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/raid1/www/Hosts/bankrupt/TCR_Public/061207.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, December 7, 2006, Vol. 10, No. 291 Headlines ACTIS GLOBAL: Sept. 30 Stockholder' Deficit Tops $3.7 Million AIMS WORLDWIDE: Sept. 30 Balance Sheet Upside-Down by $1.08 Mil. ALCATEL LUCENT: Merger Approval Cues S&P to Pare Rating to BB- ANVIL KNITWEAR: Court Approves Amended Disclosure Statement ANVIL KNITWEAR: Judge Gropper Sets Confirmation Hearing on Jan. 10 APW ENCLOSURE: Voluntary Chapter 11 Case Summary ASSET BACKED: Fitch Lowers Rating on Class B Debt to C from CC AUTO UNDERWRITERS: Sept. 30 Balance Sheet Upside-Down by $3.9 Mil. AXS-ONE: September 30 Balance Sheet Upside-Down by $9.8 Million BASELINE SPORTS: Files Schedules of Assets and Liabilities BOSTON GENERATING: Moody's Rates Proposed $1.8-Billion Loans at B1 C2 GLOBAL: Equity Deficit Widens to $80.2 Million at Sept. 30 CALPINE CORP: Sells Aries Facility to Kelson Holdings for $233MM CANNINGTON FUNDING: Moody's Rates $14-Mil. Class D Notes at Ba2 CAPITALSOURCE REAL: S&P Rates $47-Million Class J Loan at BB CARDINAL COMMS: Sept. 30 Balance Sheet Upside-Down by $3.9 Million CARMIKE CINEMAS: Form 10-Q Filing Cues S&P to Affirm B- Rating CASCADES INC: To Buy Domtar's 50% Norampac Stake for CDN$560 Mil. CELLNET TECHNOLOGY: Acquisition Offer Cues S&P's Developing Watch CINEMARK USA: Likely Reduced Leverage Cues S&P's Positive Outlook COFFEYVILLE RESOURCES: Moody's Rates New $775 Million Loan at B2 COINMACH SERVICE: Merger Proposal Prompts S&P's Negative Outlook COMM: Fitch Junks Rating on $6.7 Million Class M Certificates COMM: Fitch Holds B+ Rating on $13.4 Million Class V-GP Certs. DEVELOPERS DIVERSIFIED: Inks Common Share Forward Sale Agreements DOMTAR INC: Sells 50% Norampac Stake to Cascades for CDN$560 Mil. DOMTAR INC: DBRS Confirms Unsecured Notes Rating at BB (low) DURA AUTOMOTIVE: Taps Brunswick as Communications Consultants DURA AUTOMOTIVE: Ontario Court Grants Foreign Recognition Order ECHOSTAR DBS: Posts $134.1 Mil. Net Income for 3rd Quarter of 2006 ECUITY INC: Sept. 30 Balance Sheet Upside-Down by $12.9 Million EMISPHERE TECH: Equity Deficit Narrows to $5.5 Million at Sept. 30 ENDURANCE SPECIALTY: S&P Upgrades Rating on Preferred Stock ENRON CORP: Can Enter Into Settlement Pacts With Del Mar & ASC ENRON CORP: Can Enter Into Settlement Pacts With Six Parties ENTERGY NEW: Capital One Has Until January 17 to File Objections ENTERGY NEW ORLEANS: Court Approves Certain Claims Transfer ENVIRONMENTAL LAND: Can Hire Go Real Estate as Real Estate Agent EQUITABLE PARTNERS: Case Summary & 3 Largest Unsecured Creditors ERA AVIATION: Court Confirms Amended Ch. 11 Reorganization Plan EUGENE SCIENCE: Sept. 30 Balance Sheet Upside-Down by $10.6 Mil. FEDERAL-MOGUL: Adbar Wants Objection to Claim No. 6869 Overruled FOAMEX INT'L: Court Approves $940 Million Exit Financing Deals FOAMEX INTERNATIONAL: Court Approves GMAC Settlement Agreement FORD MOTOR: To Raise Borrowing Capacity of Financing to $23 Bil. FORD MOTOR: Intends to Offer $3 Billion Senior Convertible Notes FORD MOTOR: Fitch Rates $3 Billion Senior Unsecured Notes at B FORD MOTOR: Fitch Pares Senior Unsecured Ratings to B- from B GENERAL MOTORS: Kerkorian Sells Remaining 5% Stake GMAC COMMERCIAL: Fitch Ups Rating on $19 Mil. Class K Loan to BB- GRACEWAY PHARMA: Moody's Rates $210-Mil. Senior Term Loan at B3 GRACEWAY PHARMA: S&P Rates $530 Million Senior Secured Loan at B+ GREEKTOWN HOLDINGS: S&P Holds Ratings and Removes Negative Watch HOT PIZZA: Case Summary & 20 Largest Unsecured Creditors IMPART MEDIA: Posts $3.4 Million Net Loss in 2006 Third Quarter INFORMATION ARCHITECTS: Posts $210,724 Net Loss in 2006 3rd Qtr. IVOICE INC: Posts $75,618 Net Loss in 2006 Third Quarter JP MORGAN: Fitch Affirms B- Rating on $4.3 Million Class M Certs. KEYSTONE AUTO: To Refinance Debts with $325 Mil. Credit Facilities LB-UBS: Fitch Assigns Low-B Ratings on $33.9 Million Certificates LEAR CORP: IAC Pact Prompts Moody's to Revise Outlook to Stable LEGACY COMMS: Sept. 30 Balance Sheet Upside-Down by $2.8 Million LUXELL TECH: Delays Filing of 4th Qtr. & Annual Financial Reports MAC-GRAY CORP: S&P Affirms Ratings and Says Outlook is Negative MERIDIAN AUTOMOTIVE: Bankr. Court Confirms Plan of Reorganization METALDYNE COMPANY: Moody's Puts Low-B Ratings on Senior Facilities METALDYNE CORP: Asahi Deal Cues S&P to Hold Credit Rating at B MICHELEX CORP: Sept. 30 Balance Sheet Upside-Down by $4.7 Million MICROHELIX INC: Working Capital Deficit Tops $1.2 Mil. at Sept. 30 MILLS CORP: Selects Four Nominees for Election to Board MORGAN STANLEY: Fitch Lifts Rating on $8 Million Class K Certs. NORAMPAC INC: Domtar Sells 50% Stake to Cascades for CDN$560 Mil. NORAMPAC INC: Cascades' Planned Buyout Cues DBRS to Review Rating NORTHWEST AIRLINES: Owl Creek Wants Equity Committee Appointed NORTHWEST AIRLINES: Court Disallows and Expunges 145 Claims NORTHWEST AIRLINES: Stay Doesn't Apply to RI Commission's Action ORCHARD SUPPLY: Moody's Rates $200 Million Secured Loan at B1 O'SULLIVAN INDUSTRIES: Hires Gary Ramey as Senior Marketing Exec. PNC COMMERCIAL: Fitch Lifts Rating on $7 Mil. Class K Certs. to BB QUEBECOR WORLD: QWUSA Offers to Buy QWCC's $125 Mil. Senior Notes QUINTEK TECH: Sept. 30 Balance Sheet Upside-Down by $1 Million RAPID PAYROLL: Court Approves Kibel Green as Financial Consultants REFCO INC: Submits Modified First Amended Chapter 11 Plan REFCO INC: Wants Court to Allow 1,218 Claims as Related Claims REFCO INC: GAIN Capital Wins FXA's Customer List for $750,000 REFCO INC: Wants Abadi's Multi-Debtor Claims Disallowed SATELITES MEXICANOS: Appoints Raul Cisneros Matusita as New CEO SEA CONTAINERS: Wants Collinson Grant as Human Resource Advisor SEA CONTAINERS: Panel Wants Bingham McCutchen as FIMEM Counsel SHIP FINANCE: Good Performance Cues S&P to Lift Rating to BB SOUTHPARK COMMUNITY: Case Summary & 20 Largest Unsecured Creditors SPEEDEMISSIONS INC: Earns $101,542 in 2006 Third Quarter STIEFEL LABORATORIES: S&P Rates $735 Million Senior Loans at B+ TELTRONICS INC: Equity Deficit Narrows to $2.3 Million at Sept. 30 TIX CORPORATION: Earns $433,702 in Third Quarter of 2006 THOMAS EQUIPMENT: Operating Entity Obtains $1.5 Million Financing U.S. ENERGY: Earns $12.4 Million in Third Quarter Ended Sept. 30 UNITEDHEALTH GROUP: Stephen Hemsley is New CEO Effective Dec. 1 USXL FUNDING: Moody's Rates $14 Million Class B Notes at Ba2 VOYAGER ENTERTAINMENT: Posts $845,903 Net Loss in 2006 3rd Quarter WELLCARE HEALTH: Improved Finances Cue S&P's Rating Upgrade WILLIAMS PARTNERS: Fitch Rates $600 Million Notes Offering at BB * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ACTIS GLOBAL: Sept. 30 Stockholder' Deficit Tops $3.7 Million ------------------------------------------------------------- ACTIS Global Ventures Inc. reported a $763,361 net loss on $2.6 million of revenues for the third quarter ended Sept. 30, 2006, compared with an $879,213 net loss on $2 million of revenues for the same period in 2005. Net sales for the three months ended Sept. 30, 2006, increased due to a net increase in revenue from Direct Sales from the BIOPRO Technology division of $210,056, or 11% over 2005 and increased sales by SRA Marketing of $271,505 over 2005. Net loss for the three months ended Sept. 30, 2006, decreased due primarily to the increased non-cash gain on value of derivatives recorded in the 2006 period partially offset by the increased loss on discontinued operations and estimated loss on disposal of discontinued subsidiary, BIOPRO Asia, effective in September 2006. At Sept. 30, 2006, the company's balance sheet showed $1.8 million in total assets, $5.4 million in total liabilities, and $58,606 in minority interest, resulting in a $3.7 million total stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $1.1 million in total current assets available to pay $5.4 million in total current liabilities. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?1674 Going Concern Doubt Peterson & Co., LLP, expressed substantial doubt about Actis Global Ventures, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the company's recurring losses from operations and working capital deficiency at Dec. 31, 2005 and 2004. About ACTIS Global Based in Carlsbad, Calif., ACTIS Global Ventures, Inc. (AGLV.OB), formerly FemOne, Inc., -- http://www.actisglobalventures.com/-- markets a variety of leading edge wellness products in the areas of Bioenergetics, Nutrition and Beauty through the Direct Sales and Direct Response Television channels. ACTIS' direct sales divisions are BIOPRO Technology -- http://www.bioprotechnology.com/-- and FemOne -- http://www.femone.com/-- BIOPRIO distributes a new generation of Bioenergetics wellness products in the United States, Canada, Australia, New Zealand, the Philippines and South Africa, while FemOne markets nutritional products in the United States and Canada. ACTIS Global Ventures' Direct Response Television sales are generated through its subsidiary, SRA Marketing. AIMS WORLDWIDE: Sept. 30 Balance Sheet Upside-Down by $1.08 Mil. ---------------------------------------------------------------- AIMS Worldwide Inc. incurred a $369,579 net loss for the three months ended Sept. 30, 2006, compared with a $536,144 net loss for the same period in 2005. The company generated $614,737 in revenue for the three months ended Sept. 30, 2006, compared with $211,062 in revenue for the same three-month period of 2005. The increase was primarily due to activities added by the acquisition of Prime Time Broadband and activity on the part of AIMSolutions, the company's corporate consulting practice. Cost of sales was $119,802 leaving a gross profit of $494,935 for the three month period of 2006 compared cost of sales of $93,601 and a gross profit of $117,461 for the same three month period of 2005. At Sept. 30, 2006, the company's balance sheet showed $3,255,732 in total assets and $4,336,624 in total liabilities, resulting in a $1,080,892 stockholders' deficit. A full-text copy of the company's quarterly report is available for free at http://researcharchives.com/t/s?166f AIMS Worldwide, Inc. -- http://www.aimsworldwide.com/-- is a marketing communications consultancy firm providing organizations with its AIMSolutions branded focused marketing solutions. The Company says AIMS(TM) or Accurate Integrated Marketing Solutions increases the accuracy of the strategic direction of its client's marketing program, improves results and reduces the cost, by refocusing "mass marketing" to a more strategic "One-2-One(TM)" relationship with the ideal customer. ALCATEL LUCENT: Merger Approval Cues S&P to Pare Rating to BB- -------------------------------------------------------------- Standard & Poor's reports, after news that the merger between French telecoms equipment supplier Alcatel and U.S. peer Lucent Technologies Inc. has received final approval from the U.S. Committee on Foreign Investments, it has lowered its long-term corporate credit and senior unsecured debt ratings on Alcatel -- now named Alcatel Lucent -- to 'BB-' from 'BB', in line with its preliminary indication in its Nov. 7, 2006, research update. The 'B' short-term corporate credit rating on Alcatel Lucent was affirmed. The outlook is positive. At the same time, Standard & Poor's equalized its long-term corporate credit rating on Lucent with that of Alcatel Lucent, raising it to 'BB-' from 'B', and affirmed its 'B-1' short-term corporate credit rating on the U.S. company. The outlook is positive. Standard & Poor's also raised its long-term ratings on Lucent's senior unsecured debt to 'B+' from 'B', on its subordinated debt to 'B' from 'CCC+', and on its preferred stock to 'B-' from 'CCC'. All of the long-term ratings on Alcatel Lucent and on Lucent were removed from CreditWatch -- except Lucent's senior unsecured debt ratings, which remain on CreditWatch with positive implications -- where they had been placed with negative and positive implications, respectively, on March 24, 2006, on news of the merger plans. The completion of the proposed consent solicitation for Lucent's 2.75% Series A and B convertible senior debentures due respectively in 2023 and 2025, in return for a full and unconditional subordinated guarantee from Alcatel, will be a first step toward resolving the CreditWatch status on Lucent's senior unsecured debt. Resolution will also depend on Standard & Poor's analysis of the ranking and support mechanisms for the various debt classes within the merged group, in particular Lucent's senior debt. "The downgrade reflects the challenges that Alcatel Lucent will face combining two large organizations, integrating different technology platforms while preserving key customer relationships, implementing a large restructuring program, and continuing to support significant levels of debt and unfunded health care obligations," said Standard & Poor's credit analyst Leandro de Torres Zabala. "Nevertheless, we believe the merger has a clear logic, given continuing carrier consolidation and the convergence of fixed- and mobile-network technologies." The combined group will have a larger scale, greater product depth, wider geographic reach, and stronger R&D capability. Alcatel Lucent will be headquartered in Paris, France. Pro forma for the Thales S.A. transaction and the acquisition of Nortel's third-generation activities, Standard & Poor's estimate that Alcatel Lucent achieved ?19 billion in sales in 2005 and had about ?7.4 billion in debt securities and bank debt outstanding at Sept. 30, 2006. The ratings on Alcatel Lucent are supported by Standard & Poor's assessment of the industry's moderate revenue growth prospects, as well as by the group's broad portfolio of wireline and wireless systems, large-scale and geographically diversified operations, strong customer relations, R&D capabilities that are among the largest in the industry, and robust liquidity. These positive factors are constrained by: -- the very competitive telecoms equipment industry, notably in the context of continuing carrier consolidation; -- ongoing major changes in the industry's technology direction, resulting in potential rapid adverse changes in demand patterns; -- significant gross debt; and uneven free cash flow generation, reflecting moderate sales growth, health care, restructuring costs, and working-capital changes. "An upgrade is possible over the next 18 months if the group shows clear progress in integrating the two former entities and in achieving its targeted synergies, reaching high-single-digit operating margins and meaningful sustained free cash flow generation, as well as maintaining solid liquidity in stable market conditions," said Mr. de Torres. Conversely, the outlook would be revised to stable if the integration of the two companies and the extraction of synergies did not proceed apace and had harmful effects on profitability and free cash flow generation. ANVIL KNITWEAR: Court Approves Amended Disclosure Statement ----------------------------------------------------------- The Honorable Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan approved Dec. 5, 2006, the Modified First Amended Disclosure Statement explaining the Modified First Amended Joint Plan of Reorganization of Anvil Holdings Inc., Anvil Knitwear Inc., and Spectratex Inc. Judge Gropper determined that the Disclosure Statement contained adequate information -- the right amount of the right kind -- for creditors to make informed decisions when the Debtors ask them to vote to accept the Plan. Treatment of Claims These claims will be paid in full: -- Allowed Administrative Claims, -- Allowed Debtor-In-Possession Facility Claims, -- Allowed Tax Claim, -- Allowed Priority Claims, -- Allowed Revolving Credit Facility Claims, and -- Allowed Other Secured Claims. Class 3A Allowed General Unsecured Claims against Anvil Holdings, Class 3B Allowed General Unsecured Claims against Anvil Knitwear, and Class 3C Allowed General Unsecured Claims against Spectratex will be reinstated. Holders of Class 3D Old Senior Notes Claims will receive a pro rata share of 9.9 million shares of New Anvil Holdings common stock. This represents, as of the Plan Effective Date, 99% of the Reorganized Anvil Holdings outstanding shares. Holders of Class 4 Old Anvil Holdings Preferred Stock Interests will receive a pro rata share of: a. 100,000 shares of New Anvil Holdings common stock, representing 1% of the outstanding shares of Reorganized Anvil Holdings; b. any shares issued upon the exercise of New Warrants or any shares issued on the exercise of any options issued under the Management and Director Equity Plan; c. the New Class A Warrants; and d. the New Class B Warrants. Holders of Class 5 Old Anvil Holdings Common Stock Interests, Class 6 Intercompany Claims, and Class 7 Old Stock of Debtor Subsidiaries will not receive anything. Headquartered in New York, Anvil Holdings, Inc., is a Delaware holding company with no material operations and owns all of the outstanding common stock of Anvil Knitwear, Inc. Anvil Knitwear, in turn, owns all of the outstanding common stock of Spectratex, Inc., fka Cottontops, Inc. The Debtors design, manufacture, and market active wear. The Debtors filed for chapter 11 protection on Oct. 2, 2006 (Bankr. S.D.N.Y. Case Nos. 06-12345 through 06-12347). Richard A. Stieglitz, Jr., Esq., Stephen J. Gordon, Esq., and Joel H. Levitin, Esq., at Dechert LLP represent the Debtors in their restructuring efforts. The Debtors' consolidated financial data as of July 29, 2006, showed total assets of $110,682,000 and total debts of $244,586,000. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 30, 2007. ANVIL KNITWEAR: Judge Gropper Sets Confirmation Hearing on Jan. 10 ------------------------------------------------------------------ The Honorable Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan scheduled a hearing at 11:00 a.m., on Jan. 10, 2007, to consider confirmation of the Modified First Amended Joint Plan of Reorganization of Anvil Holdings Inc., Anvil Knitwear Inc., and Spectratex Inc. Objections to confirmation of the Plan must be filed with the Court by 5:00 p.m. on Jan. 5, 2007. Ballots All ballots must be completed, signed, and received by the claims agent by 5:00 p.m. on Jan. 5, 2007, and those forms must be delivered to: if by mail: Donlin, Recano & Company Inc. Re: Anvil Knitwear P.O. Box 2034 Murray Hill Station New York, NY 10156-0701 if by hand delivery or overnight courier: Donlin, Recano & Company Inc. Re: Anvil Knitwear Attn: Voting Department 419 Park Avenue South New York, NY 10016 Headquartered in New York, Anvil Holdings, Inc., is a Delaware holding company with no material operations and owns all of the outstanding common stock of Anvil Knitwear, Inc. Anvil Knitwear, in turn, owns all of the outstanding common stock of Spectratex, Inc., fka Cottontops, Inc. The Debtors design, manufacture, and market active wear. The Debtors filed for chapter 11 protection on Oct. 2, 2006 (Bankr. S.D.N.Y. Case Nos. 06-12345 through 06-12347). Richard A. Stieglitz, Jr., Esq., Stephen J. Gordon, Esq., and Joel H. Levitin, Esq., at Dechert LLP represent the Debtors in their restructuring efforts. The Debtors' consolidated financial data as of July 29, 2006, showed total assets of $110,682,000 and total debts of $244,586,000. