately offered class M11 'BB'. The 'AAA' rating on the senior certificates reflects the 23.75% total credit enhancement provided by the 5.4% class M1, the 4.6% class M2, the 1.3% class M3, the 2.15% class M4, the 1.8% class M5, the 0.95% class M6, the 1.1% class M7, the 0.9% class M8, the 1.15% class M9, 1.30% class M10, 1.35% privately offered class M- 11 and the initial and target overcollateralization of 1.75%. All certificates have the benefit of monthly excess cash flow to absorb losses. In addition, the ratings reflect the quality of the loans, the integrity of the transaction's legal structure as well as the capabilities of Select Portfolio Servicing, Inc. as servicer and U.S bank National Association, as Trustee. The certificates are supported by two collateral groups. Group I will consist of 2,166 mortgage loans that have original principal balances that conform to Fannie Mae or Freddie Mac guidelines. The Group I mortgage pool consists of first lien, second liens, adjustable-rate and fixed-rate mortgage loans that have a cut-off date pool balance of $387,668,377. There are approximately 76% adjustable-rate mortgages and 1.7% second lien mortgages. The weighted average current loan rate is approximately 8.505%. The weighted average remaining term to maturity is 357 months. The average principal balance of the loans is $178,979. The weighted average original combined loan-to-value ratio is approximately 85%. The weighted average FICO score is 615. The properties are primarily located in California, Illinois, and Florida. Group II will consist of 2,368 mortgage loans that have original balances that may or may not conform to Fannie Mae or Freddie Mac guidelines. The Group II mortgage pool consists of first and second lien, adjustable-rate and fixed-rate mortgage loans that have a cut-off date pool balance of $646,345,500. Approximately 15.38% of the mortgage loans are fixed rate mortgage loans and 84.62% are adjustable-rate mortgage loans. The second lien amount is 0.66%. The weighted average current loan rate is approximately 8.133%. The weighted average remaining term to maturity is 357 months. The average principal balance of the loans equals $272,950. The weighted average original combined loan-to-value ratio is approximately 82%. The weighted average FICO score is 612. The properties are primarily located in California, Florida, and New York. For federal income tax purposes, multiple real estate mortgage investment conduit elections will be made with respect to the trust estate. The mortgage loans were originated or acquired by Argent Mortgage Company, L.L.C and Ameriquest Mortgage Company. Argent Mortgage Company LLC is a subsidiary of Ameriquest Mortgage Company. Ameriquest Mortgage Company is a specialty finance company engaged in the business of originating, purchasing and selling retail and wholesale sub prime mortgage loans. BACH TO ROCK: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Bach to Rock Music dba East Coast Piano 198 Route 46 East Fairfield, NJ 07004 Bankruptcy Case No.: 06-21910 Chapter 11 Petition Date: November 30, 2006 Court: District of New Jersey (Newark) Debtor's Counsel: Santo J. Bonanno, Esq. 1430 Route 23 North Wayne, NJ 07470 Tel: (973) 686-9060 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. BANC OF AMERICA: Fitch Rates $1.5 Million Class Certificates at BB ------------------------------------------------------------------ Banc of America Funding Corporation's mortgage pass-through certificates, series 2006-I, are rated by Fitch Ratings as: Groups 1 and 2 certificates (Pool S) -- $738,405,100 classes 1-A-1, 1-A-2, 1-A-R, 2-A-1, 2-A-2 'AAA'; -- $8,719,000 class S-B-1 'AA'; -- $4,170,000 class S-B-2 'A'; -- $1,137,000 class S-B-3 'BBB+'; -- $1,516,000 class S-B-4 'BBB'; and -- $1,516,000 class S-B-5 'BB'. Groups 3, 4 and 5 certificates (Pool N) -- $195,091,000 classes 3-A-1, 3-A-2, 4-A-1, and 5-A-1 through 5-A-4'AAA'; -- $5,122,000 class N-B-1 'AA'; -- $1,537,000 class N-B-2 'A'; -- $1,126,000 class N-B-3 'BBB'; -- $819,000 class N-B-4 'BB'; and -- $512,000 class N-B-5 'B'. Group 6 certificates (OC Pool) -- $532,838,000 classes 6-A-1 and 6-A-2'AAA'; -- $5,852,000 class M-1 'AA+'; -- $2,787,000 class M-2 'AA'; -- $2,787,000 class M-3 'AA'; -- $2,787,000 class M-4 'A+'; -- $2,787,000 class M-5 'A'; -- $2,787,000 class M-6 'BBB+'; and -- $2,788,000 class M-7 'BBB-'. The 'AAA' ratings on the pool S senior certificates reflect the 2.6% subordination provided by the 1.15% class S-B-1, the 0.55% class S-B-2, the 0.15% class S-B-3, the 0.2% class S-B-4, the 0.2% privately offered class S-B-5, the 0.2% privately offered class S- B-6 and the 0.15% privately offered class S-B-7. Classes S-B-6 and S-B-7 are not rated by Fitch. The 'AAA' ratings on pool N senior certificates reflect the 4.75% subordination provided by the 2.5 % class N-B-1, the 0.75% class N-B-2, the 0.55% class N-B-3, the 0.4% privately offered class N- B-4, the 0.25% privately offered class N-B-5, and the 0.3% privately offered class N-B-6. Class N-B-6 is not rated by Fitch. The 'AAA' ratings on OC pool senior certificates reflect the 4.4% subordination provided by the 1.05% class M-1, the 0.5% class M-2, the 0.5% class M-3, the 0.5% class M-4, the 0.5% class M-5, the 0.5% class M-6, the 0.5% class M-7, and the 0.35% privately offered class CE. Fitch believes the amount of credit enhancement will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral purchased by Banc of America Funding Corporation, the integrity of the legal and financial structures, the servicing capabilities of Wells Fargo Bank, N.A., Bank of America, N.A., ABN AMRO Mortgage Group, Inc., National City Mortgage Co., PHH Mortgage Corporation and the Master Servicing capabilities of Wells Fargo Bank, N.A.. The trust is comprised of six loan groups of adjustable interest rate, fully-amortizing mortgage loans secured by first liens on one- to four-family residential properties. Loan groups 1 and 2 are cross-collateralized comprising pool S, and loan groups 3, 4, and 5 are cross-collateralized comprising pool N. Pool S consists of 1,300 mortgage loans that have original terms to maturity of 360 months. The aggregate unpaid principal balance is $758,117,300 as of Nov. 1, 2006 and the average principal balance is $583,167. The weighted average original loan-to-value ratio of the loan pool is approximately 70.59%. The weighted average coupon of the mortgage loans is 5.063% and the weighted average FICO score is 756. Cash-out and rate/term refinance loans represent 19.93% and 20.25% of the loan pool, respectively. The states that represent the largest geographic concentration of mortgaged properties are California, New Jersey, Florida, New York and Illinois. All other states represent less than 5% of the outstanding balance of the pool. Pool N consists of 313 mortgage loans that have WAM of 365 months. The aggregate unpaid principal balance of the combined pool is $204,822,402 as of Nov. 1, 2006 and the average principal balance is $654,385. The OLTV of the loan pool is approximately 73.08%. The WAC of the mortgage loans is 6.3% and the weighted average FICO score is 737. Cash-out and rate/term refinance loans represent 24.52% and 30.64% of the loan pool, respectively. The states that represent the largest geographic concentration of mortgaged properties are California and Illinois. All other states represent less than 5% of the outstanding balance of the pool. OC Pool consists of 978 mortgage loans that have original terms to maturity of 364 months. The aggregate unpaid principal balance is $557,362,230 as of Nov. 1, 2006 and the average principal balance is $569,900. The weighted average original loan-to-value ratio of the loan pool is approximately 73.44%. The weighted average coupon of the mortgage loans is 5.939% and the weighted average FICO score is 723. Cash-out and rate/term refinance loans represent 24.85% and 35.27% of the loan pool, respectively. The states that represent the largest geographic concentration of mortgaged properties are California, Illinois and Florida. All other states represent less than 5% of the outstanding balance of the pool. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. BAFC, a special purpose corporation, deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. US Bank, National Association will serve as trustee. Elections will be made to treat the trust as multiple separate real estate mortgage investment conduits for federal income tax purposes. BON-TON STORES: Posts $10.9 Mil. Net Loss in Third Fiscal Quarter ----------------------------------------------------------------- The Bon-Ton Stores Inc. reported a net loss of $10.9 million for the 2006 third fiscal quarter ended Oct. 28, 2006, compared with a net loss of $6.3 million for the same fiscal quarter in 2005. The third quarter of fiscal 2006 includes a $1.7 million reduction in the income tax benefit associated with tax planning strategies initiated by the company in the third quarter. The Company reported a net loss of $41.5 million for the 39 weeks ended Oct. 28, 2006, compared with a net loss of $12.2 million for the comparable period last year. Bud Bergren, president and chief executive officer commented, "We are pleased with our third quarter results and our progress in integrating the Bon-Ton and Carson's operations." Total sales for the third quarter of fiscal 2006 increased 181% to $804.1 million compared with $285.7 million for the prior year period. Third quarter sales included $537.5 million from the Carson's stores. Comparable store sales decreased 4.8%. Carson's sales are not included in the Company's reported comparable store sales. Carson's comparable store sales for the thirteen weeks ended Oct. 28, 2006, increased 7.8% and, for the period March 5, 2006, through Oct. 28, 2006, increased 4.3%. For Carson's and Bon-Ton combined, comparable store sales for the thirteen weeks ended Oct. 28, 2006, increased 3.3%. Other income increased $20.7 million in the third quarter of fiscal 2006, as compared with the prior year period, primarily due to program revenue received in the third quarter of fiscal 2006 under the Credit Card Program Agreement with HSBC Bank Nevada N.A. For the 39 weeks ended Oct. 28, 2006, other income increased $51.5 million as compared with the prior year period. In the third quarter of fiscal 2006, gross margin increased $197.8 million compared with the prior year period. The gross margin rate increased to 36.6% of net sales, as compared with 33.8% in the prior year period. Selling, general and administrative expenses in the third quarter of fiscal 2006 increased $175.8 million, to 34% of net sales, compared with 34.2% for the prior year period. Integration expenses in the third quarter of fiscal 2006 approximated $3.7 million. Net income (EBITDA) before interest, income taxes, depreciation and amortization, increased $42.7 million in the third quarter of fiscal 2006, to $43.5 million, from $800,000 in the third quarter of fiscal 2005. Keith E. Plowman, executive vice president and chief financial officer, commented, "With the third quarter results, and with the November sales results, . . . we reaffirm our guidance of earnings per share of $2.15 to $2.25 and EBITDA of $270 million to $280 million for fiscal 2006. Our guidance for fiscal 2006 reflects preliminary purchase accounting for the Carson's acquisition, which is subject to future revision. Such revisions could have a material impact upon our earnings per share guidance." The company's balance sheet at Oct. 28, 2006, showed long-term debts net of current maturities of $1.2 billion compared with $42.4 million at Jan. 28, 2006. The Bon-Ton Stores Inc. -- http://www.bonton.com/-- operates 275 department stores and seven furniture stores in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers nameplates and, under the Parisian nameplate, one store in each of Indianapolis, Indiana and Dayton, Ohio and two stores in the Detroit, Michigan area. The stores offer a broad assortment of brand-name fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings. * * * The Bon-Ton Stores Inc.'s $1 billion senior secured credit facility carries Fitch's 'B+/RR2' rating. The company's $260 million mortgage loan facility carries Fitch's 'B+/RR2' rating and its $525 million of senior unsecured notes is rated 'CCC/RR6'. Fitch also rated the company's Issuer default rating at 'B-'. Moody's Investors Service's rated the company's $525 million of senior unsecured guaranteed notes at B2 and Corporate family rating at B1. BOWATER INC: Posts $216.1 Million Net Loss in 2006 Third Quarter ----------------------------------------------------------------- Bowater Incorporated reported a net loss of $216.1 million on sales of $875.9 million for the third quarter of 2006, compared with a net loss of $16.0 million on sales of $872.9 million in the third quarter of 2005. At Sept. 30, 2006, the company's consolidated balance sheet showed $4.81 billion in total assets, $3.83 billion in total liabilities, $62.5 million in minority interest, and $921.2 million in total stockholders' equity. The $200.1 million increase in net loss in the third quarter of 2006 is mainly due to higher cost of sales, charges for impairment amounting to $246.4 million, higher selling and administrative expenses, offset by an increase in net gain on disposition of assets of $54 million due to higher land sales in the third quarter of 2006, compared to the third quarter of 2005. Sales increased slightly in the third quarter of 2006 as compared to the third quarter of 2005 due primarily to higher transaction prices for specialty papers, newsprint and market pulp and increased shipments of coated papers and specialty papers, partially offset by lower transaction prices for coated papers and lumber and lower shipments of newsprint, market pulp and lumber, Cost of sales during the third quarter of 2006, as compared to the third quarter of 2005, increased by $20.2 million, primarily due to the stronger Canadian dollar which increased from an average rate of $0.83 to $0.89, lower production volumes, reduced benefits from the company's Canadian hedging program, and higher chemical costs. These higher costs were partially offset by lower maintenance costs, wood and fiber costs, labor costs, energy costs, and lower depreciation. In addition, the company recorded impairment and other related charges of $246.4 million and $0.4 million in cost of sales during the third quarter associated with the impairment of goodwill at the Thunder Bay, Ontario facility, the closure of the company's Benton Harbor, Michigan facility and the impairment of paper machine No. 3 at the Thunder Bay, Ontario facility. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2006, are available for free at: http://researcharchives.com/t/s?1628 Headquartered in Greenville, South Carolina, Bowater Incorporated (TSX: BWX) -- http://www.bowater.com/-- produces coated and specialty papers and newsprint. In addition, the company sells bleached market pulp and lumber products, employs approximately 7,600 people and has 12 pulp and paper mills in the United States, Canada and South Korea, 10 sawmills and 2 converting facilities in North America. Bowater's operations are supported by approximately 835,000 acres of timberlands owned or leased in the United States and Canada and 28 million acres of timber cutting rights in Canada. * * * Bowater, Inc.'s senior secured bank debt carries Fitch's 'BB' rating. CAIRN MEZZ: Moody's Rates $16 Million Class E Secured Notes at Ba1 ------------------------------------------------------------------ Moody's Investors Service assigned these ratings to Notes issued by Cairn Mezz ABS CDO II Limited and Cairn Mezz ABS CDO II Inc.: -- Aaa to the $450,000,000 Class A1-VF Senior Secured Floating Rate Notes Due 2047; -- Aaa to the $30,000,000 Class A2A Senior Secured Floating Rate Notes Due 2047; -- Aaa to the $120,000,000 Class A2B Senior Secured Floating Rate Notes Due 2047; -- Aa2 to the $37,500,000 Class B1 Senior Secured Floating Rate Notes Due 2047; -- Aa3 to the $11,250,000 Class B2 Senior Secured Floating Rate Notes Due 2047; -- A2 to the $33,750,000 Class C Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047; -- Baa2 to the $30,000,000 Class D Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047; -- Ba1 to the $16,875,000 Class E Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047; -- Baa2 to the $10,000,000 Combination Notes Due 2047 According to Moody's, the ratings on the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The rating on the Combination Notes addresses the ultimate receipt of the Combination Note Contingent Coupon and the initial Rated Balance and is based on the expected loss posed to holders of the Combination Notes relative to the promise of receiving the present value of Combination Note Contingent Coupon and the initial Rated Balance. The ratings are based on the safety of the transaction's legal structure and the characteristics of the underlying assets. Cairn Financial Products Limited will serve as the Portfolio Manager for this transaction. CARAUSTAR INDUSTRIES: Debt Reduction Cues Moody's to Hold Ratings ----------------------------------------------------------------- Moody's Investors Service affirmed Caraustar Industries, Inc.'s B2 corporate family rating and B3 senior unsecured rating. The ratings reflect the overall probability of default of the company, to which Moody's assigns a PDR of B2. The B3 senior unsecured rating reflects a loss given default of LGD4, 68%. The affirmation of the rating reflects Caraustar's significant reduction in debt following the sale of its 50% interest in Standard Gypsum, and its ongoing effort to rationalize operating assets in the face of difficult market conditions. The rating outlook remains stable. Ratings Assigned: -- Corporate Family Rating at B2 -- Probability of Default Rating at B2 -- $190 million 7.375% Notes due June 1, 2009 at B3, LGD4, 68% -- $29 million 7.25% notes due May 1, 2010 at B3, LGD4, 68% The B2 corporate family rating reflects Caraustar's small size, high cost base, exposure to volatile pricing and input costs, including high recovered fiber and energy costs, regionally dispersed asset base, and the difficult packaging markets in which Caraustar operates. The B2 rating also considers the continuing restructuring that the company is going through in its effort to streamline and rationalize operations and the resultant restructuring and impairment charges incurred over the past few years. The B2 rating recognizes the repayment of the company's $258 million of subordinated debentures earlier this year following the sale of the company's 50% interest in Standard Gypsum. Moody's last rating action on Caraustar was a downgrade of its senior unsecured rating to B2 in May 2004. Caraustar, headquartered in Austell, Georgia, manufacturers recycled paperboard, producing a wide variety of tubes, cores, composite containers, folding cartons, and industrial and consumer packaging. Caraustar had revenues in 2005 of $862 million. CENTRAL PARKING: Retains Blackstone Group as Financial Advisor -------------------------------------------------------------- Central Parking Corporation has retained The Blackstone Group L.P. as its financial advisor to assist the company in exploring strategic alternatives to enhance stockholder value. In making the announcement, Emanuel J. Eads, President and Chief Executive Officer of Central Parking, stated that, "The company has engaged The Blackstone Group L.P. to assist management and the Board in evaluating the assets and operations of the Company in order to develop possible alternative strategies to achieve greater stockholder value. These alternatives may include a complete or partial sale of the Company, a merger or a decision to take no action at this time. Although the Company has met with certain interested parties, at this time no agreements or understandings have been reached with any party as to the terms of a possible transaction. There is no certainty that any such transaction will actually occur in either the short or long term and the Company is continuing to implement its previously announced strategic plan. Central Parking does not intend to issue any other press release or make any other comments relating to the subject matter referenced above until such time, if ever, as it enters into a definitive agreement with a third party or parties in connection with any such transaction or series of transactions or determines to terminate this strategic process." Headquartered in Nashville, Tennessee, Central Parking Corporation (NYSE: CPC) provides parking and transportation-related services. As of September 30, 2006, the Company operated approximately 3,100 parking facilities containing approximately 1.5 million spaces at locations in 37 states, the District of Columbia, Canada, Puerto Rico, the United Kingdom, the Republic of Ireland, Chile, Colombia, Peru, Spain, Switzerland, and Greece. CENTRAL PARKING: Blackstone Engagement Cues S&P's Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Nashville, Tennessee-based Central Parking Corp., including the 'B+' corporate credit rating, on CreditWatch with negative implications. The company had about $209.4 million of total debt at June 30, 2006. The CreditWatch listing comes after Central Parking's recent report that it has engaged The Blackstone Group L.P. to assist management and the board of directors in pursuing various strategic alternatives, including a partial or complete sale of the company, or a possible merger. The company does not plan to release any additional information about the status of this review until a definitive agreement is entered into or the strategic review process is completed. "Although the ultimate outcome of this process is uncertain, these strategic alternatives could potentially weaken credit protection measures to levels below those appropriate for the current rating," noted Standard & Poor's credit analyst Mark Salierno. "In the event that a sale to a financially stronger company is announced, we would consider revising the CreditWatch listing. We will monitor developments associated with a potential sale of the company in order to assess the rating implications." CEP HOLDINGS: Taps McDonald Hopkins as Special Conflicts Counsel ---------------------------------------------------------------- CEP Holdings LLC and its debtor-affiliates asks the United States Bankruptcy Court for the Northern District of Ohio for permission to employ McDonald Hopkins Co., LPA, as their special counsel, nunc pro tunc to Oct. 16, 2006. The Debtors want McDonald Hopkins to represent them when their lead counsel, Baker & Hostetler won't be able to represent them as conflicts arise. In addition, the firm will also be the Debtors' primary conflicts counsel, when specific matters occur that cannot be handled by Baker & Hostetler. The firm's professionals bill: Position Hourly Rate -------- ----------- Shareholders $255 - $460 Of Counsel $215 - $400 Associates $145 - $290 Paralegals $100 - $180 Law Clerks $85 To the best of the Debtor's knowledge, McDonald Hopkins does not represent nor hold any interest adverse to the Debtors or their estate. Based in Akron, Ohio, CEP Holdings, LLC, manufactured hard, molded rubber products and extruded plastic materials for companies in the automotive, construction, and the medical industries. The Company and two of its subsidiaries filed for chapter 11 protection on Sept. 20, 2006 (Bankr. N.D. Ohio Case No. 06-61796). McGuireWoods LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 18, 2007. CHAPARRAL STEEL: Moody's Lifts Corp. Family Rating to Ba3 from B1 ----------------------------------------------------------------- Moody's Investors Service upgraded Chaparral Steel Company's corporate family rating to Ba3 from B1. In a related action, the rating on the company's $150 million senior secured borrowing base revolving credit facility was upgraded to Baa3 from Ba1 and the rating on its $300 million senior unsecured notes due 2013 was upgraded to B1 from B2. The ratings outlook is stable. This concludes the ratings review initiated on Sept. 6, 2006 when Chaparral's ratings were placed under review for possible upgrade. The upgrade reflects the company's significantly improved debt protection metrics over recent years, including strengthened operating margins and coverage ratios, which Moody's views as sustainable, and the considerable progress being made in improving utilization levels at its Virginia mill. Similarly, Chaparral is expected to continue to benefit from a strong, albeit moderating, steel environment, particularly for structural products, as well as be able to contain margin pressure resulting from rising raw material costs through surcharges. The stable outlook is predicated on Moody's belief that Chaparral will continue to enjoy above-average metal margins resulting from healthy demand levels, largely driven by non-residential construction, that structural products will not be as vulnerable to import threats as other steel products, such as hot-rolled coil, and that its liquidity profile will remain strong. Chaparral's Ba3 corporate family rating recognizes the company's low cost mini-mill operating structure, which contributes to its strong earnings power, its position as the second largest supplier of structural steel in the United States, only behind Nucor, its ability to generate reasonable cash flow through the cycle, and improving utilization levels at its Virginia mill, which has historically been its weaker facility. In addition, the robust steel price environment in recent years has enabled the company to significantly enhance its performance and maintain a very solid financial profile, with debt to EBITDA currently tracking under 1. Given this substantial improvement in performance over recent years and Chaparral's business and financial strategy, Moody's believes that Chaparral's financial metrics have adequate cushion at the Ba3 level for more normal through -the cycle-earnings performance. These ratings were upgraded: * Chaparral Steel Company -- Corporate Family Rating to Ba3 from B1 -- $150 million graduated senior secured revolving credit facility to Baa3, LGD2, from Ba1, -- $300 million 10% graduated senior unsecured notes due 2013 to B, LGD4, 65% from B2, -- Probability of Default Rating to Ba3 from B1 This rating was affirmed: * Chaparral Steel Company -- speculative grade liquidity rating of SGL-1 Moody's previous rating action on Chaparral was on Sept. 6, 2006, when its ratings were placed under review for possible upgrade in recognition of the company's improved financial metrics and an overall reduction in financial risk. Headquartered in Midlothian, Texas, Chaparral had total consolidated steel shipments of approximately 2.6 million tons and generated revenues of $1.5 billion for the trailing twelve months ended Aug. 31, 2006. CHATEAUX FRAMING: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Chateaux Framing, Inc. 3701 Georgeann Place Ceres, CA 95307 Bankruptcy Case No.: 06-90764 Chapter 11 Petition Date: Court: Eastern District of California (Modesto) Judge: Robert S. Bardwil Debtor's Counsel: David C. Johnston, Esq. 1020 15th Street #10 Modesto, CA 95354-1132 Tel: (209) 578-9009 Fax: (209) 578-5909 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. CHEMTURA CORP: Posts $39.9 Million Net Loss in 2006 Third Quarter ----------------------------------------------------------------- Chemtura Corp. reported a $39.9 million net loss on $917 million of sales for the third quarter ended Sept. 30, 2006, compared with a $118.9 million net loss on $918.4 million of sales for the same period in 2005. At Sept. 30, 2006, the company's balance sheet showed $4.62 billion in total assets, $2.79 billion in total liabilities, and $1.83 billion in total stockholders' equity. Third quarter 2006 net sales of $917.0 million were less than 1% below third quarter 2005 net sales of $918.4 million. The decrease is due to lower sales of $13.6 million related to the sale of the company's Industrial Water Additives business in May 2006 and a $21.7 million decrease in sales volume, which were mostly offset by increased selling prices of $26.5 million and favorable foreign currency translation of $7.0 million. "This year's third quarter results reflect a number of operating challenges and several notable accomplishments," said Robert L. Wood, Chairman and CEO. "Crop Protection results were negatively impacted by high bad debt reserves and lower sales in Latin America and competitive pressures in the U.S. mite market, and we continued to struggle in Rubber Additives and EPDM Elastomers. We've begun recapturing volume in our non-flame retardant Plastic Additives business but it has not yet translated into the margin recovery we anticipate. Flame Retardants, Consumer Products, Lubricant Additives and Urethanes all turned in solid performances. Included in the operating loss for the three month period ended Sept. 30, 2006 is a pre-tax impairment charge of $51.9 million, due primarily to continued weak market share and the projected loss of revenue in the Fluorine business resulting from the loss of a customer. Additionally, the company recorded an impairment charge related to certain assets used in the Fluorine business of $22.7 million. The operating loss for the third quarter of 2006 was $51.9 million as compared to an operating loss of $49.7 million for the third quarter of 2005 The loss from continuing operations for the third quarter of 2006 was $85.8 million compared to $120.3 million for the third quarter of 2005. The improvement is partly due to lower interest expense of $6.8 million and a higher tax benefit in 2006 compared to 2005 principally due to the absence of non-recurring taxes in 2005 on dividends under the Foreign Earnings Repatriation provisions of the 2004 American Jobs Creation Act and the lack of any tax benefit in 2005 for the write-off of in-process research and development. These increases were partially offset by higher costs of $13.5 million for the loss on early extinguishment of debt principally related to the early retirement of the company's 9.875% Notes in July 2006. During the third quarter of 2006, the company recorded a gain on sale of discontinued operations of $45.9 million related to the sale of the OrganoSilicones business to General Electric Company in July of 2003. This gain represents the recognition of the additional contingent earn-out proceeds related to the combined performance of GE's existing Silicones business and the OrganoSilicones business from the date of the sale through Sept. 30, 2006. Full-text copies of the company's consolidated financial statements for the third quarter ended Sept. 30, 2006, are available for free at: http://researcharchives.com/t/s?1630 About Chemtura Corporation Headquartered in Middlebury, Connecticut, Chemtura Corporation (NYSE: CEM) -- http://www.chemtura.com/ -- is a global supplier of plastic additives, including flame retardants. The company also manufactures and markets pool and spa products and seed treatment and miticides in the agricultural market. Chemtura has more than 6,500 employees in research, manufacturing, sales and administrative facilities in every major market of the world. * * * As reported in the Troubled Company Reporter on Nov. 7, 2006, Moody's Investors Service affirmed its Ba1 Corporate Family Rating for Chemtura Corp., in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. chemicals and allied products sectors. Additionally, Moody's held its Ba1 probability-of-default rating on the company's $500 Million 6.875% Guaranteed Senior Notes due June 2016. CINCINNATI BELL: Carl Redfield Resigns as Director -------------------------------------------------- Cincinnati Bell Inc. disclosed that on Nov. 22, 2006, Carl Redfield resigned from its board of directors. Mr. Redfield was a director of the company since 2000. He was also defendant in a derivative lawsuit filed by Jack Garlich on behalf of nominal defendant, Cincinnati Bell, in the Hamilton County Court of Common Pleas, Ohio Civil Division, against present or former officers and/or directors of the company including Lawrence J. Bouman, Carl Redfield, John M. Zrno, Karen M. Hoguet, Daniel J. Meyer, Phillip M. Cox, David B. Sharrock, Mary D. Nelson, William A. Friedlander, and J. Taylor Crandall. The suit alleged, among other things, that the defendants breached their fiduciary duties to the company. The defendants had denied breaching any duty. In settlement of the action the company on behalf of all defendants, agreed to, among others, commit to a 2:1 ratio of independent outside directors to inside directors on its board of directors. Headquartered in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE:CBB) -- http://www.cincinnatibell.com/-- provides a wide range of local exchange and wireless telecommunications products and services to residential and business customers in Ohio, Kentucky and Indiana. * * * Cincinnati Bell's senior secured debt, bank loan debt and corporate family ratings carry Moody's Ba3 rating. Moody's also junked the Company's preferred stock rating and placed its senior unsecured debt at B1 and senior subordinated debt at B2. Standard & Poor's placed the Company's long-term foreign and local issuer credit ratings at B+ with a negative outlook. The Company's senior secured and bank loan debts carry Fitch's BB+ ratings. Fitch also assigned a BB- rating to the Company's senior unsecured debt, a B rating to its subordinated debt and a B- rating to its preferred stock. COLLINS & AIKMAN: Seeks Bridge Order Extending Plan-Filing Period ----------------------------------------------------------------- Collins & Aikman Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan for a bridge order extending their exclusive right to file a plan of reorganization until Jan. 12, 2007, and to solicit plan acceptances until Feb. 26, 2007, without prejudice to their right to seek additional extensions. The Debtors tell Judge Rhodes that the proposed extension is consistent with their decision to pursue a cooperative sale process to maximize the value of their estates and to save jobs. The Debtors expect the sale process to culminate with the Plan confirmation. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, relates that although all of the parties continue to work in good faith toward the goal of finalizing an agreement that will form the basis of the Plan as quickly as possible, more time is needed so that the parties can complete their negotiations. The Debtors anticipate that they would then be in a position to file a plan shortly and before the Court's hearing on that agreement. A brief extension of the Exclusivity Periods is intended to enable the Debtors to continue the Plan process in an orderly, efficient and cost-effective manner for the benefit of all parties, Mr. Schrock maintains. The Court will convene a hearing to consider the Motion on Dec. 14, 2006, at 2:00 p.m. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) COLLINS & AIKMAN: Textron Wants to Sell C&A Products' Shares ------------------------------------------------------------ Textron, Inc., notifies the U.S. Bankruptcy Court for the Eastern District of Michigan that it intends to sell, trade, or otherwise transfer (i) 56,218 shares of Series A preferred stock and (ii) 143,700 shares of Series B preferred stock of Collins & Aikman Products Co. James E. DeLine, Esq., at Kerr, Russell and Weber, PLC, relates that Textron originally owned the Stock before the Debtor's Petition Date. Mr. DeLine discloses that if the proposed transfer is permitted to occur, Textron will beneficially own no further shares of Stock effective December 31, 2006. C&A Products has until December 21 to object to the Proposed Transfer. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) COLLINS & AIKMAN: Rejects Ten Contracts and Leases -------------------------------------------------- Collins & Aikman Corporation and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Eastern District of Michigan to reject 10 executory contracts and unexpired leases pursuant to Court-established rejection procedures. The Rejected Contracts and Leases are: Counterparty Contract/Lease Effective Date ------------ -------------- -------------- Primary Energy of North Steam Purchase Contract 11/01/06 Carolina, LLC Vesey Air, LLC Raytheon aircraft lease 10/31/06 DaimlerChrysler Aviation Aircraft storage contract 11/30/06 Services, Inc. SeaGil Software Company Software licensing deal 11/10/06 Satcom Direct Comm. Satcom/Iridium network 11/10/06 services MedAire, Inc. Business & General 11/10/06 Aviation Service Deal ARINC Incorporated ARINC Direct Service Pact 11/10/06 TriMas Corporation Time Sharing Pact 11/10/06 Metaldyne Corporation Time Sharing Pact 11/10/06 Honeywell Turbofan Engine 11/10/06 Maintenance Service Plan The Debtors do not waive any claims against the counterparties to the Contracts or Leases whether or not those claims are related to the rejection. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) COMPLETE PRODUCTION: Prices $650 Mil. Sr. Notes Private Offering ---------------------------------------------------------------- Complete Production Services Inc. has priced a private offering of $650 million of 8% Senior Notes due 2016. The company expects to close the sale of the notes on Dec. 6, 2006, subject to satisfaction of customary closing conditions. Complete intends to use net proceeds from the sale of the notes to retire the outstanding balance of approximately $415.8 million under its existing bank term loan, to retire outstanding indebtedness of approximately $30.3 million it assumed in connection with its recent acquisition of Pumpco Services, Inc., and to repay approximately $191.9 of the outstanding borrowings under its existing revolving credit facility. Complete Production Services, Inc. provides completion, production and drilling services and products to the oil and gas industry in many of the most active basins throughout North America. * * * As reported in the Troubled Company Reporter on Nov. 21, 2006, Standard & Poor's Ratings Services assigned its 'B' rating to oilfield services company Complete Production Service's proposed $600 million unsecured senior notes due 2016. The corporate credit rating on Complete is 'B+'. COPANO ENERGY: Prices Public Offering at $59.11 per Unit -------------------------------------------------------- Copano Energy, L.L.C., has priced an underwritten public offering of 2,500,000 common units at $59.11 per unit. The offering is scheduled to close on Dec. 6, 2006. In connection with the offering, Copano Energy has granted the underwriters a 30-day option to purchase up to 375,000 additional common units to cover over-allotments. Copano Energy intends to use the net proceeds from the offering to repay in full its $100 million unsecured term loan and for general company purposes, including reducing amounts outstanding under its senior secured revolving credit facility, entering into new hedge arrangements as market conditions warrant or funding capital expenditures. UBS Investment Bank and Morgan Stanley & Co., Incorporated are joint book- running managers for the offering. The co-managing underwriters participating in the offering are RBC Capital Markets Corporation, Lehman Brothers Inc., Citigroup Global Markets Inc., Wachovia Capital Markets, LLC, Banc of America Securities LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., KeyBanc Capital Markets, a Division of McDonald Investments Inc., and Sanders Morris Harris Inc. A copy of the final prospectus supplement and related base prospectus, meeting the requirements of Section 10 of the Securities Act of 1933, as amended, can be obtained from: UBS Securities LLC Attention: Prospectus Department 299 Park Avenue New York, NY 10171 Telephone: 212-821-3000 and Morgan Stanley Attention: Prospectus Department 1585 Broadway New York, NY 10036 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. CROWN CASTLE: Completes $1.55 Bil. Tower Revenue Notes Offering --------------------------------------------------------------- Crown Castle International Corp. has completed the sale of its previously announced offering of $1.55 billion of Senior Secured Tower Revenue Notes, Series 2006-1. The Offered Notes were issued by certain of its indirect subsidiaries in a private transaction as additional debt securities under the existing Indenture dated as of June 1, 2005, pursuant to which the Senior Secured Tower Revenue Notes, Series 2005-1 were issued. The Offered Notes consist of seven classes of notes, five of which are rated investment grade. The weighted average interest rate on the various classes of Offered Notes is approximately 5.71%. Further, all of the Offered Notes have an expected life of five years with a final maturity of November 2036. Crown Castle used approximately $1 billion of the net proceeds received from this offering to repay the outstanding term loan under the Crown Castle Operating Company credit facility. Crown Castle expects to use the remaining net proceeds received from this offering to pay the expected cash portion of the consideration of the planned acquisition of Global Signal Inc. or, in the event the acquisition of Global Signal Inc. is not consummated, for general corporate purposes. The Borrowers' obligation to make interest payments under the Offered Notes is entirely on a fixed interest rate basis. The Offered Notes are comprised of seven classes, including $623.5 million of Class A notes, receiving the highest investment grade rating of Aaa/AAA by Moody's Investor Services and Fitch Ratings, respectively. The Class A notes include $453.5 million of a fixed rate class and $170 million of a floating rate class (floating rate payments will be paid by a third party pursuant to a swap arrangement between the indenture trustee and such third party in exchange for a fixed rate payment by the Borrowers). About Crown Castle Crown Castle International Corp. -- http://www.crowncastle.com/ -- engineers, deploys, owns and operates shared wireless infrastructure, including extensive networks of towers. Crown Castle offers wireless communications coverage to 68 of the top 100 United States markets and to substantially all of the Australian population. Crown Castle owns, operates and manages over 10,600 and over 1,300 wireless communication sites in the U.S. and Australia, respectively. CROWN CASTLE: Moody's Rates $83-Mil. Class G Senior Notes at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned ratings to eight classes of notes issued by Crown Castle Towers LLC. These are the rating actions: * Issuer: Crown Castle Towers LLC * Anticipated Repayment Date: Nov. 15, 2011 * Rated Final Payment Date: Nov. 15, 2036 -- $453,540,000, 5.2446%, Class A-FX Series 2006-1 Senior Secured Tower Revenue Notes, Aaa -- $170,000,000, Libor + 0.17%, Class A-FL Series 2006-1 Senior Secured Tower Revenue Notes, Aaa -- $150,155,000, 5.3620% Class B Series 2006-1 Senior Secured Tower Revenue Notes, Aa2 -- $150,155,000, 5.4696% Class C Series 2006-1 Senior Secured Tower Revenue Notes, A2 -- $150,150,000, 5.7724% Class D Series 2006-1 Senior Secured Tower Revenue Notes, Baa2 -- $144,000,000, 6.0652% Class E Series 2006-1 Senior Secured Tower Revenue Notes, Baa3 -- $249,000,000, 6.6496% Class F Series 2006-1 Senior Secured Tower Revenue Notes, Ba1 -- $83,000,000, 6.7954% Class G Series 2006-1 Senior Secured Tower Revenue Notes, Ba2 Crown Castle International Corp. is a large wireless communications tower owner with a presence throughout the United States and Australia. The firm derives approximately 90% of its revenues by leasing site space on its 11,527 U.S. towers to wireless service providers and constitutes the cash flow stream for this securitization. The remaining revenue is derived from its services business, which provides network services relating to sites or wireless infrastructure for customers, including project management of antenna installation. On June 8, 2005 Crown Castle Towers LLC issued a series of notes consisting of four subclasses in the amount of $1,900,000,000. Since then Crown Castle International Corp. has acquired three other tower portfolios: (a) Trintel, a portfolio of 467 sites in Dallas-Fort Worth, Detroit and New Orleans; (b) Mountain Union Telecom, a portfolio of 474 sites in Los Angeles, Denver, Phoenix and Las Vegas; and, (c) on Oct. 6, 2006 CCI announced it had entered into a definitive agreement to acquire Global Signal in a stock and cash transaction valued at approximately $5.8 billion and is expected to close in the first quarter of 2007 The additional $1.55 billion raised through this offering will be used to refinance its existing credit facility and the cash portion of the Global Signal acquisition. 10,578 towers owned by the Initial Issuers that constituted the cash flow stream for the 2005-1 notes will be supplemented by an additional 949 sites. The cash flows from the combined 11,527 sites will constitute the cash flow for 2005-1 and 2006-1 notes, and as of Sept. 30, 2006 the 11,527 sites had an annualized run rate net cash flow of $423 million. Moody's ratings on this transaction are derived from Moody's projected net cash that the pool will generate from leasing the tower sites, the structural enhancement including the subordinate tranches, and the legal structure. Moody's ratings address only the credit risks associated with the transaction. Other non- credit risks, such as those associated with the timing of principal prepayments and the payment of prepayment penalties, have not been addressed and may have a significant effect on yield to investors. CWABS INC: Moody's Chips Rating on Class B-1 Tranches to Ba3 ------------------------------------------------------------ Moody's Investors Service upgraded twenty-five mezzanine and subordinate tranches, has downgraded three mezzanine and subordinate tranches, and has confirmed the ratings on fourteen mezzanine and subordinate tranches from eleven mortgage backed securitizations all issued by Countrywide Home Loans, Inc. in 2002 and 2003. The pools are primarily backed by first and second lien adjustable-rate and fixed-rate subprime mortgage loans. The underlying collateral in the 2003-S2 deal consists of prime- quality fixed-rate mortgages. The loans are serviced by Countrywide Home Loans Servicing, LP. The certificates are being upgraded based on the strong performance of the mortgage pools. The bonds' current credit enhancement, provided by subordination, excess spread, overcollateralization and mortgage insurance where applicable, is high compared to the current projected losses on the underlying pools. The certificates from the 2003-S&D deals are being downgraded based on the fact that existing credit enhancement levels are relatively low given the current projected losses on the underlying pools. At origination, the seasoned loans in these "scratch and dent" transactions had either delinquency histories and/or missing loan documentation, or were in non-compliance with sellers' underwriting guidelines. Although the collateral in these deals may be performing within Moody's original expectations, some of the current credit support deterioration can be attributed to the deals passing performance triggers and therefore releasing large amounts of overcollateralization. Finally, Moody's has confirmed the current ratings on several classes of certificates as credit support is sufficient to support their current ratings. * Issuer: CWABS, Inc. Asset-Backed Certificates * Upgrade: -- Series 2003-BC6, Class M-1, upgraded from Aa2 to Aaa -- Series 2003-BC6, Class M-2, upgraded from A2 to Aa1 -- Series 2003-BC6, Class M-3, upgraded from A3 to Aa3 -- Series 2003-BC6, Class M-4, upgraded from Baa1 to A2 -- Series 2003-4, Class M-1, upgraded from Aa2 to Aaa -- Series 2003-4, Class M-2, upgraded from Aa3 to Aa1 -- Series 2003-4, Class M-3, upgraded from A2 to A1 -- Series 2003-5, Class MF-1, upgraded from Aa2 to Aaa -- Series 2003-5, Class MF-2, upgraded from A2 to Aa1 -- Series 2003-5, Class MF-3, upgraded from A3 to Aa2 -- Series 2003-5, Class MF-4, upgraded from Baa1 to A1 -- Series 2003-5, Class MF-5, upgraded from Baa2 to A2 -- Series 2003-5, Class BF, upgraded from Baa3 to A3 -- Series 2003-5, Class MV-1, upgraded from Aa2 to Aaa -- Series 2003-5, Class MV-2, upgraded from A2 to Aa3 -- Series 2003-5, Class MV-3, upgraded from A3 to A1 -- Series 2003-S2, Class M-1, upgraded from Aa2 to Aaa -- Series 2003-S2, Class M-2, upgraded from A2 to Aa2 -- Series 2003-S2, Class B-1, upgraded from Baa2 to A3 -- Series 2003-SC1, Class M-1, upgraded from Aa2 to Aaa -- Series 2003-SC1, Class M-2, upgraded from A2 to Aa2 -- Series 2003-SC1, Class M-3, upgraded from A3 to Aa3 -- Series 2003-SC1, Class M-4, upgraded from Baa1 to A1 -- Series 2003-SC1, Class M-5, upgraded from Baa2 to A2 -- Series 2003-SC1, Class B, upgraded from Baa3 to A3 * Confirm: -- Series 2002-6, Class M-2, confirmed at A2 -- Series 2002-6, Class B, confirmed at Baa2 -- Series 2003-BC4, Class M-1, confirmed at Aa2 -- Series 2003-BC4, Class M-2, confirmed at Aa3 -- Series 2003-BC4, Class M-3, confirmed at A1 -- Series 2003-BC4, Class M-4, confirmed at A2 -- Series 2003-BC6, Class M-5, confirmed at Baa2 -- Series 2003-BC6, Class B, confirmed at Baa3 -- Series 2003-1, Class M-1, confirmed at Aa2 -- Series 2003-1, Class M-2, confirmed at A2 -- Series 2003-1, Class B, confirmed at Baa2 -- Series 2003-5, Class MV-4,confirmed at Baa1 -- Series 2003-5, Class MV-5,confirmed at Baa2 -- Series 2003-5, Class BV, confirmed at Baa3 * Issuer: Countrywide Home Loan Trust * Downgrade: -- Series 2003-S&D1, Class B-1, downgraded from Baa2 to Baa3 -- Series 2003-S&D2, Class M-2, downgraded from A2 to Baa2 -- Series 2003-S&D2, Class B-1, downgraded from Baa2 to Ba3 * Confirm: -- Series 2003-S&D3, Class B-1, confirmed at Baa2 DANA CORPORATION: Wants to Participate in Hicks's PI Appeal ----------------------------------------------------------- In December 2002, Louis Hicks filed a lawsuit in the Philadelphia Court of Common Pleas against 46 defendants, including Dana Corporation, alleging physical injury from exposure to asbestos. Mr. Hicks died in 2003 at the age of 76. Since then, the Philadelphia Lawsuit has proceeded on behalf of Mr. Hicks's estate via his daughter, Denyse Hicks. The Philadelphia Lawsuit proceeded to a jury trial against only two defendants, John Crane, Inc., and Dana. In June 2004, the jury returned a verdict of $5,000,000 in favor of the Hicks Estate. Based on Dana's proportionate share of the Verdict, along with an award of "delay damages," the Trial Court entered judgment of $464,606 against Dana. In May 2005, Crane and Dana appealed the Trial Court order to the Pennsylvania Supreme Court. The Appeal addresses certain issues raised solely by Crane, certain issues raised solely by Dana and certain issues raised by both parties. In September 2006, the Supreme Court upheld the Trial Court's ruling on the constitutionality of the Fair Share Act and remanded the Appeal to the Pennsylvania Superior Court for resolution of the remaining issues on appeal. The Appeal is stayed with respect to Dana because of its bankruptcy filing, but is not stayed with respect to Crane. Dana anticipates that the Supreme Court will shortly issue a remand mandate to the Superior Court and transfer the appellate record to the Superior Court for further proceedings on the Appeal. Dana also anticipates that the Superior Court will promptly issue a briefing schedule for the Appeal and proceed with the Appeal, with respect to Crane only, if the automatic stay remains in place as to Dana. If so, Dana notes that Crane would be responsible for all briefing and oral argument in the Appeal that necessarily relate address only the Crane Issues and Common Issues. Such an outcome is likely to prejudice materially Dana's interests. Dana believes that it could become bound by the Superior Court's decisions on the Common Issues without having had a voice in the Appeal, if it remains stayed from participating in the proceeding. Dana also believes that the Dana Issues, when considered in conjunction with the Common Issues, may enhance its prospects of obtaining reversal of the Trial Court order. Accordingly, Dana desires to participate in the Appeal. Dana asserts that the Appeal will only require its briefing and argument as opposed to discovery and trial and therefore, should not burden the estate with excessive costs. Thus, the Debtors, the Official Committee of Unsecured Creditors and the Official Committee of Equity Security Holders stipulate to seek modification of the automatic stay to permit Dana to participate in the Appeal. About Dana Corporation Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Sept. 30, 2005, the Debtors listed $7,900,000,000 in total assets and $6,800,000,000 in total debts. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non- Union Retirees. The Debtors' exclusive period to file a plan expires on Jan. 3, 2007. They have until Mar. 5, 2007, to solicit acceptances to that plan. (Dana Corporation Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANA CORP: Inks Pact Moving Danacq Lease Decision Date to Jan. 12 ----------------------------------------------------------------- Dana Corporation, its debtor-affiliates, and Danacq Rochester Hills, agreed to further extend the time for the Debtors to decide whether to assume or reject the 20-year lease agreement they entered into with Danacq Rochester until Jan. 12, 2007. The Debtors' decision period on the Danacq's Lease expired on Dec. 4, 2006. Dana and Danacq Rochester entered into that lease agreement in October 2001, pursuant to which Danacq Rochester leased to Dana certain non-residential real property located at 2910 Waterview, Rochester Hills, in Michigan. About Dana Corporation Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Sept. 30, 2005, the Debtors listed $7,900,000,000 in total assets and $6,800,000,000 in total debts. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non- Union Retirees. The Debtors' exclusive period to file a plan expires on Jan. 3, 2007. They have until Mar. 5, 2007, to solicit acceptances to that plan. (Dana Corporation Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANA CORP: Trade Creditors Sell 814 Claims Totaling $8,181,711 -------------------------------------------------------------- In July 2006, the Clerk of the U.S. Bankruptcy Court for the Southern District of New York recorded 814 claims transfers totaling $8,181,711: Transferee Transfers Total Amount ---------- --------- ------------ Deutsche Bank Securities, Inc. 13 $6,437,184 Madison Investment Trust 79 5,937,912 Merrill Lynch Credit Products, LLC 2 5,694,262 Longacre Master Fund 11 3,904,595 Argo Partners 95 3,269,148 JPMorgan Chase Bank, N.A. 2 1,678,535 Sierra Liquidity Fund 139 1,355,528 ASM Capital, LP 94 1,123,999 Debt Acquisition 198 578,959 Liquidity Solutions, Inc. 31 566,252 Blue Angel Claims, LLC 2 214,495 Trade.Debt.Net 151 149,256 Capital Investors, LLC 1 6,018 Deutsche Bank could be reached through Richard Vichaidith at 60 Wall Street, Floor 3, in New York, at (212) 250-5760. Gary Cohen acts on behalf of Merrill Lynch, at 4 World Financial Center, 7th Floor, in New York. Mr. Cohen can be contacted at (212) 449-4969. ASM Capital could be contacted through Adam Moskowitz at 7600 Jericho Turnpike, Suite 302, in Woodbury, New York. Blue Angel is located at 65 East 55th Street, 19th Floor, in New York. Capital Investors is located at One University Plaza, Suite 312, in Hackensack, New Jersey. About Dana Corporation Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Sept. 30, 2005, the Debtors listed $7,900,000,000 in total assets and $6,800,000,000 in total debts. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non- Union Retirees. The Debtors' exclusive period to file a plan expires on Jan. 3, 2007. They have until Mar. 5, 2007, to solicit acceptances to that plan. (Dana Corporation Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DETROIT PUBLIC: Moody's Cuts Rating to Ba1 with Negative Outlook ---------------------------------------------------------------- Moody's Investors Service has downgraded Detroit Public Schools' rating to Ba1 from Baa3, impacting the Series 1996 and 1999 General Obligation Limited Tax bonds, on which Moody's currently has outstanding ratings. The outlook is negative. The remaining principal outstanding for the two series of debt is $13.395 million. The downgrade to the Ba1 rating reflects: -- the district's limited revenue raising flexibility; -- long-term trends of population erosion resulting in declining enrollment and revenue trends; -- a balance sheet supported by previously issued deficit elimination bonds; and, -- significant deferred maintenance needs. Exacerbating these long-term trends, recent external pressures include a significant decline in 2006-2007 enrollment from budgeted figures following a protracted teachers strike, and expected mid-year state aid reductions. The district has already made difficult decisions, and with looming challenges, continued difficult steps are expected. While the FY05 conversion of $213 million of cash-flow notes into long-term debt provided much needed time to implement structural changes in accordance with the Deficit Elimination Plan, external forces continue to pressure the district's operations and the financial profile has returned to a weak liquidity position. The enhanced Aa2 ratings are unaffected by the revision to the underlying rating, as they are dependent on the state of Michigan's credit rating. Enrollment suffers larger-than-budgeted decline: Over the past several years, the district's enrollment has declined annually, and the district is budgeting for continued declines. Given the per pupil state aid funding formula, revenue has subsequently declined in each of the past three fiscal years. This has resulted in the district making difficult expenditure reductions. For the current school and fiscal year, the district had budgeted an enrollment drop of 9,300. However, after the illegal protracted teachers strike and the related school closings at the beginning of the school year, the state's October 2006 enrollment count was down an additional 6,000-7,000, with a material $40 million revenue impact for FY07. The district responded by making lay-off announcements in early November, cutting $29 million in operating expenditures. The balance of the offsetting cuts are expected from discretionary line-items. The unbudgeted enrollment decline is largely a function of the temporary school closings. While some students may migrate back to the district, it is likely that the impact will carry-forward and result in a long-term loss of a portion of that population and revenue base. Deficit elimination plan in place: When the Deficit Elimination Plan was updated and submitted to the state in July 2006, Moody's believes many of the underlying assumptions and action plans were reasonable and achievable, with balanced operations expected for FY07. However, since that time, several material changes have emerged. The enrollment count for FY07 is dramatically less than budgeted after the teacher's strike and the district's temporary school closure, resulting in a proportionate revenue loss. Moody's believes this elevated enrollment loss is not annual in nature. Compounding enrollment pressures, the state recently announced that the state's school aid fund was challenged, and that a mid- year reduction in the per-pupil formula is likely, which would negatively impact FY07 and beyond. With the district's FY07 budget set, any change to state aid creates unforeseen budgetary stress. The DEP and FY07 budget was contingent on achieving $88 million in concessions from labor unions; $40 million was realized, with the balance of reductions occurring in discretionary line-items. The DEP lays out detailed and aggressive strategies for balancing financial operations, including operational reductions as well as school building closures. These very difficult decisions will require significant political support and managerial discipline, with the likely financial impact hitting in FY08. Better-than-budgeted fy06 operating deficit expected: Favorably, the district reports that FY06 will result in better- than-budgeted results. The FY05 General Fund balance was $46.8 million, and the DEP cites a budgeted $11 million General Fund balance for FY06. Officials expect the FY06 General Fund balance to be $17-18 million, reflecting effective management actions taken in the previous year. Nevertheless, this represents another year of operating deficit, on a balance sheet that is supported by proceeds of the FY05 Deficit Elimination Bonds. New board in 2006: In 1999, the state abolished the elected board and appointed a temporary board with a strong CEO position and which answered to the Mayor. In 2004, the voters restored the elected board for the November 2005 election. As appointed board members are prohibited from running for office for one year, there will be significant change in the governing body. Moody's believes this wholesale change creates uncertainty as to the financial goals of the district. Despite declining enrollments and the closure of many schools, the district faces many deferred maintenance capital needs. Officials cite that the average age of a school exceeds 