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 30, 2007. APW ENCLOSURE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: APW Enclosure Systems, Inc. 2100 East Orangewood Avenue Anaheim, CA 92806 Bankruptcy Case No.: 06-11378 Type of Business: The Debtor designs, manufactures, and integrates electronic enclosures, racks, chassis, backplanes, power supplies, thermal management products and related services for the computer, networking, medical, telecom, semiconductor and embedded computer device industries. Chapter 11 Petition Date: December 4, 2006 Court: District of Delaware (Delaware) Debtor's Counsel: Frederick Brian Rosner, Esq. Duane Morris LLP 1100 North Market Street Wilmington, DE 19801 Tel: (302) 657-4900 Fax: (302) 657-4901 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. ASSET BACKED: Fitch Lowers Rating on Class B Debt to C from CC -------------------------------------------------------------- Fitch Ratings has taken rating actions on these classes of Asset Backed Funding Corporation series 2002-SB1: -- Classes A-II-1 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 downgraded to 'BB' from 'BBB'; and, -- Class B downgraded to 'C/DR4' from 'CC/DR3'. The affirmations reflect satisfactory credit enhancement relationships to future loss expectations and affect approximately $39 million of outstanding certificates as of the Nov. 27, 2006 distribution date. The negative rating actions, affecting approximately $5.6 million of outstanding certificates, reflect the deterioration of CE relative to expected future losses. As of the Nov. 2006 distribution, series 2002-SB1 has suffered a cumulative loss of 4.99% of its original balance. The overcollateralization has been beneath its target for the past 15 months and is currently only providing 1.24% CE for class B. Class M-3 is currently only benefiting from 6.71% CE as protection. The average monthly excess spread for the past three months has been approximately $104,965 and the average monthly losses for the same period have been $188,425. This has led to an average monthly reduction in credit enhancement of $83,460 for the past three months. The 60+ delinquencies represent 24.54% of the current collateral balance and this includes foreclosures and real estate owned of 5.52% and 5.34%, respectively. Fitch expects the protection provided by the OC in this transaction to continue to deteriorate. The underlying collateral in this transaction consists of conventional fixed-rate and adjustable-rate mortgage loans extended to subprime borrowers. Substantially all of the loans in this trust were originated or acquired by Superior Federal Bank, FSB. Banc of America Mortgage Capital Corporation, an affiliate of the depositor ABFC, acquired these loans from the originator. These loans were sold to ABFC on the closing date. The loans in this transaction are serviced by Litton Loan Servicing LP, which is rated 'RPS1' by Fitch for subprime transactions. This transaction is 55 months seasoned and the pool factor is 14.45%. As of the Nov. 27, 2006 distribution, the OC was $565,531 with a target of $1,578,734. AUTO UNDERWRITERS: Sept. 30 Balance Sheet Upside-Down by $3.9 Mil. ------------------------------------------------------------------ Auto Underwriters of America Inc. reported a $589,313 net loss on $1.3 million of revenues for the first fiscal quarter ended Sept. 30, 2006, compared with a $42,165 net loss on $6.2 million of revenues for the same period in 2005. Total revenues decreased principally as a result of the company's inability to operate at full capacity because of insufficient capital. At Sept. 30, 2006, the company's balance sheet showed $8.8 million in total assets and $12.6 million in total liabilities, resulting in a $3.9 million total stockholders' deficit. Full-text copies of the company's first fiscal quarter financials are available for free at http://researcharchives.com/t/s?1678 Going Concern Doubt As reported in the Troubled Company Reporter on Dec. 5, 2006, Malone & Bailey PC expressed substantial doubt about Auto Underwriters of America Inc.'s ability to continue as a going concern after auditing the company's financial statements for the fiscal years ended June 30, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and significant working capital deficiency. About Auto Underwriters of America Based in San Jose, Calif., Auto Underwriters of America Inc. -- http://www.autounderwriter.com/-- purchases and services non- prime installment sales contracts originated by automobile dealers in the sale of new and used automobiles, and light trucks in the United States. AXS-ONE: September 30 Balance Sheet Upside-Down by $9.8 Million --------------------------------------------------------------- AXS-One Inc. reported a $2.8 million net loss on $2.2 million of revenues for the third quarter ended Sept. 30, 2006, compared with a $177,000 of net income on $3.7 million of revenues for the same period in 2005. The net loss is primarily due to the twin effects of a decrease in revenues and an increase in operating expenses. The $1.47 million or 39.8% decrease in total revenues was mainly due to a $1.54 million or 76.4% decrease in license fees. The three months ended Sept. 30, 2005 included a license fee of approximately $1.0 million to one customer which was not repeated in the three months ended September 30, 2006. At Sept. 30, 2006, the company's balance sheet showed $7.3 million in total assets and $17 million in total liabilities, resulting in a $9.8 million total stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $4.5 million in total current assets, available to pay $8.4 million in total current liabilities. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?166a About AXS-One Headquartered in Rutherford, NJ, AXS-One Inc. (AMEX: AXO) -- http://www.axsone.com-- is a leading provider of high-performance Records Compliance Management solutions. The AXS-One Compliance Platform enables organizations to implement secure, scalable and enforceable policies that address records management for corporate governance, legal discovery and industry regulations such as SEC17a-4, NASD 3010, Sarbanes-Oxley, HIPAA, The Patriot Act and Gramm-Leach Bliley. AXS-One has offices worldwide including the United States, Australia, Singapore, United Kingdom and South Africa. BASELINE SPORTS: Files Schedules of Assets and Liabilities ---------------------------------------------------------- Baseline Sports Inc. delivered to the U.S. Bankruptcy Court for the Eastern District of Virginia its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property $3,149,246 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $1,258,318 E. Creditors Holding Unsecured Priority Claims $11,078 F. Creditors Holding Unsecured Nonpriority Claims $1,931,194 ---------- ---------- Total $3,149,246 $3,200,590 A full-text copy of the Debtor's 182-page list of schedules is available for free at http://ResearchArchives.com/t/s?1680 Headquartered in Norfolk, Virginia, Baseline Sports Inc. -- http://www.blsports.com/-- develops products featuring professional sports, college sports and entertainment-licensed properties targeted at individuals and family's active life styles. The company filed for chapter 11 protection on October 16, 2006 (U.S. Bankr. E.D. Va. Case No. 06-71505) Christopher A. Jones, Esq. at LeClair Ryan, P.C. represents the Debtor in its restructuring efforts. BOSTON GENERATING: Moody's Rates Proposed $1.8-Billion Loans at B1 ------------------------------------------------------------------ Moody's Investors Service assigned a B1 rating to Boston Generating LLC's proposed $1.4 billion first lien credit facilities and a B3 rating to its proposed $400 million second lien term loan. The first lien credit facilities will consist of a $1.08 billion term loan, a $250 million synthetic letter of credit facility, and a $70 million revolving credit facility. The rating outlook is stable. Proceeds from the financing, along with $300 million of unrated, unsecured debt issued by parent company, EBG Holdings, LLC, will be used to refinance $796 million of existing Boston Gen's funded debt, to provide working capital and fund reserve accounts of around $285 million, to provide a $70 million revolver, and to tender for up to $1.025 billion of EBG units including warrants. The ratings reflect the expected high degree of contracted cash flow anticipated at Boston Gen provided from capacity revenues earned through the Forward Capacity Market in New England and from four year hedges established with investment grade counterparties. Over the next four years, about one-third of Boston Gen's revenues will be earned from FCM payments received from the Independent System Operator - New England providing a highly reliable source of cash flow. Another 30% - 45% of Boston Gen's revenues are expected to be provided from various hedges with investment grade counterparties. At closing, Boston Gen will have entered into four year financial hedges on 1,600 megawatts of NEMA capacity, and is required, per the terms of the financing documents, to enter into an additional 600mw - 800 mw of financial hedges related to the SEMA capacity region. Depending on the commercial terms of these hedges, about 80% of Boston Gen's net energy margin could be provided by contracted sources. Moody's notes that while the third party hedges provide a relatively high degree of cash flow predictability, the hedges principally mitigate natural gas price risk; however, they do not address operational performance risk or some basis risk that exists between the hedge reference point for natural gas and the delivery point. Consequently, margin compression could occur if Boston Gen were to experience operating performance issues at the plants or if the basis differential were to widen beyond historical levels. The ratings also incorporate Boston Gen's expected credit metrics after the completion of the refinancing. Boston Gen's ratio of funds from operations to total first and second lien debt is expected to range between 5% to 6% during the first three years while its coverage of first and second lien interest expense averages around 2x over this time period. These credit metrics are consistent with other B-rated enterprises which have exposure to the more volatile merchant energy marketplace. While Boston Gen's historical financial performance has been very weak resulting in losses each year, the financial performance of Boston Gen improved measurably during 2006 due in large part to better regional market conditions and the receipt of reliability must run capacity payments from the ISO-NE. Moody's expects that the continued receipt of capacity payments, fortified by the introduction of the forward capacity market, as well as the benefits of the financial hedges will produce greater financial predictability around the expected results. While market conditions have strengthened and cash flow predictability has improved, the ratings further incorporate the substantial amount of debt that will exist following this recapitalization. About $1.1 billion of incremental debt will be added to the consolidated balance sheet at closing at EBG, all of which will be distributed to current EBG unit holders, resulting in substantial negative net worth at both Boston Gen and at EBG. While the improved market place, the degree of contracted revenues, the 100% cash sweep mechanism, and the assets' competitive position help to mitigate this issue, the incremental debt weakens credit quality exposing Boston Gen to greater refinancing risk, particularly given the intermediate term of existing hedges and the volatile nature of this future merchant energy market. The ratings also acknowledge the existence of litigation that exists at Federal Energy Regulatory Commission concerning Boston Gen's receipt of RMR payments as well as the litigation between Boston Gen and Distrigas, which sells natural gas to Boston Gen under long-term natural gas contracts. The ratings incorporate the prospects for reasonable settlements in both pieces of litigation and factors in appropriate levels of liquidity to satisfy such future settlements. Under the $1.4 billion in first lien credit facilities, $1,080 million will be drawn as a term loan maturing in seven years. Of the remaining $320 million of first lien debt, $250 million will be drawn to fund a synthetic letter of credit facility of which $70 million will fund a debt service reserve and $180 million will be used for hedging and other performance LC requirements. A $70 million revolving credit facility will be available for additional working capital needs. The maturity on the first lien credit facilities will be seven years, while the maturity on the revolving credit facility will be five years. The first lien facilities will be secured by a first lien on the all of the Boston Gen assets, and will receive upstream guarantees from each of the legal entities that hold the generating assets. First lien lenders will share the collateral on a pro-rata basis with hedge counterparties. The term loan will have a waterfall for payments and will feature a 100% cash sweep of any excess cash, which should help to facilitate a more rapid amortization of the term loan. The $400 million second lien term loan will have a second priority position in the same collateral and will largely have the same covenant package as the first lien term loan. The financing documents will include minimum EBITDA/Interest and maximum Debt/EBITDA ratios. Moody's will withdraw the B2 first lien rating on Boston Gen's existing $370 million term loan and its $130 million revolving credit facility upon closing of the recapitalization. Boston Gen's rating outlook is stable reflecting the expected receipt of relatively stable cash flows over the next four years through FCM payments from ISO-NE and hedge counterparty payments. The rating outlook incorporates an expectation of continued strong operating performance across Boston Gen's plants and relatively rapid de-leveraging given the 100% cash sweep mechanism that is incorporated into the financing documents. In light of anticipated substantial leverage and the company's reported hedging strategies, limited prospects exist for the ratings to be upgraded in the intermediate term. However, longer- term, the rating could be upgraded should Boston Gen utilize excess cash to permanently reduce debt by more than $400 million and if greater clarity concerning the sustainability of a forward capacity market in New England surfaced, resulting in the ratio of FFO to total first and second lien debt approaching 10% on a sustainable basis. The ratings could be downgraded if the operating performance were to weaken or if margins were to shrink resulting in the ratio of FFO to total first and second lien debt falling below 4% on a sustainable basis. The ratings are predicated upon final documentation in accordance with Moody's current understanding of the transaction, and final debt sizing consistent with initially projected credit metrics. Assignments: * Issuer: Boston Generating LLC -- Senior Secured Bank Credit Facility, Assigned B1 -- Senior Secured Bank Credit Facility, Assigned B1 -- Senior Secured Bank Credit Facility, Assigned B1 -- Senior Secured Bank Credit Facility, Assigned B3 Boston Gen is a wholly-owned subsidiary of EBG Holdings, Inc., which in turn, after completion of the debt restructuring will be owned 9.9% by K Road BG LLC and 90.1% by others. Boston Gen owns three separate operating subsidiaries, Mystic I, LLC, Mystic Development, LLC, and Fore River Development, LLC. These subsidiaries collectively own generation facilities which aggregate 2,976 megawatts and each will guarantee the credit facilities. Mystic I, LLC owns Mystic Station, a 573 MW two unit dual fuel-fired generation station in Everett, Massachusetts. Mystic Development owns Mystic 8 and 9, a combined 1,602 MW natural gas fired combined cycle generating facility adjacent to Mystic 7. Fore River owns an 801 MW natural gas fired combined cycle generating facility in Weymouth, Massachusetts. In addition, an affiliate of K Road manages and operates the companies and their assets. C2 GLOBAL: Equity Deficit Widens to $80.2 Million at Sept. 30 ------------------------------------------------------------- C2 Global Technologies Inc.'s balance sheet at Sept. 30, 2006 showed total assets of $1.6 million and total liabilities of $81.8 million resulting in a total stockholders' deficit of $80.2 million. The company's total stockholders' deficit at Dec. 31, 2005 stood at $77.9 million. For the quarter ended Sept. 30, 2006, the company reported a net loss of $1.7 million, as compared with a net income of $1.7 million for the same quarter in 2005, brought about by a $4.2 million income from discontinued operations. Counsel Corporation and its subsidiaries are the controlling stockholder and major debt holder of the company, owning 97% of the company's debt at Sept. 30, 2006. Counsel has subordinated its debt position and pledged its ownership interest in C2 in favor of Laurus. The related party subordinated notes payable to Counsel are to mature on Dec. 31, 2006. Counsel has advised the company that it intends to extend the maturity date of the notes to Oct. 31, 2007. Counsel, via a "Keep Well" agreement, has agreed to fund the cash requirements of the company until Dec. 31, 2006. At Sept. 30, 2006, the company has $61.5 million in 10% subordinated notes and $17.7 million in 9% subordinated convertible notes payable to Counsel. A full text-copy of C2 Global Technologies Inc.'s quarterly report on Form 10-Q may be viewed for free at: http://ResearchArchives.com/t/s?1653 Going Concern Doubt On March 27, 2006, BDO Seidman LLP and PricewaterhouseCoopers LLP expressed substantial doubt about C2 Global Technologies Inc. and subsidiaries' ability to continue as a going concern after auditing the Company's financial statements for the year ended Dec. 31, 2005 and 2004. The auditing firms pointed to the Company's recurring losses, negative cash flows from operations and net capital deficiency. C2 Global Technologies Inc. -- http://www.c-2technologies.com/-- licenses its patents, which include two foundational patents in Voice over Internet Protocol technology. C2 plans to realize value from its intellectual property by offering licenses to service providers, equipment companies and end-users that are deploying VoIP networks for phone-to-phone communications. CALPINE CORP: Sells Aries Facility to Kelson Holdings for $233MM ---------------------------------------------------------------- Calpine Corporation received approval from the U. S. Bankruptcy Court for the Southern District of New York for the sale of the company's 590-megawatt Aries Power Plant to Kelson Holdings, LLC for $233.6 million. The transaction, subject to certain regulatory approvals, is expected to close within the next 30 to 60 days. "Calpine continues to make significant progress with our restructuring efforts and in divesting of non-core power assets," said Robert P. May, Calpine's Chief Executive Officer. "This transaction represents another positive step towards our goal of emerging from Chapter 11 a stronger, more competitive power company. In addition to enhancing Calpine's liquidity and reducing project debt, the Aries sale is consistent with our strategy of focusing our resources on core power assets in our key power markets where Calpine can best compete." In October, Calpine received Court approval to proceed with the sale process for Aries and initially obtained a $158.5 million bid from Aquila, Inc. In accordance with asset sales procedures approved by the Bankruptcy Court, Calpine held an auction on Dec. 4, 2006 to allow other potential buyers to bid on the asset. At the conclusion of this auction, Kelson Holdings, LLC was selected as the winning bidder. Calpine will utilize the $233.6 million in proceeds to repay approximately $191 million of project-related debt that includes all outstanding principal, accrued interest and other debt claims. The Aries facility is a natural gas-fired, combined-cycle power plant located in Pleasant Hill, Missouri that has been in operation since 2001. Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. CANNINGTON FUNDING: Moody's Rates $14-Mil. Class D Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Cannington Funding Ltd.: -- Aaa to $337,500,000 Class A-1 Floating Rate Senior Notes Due 2020; -- Aa2 to $26,000,000 Class A-2 Floating Rate Senior Notes Due 2020; -- A2 to $26,000,000 Class B Floating Rate Deferrable Senior Subordinate Notes Due 2020; -- Baa2 to $20,000,000 Class C Floating Rate Deferrable Senior Subordinate Notes Due 2020 and -- Ba2 to $14,000,000 Class D Floating Rate Deferrable Subordinate Notes Due 2020. 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 as well as the credit enhancement for the Notes inherent in the capital structure and the transaction's legal structure. This cash-flow CLO is managed by Silvermine Capital Management LLC. CAPITALSOURCE REAL: S&P Rates $47-Million Class J Loan at BB ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary ratings to CapitalSource Real Estate Loan Trust 2006-A's $1.3 billion CDO. The preliminary ratings are based on information as of Dec. 1, 2006. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the economics of the collateral, the property type diversity of the collateral, and the backup advancing provided by the trustee. Preliminary Ratings Assigned CapitalSource Real Estate Loan Trust 2006-A Recommended Preliminary Credit Class Rating Amount Support ----- ------ ------------ ----------- A-1 AAA $895,375,000 31.13% B AA $82,875,000 24.75% C A+ $62,400,000 19.95% D A $30,225,000 17.63% E A- $30,225,000 15.30% F BBB+ $26,650,000 13.25% G BBB $33,150,000 10.70% H BBB- $31,200,000 8.30% J BB $47,450,000 4.65% Preferred shares NR $60,450,000 NR -- Not rated. CARDINAL COMMS: Sept. 30 Balance Sheet Upside-Down by $3.9 Million ------------------------------------------------------------------ Cardinal Communications Inc. reported a net loss of $899,608 on $9.9 million of revenues for the third quarter ended Sept. 30, 2006, compared with a $3.4 million net loss on $5.1 million of revenues for the same period in 2005. The increase in revenues is primarily due to increased real estate sales, while the decrease in net loss is primarily the result of lower operating expenses. At Sept. 30, 2006, the company's consolidated balance sheet showed $61 million in total assets, $62.1 million in total liabilities, $1.2 million in committed stock, and $1.5 million in minority interest, resulting in a $3.9 million total stockholders' deficit. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?1682 Going Concern Doubt A.J. Robbins PC in Denver, Colorado, expressed substantial doubt about Cardinal Communications Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's recurring losses, negative cash flows from operations, and working capital and capital deficits. About Cardinal Communications Inc. Cardinal Communications Inc. designs, constructs, and operates diversified communication systems. The systems include voice, video, internet, wireless, and video-on-demand services to customers in multiple dwelling units, newly constructed housing developments, commercial properties, and the hospitality industry. The company also builds residential and commercial properties, insuring a steady stream of telecommunication customers. CARMIKE CINEMAS: Form 10-Q Filing Cues S&P to Affirm B- Rating -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on Columbus, Georgia-based movie exhibitor Carmike Cinemas Inc., and removed the ratings from CreditWatch, where they had been placed with negative implications on March 31, 2006. The outlook is developing. The rating action comes after the company's filing of its third- quarter SEC Form 10-Q within the required window of time despite the change in external auditor. As of Sept. 30, 2006, the company had approximately $438 million in debt and approximately $244 million in capitalized operating leases. "Although the company's recent filing gives us more comfort that further filing delays are less likely, the recent change in external auditor and the company's remaining material weaknesses in internal controls could still lead to further possible restatements and/or filing delays," said Standard & Poor's credit analyst Tulip Lim. The ratings reflect: -- high lease-adjusted leverage; -- weak discretionary cash flow; -- limited liquidity; -- a less modern theater circuit compared with key peers; -- participation in the mature and highly competitive U.S. movie exhibition industry; -- exposure to the fluctuating popularity of Hollywood films; -- regions of operation with narrower film preferences; -- a risk that the change in auditors or the company's weaknesses in internal controls could still result in filing delays or further restatements; and -- Standard & Poor's longer term concern that U.S. movie theater attendance will be pressured by the proliferation of competing entertainment alternatives and shortening periods in theatrical release prior to home video and video-on-demand release. These factors more than outweigh Carmike's decent geographic diversity and its competitive positions in many of its smaller markets. CASCADES INC: To Buy Domtar's 50% Norampac Stake for CDN$560 Mil. ----------------------------------------------------------------- Cascades Inc. will buy Domtar Inc.'s 50% interest in Norampac Inc. for CDN$560 million or $491 million in cash, Frederic Tomesco writes for Bloomberg. According to the source, the purchase deal, which will close by Dec. 31, 2006, covers CDN$360 million in debt and CDN$200 million in equity, including subscription receipts that are convertible to common stock. Bloomberg relates that Norampac's partner, Domtar, will use the proceeds to reduce debt as part of its merger with Weyerhaeuser Co.'s paper unit. As reported in the Troubled Company Reporter on Aug. 24, 2006, Domtar Inc. signed a definitive agreement to combine with Weyerhaeuser's fine paper business and related assets in a $1.35 billion transaction. The new company, to be called Domtar, will have its head office in Montreal, Quebec, while the headquarters of operations will be in Fort Mill, South Carolina. The transaction has been approved by the Boards of Directors of both companies. Shares of both companies, Bloomberg says, were cut short prior to the announcement. Cascades last traded at CDN$13.33 with a gain of 13 cents on the Toronto Stock Exchange, while Domtar traded at CDN$8.22, or 7 cents higher, Bloomberg adds. About Norampac Norampac owns eight containerboard mills and 26 corrugated products plants in the United States, Canada and France. With annual production capacity of more than 1.45 million short tons, Norampac is the largest containerboard producer in Canada and the seventh largest in North America. Norampac, which is also a major Canadian manufacturer of corrugated products, is a joint venture company owned by Domtar Inc. (TSX: DTC) and Cascades Inc. (TSX: CAS). About Domtar Headquartered in Montreal, Quebec, Domtar Inc. (TSX/NYSE: DTC) -- http://www.domtar.com/-- produces uncoated freesheet paper in North America. The Company also a manufactures business papers, commercial printing and publication papers, and technical and specialty papers. Domtar manages according to internationally recognized standards 18 million acres of forestland in Canada and the United States, and produces lumber and other wood products. Domtar has 10,000 employees across North America. The company also has a 50% investment interest in Norampac Inc., a Canadian producer of containerboard. About Cascades Founded in 1964, Cascades Inc. -- http://www.cascades.com/-- produces, transforms, and markets packaging products, tissue paper and fine papers, composed mainly of recycled fibres. Cascades employs nearly 15,600 men and women who work in some 140 modern and flexible production units located in North America, in Europe and in Asia. Cascades' management philosophy, its more than 40 years of experience in recycling, its continued efforts in research and development are strengths which enable the company to create new products for its clients and thus offer superior performance to its shareholders. The Cascades shares trade on the Toronto stock exchange under the ticker symbol CAS. * * * Standard & Poor's Ratings Services rated the Cascades Inc.'s 7-1/4% Senior Notes due 2013 at BB+. CELLNET TECHNOLOGY: Acquisition Offer Cues S&P's Developing Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'B-' corporate credit rating, on Alpharetta, Goergia-based Cellnet Technology Inc. on CreditWatch with developing implications. The CreditWatch placement comes after the report that the company is in the process of being acquired by Sydney, Australia-based Bayard Group, an investment firm specializing in advanced metering and energy measurement. Depending upon how the transaction is effectuated, a variety of rating outcomes is possible, including a withdrawal of the ratings on Cellnet's existing indebtedness. After the acquisition, Cellnet may enter into a merger with one or more of the other advanced metering providers that are under Bayard's ownership. The impact of the new capital structure on the company's financial risk profile has yet to be determined, though Cellnet's existing term loans are expected to be refinanced under the transaction. Standard & Poor's will meet with management to discuss further details and will resolve the CreditWatch placement in an appropriate timeframe. CINEMARK USA: Likely Reduced Leverage Cues S&P's Positive Outlook ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Cinemark Inc. and subsidiary Cinemark USA Inc., which are analyzed on a consolidated basis, to positive from stable. At the same time, Standard & Poor's affirmed its existing ratings on Cinemark, including the 'B' corporate credit ratings. The Plano, Texas-based movie exhibitor had about $3.1 billion in total debt, including capitalized operating leases and pro forma for its new senior secured credit facility, which closed on Oct. 5, 2006. "The outlook revision is based on the potential for the company to reduce leverage from the proceeds of an IPO of National Cinemedia Inc.," said Standard & Poor's credit analyst Tulip Lim. As of Sept. 30, 2006, Cinemark has a 21% interest in National CineMedia Inc., a distributor of cinema on-screen advertising, but should have about a 25% interest in the company pro forma for the acquisition of Century Theatres Inc. If NCM completes an IPO and recapitalizes, Cinemark would receive some of the proceeds. A further key ingredient in Cinemark's upgrade potential is how well the business performs over the near-to-intermediate term. The ratings reflect the company's high lease-adjusted leverage and financial risk, its participation in the mature and highly competitive U.S. motion picture exhibition industry, its exposure to the fluctuating popularity of Hollywood films, the shortening windows between theatrical and DVD/video-on-demand release, and competition from other exhibitors and alternative entertainment sources. These concerns outweigh the benefits of the company's quality theater circuits, above-average profit margins, experienced management team, and asset flexibility provided by its profitable non-U.S. operations. COFFEYVILLE RESOURCES: Moody's Rates New $775 Million Loan at B2 ---------------------------------------------------------------- Moody's Investors Service placed Coffeyville Resources LLC's B2 corporate family rating on review for downgrade and assigned a B2, LGD3, 32% rating to its new $775 million senior first-lien secured term loan under the Loss Given Default notching methodology. Term loan proceeds would refinance $533 million of outstanding debt and fund a large cash dividend. Moody's also assigned B2, LGD3, 32% ratings to CRL's $150 million senior first lien secured revolving credit facility, replacing a $100 million facility that had been rated Ba3 and to its $150 million senior first lien secured letter of credit facility. Moody's also reduced CRL's Probability of Default Rating to B3 from B2. The new ratings are assigned subject to the review for downgrade which Moody's expects to resolve in first quarter 2007 and are subject to Moody's review of the new facilities final terms and conditions. The review results from CRL's imminent increased leverage arising mostly from its large cash dividend to existing private equity owners, including sponsors Goldman Sachs Capital Partners and Kelso Investment Associates. The dividend will constitute a large majority of net proceeds from CRL's proposed approximately $300 million initial public offering. Under the LGD methodology, the lower first lien secured ratings and reduced Probability of Default Rating reflect a pro forma capital structure comprised entirely of first lien bank debt, versus a current structure including a $275 million junior cushion of second-lien secured debt under the first-lien debt. Moody's withdraws the ratings on facilities to be retired by the term loan and million revolver, including the Ba3 rated $225 million first-lien term loan and $50 million delayed draw first lien term loan and B3 rated $275 million second-lien term loan. The review for downgrade reflects post-dividend leverage coupled with: -- inherent potential for delay in CRL's proposed IPO due to a need to first complete its review process with the SEC and due to volatile refining and equity markets; -- much reduced cash flow in the traditionally weak fourth and first quarters; -- further reduced first quarter cash flow due to a scheduled 40 to 45 days of downtime arising from first quarter 2007 turnaround work; -- scheduled proportionately large capital spending that will further boost first half 2007 leverage; and -- the inherent risk of unscheduled downtime that is not uncommon to the refining sector. If CRL's single unit experienced unscheduled downtime or the market is not sufficiently responsive to its IPO, CRL's increased leverage would be higher than expected for its B2 rating. The ratings are supported by: -- expected moderating but still historically sound 2007 refining margins supportive of CRL's leverage and ratings; -- CRL's sound crude oil sourcing tactics and logistics; -- CRL's strong regional refined product distribution logistics and proximity to end-user markets; and, -- generally protective aspects of CRL's crack spread hedge on 60% to 70% of its current production which, assuming CRL avoids material downtime, provides a partial gross margin hedge on that production. Furthermore, CRL's projects are not based on new technology and have added significantly to CRL's value in the past year. As well, CRL's CEO, who started with CRL in June 2005 in connection with its acquisition by GSCP and Kelso, is seasoned in project management and refinery operations. The ratings benefit from: -- a degree of diversification provided by CRL's fertilizer business; -- expected sound fertilizer prices in the near term; -- diversification in the types of crudes CRL refines; and, -- substantial business interruption insurance although it cannot be known at this time how closely business interruption payments would match the timing of contractual obligations. The ratings are restrained: -- by CRL's very high leverage relative to its refining peers; -- volatile markets; and, -- CRL's status as a single refinery with redundancy limited to certain processing units. CRL does not have material redundancy in the important value adding units downstream from those units. The ratings are also restrained by substantial capital spending for Tier II low sulfur gasoline and ultra low sulfur diesel requirements and for projects key to continuing a trend of operating improvements achieved since June 2005. CRL also produces a very low level of high margin premium gasoline and it carries the higher unit costs of comparatively low energy and heat efficiency. CRL carries high leverage measured by Debt/Complexity barrels. Complexity barrels equal a refinery's effective crude oil distillation capacity divided by its Nelson Complexity Index. The Nelson Index is a rough proxy for a refinery's relative capacity to add value to a crude oil barrel above its cost. High complexity refineries tend to be able to run cheaper crude oils and convert them into higher proportions of valuable transportation fuels and light refined products. Moody's views refining leverage measures oriented around EBITDA to have limited value due to the volatility of margins, wide variations in the quality and sustainability of EBITDA, wide working capital in concert with to market conditions driving EBITDA, the sector's substantial refinery maintenance capital spending needs, and heavy sector low sulfur fuels capital spending through at least 2007. CRL owns and operates a stand-alone crude oil refinery and a fertilizer plant located in Coffeyville, Kansas. Management reports that it maintained peak crude oil throughput of approximately 94,000 barrels per calendar day in 2006 to date, slightly ahead of the 93,500 barrels per calendar day anticipated at the time of the 2005 acquisition, and averaged 103,000 barrels per calendar day in second quarter 2006 during the summer transportation fuels build-up. CRL reports that it temporarily attained a peak crude oil run rate of 108,000 barrels per stream day for several days in May 2006. Liquids recovery has also reportedly increased to over 94% as a result of optimized utilization of downstream units, though the average for 2006 to date is comparatively flat at 93.8% versus 93.7% in both 2005 and 2004. CRL also reports higher production within the fertilizer segment as well. While the fertilizer business carries high fixed costs relative to natural gas fed competitors, the fertilizer business has a key cost advantage in being fed by low cost petroleum coke which is gasified to provide feedstock and energy. It benefits from current comparatively strong fertilizer prices driven by competitor's high natural gas costs and still strong demand for urea and liquid nitrogen fertilizer. The plant is also situated in the midst of a major market for nitrogen fertilizer. Capital spending, since the June 2005 acquisition and to date in 2006, approximated $252 million for mandatory ultra low sulfur transportation fuels units and sulfur removal plant, now in operation and for new continuous catalytic reformer and revamps to the catalytic cracking, delayed coking, and crude oil distillation units that CRL estimates will take CRL's peak crude oil throughput to 120,000 barrels per stream day. Moody's believes that 2006 capital spending will be approximate $280 million and that pro-forma interest expense would be in the range of $55 million to $60 million for 2006. Capital spending will continue to be very substantial in 2007 though it appears likely to decline substantially thereafter. In the twelve months ended Sept. 30, 2006, CRL generated approximately $336 million of Adjusted EBITDA, versus $252 million in 2005, and pro-forma EBIT/total throughput barrels above its B- rated peers. This predominantly reflected historic sector crack spreads and crude oil quality price differentials and secondarily CRL's more opportunistic crude oil sourcing, important ongoing operating improvements, and increased direct sales of refined product. Moody's anticipates year-end 2006 EBITDA to be in the $330 million to $340 million range, depending on fourth quarter strength of U.S. and world petroleum product demand. In Moody's view, given the macro and sector operational forces at work, the sector has already seen its cyclical peaks and refining margins will moderate during 2007. The pro-forma capital structure includes approximately $795 million of debt and $206 million of equity. While LTM EBIT/Interest is in the Baa range at 4.8x on a pro-forma basis, CRL's retained cash flow measures on a pro-forma basis are significantly below par for its B2 rating. This is directly related to the large dividend payout during the current recapitalization. Moody's also notes that trade payables or alternative funding needs would increase by in the range of $150 million if J. Aron & Company no longer fronted for CRL's sourcing of 84% of its crude oil and its exposure to crude oil price volatility would also therefore increase. CRL is headquartered in Sugar Land, Texas. COINMACH SERVICE: Merger Proposal Prompts S&P's Negative Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Plainview, New York-based Coinmach Service Corp. to negative from stable. At the same time, existing ratings on CSC, including its 'B' corporate credit rating, were affirmed. For analytical purposes, Standard & Poor's consolidate Coinmach Corp. with its sister companies and base our ratings conclusion on an operational and financial review of CSC. Total debt outstanding at Sept. 30, 2006, was about $655 million. "The outlook revision follows CSC's announcement that it made a merger proposal to Mac-Gray Corp., which we believe reflects a more aggressive financial policy," said Standard & Poor's credit analyst Jean C. Stout. Although Mac-Gray subsequently rejected CSC's offer, under CSC's proposal, Mac-Gray's shareholders would receive between $13.00 and $13.75 per share in cash plus the assumption of debt for an estimated transaction value of about $375 million. A transaction of this size would increase Coinmach's leverage. The ratings on CSC reflect its highly leveraged financial profile and its significant cash flow requirements to fund capital expenditures, interest, and expected dividends. CSC, through its operating company, Coinmach, is the leading supplier of outsourced laundry services for multifamily housing properties in the highly fragmented North American market, with a strong presence in the Northeast, Mid-Atlantic, Southwest, and Southeast regions. The long-term renewable nature of lease contracts provide a barrier to market entry which, together with the relatively constant demand and recession-resistant nature of its services, has provided the company with a relatively stable revenue stream and cash flows. Nevertheless, demand can and has been affected by extended periods of reduced rental occupancy. COMM: Fitch Junks Rating on $6.7 Million Class M Certificates ------------------------------------------------------------- Fitch Ratings downgrades the long-term credit rating and lowers the distressed recovery rating of COMM's commercial mortgage pass- through certificates, series 2000-C1, as: -- $6.7 million class M to 'C/DR6' from 'CCC/DR1'. In addition, Fitch downgrades the long-term credit rating and assigns a DR rating to these class: -- $7.8 million class L to 'CCC/DR1' from 'B-'. Fitch also upgrades these classes: -- $13.5 million class D to 'AAA' from 'AA+'; -- $25.8 million class E to 'AA+' from 'A'; -- $11.2 million class F to 'AA-' from 'BBB+'; -- $26.9 million class G to 'BBB' from 'BB+'; and, -- $6.7 million class H to 'BB+' from 'BB'. In addition, Fitch affirms these classes: -- $0.3 million class A-1 at 'AAA'; -- $542.9 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $38.2 million class B at 'AAA'; -- $39.3 million class C at 'AAA'; -- $6.7 million class J at 'B+'; and, -- $10.1 million class K at 'B'. $6.7 million class N remains at 'C/DR6'. Fitch does not rate the $79 thousand class O certificates. The rating downgrades are the result of increased loss expectations on the