50 years, even after the construction of approximately 20 new buildings. With an existing high debt burden coupled with slow amortization, the district will be challenged to address their capital needs at a time of operating pressure. Outlook: The negative outlook reflects the difficult decisions that confront the district in the upcoming years, and our expectation that operating deficits could continue into FY07 and beyond. Revenues are expected to continue declining, due to enrollment reductions coupled with pressured state aid, which will require offsetting expenditure cuts. While the district's Deficit Elimination Plan is reasonable in its original assumptions and achievable, new external forces weigh heavily on the district's capacity to restore financial structural balance. What could change the rating - up -- Ability to implement and realize the goals of the Deficit Elimination Plan -- Structurally balanced operations in FY07 and beyond -- Enrollment losses that taper off What could change the rating - down -- Continued revenue losses resulting in ongoing operating deficits -- Significant change to the debt profile - though at this time, this is not expected. Key statistics: -- 2000 population: 951,267 (a 7.5% decline from previous census) -- Full valuation: $26.8 billion -- Full value per capita: $26,874 -- Per capita income as % of the state (2000 census): 66.4% (68.2% of the nation) -- Largest taxpayer as a % of taxbase: 8.3% (DaimlerChrysler) -- Debt burden: 11.3% -- Average annual enrollment decline (2000-2005): 3.9% -- FY05 General Fund balance: deficit $46.79 million, or 3.3% of General Fund revenues -- Deficit Elimination Bonds outstanding: $213 million DEVELOPERS DIVERSIFIED: Plans 2007 Quarterly Dividend Increase -------------------------------------------------------------- Developers Diversified intends to increase its quarterly 2007 common share dividend to $0.66 per share, which is 11.9% higher than the quarterly common share dividend of $0.59 per share paid by Developers Diversified in 2006. This increase is scheduled to commence in April 2007. On an annualized basis, the dividend would increase to $2.64 per share in 2007 from $2.36 per share in 2006. Scott Wolstein, Developers Diversified's Chairman and Chief Executive Officer, commented, "This dividend increase is achieved through our continued outstanding financial performance and signals the Board's confidence in the growth, earnings and cash generating potential of our business. Our dividend policy reflects our commitment to shareholders' interests by balancing dividend growth with dividend safety." Based in Beachwood, Ohio, Developers Diversified Realty Corporation -- http://www.ddr.com/-- currently owns and manages over 500 retail operating and development properties in 44 states, plus Puerto Rico and Brazil, totaling 118 million square feet. The Company is a self-administered and self-managed real estate investment trust operating as a fully integrated real estate company which acquires, develops and leases shopping centers. * * * As reported in the Troubled Company Reporter on Oct. 31, 2006, Fitch Ratings affirmed Developers Diversified Realty Corporation's ratings following the company's announcement of the pending acquisition of Inland Retail Real Estate Trust Inc. Ratings affirmed include the Company's BBB Issuer Default Rating, BBB Senior unsecured debt and BB+ preferred stock rating. DOBSON COMMS: Improved Operations Prompt S&P's Positive Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook for Dobson Communications Corp. and its wholly owned operating subsidiaries, American Cellular Corp., Dobson Cellular Systems Inc., and Dobson Operating Co. LLC, to positive from developing and affirmed the 'B-' corporate credit rating for the four entities. Okalahoma City, Oklahoma-based Dobson is a wireless communications provider serving approximately 1.6 million subscribers in rural and suburban markets in 16 states across the U.S. "The outlook revision reflects improvement in operating trends during 2006, after a challenging 2005," said Standard & Poor's credit analyst Susan Madison. Since the beginning of 2006, the company has seen a meaningful improvement in operating metrics. "We expect continued improvement in credit metrics over the next year," said Ms. Madison. Dobson's ratings reflect increasing competition in the wireless sector, particularly from larger, better-capitalized national competitors, the company's reliance on roaming revenue, and a highly leveraged financial profile. These risks are somewhat tempered by the recent improvement in operating trends, the extension through 2009 of the company's roaming agreement with Cingular, and a strengthening financial profile. DOLLAR GENERAL: Names David L. Bere' as Chief Operating Officer --------------------------------------------------------------- Dollar General Corp. has named David L. Bere' as its new President and Chief Operating Officer, effective Dec. 4, 2006. Mr. Bere' will report to David A. Perdue, Chairman and CEO, and will be responsible for overseeing the business operations of the company. "I am excited to have David join our management team as we embark upon a period of exciting changes," said Mr. Perdue. "He understands the Company and our culture. David's perspective is both strategic and tactical, and I am confident that he will play a key role as we move to the next level in the development of our business model." Headquartered in Goodlettsville, Tennessee, Dollar General Corporation -- http://www.dollargeneral.com/-- is a Fortune 500(R) discount retailer with 7,821 neighborhood stores as of Oct. 28, 2005. Dollar General stores offer convenience and value to customers by offering consumable basic items that are frequently used and replenished, such as food, snacks, health and beauty aids and cleaning supplies, as well as a selection of basic apparel, housewares and seasonal items at everyday low prices. * * * On Oct. 17, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology for the US and Canadian Retail sector, the rating agency confirmed its Ba1 Corporate Family Rating for Dollar General Corporation and downgraded its Ba1 rating on the Company's $200 million 8-5/8% senior unsecured notes to Ba2. In addition, Moody's assigned an LGD4 rating to notes, suggesting noteholders will experience a 66% loss in the event of a default. DURA AUTO: U.S. Trustee Appoints Seven-Member Creditors Committee ----------------------------------------------------------------- Relative to DURA Automotive Systems, Inc. and its debtor affiliates' Chapter 11 cases, Kelly Beaudin Stapleton, U.S. Trustee for Region 3 pursuant to Section 1102(a)(1) of the Bankruptcy Code, appointed seven creditors to the Official Committee of Unsecured Creditors. The appointed creditors are: (1) Wilfrid Aubrey LLC Attn: Nicholas W. Walsh 100 William Street Suite 1850 New York, NY 10038 Phone: 212-675-4906 Fax: 212-675-3626 (2) BNY Trust Company Midwest. Attn: Robert H. Major 6525 W. Campus Oval New Albany, OH 43054 Phone: 614-775-5278 Fax:614-775-5636 (3) US Bank National Association. Attn: James E. Murphy 100 Wall Street Suite 1600 New York, NY 10005 Phone: 212-361-6174 Fax: 212-514-6841 (4) International Union, UAW Attn: Niraj Ganatra, Esq. 8000 East Jefferson Avenue Detroit, MI 48214 Phone: 313-926-5216 Fax: 313-926-5240 (5) Pension Benefit Guaranty Corporation Attn: William McCarron, Jr. 1200 K Street N.W. Washington, D.C. 20005 Phone: 202-326-4000, ex. 3471 Fax: 202-326-4112 (6) Johnson Electric N.A., Inc. Attn: Douglas G. Eberle 47660 Halyard Drive Plymouth, MI 48170 Phone: 734-392-5308 Fax: 734-392-5388 (7) Thompson I.G., LLC Attn: Christine Maria DeSonia 3196 Thompson Rd. Fenton, MI 48430 Phone: 810-629-9558 Fax: 810-629-8342 Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). E2 BROKERS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: E2 Brokers, Inc. dba Naturally Pure Enterprises dba EZ Brokers 1160 Tara Court #B Rocklin, CA 95765 Bankruptcy Case No.: 06-25014 Type of Business: The Debtor conducts employment drug testing. Chapter 11 Petition Date: November 28, 2006 Court: Eastern District of California (Sacramento) Judge: Michael S. McManus Debtor's Counsel: Scott A. CoBen, Esq. CoBen & Associates 1214 F Street Sacramento, CA 95814 Tel: (916) 492-9010 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Income taxes $743,606 P.O. Box 21126 Philadelphia, PA 19114 Law Office Wanland & Business debt $187,000 Spaulding 705 University Avenue Sacramento, CA 95825 Franchise Tax Board State income taxes $181,273 Attn: Bankruptcy Unit P.O. Box 2952 Mail Stop A-340 Sacramento, CA 95812-2952 Jake Mickalich Business debt $120,000 6661 Stanford Ranch Road #F172 Rocklin, CA 95765 J&S Jackson Center, LLC Business debt $78,709 Gaspar Garcia II, Esq. Business debt $45,000 Unishippers Business debt $35,510 Samantha Betts Business debt $20,000 PG&E Business debt $12,371 Dell Financial Services Business debt $9,101 Cingular Wireless Business debt $4,247 Avaya, Inc. Business debt $2,170 Cingular Wireless Business debt $1,023 Pitney Bowes Business debt $673 SBC Business debt $423 BA Merchant Services Business debt $272 Bank of America Business debt $195 Safeguard Business debt $37 Telepage Communications, Inc. Business debt $26 Steve's Place, Inc. Business debt $15 ELMTREE HEIGHTS: Case Summary & Four Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Elmtree Heights, LLC 306 Lorton Avenue Burlingame, CA 94010 Bankruptcy Case No.: 06-31130 Chapter 11 Petition Date: November 29, 2006 Court: Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Peter M. Radin, Jr., Esq. Law Office of Peter M. Radin 601 California Street #1300 San Francisco, CA 94104 Tel: (415) 421-2077 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Union Holdings Commercial loan $54,000 dba PaC Union Prop. Serv. 601 California Street Suite 1300 San Francisco, CA 94108 Canyon Way, LLC Claim for sanctions Unknown 62 First Street, 4th Floor San Francisco, CA 94105 Farella, Braun & Martel Professional services Unknown 235 Montgomery Street San Francisco, CA 94104 Pinnacle Law Group Professional services Unknown 425 California Street Suite 1800 San Francisco, CA 94104 EMMIS COMMS: Lowers Preferred Stock's Price to $20.495 Per Share ---------------------------------------------------------------- Emmis Communications Corporation adjusted the price of its 6.25% Series A Cumulative Convertible Preferred Stock to $20.495 per share from $30.100 per share. The adjustment was made in connection with its payment of a special $4 per share dividend on its common stock. Indianapolis, Ind.-based Emmis Communications Corporation (NASDAQ: EMMS) -- http://www.emmis.com/-- is a diversified media firm with radio broadcasting, television broadcasting, and magazine publishing operations. Emmis owns 22 FM and 2 AM domestic radio stations serving New York, Los Angeles, and Chicago as well as St. Louis, Austin, Indianapolis and Terre Haute, Indiana. In addition, Emmis owns a radio network, international radio interests, two television stations, regional and specialty magazines, and ancillary businesses in broadcast sales and publishing. * * * As reported in the Troubled Company Reporter on Oct. 16, 2006, Moody's Investors Service downgraded Emmis Communications Corp.'s Corporate Family rating from Ba3 to B1 and assigned a B1 rating to the $600 million senior secured credit facilities of Emmis' subsidiary, Emmis Operating Company. As reported in the Troubled Company Reporter on Oct. 16, 2006, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Emmis Communications Corp. and subsidiary Emmis Operating Co. by one notch, to 'B' and S&P assigned its 'B' bank loan rating to Emmis Operating's $600 million secured credit facility. ENRON CORP: Jeffrey Skilling Inks Pact with U.S. Labor Department ----------------------------------------------------------------- The U.S. Department of Labor and Jeffrey K. Skilling have entered into a settlement agreement that resolves the department's action against the former Enron Corp. executive. Under the agreement, Mr. Skilling will drop his opposition to a previous $85,000,000 settlement, waive his right to benefits from Enron's pension plans, and be permanently barred from serving in a fiduciary capacity to any employee benefit plan governed by the Employee Retirement Income Security Act (ERISA) in the future. The proposed settlement must be formally documented and submitted for approval to the U.S. District Court for the Southern District of Texas. The settlement acknowledges that Mr. Skilling is already subject to an order of forfeiture obtained by the U.S. Department of Justice's Enron Task Force. That order, entered Oct. 23, 2006 in U.S. District Court for the Southern District of Texas, requires the establishment of a $45,000,000 restitution fund for victims of Enron-related fraud, including plan participants and securities investors. The Labor Department's settlement provides that, if Mr. Skilling's convictions are overturned or vacated and the restitution fund is dissolved, Mr. Skilling will still pay $2,500,000 to the participants and beneficiaries in the company's savings and employee stock ownership plans plus $500,000 in penalties to the department. On June 26, 2003, the Labor Department had sued Mr. Skilling and others for mismanagement of the plans in violation of ERISA. The department alleged that Mr. Skilling failed to properly oversee the fiduciaries appointed to run Enron's plans and failed to correct misstatements about Enron's financial condition made by Kenneth Lay to plan participants. Mr. Skilling also was sued as a member of Enron's board of directors for failing to properly appoint and monitor a trustee to oversee the employee stock ownership plan. In previous settlements obtained by the Labor Department and private plaintiffs, more than $220,800,000 has been recovered for the pension plans from Enron, its directors, officers and fiduciaries who served on the plans' administrative committee. The department and private plaintiffs also obtained a $12,000,000 claim against Mr. Lay's estate, although the final recovery will depend on the total amount of assets available for distribution from the estate. These recoveries are subject to the resolution of certain appeals as well as attorneys' fees and expenses, and they do not include any recovery obtained from Mr. Skilling. The department's suit resulted from a comprehensive investigation conducted by the Dallas regional office of the department's Employee Benefits Security Administration and the Office of the Solicitor of Labor. 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. 183; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENRON CORP: Panel Wants Settlement Pact with Richard Buy Approved ----------------------------------------------------------------- The Official Committee of Unsecured Creditors asks the U.S. Bankruptcy Court for the Southern District of New York to approve their settlement agreement with Richard B. Buy, Enron Corp.'s former senior vice president and chief risk officer. On the Reorganized Debtors' behalf, the Creditors Committee had sued Richard B. Buy to recover, among other things, a $400,000 transfer made by Enron Corp. to him before the Debtors' filing for bankruptcy. The Committee alleges that Mr. Buy received an avoidable preferential transfer that is recoverable under Section 550(a) of the Bankruptcy Code and a fraudulent transfer under Section 548(a)(1)(B), since the Debtors received less than the reasonably equivalent value in exchange for some or all of the transfer. Following negotiations, the Committee, in consultation with the Reorganized Debtors, entered into a settlement agreement with Mr. Buy to resolve all matters related to the Adversary Proceeding, Susheel Kirpalani, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, in New York, relates. Under the settlement, the parties agree that: (1) Mr. Buy will make a $120,000 settlement payment to the Reorganized Debtors; and (2) The Committee will withdraw and dismiss with prejudice the Adversary Proceeding. About Enron Corp. Headquartered in Houston, Texas, Enron Corporation filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtor. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. (Enron Bankruptcy News, Issue No. 183; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERGY NEW ORLEANS: Objects to Creditors Panel's Avoidance Action ------------------------------------------------------------------ Entergy New Orleans, Inc., opposes the Official Committee of Unsecured Creditors' request for authority to pursue an avoidance action in connection with postpetition payments the company made to its affiliates on account of alleged prepetition obligations. ENOI asserts that the Committee's request: (1) could cause significant harm to the estate by resulting in the loss of economically valuable contracts that are integral to the company's operations; (2) would cause harm to the estate by significantly increasing the interest costs associated with the contacts that the company seeks to assume; and (3) would result in a waste of resources because the Committee seeks the return of prepetition contract payments to the Entergy Affiliates that once recovered, would almost immediately be returned to the Affiliates upon assumption. Joshua J. Lewis, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre LLP, in New Orleans, Louisiana, says the power purchase agreements are an integral part of ENOI's ability to serve its customers at the lowest reasonable cost consistent with the need to provide reliable service, to meet customers' needs and provide for adequate reserves of power. He notes that the Committee's request will risk the termination of the PPAs as forward contracts, would negatively impact ENOI, and could result in higher electricity charges to its retail customers. Additionally, Mr. Lewis says, approval of the Committee's request would increase ENOI's interest costs for the PPAs at about $575,000 annually, as well as interest costs for its Unit Power Sales Agreement. With regards to the UPSA payment, the interest rate applicable to defaults is the interest rate required for refunds ordered pursuant to FERC Regulations under the Federal Power Act, which is 2% to 3% higher than the applicable rate under ENOI's DIP Loan. Accordingly, ENOI asks the U.S. Bankruptcy Court for the Eastern District of Louisiana to deny the Committee's motion. Creditors Committee Disputes ENOI's Arguments The Committee contends that ENOI's objection is completely without merit. Philip K. Jones, Esq., at Liskow & Lewis, APLC, in New Orleans, Louisiana, asserts that ENOI has failed to satisfy its burden of establishing the validity of the Affiliate Payments as required by Rule 6001 of the Federal Rules of Bankruptcy Procedure. He adds that the postpetition transfers constituting the Affiliate Payments are invalid per se as they have not been authorized by the Court, and are not permitted under the Bankruptcy Code. As for ENOI's arguments that the Affiliate Payments were necessary to prevent (i) the permanent loss of the PPAs, and (2) incurring higher interest costs to satisfy the Affiliates' purported "Cure Amount Claim" relative to ENOI's ultimate assumption of the PPAs, Mr. Jones asserts that both arguments are incorrect and wholly unavailing to establish the Affiliate Payments' validity or ENOI's justification for its failure to demand the return of the Affiliate Payments with interest. ENOI asserted that its Affiliate Payments relative to the Unit Power Sales Agreement was justified because the default might otherwise have increased administrative costs and ENOI would be required to seek approval from the U.S. Federal Energy Regulatory Commission to assume the UPSA. Mr. Jones argues that ENOI's assertion is unsupported by any specific authority and evidence. He notes that it is the Court, not the FERC, that has authority to approve the assumption or rejection of executory contracts notwithstanding the authority given to the FERC to regulate rates for the interstate sale of electricity at wholesale, citing In re Mirant Corp. 378 F.3d 511,518 (5th Circ. 2004). Thus, the Committee asks the Court to approve its request. BNY Supports Committee The Bank of New York supports the Committee's request, and asserts that ENOI's arguments are not relevant because ENOI withdrew its request to assume the PPAs and deferred the assumption issue until confirmation of its proposed Chapter 11 Plan. Douglas S. Draper, Esq., at Heller, Draper, Hayden, Patrick and Horn LLC, in New Orleans, Louisiana, points out that it is still uncertain whether the three PPAs and the UPSA at issue in the Committee's request will actually be assumed by ENOI under its Plan. Mr. Draper notes that there have been no findings by the Court that the contracts are executory contracts capable of assumption pursuant to Section 365 of the Bankruptcy Code, or if they constitute forward contracts within the meaning of Section 556. Mr. Draper disputes ENOI's argument that the Committee's request will significantly increase the interest costs associated with the Contracts. During the hearing on BNY and FGIC's Motions for Adequate Protection, ENOI had no qualms in deciding that it was in the best interest of the estate to pay higher interest rates and to pay default interest to BNY in lieu of providing BNY with adequate protection. Faced with the possibility of having to sue its Affiliates to avoid and recover unauthorized postpetition payments, the "harm" that would supposedly result to the estate from the increased cost of paying higher interest and default interest is one of the primary reasons ENOI uses in refusing to sue to recover the payments, Mr. Draper notes. According to Mr. Draper, it is not clear how ENOI can reconcile its two conflicting positions, other than to surmise that the harm that the company is truly seeking to avoid is depriving its Affiliates of $19,108,860. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERGY NEW ORLEANS: Dist. Court Affirms Gordon Action Dismissal ---------------------------------------------------------------- Pursuant to Rule 8013 of the Federal Rules of Bankruptcy Procedure, Reverend C.S. Gordon, et al., took an appeal from a bankruptcy court judgment dismissing their action for declaratory relief without prejudice against Entergy New Orleans, Inc. Gordon, et al., had previously sought a declaratory judgment that ENOI and its parents and affiliates are a single business entity, and are liable for the acts of ENOI alleged in previously filed civil actions. Bankruptcy Judge Jerry A. Brown ruled that Gordon, et al., lacked standing in ENOI's bankruptcy case because they sought both to assert a claim that was property of the Debtor and to control property of the Debtor, thus their claim was barred by the automatic stay. After reviewing the pleadings, memoranda, and relevant law as well as hearing oral argument on Oct. 4, 2006, the U.S. District Court for the Eastern District of Louisiana affirmed the Bankruptcy Court's decision. It is patently clear that the SBE claim is part of the Debtor's estate, and it is also similarly clear that the automatic stay prevents a creditor from possession or control of the Debtor's property, District Court Judge Stanwood R. Duval, Jr., said. What remains troublesome is ENOI's contention that the SBE claim is exclusively held by ENOI, and that ENOI, as debtor-in- possession, has the exclusive discretion to exercise this remedy, and that discretion is indefinite by virtue of the bankruptcy, Judge Duval noted. The Bankruptcy Rules do not preempt a cause of action or otherwise remove state law standing, Judge Duval said. Rather, the SBE claim is temporarily suspended to facilitate the orderly administration of the ENOI bankruptcy. "The Plaintiffs should be allowed to assert the claim in the bankruptcy if the stay is lifted, which will be at the appropriate time as to be determined by the bankruptcy judge. The adversary proceeding at this time would thus be better characterized as premature rather than flawed due to a lack of standing of the claimants," Judge Duval declared. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FERRELLGAS PARTNERS: Declares First Quarter Cash Distribution ------------------------------------------------------------- Ferrellgas Partners, L.P., has declared a first quarter cash distribution of $0.50 per partnership common unit. The distribution is payable Dec. 15, 2006, to common unitholders of record as of Dec. 8, 2006. The distribution covers the period from Aug. 1, 2006 to Oct. 31, 2006, the end of the partnership's first quarter of fiscal 2007. Ferrellgas' annualized distribution is currently $2 per common unit. Headquartered in Overland Park, Kansas, Ferrellgas Partners, LP -- http://www.ferrellgas.com/-- through its operating partnership, Ferrellgas, LP, is a propane marketer in the United States. Ferrellgas serves more than 1 million customers in all 50 states, the District of Columbia, Puerto Rico, and Canada, and has annual sales volumes approaching 1 billion retail gallons. Ferrellgas employees indirectly own more than 20 million common units of the partnership through an employee stock ownership plan. * * * In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the broad energy midstream sector, encompassing companies that engage in the extraction, treating, transmission, distribution, and logistics for crude oil, natural gas, and other hydrocarbon products, the rating agency affirmed its Ba3 corporate family rating on Ferrellgas Partners L.P. GB HOLDINGS: Committee Proposes Sale of Atlantic Coast Stock ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of New Jersey will convene a hearing at 10:00 a.m., on Dec. 8, 2006, to consider the request of the Official Committee of Unsecured Creditors of GB Holdings, Inc., to sell the Debtor's stock in Atlantic Coast Entertainment Holdings, Inc. The 2,882,938 shares of Atlantic common stock is the Debtor's sole tangible asset. The Committee has secured a purchase offer from a group of investors known as the Icahn Affiliates. According to the Committee, Icahn's bid could provide the estate with as much as $53 million in cash to satisfy administrative expenses and general unsecured claims. The Committee anticipates a 90% recovery for general unsecured creditors under the agreement with Icahn. The proposed sale of the stocks to Icahn is subject to higher and better offers. Competing bids must by $500,000 higher than Icahn's offer. Icahn's stalking-horse offer is not subject to a break-up fee. However, the Committee and Icahn has agreed to certain bid protections as reasonable consideration for the stalking-horse bid. The bid protections, in sum, provides a release for the Icahn Affiliates from the estate and the Committee's claims. It also bars other entities from asserting any claim against the released parties. As reported in the Troubled Company Reporter on Sept. 27, 2006, the Committee has filed a Chapter 11 Plan and Disclosure Statement for the Debtor. The Committee's Plan hinges either on its successful attempt to compel the payment of dividends due on Atlantic Coast Entertainment Holdings, Inc., common stock owned by the Debtor or the sale of these common stock holdings to the highest bidder at an auction. About GB Holdings Headquartered in Atlantic City, New Jersey, GB Holdings, Inc., primarily generates revenues from gaming operations in Atlantic Coast Entertainment Holdings, which owns and operates The Sands Hotel and Casino in Atlantic City, New Jersey. The Debtor also provides rooms, entertainment, retail store and food and beverage operations. These operations generate nominal revenues in comparison to the casino operations. The Debtor filed for chapter 11 protection on September 29, 2005 (Bankr. D. N.J. Case No. 05-42736). Alan I. Moldoff, Esq., at Adelman Lavine Gold and Levin, represents the Debtor. Charles A. Stanziale, Jr., Esq., at McElroy, Deutsch, Mulvaney & Carpenter, serves as counsel to the Official Committee Of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. GEORGE MASSEY: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: George H. Massey, Jr. and Sharron Beach Massey 2507 Prytania Street New Orleans, LA 70130 Bankruptcy Case No.: 06-11338 Type of Business: Chapter 11 Petition Date: November 29, 2006 Court: Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtor's Counsel: Phillip K. Wallace, Esq. Phillip K. Wallace, PLC 2027 Jefferson Street Mandeville, LA 70448 Tel: (985) 624-2824 Fax: (985) 624-2823 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ L. Mack Laney Loan for purchase $250,000 c/o Eric Oliver Person, Esq. of furniture 2727 Prytania Street Suite 20 New Orleans, LA 70130 American Express Credit card $138,907 P.O. Box 360001 purchases Ft. Lauderdale, FL 33336-0001 Amerisourcebergen Drug Corp. Lawsuit $93,000 c/o Frank A. Baker, Esq. 4431 Lafayette Street Marianna, FL 32446 Mercedes Benz Financial Location: 2507 $85,000 Prytania Street New Orleans, LA 2004 SL 500R Mercedes Benz Phoenix Medical Supply Inc. Promissory note $70,000 Neiman Marcus Credit card $41,685 purchases Saks Fifth Avenue Credit card $35,423 purchases Statewide Bank Location: 2507 $34,691 Prytania Street, New Orleans, LA 2002 Lincoln Towncar (Stretched) Chase Bank One Credit card $25,382 purchases Mercedes Benz Financial Location: 2507 $23,000 Prytania Street New Orleans, LA 2000 Mercedes Benz S500V Medline Industries Inc. Lawsuit in the $8,738 5th Circuit Court Cook County, IL Case No. 06M1-134274 Discover Card Credit card $7,765 purchases Concord Service Inc. Interest in $911 Condominium Timeshare, Royal Holiday Club GERDAU AMERISTEEL: Moody's Lifts Corporate Rating to Ba1 from Ba2 ----------------------------------------------------------------- Moody's Investors Service upgraded Gerdau Ameristeel, raising its corporate family rating to Ba1 from Ba2 and the rating on its senior unsecured notes to Ba2 from Ba3. The upgrades recognize Gerdau's progress over the last two years in growing its North American footprint of steel minimills and downstream fabricated products plants without pressuring its balance sheet. In 2006, Gerdau has applied its strong cash flow to reduce debt, leaving it with only $706 million of debt, or 0.9x LTM EBITDA as of Sept. 30. Over the last year it has also held its mill conversion costs relatively constant, demonstrating effective cost control in a period of generally rising input costs. In addition, steel market conditions and non-residential construction activity are expected to remain favorable in the near term, keeping Gerdau's credit metrics at safe levels. The considerable amount of consolidation that has occurred within the North