specially serviced assets. Fitch projected losses on the specially serviced assets are expected to fully deplete classes N and O and negatively impact classes L and M. The rating upgrades reflect increased credit enhancement due to scheduled amortization and the additional defeasance of eight loans since Fitch's last rating action. As of the Nov. 2006 distribution date, the pool's balance has been reduced 17.5% to $740.8 million from $897.9 million at issuance. To date, 21 loans have defeased, including the largest loan in the pool. Fitch remains concerned about the performance of 14 loans in the pool that have been identified as Fitch Loans of Concern. These include the specially serviced loans and loans with low DSCR and occupancies. Currently, there are six assets in special servicing. The largest asset in special servicing consists of an apartment portfolio that was originally secured by six multifamily properties in MI, one apartment building in OH and one apartment complex in IL. The original loan was split into an A-note portion, which is included in the trust, and a B-note, with a current balance of $14.68 million, which is held outside the trust. Two of the properties were sold at their respective foreclosure sales at no loss to the trust. Receipts from the sales have been used to reduce the outstanding balance on the asset. The remaining six properties have been foreclosed on and are real estate owned. The special servicer is in negotiations with a prospective purchaser for the MI properties with a closing scheduled for first quarter 2007. The second largest asset in special servicing is a 156,259 square foot retail property in Cincinnati, OH and is REO. The asset is completely vacant. The special servicer is marketing the asset for sale. The third largest specially serviced loan is a 289,000 sf industrial warehouse that is located in City of Industry, CA and is in foreclosure. The loan transferred to special servicing in March 2006 due to monetary default and unauthorized transfer. Defeasance of the loan was originally anticipated to occur in May 2006. However, the defeasance fell through and the borrower filed bankruptcy on the date of the foreclosure filing. The special servicer is in litigation with the borrower. Fitch continues to monitor the eighth largest loan in the pool. This loan is secured by three retail/office buildings in various cities in Maryland and Virginia. Two of the three properties have suffered sharp declines in occupancy, resulting in decreased net cash flow in comparison to underwriting. Consolidated occupancy as of June 2006 was 60.2%. Fitch maintains an investment grade credit assessment on the Crystal Park One loan. The Fitch stressed debt service coverage ratio is calculated using servicer provided net operating income less required reserves divided by debt service payments based on the current balance using a Fitch stressed refinance constant. The Crystal Park One loan is secured by a 416,524 sf, 11-story office building located in the Crystal City section of Arlington, Virginia. This loan also has an A and B-note structure, where the B-note, with a current balance of $12.7 million, is held outside the trust. Occupancy at the property has rebounded to 92% as of June 2006 from 63% at year-end 2005. Although current occupancy is below the underwritten occupancy of 99%, leasing activity remains strong and rental rates of the recently leased space are inline with market rents. Fitch will continue to monitor the performance of the collateral. COMM: Fitch Holds B+ Rating on $13.4 Million Class V-GP Certs. -------------------------------------------------------------- Fitch upgrades these classes of COMM 2005-FL11 Commercial Mortgage Pass-Through Certificates: -- $36.2 million class B to 'AAA' from 'AA+'; -- $41.2 million class C to 'AAA' from 'AA'; -- $28.0 million class D to 'AAA' from 'AA-'; -- $36.2 million class E to 'AA+' from 'A+'; -- $32.9 million class F to 'AA' from 'A'; -- $28.0 million class G to 'A+' from 'A-'; -- $24.7 million class H to 'A' from 'BBB+'; and, -- $28.0 million class J to 'BBB+' from 'BBB'. These classes are affirmed: -- $448.4 million class A-1 at AAA; -- $320.0 million class A-J at AAA'; -- $29.6 million class K at 'BBB-'; -- $24.7 million class L at 'BBB-'; -- $5.0 million class M-COP at 'BBB-'; and, -- Interest only classes X-1, X-2-CB, X-2-DB, X-2-SG, X-3-CB, X-3-DB, and X-3-SG 'AAA'. These are also affirmed: -- $10.8 million class M-GP at 'AA+', -- $18.8 million class N-GP at 'AA-'; -- $22.2 million class O-GP at 'A+' -- $28.5 million class P-GP at 'A-' -- $15.4 million class Q-GP at 'BBB+'; -- $21.1 million class R-GP at 'BBB'; -- $28.6 million class S-GP at 'BBB-'; -- $31.9 million class T-GP at 'BB+' -- $32.4 million class U-GP at 'BB'; and, -- $13.4 million class V-GP at 'B+'. Class M-SHI has paid in full. The upgrades are based on the increases to credit enhancement levels resulting from the payoff of five loans in the transaction, three of which were top ten loans, as well as the partial paydown of one other loan. As of the Nov. 2006 distribution date, 35.7% of the transaction has paid off, with the balance of the transaction at $1.08 billion, down from $1.68 billion at issuance. The servicer provided updated financial and occupancy information as of third quarter 2006 for the majority of loans in the transaction. Twelve floating rate loans remain: -- Toys R Us DE Portfolio (23.5%); -- SHC REIT Hotel Portfolio (17.0%); -- Whitehall/Starwood Golf Portfolio (18.3%); -- Crescent Office Portfolio (10.2%); -- Toys R Us MPO Portfolio (8.0%); -- DDR Macquarie/Mervyn's Portfolio (4.2%); -- Camelback Colonnade (3.8%); -- Rockwall I & II (3.8%); -- Universal City Hilton (3.1%); -- Airport Technology Park (3.0%); -- Long Beach Hilton (2.8%); and, -- Crossgates Commons (2.4%). One loan, Rockwall I & II, is on the servicer's watch list because of a decline in performance. As of Oct. 2006, occupancy at that property had declined to 78% from 82% at issuance. The balance of the trust portion of the SHC REIT Hotel Portfolio has been reduced to $183.7 million from $220 million at issuance, with the release of two properties All pooled whole loans, A notes, or senior participations of whole loans in the trust have credit characteristics consistent with investment-grade obligations. Five loans, representing 81% of the collateral, are backed by properties broadly dispersed across the US. Among property types, the loans are distributed as: -- Retail: 42.0%; -- Hotel: 22.8%; -- Office: 16.9%; and, -- Other (Golf Courses): 18.3%. Eleven of the twelve remaining loans have junior non-trust debt or additional mezzanine debt. DEVELOPERS DIVERSIFIED: Inks Common Share Forward Sale Agreements ----------------------------------------------------------------- Developers Diversified Realty Corporation has agreed to sell 11,599,134 of its common shares in an at-the-market public offering underwritten by Goldman, Sachs & Co. In connection with the forward sale agreements, the offering will consist of 5,799,568 common shares to be borrowed and sold by Deutsche Bank Securities Inc., 2,899,783 common shares to be borrowed and sold by Merrill Lynch & Co., Inc., and 2,899,783 common shares to be borrowed and sold by J.P. Morgan Securities Inc. in each case, to Goldman, Sachs & Co. as book-running manager and underwriter in this offering. In connection with the offering of its common shares, Developers Diversified has entered into forward sale agreements with each of Deutsche Bank, an affiliate of Merrill Lynch & Co., Inc. and an affiliate of J.P. Morgan Securities Inc. Pursuant to the terms of the forward sale agreements, and subject to its right to elect cash settlement, Developers Diversified has agreed to sell, upon physical settlement of such forward sale agreements, an aggregate of 11,599,134 of its common shares to Deutsche Bank, an affiliate of Merrill Lynch & Co., Inc. and an affiliate of J.P. Morgan Securities Inc. Developers Diversified intends to use the proceeds it expects to receive upon any physical settlement of the forward sale agreements to fund a portion of its previously announced acquisition of Inland Retail Real Estate Trust, Inc. Developers Diversified will not receive any proceeds from the sale of its common shares until settlement of the forward sale agreements, which is expected to occur on or before Sept. 8, 2007. The securities will be offered and sold pursuant to an effective registration statement filed with the Securities and Exchange Commission. A copy of the prospectus relating to these securities may be obtained, when available from: Goldman, Sachs & Co. 85 Broad Street New York, NY 10004 Fax: 212-902-9316 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 BB+ preferred stock rating. DOMTAR INC: Sells 50% Norampac Stake to Cascades for CDN$560 Mil. ----------------------------------------------------------------- Cascades Inc. will buy Domtar Inc.'s 50% interest in Norampac Inc. for CDN$560 million or US$491 million in cash, Frederic Tomesco writes for Bloomberg. According to the source, the purchase deal, which will close by Dec. 31, 2006, covers CDN$360 million in debt and CDN$200 million in equity, including subscription receipts that are convertible to common stock. Bloomberg relates that Norampac's partner, Domtar, will use the proceeds to reduce debt as part of its merger with Weyerhaeuser Co.'s paper unit. As reported in the Troubled Company Reporter on Aug. 24, 2006, Domtar Inc. signed a definitive agreement to combine with Weyerhaeuser's fine paper business and related assets in a $1.35 billion transaction. The new company, to be called Domtar, will have its head office in Montreal, Quebec, while the headquarters of operations will be in Fort Mill, South Carolina. The transaction has been approved by the Boards of Directors of both companies. Shares of both companies, Bloomberg says, were cut short prior to the announcement. Cascades last traded at CDN$13.33 with a gain of 13 cents on the Toronto Stock Exchange, while Domtar traded at CDN$8.22, or 7 cents higher, Bloomberg adds. About Norampac Norampac owns eight containerboard mills and 26 corrugated products plants in the United States, Canada and France. With annual production capacity of more than 1.45 million short tons, Norampac is the largest containerboard producer in Canada and the seventh largest in North America. Norampac, which is also a major Canadian manufacturer of corrugated products, is a joint venture company owned by Domtar Inc. (TSX: DTC) and Cascades Inc. (TSX: CAS). About Cascades Founded in 1964, Cascades Inc. -- http://www.cascades.com/-- produces, transforms and markets packaging products, tissue paper and fine papers, composed mainly of recycled fibres. Cascades employs nearly 15,600 men and women who work in some 140 modern and flexible production units located in North America, in Europe and in Asia. Cascades' management philosophy, its more than 40 years of experience in recycling, its continued efforts in research and development are strengths which enable the company to create new products for its clients and thus offer superior performance to its shareholders. The Cascades shares trade on the Toronto stock exchange under the ticker symbol CAS. About Domtar Headquartered in Montreal, Quebec, Domtar Inc. (TSX/NYSE: DTC) -- http://www.domtar.com/-- produces uncoated freesheet paper in North America. The Company also a manufactures business papers, commercial printing and publication papers, and technical and specialty papers. Domtar manages according to internationally recognized standards 18 million acres of forestland in Canada and the United States, and produces lumber and other wood products. Domtar has 10,000 employees across North America. The company also has a 50% investment interest in Norampac Inc., a Canadian producer of containerboard. DOMTAR INC: DBRS Confirms Unsecured Notes Rating at BB (low) ------------------------------------------------------------ Dominion Bond Rating Service maintained the ratings of Domtar Inc. at Under Review with Developing Implications following the announcement that Domtar will sell its 50% equity interest in Norampac Inc. to Cascades Inc. for CDN$560 million in cash. The Unsecured Notes and Debentures are rated at BB (low) and the Preferred Shares at Pfd-5 (high). The sale is likely to close by the end of 2006, with the proceeds expected to be contributed to reduce opening indebtedness in the "new Domtar." DBRS views the sale of Norampac as positive to Domtar's financial profile. DBRS will establish a rating for the new Domtar in first quarter 2007 prior to the expected closing of the transaction between Domtar and Weyerhaeuser Company's fine paper and related assets, to form a new U.S. company that will continue to be named Domtar. DBRS views the price that Domtar received for its stake in Norampac as reasonable, and the sale was not entirely unexpected. On a pro forma basis, the transaction is positive to Domtar's financial profile, as the modest reduction in earnings from Norampac is more than offset by the expected reduction in debt. Cash related to the Norampac sale, in addition to U.S. softwood lumber duty refunds, is expected to reduce opening indebtedness in the new Domtar by approximately $645 million. As a result, the original debt target of $3.1 billion for the new Domtar is expected to decline by roughly 20% to $2.5 billion. However, the debt structure and accounting equity of the Company has not been finalized and, as such, debt-to-capital and coverage ratios cannot be determined at this point. DURA AUTOMOTIVE: Taps Brunswick as Communications Consultants ------------------------------------------------------------- DURA Automotive Systems, Inc. and its debtor affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Brunswick Group LLC as corporate communications consultants, nunc pro tunc to Oct. 30, 2006. Keith Marchiando, chief financial officer, notes that Brunswick has extensive experience in corporate and crisis communications. The Company says that since its founding in 1987, Brunswick has provided public relations services to companies experiencing financial and operating difficulties. It has recently provided services in a number of large and mid-sized bankruptcy restructurings. As communications consultants, Brunswick will: (a) prepare materials to be distributed to the Debtors' employees explaining the impact of the Reorganization Cases, (b) draft correspondence to creditors, vendors, employees and other interested parties regarding the Reorganization Cases, (c) prepare written guidelines for head office and location managers to assist them in addressing employee and customer concerns, (d) prepare news releases for dissemination to the media for distribution, (e) interface and coordinate media reports to contain the correct facts and the Debtors' perspective as an ongoing business, (f) assist the Debtors in maintaining their public image as a viable business and going concern during the Chapter 11 reorganization process, (g) assist the Debtors, and develop internal systems, in handling inquiries, (h) coordinate public relations services with a third party making an investment in the Debtors, (i) perform other strategic communications consulting services as may be required by the Debtors in the Reorganization Cases, and (j) provide additional public relations services appropriate and necessary to the benefit of the Debtors' estates. The Debtors will pay Brunswick based on the firm's hourly rates: Professional Hourly Rate ------------ ----------- Partner $700 Director $550 Associate $450 AD $325 Exec $225 The Debtors will also reimburse Brunswick for its actual and necessary out-of-pocket expenses. Production-related expenditures -- e.g., photography, printing, etc. -- will be charged to the Debtors at cost. The Debtors have made prepetition payments totaling $227,917 to Brunswick in the year preceding the bankruptcy filing date. The payments have been applied to outstanding invoices and on account of fees and expenses incurred in providing services to the Debtors in connection with the restructuring activities. The payments received include: (a) $91,495 for fees and expenses incurred for periods before October 13, 2006, and (b) $136,422 on October 24, 2006. The Debtors do not owe Brunswick any amount for services performed or expenses incurred prior to its bankruptcy filing and thus Brunswick is not a prepetition creditor of the Debtors. Robert Mead, a partner at Brunswick, assures the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, and it does not hold nor represent any interest adverse to the Debtors or their estates. 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. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Ontario Court Grants Foreign Recognition Order --------------------------------------------------------------- The Honorable Justice Sidney N. Lederman of the Ontario Superior Court of Justice (Commercial List) in Canada ruled that proceedings commenced by Dura Automotive Systems, Inc., and certain of its affiliates before the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 of the U.S. Bankruptcy Code are a "foreign proceeding" as defined in subsection 18.6(1) of the Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended. Justice Lederman also holds that until and including Dec. 15, 2006, creditors and other parties-in-interest subject to the jurisdiction of the Canadian court are enjoined and restrained from initiating or continuing actions in any court or tribunal in Canada against the Debtors or that affect their ability to carry on their business. Any actions against the Debtors or their former, current or future officers and directors are stayed. Suppliers and other parties providing service to the Debtors are barred from discontinuing, failing to honor, altering, interfering with, repudiating or ceasing to perform any right, renewal right, contract, agreement, license or permit held by the Debtors, absent their written consent or leave of the CCAA Court. The CCAA Court authorizes the Debtors to enter into a postpetition Senior Secured Super-priority DIP Term Loan and Guaranty Agreement with Goldman Sachs Credit Partners, L.P., as agent; and a Senior Secured Super-priority DIP Revolving Credit and Guaranty Agreement with General Electric Capital Corp., as agent. Goldman Sachs and GECC are granted liens and security interests on the Debtors' property to secure repayment of the DIP Loans. The Debtors are also permitted to continue to utilize their central cash management system currently in place. D&O Indemnification The CCAA Court authorizes the Debtors to indemnify their directors and officers from all claims and causes of action with respect to any liabilities or obligations related to their capacities as directors and officers of the Debtors, except in the event of the directors and officers' breach of their fiduciary duties or grossly negligent or willful misconduct. Justice Lederman also grants the directors and officers of Dura Automotive's Canadian affiliates a charge on the Applicants' Property not exceeding US$2,500,000 in the aggregate, as security for the Applicants' indemnification obligations. Information Officer The CCAA Court appoints RSM Richter, Inc., as the Debtors' information officer. RSM will report to the Court at least once every three months on the status of the U.S. bankruptcy proceedings and other material information. As information officer, RSM will not take possession of the Debtors' property nor take part in the management or supervision of the Debtors' business. Nothing in the Initial CCAA Order, however, will prevent RSM from acting as interim receiver, receiver, manager, monitor under the CCAA, or trustee in bankruptcy of the Debtors, or their business or property. RSM will be paid on a monthly basis for its services. The Applicants are authorized to pay a CDN$25,000 retainer to RSM as security for payment of its fees and disbursements outstanding from time to time. The CCAA Court also grants RSM an administration charge not exceeding CDN$250,000 in the aggregate as security for its professional fees and disbursements incurred. The Administration Charge will have priority over the DIP Lender's Charge and the Directors' Charge, in that order. The Administration Charge, DIP Lender's Charge and Directors' Charge will rank in priority to all Encumbrances, other security interests, trusts, liens and charges on the Debtors' property in favor of other parties, excluding: 1. existing purchase-money security interests and equipment financing leases registered in accordance with applicable personal property security legislation and recognized under the legislation as being entitled to priority over the security in place as of November 1, 2006; 2. with respect to any real property, (a) existing by-laws and regulations as to the use of the Debtors' property; (b) notices of lease; (c) subdivision, site plan control, development, servicing and other similar agreements with municipal and other governmental authorities; (d) permits, rights of access or user licenses, easements, and rights of way; 3. future purchase-money security interests registered in accordance with applicable personal property security legislation and recognized under the legislation as being entitled to priority; and 4. Encumbrances arising by operation of law -- other than as a result of a default in payment or performance of an obligation by the Debtors -- without any grant of a security interest by the Debtors, and that are given priority over prior fixed charges by statute or law in the event of the Debtors' bankruptcy. A full-text copy of the Initial Recognition Order is available at no charge at http://ResearchArchives.com/t/s?15c3 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. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ECHOSTAR DBS: Posts $134.1 Mil. Net Income for 3rd Quarter of 2006 ------------------------------------------------------------------ Echostar DBS Corporation reported net income decreased by $95.8 million or 41.6% to $134.1 million for the quarter ended Sept. 30, 2006, from $229.9 million for the same quarter in 2005. Total revenue increased by $300 million to $2.4 billion for the quarter ended Sept. 30, 2006 from $2.1 billion for the same quarter in 2005. The increase in total revenue was due to a $363.4 million increase in subscriber-related revenue. The company had, as of Sept. 30, 2006, approximately 12.755 million DISH Network subscribers compared to approximately 11.710 million subscribers at Sept. 30, 2005, an increase of 8.9%. A substantial majority of its gross new subscribers are acquired through its equipment lease program. Subscriber-related revenue totaled $2.3 billion for the three months ended Sep. 30, 2006, an increase of $363.5 million or 18% compared to the same period in 2005. The increase was attributable to DISH Network subscriber growth and an increase in "ARPU". Monthly average revenue per subscriber was $62.86 during the three months ended Sept. 30, 2006, versus $57.87 during the same period in 2005. The $4.99 or 8.6% increase in ARPU was primarily attributable to price increases in February 2006 on some of its packages, smaller monthly programming discounts than in its 2005 promotions, higher equipment rental fees resulting from increased penetration of its equipment leasing programs, fees for DVRs, revenue from increased availability of standard and high definition local channels by satellite and fees earned from its DishHOME Protection Plan. For the three months ended Sept. 30, 2006, equipment sales totaled $74.1 million, a decrease of $21 million or 22.1% compared to the same period during 2005. The decrease principally resulted from a decline in sales of non-DISH Network digital receivers and related components to international customers. Subscriber-related expenses totaled $1.2 billion during the three months ended Sept. 30, 2006, an increase of $224.8 million or 22.5% compared with the same period in 2005. Satellite and transmission expenses totaled $36.3 million during the three months ended Sept. 30, 2006, a $2.5 million or 7.3% increase compared with the same period in 2005. The increase primarily resulted from certain operational costs associated with its capital leases of AMC-15 and AMC-16. Cost of sales - equipment totaled $58.7 million during the three months ended Sept. 30, 2006, a decrease of $10.2 million or 14.8% compared with the same period in 2005. The decrease resulted from a decline in sales of non-DISH Network digital receivers and related components to international customers. Cost of sales - equipment represented 79.3% and 72.5% of equipment sales, during the three months ended Sept. 30, 2006 and 2005, respectively. Subscriber acquisition costs totaled $439.5 million for the three months ended Sept. 30, 2006, an increase of $36 million or 8.9% compared with the same period in 2005. Earnings before interest, taxes, depreciation and amortization was $570.3 million during the three months ended Sept. 30, 2006, an increase of $68.3 million or 13.6% compared with the same period in 2005. Income tax provision was $79.5 million during the three months ended Sept. 30, 2006 compared to a benefit of $5.5 million during 2005. The income tax benefit for the three months ended September 30, 2005 included an approximate $77.8 million credit resulting from the reversal of our recorded valuation allowance. The three months ended September 30, 2006, includes a credit of $4.8 million related to amended state filings. Our effective tax rate going forward is expected to be approximately 37.8% of income before income taxes Distant Network Litigation On Oct. 20, 2006, a District Court in Florida entered a permanent nationwide injunction prohibiting the company from offering distant network channels to its consumers effective Dec. 1, 2006. Distant networks are ABC, NBC, CBS and Fox network channels, which originate outside the community where the consumer who wants to view them, lives. Approximately 900,000 of its customers currently subscribe to distant network channels, generating approximately $3 million of gross distant network channel revenue per month. The company disclosed that it is pursuing judicial, legislative and other avenues to attempt to protect access to these channels by its customers. About Echostar DBS EchoStar DBS Corporation is a holding company and a wholly-owned subsidiary of EchoStar Communications Corporation. Headquartered in Englewood, Colorado, EchoStar Communications Corporation provides direct broadcast satellite pay television services to approximately 12 million subscribers. * * * As reported in the Troubled Company Reporter on Oct 4, 2006, Fitch Ratings assigned a 'BB-' rating to Echostar DBS Corporation's $500 million offering of 7% senior notes due 2013. The notes will rank equally with the other debt outstanding at Echostar DBS Corporation. The Issuer Default Rating for Echostar Communications Corporation and its wholly owned subsidiary, Echostar DBS Corporation, is 'BB-'. The Rating Outlook is Stable. As reported in the Troubled Company Reporter on Oct. 2, 2006, Moody's Investors Service affirmed all ratings including the Ba3 corporate family and SGL-1 liquidity rating for EchoStar Communications Corporation and its subsidiary EchoStar DBS Corporation. As reported in the Troubled Company Reporter on Oct. 2, 2006, Standard & Poor's Ratings Services assigned a 'BB-' rating to Echostar DBS Corp.'s aggregate $500 million senior notes with maturities of 2013 and 2016. ECUITY INC: Sept. 30 Balance Sheet Upside-Down by $12.9 Million --------------------------------------------------------------- Ecuity Inc. posted a $49,120 net loss on $492,228 of net revenues for the three months ended Sept. 30, 2006, compared to a $736,689 net loss on $669,306 of net revenues for the same period in 2005. At Sept. 30, 2006, the company's balance sheet showed $1.3 million in total assets and $14.3 million in total liabilities, resulting in a $12.9 million stockholders' deficit. The company's Sept. 30 balance sheet also showed strained liquidity with $210,361 in total current assets available to pay $12.2 million in total current liabilities. The working capital deficit decreased to $12 million at Sept. 30, 2006, from a deficit of $12.4 million as of June 30, 2006, primarily as a result of the $766,469 gain on the change in fair value of the derivative instruments liabilities. For the three month period, cash decreased by $12,250, net accounts receivable decreased by $22,949, accounts payable increased by $80,652, and deposits on advance billings to customers decreased by $12,660. A full-text copy of the company's quarterly report is available for free at http://researcharchives.com/t/s?165e Going Concern Doubt De Leon & Company, PA, expressed substantial doubt on Y3k Secure Enterprise Software Inc.'s ability to continue as a going concern after it audited the company's financial statements for the fiscal years ended June 30, 2006, and 2005. The auditing firm pointed to the company's current year losses from operations of $5,648,456, net capital deficiency of $12,976,547, and cumulative deficit of $26,367,167 at June 30, 2006. About Ecuity Inc. Based in Seattle, Washington, Ecuity Inc. fka Y3k Secure Enterprise Software Inc. is a facilities-based telecommunication carrier providing Voice over Internet Protocol service offerings as well as legacy telecommunication services. Ecuity currently provides VoIP services over FTTP including fiber to residences and businesses, VoIP over WiFi, Business VoIP Services including IP- PBX and IP-Centrix solutions, "SmartCall" VoIP services utilizing a downloadable soft-client on a customer's PC or other Windows compatible computing device, and conference calling. EMISPHERE TECH: Equity Deficit Narrows to $5.5 Million at Sept. 30 ------------------------------------------------------------------ Emisphere Technologies Inc.'s balance sheet at Sept. 30, 2006 showed total assets of $34.8 million and total liabilities of $40.3 million resulting to a total stockholders' deficit of $5.5 million. Total stockholders' deficit at Dec. 31, 2005 stood at $14.8 million. For the third quarter ended Sept. 30, 2006, the company reported a net loss of $8.1 million, compared with a net loss of $9.6 million for the comparable quarter in 2005. The decline in net loss was caused by the increase in fair value of derivative instruments by $2 million compared to the same quarter in the prior year primarily due to the rise in the stock price from $4.50 to $8.45 at Sept. 30, 2005 and 2006, respectively, and by the increase in other income as a direct result of the increase in interest income related to higher investments. Revenue for the third quarter ended Sept. 30, 2006 was $60,000, versus revenue of $431,000 for the same quarter in 2005. Revenue decreased for the quarter due to the decrease in revenue associated with the company's Roche and Novartis collaborations. A full text copy of the company's quarterly report on Form 10-Q may be viewed at no charge at http://ResearchArchives.com/t/s?167f Going Concern Doubt PricewaterhouseCoopers LLP raised substantial doubt about Emisphere Technologies, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's operating losses, limited capital resources and significant future commitments. About Emisphere Technologies Headquartered in Tarrytown, New York, Emisphere Technologies Inc. -- http://www.emisphere.com/-- is a biopharmaceutical company charting new frontiers in drug delivery. The Company develops oral forms of injectable drugs, either alone or with corporate partners, by applying its proprietary eligen(R) technology to these drugs. ENDURANCE SPECIALTY: S&P Upgrades Rating on Preferred Stock ----------------------------------------------------------- Standard & Poor's Ratings Services raised its counterparty credit and financial strength ratings on Endurance Specialty Holdings Ltd.'s operating companies to 'A' from 'A-'. At the same time, Standard & Poor's raised its counterparty credit and senior debt ratings on Endurance Specialty Holdings Ltd. to 'BBB+' from 'BBB' and raised its preferred stock rating to 'BBB-' from 'BB+.' The outlook on all these ratings is stable. The upgrade on Endurance reflects its strong competitive position based on its global market presence, scale, and diversified insurance and reinsurance platforms, in particular the increased scale within its U.S. excess and surplus platform. In addition, Endurance maintains very strong capital adequacy measuring a capital adequacy ratio of 152% as of third-quarter 2006, above expectations for the rating. Endurance is expected to measure strong operating performance prospectively, and year-to date third-quarter 2006 Endurance has measured a combined ratio of 87% and net income of $299 million versus a loss of $220 million in 2005 on a combined ratio of 124%, so all of 2005's losses have been replenished. Also, Endurance's strong financial flexibility was highlighted with its ability to raise $600 million in debt, perpetual preferred, and common equity in 2005. In contrast, Endurance is expected not to perform as well as concentrated property companies in years when there are low catastrophes, as Endurance had 46% in casualty writings in 2005. Furthermore, management underestimated the volatility and correlations inherent within its large national commercial per risk accounts and property and offshore marine exposure correlations in 2005, but the company has moved to non-renew or cancel these exposures. Based on Endurance's strong enterprise risk management, Standard & Poor's expect prospective volatility to be reduced. However, while fully reflected in the new rating, Endurance does still write severity risks that could create earnings and capital volatility, and this limits future prospects for additional favorable rating actions. The outlook is based on Standard & Poor's expectation that Endurance will maintain strong earnings in 2007, potentially net income near $400 million before significant catastrophe losses on a combined ratio of about 90%. To the extent that Endurance does not maintain capital adequacy and combined ratio thresholds of more than 140% and about 95%, respectively, the outlook may be revised to negative. From a qualitative standpoint, Endurance has built-out its competitive position in the insurance and reinsurance markets and the company's growth in niche products is expected to continue. Expectations are that debt leverage and debt plus preferred leverage will be maintained within rating expectations of 20% and 35%, respectively, in support of nonstandard holding company notching. Considering the upgrade, a positive outlook in 2007 is unlikely. ENRON CORP: Can Enter Into Settlement Pacts With Del Mar & ASC -------------------------------------------------------------- The Honorable Arthur Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York approved settlement agreements among Reorganized Enron Corp. and its debtor-affiliates, Del Mar Industries Inc., and American Services Corporation. According to Evan R. Fleck, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, EESI were parties to various prepetition contracts with Del Mar and ASC relating to the Debtors' supply of power and other services. Certain disputes arose under the contracts. On Oct. 29, 2004, EESI filed Adversary Proceeding No. 04-04437 against ASC. Following negotiations regarding the Contracts, the parties entered into the settlement agreements and agreed that: (1) Del Mar and ASC will make settlement payments to the applicable Reorganized Debtor or Debtor; (2) they will mutually release each other from all claims related to the contracts; (3) all liabilities scheduled in favor of Del Mar and ASC will be deemed irrevocably withdrawn, with prejudice, and to the extent applicable expunged; and (4) the Adversary Proceeding will be dismissed with prejudice. 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. 181 and 183; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENRON CORP: Can Enter Into Settlement Pacts With Six Parties ------------------------------------------------------------ The Honorable Arthur Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York approved six separate settlement agreements between the reorganized Enron Corp. and its debtor- affiliates and these parties: Debtor Party Customer ------------ -------- Enron North America Corp. Alabama Gas Corporation & Energen Resources Corporation Enron Energy Services, Inc. Pacific Telesis Group, nka AT&T Teleholdings Inc. EESI Bay City Flower Co. Inc. ENA Total International Limited Enron Power Marketing, Inc. Mississippi Delta Energy Agency Enron Energy Services North America, Inc. T Group America Inc. As reported in the Troubled Company Reporter on Nov. 24, 2006, the Reorganized Debtors and the Customers were parties to various prepetition contracts relating to the Debtors' supply of power and other services to the Customers. Enron Corp. issued various guarantees as credit support for the Contracts with Alabama Gas and Energen Resources. Certain disputes between the Debtors and the Customers arose under the prepetition contracts. Consequently, the Debtors commenced adversary proceedings against certain Customers. Following negotiations regarding the Contracts, the parties entered into the settlements agreements and agreed that: (1) the Customers will make a settlement payment to the applicable Reorganized Debtor or Debtor; (2) they will mutually release each other from all claims related to the Contracts; (3) all liabilities scheduled in favor of Alabama Gas and Energen Resources, Pacific Telesis, and Bay City will be deemed irrevocably withdrawn, with prejudice, and to the extent applicable expunged; and (4) the Adversary Proceedings will be dismissed. The settlement agreement with Alabama Gas and Energen Resources also provides that all claims filed by Alabama and Energen against ENA and the applicable Reorganized Debtor in connection with the Contracts will be deemed withdrawn, with prejudice, and to the extent applicable expunged, provided, however, that Claim Nos. 7276 and 7277 will each be reduced and allowed for $12,500,000. 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: Capital One Has Until January 17 to File Objections ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Louisiana approved Capital One, National Association, formerly known as Hibernia National Bank's request to extend its deadline to file written objections to any disclosure statements filed in Entergy New Orleans, Inc.'s Chapter 11 case until Jan. 17, 2007. The deadline for all parties to file written objections to ENOI's amended disclosure statement expired on November 29, 2006. The hearing on the approval of any disclosure statements has been rescheduled to Jan. 25, 2007. Patrick Johnson, Jr., Esq., at Lemle & Kelleher, L.L.P., in New Orleans, Louisiana, tells the Court that ENOI does not oppose the deadline extension requested by Capital One. 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. 29; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERGY NEW ORLEANS: Court Approves Certain Claims Transfer ----------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Louisiana has approved the transfer of the claims of Magnus Energy and Security Support to their transferees. From Nov. 2 to 20, 2006, the Bankruptcy Clerk recorded 12 claim transfers in Entergy New Orleans, Inc.'s Chapter 11 case: Creditor Transferee Claim Amount -------- ---------- ------------ Magnus Energy Deutsche Bank $2,226,291 Marketing, Ltd. Securities, Inc. Cottonwood Energy Deutsche Bank 787,827 Company LP Securities, Inc. Security Support Redrock Capital 19,196 Services Security Support Redrock Capital 7,570 Services American Eagle Door Trade-Debt.Net Inc. 4,306 & Glass Co LLC Flat Busters Trade-Debt.Net Inc. 943 of LA LLC Salathe Oil Co Inc. Trade-Debt.Net Inc. 786 AAS Co. Trade-Debt.Net Inc. 545 Ogden Museum Trade-Debt.Net Inc. 350 of Southern Art French Quarter Trade-Debt.Net Inc. 250 Festivals Inc. LA Spring Water Trade-Debt.Net Inc. 229 Merlin J & Trade-Debt.Net Inc. 167 Dorothy K. Lehman The claims transfer notices were filed by: -- Deutsche Bank Securities, Inc. 60 Wall Street, 2nd Floor New York, NY 10005 Attn: Matt Doheny Tel: (212) 250-5760 -- Redrock Capital Partners, LLC 111 S. Main Street, Ste C11 P.O. Box 9095 Breckenridge, CO 80424 Attn: Christopher Todd belitz Tel: (970) 547-9065 -- Trade-Debt.Net Inc. P.O. BOX 1487 West Babylon, NY 11704 Salathe's Objection Salathe Oil objects to the transfer of its claim to Trade- Debt.Net. The company wishes to remain as the creditor of the claim in ENOI's Chapter 11 case. 