American long products market, and the fact that the larger producers have similar costs, should support higher and more stable margins than were experienced over the last five years. However, the industry remains highly cyclical. Gerdau has a stable rating outlook. This concludes the ratings review initiated on Sept. 6, 2006, when Gerdau's ratings were placed under review for possible upgrade. These ratings were raised: -- $405 million of 10.375% guaranteed senior unsecured notes due 2011 upgraded to Ba2, LGD5, 74% from Ba3, -- Corporate Family Rating upgraded to Ba1 from Ba2, -- Probability of Default Rating upgraded to Ba1 from Ba2. Gerdau currently has a solid financial profile but still faces several challenges in addition to those common to the industry, predominantly cyclicality and cost inflation. First, although its rebar and merchant bar products businesses have enjoyed significant success lately, the wire rod business is lagging. In part, this has been due to high imports, which remain an area of concern. Also, Gerdau has higher than average risks related to labor issues and retiree benefit costs. The company is rather unusual among minimill producers in that many of its operations are unionized and its employees are covered by defined benefit pension and retiree healthcare plans. Collective bargaining agreements at six facilities have expired, several in 2005, and have not yet been renegotiated, and labor contracts at several other Gerdau plants expire in 2007. Finally, Moody's notes the growth aspirations of Gerdau and its parent, Gerdau S.A. Through acquisitions, the company has grown three-fold since 1999, greatly increasing its market position, but the dwindling universe of takeover targets in the long products sphere raises the concern that Gerdau will pursue targets outside of its long products focus. A move into new products and markets could magnify the leverage and integration risks that accompany any acquisition. Moody's previous rating action on Gerdau was on Sept. 6, 2006, when Moody's placed its ratings under review for possible upgrade in recognition of the company's improved financial metrics and an overall reduction in its financial risk. Gerdau Ameristeel, headquartered in Tampa, Florida, produces rebar, merchant bar, structural shapes, wire rod, and flat-rolled sheet at 17 North American minimills, and conducts downstream steel fabricating operations at 50 facilities. The company had sales of $4.36 billion for the 12 months ended Sept. 30, 2006. GMAC LLC: Moody's Rates $1.9 Billion Preferred Securities at Ba3 ---------------------------------------------------------------- Moody's Investors Service confirmed GMAC LLC's Ba1 senior unsecured ratings, after GM's disclosure that it has closed the sale of a 51% stake in GMAC to FIM Holdings, LLC, an investor consortium led by Cerberus FIM Investors, LLC. Moody's also assigned a new rating of Ba3 to GMAC's $1.9 billion preferred equity securities, which were issued to GMAC's owners in connection with the sale transaction. The outlook for GMAC's ratings is negative. Concurrently, Moody's also confirmed Residential Capital LLC's Baa3 unsecured and Prime-3 short-term ratings, with a stable outlook. GM's ratings are unchanged as they already take into consideration the impact of the sale on the company's credit profile. Moody's confirmation of GMAC's ratings incorporates these key factors: -- GM's sale of a 51% stake in GMAC results in ratings de- linkage from GM on the basis of a change in control in favor of the Cerberus consortium. -- The transaction reduces GMAC's direct and indirect exposure to GM and eliminates its potential liability for GM's pension obligations, which improves the firm's risk profile. -- GMAC's new owners are expected to have a positive influence on GMAC's operating strategy, which will emphasize profitability improvements through gains in operating and funding efficiency, capital strengthening through earnings retention and dividend reinvestment, and enhanced liquidity through improved access to the capital markets. -- GMAC will have a continuing business concentration with GM, which, given GM's operating challenges, poses ongoing risks to GMAC's operating metrics and access to confidence sensitive funding, constraining the rating and outlook. -- GM's call option on GMAC's automotive operations represents an upside ceiling on GMAC's unsecured rating based upon a re-linkage of ratings should GM exercise the option. Moody's noted that GMAC's negative rating outlook could improve to stable in the near term should the firm succeed in strengthening its liquidity profile, in particular, by mitigating the GM bankruptcy risk embedded within its wholesale receivable funding facility, SWIFT. Developments in GM's condition and performance will also be very important considerations in reassessing GMAC's rating outlook. Confirmation of ResCap's ratings reflects these considerations: -- The sale of a 51% interest of GMAC to Cerberus will result in ratings de-linkage from GM and likely improve ResCap's access to alternative funding sources. -- ResCap has had significant success in gaining strong access to diverse funding sources in the global public capital markets, thus eliminating its reliance on intercompany borrowings from GMAC. -- ResCap has made solid progress in integrating its GMAC Residential and GMAC RFC mortgage businesses. -- However, ResCap has further progress to make to complete the integration of its business platforms and reduce business infrastructure costs. -- ResCap's limited independent operating track record, the highly competitive residential mortgage banking environment in which it operates and its moderate capitalization continue to be rating factors. ResCap's stable outlook implies that after a change in ownership there will not be a material alteration to ResCap's leadership, business model or capital structure. The stable outlook also reflects a reduction in the linkage between ResCap and GMAC. Moody's expects that the sale will lead to an enhancement of ResCap's operational structure and flexibility, which should result in further earnings and funding diversity over time. Nonetheless, ResCap's rating continues to be linked to that of its parent. Thus, an action regarding GMAC's ratings could result in a similar action with ResCap's ratings, assuming no material changes in ResCap's corporate ownership. Notching between the two firms' ratings could increase to as much as two notches, once existing operational and funding structure uncertainties are resolved, demonstrating ResCap's independence from GMAC. GMAC LLC is a Detroit-based provider of retail and wholesale auto financing, primarily in support of GM's auto operations. GMAC reported earnings of $2.4 billion in 2005. ResCap is a holding company for the real estate financing businesses of GMAC, including GMAC-RFC Holding and GMAC Residential Holding Corp. HANESBRANDS INC: Launches Proposed $500 Senior Notes Financing -------------------------------------------------------------- Hanesbrands Inc. has begun a proposed $500 million offering of senior unsecured notes to qualified institutional buyers subject to market and other conditions. Hanesbrands plans to use the net proceeds of the offering to repay outstanding borrowings under its bridge loan facility, which was approximately $500 million as of Oct. 31, 2006. The notes are being offered in the United States pursuant to Rule 144A under the Securities Act of 1933, as amended, and to persons outside of the United States under Regulation S under the Securities Act. The notes will bear interest at a rate to be determined at pricing and will be guaranteed on a senior unsecured basis by each of Hanesbrands' existing and future subsidiaries that guarantee indebtedness under Hanesbrands' senior secured credit facility. Hanesbrands Inc. -- http://www.hanesbrands.com/-- markets innerwear, outerwear and hosiery apparel under consumer brands, including Hanes, Champion, Playtex, Bali, Just My Size, barely there and Wonderbra. The company designs, manufactures, sources and sells T-shirts, bras, panties, men's underwear, children's underwear, socks, hosiery, casual wear and active wear. Hanesbrands has approximately 50,000 employees in 24 countries. HANESBRANDS INC: Moody's Rates Proposed $500 Million Notes at B2 ---------------------------------------------------------------- Moody's Investors Service assigned a B2 rating and a loss given default assessment of LGD5, 89% to Hanesbrands Inc.'s proposed $500 million senior unsecured note issue . All other ratings have been affirmed and the rating outlook remains stable. The ratings assigned are subject to receipt of final documentation with no material changes to the terms originally reviewed by Moody's. Proceeds from the new note issue will be used to repay in full the outstanding $500 million unsecured bridge loan and upon repayment in full Moody's expects to withdraw ratings on the unsecured bridge loan. These ratings were assigned: -- $500 million senior unsecured notes at B2, LGD5, 89% These ratings were affirmed: -- Corporate Family Rating at Ba3 -- Probability of Default Rating at Ba3 -- Speculative Grade Liquidity Rating at SGL-1 -- $500 million senior unsecured bridge loan at B2, LGD5, 89% These ratings were affirmed, but LGD assessments were revised: -- $2.15 billion 1st lien facilities at Ba2, LGD3, 32% from LGD3, 31% -- $450 million 2nd lien facilities at B1, LGD5, 74% from LGD5, 73% Hanesbrands' Ba3 corporate family rating reflect the size and scale of its operations, its portfolio of well recognized apparel brands with leading market shares in their categories, and the staple nature of the products which provides stable replenishment demand. The ratings also reflect Moody's view that the product and segments in which the company operates are a relatively commoditized category with limited ability to achieve brand differentiation relative to peers. The categories in which the company operates are also highly competitive and the company faces competition across its product categories from a number of competitors in the apparel industry, private label competition and specialty apparel retailers, some of whom have greater financial resources. In addition, concentration risk is high with the top 10 customers accounting for 65% of fiscal 2006 sales. The company's financial position is leveraged following a debt financed dividend paid to Sara Lee, with adjusted debt/EBITDA of approximately 5x and fixed charge coverage of approximately 2.2x. These financial metrics are weak for the rating category and the ratings assigned reflect Moody's expectation the company will utilize free cash flow to reduce debt. Moody's rating outlook is stable as Moody's expects the company to utilize free cash flow to reduce debt to levels more appropriate for the rating category. The rating outlook also reflects expectations the company will maintain a competitive cost profile and that the company's transition to a stand alone company will be achieved without disruption to operations. The B2 rating on the new senior unsecured notes reflects the company's probability of default rating, which is rated Ba3, and a loss given default assessment of LGD5, 89%. The LGD assessment of the unsecured notes reflects their structural subordination to the $2.6 billion of secured credit facilities, which are secured by substantially all assets of Hanesbrands Inc. and its wholly owned domestic subsidiaries. Hanesbrands Inc., headquartered in Winston-Salem, NC, is a major manufacturer and marketer of branded innerwear and outerwear apparel. The company markets products under the "Hanes", "Champion", "Playtex", "Bali", "Wonderbra" and "L'eggs" brands. The company reported sales of $4.6 billion for its fiscal year ending July 3, 2006. HILLMARK FUNDING: Moody's Rates $15.2 Million Class D Notes at Ba2 ------------------------------------------------------------------ Moody's Investors Service assigned these ratings to Notes issued by HillMark Funding Ltd.: -- Aaa to $368,000,000 Class A-1 Senior Secured Floating Rate Notes due 2021; -- Aa2 to $24,500,000 Class A-2 Senior Secured Floating Rate Notes due 2021; -- A2 to $28,000,000 Class B Senior Secured Deferrable Floating Rate Notes due 2021; -- Baa3 to $25,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2021 and -- Ba2 to $15,250,000 Class D Secured Deferrable Floating Rate Notes due 2021. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Note's governing documents, and are based on the expected loss posed to the noteholders relative to receiving the present value of such payments. The ratings of the notes reflect the credit quality of the underlying assets--which consist primarily of senior secured loans-- as well as the credit enhancement for the Notes inherent in the capital structure and the transaction's legal structure. HillMark Capital Management, L.P. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. HOME PRODUCTS: Failed Interest Payment Cues S&P's Default Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Chicago, Illinois-based household goods manufacturer Home Products International Inc. to 'D' from 'CCC+'. At the same time, the subordinated debt rating on the company was lowered to 'D' from 'CCC-'. The ratings downgrade reflects Home Products' failure to make a $5.6 million interest payment to noteholders due in mid November. "Although the company is currently in a 30-day cure period that began Nov. 15, we believe that it is unlikely to make the missed payment," said Standard & Poor's credit analyst Bea Chiem. Also, on Nov. 16, Home Products reported that it reached an agreement in principle with noteholders to restructure its approximately $120 million of outstanding notes. As part of the restructuring, holders of the 9.625% senior subordinated notes would convert their holdings into 95% of the equity of the reorganized company. Existing common shareholders will receive 5% of the common stock. Terms of the agreement are still being finalized; the company has until mid December to reach an agreement. Home Products is a narrowly focused company engaged in the manufacturing and marketing of consumer housewares, primarily storage-related products. HOUSTON EXPLORATION: Provides Update on Restructuring Plans ----------------------------------------------------------- The Houston Exploration Co. disclosed in a regulatory filing with the Securities and Exchange Commission that it is continuing to explore a broad range of strategic alternatives that includes: * a recapitalization of the company either through additional share repurchases or a special dividend; * operating partnerships and/or strategic alliances; and * the sale or merger of the company. The company does not expect to make any public comments regarding this process until after the its Board of Directors has completed its review of the strategic alternatives and approved a definitive course of action. Strategic Restructuring Plan Update Since November 2005, the company has been implementing a strategic restructuring plan, the primary purpose of which is to improve the company's financial and operating performance by focusing its operations onshore. Recap of Key Milestones * In March 2006, the company completed the sale of the Texas portion of its Gulf of Mexico assets, which included 58.5 billion cubic feet of natural gas equivalent of estimated proved reserves at year-end 2005, for a gross sales price of $220 million. * In May 2006, the company initiated activity under its share repurchase program. To date, the company has repurchased 1,176,500 shares of its common stock, or approximately 4% of its outstanding shares, for approximately $61.6 million. * In June 2006, the company completed the sale of substantially all of the Louisiana portion of its Gulf of Mexico assets, which included 186.1 Bcfe of estimated proved reserves at year-end 2005, for a gross sales price of $590 million. Net cash proceeds from the sale totaled $530.8 million, of which $314.2 million was deposited with qualified intermediaries for potential reinvestment in like- kind exchange transactions under Section 1031 of the Internal Revenue Code. The remaining balance of these escrowed funds is shown on the company's balance sheet as designated cash. * In June 2006, and in connection with the sale of its Gulf of Mexico assets, the company completed the unwinding of natural gas hedges totaling 60,000 million British thermal units per day for the period July 2006 through December 2006 for a cost of $14.3 million. * In June 2006, the company's Board of Directors engaged Lehman Brothers to assist the company in an evaluation of a broad range of strategic alternatives. This evaluation is ongoing. Update on Related Initiatives * In August 2006, following the sale of its Gulf of Mexico assets, the company elected to unwind natural gas hedges totaling 20,000 MMBtu/d for the period September 2006 through October 2006 for a cost of $0.9 million. * On November 27, 2006, the 180-day time period prescribed by Section 1031 for reinvestment of the company's designated cash associated with the sale of its offshore Louisiana assets will expired. Currently, the company does not expect to complete any qualifying like-kind exchange transactions prior to that expiry date. As a result, the company anticipates that during the fourth quarter 2006: (i) the remaining balance of the company's designated cash will be released from escrow and reclassified as cash, and (ii) a tax gain of $250 million to $260 million on the sale of the company's offshore assets will be recognized. The company estimates that, after considering available net operating losses, alternative minimum tax credits and other corporate tax attributes, this gain will result in a current net income tax liability of $35 million to $40 million. Headquartered in Houston, Texas, The Houston Exploration Company -- http://www.houstonexploration.com-- is an independent natural gas and crude oil producer engaged in the exploration, development, exploitation and acquisition of natural gas and crude oil properties. The company's operations are focused in South Texas, the Arkoma Basin, East Texas, and the Rocky Mountains. HOUSTON EXPLORATION: S&P Holds Negative Watch on BB- Credit Rating ------------------------------------------------------------------ Standard & Poor's Rating Services' 'BB-' corporate credit rating on The Houston Exploration Co. remains on CreditWatch with negative implications. The company recently reported that it is exploring strategic alternatives, including shareholder friendly actions or sale of the company. The Houston, Texas-based company has $362 million in total debt outstanding as of Sept. 30, 2006. "The CreditWatch listing reflects the risk that Houston Exploration will pursue large share repurchases or special dividends funded with debt or asset sale proceeds," said Standard & Poor's credit analyst Ben Tsocanos. "This could result in the company significantly increasing its financial leverage or having a smaller asset and production base." Standard & Poor's said that, alternately, a sale or merger carries the risk that the buyer or resulting merged company will have a lower rating. Standard & Poor's expects to resolve the CreditWatch after an assessment of the company's plans regarding its credit strength. INDIAN CREEK: Section 341(a) Meeting Continued to December 6 ------------------------------------------------------------ The United States Trustee for Region 17 will continue the meeting of Indian Creek Vineyard Estates, LLC's creditors at 12:00 p.m., on Dec. 6, 2006, at San Jose Room 130, U.S. Federal Bldg., 280 South 1st Street #130, in San Jose, California. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Carmel Valley, California, Indian Creek Vineyard Estates, LLC, filed for chapter 11 protection on June 14, 2006 (Bankr. N.D. Ca. Case No. 06-51053). Henry B. Niles, Esq., represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy proceedings. The Debtor's schedules show total assets of $17,011,000 and total debts of $6,868,740. INTEGRATED DISABILITY: Plan Confirmation Hearing Set for Dec. 7 --------------------------------------------------------------- The Honorable Barbara J. Houser of the U.S. Bankruptcy Court for the Northern District of Texas in Dallas will consider confirmation of Integrated DisAbility Resources, Inc.'s Second Amended Plan of Reorganization at 1:15 p.m. on Dec. 7, 2006. The hearing will be held at the U.S. Courthouse, 1100 Commerce Street, Room 1424 in Dallas, Texas. The Second Amended Plan incorporates changes to the treatment of the Jensen Family Organization interest in the Debtor. JFO acquired the Debtor in 2004. JFO has agreed to subordinate its $13,625,640 general unsecured claim and waive any distribution that it would otherwise be entitled to receive as an unsecured claim holder. In addition, creditors Reliance Standard Life Insurance Company and AIG have agreed to release JFO from any claim, obligation, cause of action, or liability for any prepetition or postpetition act or omission through and including the effective date in connection with the Debtor's business and bankruptcy filing, except for: -- the right to receive a Pro Rata share of the funds available as a result of the JFO subordination; or -- any act or omission to the extent such act or omission is determined to have constituted willful misconduct or gross negligence However, if RSL and AIG fail to receive an aggregate distribution of 1.5% of their claims before a final decree is entered in the Debtor's bankruptcy case, the release will be revoked Other terms of the Debtor's Plan remain unchanged. As reported in the Troubled Company Reporter on Aug. 17, 2006, the Debtor anticipates paying creditors from the $2,324,930 cash it holds as of Apr. 30, 2006, which include proceeds from the sale of substantially all of its assets to RSL for $750,000. The Debtor proposes to satisfy the secured claims of Reliance Standard and Citicorp Vendor Finance Inc. upon surrender of their collaterals on the initial date of distribution to creditors. Holders of general unsecured claims less than or equal to $5,000 will receive 25% of their allowed claims in cash on the initial distribution date, while holders of general unsecured claims greater than $5,000 may elect to have their claims valued at $5,000 to be treated as Class 3 Convenience Claims. Holders of general unsecured claims greater than $5,000 are also entitled to a pro rata share of the remaining net reorganized assets up to the allowed amount of their claims. Holders of interests in the Debtor will have their stock or other securities canceled and will receive nothing under the Plan. A redlined copy of the Debtor's disclosure statement is available for a fee at: http://www.researcharchives.com/bin/download?id=061201205906 Headquartered in Irving, Texas, Integrated DisAbility Resources, Inc. -- http://www.myidr.com/-- provides disability plans and ongoing health and productivity services to claimants and employees. The Debtor filed for chapter 11 protection on Feb. 10, 2006 (Bankr. N.D. Tex. Case No. 06-30575). Cynthia Williams Cole, Esq., and Vincent P. Slusher, Esq., at Godwin Pappas Langley Ronquillo LLP, represent the Debtor in its restructuring efforts. The United States Trustee for Region 6 was not able to form an Official Committee of Unsecured Creditors due to lack of interest and lack of attendance during the creditors' meeting on March 21, 2006. When the Debtor filed for protection from its creditors, it estimated $1 million to $10 million in assets and $10 million to $50 million in debts. INTERSTATE BAKERIES: Trade Creditors Sell 25 Claims Totaling $14M ----------------------------------------------------------------- Papers filed with the Clerk of the Bankruptcy Court for the Western District of Missouri recorded in July 2006 25 claims transfers in Interstate Bakeries Corp. and its debtor-affiliates' bankruptcy cases totaling $14,397,652: (a) Debt Acquisition Company of America V LLC: Transferor Claim Amount ---------- ------------ Compusa $2,844 P&P Transport 743 C&E Doors, Inc. 556 Rays of New Bedford 381 OK Tire Store 207 Freeman Health System 149 A-1 Tool Maintenance, Inc. 144 Andys 2 79 Baker Fire Protection 51 (b) Distressed/High Yield Trading Opportunities Fund Ltd.: Transferor Claim Amount ---------- ------------ Madison Niche Opportunities $2,827,678 Madison Niche Opportunities 1,652,683 Madison Liquidity Investors 3,100,562 Madison Liquidity Investors 2,291,549 Madison Liquidity Investors 201,795 Madison Liquidity Investors 54,543 Madison Investment Trust Series 456,398 Madison Investment Trust Series 334,340 Distressed/High Yield Trading Opportunities Fund, Ltd., can be reached through Scott Stagg at 1 Greenwich Office Park North, 51 East Weaver Street, in Greenwich, Connecticut. (c) Minnesota Energy Resources Transferor Claim Amount ---------- ------------ Aquila, Inc. $28 Aquila, Inc. 24 (d) Madison Investment Trust - Series 17 Transferor Claim Amount ---------- ------------ Tommy Burns $150,530 DIB, Fagen & Brault, P.C. 99,470 Madison Investment Trust - Series 17 can be reached through Kristy Stark at 25892 Woodward Avenue, in Royal Oak, Michigan. The Court also recorded four claim transfers to: Transferee Transferor Claim Amount ---------- ---------- ------------ Cargill Financial Lehman Commercial $2,990,301 Home Finance Co., et al. Contrarian Funds, LLC 175,000 Red Line Refrigerated Longacre Master Fund 49,924 Republic Services Madison Liquidity 7,673 Lehman Commercial Paper Inc. can be reached through Andrew Kurth at 450 Lexington Avenue, 15th Floor, in New York. 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. 52; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) IPSCO INC: Near Completion of NS Group Buy Cues S&P to Up Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services raised the long-term corporate credit rating on IPSCO Inc. to 'BBB-' from 'BB+', as the company nears completion of its acquisition of NS Group Inc. The senior unsecured debt rating on the company's $150 million 8.75% senior notes due 2013 was also raised to 'BBB-' from 'BB+'. At the same time, Standard & Poor's removed all ratings from CreditWatch, where they were placed Sept. 11, 2006. The outlook is stable. Lisle, Illinois-based IPSCO continues to generate exceptional cash flow, which should ensure that the company preserves a solid financial risk profile, even after increasing its debt load to complete the acquisition. The acquisition of NS Group is being moderately financed with about 60% cash on hand and debt, and enhances IPSCO's product offering in the oil-country tubular goods market. The transaction will increase IPSCO's low debt to capital to about 30%, which is in line with its target capital structure, but very strong free cash flow should ensure good prospects to quickly reduce debt in the near term. The ratings on IPSCO reflect the company's modern, low-cost assets, good competitive position in the attractive steel plate and energy tubular markets, and moderate capital structure. These strengths are counterbalanced by the company's limited diversity and its exposure to volatile industry conditions in the North American steel market. The outlook is stable. Standard & Poor's expects that IPSCO's modern, low-cost asset base and moderate financial policies will enable it to maintain an investment-grade financial risk profile through volatile business conditions in the North American steel and scrap markets. IPSCO is expected to generate better and more stable cash flow than many of its peers at all points in the cycle, although the financial risks associated with a dislocation of the historical relationship between steel prices and scrap steel inputs would only be cushioned by maintaining a moderate capital structure. ITEN CHEVROLET: Taps Radde to Sell Harley Motorcycle & Searay Boat ------------------------------------------------------------------ Iten Chevrolet Co. asks the U.S. Bankruptcy Court for the District of Minnesota for permission to employ Fred W. Radde & Sons Inc. as its auctioneer. The firm will assist the Debtor in selling a Harley Davidson motorcycle and SeaRay boat. The Firm will receive a 15% commission on total gross sales and $200 to pick up the vehicles. Fred W. Radde, an auctioneer of the firm, assures the Court that his firm does not hold any interest adverse to the Debtor's estates. Mr. Radde can be reached at: Fred W. Radde Fred W. Radde & Sons Inc. 5545 County Road 33 New Germany, MN 55367 Tel: (952) 446-1441 http://www.fwr-auctioneers.com/ Based in Brooklyn Center, Minnesota, Iten Chevrolet Company, Inc. -- http://www.gmbuypower.com/-- operates a General Motors Corporation automobile dealerships in Minnesota. The Company filed for chapter 11 protection on June 28, 2006 (Bankr. D. Minn. Case No. 06-41259). Mary Jo A. Jensen-Carter, Esq., at Buckley and Jensen, represents the Debtor. When the Debtor filed for protection from its creditors, it listed assets of $16,083,417 and debts of $17,703,249. ITEN CHEVROLET: Court Approves Wipfli LLP as Accountants -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Minnesota gave Iten Chevrolet Co. permission to employ Steve C. Hewitt and Wipfli LLP as its accountants. Mr. Hewitt will: a) prepare the Debtor's final accounting forms, including payroll tax returns and W-2 forms for 2006; b) prepare the Debtor's federal and state income tax returns; and c) assist the debtor-in-possession with any other accounting services needed during the course of its chapter 11 proceeding. On the Debtor's bankruptcy filing, it owed the firm $3,505 for prepetition services. However, if application is approved, the firm says it will waive the claim. The firm's professionals billing rates are: Designation Hourly Rate ----------- ----------- Partner $285 - $310 Managers $160 - $200 Staff $80 - $125 Mr. Hewitt assures the Court that his firm does not hold any interest adverse to the Debtor, its creditor, or estates. Mr. Hewitt can be reached at: Steve C. Hewitt Wipfli LLC 7601 France Avenue S., Suite 400 Minneapolis, MN 55435 Tel: (952) 548-3455 Based in Brooklyn Center, Minnesota, Iten Chevrolet Company, Inc. -- http://www.gmbuypower.com/-- operates a General Motors Corporation automobile dealerships in Minnesota. The Company filed for chapter 11 protection on June 28, 2006 (Bankr. D. Minn. Case No. 06-41259). Mary Jo A. Jensen-Carter, Esq., at Buckley and Jensen, represents the Debtor. When the Debtor filed for protection from its creditors, it listed assets of $16,083,417 and debts of $17,703,249. JOLAMI LLC: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Jolami, LLC P.O. Box 1535 Boring, OR 97009 Bankruptcy Case No.: 06-33759 Chapter 11 Petition Date: November 29, 2006 Court: District of Oregon (Portland) Judge: Trish M. Brown Debtor's Counsel: Gary U. Scharff, Esq. Law Office of Gary Scharff 621 Southwest Morrison Street #1300 Portland, OR 97205 Tel: (503) 493-4353 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. LEAR CORP: Shifting North American Interior Biz to Joint Venture ---------------------------------------------------------------- Lear Corporation has reached a definitive agreement with WL Ross & Co. LLC and Franklin Mutual Advisers LLC to transfer substantially all of the assets of its North American Interior business and $25 million of cash to a newly formed joint venture, International Automotive Components Group North America LLC. Lear will hold a 25% equity interest in IAC North America and warrants for an additional 7% equity interest in IAC North America. This transaction completes a series of strategic initiatives intended to improve the Company's ongoing operating results, strengthen its balance sheet, and increase operating flexibility. Separately, Lear successfully completed a private offering of $900 million in new senior notes on November 24 and has commenced a tender offer for its outstanding 2008 and 2009 senior notes. Also, on November 8, Lear completed a $200 million sale of common stock in a private placement to affiliates of, and funds managed by, Carl C. Icahn. "We are very pleased to have reached a definitive agreement to transfer our North American Interior business to IAC North America. This transaction combined with our recent financing initiatives have significantly strengthened the Company's financial and competitive position," Lear's chairman and chief executive officer Bob Rossiter said. "Our focus going forward is to concentrate on delivering superior quality and service to our customers and to invest in further strengthening and growing our core businesses to increase value for our shareholders." Under the terms of the agreement with respect to the company's North American Interior business, WL Ross and Franklin would make aggregate cash contributions of $75 million to IAC North America, in exchange for the remaining equity, and extend a $50 million term loan. Lear's North American Interior business has annual sales of approximately $2.5 billion. Lear expects to record a charge of about $675 million related to the divestiture of the North American Interior business in the fourth quarter of 2006, and recognize its investment in IAC North America under the equity method of accounting. The closing of the transaction is subject to various conditions, such as the receipt of required third-party consents and other closing conditions customary for transactions of this type. Citigroup Corporate and Investment Banking and UBS Investment Bank acted as financial advisors to Lear in connection with this transaction. In October, Lear announced that it had completed the contribution of substantially all of its European Interior business to International Automotive Components Group LLC, another joint venture with WL Ross and Franklin, in exchange for a one-third equity interest in IAC Europe. IAC Europe also owns the European Interior business formerly held by Collins & Aikman Corporation. A full-text copy of the asset purchase agreement is available for free at http://ResearchArchives.com/t/s?1638 A full-text copy of the limited liability company agreement is available for free at http://ResearchArchives.com/t/s?1639 Southfield, Mich.-based Lear Corporation (NYSE: LEA) -- http://www.lear.com/-- is a global supplier of automotive interior systems and components. Lear provides complete seat systems, electronic products, electrical distribution systems, and other interior products. The company has 111,000 employees at 286 locations in 34 countries. * * * As reported in the Troubled Company Reporter on Nov. 23, 2006, Fitch Ratings assigned a rating of 'B/RR4' to Lear's $900 million senior unsecured notes. As reported in the Troubled Company Reporter on Nov. 22, 2006, Standard & Poor's Ratings Services assigned its 'B-' ratings to Lear Corp.'s $300 million senior notes due 2013 and its $400 million senior notes due 2016. S&P affirmed Lear's 'B+' corporate credit and other ratings and said Lear's outlook is negative. At the same time, Moody's Investors Service assigned a B3, LGD4, 61% rating to Lear Corporation's offering of $700 million of unsecured notes. Moody's affirmed Lear's Corporate Family Rating of B2, Speculative Grade Liquidity rating of SGL-2, and negative outlook. Moody's said all other long-term ratings are unchanged. LEAR CORP: Net Loss Down to $74 Million in 2006 Third Quarter ------------------------------------------------------------- Lear Corporation has filed its third quarter financial statements ended Sept. 30, 2006, with the Securities and Exchange Commission. For the three months ended Sept. 30, 2006, the company reported a $74 million net loss compared with a $750.1 million net loss in the comparable quarter of 2005. For the third quarter of 2006, Lear posted net sales of $4.1 billion and a pretax loss of $65.9 million, including $46.1 million related to restructuring costs and a loss on the divestiture of the company's European Interior business. These results compare with year-earlier net sales of $4 billion and a pretax loss of $787.8 million, including $777.7 million related to impairments and restructuring costs. Net loss for the third quarter of 2006 was $74 million. This compares with a net loss of $750.1 million for the third quarter of 2005. "In response to very challenging industry conditions, we are continuing to aggressively implement cost reduction and restructuring actions to improve future profitability. Margins in our Seating business are showing solid improvement, and the actions we are taking to improve our manufacturing footprint will benefit our Electronic and Electrical margins in the future. We are also moving forward with our strategy to put in place a new, more sustainable business model for our Interior segment," Lear chairman and chief executive officer Bob Rossiter said. Net sales were up from the prior year, primarily reflecting the addition of new business globally, offset in large part by lower production in North America and Europe. Operating performance was slightly below the year-earlier results, reflecting the adverse impact of lower production and higher raw material costs, largely offset by the benefit of new business and cost reductions in our core businesses. Free cash flow was negative $48.2 million for the third quarter of 2006. (Net cash provided by operating activities was negative $8.1 million.) Lear continued to make progress on important strategic initiatives, including the completion of a transaction to contribute substantially all of its European Interior business to International Automotive Components Group LLC in return for a 1/3 equity interest. With respect to the company's North American Interior business, it has reached a definitive agreement with WL Ross & Co. LLC and Franklin Mutual Advisers LLC to transfer substantially all of its assets. Lear is also aggressively expanding its business in Asia and with Asian automakers globally, and was awarded several new Asian programs during the third quarter. The company's recent agreement to issue $200 million of common stock provides additional operating and financial flexibility, allowing the company to invest in and further strengthen its core businesses. Additionally, the company continued to develop new products and technologies, including the industry's first solid-state Smart Junction Box. Full-Year 2006 Guidance On Oct. 16, 2006, the company completed the contribution of substantially all of its European Interior business to International Automotive Components Group, LLC. Accordingly, Lear's full-year financial results will reflect Lear's minority interest in the joint venture on an equity basis for the fourth quarter. For the full year of 2006, Lear expects worldwide net sales of about $17.7 billion, reflecting recently announced production cuts in North America and the divestiture of the company's European Interior business. Lear anticipates full-year income before interest, other expense, income taxes, impairments, restructuring costs and other special items (core operating earnings) to be in the range of $345 million to $375 million. Restructuring costs for the full year are estimated to be in the range of $105 million to $115 million. Full-year interest expense is estimated to be in the range of $210 million to $215 million. Pretax income before impairments, restructuring costs and other special items is estimated to be in the range of $65 to $95 million. Income tax expense is estimated to be approximately $40 million in the fourth quarter, subject to the actual mix of financial results by country. Full-year capital spending is estimated to be in the range of $380 million to $390 million. Free cash flow for the full year is expected to be about breakeven. Fourth quarter industry production assumptions underlying Lear's financial outlook include 3.7 million units in North America, down 5% from a year ago, and 4.7 million units in Europe, down 1% from a year ago. Lear's major platforms in North America are expected to be down significantly more than the industry average. Preliminary 2007 Outlook With respect to its core Seating, Electronic and Electrical businesses, the company estimates that it will add new business of about $800 million. Seating margins are expected to continue to improve to the mid-5% level. In the Electronic and Electrical segment, the company is continuing to implement aggressive restructuring actions, and it expects margins to improve during the course of the year to the 5.5% to 6% range. These margins assume an industry production environment roughly in line with 2006 and reflect underlying operating margins, excluding restructuring costs and other special items. Capital spending for 2007 in its core businesses is expected to be in the range of $250 million to $280 million. Free cash flow is expected to return to a solid positive level. At Sept. 30, 2006, the company's balance sheet showed $8.451 billion in total assets, $7.328 billion in total liabilities, and $1.123 billion in total stockholders' equity. Full-text copies of the company's third quarter financials are available for free at http://ResearchArchives.com/t/s?163a Southfield, Mich.-based Lear Corporation (NYSE: LEA) -- http://www.lear.com/-- is a global supplier of automotive interior systems and components. Lear provides complete seat systems, electronic products, electrical distribution systems, and other interior products. The company has 111,000 employees at 286 locations in 34 countries. * * * As reported in the Troubled Company Reporter on Nov. 23, 2006, Fitch Ratings assigned a rating of 'B/RR4' to Lear's $900 million senior unsecured notes. As reported in the Troubled Company Reporter on Nov. 22, 2006, Standard & Poor's Ratings Services assigned its 'B-' ratings to Lear Corp.'s $300 million senior notes due 2013 and its $400 million senior notes due 2016. S&P affirmed Lear's 'B+' corporate credit and other ratings and said Lear's outlook is negative. At the same time, Moody's Investors Service assigned a B3, LGD4, 61% rating to Lear Corporation's offering of $700 million of unsecured notes. Moody's affirmed Lear's Corporate Family Rating of B2, Speculative Grade Liquidity rating of SGL-2, and negative outlook. Moody's said all other long-term ratings are unchanged. LONDON FOG: Court Approves Homestead Business Sale to Millwork -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada approved London Fog Group Inc. and its debtor-affiliates' sale of their homestead business to Millwork Trading Co. Ltd. dba Li & Fung USA. Millwork Trading was the highest bidder in an auction held on Nov. 17, 2006. Pursuant to an asset purchase agreement dated Oct. 24, 2006, Millwork will acquire the Debtors' Homestead Business for aggregate consideration consisting of: a) 50% of the amount Millwork collects from eligible accounts receivable in excess of 85%; b) 50% of the amount Millwork collects from ineligible accounts receivable; c) $250,000 in cash; d) assumption of certain obligations, primarily licenses; and e) half of the guaranteed inventory payment, half of the guaranteed eligible receivables, and all of the cash will be paid at closing of the sale, the remainder of which will be paid six months after sale closing. DDJ Capital Management LLC, the Debtors' principal secured creditor, has consented to the sale of the assets. All of the proceeds of the sale will be paid directly to DDJ Capital on account of its secured claims, subject to disgorgement, except that $500,000 will be paid to the estate out of the final payment received from Millwork. About London Fog Headquartered in Seattle, Washington, London Fog Group Inc. nka PTI Holding Corp. -- http://londonfog.com/-- designs and retails jackets and other professional apparel. The company and its affiliates first filed for chapter 11 protection on September 27, 1999 (Bankr. D. of Delaware, Lead Case No. 99-03446). On March 20, 2006, the company filed for a second chapter 11 protection (Bankr. D. Nev. Case No. 06-50146), with six affiliates, including its parent company, PTI Holding Corp., filing separate chapter 11 petitions. London Fog's case is consolidated under PTI Holding Corp.'s bankruptcy case (Bankr. D. Nev. Case No. 06-50140) Stephen R. Harris, Esq., at Belding, Harris & Petroni, Ltd. and Alan D. Smith, Esq., at Perkins Coie LLP represent the Debtors in their restructuring efforts. Aron M. Oliner, Esq., at Buchalter Nemer and David C. McElhinney, Esq., at Beckley Singleton, Chtd. represent the Official Committee of General Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $50 million to $100 million. MERRILL LYNCH: Moody's Puts Ratings on Review and May Downgrade --------------------------------------------------------------- Moody's placed under review for possible downgrade three classes of Merrill Lynch Mortgage Investors Trust Series 2005-HE1 securitization. The transaction, issued in 2005, is backed by first and second lien adjustable- and fixed-rate mortgage loans. The projected pipeline loss has increased over the past few months and may affect the credit support for these certificates. The certificates are being placed on review for downgrade based on the fact that the bonds' current credit enhancement levels, including excess spread, may be too low compared to the current projected loss numbers for the current rating level. These are the rating actions: * Issuer: Merrill Lynch Mortgage Investors Trust * Under review for possible downgrade: -- Series 2005-HE1, Class B-3, current rating Baa3, under review for possible downgrade; -- Series 2005-HE1, Class B-4, current rating Ba1, under review for possible downgrade; -- Series 2005-HE1, Class B-5, current rating Ba2, under review for possible downgrade; MESABA: Unions Want District Court to Review Injunction Issues -------------------------------------------------------------- The Air Line Pilots Association, International, the Association of Flight Attendants-CWA, AFL-CIO, and the Aircraft Mechanics Fraternal Association ask the U.S. District Court for the District of Minnesota to review certain issues relating to the injunctive relief given by the U.S. Bankruptcy Court for the District of Minnesota on Oct. 26, 2006, which enjoins and bars the Unions from engaging in strikes, work stoppages, and other activities that disrupt Mesaba Aviation, Inc.'s ordinary course of business. Specifically, the Unions ask the District Court to review whether: (1) the Norris-LaGuardia Act, 29 U.S.C. Section 101, in 1932, deprived the Bankruptcy Court of jurisdiction to enjoin the Unions from striking or otherwise engaging in self- help in response to the Debtor's (a) rejection of the Unions' collective bargaining agreements, and (b) unilateral imposition of new work rules, rates of pay and other terms of employment; (2) the Bankruptcy Court committed an error in failing to require the Debtor to post a bond or other undertaking as a condition to entry of the injunction, as required by the Norris-LaGuardia Act, and whether the Bankruptcy Court's failure to require the posting of the bond or undertaking deprive it of jurisdiction to issue the injunction; and (3) the Bankruptcy Court committed an error when it failed to conclude that the Debtor's premature proffer of a notice to ALPA under Section 6 of the Railway Labor Act, 29 U.S.C. Section 156, in violation of the bargaining moratorium contained in the parties' CBA, constituted an unlawful act and unclean hands which deprived the Bankruptcy Court of jurisdiction to issue an injunction relative to ALPA under the Norris-LaGuardia Act. Debtor Wants Appeal Stayed "The so-far dormant strike injunction does not present a live case or controversy. Accordingly, the district court lacks jurisdiction to hear the appeal," Timothy R. Thornton, Esq., at Briggs and Morgan P.A., in Minneapolis, Minnesota, asserts. Mr. Thornton argues that the appeal should be stayed as ratification of the tentative agreements would render disputes over strikes moot. In addition, the circumstances warrant a litigation stand-down because: (a) The Railway Labor Act dispute resolution would be allowed to proceed without the distraction of contentious litigation; (b) The judicial interference in the process would be circumscribed as the U.S. Congress intended; (c) Scarce estate and court resources would be preserved; and (d) Further bitterness that would be inevitably engendered by appellate proceedings would be avoided. Since the Debtor has not implemented Section 1113(c) terms, no harm will be inflicted by holding off further litigation while the votes are tallied, Mr. Thornton adds. About Mesaba Aviation Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. Craig D. Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) MESABA AVIATION: Wants to Assume Amendmended Spectrum Lease ----------------------------------------------------------- Mesaba Aviation, Inc. asks the Honorable Gregory Kishel of the U.S. Bankruptcy Court for the District of Minnesota to approve its assumption of the Prepetition Lease and Second Amendment with Spectrum Investment Group, LLC. Pursuant to a lease dated April 25, 2003, the Debtor leases 32,921 square feet of space from Spectrum Investment for its administrative offices, operation control center and data center. The Lease was amended on Jan. 24, 2005, between the Debtor and Spectrum Commerce Center, LLC -- the successor-in- interest to Spectrum Investment. The Debtor is not in default under the Prepetition Lease, Will R. Tansey, Esq., at Ravich Meyer Kirkman McGrath & Nauman, in Minneapolis, Minnesota, tells the Court. According to Mr. Tansey, the Debtor and Spectrum Commerce have agreed on a second amendment to the Prepetition Lease. Amendment No. 2 provides that: (a) The term of the Prepetition Lease will be extended for 10 years commencing on Dec. 1, 2006; (b) Rent under the Prepetition Lease will be reduced to a level that the Debtor believes meets the best rental rates available for comparable locations: (1) $1.00 per square foot in 2007, (2) $1.50 per square foot in 2008, (3) $1.00 per square foot in 2009, (4) $1.50 per square foot in 2010, (5) $0.50 per square foot in 2011, (6) $1.00 per square foot in 2012, and (7) $0.50 per square foot in 2013; (c) The Debtor will have an option to increase the size of the Premises, including a significant tenant improvement allowance, to accommodate potential new flying or other growth opportunities; and (d) In the event that the Debtor is unable to successfully reorganize and the Prepetition Lease and Amendment No. 2 are rejected, Spectrum Commerce's administrative expense claim will be capped at an acceptable level. Mr. Tansey tells Judge Kishel that retaining the Premises is the most cost effective use of its assets because this will: * permit the Debtor to save cash expenses associated with moving the location of its operations control center, data center, and administrative offices; and * maintain the operational efficiency created by leaving the integral operational components in the same location. A full-text copy of the Prepetition Lease is available for free at http://researcharchives.com/t/s?161b A full-text copy of Amendment No. 2 is available for free at: http://researcharchives.com/t/s?161c Creditors Committee Objects The Official Committee of Unsecured Creditors asks Judge Kishel to deny the Debtor's request to assume the Prepetition Lease and Amendment No. 2, without prejudice to the Debtor's right to assume the Prepetition Lease or its modified form in the future. Thomas J. Lallier, Esq., at Foley & Mansfield, P.L.L.P, in Minneapolis, Minnesota, notes that Amendment No. 2 requires the Creditors Committee's approval. While Amendment No. 2 would (a) reduce the rental rate for the Premises by a nominal amount over the term of the Prepetition Lease, and (b) extend the Prepetition Lease for an additional three years to January 1, 2017, it also provides Spectrum Commerce with a guaranteed minimum administrative claim in the event of the occurrence of a "Bankruptcy Event," Mr. Lallier asserts. A "Bankruptcy Event," as defined in Amendment No. 2, includes: (a) appointment of a Chapter 11 of the Bankruptcy Code trustee in the Debtor's bankruptcy proceeding; (b) conversion of the Debtor's Chapter 11 case to a liquidation under Chapter 7 of the Bankruptcy Code; (c) the Debtor's commencement of a sale of, or entry into an agreement to sell, all or substantially all of its assets; or (d) the Debtor's discontinuity of its current business operations. Mr. Lallier relates that the present value of the total Rent Reduction is approximately $149,000. On the other hand, assuming the Debtor were forced to shut down or liquidate during calendar year 2007 and the Prepetition Lease were rejected, the present value of the Spectrum Administrative Claim would exceed $1,000,000. Mr. Lallier contends that at this point in the Debtor's reorganization, there's no sound reason to assume a contract that could give rise to a $1,000,000 administrative claim against the estate in return for a modest reduction in the rent that -- were the Debtor to shut down or liquidate -- would never be realized by the Debtor. If the Court approves the Debtor's third request to extend its lease decision period, Spectrum Commerce will have no authority to deprive the Debtor of the use of the Premises. Mr. Lallier further argues that the Debtor's successful reorganization remains highly contingent on the actions of Northwest Airlines, Inc., and future events outside the control of the Debtor. He notes that the Debtor's Lease Extension Motion states that the Debtor's continued operation remains "uncertain" due to its inability to secure either its core Saab flying for Northwest or additional regional jet flying with either Northwest or another airline. Thus, the Creditors Committee submits that the Debtor's request is both premature and clearly not in the best interests of the estate. About Mesaba Aviation Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. Craig D. Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) MILLS CORPORATION: Expects to File 2005 Annual Report Soon ---------------------------------------------------------- The Mills Corporation currently expects to file its 2005 Form 10-K with the Securities and Exchange Commission within the next several weeks. The Company is working diligently with Ernst & Young, its outside auditor, to complete the restated financial statements. The company's Board of Directors has also rescheduled its 2006 annual meeting of shareholders from Dec. 21, 2006 to Dec. 29, 2006. The meeting will be held at 10:00 a.m. at the Hyatt Regency Bethesda, One Bethesda Metro Center in Bethesda, Maryland. 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. NANOBAC PHARMA: September 30 Balance Sheet Upside-Down by $327,957 ------------------------------------------------------------------ Nanobac Pharmaceuticals Inc.'s balance sheet as of Sept. 30, 2006, showed total assets of $8,098,539 and total liabilities of $8,426,496, resulting in a total stockholders' deficit of $327,957. This compared to the company's $2,464,721 stockholders' equity as of Dec. 31, 2005. The company's Sept. 30 balance sheet also showed strained liquidity with $269,425 in total current assets available to pay $5,589,958 in total current liabilities. For the three months ended Sept. 30, 2006, the company's net loss increased to $787,183 from $673,913 for the three months ended Sept. 30, 2005. Revenues for the current quarter decreased to $23,894 from $130,394 for the same period last year. The company is experiencing significant losses as it conducts research and development related to nanobacteria. The company believes it will take significant time before it will earn meaningful revenue to offset expenses and there is no assurance that it will be able to accomplish this goal. As a result of the losses, the company is dependent on affiliates of its CEO and other investors to provide sufficient cash sources to fund operations. Operating loss increased to $736,000 for the three months ended Sept. 30, 2006, compared to $649,000 for the three months ended Sept. 30, 2005. Approximately $45,000 of this increased loss was the result of the elimination of the dietary supplement business. In addition, R&D costs increased $93,000 due to increased focus on research initiatives. These increases were partially offset by a decrease in amortization expense of $61,000. Operating loss increased to $3 million for the nine months ended Sept. 30, 2006, compared with $2 million for the nine months ended Sept. 30, 2005. The majority of the increase is attributable to the $106,000 charge for the abandonment of Tampa lease and the $585,000 additional amortization expense for product right's intangible asset due to termination of marketing and selling of dietary supplements. The company also experienced an increase in R&D expense for this period. Stockholders' Equity Effective Jul. 1, 2006, the company amended an employment agreement to settle a $175,000 bonus that was due to the employee since Jan. 31, 2006, through the issuance of 3,500,000 stock options with an exercise price of $0.05 per common share, with immediate vesting. In accordance with SFAS No. 123(R), this grant was valued at approximately $166,000 using the Black-Scholes valuation model and assuming a risk-free interest rate of 5%, volatility of 100% and an expected term of 60 months. The Stock option grant was approved by a corporate officer who has been provided this authority by the Board of Directors. In addition, the employment agreement provides for additional compensation in the form of stock options on an annual basis valued at $225,000 plus bonus stock option grants of up to $80,000 in equivalent stock for completion of specific research functions and reports through Dec. 31, 2006. At Sept. 30, 2006, the company did not have a formal stock option plan for the stock option issuances. In July 2006, the company entered into an agreement with Wall Street Resources Inc. whereby Wall Street will provide the company with written analytical coverage and reports and to advise and assist the company in developing and implementing a business plan, strategy and objectives to present to the financial community. The agreement required the company to issue 466,667 shares of common stock, valued at $56,000, and pay $15,000 cash to Wall Street upon the issuance of Wall Street's initial report, which was dated Sept. 12, 2006. The agreement remains in effect through March 11, 2007 During March 2006, the company terminated the marketing and selling of dietary supplements in order for it to focus exclusively on the science related to CNPs, which it plans to lead to drug discovery and the development of diagnostic products for the detection and treatment of CNP related diseases. Accordingly, the company had no revenue from dietary supplements for the three months ended Sept. 30, 2006. The company expects no revenue from dietary supplements in future periods. Revenue from observation rights was recognized over the agreement's 12-month term using the straight-line method. This term ended on Aug. 31, 2006, accordingly, there will be no revenue from observation rights in future periods. As a percentage of revenue, the company's gross profit was 65% to 70% of revenue when it was selling dietary supplements. Its diagnostic product line has historically generated a gross profit margin of 40% to 50%. During October 2006, the company announced its agreement with American Health Associates Clinical Laboratories to serve as the exclusive U.S. provider of its proprietary blood diagnostic tests. The company does not anticipate a material impact on its future gross margins as a result of the agreement. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?1632 Headquartered in Tampa, Florida, Nanobac Pharmaceuticals Inc. -- http://www.nanobaclabs.com-- is a bio-lifescience company, engages in the research and development of therapeutic and diagnostic technologies related to nanobacterium sanguineum. NORTEK INC: Moody's Holds Rating on $625-Mil. Senior Notes at B3 ---------------------------------------------------------------- Moody's affirms NTK Holdings, Inc. and its subsidiary Nortek, Inc.'s existing ratings and negative outlook. The negative outlook reflects the company's expected operating performance in a difficult market, the company's low concentration of business related to new home construction, and product diversification. Proceeds from Nortek's planned IPO are earmarked for debt reduction. It is currently anticipated that the improvement in the company's balance sheet would significantly strengthen the company's position in the B2 ratings category. The outlook remains negative. These ratings for NTK Holdings, Inc. have been affirmed: -- $403 million senior discount notes, due 2014, affirmed at Caa1, LGD6, 91%; -- Corporate Family Rating, affirmed at B2; -- Probability of Default Rating, affirmed at B2. These ratings for Nortek, Inc. have been affirmed; -- $200 million senior secured revolving credit facility, due 2011, affirmed at Ba2, LGD2, 18%; -- $691.25 million senior secured term loan, due 2011, affirmed at Ba2, LGD2, 18%; -- $625 million senior subordinated notes, due 2014, affirmed at B3, LGD4, 68%. The negative rating outlook reflects uncertainty surrounding the execution of the company's IPO. If the IPO was concluded successfully and debt is paid down, the negative outlook would likely be changed to stable or potentially positive based on the company's operating outlook at the time. The negative outlook also reflects a history of aggressive balance sheet management and the view that the company's leverage reduces its financial flexibility during a potentially significant industry downturn. Given the company's aggressive balance sheet management, the company's financial metrics would have to be well within the parameters that are typical for a B1 company in the building products portfolio such that debt to EBITDA would be less than 4x and free cash flow to debt of no less than 8% for the ratings to be upgraded. These metrics would need to be deemed sustainable. The outlook could improve if the company's planned IPO successfully reduces the company's debt levels. The ratings could be pressured if free cash flow to debt falls below 3% and if the company's leverage were to remain over 6x for several consecutive quarters. A large debt financed acquisition would be a major concern as the company has been successful with its current small acquisitions strategy. Headquartered in Providence, Rhode Island, Nortek, Inc. is an international manufacturer and distributor of building, remodeling, and indoor environmental control products for the residential and commercial markets. Its products include range hoods and other spot ventilation products, heating and air conditioning systems, indoor air quality systems, and specialty electronic products. Revenues for the 2005 year were almost $2 billion. NORTEL NETWORKS: Implements Consolidation of Common Shares ---------------------------------------------------------- Nortel Networks Corporation implemented the previously announced consolidation of its issued and outstanding common shares as approved by the company's Board of Directors on Nov. 6, 2006, and its shareholders at the annual and special meeting of shareholders on June 29, 2006. Nortel's common shares, listed on the New York Stock Exchange and the Toronto Stock Exchange, will begin trading on a consolidated basis when the NYSE and TSX open. The consolidation was implemented with a ratio of one consolidated share for every ten pre-consolidation shares. The consolidation has reduced the number of shares outstanding from approximately 4.3 billion to approximately 433 million. Registered shareholders of the company are receiving instructions by mail on how to obtain a new share certificate representing their consolidated common shares. No fractional shares will be issued as a result of the consolidation. If the consolidation results in a registered shareholder having a fractional interest of less than a whole share, the registered shareholder will receive a cash payment for the value of that interest, with the amount of the payment determined by multiplying the fraction by $21.15 (the average closing price of Nortel common shares, as adjusted for the consolidation, on the NYSE for the 10 trading days prior to Dec. 1, 2006, effective date), with Canadian residents receiving the Canadian dollar equivalent of such payment based on the noon spot rate published by the Bank of Canada on Nov. 30, 2006. Nortel shares held through a broker, bank, trust company, nominee or other financial intermediary will be adjusted by that firm. With the implementation of the consolidation, the Company's 4.25% convertible senior notes due Sept. 1, 2008, are convertible by holders into common shares of Nortel Networks Corporation at a new conversion price of $100 per common share. Furthermore, proportional adjustments reflecting the share consolidation have been made under Nortel's equity compensation plans. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. * * * As reported in the Troubled Company Reporter on Oct. 5, 2006, Moody's Investors Service upgraded its B3 Corporate Family Rating for Nortel Networks Corp. to B2. NTK HOLDINGS: Moody's Holds Junk Rating on $403-Mil. Senior Notes ----------------------------------------------------------------- Moody's affirms NTK Holdings, Inc. and its subsidiary Nortek, Inc.'s existing ratings and negative outlook. The negative outlook reflects the company's expected operating performance in a difficult market, the company's low concentration of business related to new home construction, and product diversification. Proceeds from Nortek's planned IPO are earmarked for debt reduction. It is currently anticipated that the improvement in the company's balance sheet would significantly strengthen the company's position in the B2 ratings category. The outlook remains negative. These ratings for NTK Holdings, Inc. have been affirmed: -- $403 million senior discount notes, due 2014, affirmed at Caa1, LGD6, 91%; -- Corporate Family Rating, affirmed at B2; -- Probability of Default Rating, affirmed at B2. These ratings for Nortek, Inc. have been affirmed; -- $200 million senior secured revolving credit facility, due 2011, affirmed at Ba2, LGD2, 18%; -- $691.25 million senior secured term loan, due 2011, affirmed at Ba2, LGD2, 18%; -- $625 million senior subordinated notes, due 2014, affirmed at B3, LGD4, 68%. The negative rating outlook reflects uncertainty surrounding the execution of the company's IPO. If the IPO was concluded successfully and debt is paid down, the negative outlook would likely be changed to stable or potentially positive based on the company's operating outlook at the time. The negative outlook also reflects a history of aggressive balance sheet management and the view that the company's leverage reduces its financial flexibility during a potentially significant industry downturn. Given the company's aggressive balance sheet management, the company's financial metrics would have to be well within the parameters that are typical for a B1 company in the building products portfolio such that debt to EBITDA would be less than 4x and free cash flow to debt of no less than 8% for the ratings to be upgraded. These metrics would need to be deemed sustainable. The outlook could improve if the company's planned IPO successfully reduces the company's debt levels. The ratings could be pressured if free cash flow to debt falls below 3% and if the company's leverage were to remain over 6x for several consecutive quarters. A large debt financed acquisition would be a major concern as the company has been successful with its current small acquisitions strategy. Headquartered in Providence, Rhode Island, Nortek, Inc. is an international manufacturer and distributor of building, remodeling, and indoor environmental control products for the residential and commercial markets. Its products include range hoods and other spot ventilation products, heating and air conditioning systems, indoor air quality systems, and specialty electronic products. Revenues for the 2005 year were almost $2 billion. OCEAN TRAILS: Moody's Rates $13.2 Million Class D Notes at Ba2 -------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Ocean Trails CLO I: -- Aaa to $259,000,000 Class A-1 Floating Rate Notes Due 2020; -- Aa2 to $21,000,000 Class A-2 Floating Rate Notes Due 2020; -- A2 to $16,500,000 Class B Deferrable Floating Rate Notes Due 2020; -- Baa2 to $13,250,000 Class C Deferrable Floating Rate Notes Due 2020 and -- Ba2 to $13,250,000 Class D Deferrable Floating Rate Notes Due 2020. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings of the Notes reflect the credit quality of the underlying assets--which consist primarily of senior secured loans-- as well as the credit enhancement for the Notes inherent in the capital structure and the transaction's legal structure. West Gate Horizons Advisors, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. OCWEN RESIDENTIAL: Moody's Junks Rating on Class B5-A Certificates ------------------------------------------------------------------ Moody's Investors Service downgraded two classes of certificates from a deal issued by Ocwen Residential MBS Corp. in 1999. The certificates are secured by primarily first lien, seasoned reperforming collateral, as well as high-LTV loans. The B4-A and B5-A certificates in this adjustable rate pool are being downgraded as a result of weak collateral performance. Recent losses on this particular pool, as well as high anticipated loss severities on the remaining collateral has contributed to this rating action. These are the rating actions: * Issuer: Ocwen Residential MBS Corporation Series 1999-R1 -- Class B4-A, downgraded to B1 from Ba2. -- Class B5-A, downgraded to C from Ca. ON SEMICONDUCTOR: Wants Senior Secured Credit Facility Amended -------------------------------------------------------------- ON Semiconductor Corp. is seeking an amendment of its senior secured credit facility to enable it to replace a significant portion of its bank debt with indebtedness to be incurred outside of the facility, to incur additional junior indebtedness and to permit the expenditure of up to $300 million to repurchase shares of common stock, all subject to market and certain financial conditions. "With our current strong cash position, ongoing cash flow generating capabilities of the business and the availability of lower cost financing, we believe we are in a position to take a number of steps to continue improving our overall financial performance" said Donald Colvin, ON Semiconductor executive vice president and CFO. "The proposed changes to our bank facility will allow us to be opportunistic in taking advantage of market conditions." Indebtedness under the senior secured credit facility at Sept. 29, 2006 was approximately $574 million, and the company has prepaid $55 million of that amount during the fourth quarter. The company also reported that its board of directors has authorized the company to repurchase up to 50 million shares of common stock from time to time in the open market. About ON Semiconductor ON Semiconductor -- http://www.onsemi.com/-- supplies power solutions to engineers, purchasing professionals, distributors and contract manufacturers in the computer, cell phone, portable devices, automotive and industrial markets. * * * ON Semiconductor Corp.'s bank loan debt and long-term corporate family rating carry Moody's B2 ratings. The ratings were placed on Dec. 15, 2005 with a positive outlook. PACSUN LLC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: PacSun LLC 2 North Lake Avenue, Suite 800 Pasadena, CA 91101 Bankruptcy Case No.: 06-16225 Type of Business: The Debtor is a master developer that owns and controls the entire master planned Golden Valley community. Chapter 11 Petition Date: November 29, 2006 Court: Central District Of California (Los Angeles) Judge: Ernest M. Robles Debtor's Counsel: Todd C. Ringstad, Esq. Ringstad & Sanders LLP 2030 Main Street #1200 Irvine, CA 92614 Tel: (949) 851-7450 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ ACI Trade debt $2,775,175 13300 Citrus Street Corona, CA 92800 Allan E. Seward Trade debt $439,291 27825 Smyth Drive Valencia, CA 91355 Pinnacle Land Surveying Inc. Trade debt $162,429 26370 Diamond Place Suite 505 Santa Clarita, CA 91350 Los Angeles Tax Collector 2006/07 First $97,013 Installment T-Y-Lin International Trade debt $55,156 Scheer's Incorporated Trade debt $37,290 The Christane Company, Inc. Trade debt $27,914 Viking Capital Trade debt $27,914 Sterndahl Enterprises Inc. Trade debt $23,359 Stantec Consulting Inc. Trade debt $20,322 Kate, Okitsu & Associates Trade debt $11,960 Li & Associates Trade debt $11,770 Rincon Consultants Inc. Trade debt $2,339 Goodwin Procter LLP Trade debt $2,033 Andy Gump Trade debt $1,076 GE Capital Modular Space Modular rental $693 OCB Reprographics Inc. Trade debt $565 GMAC Truck rental $545 Cal-State Rent A Fence Fence rental $205 GMAC Mortgage/Mastercard Trade debt $100 PCS EDVENTURES!.COM: Sept. 30 Working Capital Deficit Tops $1 Mil. ------------------------------------------------------------------ PCS Edventures!.com Inc. filed its second fiscal quarter financial statements ended Sept. 30, 2006, with the Securities and Exchange Commission. At Sept. 30, 2006, the company's balance sheet showed $1,315,129 in total assets and $1,626,579 in total liabilities, resulting in a $311,450 stockholders' deficit The company's September 30 balance sheet also showed strained liquidity of $1,158,867 with $467,712 in total current assets available to pay $1,626,579 in total current liabilities. The second fiscal quarter ended Sept. 30, 2006, resulted in a net loss of $691,569. This net loss is a decrease in income by approximately 393% as compared with the net loss for quarter ended Sept. 30, 2005, of $140,216. Revenues for the three-month period ended Sept. 30, 2006, decreased to $504,886 or by approximately 38% as compared with $811,437 for the three-month period ended Sept. 30, 2005. This decrease is due to the unusually large sales during the Sept. 30, 2005, quarter to Meridian Joint School District and Detroit Public Schools. Full-text copies of the company's second fiscal quarter financials are available for free at http://ResearchArchives.com/t/s?1627 Going Concern Doubt As reported in the Troubled Company Reporter on July 7, 2006, HJ & Associates LLC expressed substantial doubt about PCS Edventures!.com Inc.'s ability to continue as a going concern after auditing the company's financial statements for the fiscal years ended March 31, 2006, and 2005. The auditing firm pointed to the Company's recurring losses from operations and working capital deficit. About PCS Edventures!.com PCS Edventures!.com Inc. -- http://www.edventures.com/-- designs, develops, and delivers hands-on, project-based learning labs to the K-14 market worldwide. It has sold and installed more than 2,750 hands-on, Engineering, Robotics & Science labs at public and private schools, pre-schools, Boys & Girls Clubs, YMCAs, and other after-school programs in all 50 states in the U.S., as well as sites in 15 countries internationally. The Labs are supported by Edventures! OnLine, which is an Internet-based and accessed program available in multiple languages, through its curriculum, communication, assessment capabilities, and online community features. PITTSFIELD WEAVING: Taps William Gannon as Bankruptcy Counsel ------------------------------------------------------------- Pittsfield Weaving Company asks the U.S. Bankruptcy Court for the District of New Hampshire for permission to employ William S. Gannon PLLC as its counsel. William Gannon will: a) give the Debtor legal advice with respect to its powers and duties as debtor-in-possession in the continued operation of its business and management of its property; b) assist Debtor as debtor-in-possession to develop a plan and negotiate with the creditors' committees and creditors, as necessary; c) file necessary adversary proceedings for avoidance and recovery of preferential and, or fraudulent transfers, turnover of property of the estate, objections to allowance of claims, etc.; d) represent the Debtor as debtor-in-possession in all proceedings before the Court; e) prepare on behalf of the Debtor as debtor-in-possession necessary applications, answers, orders, reports, and legal papers; and f) perform all other legal services for the Debtor which may be necessary. The firm's professionals will be paid an hourly rate ranging from $65 to $350 for its services performed. William S. Gannon, Esq., at William Gannon, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Based in Pittsfield, New Hampshire, Pittsfield Weaving Company -- -- http://www.pwcolabel.com/-- provides brand identification to the apparel and soft goods industries, and manufactures woven and printed labels and RFID/EADS solutions. The Company filed it chapter 11 protection on Sept. 20, 2006 (Bankr. D. NH Case No. 06- 11214). Williams S. Gannon, Esq., at William S. Gannon PLLC represent the Debtor in its restructuring efforts. Pittsfield Weaving estimated its assets and debts at $10 million to $50 million when it filed for protection from its creditors. PITTSFIELD WEAVING: U.S. Trustee Picks 3-Member Creditors Panel --------------------------------------------------------------- The U.S. Trustee for Region 1 appointed three creditors to serve on an Official Committee of Unsecured Creditors in Pittsfield Weaving Company's chapter 11 case: 1. Mr. Homer Coker d/b/a CES Designs Represented by: J. Brooks Reitzel, Jr., Esq. 2613 Cambridge Road Burlington, NC 27215 Tel: (336) 584-9591 Fax: (336) 584-8301 2. Mr. Walter H. Toben, President W & W Assoc. Inc. 704 Telser Road Lake Zurich, IL 60047 Tel: (847) 719-1760 Fax: (847) 719-1766 3. Mr. Paul H. Gibson, Owner Paul Gibson Sales 3402 Cloverdale Drive Greensboro, NC 27408 Tel: (336) 282-1114 Fax: (336) 282-1122 The Committee has selected Sheehan, Phinney, Bass + Green, PA, as its counsel in the course of the Debtor's bankruptcy proceeding. 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 Pittsfield, New Hampshire, Pittsfield Weaving Company -- -- http://www.pwcolabel.com/-- provides brand identification to the apparel and soft goods industries, and manufactures woven and printed labels and RFID/EADS solutions. The Company filed it chapter 11 protection on Sept. 20, 2006 (Bankr. D. N.H. Case No. 06-11214). Williams S. Gannon, Esq., at William S. Gannon PLLC represent the Debtor in its restructuring efforts. Pittsfield Weaving estimated its assets and debts at $10 million to $50 million when it filed for protection from its creditors. PROFESSIONAL INVESTORS: Files Plan and Disclosure Statement ----------------------------------------------------------- Professional Investors Insurance Group, Inc., delivered its Chapter 11 Plan of Reorganization and accompanying Disclosure Statement to the U.S. Bankruptcy Court for the Northern District of Texas in Dallas on Nov. 13, 2006. The Debtor relates that it has not actively engaged in business for several years and has no tangible real or personal property. Its primary asset is an account receivable from its sole shareholder, One RealCo Corporation, having a current balance in excess of $19,000,000. Under the Plan, the Debtor will continue to manage its financial affairs following confirmation and collect amounts due from One RealCo to fund distributions under the Plan. One RealCo will pay $50,000 on the Plan's effective date on account of the amounts it owes the Debtor on the receivable. The Debtor says the payment will be sufficient to satisfy all allowed claims, but will pursue additional payments from One RealCo Corporation to fund additional Plan payments if necessary. Unsecured creditors, other than those holding claims for indemnity or contribution which are subordinated under the Plan, will be paid the allowed amount of their claims in cash on the effective date. William Gibbs, who holds a disputed and contested claim that is the subject of pending litigation, is granted the option to settle and compromise his claim for $25,000. Mr. Gibbs asserts over $200,000 in claims against the Debtor for breach of contract. The Debtor, which has no operations, sought Chapter 11 relief because of the financial and other burdens of defending the Gibbs litigation. One RealCo will retain its equity interest in the Debtor. The Debtor is wholly owned by One RealCo, which in turn is owned by Ronald F. Akin and DTS Holdings, LLC, which in turn is controlled or owned by Mr. Terry Shumate. Headquartered in Plano, Texas, Professional Investors Insurance Group, Inc., filed for chapter 11 protection on Aug. 9, 2006 (Bankr. N.D. Tex. Case No. 06-33278). John P. Lewis, Jr., Esq., represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy proceedings. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and debts between $1 million and $10 million. PUBLICARD INC: Sept. 30 Balance Sheet Upside-Down by $1.02 Million ------------------------------------------------------------------ PubliCARD Inc. reported a $7,081,000 net income on $887,000 of revenues for the quarter ended Sept. 30, 2006, compared with a $312,000 net loss on $1,029,000 of revenues for the same period in 2005. The increase in net income is primarily due to the company's recognition of a $7.2 million gain on settlement of the liability to the Pension Benefit Guaranty Corp. At Sept. 30, 2006, the company's balance sheet showed $1,321,000 in total assets and $2,341,000 in total liabilities, resulting in a $1,020,000 total stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $1,297,000 in total current assets available to pay $2,122,000 in total current liabilities. Excluding the impact of foreign currency changes, sales in 2006 decreased by 17% driven by a $146,000 decline in direct sales to customers located in the United Kingdom offset by a $3,000 increase in shipments to distribution partners located outside of the Kingdom, other than the U.S. Gross margin, as a percentage of net revenues, was 54% in 2006 compared to 58% in 2005. The decrease is primarily a result of a shift in the company's sales mix which provided a greater proportion of sales to customers located outside the United Kingdom. Sales to these distribution partners are generally at a lower margin than sales to customers located within the United Kingdom. Full-text copies of the company's consolidated financial statements for the third quarter ended Sept. 30, 2006, are available for free at: http://researcharchives.com/t/s?161d PBGC Settlement Agreement Under the terms of the Settlement Agreement, effective Sept. 23, 2004, between the Pension Benefit Guaranty Corp. and the company, the company was liable to the PBGC for the unfunded guaranteed benefit payable by the PBGC to Plan participants in the amount of $7.5 million. The company satisfied this liability by issuing a non-interest bearing note payable to the PBGC with a face amount of $7.5 million. On July 27, 2006, the company entered into a Payment, Retirement and Release Agreement with the PBGC pursuant to which the PBGC and the company provided for the settlement and discharge of the company's obligations under the Settlement Agreement. Pursuant to this agreement, the company paid the $256,391.31 on July 27, 2006, and agreed to pay the PBGC 50% of all net proceeds received in excess of $250,000. On Oct. 13, 2006, the company entered into an Assignment of Shares and Assumption of Obligations agreement with Sallyport Investment Partnership, pursuant to which the company assigned 60,058 shares of Series A Preferred Stock of Tecsec to Sallyport in exchange for $150,000. In addition, Sallyport agreed to use its best efforts to transfer to the company shares of common stock of Tecsec representing 2-1/2% of Tecsec's common stock. On Oct. 13, 2006, Tecsec confirmed its agreement to issue such shares to the company. As a result of this settlement of the liability to the PBGC, the company recognized a $7.2 million gain on its Statement of Operations. Going Concern Doubt As reported in the Troubled Company Reporter on May 22, 2006, Deloitte & Touche LLP, expressed doubt about PubliCARD, Inc.'s ability to continue as a going concern after auditing the company's 2005 financial statements. The auditing firm pointed to the company's recurring losses from operations, substantial decline in working capital and negative cash flows from operations, and need for additional capital to meet its obligations at Dec. 31, 2005. About PubliCARD Headquartered in New York City, PubliCARD, Inc. (OTCBB: CARD.OB) -- http://www.publicard.com/-- through its Infineer Ltd. subsidiary, designs smart card solutions for educational and corporate sites. PUREBEAUTY INC: Court Okays Gilbert Kelly as Special Counsel ------------------------------------------------------------ PureBeauty, Inc. and its debtor-affiliate, Pure Salons, Inc., obtained permission from the U.S. Bankruptcy Court for the Central District of California to employ Gilbert, Kelly, Crowley & Jennett LLP, as their special litigation counsel. The Debtors are currently facing a lawsuit filed by Blanca McCain for alleged workplace violations. Pursuant to a personnel insurance policy which the Debtors maintained through Houston Casualty Company, the claims filed by Ms. McCain were tendered to HCC. At the recommendation of HCC, Gilbert Kelly is expected to represent the Debtors as their defense counsel in the McCain Litigation. Stephen M. Moloney, Esq., an attorney at Gilbert Kelly, tells the Court that the Firm will charge the Debtors a blended hourly rate of $225 for its services. In addition, pursuant to the insurance policy with HCC, the Debtors are liable for the first $50,000 in legal fees and expenses incurred. Any fees and expenses incurred in excess of the $50,000 limit are subject to reimbursement from HCC. Mr. Moloney assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Moloney can be reached at: Stephen M. Moloney, Esq. Gilbert, Kelly, Crowley & Jennett LLP 1055 West Seventh Street, Suite 2000 Los Angeles, California 90017 Tel: (213) 580-7000 Fax: (213) 580-7100 http://www.gilbertkelly.com PureBeauty, Inc. -- http://www.purebeauty.com/-- operated 48 retail stores and salons offering professional hair care and skincare services, featuring a leading assortment of professional and prestige personal care products. PureBeauty also operated six "brand" stores, providing customers with a variety of aspirational products and services. PureBeauty Inc. and Pure Salons, Inc., an affiliate, filed for chapter 11 protection on April 18, 2006 (Bankr. C.D. Calif. Case No. 06-10545). Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP represented the Debtors. The Debtors' Official Committee of Unsecured Creditors selected Eric E. Sagerman, Esq., and David J. Richardson, Esq., at Winston & Strawn, LLP, as its counsel. When the Debtors filed for protection from their creditors, they estimated $14 million in assets and $82 million in debts. REAL ESTATE: Sept. 30 Balance Sheet Upside-Down by $18.645 ---------------------------------------------------------- Real Estate Associates Limited VII's balance sheet at Sept. 30, 2006, showed $2.092 million in total assets and $20.737 million in total liabilities, resulting in an $18.645 million partners' deficit. For the third quarter ended Sept. 30, 2006, the partnership reported a $203,000 net loss on $27,000 of interest income, compared with a $243,000 net loss on $20,000 of interest income in the comparable quarter of 2005. Full-text copies of the company's third quarter financials are available for free at http://ResearchArchives.com/t/s?1625 Going Concern Doubt Ernst & Young LLP expressed substantial doubt about Real Estate Associates' ability to continue as a going concern after auditing the Partnership's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Partnership's recurring operating losses and default on approximately $20,231,000 of notes payable and related accrued interest. Ten of the Partnership's 23 investments involved purchases of partnership interests from partners who subsequently withdrew from the operating partnership. The Partnership is obligated for non-recourse notes payable of approximately $6,840,000 to the sellers of the partnership interests, bearing interest at 9.5% to 10%. Accrued interest is approximately $13,869,000 as of Sept. 30, 2006. These obligations and the related interest are collaterized by the Partnership's investment in the local limited partnerships and are payable only out of cash distributions from the Local Limited Partnerships, as defined in the notes. Unpaid interest was due at maturity of the notes. All notes payable have matured and remain unpaid at Sept. 30, 2006. About Real Estate Associates Real Estate Associates Limited VII is a limited partnership formed under the laws of the State of California on May 24, 1983. The general partners of the Partnership are National Partnership Investments Corp., a California Corporation, and National Partnership Investments Associates II. ROTECH HEALTHCARE: Posts $84 Mil. Net Loss in 2006 Third Quarter ---------------------------------------------------------------- Rotech Healthcare Inc. reported an $84.008 million net loss for the third quarter ended Sept. 30, 2006, compared with $2.990 million of net income in the comparable period of 2005. The company has been significantly impacted by Medicare reimbursement changes, which decreased its net revenue by $15.1 million for the three months ended Sept. 30, 2006. The internal growth has not been sufficient to offset these reimbursement reductions. In addition, the company recorded a non-cash goodwill impairment charge of $80.0 million Total net revenues for the three months ended Sept. 30, 2006, were $127.2 million as compared with $137 million for the comparable period in 2005. The net decrease was primarily attributable to reduced Medicare reimbursement rates for compounded budesonide, which reduced net revenues by $9.1 million for the three months ended Sept. 30, 2006. In addition, reimbursement cuts related to non-oxygen HME items subject to the FEHBP provisions and the dispensing fee for inhalation drugs reduced net revenues by $6.0 million for the three months ended Sept. 30, 2006. These decreases were partially offset by $1.7 million in net revenue for the three months ended Sept. 30, 2006, from locations acquired after Sept. 30, 2005, and $3.6 million in net revenue for the three months ended Sept. 30, 2006 from a 6.0% increase in oxygen and drug patient counts (excluding acquisitions) and a 9.7% increase in other DME respiratory product counts (excluding acquisitions). Cost of net revenues totaled $41.5 million for the three months ended September 2006, a decrease of $1.6 million or 3.7% from the comparable period in 2005. The net decrease was primarily attributable to an $800,000 decrease in patient service equipment depreciation due to a portion of our oxygen rental equipment becoming fully depreciated during the three months ended Sept. 30, 2006, and decreased operating costs as the result of a $600,000 decrease in overall pharmacy-related costs, offset by a 4.5% increase in the number of respiratory therapists employed. Cost of net revenues as a percentage of net revenue was 32.6% for the three months ended Sept. 30, 2006, as compared to 31.5% for the comparable period in 2005. The provision for doubtful accounts for the three months ended Sept. 30, 2006, totaled $3.5 million, a $500,000 decrease from the comparable period in 2005. This decrease was mainly attributable to a shift in the overall allowance accrual rate, reducing the monthly provision for bad debt expense and increasing the monthly allowance for contractual adjustments recorded as a reduction of net revenues. The shift in the accrual rate is based on historical adjustment experience. The provision for doubtful accounts as a percentage of net revenue decreased to 2.7% for the three months ended Sept. 30, 2006, as compared with 2.9% from the comparable period in 2005. At Sept. 30, 2006, the Company's balance sheet showed $501.025 million in total assets, $443.541 million in total liabilities, $5.230 million in convertible redeemable preferred stock, and $52.254 million in total stockholders' equity. The Company had $569.515 million in total equity at Dec. 31, 2005. Full-text copies of the Company's third quarter financials are available for free at http://ResearchArchives.com/t/s?1618 Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ:ROHI) -- http://www.rotech.com/-- provides home respiratory care and durable medical equipment and services to patients with breathing disorders such as chronic obstructive pulmonary diseases. The Company provides its equipment and services in 48 states through approximately 485 operating centers, located principally in non- urban markets. The Company's local operating centers ensure that patients receive individualized care, while its nationwide coverage allows the Company to benefit from significant operating efficiencies. * * * As reported in the Troubled Company Reporter on Nov. 9, 2006, Moody's Investors Service confirmed Rotech Healthcare Inc.'s Caa2 Corporate Family Rating in connection with the rating agency's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology. SAN RAPHAEL: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: San Raphael Fruits Corporation pka San Raphael Citrus Corporation 904 Silver Spur Road #388 Rolling Hills Estate, CA 90274 Bankruptcy Case No.: 06-16230 Type of Business: The Debtor operates a citrus farm. The Debtor previously filed for chapter 11 protection on Dec. 16, 2002 (Bankr. E.D. Calif. Case No. 02-61449) Chapter 11 Petition Date: November 29, 2006 Court: Central District Of California (Los Angeles) Judge: Victoria S. Kaufman Debtor's Counsel: Alan F. Broidy, Esq. Law Offices of Alan F. Broidy, PC 1925 Century Park East, 17th Floor Los Angeles, CA 90067 Tel: (310) 286-6601 Debtor's financial condition as of Nov. 28, 2006: Total Assets: $15 million Total Debts: $9 million Debtor's 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Orange Belt Supply Company Trade debt $107,288 25244 Road 204 P.O. Box 249 Lindsay, CA 93247-0249 State of California - Taxes $48,000 Franchise Tax Board Special Procedures Dept. P.O. Box 942867 Sacrament, CA 94267-0001 Grapevine Oil Co., Inc. Trade debt $15,853 Attn: Accounts Payable Dept. 607 Kern Street Taft, CA 93268 Waldrops Auto Parts, Inc. Trade debt $3,598 Sprint Services rendered $2,693 Benko And Piane Services rendered $2,500 State of California - Taxes $900 Franchise Tax Board DMV Renewal Fees $585 Sawtelle & Rospirin Services rendered $70 Cooper True Value Center Services rendered $54 SATELITES MEXICANOS: Emerges from U.S. Bankruptcy Protection ------------------------------------------------------------ In fewer than four months after commencing its pre-negotiated U.S. bankruptcy, Satelites Mexicanos, S.A. de C.V., officially concluded its reorganization efforts and emerged from its U.S. bankruptcy case on Nov. 30, 2006. The Company consummated its U.S. chapter 11 plan of reorganization, which was confirmed by the United States Bankruptcy Court for the Southern District of New York by order dated Oct. 26, 2006, and implemented the restructuring approved in Satmex's Mexican Concurso Mercantil proceeding by the Concurso Plan Order issued on July 14, 2006. Reorganized Capital Structure In accordance with the terms of the restructuring, the holders of Satmex's former $203.4 million of Floating Rate Notes received, in full satisfaction of the obligations due under such notes, new First Priority Senior Secured Notes due in 2011 in the amount of approximately $238.2 million with a quarterly coupon of LIBOR + 875 basis points. The new First Priority Senior Secured Notes are callable at a price of 103 in year 1, 102 in year 2, 101 in year 3 and at par (plus accrued interest) thereafter; have a first priority security interest in all of Satmex's assets; and benefit from cash sweep prepayments on excess cash balances over U.S. $5 million. The CUSIP number for the First Priority Senior Secured Notes is 803895AE1. Holders of Satmex's former $320 million of High Yield Bonds received, in full satisfaction of $140 million of the obligations due under such bonds, including all accrued interest, new Second Priority Senior Secured Notes due 2013 in the principal amount of $140,000,000. The new Second Priority Senior Secured Notes due 2013 have a quarterly coupon of 10.125% all-in, with 0.0% cash payment in year 1 with the balance paid-in-kind, 2.0% cash payment through year five, with the balance paid-in-kind, with the coupon paid wholly in cash in years 6-7. The Notes are callable at par throughout their life; have a second lien on Satmex's assets junior in priority, operation and effect to the security interests of the First Priority Senior Secured Notes; and after the full payment of the First Priority Senior Secured Notes, cash sweep prepayment on excess cash balances over $5 million. The CUSIP number for the Second Priority Senior Secured Notes is 803895AF8. Further, holders of the High Yield Bonds received, in exchange for capitalization of the balance of their claim of approximately $274 million in principal and unpaid interest, 78% of the economic interest in the equity of Reorganized Satmex and 43% of the voting shares, comprised of 7,166,667 Series B shares and 29,395,833 Series N shares. The shares have been deposited in a trust and bondholders have been issued Units representing their interest in the trust based on 1 Unit issued for each $1,000 of face amount of the old 10-1/8% Notes due 2004. Each Unit represents a proportional interest in approximately 22.396 Series B shares and 91.862 Series N shares. A Global Trust Certificate representing the Units has been issued to the Depository Trust Corporation, and the CUSIP number of the Units is L2399K107. The remaining economic equity of Reorganized Satmex is held by Satmex's current shareholders, 2% by Principia and Loral, and 20% by the Mexican Government, directly and through Servicios Corporativos Satelitales, S.A. de C.V. The Mexican Government will own voting shares in Reorganized Satmex representing 10% and the rights to proceed from shares representing an additional 45%. Reorganized Satmex has a total of 9,166,667 Series A shares, 7,500,001 Series B Shares, and 30,208,331 Series N shares. Reorganized Satmex Board of Directors Reorganized Satmex's Board of Directors consists of Luis Rebollar Corona, former Chairman and CEO of Grupo Sidek and Grupo Situr, Sergio M. Autrey Maza, Satmex's former Chairman of the Board and interim CEO, Vicente Ariztegui Andreve, President and founding partner of Grupo Arizan, S.A. de C.V., Nexxtrade, S.A. de C.V. and Marmiitalia, S.A. de C.V., Alberto Mulas Alonso, founding partner of Cresce Consultores, S.C., Thomas S. Heather, a partner in the Mexico City office of White & Case, LLP and the Conciliador in the Company's former Concurso Mercantil proceeding, Roberto Enrique Colliard Lopez, Director General and CEO of Pendulum, S. de R.L. de C.V., and Robert L. Rauch, a Partner and Director of Research for Gramercy Advisors LLC. Erwin Starke, the current CEO of Secured Capital, S.A. de C.V., is chairing the Audit Committee for Reorganized Satmex. About SATMEX Satelites Mexicanos, S.A. de C.V., provides fixed satellite services in Mexico. Satmex provides transponder capacity via its satellites to customers for distribution of network and cable television programming, direct-to-home television service, on-site transmission of live news reports, sporting events and other video feeds. Satmex also provides satellite transmission capacity to telecommunications service providers for public telephone networks in Mexico and elsewhere and to corporate customers for their private business networks with data, voice and video applications. Satmex also provides the government of the United Mexican States with approximately 7% of its satellite capacity for national security and public purposes without charge, under the terms of the Orbital Concessions. The Debtor filed for chapter 11 petition on August 11, 2006 (Bankr. S.D.N.Y. Case No. 06-11868). Luc A. Despins, Esq., at Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the U.S. Bankruptcy proceedings. Attorneys from Galicia y Robles, S.C., and Quijano Cortina Lopez y de la Torre give legal advice in the Debtor's Mexican Bankrutpcy proceedings. UBS Securities LLC and Valor Consultores, S.A. de C.V., give financial advice to the Debtor. Steven Scheinman, Esq., Michael S. Stamer, Esq., and Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld LLP give legal advice to the Ad Hoc Existing Bondholders' Committee. Dennis Jenkins, Esq., and George W. Shuster, Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP give legal advice to Ad Hoc Senior Secured Noteholders' Committee. As of July 24, 2006, the Debtor has $905,953,928 in total assets and $743,473,721 in total liabilities. On May 25, 2005, certain holders of Satmex's Existing Bonds and Senior Secured Notes filed an involuntary chapter 11 petition against the Company (Bankr. S.D.N.Y. Case No. 05-13862). On June 29, 2005, Satmex filed a voluntary petition for a Mexican reorganization, known as a Concurso Mercantil, which was assigned to the Second Federal District Court for Civil Matters for the Federal District in Mexico City. On Aug. 4, 2005, Satmex filed a petition, pursuant to Section 304 of the Bankruptcy Code that commenced a case ancillary to the Concurso Proceeding and a motion for injunctive relief that sought among other things, to enjoin actions against Satmex or its assets (Bankr. S.D.N.Y. Case No. 05-16103). SCORPIUS CDO: Moody's Rates Class B Preferred Securities at Ba3 --------------------------------------------------------------- Moody's Investors Service assigned ratings to notes issued by Scorpius CDO, Ltd. These are the rating actions: -- Aaa to Class A-1 First Priority Senior Secured Floating Rate Notes due November 2046; -- Aaa to Class A-2A Second Priority Senior Secured Floating Rate Notes due November 2046; -- Aaa to Class A-2B Third Priority Senior Secured Floating Rate Notes due November 2046; -- Aa2 to Class B Fourth Priority Senior Secured Floating Rate Notes due November 2046; -- Aa3 to Class C Fifth Priority Senior Secured Floating Rate Notes due November 2046; -- A2 to Class D Sixth Priority Mezzanine Secured Floating Rate Notes due November 2046; -- A3 to Class E Seventh Priority Mezzanine Secured Floating Rate Notes due November 2046; -- Baa2 to Class F Eighth Priority Mezzanine Secured Floating Rate Notes due November 2046; -- Baa3 to Class G Ninth Priority Mezzanine Secured Floating Rate Notes due November 2046; -- Ba1 to Class A Preferred Securities; and -- Ba3 to Class B Preferred Securities. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Note's governing documents, and are based on the expected loss posed to the noteholders relative to receiving the present value of such payments. The ratings of the Notes reflect the credit quality of the portfolio of Reference Obligations, the swap counterparties, the characteristics of the cash collateral pool, the credit enhancement for the Notes inherent in the capital structure and the transaction's legal structure. This transaction is managed by Strategos Capital Management, LLC. SEA CONTAINERS: GE Wants Relief from Stay to Pursue Arbitration --------------------------------------------------------------- GE Capital Container SRL and GE Capital Container Two SRL, Sea Containers, Ltd. and its debtor-affiliates' partners in a certain GE SeaCo Srl joint venture, obtained authority from the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to file a request for relief from the automatic stay under seal and to serve redacted versions of that request on all entitled parties. In their request, the GE Parties ask the Court to: * grant relief from stay to proceed to mandatory arbitration against Sea Containers, Ltd., to determine that a change of control occurred; and * upon that finding, appoint a third-party arbiter to determine a buy out price. In March 1998, SCL, GE Container One, and Genstar Container had entered into an omnibus agreement pursuant to which a joint venture, GE SeaCo Srl, was formed. SCL and GE Container One filed articles of organization creating the JV under Barbados law. On May 1, 1998, SCL and GE Container One executed a members' agreement setting forth certain rights, obligations, and duties related to their membership interests in the JV -- the Quotas. Pursuant to certain amendments to the Members' Agreement, GE Container Two and Quota Holdings, Ltd., were added as members. Under the JV' Articles of Organization and the Members' Agreement, the GE Parties have the right to purchase the Quotas owned by SCL and QHL at their fair market value if a change of control occurs and if the parties are unable to agree on a purchase price, a third party arbiter will determine the price. The Members' Agreement also requires that any dispute concerning the buy-out right be decided by binding arbitration. Howard A. Cohen, Esq., at Drinker Biddle & Reath LLP, in Wilmington, Delaware, discloses that prior to the Debtors' filing for bankruptcy, the GE Parties notified SCL and QHL that: (1) a change of control had occurred with the resignation from various key positions of James Sherwood, a former controlling principal of SCL; (2) GE was exercising its right to purchase the entire equity interest held by SCL and QHL in the JV; and (3) GE was prepared to enter into good faith negotiations regarding the fair market purchase price of SCL's and QHL's Quotas. SCL and QHL dispute that a change of control occurred. Mr. Cohen points out that cause exists to grant GE's request because, among other things: (a) allowing the arbitration of the change of control dispute and the valuation will not prejudice SCL; (b) no alternative forum that would be quicker, more efficient, and more cost effective than arbitration exists; and (c) the hardship to the GE Parties of continuing the stay considerably outweighs the hardship to SCL of modifying the stay. Mr. Cohen notes that, the Third Circuit in Mintze v. Am. Gen. Fin. Servs., Inc. (In re Mintze), 434 F.3d 222 (3d Cir. 2006), has held that there is no judicial discretion to deny arbitration even if the arbitration involves core proceedings under Section 157(b) of the Bankruptcy Code. Accordingly, Mr. Cohen asserts, SCL cannot use Chapter 11 to shield itself from arbitration. "Because there is no alternative to arbitration, the Court need not and, indeed, cannot analyze the costs and benefits of arbitration versus the costs and benefits of an alternative means of resolving the disputes, including the bankruptcy process." Arbitrating now the Change of Control Dispute and the Valuation will not burden the Debtors or their management, Mr. Cohen maintains. He says any delay in the arbitration will prejudice the Debtors and their estates because resolution of the Change of Control Dispute and the Valuation is indispensable to the formulation of any plan of reorganization. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Wants to Sell 50% Stake in Aegean Speed Lines ------------------------------------------------------------- Sea Containers, Ltd. asks the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to approve its sale of its 50% interest in the Aegean Speed Lines NE joint venture to Speed Shipping Company Ltd., pursuant to a sale agreement dated November 2006 between the Debtor, Speed Shipping, ASL, Niver Lines Shipping Co. SA, Hoverspeed GB Ltd., and Sea Containers Cyprus Holdings Ltd. Shareholders' Agreement In February 2005, the Debtor and Speed Shipping, who each owns 50% interest in ASL, had entered into a shareholders' agreement under which the parties each subscribed for 2,500 shares in ASL, and agreed on the manner in which the affairs of ASL were to be conducted. ASL has no other operations aside from operating Speedrunner 1, a passenger ferry. HGB, an indirect, wholly owned subsidiary of the Debtor, owns Speedrunner 1 and charters it to SC Cyprus. SC Cyprus, in turn, sub-charters the ferry to ASL. Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that ASL incurred a EUR1,600,000 loss in 2005, and is forecasted to make a EUR1,400,000 loss in 2006. Under the Shareholders' Agreement, the Debtor is obliged to make subordinated loans to ASL in amounts necessary to meet its portion of ASL's liability to third party creditors. The Debtor estimates a $600,000 potential loan advance obligation for 2006. HGB has agreed to sell the Vessel to Speed Shipping for $2,000,000. The Vessel is not a property of the Debtor's estates, Mr. Brady relates. In conjunction with the sale, the Debtor has agreed to sell its 50% stake in the ASL joint venture to Speed Shipping for the nominal fee of EUR1 and the release of its obligations under the Shareholders' Agreement. The Shareholders' Agreement provides that before transferring its 50% joint venture interest in ASL to a third-party, the Debtor must first offer its 2,500 shares to Speed Shipping. The Debtor may only proceed to transfer to a third-party those shares which Speed Shipping declines to purchase, and may only transfer the shares on terms no less favorable than those offered to Speed Shipping. Mr. Brady discloses that the Debtor has not formally marketed its Joint Venture Interest for sale for these reasons: (1) the ASL business has generated losses and is expected to generate a loss for 2007; (2) ASL has no meaningful assets other than its interest in the Vessel's sub-charter and the goodwill generated by the business operations; (3) any buyer of the Debtor's Joint Venture Interest would be liable to pay, by way of subordinated loan, $600,000 in respect of estimated losses incurred by ASL; and (4) to retain the Vessel's class status as a "High Speed Craft," ASL would be required to overhaul two of the Vessel's engines, which is estimated to cost $1,900,000. Debtor's Equity Sale The Debtor believes that it can maximize the value of its Joint Venture Interest and minimize its liability to ASL only through a combined sale transaction of its Joint Venture Interest together with the Vessel. The parties subsequently enter into a sale agreement, pursuant to which: (a) the Vessel will be transferred to Speed Shipping on the terms contained in a memorandum of agreement; (b) the head-charter and the sub-charter will be terminated with effect from the delivery of the Vessel to Speed Shipping; (c) SCL will transfer its shares in ASL to Speed Shipping for EUR1; (d) upon the delivery of the Vessel, the payment of the purchase price, and the share transfer, all obligations of each of the parties under the Shareholders' Agreement, the Head-Charter and the Sub Charter will be deemed satisfied, with every liability that any party may have considered settled or waived and with each party deemed to have fully complied with its obligations under the agreements; and (e) HGB may retain the proceeds of any insurance recovery arising out of a claim for engine damage sustained by the Vessel in July 2006. Speed Shipping may opt to cancel the Memorandum of Agreement should the Vessel's delivery not occur prior to Dec. 7, 2006. Because the sale of the Vessel is contingent upon the sale of SCL's interest in ASL, the Debtor also asks the Court to approve the sale of the Joint Venture Interest on the terms agreed and not require competitive bidding through a formal, court- supervised auction process. A full-text copy of the Sale Agreement and the Memorandum of Agreement is available for free at: http://researcharchives.com/t/s?1629 Mr. Brady tells Judge Carey that the Sale should be approved because, among other things: -- the proposed sale enables the Debtor to liquidate an asset that is unnecessary to their core business operations, and to exit a joint venture that has not been and is not projected to be profitable in 2007 without incurring further liability; -- the transaction represents the highest and best offer for the Joint Venture Interest; and -- the Sale Agreement and the MOA are the product of good faith, arm's-length negotiations between SCL and Speed Shipping. Furthermore, Mr. Brady says there are no known liens or encumbrances that exist in, to, or against the Joint Venture Interest. Mr. Brady however says that there are certain restrictions contained in the public note indentures of SCL that might be read to prohibit the sale of the Joint Venture Interest. As required pursuant to the Sale Agreement, the Debtor further seek the Court's authority to transfer the Joint Venture Interest free and clear of any and all liens, claims and encumbrances, except those expressly assumed by Speed Shipping under the Sale Agreement. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHAW GROUP: S&P Holds BB Rating and Removes Negative CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on The Shaw Group Inc. and removed it from CreditWatch, where it was placed with negative implications in Oct. 2006. The outlook is stable. In addition, 'BB' senior secured debt rating was affirmed after the $100 million increase to the company's revolving credit facility. The affirmation comes after the acquisition of a 20% interest in the Toshiba Corp.-led purchase of Westinghouse Electrical Company by Shaw subsidiary Nuclear Energy Holdings LLC. "Ratings are not immediately affected by the acquisition due largely to the put option rights NEH holds," said Dan Picciotto, Standard & Poor's credit analyst. These rights allow NEH to sell all or part of its ownership interest to Toshiba prior to maturity of the bonds. SORIN CDO: Moody's Rates $6.5-Mil. Class C Secured Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Sorin CDO V Ltd.: -- Aaa to $402,000,000 Class A-1S Senior Secured Floating Rate Notes Due 2051; -- Aaa to $66,000,000 Class A-1J Senior Secured Floating Rate Notes Due 2051; -- Aa2 to $60,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2051; -- A2 to $27,000,000 Class A-3 Deferrable Secured Floating Rate Notes Due 2051; -- Baa2 to $18,000,000 Class B Deferrable Secured Floating Rate Notes Due 2051 and -- Ba2 to $6,500,000 Class C Deferrable Secured Floating Rate Notes Due 2051. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of Asset-Backed Securities and CDS Transactions with respect to Asset-Backed Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Sorin Capital Management, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. SPANISH BROADCASTING: Continued Losses Cue S&P to Cut Rating to B- ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Miami, Florida-based radio and television broadcaster Spanish Broadcasting System Inc. to 'B-' from 'B'. At the same time, we removed the ratings from CreditWatch, where they were placed with negative implications on Sept. 8, 2006. The outlook is stable. "The downgrade is based on continued losses at the company's start-up television operations and anticipated declines in radio advertising, especially national sales, which we believe will result in continued increases in leverage over the intermediate term," said Standard & Poor's credit analyst Michael Altberg. As of Sept. 30, 2006, the company had $426 million in debt outstanding, including cumulative preferred stock. The stable outlook recognizes that the company has sufficient liquidity over the intermediate term due to good cash balances, unrestricted borrowing availability under its undrawn revolving credit facility, and no sizable debt maturities until 2012. "We could revise the outlook to positive if the company can curtail its increasing leverage and undertake a debt-reduction plan, which we currently view as less likely, absent asset sales, cash-flow financed debt paydowns, or earlier-than-anticipated break-even results at its TV operations," Mr. Altberg said. "Alternatively, deteriorating operations, debt-financed acquisitions, and discretionary cash flow deficits that squeeze liquidity could pressure the outlook and rating." STATION CASINOS: DOJ Says Gun Lake Land Won't be Taken into Trust ----------------------------------------------------------------- Station Casinos Inc. disclosed that the U.S. Department of Justice filed a notice with the U.S. District Court for the District of Columbia stating that the Department of the Interior does not intend to take the land, subject to the Gun Lake Litigation, into trust prior to March 5, 2007. The Company previously disclosed the U.S. Department of Interior's decision to issue a Notice of Intent to place land in trust for gaming purposes for the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, commonly known as the Gun Lake Tribe, in Wayland Township, Michigan. The Company had purchased an interest in MPM Enterprises LLC and entered into a development services agreement and a management agreement with the Gun Lake Tribe. "We are very pleased that the U.S. Department of Interior has decided to take the 145 acre parcel into trust for the Gun Lake Tribe to use for gaming purposes," Glenn Christenson, executive vice president and chief financial officer, said. "We view this decision as one of the final steps in the development of a state- of-the-art gaming and entertainment facility in West Michigan." Station Casinos Inc. -- http://www.stationcasinos.com/-- provides gaming and entertainment to the residents of Las Vegas, Nevada. Station owns and operates Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Casino, and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel & Casino, Fiesta Henderson Casino Hotel, Magic Star Casino and Gold Rush Casino in Henderson, Nevada. Station also owns a 50% interest in Green Valley Ranch Station Casino, Barley's Casino & Brewing Company and The Greens in Henderson, Nevada and a 6.7% interest in the Palms Casino Resort in Las Vegas, Nevada. In addition, Station manages Thunder Valley Casino near Sacramento, California, on behalf of the United Auburn Indian Community. * * * As reported in the Troubled Company Reporter on Nov. 6, 2006, Standard & Poor's Ratings Services placed its ratings on Station Casinos Inc., including its 'BB' long-term and 'B-2' short-term corporate credit ratings, on CreditWatch with negative implications. As reported in the Troubled Company Reporter on Oct. 19, 2006, Moody's Investors Service confirmed its Ba2 Corporate Family Rating for Station Casinos in connection with its implementation of the new Probability-of-Default and Loss-Given-Default rating methodology for the Gaming, Lodging & Leisure sector. STIEFEL LABS: Moody's Rates Proposed $150 Mil. Senior Loan at B3 ---------------------------------------------------------------- Moody's assigned a Ba3 and a B3 rating to the proposed first and second lien credit facilities, respectively, of Stiefel Laboratories, Inc. Moody's also assigned Stiefel a Corporate Family Rating of B1. The outlook for the ratings is stable. This is the first time Moody's has assigned ratings for Stiefel. The proceeds of the proposed offering are expected to be used primarily to acquire the stock of Connetics Corporation for approximately $620 million, retire Connectics' outstanding debt and refinance the existing debt of Stiefel. Stiefel's rating reflects the key factors enumerated in Moody's Global Pharmaceutical Rating Methodology. The B1 Corporate Family Rating reflects the modest scale of the combined company with pro forma revenue for the twelve months ended Sept. 30, 2006 of approximately $730 million. The proposed acquisition of Connetics is the company's largest acquisition to date and the related financing will result in a significant increase in financial leverage. After the transaction, the company's funded debt of $810 million will exceed pro forma revenue. The considerable financial leverage along with increased capital spending in the next few years are also expected to constrain cash flow coverage of debt in the near term. However, Moody's expects the company to be able to generate sufficient cash flow to fund the increased capital spending and to reduce debt. Additionally, the combined company will have a fairly diverse product mix with the top three products generating about 34% of pro forma sales for the fiscal year ended March 31, 2006. Moody's believes the company's diverse product portfolio, spanning multiple indications, including acne, psoriasis and dermatoses, should be a credit positive over the rating horizon. Further, the combined company has modest exposure to patent expirations and challenges over the near term. The stable ratings outlook reflects Moody's expectation that sustained sales growth and cost savings initiatives associated with the combination of the two companies should contribute to a continuation of positive operating results and stable cash flow over the rating horizon. Sales of dermatological products should continue to be fueled by favorable demographics and lifestyle trends. Also contributing to the stable outlook is the expectation of a conservative acquisition strategy following the Connetics transaction and the anticipation that free cash flow will be used to repay debt. If Stiefel continues to grow revenues, maintains its positive margin performance and returns to its conservative leverage profile, Moody's could change the rating outlook to positive or upgrade the rating. Downward rating pressure could result from any of the following circumstances: -- integration issues arising from the acquisition of Connetics; -- a material decline in revenue and cash flow caused by generic competition for Soriatane; -- the loss of patent protection and resulting competition for OLUX; or, -- large cash-financed acquisitions. These are the rating actions: -- $75 million senior secured first lien revolving credit facility, Ba3, LGD3, 41% -- $623 million senior secured first lien term loan, Ba3, LGD3, 41% -- $150 million senior secured second lien term loan, B3, LGD6, 91% -- Corporate Family Rating, B1 -- Probability of Default Rating, B1 Headquartered in Coral Gables, Florida, Stiefel Laboratories, Inc. is a privately held pharmaceutical company specializing in dermatological products. Stiefel has nearly 160 years of experience in dermatology and currently markets over 160 products in more than 100 countries. The company manufactures and markets a variety of prescription and non-prescription dermatological products, including Duac, Brevoxyl and Rosac Cream. Stiefel recognized approximately $550 million of revenue for the twelve months ended Sept. 30, 2006. THREE PUTT: Case Summary & Two Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Three Putt Investments, LLC P.O. Box 464 Owensboro, KY 42302 Bankruptcy Case No.: 06-40872 Chapter 11 Petition Date: November 29, 2006 Court: Western District of Kentucky (Owensboro) Debtor's Counsel: Russ Wilkey, Esq. Russ Wilkey, P.S.C. 121 West Second Street Owensboro, KY 42303 Tel: (270) 685-6000 Fax: (270) 683 2229 Total Assets: $1,054,000 Total Debts: $989,417 Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Pramco III, LLC $46,017 SDS-12-2500 P.O. Box 86 Minneapolis, MN 55486 City of Owensboro 8-unit apartment Unknown 101 East Fourth Street complex at 3816 Owensboro, KY 42303 Brentwood Drive, Owensboro, KY 12-unit apartment complex at 1926 Tamarack Drive Owensboro, KY Secured: $966,000 Senior Lien: $935,710 UNIGENE LABS: Septmber 30 Equity Deficit Narrows to $11.4 Million ----------------------------------------------------------------- Unigene Laboratories Inc.'s balance sheet at Sept. 30, 2006, showed $16,108,404 in total assets and $27,514,927 in total liabilities, resulting in an $11,406,523 stockholders' deficit. The company's deficit at Dec. 31, 2005, was $16,506,628. The company's September 30 balance sheet also showed strained liquidity with $11,307,513 in total current assets available to pay $18,791,536 in total current liabilities. Revenue for the third quarter ended Sept. 30, 2006, was $1,700,870 compared with $11,872,608 for the three months ended Sept. 30, 2005, and $2,643,748 for the nine months ended Sept. 30, 2006, compared with $12,675,951 for the nine months ended Sept. 30, 2005. Revenue from Fortical sales and royalties were $1,510,000 for the three months ended Sept. 30, 2006, $348,000 for the three months ended June 30, 2006, and $197,000 for the three months ended March 31, 2006. Fortical royalties were $673,000 and $2,007,000 respectively, for the three months ended Sept. 30, 2006, and 2005 and $1,218,000 and $2,007,000 respectively, for the nine months ended Sept. 30, 2006, and 2005. Fortical sales were $837,000 for the three-month and nine-month periods ended Sept. 30, 2006. Sales, primarily Fortical, were $5,675,000 and $6,033,000, respectively, for the three month and nine month periods ended Sept. 30, 2005. For the third quarter ended Sept. 30, 2006, the company reported a $2,514,834 net loss compared with $7,897,455 of net income in the comparable quarter of 2005. The three months ended Sept. 30, 2006, includes $147,000 in expenses for non-cash stock option compensation under SFAS 123 (R). Total operating expenses were $3,897,000 for the three months ended Sept. 30, 2006, an increase from $3,562,000 for the three months ended Sept. 30, 2005. Total operating expenses were $10,440,000 for the nine months ended Sept. 30, 2006, an increase from $9,380,000 for the nine months ended Sept. 30, 2005. The company's cash balance at Sept. 30, 2006, was $4,825,000, an increase of approximately $679,000 from year-end. "Retail sales of Fortical, our first U.S. product for the treatment of osteoporosis, continue to grow at an appreciable rate," president and chief executive officer Warren P. Levy, Ph.D., commented. "According to NDC, a well-recognized pharmaceutical sales tracking service, Fortical prescriptions have exceeded 60,000 for the month of September, representing a market share of approximately 28%. "In August, we reported that the process of 'pull through' was complete. Our partner, Upsher-Smith Laboratories, has submitted purchase orders for the remainder of 2006 and the beginning of 2007. "As Upsher-Smith and their customers have begun to rebuild inventories, a more regular ordering pattern seems to be developing. As evidence of this, we have reported that our sales and royalties grew from $348,000 in the second quarter to $1,510,000 in the third quarter, reflecting significant growth despite the fact that the first re-order was filled in mid- quarter. We are encouraged by that increase and believe that the prospects for further increases are excellent. "We are aggressively pursuing internal activities to support our partnership with GlaxoSmithKline in oral PTH. These activities include additional formulations and in vivo testing. The program is being undertaken with the full support of GSK, and we believe it should expedite the product's development and entrance into Phase II. It is believed that the opportunity for an oral PTH will continue to grow, as the currently marketed injectable PTH product sold by a third party has been projected to achieve annual sales in 2006 exceeding $600 million." Dr. Levy also said, "Our current clinical studies in China are expected to be completed late this year or early next year. Following the conclusion of those studies and analysis of the data, we intend to meet with the regulatory agency to determine the prospects for, and timing of, a marketing approval. "Finally, our site-directed bone growth program is progressing well. We have repeated and amplified earlier studies and are filing patent applications overseas in addition to those already filed in the U.S. We are focusing on several specific possible applications of the technology, which involves a combination of drugs and device along with proprietary methodology, including stabilization of the spine, treatment of chronic back pain and prevention of hip fractures. We plan to engage key opinion leaders and clinical experts to assist in the early-stage clinical development of the technology and to seek a commercial partner with device expertise to assist in the remaining activities." Full-text copies of the company's third quarter financials are available for free at http://ResearchArchives.com/t/s?1624 Going Concern Doubt Grant Thornton LLP in Edison, New Jersey, expressed substantial doubt about Unigene Laboratories' ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended Dec. 31, 2005. The auditing firm pointed to the Company's recurring losses from operations, working capital deficiency, and the Company has stockholder demand loans in default at Dec. 31, 2005. About Unigene Laboratories Inc. Fairfield, New Jersey-based Unigene Laboratories Inc. (OTCBB: UGNE) -- http://www.unigene.com/or http://www.fortical.com/-- is a biopharmaceutical company focusing on the oral and nasal delivery of large-market peptide drugs. Due to the size of the worldwide osteoporosis market, Unigene is targeting its initial efforts on developing calcitonin and PTH-based therapies. Fortical(R), Unigene's nasal calcitonin product for the treatment of postmenopausal osteoporosis, received FDA approval and was launched in August 2005. Unigene has licensed the U.S. rights for Fortical to Upsher-Smith Laboratories, worldwide rights for its oral PTH technology to GlaxoSmithKline and worldwide rights for its calcitonin manufacturing technology to Novartis. US ENERGY: Gets Court Approval on Critical "First Day Pleadings" ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has granted approval of U.S. Energy Biogas Corp.'s critical "first day pleadings," including the use of up to $1.2 million cash collateral that will facilitate USEB's continued normal business operations. The Court action follows USEB's Nov. 30, 2006, announcement that it had voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. USEB's Chapter 11 filing did not include USEB's parent company, U.S. Energy Systems Inc., or the parent company's other subsidiary, a UK-based natural gas exploration and development business, UK Energy Systems. Moreover, neither USEY's nor UKEY's operations are affected by USEB's Chapter 11 filing. "We are pleased with the court's prompt approval of USEB's critical first day pleadings," said Asher E. Fogel, Chairman of USEB and Chief Executive Officer of USEY. "USEB's ability to use up to $1.2 million of cash collateral, along with the approval of other key first day pleadings, ensures that USEB will maintain normal business operations while we work to establish a viable capital structure for USEB through reorganization." With approvals granted on Dec. 1, 2006, by Judge Robert D. Drain, USEB has now received court authorization to, among other things: -- Use up to $1.2 million of cash collateral to pay obligations incurred in ongoing postpetition operations; -- Pay employee wages, salaries and benefits without interruption; and -- Continue to use existing bank accounts and cash management systems on an interim basis. Headquartered in Avon, Connecticut, U.S. Energy Biogas Corp. -- http://www.usenergysystems.com/-- develops landfill gas projects in the United States. Formerly known as Zahren Alternative Power Corporation or ZAPCO, the company was formed in May 2001 after ZAPCO's acquisition by U.S. Energy Systems, Inc. Currently, the Debtor owns and operates 23 LFG to energy projects with 52 megawatts of generating capacity. The Debtor and 31 of its affiliates filed separate voluntary chapter 11 petitions on Nov. 29, 2006 (Bankr. S.D.N.Y. Case Nos. 06-12827 through 06- 12857). Joseph J. Saltarelli, Esq., at Hunton & Williams represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. VARIG S.A.: Preliminary Injunction Continued Through January 11 --------------------------------------------------------------- Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York continues the preliminary injunction imposed in VARIG S.A. and its debtor-affiliates' Section 304 cases through and including Jan. 11, 2007. The Court will hold a hearing on Jan. 10, 2007, at 10:00 a.m., to consider whether to extend the Preliminary Injunction or, if appropriate, convert it into a Permanent Injunction. Previously filed objections to the extension of the Preliminary Injunction or entry of a Permanent Injunction will be carried over to the January 10 hearing. Any other objection must be filed with the Court by January 3, 2007. Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) VARIG S.A.: Judge Drain Denies Port Authority's Payment Request --------------------------------------------------------------- The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York denies The Port Authority of New York and New Jersey's request to compel VARIG, S.A., and its two foreign debtor-affiliates to pay postpetition flight fees and other fees totaling $207,500 as an administrative expense pursuant to Sections 105, 503 and 507 of the Bankruptcy Code. For reasons stated on the record of hearing, Judge Drain holds that the Court lacks the jurisdiction to grant the relief requested by the Port Authority of New York and New Jersey. As reported in the Troubled Company Reporter on Nov. 3, 2006, Eduardo Zerwes, the Foreign Representative of VARIG S.A. and its debtor-affiliates, objected to the Port Authority of New York and New Jersey's request. Mr. Zerwes asserted that Sections 503 and 507 of the Bankruptcy Code do not apply in the ancillary case and allowance or disallowance of the claims must be determined in the Foreign Proceeding in Brazil. Representing Mr. Zerwes, Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, argued that: * the Port Authority's request improperly applies the Bankruptcy Code and lacks the necessary basis to support an order granting the relief it seeks; and * any order from the U.S. Court compelling payment of any claim is premature because claims should first be administered in accordance with VARIG's approved In-Court Reorganization Plan. Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) VERTICAL VIRGO: Moody's Rates Class I Subordinated Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Vertical Virgo 2006-1, Ltd.: -- Aaa to up to $1,266,000,0001 Class A1S Variable Funding Senior Secured Floating Rate Notes Due 2046; -- Aaa to $255,000,000 Class A1J Senior Secured Floating Rate Notes Due 2046; -- Aa2 to $177,000,000 Class A2 Senior Secured Floating Rate Notes Due 2046; -- A2 to $80,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes Due 2046; -- Baa1 to $17,500,000 Class B1 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2046; -- Baa2 to $74,500,000 Class B2 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2046; -- Baa3 to $20,000,000 Class B3 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2046 and -- Ba2 to $40,000,000 Class I Subordinated Notes Due 2046. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The rating assigned to the Class I Subordinated Notes addresses solely the ultimate return of the Class I Subordinated Note Return Amount and the Remaining Class I Balance. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of RMBS Securities, CMBS Securities, other Asset-Backed Securities and Synthetic Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Vertical Capital, LLC, a Delaware limited liability company, will manage the selection, acquisition and disposition of portfolio securities on behalf of the Issuer. WHOLE AUTO: Good Performance Pormpts S&P's Positive CreditWatch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on four classes of notes from two Whole Auto Loan Trust securitizations originated in 2003 and 2004 on CreditWatch with positive implications. The CreditWatch placements reflect the strong performance of the underlying collateral, which consists of prime vehicle loan receivables originated by DaimlerChrysler Services N.A., Ford Motor Credit Co., and General Motors Acceptance Corp., as well as increased credit enhancement as a percentage of the current amortizing pool balances. With current pool factors of 13% for WALT 2003-1 and 30.61% for WALT 2004-1, cumulative net losses for the transactions are 1.16% and 0.86%, respectively, which are below Standard & Poor's initial expectations. Both transactions have reached their target overcollateralization levels of 1% of the initial adjusted pool balances. The overcollateralization is nonamortizing and therefore has increased over time as a percentage of the current pool balances. Moreover, all mezzanine and subordinate classes continue to benefit from the pro rata principal payment structure. Furthermore, the principal cash flow associated with the overcollateralization amount has been used to fast-pay the notes in reverse order of seniority, thus causing the most subordinate notes to be retired first. Over the next one to two months, Standard & Poor's will conduct a detailed review of the credit performance and enhancement levels for both transactions and determine whether upgrades are warranted. Ratings Placed On Creditwatch Positive Whole Auto Loan Trust 2003-1 Rating ------ Class To From ----- -- ---- B AA+/Watch Pos AA+ Whole Auto Loan Trust 2004-1 Rating ------ Class To From ----- -- ---- B A/Watch Pos A C BBB/Watch Pos BBB D BB-/Watch Pos BB- WILLIAMS SCOTSMAN: Moody's Puts Ratings on Review & May Upgrade --------------------------------------------------------------- Moody's Investors Service placed all ratings of Williams Scotsman International, Inc. on review for possible upgrade. The review was prompted by the company's continued strong performance, supported by substantial increases in average lease rates with stable utilization. This has resulted in greater cash flow generation, causing leverage metrics to improve to the strongest levels since the equity IPO in Sept. 2005. Moody's notes management's commitment to a more conservative leverage profile since the IPO as a key driver in the review decision. This has been evidenced by a disciplined approach regarding the usage of debt for both organic growth and acquisitions, in addition to a secondary equity offering in the second quarter of 2006 that was used in-part to reduce outstandings under the company's revolving credit facility. During the review for possible upgrade, Moody's will also analyze the sustainability of Williams Scotsman's recent strong operating performance. This has been in part due to a favorable period in the economic cycle, and Moody's will evaluate whether there has been a structural shift in the firm's business model so that cyclical troughs will generate less stress on the company's earnings and cash flows. A review of the firm's leasing versus sales mix, and the characteristics of each, will be undertaken as a component of this analysis. Williams Scotsman's business strategy as the company continues to grow and expand with larger operations outside of North America will also be reviewed by Moody's. The company's recent purchase of the remaining outstanding interest in Wiron Constructucciones Modulares, S.A. is an example. Moody's will evaluate the possibility of greater expansion and investment both domestically and in Europe and its effect on the company's leverage metrics, particularly given the company's excess availability on its senior secured revolver facility. Also, given the company's historical operations have been firmly centered in North America, its ability to manage and control its European expansion will be a factor to the rating. These ratings were placed on review for possible upgrade: -- Long-Term Corporate Family Rating at B2 -- Senior Secured Credit Facility at B2 -- Senior Unsecured Notes at B3 Williams Scotsman International, Inc. is headquartered in Baltimore, Maryland, and is a provider of modular space solutions in North America and Europe. ZIM CORP: Posts $369,991 Net Loss in Second Quarter Ended Sept. 30 ------------------------------------------------------------------ ZIM Corp. filed its second fiscal quarter financial statements ended Sept. 30, 2006, with the Securities and Exchange Commission on Nov. 13, 2006. Revenue for the three months ended Sept. 30, 2006, was $580,913, compared with revenue of $817,389 for the three months ended Sept. 30, 2005. The decrease of $236,476 is attributable to a decrease in short message service or text messaging and aggregation. Net loss for the three months ended Sept. 30, 2006, was $369,991 as compared with $368,720 for the three months ended Sept. 30, 2005. At Sept. 30, 2006, the company's balance sheet showed $2,121,914 in total assets, $1,078,804 in total liabilities, and $1,043,110 in total stockholders' equity. ZIM had cash of $578,883 at Sept. 30, 2006, as compared with cash, net of bank indebtedness of $207,068 at March 31, 2006. The increase in cash is due to the receipt of investment tax credits from the Canadian government relating to the 2005 fiscal year and to the closing of a private placement of the company's common shares on June 30, 2006, that raised cash of $280,422. The private placement also resulted in its Chief Executive Officer converting $454,194 on a line of credit into units in the private placement. The units were priced at $0.04 per unit, the closing market price on the OTCBB on June 29, 2006, with each unit consisting of one common share and one warrant to purchase common shares for $0.04 per share. Full-text copies of the company's second fiscal quarter financials are available for free at http://ResearchArchives.com/t/s?162a Going Concern Doubt As reported in the Troubled Company Reporter on July 5, 2006, Raymond Chabot Grant Thornton LLP expressed substantial doubt about ZIM Corporation's ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended March 31, 2006, and 2005. The auditing firm pointed to the Company's net loss of $3,388,493 for the year and negative cash flows from operations during each of the last five years. About ZIM Corp. Ottawa, Canada-based ZIM Corporation (OTCBB: ZIMCF) -- http://www.zim.biz/-- is a mobile service provider, aggregator, and application developer for the global SMS market. ZIM's products include mobile e-mail and office tools, such as ZIM SMS Chat, and its message delivery services include Bulk SMS, Premium SMS, and Location Based Services. ZIM also provides enterprise- class software and tools for designing, developing and manipulating database systems and applications. Through its two- way SMS expertise and mobile-enabling technologies, ZIM bridges the gap between data and mobility. *Gibson Dunn Promotes 11 Lawyers to Partner ------------------------------------------- Gibson, Dunn & Crutcher LLP disclosed that the firm has named 11 new partners, effective Jan. 1, 2007, representing a diverse range of practice areas and geographical regions. "We are pleased to welcome as partners such an accomplished and talented group of attorneys," Ken Doran, managing partner, said. "They bring a wealth of knowledge and experience that will help ensure that we will continue to provide the best legal services to our clients. They also exemplify our firm's core values of excellence, professionalism and collegiality." The Firms new partners are: * Michael J. Collins - his practice focuses on all aspects of executive compensation and employee benefits. A resident in its Washington, D.C. office, he graduated summa cum laude from Notre Dame Law School in 1995. * Ethan Dettmer - practices complex commercial litigation, with an emphasis on securities, professional liability and appellate matters. A resident in its San Francisco office, he received his law degree from the University of Michigan Law School in 1997 and served as a law clerk to the late Justice James H. Brickley of the Michigan Supreme Court prior to joining the firm. * Rashida K. La Lande - practices corporate law with an emphasis on mergers and acquisitions and private equity. A resident in its New York office, she received her law degree from Columbia Law School in 1998. * Jeffrey A. Le Sage - practices corporate law with a focus on domestic and international mergers and acquisitions, private equity transactions, venture capital transactions and corporate securities matters. A resident in its Los Angeles office, he graduated cum laude from Loyola Law School, Los Angeles in 1998. * Cromwell Montgomery - practices finance law, with a focus on a broad variety of secured and unsecured credit transactions, including high yield, second lien, mezzanine and subordinated debt transactions. A resident in its Century City office, he received his law degree from Boalt Hall School of Law at the University of California, Berkeley in 1997. Prior to joining the firm, he served as a judicial law clerk to the Honorable Samuel L. Bufford of the U.S. Bankruptcy Court for the Central District of California. * Trey Nicoud - practices antitrust and trade regulation law. A resident in its San Francisco office, he received his J.D. with honors in 1982 from the University of Texas School of Law. * G. Charles "Chip" Nierlich - practices complex commercial litigation and antitrust law. Resident in the San Francisco office, he graduated magna cum laude from Harvard Law School in 1997. Mr. Nierlich served as a judicial clerk to the Honorable Morris S. Arnold on the U.S. Court of Appeals for the Eighth Circuit prior to joining the firm. * Sophie Resplandy-Bernard - practices corporate law, with a focus on mergers and acquisitions, private equity, offerings and international transactions. A resident in its Paris office, she is a graduate of HEC business school, where she obtained a Masters degree in Management, and received her Masters in private law at the University of Paris X - Nanterre in 1994. * Michael J. Scanlon - practices corporate law, with an emphasis on securities regulatory and corporate governance matters. A resident in its Washington, D.C. office, he received his law degree cum laude from Georgetown University Law Center in 1997. Prior to joining the firm, Mr. Scanlon served as a law clerk to the Honorable Richard W. Goldberg of the U.S. Court of International Trade. * Jason C. Schwartz - practices labor and employment law. A resident in the Washington, D.C. office, he graduated magna cum laude from Georgetown University Law Center in 1998. * J. Christopher Wood - practices antitrust and international trade regulation and compliance law. A resident in its Washington, D.C. office, he graduated with high honors from the University of Texas School of Law in 1997 and served as clerk for the Honorable William C. Bryson on the Court of Appeals for the Federal Circuit prior to joining the firm. Headquartere in Los Angeles, Ca., Gibson, Dunn & Crutcher LLP -- http://www.gibsondunn.com/-- is a law firm with 800 lawyers and 13 offices, including Los Angeles, New York, Washington, D.C., San Francisco, Palo Alto, London, Paris, Munich, Brussels, Orange County, Century City, Dallas, and Denver. * BOND PRICING: For the week of November 27 -- December 1, 2006 --------------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 12/31/04 0 Adelphia Comm. 3.250% 05/01/21 0 Adelphia Comm. 6.000% 02/15/06 1 Aetna Industries 11.875% 10/01/06 11 Allegiance Tel. 11.750% 02/15/08 44 Allegiance Tel. 12.875% 05/15/08 44 Amer & Forgn Pwr 5.000% 03/01/30 60 Amer Color Graph 10.000% 06/15/10 68 Amer Tissue Inc 12.500% 07/15/06 1 Antigenics 5.250% 02/01/25 66 Anvil Knitwear 10.875% 03/15/07 67 Archibald Candy 10.000% 11/01/07 0 Atlantic Coast 6.000% 02/15/34 13 Autocam Corp. 10.875% 06/15/14 30 Bank New England 8.750% 04/01/99 7 Bank New England 9.500% 02/15/96 13 BBN Corp 6.000% 04/01/12 0 Budget Group Inc 9.125% 04/01/06 0 Burlington North 3.200% 01/01/45 60 Calpine Corp 4.000% 12/26/06 48 Calpine Corp 4.750% 11/15/23 69 Calpine Corp 6.000% 09/30/14 55 Calpine Corp 7.750% 06/01/15 48 Calpine Corp 8.500% 02/15/11 67 Calpine Corp 8.625% 08/15/10 70 Cell Therapeutic 5.750% 06/15/08 70 Cell Therapeutic 5.750% 06/15/08 74 Central Tractor 10.625% 04/01/07 0 Chic East Ill RR 5.000% 01/01/54 57 CHS Electronics 9.875% 04/15/05 2 Clark Material 10.750% 11/15/06 0 Collins & Aikman 10.750% 12/31/11 4 Columbia/HCA 7.500% 11/15/95 74 Comcast Corp 2.000% 10/15/29 43 Conseco Inc 8.500% 10/15/02 0 Dal-Dflt09/05 9.000% 05/15/16 56 Dana Corp 5.850% 01/15/15 73 Dana Corp 7.000% 03/01/29 73 Dana Corp 7.000% 03/15/28 75 Dana Corp 9.000% 08/15/11 74 Dana Corp 10.125% 03/15/10 72 Decode Genetics 3.500% 04/15/11 72 Delco Remy Intl 9.375% 04/15/12 30 Delco Remy Intl 11.000% 05/01/09 33 Delta Air Lines 2.875% 02/18/24 57 Delta Air Lines 7.700% 12/15/05 58 Delta Air Lines 7.900% 12/15/09 58 Delta Air Lines 8.000% 06/03/23 59 Delta Air Lines 8.300% 12/15/29 59 Delta Air Lines 9.250% 03/15/22 57 Delta Air Lines 9.250% 12/27/07 29 Delta Air Lines 9.750% 05/15/21 57 Delta Air Lines 10.000% 08/15/08 58 Delta Air Lines 10.060% 01/02/16 73 Delta Air Lines 10.125% 05/15/10 58 Delta Air Lines 10.375% 02/01/11 57 Delta Air Lines 10.375% 12/15/22 56 Delta Mills Inc 9.625% 09/01/07 22 Deutsche Bank NY 8.500% 11/15/16 74 Diamond Triumph 9.250% 04/01/08 71 Diva Systems 12.625% 03/01/08 1 Dov Pharmaceutic 2.500% 01/15/25 45 Drum Financial 12.875% 09/15/99 0 Dura Operating 8.625% 04/15/12 25 Dura Operating 9.000% 05/01/09 4 E.Spire Comm Inc 10.625% 07/01/08 0 E.Spire Comm Inc 13.750% 07/15/07 0 Eagle Family Food 8.750% 01/15/08 74 Epix Medical Inc 3.000% 06/15/24 71 Exodus Comm Inc 10.750% 12/15/09 0 Exodus Comm Inc 11.625% 07/15/10 0 Family Golf Ctrs 5.750% 10/15/04 0 Fedders North AM 9.875% 03/01/14 69 Federal-Mogul Co. 7.375% 01/15/06 66 Federal-Mogul Co. 7.500% 01/15/09 67 Federal-Mogul Co. 8.160% 03/06/03 65 Federal-Mogul Co. 8.250% 03/03/05 67 Federal-Mogul Co. 8.330% 11/15/01 68 Federal-Mogul Co. 8.370% 11/15/01 63 Federal-Mogul Co. 8.370% 11/15/01 65 Federal-Mogul Co. 8.800% 04/15/07 68 Finova Group 7.500% 11/15/09 31 Ford Motor Co 6.500% 08/01/18 74 Ford Motor Co 6.625% 02/15/28 72 Ford Motor Co 7.125% 11/15/25 75 Ford Motor Co 7.400% 11/01/46 72 Ford Motor Co 7.700% 05/15/97 75 Ford Motor Co 7.750% 06/15/43 74 GB Property Fndg 11.000% 09/29/05 57 Golden Books Pub 10.750% 12/31/04 0 GST Network Fndg 10.500% 05/01/08 0 HNG Internorth 9.625% 03/15/06 38 Home Prod Intl 9.625% 05/15/08 64 Imperial Credit 9.875% 01/15/07 0 Inland Fiber 9.625% 11/15/07 63 Insight Health 9.875% 11/01/11 22 Iridium LLC/CAP 10.875% 07/15/05 29 Iridium LLC/CAP 11.250% 07/15/05 29 Iridium LLC/CAP 13.000% 07/15/05 31 Iridium LLC/CAP 14.000% 07/15/05 27 Isolagen Inc. 3.500% 11/01/24 75 IT Group Inc 11.250% 04/01/09 0 JTS Corp 5.250% 04/29/02 0 Kaiser Aluminum 9.875% 02/15/02 30 Kaiser Aluminum 12.750% 02/01/03 8 Kellstrom Inds 5.750% 10/15/02 0 Kmart Funding 9.440% 07/01/18 20 Lehman Bros Hldg 10.000% 10/30/13 75 Liberty Media 3.750% 02/15/30 62 Liberty Media 4.000% 11/15/29 66 Lifecare Holding 9.250% 08/15/13 61 Macsaver Financl 7.400% 02/15/02 5 Macsaver Financl 7.600% 08/01/07 5 Macsaver Financl 7.875% 08/01/03 5 Merisant Co 9.500% 07/15/13 55 MHS Holdings Co 16.875% 09/22/04 0 Movie Gallery 11.000% 05/01/12 71 Muzak LLC 9.875% 03/15/09 71 New Orl Grt N RR 5.000% 07/01/32 72 Northern Pacific RY 3.000% 01/01/47 58 Northern Pacific RY 3.000% 01/01/47 58 Northwest Airlines 7.248% 01/02/12 30 Northwest Airlines 9.152% 04/01/10 7 Northwest Airlines 9.179% 04/01/10 27 Northwst Stl&Wir 9.500% 06/15/01 0 NTK Holdings Inc 10.750% 03/01/14 70 Nutritional Src 10.125% 08/01/09 65 Oakwood Homes 7.875% 03/01/04 9 Oakwood Homes 8.125% 03/01/09 9 Oscient Pharm 3.500% 04/15/11 70 OSU-DFLT10/05 13.375% 10/15/09 0 Outboard Marine 7.000% 07/01/02 0 Outboard Marine 9.125% 04/15/17 0 Overstock.com 3.750% 12/01/11 70 Pac-West-Tender 13.500% 02/01/09 47 PCA LLC/PCA Fin 11.875% 08/01/09 19 Pegasus Satellite 9.625% 10/15/49 13 Pegasus Satellite 12.375% 08/01/08 10 Pegasus Satellite 13.500% 03/01/07 0 Phar-mor Inc 11.720% 09/11/02 2 Piedmont Aviat 10.250% 01/15/49 3 Pixelworks Inc 1.750% 05/15/24 72 Pliant Corp 13.000% 07/15/10 55 Polaroid Corp 6.750% 01/15/02 0 Polaroid Corp 7.250% 01/15/07 0 Polaroid Corp 11.500% 02/15/06 0 Primus Telecom 3.750% 09/15/10 38 Primus Telecom 8.000% 01/15/14 60 Primus Telecom 12.750% 10/15/09 73 PSINET Inc 11.000% 08/01/09 0 Radnor Holdings 11.000% 03/15/10 17 Railworks Corp 11.500% 04/15/09 1 Read-Rite Corp. 6.500% 09/01/04 8 Rite Aid Corp 6.875% 12/15/28 75 RJ Tower Corp. 12.000% 06/01/13 20 Spinnaker Inds 10.750% 10/15/06 0 Tom's Foods Inc 10.500% 11/01/04 9 Tribune Co 2.000% 05/15/29 68 Trism Inc 12.000% 02/15/05 0 United Air Lines 7.270% 01/30/13 56 United Air Lines 9.020% 04/19/12 56 United Air Lines 9.200% 03/22/08 49 United Air Lines 9.210% 01/21/17 9 United Air Lines 9.300% 03/22/08 49 United Air Lines 9.350% 04/07/16 33 United Air Lines 9.560% 10/19/18 56 United Air Lines 10.020% 03/22/14 52 United Air Lines 10.110% 02/19/49 48 United Air Lines 10.110% 12/31/49 3 United Air Lines 10.850% 02/19/15 48 United Homes Inc 11.000% 03/15/05 0 US Air Inc. 10.250% 01/15/49 5 US Air Inc. 10.800% 01/01/49 10 USAutos Trust 2.212% 03/03/11 8 Venture Holdings 11.000% 06/01/07 0 Venture Holdings 12.000% 06/01/09 0 Vesta Insurance Group 8.750% 07/15/25 7 Werner Holdings 10.000% 11/15/07 10 Westpoint Steven 7.875% 06/15/08 0 Winstar Comm Inc 12.500% 04/15/08 0 Winstar Comm Inc 12.750% 04/15/10 0 World Access Inc 13.250% 01/15/08 5 Xerox Corp 0.570% 04/21/18 44 Ziff Davis Media 12.000% 07/15/10 42 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Robert Max Victor M. Quiblat II, Shimero R. Jainga, Joel Anthony G. Lopez, Melvin C. Tabao, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Ronald C. Sy, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin, and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***