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) ENVIRONMENTAL LAND: Can Hire Go Real Estate as Real Estate Agent ---------------------------------------------------------------- Environmental Land Technology Ltd. obtained authority from the U.S. Bankruptcy Court for the District of Columbia to employ Go Real Estate Inc. as its real estate agent. Go Real Estate will sell the Debtor's real property in: a) Washington County, Utah: Tax Serial Number Acreage ----------------- ------- 6810-D-1 266.94 6225-Tr-2 274.40 SG-5-2-17-2001 110.15 6600-NP-1 321.80 SG-5-TR-1-A 34.32 6810-D-2 287.62 6225-TR-1-A 115.00 ------- Total: 1,379.22 b) St. George, Utah: Tax Serial Number Acreage ----------------- ------- SG-54-2-16-2304 24.40 SG-54-2-16-2304 6.60 ------- Total: 31.00 Pursuant to a Listing Agreement & Agency Disclosure between the Debtor and the Firm, Go Real Estate will receive a 2% commission from the sale or exchange value of any of the Debtor's property up to a ceiling of $600,000. The Firm has already received commissions for some properties that have been sold. Dallin Gardner, the owner, president, and principal broker of Go Real Estate Inc. assured the Court that the Firm is disinterested pursuant to Section 101(14) of the Bankruptcy Code. Headquartered in Washington, District of Columbia, Environmental Land Technology, Ltd., filed for chapter 11 protection (Bankr. D.C. Case No. 04-00926) on June 8, 2004. Donald A. Workman, Esq., at Foley & Lardner, represents the Company in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed over $10 million in estimated assets and over $50 million in estimated liabilities. EQUITABLE PARTNERS: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Equitable Partners II LLC 320 South Madison Avenue Monroe, GA 30655 Bankruptcy Case No.: 06-30909 Chapter 11 Petition Date: December 4, 2006 Court: Middle District of Georgia (Athens) Debtor's Counsel: Ernest V. Harris, Esq. Harris & Liken, L.L.P. P.O. Box 1586 Athens, GA 30603 Tel: (706) 613-1953 Fax: (706) 613-0053 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Three Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Hawkeye Land Development, Inc. $275,000 1470 Monroe Drive Monroe, GA 30655 John Herring $250,000 114 Gary Drive Milledgeville, GA 31061 Cheyenne Bagley $41,970 3040 Bold Springs Road Monroe, GA 30655 ERA AVIATION: Court Confirms Amended Ch. 11 Reorganization Plan --------------------------------------------------------------- The Hon. Donald MacDonald IV of the U.S. Bankruptcy Court for the District of Alaska confirmed Era Aviation Inc.'s Amended Chapter 11 Plan of Reorganization. Judge MacDonald determined that the Amended Plan satisfies the 13 standards for Confirmation under Section 1129(a) of the Bankruptcy Code. Overview of Amended Plan The Debtor's Amended Plan provides that the existing stock in the Debtor held by CS Equity LLC and Era Aviation Investment Group LLC will be cancelled on the effective date, and a new corporation will acquire all the Debtor's stock in return for $1 million cash. The Debtors will use the proceeds for working capital and to pay its debt obligations on the Effective Date. According to the Plan, to provide the Debtor with additional liquidity after the Effective Date, several Era Aviation Investment members will lend to the Debtor up to $1.5 million under a revolver agreement. The loan will carry 6% simple interest on the amount of funds actually borrowed by the Debtor. Pursuant to the Amended Plan, the Debtor developed a Management and Employee Incentive Program and a Management Retention Program to provide the Debtor's management and employees a tangible incentive to reach the projected earnings goals. Treatment of Claims Under the Amended Plan, Administrative creditors, including U.S. Trustee quarterly fees, Court-approved professional fees and other claims, will be paid in full on the effective date. CapitalSource Finance LLC will retain all of its liens and receive full payment. The Seacor Entities consisting of Seacor Holdings Inc., its holding subsidiary Offshore Aviation Inc., and Offshore's operating subsidiaries Era FBO LLC and Era Helicopters LLC will withdraw, with prejudice, their proofs of claim against Era Aviation Investment and will have no any claim against EAIG. The parties will dismiss the claims asserted in the pending Washington state court action, King County Superior Court, Case No. 05-2- 37997-9 SEA. Claims No. 128, 129 and 130 against the Debtor, together with any of Era's offsets against those claims will be determined in the Bankruptcy Court. If any of those claims are allowed unsecured claims by July 1, 2007, then those claims will be paid in full. With respect to claims that are not yet allowed unsecured claims by that date, the Debtor will pay the undisputed portion of that claim and will make monthly payments on the disputed portion of those claims into a separate interest bearing account, which the Debtor will hold for the benefit of the Seacor Entity holding that claim. Class U-3 Holders of allowed unsecured claims of $1,000 or less, will be paid, in cash on the effective date, in full satisfaction of their claims. Class U-2 Holders of allowed unsecured claims in excess of $1,000, who failed to elect to receive $1,000 cash in full payment, will be paid under the Full Payment Treatment. Full Payment Treatment provides that the creditors who do not elect the Cash Discount Option will receive 100 cents on the dollar of the allowed unsecured claim, plus interest. Under that treatment, the creditors of the Seacor Entities and Class U-2 will: a) receive monthly installments equal to 2.1676% of the amount of the allowed unsecured claim, including a 4.34% interest rate from Dec. 28, 2005, in full satisfaction of their claims. The First payment will be due July 1, 2007; b) be paid an equal amount, which will not be a credit to the monthly payments due, but will instead be a credit to the principal balance in the event the Debtor pays any bonuses under the said Programs; c) receive pro rata under all payments made to undisputed allowed unsecured claims, except that: i) the Debtor may make other than pro rata payments, if the payments are made to those Class U-2 holding the smallest unpaid claims, and ii) the other than pro rata payments made, iii) do not exceed $15,000 in any one calendar quarter, d) be secured by a security agreement covering all of the Debtor's assets. Class U-2 creditors who elected the Cash Discount Option will be paid 80% of their allowed unsecured claim within 15 days after the effective date. A full-text copy of the Debtor's Amended Disclosure Statement explaining its Amended Chapter 11 Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=061205053228 About Era Aviation Headquartered in Anchorage, Alaska, Era Aviation, Inc. -- http://www.flyera.com/-- provides air cargo and package express services. The Company filed for chapter 11 protection on Dec. 28, 2005 (Bankr. D. Ak. Case No. 05-02265). Cabot C. Christianson, Esq., at Christianson & Spraker, represents the Debtor in its restructuring efforts. John C. Siemers, Esq., at Burr, Pease & Kurtz, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. EUGENE SCIENCE: Sept. 30 Balance Sheet Upside-Down by $10.6 Mil. ---------------------------------------------------------------- Eugene Science Inc. filed its third quarter financial statements for the three months ended Sept. 30, 2006, with the Securities and Exchange Commission reporting $6,076,682 in total assets, $16,750,391 in total liabilities, resulting in a $10,673,709 total stockholders' deficit. The company reported a $725,136 net loss on $657,566 of net sales for the three months ended Sept. 30, 2006, compared with a $2,950,316 net loss on $790,479 of net revenues in the comparable period of 2005. The company's September 30 balance sheet also showed strained liquidity with $2,556,354 in total current assets available to pay $16,003,573 in total current liabilities. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1673 Going Concern Doubt As reported in Troubled Company Reporter on May 18, 2006, SF Partnership, LLP, Chartered Accountants, in Toronto, Canada, raised substantial doubt about Eugene Science Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's recurring losses, negative working capital, and operation in a country whose economy is currently unstable -- South Korea. About Eugene Science Based in Kyonggi Do, South Korea, Eugene Science Inc. is a global biotechnology company that develops, manufactures and markets nutraceuticals, or functional foods that offer health-promoting advantages beyond that of nutrition. Plant sterols are the company's primary products, which include CZTM Series of food additives and CholZeroTM branded beverages and capsules. In June 2005, the company received regulatory approval for certain health claims associated with the company's products from government agencies in the Republic of Korea. FEDERAL-MOGUL: Adbar Wants Objection to Claim No. 6869 Overruled ---------------------------------------------------------------- Adbar Company, L.C., in response to Federal-Mogul Corporation and its debtor affiliates' request to disallow and expunge Adbar's Claim No. 6869, ask the U.S. Bankruptcy Court for the District of Delaware to: (a) overrule the Debtors' Objection to its Claim No. 6869; and (b) determine an amount to compensate it for damages resulting from Debtor Carter Automotive Company, Inc.'s failure to timely remediate the industrial property located at 2841 North Spring Avenue in St. Louis, Missouri. Adbar's Claim relates to an Agreement of Purchase and Sale dated June 4, 1998, between CAC and Barket, Levy & Fine, Inc., pursuant to which Barket Levy purchased the St. Louis Property. Claim No. 6869 against Debtor Carter Automotive Company, Inc., asserts a general unsecured claim estimated at $2,000,000. The claim was filed to preserve Adbar's rights to enforce a provision imposing certain obligations on CAC under the agreement. Pursuant to the Agreement, Barket purchased from CAC an industrial property located at 2841 North Spring Avenue in St. Louis, Missouri. Barket subsequently assigned to Adbar the Property, which was sold "as is," but for the obligation under the Agreement requiring CAC to remediate and provide written disclosure on soil contamination due to removal of a storage tank. Federal-Mogul has asked the Court to disallow and expunge Adbar's claim on the grounds that their obligation has been fully satisfied pursuant to the Agreement. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is an automotive parts company with worldwide revenue of some $6 billion. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. (Federal-Mogul Bankruptcy News, Issue No. 116; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). FOAMEX INT'L: Court Approves $940 Million Exit Financing Deals -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorizes Foamex International Inc. and its debtor-affiliates to perform, execute, and deliver under the commitment letters providing for a $790,000,000 debt exit financing and a $150,000,000 equity exit financing in connection with their First Amended Plan of Reorganization, dated Oct. 23, 2006. The Court authorizes the Debtors to commence the rights offering and to amend the DIP Credit Facilities as necessary. The Court also grants the Debtors' request to pay the Put Option Premium, the Underwriting Fees, the Rating Agency Fees, the Alternate Transaction Fee and the other fees, expenses and monetary obligations, including any indemnification obligations, due and payable by the Debtors under the Commitment Letters, each of which will be entitled to priority as an administrative expenses of the Debtors' estates pursuant to Section 503(b)(1) and 507(a)(1) of the Bankruptcy Code. The Court authorizes the Debtors to pay the reasonable, documented, out-of-pocket fees and expenses incurred by the Substantial Equityholders' professionals since June 8, 2006, in connection with the preparation and execution of the Equity Commitment Letter. With respect to Pre-Commitment Significant Equityholder Expenses incurred between June 8, 2006, and Oct. 12, 2006, the Significant Equityholders will submit a letter detailing the expenses to the U.S. Trustee with reasonable supporting detail. The U.S. Trustee and the Debtors will have 30 calendar days to object to any of the Pre-Commitment Equityholder Expenses. Any objection will be served upon the U.S. Trustee, and counsel to the Significant Equityholders and the Debtors, and will identify in reasonable detail the basis of the objection and the amount subject thereto. The Debtors will not pay any Pre-Commitment Significant Equityholder Expenses until the 30-day period has lapsed, and will not pay any of the expenses subject to an objection absent further Court order. Prior to a hearing to consider confirmation of the Debtors' proposed plan of reorganization, the Debtors will file with the Court a document identifying in reasonable detail the amount of the Pre-Commitment Significant Equityholder Expenses paid by the Debtors or invoiced by the Equityholders' professionals. The Court retains jurisdiction to review the Expenses under the reasonableness standard of Section 1129(a) of the Bankruptcy Code. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FOAMEX INTERNATIONAL: Court Approves GMAC Settlement Agreement -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approves Foamex International Inc.'s Settlement Agreement with GMAC Commercial Finance LLC formerly known as BNY Financial Corp. As reported in the Troubled Company Reporter on Nov. 15, 2006, the principal terms of the Settlement Agreement are: (a) Foamex will allow GMAC an unsecured claim for $45,179; and (b) the parties will mutually release each other from any and all claims or actions in connection with the Adversary Proceeding or the Claim. GMAC Commercial, commenced a lawsuit against Foamex in the United States Bankruptcy Court for the Northern District of Mississippi asserting claims arising out of the recovery for certain preferential transfers made to Foamex. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FORD MOTOR: To Raise Borrowing Capacity of Financing to $23 Bil. ---------------------------------------------------------------- Ford Motor Company plans to increase its new borrowing capacity to as much as $23 billion, up from $18 billion disclosed earlier, reports Business Writer Tom Krisher of Associated Press. On Nov. 27, 2006, Ford stated plans to obtain financing totaling approximately $18 billion in order to address near- and medium- term negative operating-related cash flow, to fund its restructuring, and to provide added liquidity to protect against a recession or other unanticipated events. The financing transactions consist of: * new five-year senior secured revolving credit facility of approximately $8 billion that is intended to replace Ford's existing unsecured credit facilities of $6.3 billion; * senior secured term loan of approximately $7 billion; and * unsecured capital market transactions of approximately $3 billion, which may include unsecured notes convertible into Ford common stock. "Our target is still $18 billion, but these contingencies assure us that we have access to additional funding options," Ford spokesman Oscar Suris said. Ford said in a Securities and Exchange Commission filing that part of the raise was due to overwhelming support from lenders. Senior Convertible Notes Offering According to Mr. Krisher, Ford also raised its offering of convertible notes to $4.5 billion, from $3 billion as previously declared. On Dec. 4, 2006, Ford intended to offer, subject to market and other conditions, approximately $3 billion principal amount of Senior Convertible Notes due 2036, which will be unsecured. Ford also expected to grant the underwriters an over-allotment option to purchase up to $450 million principal amount of additional notes. The joint-book running managers for this offering are: * Citigroup Corporate and Investment Banking, * Goldman, Sachs & Co., * J.P. Morgan Securities Inc., * Deutsche Bank Securities Inc., * Lehman Brothers Inc., * Merrill Lynch, Pierce, Fenner & Smith Incorporated and * Morgan Stanley & Co. Incorporated. The joint-lead manager for this offering is BNP Paribas Securities Corp. The interest rate, conversion price, offering price and other terms will be determined by negotiations between Ford and the underwriters of the notes. Ford expects to use the net proceeds from the offering for general corporate purposes. Offers and sales of the notes will be made only by the related prospectus and prospectus supplement. A copy of the prospectus and prospectus supplement can be obtained from: 1) Citigroup Corporate and Investment Banking Brooklyn Army Terminal 140 58th Street, 8th Floor Brooklyn, NY 11220 Telephone (718) 765-6732 Fax (718) 765-6734 2) Goldman, Sachs & Co. Attn: Prospectus Dept. 85 Broad St. New York, NY 10004 Fax (212) 902-9316 3) J.P. Morgan Securities Inc. National Statements Processing 4 Chase Metrotech Center, CS Level Brooklyn, NY 11245 Telephone (718) 242-8002 Fax (718) 242-1350 Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Dec. 6, 2006, Moody's Investors Service assigned a Caa1, LGD4, 62% rating to Ford Motor Company's $3 billion of senior convertible notes due 2036. FORD MOTOR: Intends to Offer $3 Billion Senior Convertible Notes ---------------------------------------------------------------- Ford Motor Company intends to offer, subject to market and other conditions, approximately $3 billion principal amount of Senior Convertible Notes due 2036, which will be unsecured. Ford also expects to grant the underwriters an over-allotment option to purchase up to $450 million principal amount of additional notes. This offering of notes will be registered under the U.S. Securities Act of 1933, as amended. The joint-book running managers for this offering are Citigroup Corporate and Investment Banking, Goldman, Sachs & Co., J.P. Morgan Securities Inc., Deutsche Bank Securities Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated. The joint-lead manager for this offering is BNP Paribas Securities Corp. The interest rate, conversion price, offering price and other terms will be determined by negotiations between Ford and the underwriters of the notes. Ford expects to use the net proceeds from the offering for general corporate purposes. Offers and sales of the notes will be made only by the related prospectus and prospectus supplement. A copy of the prospectus and prospectus supplement can be obtained from: 1) Citigroup Corporate and Investment Banking Brooklyn Army Terminal 140 58th Street, 8th Floor Brooklyn, NY 11220 Telephone (718) 765-6732 Fax (718) 765-6734 2) Goldman, Sachs & Co. Attn: Prospectus Dept. 85 Broad St. New York, NY 10004 Fax (212) 902-9316 3) J.P. Morgan Securities Inc. National Statements Processing 4 Chase Metrotech Center, CS Level Brooklyn, NY 11245 Telephone (718) 242-8002 Fax (718) 242-1350 Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Dec. 6, 2006, Moody's Investors Service assigned a Caa1, LGD4, 62% rating to Ford Motor Company's $3 billion of senior convertible notes due 2036. FORD MOTOR: Fitch Rates $3 Billion Senior Unsecured Notes at B -------------------------------------------------------------- Fitch has assigned a rating of 'B/RR4' to the $3 billion in senior unsecured convertible notes being offered by Ford Motor Company. The securities rank pari-pasu with other existing senior unsecured debt. The notes are part of an $18 billion financing plan underway by Ford to shore up liquidity as it faces several years of very heavy negative cash flows. Under Fitch's Recovery Rating analysis, it is estimated that unsecured holders would recover between 30%-35% of principal value in the event of a bankruptcy. Fitch could review the rating of the unsecured debt for further downgrade if the final amount of the financings being arranged is meaningfully larger than currently anticipated, further impairing the recovery of unsecured holders, or if changes to Fitch's assumptions are warranted. Recovery estimates assume a significant restructuring of North American operations, values associated with various international holdings, and 100% ownership of Ford Motor Credit Company. The Rating Outlook remains Negative. Ford has estimated that cash outflows over the next several years will approximate $17 billion as a result of operating losses, restructuring costs and working capital outflows. Ford is expected to have cash of approximately $20 billion at year-end 2006, plus an additional $3 billion in long-term VEBA that is expected to be spent over the next several years. Of the $18 billion in new financing being arranged, approximately $15 billion is in the form of secured bank lines, thereby subordinating existing unsecured debt of approximately $18 billion and the planned offering of $3 billion in convertible notes. Approximately $7 billion of expected cash outflows are associated with restructuring costs. Ford also faces a renegotiation of its UAW contract in September 2007, and a stressed supply base, both of which represent event risk through potential production disruptions. Fitch's Recovery Ratings, introduced in 2005, are a relative indicator of creditor recovery on a given obligation in the event of a default. FORD MOTOR: Fitch Pares Senior Unsecured Ratings to B- from B ------------------------------------------------------------- Fitch Ratings downgraded Ford Motor Company's senior unsecured ratings to 'B-/RR5' from 'B/RR4' due to the increase in size of both the secured facilities and the senior unsecured convertible notes being offered. The upsizing of these facilities reduces expected recoveries for unsecured debtholders to between 25-30% under Fitch's recovery analysis, corresponding to an 'RR5' rating. Ford's 'B' Issuer Default Rating is unaffected, and the Rating Outlook remains Negative. Ford disclosed its intent to increase the size of its secured revolving credit facility to $10.5 - $11.5 billion, up from $8 billion previously. Ford will also increase the size of its senior unsecured convertible note offering from $3 billion to $4.5 billion. The total amount of the financing package now being raised could total $23 billion, up from a previous expectation of $18 billion. As much as $18.5 billion of this amount is expected to be on a secured basis, further impairing the position of unsecured holders. Unsecured debt outstanding that would share in recoveries in the event of a bankruptcy will expand to $22.5 billion from approximately $18 billion at Sept. 30, 2006. The increased liquidity will provide Ford with additional time and resources as it progresses in its restructuring plan, and is expected to allay any concerns regarding liquidity during 2007. Fitch downgrades these ratings with a Negative Rating Outlook: * Ford Motor Co. --Senior unsecured debt to 'B-/RR5' from 'B/RR4'. * Ford Holdings, Inc. -- Senior unsecured debt to 'B-/RR5' from 'B/RR4'. * Ford Motor Co. of Australia -- Senior unsecured debt to 'B-/RR5' from 'B/RR4'. GENERAL MOTORS: Kerkorian Sells Remaining 5% Stake -------------------------------------------------- Billionaire investor Kirk Kerkorian has sold his remaining 5% stake in General Motors Corp. to Bank of America Corp, East Bay Business Times reports. Mr. Kerkorian sold the rest of his GM shares this week for $28.75 to $29.25 per share. According to East Bay, the 5% stake was worth more than $800 million. As reported in the Troubled Company Reporter on Dec. 1, 2006, Mr. Kerkorian's Tracinda Corp. previously sold 14 million shares of GM's stock in a private transaction for $28.75 per share. This transaction came on the heels of the sale of another 14 million of Tracinda-held GM stock for $33 per share. Tom Krisher at the Associated Press writes that this week's sale was the last block of the nearly 10% percent stake Mr. Kerkorian once held in GM. Mr. Kerkorian abandoned his shares in GM after failing to implement strategic changes at the automaker. Mr. Kerkorian and his adviser, Jerome York, had pressured the company to take drastic action in response to its $10.6-billion loss last year, the Charlotte Business Journal notes. Mr. Kerkorian and Mr. York, who was a member of GM's board, lobbied for a global alliance between GM and Renault-Nissan. Mr. Kerkorian believed that the proposed alliance would allow GM to realize substantial synergies and cost savings. Alliance talks between the automakers collapsed in October after GM's board concluded that the alliance framework required by Renault-Nissan would substantially disadvantage GM's shareholders. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the world's largest automaker and has been the global industry sales leader since 1931. Founded in 1908, GM employs about 327,000 people around the world. It has manufacturing operations in 33 countries and its vehicles are sold in 200 countries. GM sells cars and trucks under these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. * * * As reported in the Troubled Company Reporter on Nov. 16, 2006, Standard & Poor's Ratings Services assigned its 'B+' bank loan rating to General Motors Corp.'s proposed US$1.5 billion senior term loan facility, expiring 2013, with a recovery rating of '1'. The 'B+' rating was placed on Creditwatch with negative implications, consistent with the other issue ratings of General Motors, excluding recovery ratings. As reported in the Troubled Company Reporter on Nov. 14, 2006, Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the proposed US$1.5 billion secured term loan of General Motors Corp. The term loan is expected to be secured by a first priority perfected security interest in all of the US machinery and equipment, and special tools of General Motors and Saturn Corp. GMAC COMMERCIAL: Fitch Ups Rating on $19 Mil. Class K Loan to BB- ----------------------------------------------------------------- Fitch upgrades GMAC commercial mortgage securities, Inc., series 1998-C2 as: -- $19 million class H to 'BBB-' from 'BB+'; -- $19 million class J to 'BB+' from 'BB-'; and, -- $19 million class K to 'BB-' from 'B+'. In addition, Fitch affirms these classes: -- $1.2 billion class A-2 at 'AAA'; -- Interest Only (IO) class X at 'AAA'; -- $126.5 million class B at 'AAA'; -- $113.9 million class C at 'AAA'; -- $164.5 million class D at 'AAA'; -- $38 million class E at 'AAA'; -- $88.6 million class F at 'AA-'; -- $44.3 million class G at 'BBB+; and, -- $25.3 million class L at 'B-'. Fitch affirms the $17.6 million class M at 'CC'. However, the distressed recovery rating has been lowered to 'DR5' from 'DR4' due to a decrease in recoveries. Class A-1 has paid in full. Class N, which is not rated by Fitch, was reduced to zero due to losses. The upgrades are a result of defeasance and an increase subordination levels due to additional loan amortization and prepayments since Fitch's last rating action. A total of 74 loans (29.0%) have defeased since issuance. As of the November 2006 distribution date, the transaction's principal balance decreased 24.4% to $1.91 billion compared to $2.53 billion at issuance. Fitch expects losses on the three specially serviced loans to significantly impact the principal balance of class M. The largest of these loans is an REO asset secured by a 467-pad mobile home property in Saginaw, Michigan. The special servicer is working with the property manager to improve the site for marketability. Fitch reviewed operating statement analysis reports and other performance information provided by the master servicer. The Fitch stressed debt service coverage ratio for the loan is calculated based on a Fitch adjusted net cash flow and a stressed debt service based on the current loan balance and a hypothetical mortgage constant. Five credit assessed loans are in the pool. One loan, the Arden Realty Inc. loan, is defeased. The OPERS Factory Outlet Portfolio is secured by 12 cross- collateralized and cross defaulted outlet properties within nine centers. Occupancy as of September 2006 was 92%, a 4.9% decrease from 96.7% at issuance. The year-end 2005 Fitch stressed debt service coverage ratio was 2.5x compared to 1.68x at issuance. The loan maintains an investment grade credit assessment. The two remaining investment grade credit assessed loans, South Towne Center & Marketplace and Grove Property Trust, have performed at or better than expected at issuance. The loans maintain investment grade credit assessments. The Boykin Portfolio remains below investment grade. Fitch's Distressed Recovery ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. GRACEWAY PHARMA: Moody's Rates $210-Mil. Senior Term Loan at B3 --------------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Graceway Pharmaceuticals, LLC, including a B1 Corporate Family Rating, a Ba3 first lien senior secured rating, and a B3 second lien senior secured rating. The ratings are being assigned in conjunction with Graceway's pending acquisition of the specialty pharmaceuticals business for the Americas of 3M Corporation for approximately $875 million. The ratings remain subject to the receipt and review of final documentation. The rating outlook is stable. Graceway's B1 Corporate Family Rating reflects the factors outlined in the Moody's Global Pharmaceutical Rating Methodology. Currently, above-average scores in cash flow from operations to debt and free cash flow to debt help offset below-average scores in size and scale, product concentration risk, cash coverage of debt, and the company's reliance on life cycle management strategies. The stable rating outlook reflects these expectations: (1) the integration of 3M Americas will be relatively seamless and not cause significant sales force disruption; (2) Graceway's overhead cost structure has been reasonably estimated; and, (3) positive sales trends will continue for the core products. A modest "downside" scenario still results in good likelihood that Graceway will sustain CFO/Debt in the range of 12% to 15% and FCF/Debt in the range of 10% to 12%. Based on Graceway's limited scale and its concentration in Aldara, Moody's does not expect that positive rating pressure will develop in the near term. Although not anticipated, inability to sustain FCF/Debt in excess of 10% could result in downward rating pressure. Scenarios where this could arise include: (1) additional cash-financed acquisitions that produce limited cash flow benefit; (2) a more pronounced decline in Aldara utilization than Moody's is currently predicting; or, (3) unexpected increases in Graceway's R&D or SG&A costs. Ratings assigned: * Graceway Pharmaceuticals, LLC -- B1 Corporate Family Rating -- B1 Probability of Default Rating -- Ba3 first lien senior secured Term Loan of $500 million due 2011 LGD3, 35% -- Ba3 first lien senior secured revolving credit facility of $30 million due 2011 LGD3, 35% -- B3 second lien senior secured Term Loan of $210 million due 2012 LGD5, 88% Headquartered in Bristol, Tennessee, Graceway Pharmaceuticals, LLC is a specialty pharmaceutical company focused on the dermatology, respiratory, and women's health markets. Graceway is 85%-owned by GTCR Golder Rauner LLC and 15%-owned by Graceway management. GRACEWAY PHARMA: S&P Rates $530 Million Senior Secured Loan at B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Bristol, Tennessee-based specialty pharmaceutical company Graceway Pharmaceuticals Inc. The rating outlook is stable. At the same time, Standard & Poor's assigned its loan and recovery ratings to Graceway's $530 million senior secured first-lien credit facility, consisting of a $30 million revolver and a $500 million term loan, both maturing in 2011. The loan rating is 'B+' with a recovery rating of '3', indicating the expectation for meaningful recovery of principal in the event of a payment default. Loan and recovery ratings were also assigned to Graceway's $210 million senior secured second-lien term loan. The loan rating is 'B-' with a recovery rating of '5', indicating the expectation for negligible recovery of principal in the event of a payment default. Proceeds will be mainly used to fund the company's roughly $860 million acquisition of the specialty pharmaceutical operations of 3M Co. "The 'B+' corporate credit rating reflects Graceway's limited size and heavy reliance on one niche product and debt leverage," said Standard & Poor's credit analyst Arthur Wong. "These factors are partially offset by the company's expected solid free cash flows and ability to rapidly improve credit measures." Graceway competes in the niche dermatology market. The company is in the midst of acquiring the Americas portion of 3M Co.'s pharmaceutical business. The main products to be acquired in the transaction are Aldara and Maxair. Aldara, a prescription cream mainly used for the treatment of genital warts, accounts for 70% of Graceway's sales base. Maxair, a pirbuterol dispensed via a breath-actuated inhaler, accounts for about 10% of the company's sales. Graceway is a newly formed specialty pharmaceutical company with a very experienced management team. The CEO, Jefferson Gregory, is one of the co-founders and former CEO of King Pharmaceuticals Inc., where he built a successful track record of product acquisitions and growing sales through increased promotion and lifecycle management. Pro forma for the secured financing transaction, debt to EBITDA is expected to be only 3.4x by the end of 2007, funds from operations to debt in the mid-teens percentage area, and EBITDA interest coverage at more than 3.0x--measures that are all solid for the 'B+' rating. The company does generate some of the higher margins in the industry, with EBITDA margins at 50% plus, and free cash flows are expected to be strong. However, the company is sponsor owned. Thus, even absent a large debt-financed transaction in the intermediate term, the possibility of a sponsor dividend during the same period will likely prevent any major rapid improvement in credit measures. GREEKTOWN HOLDINGS: S&P Holds Ratings and Removes Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including its 'B' corporate credit rating, on Detroit-based casino operator Greektown Holdings LLC. The ratings were removed from CreditWatch with negative implications where they were placed on Nov. 16, 2006. The outlook is negative. The affirmation underscores Standard & Poor's expectation that Greektown's owner, the Sault Ste. Marie Tribe of Chippewa Indians, has both the commitment and wherewithal to support Greektown if covenants imposed by its lending agreements and by the Michigan Gaming Control Board are breached. In addition, the affirmation is based on the expectation of a successful negotiation with lenders and/or the MGCB, if these covenants are violated. Greektown's development agreement with the city of Detroit requires the company to expand the existing gaming facility. As a result, Greektown is in the process of adding 25,000 sq. ft. of gaming space adjacent to its existing gaming operation, a 400-room hotel, and a 2,900-space attached parking garage. Greektown expects to complete the garage by late 2007 and both the gaming expansion and hotel by late 2008. The MGCB, as a condition of its approval of Greektown's financing structure for the permanent expansion, has imposed leverage and fixed charge covenants during the next several years that Greektown must meet or face prospects for a forced sale of the company. The recently reported delays in construction make it more likely that these covenants will be breached, barring a meaningful improvement to EBITDA relative to the level generated during the 12 months ended Sept. 30, 2006. Although the addition of an attached parking garage during the first stage of construction is expected to have a positive impact on operations, should covenants be breached, Standard & Poor's expects the Tribe to have sufficient liquidity to assist Greektown in meeting its near-term financial obligations, and obtaining a waiver and amendment to its agreements. HOT PIZZA: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: The Hot Pizza Company Inc. aka The Southern Pizza Company Inc. aka Tpgn Caguas Sur Inc. PMB 75 P.O. BOX 70158 San Juan, PR 00936 Bankruptcy Case No.: 06-04850 Type of Business: The Debtor operates a restaurant. Chapter 11 Petition Date: November 30, 2006 Court: District of Puerto Rico (Old San Juan) Judge: Enrique S. Lamoutte Inclan Debtor's Counsel: Winston Vidal-Gambaro, Esq. Winston Vidal Law Office P.O. BOX 193673 San Juan, PR 00919-3673 Tel: (787) 751-2864 Fax: (787) 763-6114 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Thomas L. Bigby Trade debt $423,314 Phyllis Bigby PMB 75 GPO Box 70158 San Juan, PR 00936 Glenn A. Tryon Trade debt $393,086 Ana P. Tryon PMB 75 GPO Box 70158 San Juan, PR 00936 Banco Popular De PR Bank loan $106,804 P.O. Box 362708 San Juan, PR 00936 Internal Revenue Services Trade debt $105,727 Mercantil Plaza Bldg. R-2 Ave. Ponce De Leon San Juan, PR 00918-1693 Labrada Distributors, Inc. Trade debt $64,134 Little Caesar's Enterprises, Trade debt $62,230 Inc. Banco Popular De PR Bank loan $42,236 Scotiabank of Puerto Rico Bank loan $28,450 Departamento Del Trabajo Y Taxes $23,982 Recursos Humanos Antonio Roig Sucesores, Inc. Trade debt $21,663 Department of Treasury of PR Taxes $18,598 Municipio de Carolina Taxes $12,862 Corporacion Fondo Seguro Trade debt $12,404 Estado Matosantos Commercial Corp. Trade debt $8,592 Pepsi Americas Trade debt $8,074 Autoridad Energia Electrica Trade debt $4,775 CRIM Trade debt $4,754 Air-Con, Inc. Trade debt $4,688 Municipio de Carolina Taxes $3,739 Primus Trade debt $3,229 IMPART MEDIA: Posts $3.4 Million Net Loss in 2006 Third Quarter --------------------------------------------------------------- Impart Media Group Inc. reported a $3.4 million net loss on $1.6 million of revenues in the third quarter ended Sept. 30, 2006, compared with an $821,000 net loss on $1.4 million of revenues for the same period in 2005. The increase in net loss is primarily due to the $2.2 million increase in general and administrative expenses, from $1.1 million in the third quarter of 2005 to $3.3 million in the third quarter of 2006. This increase was primarily due to the significant increase in compensation expenses, professional and consulting fees, the impairments to intangible assets acquired in the transaction with InTransit and other general and administrative expenses resulting from the doubling of personnel now employed by the company as a result of the acquisition of E&M. Revenues increased during the three months ended Sept. 30, 2006, as compared to the three months ended Sept. 30, 2005 due to increased media services revenues of $659,000 derived as a result of the acquisition of E&M in February 2006, and increased subscription revenues of approximately $90,000 derived as a result the acquisition of Media SideStreet Corp. in June 2005, offset by a decrease of $462,000 in revenues from sales of digital signage equipment. At Sept. 30, 2006, the company's balance sheet showed $14.8 million in total assets, $9.3 million in total liabilities, and $5.5 million in total stockholders' equity. The company's balance sheet at Sept. 30, 2006, showed strained liquidity with $6.6 million in total current assets available to pay $9.1 million in total current liabilities. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?166e Going Concern Doubt As reported in the Troubled Company Reporter on May 17, 2006, Peterson Sullivan PLLC in Seattle, Washington, raised substantial doubt about Impart Media Group, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's recurring losses from operations and substantial accumulated deficit. About Impart Media Based in Seattle, Wash., Impart Media Group Inc. -- http://www.Impartmedia.com/-- sells dynamic digital media solutions consisting of monitors, media servers, and associated technological hardware and software. The company provides design, integration, fabrication, assembly, quality assurance, creative production, and installation services throughout the United States. As a result of the company's acquisition of E&M Advertising Inc. and its affiliates in Feb. 2006, the company now provides advertising capability to digital elements and other media services. INFORMATION ARCHITECTS: Posts $210,724 Net Loss in 2006 3rd Qtr. ---------------------------------------------------------------- Information Architects Corp. reported a $210,724 net loss on $6,791 of revenues for the third quarter ended Sept. 30, 2006, compared with a $191,533 net loss on $150,083 of revenues for the third quarter ended Sept. 30, 2005. At Sept. 30, 2006, the company's balance sheet showed $1.9 million in total assets and $4.2 million in total liabilities, resulting in a $2.4 million total stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $25,875 in total current assets available to pay $4.2 million in total current liabilities. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?1679 Going Concern Doubt As reported in the Troubled Company Reporter on May 12, 2006, Jaspers + Hall PC in Denver, Colorado, raised substantial doubt about Information Architects Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the company's recurring losses from operations and stockholders' deficiencies. About Information Architects Headquartered in Ft. Lauderdale, Florida, Information Architects Corporation (OTCBB: IACH) -- http://www.ia.com/-- provides employment screening and background investigations software application. IVOICE INC: Posts $75,618 Net Loss in 2006 Third Quarter -------------------------------------------------------- iVoice Inc. reported a $75,618 net loss for the three months ended Sept. 30, 2006, compared with the net loss of $182,518 for the three months ended Sept. 30, 2005. Sales for the three months ended Sept. 30, 2006, and 2005 were $277,242 and $173, respectively. The sales in 2006 primarily represent initial product sales of the company's Acid-All product that was introduced in March and is being promoted by its subsidiary, Thomas Pharmaceuticals. The balance of the sales in 2006 represents the sale of several patents to Lamson Holdings LLC. The company's balance sheet at Sept. 30, 2006, showed $12,225,386 in total assets, $9,042,175 in total liabilities and stockholders' equity of $3,183,211. A full-text copy of the company's quarterly report is available for free at http://researcharchives.com/t/s?1676 Going Concern Doubt Bagell, Josephs, Levine & Company, LLC, in Gibbsboro, New Jersey, raised substantial doubt about iVoice Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's substantial accumulated deficits. About iVoice Inc. iVoice Inc. (OTCB: IVOC) -- http://www.ivoice.com/-- designs, manufactures, and markets innovative speech-enabled applications and computer telephony communications systems. JP MORGAN: Fitch Affirms B- Rating on $4.3 Million Class M Certs. ----------------------------------------------------------------- Fitch Ratings upgrades J.P. Morgan Chase Commercial Mortgage Securities Corp.'s pass-through certificates, series 2001-CIBC3, as: -- $27.1 million class E to 'AA+' from 'AA-'; -- $10.8 million class F to 'AA-' from 'A'; -- $17.3 million class G to 'BBB+' from 'BBB'; -- $6.5 million class H to 'BBB' from 'BB+'; -- $6.5 million class J to 'BBB-' from 'BB'; -- $7.6 million class K to 'BB' from 'BB-'; and, -- $4.3 million class L to 'B+' from 'B'. In addition, Fitch affirms these classes: -- $106.7 million class A-2 at 'AAA'; -- $457.3 million class A-3 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $36.9 million class B at 'AAA'; -- $36.9 million class C at 'AAA'; -- $9.8 million class D at 'AAA'; and, -- $4.3 million class M at 'B-'. Class A-1 has been paid in full. Fitch does not rate the $13 million class NR. The upgrades reflect the increased credit enhancement levels due to additional paydown and amortization as well as additional defeasance. An additional four loans have defeased since Fitch's last rating action. As of the November 2006 distribution date, the pool's aggregate principal balance has been reduced 14.1% to $745 million from $867.5 million at issuance. Fourteen loans (17%) have defeased since issuance. There are three assets in special servicing. The largest specially serviced loan, a 301-unit multifamily in Kansas City, MO, is suffering from a decline in performance due to major deferred maintenance and a recent fire. The special servicer is currently negotiating with the borrower and preparing to take title of the property in December. Fitch reviewed credit assessments of the Franklin Park Mall loan and the Kings Plaza pooled note. The Fitch stressed debt service coverage ratio for each loan is calculated using servicer-provided net operating income less reserves divided by Fitch stressed debt service payment. Based on their improved performance, both loans maintain investment grade credit assessments. The Franklin Park Mall loan is secured by 512,397 square feet of a 1,072,383 sf regional mall located in Toledo, Ohio. The Fitch stressed DSCR for the loan remains strong at 2.25x for year-end 2005 compared to 1.45x at issuance. Occupancy as of September 2006 is 94% compared to 99% at issuance. The Kings Plaza pooled note is secured by a 1,050,000 sf mall located in Brooklyn, New York. The Kings Plaza mortgage loan consists of notes A1, A2, and B, with an aggregate original balance of $222 million. The A2 note, included in this transaction, is pari passu with the A1 note, in the JPMCC 2001-KP trust, which also contains the B note. The Fitch stressed DSCR for YE 2005 was 2.47x compared to 2.06x at issuance. Occupancy as of October 2006 is 98.5% compared to 99% at issuance. KEYSTONE AUTO: To Refinance Debts with $325 Mil. Credit Facilities ------------------------------------------------------------------ Keystone Automotive Operations, Inc., intends to refinance its existing revolving credit facility and term loan B with $325 million in new senior secured credit facilities. The purpose of the refinancing is to provide the company with greater operational flexibility and liquidity to meet its growth and operational goals. The proposed New Credit Facilities is anticipated to close on January 2007. The Proposed New Credit Facilities will consist of a term loan B in an aggregate funded amount of approximately $200 million and an asset-based revolving credit facility with a commitment amount of $125 million. The term loan B and the asset-based revolving credit facility are anticipated to mature five years from the date of execution of the Proposed New Credit Facilities. The interest rate under the asset-based revolving credit facility are anticipated to be lower than the interest rate of the current revolving credit facility, while the interest rate of the term loan B are expected to be higher than the existing term loans. The Proposed New Credit Facilities will be guaranteed by Keystone Automotive Holdings, Inc. and all of its subsidiaries. Keystone's obligations under the asset-based revolving credit facility will be secured by a first priority security interest in all receivable and inventory and a second priority security interest in the stock of the subsidiaries and all other assets of the borrower and guarantors. Keystone's obligations under the term loan B will be guaranteed by first priority security interest in all machinery and equipment, real estate, intangibles and stock of the subsidiaries of the borrower and guarantors and a second priority security interest in receivables and inventory. Under the terms of the Proposed New Credit Facilities, Keystone anticipates a springing financial covenant based on availability under the asset-based revolving credit facility and no maintenance financial covenants under the term loan B. The Proposed New Credit Facilities will contain customary negative and affirmative covenants similar to the existing term loans, which are anticipated to be less restrictive than the covenants in the existing credit facility. The Proposed New Credit Facilities will also contain customary events of default, funding conditions, representations and warranties and other customary provisions for senior secured credit facilities. Banc of America Securities LLC is arranging the Proposed New Credit Facilities. Headquartered in Exeter, Pa., Keystone Automotive Operations, Inc. -- http://www.ekeystone.com-- distributes and markets specialty automotive accessories in North America, providing more than 800 product lines of automotive parts and accessories to approximately 16,000 wholesale customers. Keystone Automotive operates four distribution centers and 19 non-inventory stocking cross-docks in the U.S. and Canada, as well as a fleet of over 350 trucks that can provide next-day delivery to over 42 states and Canada. * * * As reported in the Troubled Company Reporter on Aug. 1, 2006, Moody's Investors Service affirmed the ratings for Keystone Automotive Operations, Inc.'s Corporate Family, B2; senior secured bank facilities, B2; and guaranteed senior subordinated notes, Caa1. The rating outlook is changed to negative. LB-UBS: Fitch Assigns Low-B Ratings on $33.9 Million Certificates ----------------------------------------------------------------- Fitch rates LB-UBS Commercial Mortgage Trust 2006-C7, commercial mortgage pass-through certificates as: -- $40,000,000 class A-1 'AAA'; -- $624,000,000 class A-2 'AAA'; -- $54,000,000 class A-AB 'AAA'; -- $968,137,000 class A-3 'AAA'; -- $427,623,000 class A-1A 'AAA'; -- $301,966,000 class A-M 'AAA'; -- $294,417,000 class A-J 'AAA'; -- $22,647,000 class B 'AA+'; -- $30,197,000 class C 'AA'; -- $30,197,000 class D 'AA-'; -- $26,422,000 class E 'A+'; -- $26,422,000 class F 'A'; -- $856,119,600 class X-CP* 'AAA'; -- $905,897,562 class X-CL* 'AAA'; -- $2,113,760,977 class X-W* 'AAA'; -- $26,422,000 class G 'A-'; -- $30,196,000 class H 'BBB+'; -- $26,422,000 class J 'BBB'; -- $26,422,000 class K 'BBB-'; -- $7,549,000 class L 'BB+'; -- $3,775,000 class M 'BB'; -- $11,324,000 class N 'BB-'; -- $3,774,000 class P 'B+'; -- $3,775,000 class Q 'B'; -- $3,774,000 class S 'B-'; and, -- $30,197,539 class T 'NR'. *Notional Amount and Interest Only. Classes A-1, A-2, A-AB, A-3, A-1A, A-M, A-J, B, C, D, E, F and X- CP are offered publicly, while classes X-CL, X-W, G, H, J, K, L, M, N, P, Q, S and T are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 184 fixed-rate loans having an aggregate principal balance of approximately $3,019,658,540 as of the cutoff date. LEAR CORP: IAC Pact Prompts Moody's to Revise Outlook to Stable --------------------------------------------------------------- Moody's Investors Service has raised Lear Corporation's rating outlook to stable from negative and affirmed all other Lear ratings. The action comes after Lear's disclosure that it has entered into an agreement to contribute the assets of its North American Interior unit to International Automotive Components Group North America, LLC. While Lear will not receive any proceeds from the sale, indeed it will initially have to contribute $25 million of cash into IAC North America, the disposition will remove a business that has had negative EBITDA. The transaction will effectively increase Lear's cash flow by curtailing those losses and amount to a de-leveraging of the company. While automotive industry pressures in North America and Western Europe will continue to affect its remaining seating and electronics business units, Lear will be both better positioned within the B2 Corporate Family Rating and be less vulnerable to those pressures through the improved complexion of its cash flows. Lear's North American interior business has had operating losses for the last two years. Combined with the earlier sale of its European interior unit, the segment would account for roughly $3.3 billion in annual revenue, combined operating losses of approximately $0.2 billion, and EBITDA of roughly $0.1 billion. Prior to working capital requirements and at recent run-rates of the business, Moody's would estimate the transaction could save Lear some $0.2 billion in cash flow. While Lear will have to invest an initial $25 million into IAC North America, and may have to add a further $40 million if defined EBITDA targets for 2007 in IAC North America are not met, Lear has recently received $200 million from an equity investment from funds managed by Mr. Carl Icahn to effectively these requirements. Lear will receive a 25% interest in IAC North America in addition to its 33% interest in International Automotive Components Group LLC. Lear expects to report a loss on the sale of the North American assets of approximately $675 million. Combined with the $29 million loss on the sale of the European business, $1,013 million of goodwill impairment charges take in 2005 and a further fixed asset impairment in that year of $82 million, Lear will have incurred a cumulative reduction in the value of its investment in the interior segment of some $1.8 billion over the last 15 months. Adjusting 3rd quarter results pro forma for the transactions, Moody's would estimate Lear's debt/EBITDA would improve to 3.9x compared to 4.3x; EBIT/Interest would have been 1.9x compared to 1.4x; and positive free cash flow of around $0.1 billion would have been generated compared to the $0.1 billion experienced. The transaction will also lower Lear's book net worth and raise its debt to book capitalization ratio. The stable outlook considers the improved prospects for Lear's free cash flow which will make it less vulnerable to potential industry pressure in 2007 and beyond while the company continues with ongoing exposure to build rates at General Motors, Ford and DaimlerChrysler, and the current mix of vehicles it supports may be adversely affected by recent trends in consumer vehicle preferences, its credit metrics are better positioned within the B2 Corporate Family rating and more likely to remain in an acceptable range for the rating category. The stable outlook also incorporates Lear's favorable liquidity profile, recently lengthened debt maturities, and the benefits of its new business awards which will, over time, facilitate improved customer diversification. All other ratings have been affirmed. The last rating action was on Nov. 20, 2006 when ratings were assigned to Lear's $900 million offering of unsecured notes. Lear Corporation, headquartered in Southfield, Michigan, is focused on providing complete seat systems, electrical distribution systems and various electronic products to major automotive manufacturers across the world. The company had revenue of $17 billion in 2005 and has more than 110,000 employees in 34 countries. LEGACY COMMS: Sept. 30 Balance Sheet Upside-Down by $2.8 Million ---------------------------------------------------------------- Legacy Communications Corp. reported $888,776 of net income on $411,728 of net revenues for the three months ended Sept. 30, 2006, compared with a $1 million net loss on $55,474 of net revenues for the same period in 2005. At Sept. 30, 2006, the company's balance sheet showed $3 million in total assets and $5.8 million in total liabilities, resulting in a $2.8 million stockholders' deficit. The company's Sept. 30 balance sheet also showed strained liquidity with $237,200 in total current assets available to pay $5.8 million in total current liabilities. The company's financial condition continues to deteriorate because of the defaults and delays experienced in the sale of radio stations that are presently or were previously under contract. As of Sept. 30, 2006, the company had accumulated operating deficits of $7,846,502, and a working capital deficit of $5,602,881. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?167c Going Concern Doubt As reported in the Troubled Company Reporter on June 16, 2006, HJ & Associates, LLC, expressed substantial doubt about Legacy Communications' ability to continue as a going concern after auditing the Company's 2005 financial statements. The auditing firm pointed to the Company's working capital deficit and stockholders' equity deficit at Dec. 31, 2005. About Legacy Communications Corp. Headquartered in St. George, Utah, Legacy Communications Corp. develops, buys, operates, and sells radio stations and auxiliary services. LUXELL TECH: Delays Filing of 4th Qtr. & Annual Financial Reports ----------------------------------------------------------------- Luxell Technologies Inc. has been delayed in filing its fourth quarter and annual financial statements, as well as the annual Management Discussion & Analysis for the year ended Aug. 31, 2006, by the required filing date on Nov. 29, 2006. The delay is due to the company's recent restructuring, a filing of a proposal to creditors under the Bankruptcy and Insolvency Act, creditor acceptance and court approval processes, as well as a reorganization of the business, which remains on-going in an effort to move the company to profitability. The company's new management is taking all possible measures to have the audit completed. Alec Couckuyt said the company "regrets the delay caused by the process Luxell has gone through but we are actively working with the auditors to resolve this delay and anticipate being able to file the annual financial statements on or before Dec. 22, 2006. While the extra work load encountered from our restructuring and reorganization process has indeed been heavy, it is not affecting our business plan going forward." The company is in contact with both the TSX and Ontario securities Commission to ensure it remains in complete compliance with any and all regulatory requirements. As reported in the Troubled Company Reporter on Oct. 24, 2006, the creditors of Luxell Technologies Inc. unanimously voted to accept the company's proposed restructuring plan. About Luxell Technologies Luxell Technologies Inc. (TSX: LUX) -- http://www.luxell.com/, http://www.aktelux.com/and http://www.luxellresearch.com/-- designs, manufactures and licenses flat panel display technologies and solutions for defence and avionics industries through its operating divisions Aktelux and Luxell Research. * * * As reported in the Troubled Company Reporter on Aug. 30, 2006, Mr. MacDonald stated, "...the Company's Board of Directors has determined the best option to realize a possible future for the Company, its shareholders, employees, suppliers and customers, is to file a proposal to creditors under the Bankruptcy and Insolvency Act, which will take a minimum of 45 days to complete and provide the Company with a complete stay on any creditor proceedings." MAC-GRAY CORP: S&P Affirms Ratings and Says Outlook is Negative --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Mac-Gray Corp. to negative from stable. At the same time, existing ratings on Mac-Gray, including its 'BB' corporate credit rating, were affirmed. Total debt outstanding at Sept. 30, 2006, was about $165 million. "The outlook revision reflects weaker than expected credit measures following the completion of several debt-financed acquisitions during 2006, and follows an announcement by outsourced laundry service provider Coinmach Service Corp. that it had made a merger proposal to Mac-Gray," said Standard & Poor's credit analyst Jean C. Stout. Although Mac-Gray subsequently rejected CSC's proposal, Standard & Poor's are concerned that as a result of this proposal, Mac-Gray's financial policies may become more aggressive if pressure to increase shareholder value were to occur. The ratings on Waltham, Massachusetts-based Mac-Gray reflect its moderately high leverage, relatively narrow business focus, and its small sales and earnings base. These factors are partly offset by its position as a leading supplier of debit card and coin-operated laundry equipment services in the highly fragmented and regional U.S. laundry market, and its relatively stable and predictable cash flow stream. Mac-Gray is a leading supplier of outsourced laundry services for multifamily housing properties in the U.S., with about $275 million in revenues. The market is highly fragmented as Mac- Gray, Coinmach Corp., and Web Service Co. Inc. represent only about one-third of the market. Many smaller, regional, and local operators represent another one-third of the market, with the remaining one-third not outsourced but operated by property owners and/or management companies. The company operates 53,500 laundry rooms in 40 states and the District of Columbia. Mac-Gray's customer base is well diversified, with no customer accounting for more than 1% of revenues. In addition, barriers to market entry are high, characterized by high capital expenditures and the long-term renewable nature of lease contracts. Mac-Gray has a large installed base of equipment, and about 90% of its equipment is under long-term leases, with high rates of retention and an average remaining life to maturity on contracts of about five years. Taken together with the relatively constant demand and recession- resistant nature of its services, these factors are expected to continue to provide the company with a relatively consistent, stable revenue stream and somewhat predictable cash flows. Acquisitions of laundry facilities management assets have strengthened the company's geographic footprint. Moreover, the trend by businesses toward outsourcing their non-core activities is expected to continue to provide Mac-Gray with growth opportunities. MERIDIAN AUTOMOTIVE: Bankr. Court Confirms Plan of Reorganization ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has confirmed Meridian Automotive Systems, Inc.'s Plan of Reorganization. The Company's confirmed Plan will become effective after certain conditions are satisfied including closing and funding of a proposed $175 million exit financing facility. Meridian has already received a fully underwritten commitment letter from Deutsche Bank and Deutsche Bank is currently in the process of finalizing the syndication of the exit financing facility. Meridian expects that its confirmed Plan will become effective by the end of December 2006. "The Bankruptcy Court's confirmation of our Plan of Reorganization is a significant accomplishment for our company," Richard E. Newsted, Meridian's President and CEO, said. "We are pleased to have court approval of a Plan that deals fairly and equitably with all of our creditors. I would like to personally thank all of the Meridian associates for their hard work and our valued customers, suppliers and creditors for their unwavering support during our reorganization. We will emerge as a stronger company with significantly less debt and increased liquidity, two very positive factors which will contribute to our long-term success in the automotive industry." A full-text copy of the Fourth Amended Plan of Reorganization is available for free at: http://ResearchArchives.com/t/s?1689 Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. METALDYNE COMPANY: Moody's Puts Low-B Ratings on Senior Facilities ------------------------------------------------------------------ Moody's Investors Service rates the proposed senior secured credit facilities of Metaldyne Corporation's direct subsidiary, Metaldyne Company LLC: -- senior secured revolving credit facility at Ba3; -- senior secured term loan facility at B2; and -- senior secured synthetic letter of credit facility, B2. Moody's upgrades: -- Metaldyne's Corporate Family and Probability of Default Rating upgraded to B3 from Caa1; -- Metaldyne's senior notes upgraded to B3 from Caa2; and, -- senior subordinated notes upgraded to Caa2 from Caa3. The senior secured facilities will be used to refinance the company's existing senior secured debt in conjunction with the company's acquisition by Asahi Tec Corporation. These rating actions conclude the review, direction uncertain, that was updated on Oct. 16, 2006. The outlook is negative. The rating reflects the lower leverage of the company afforded by the total expected equity injection of $200MM from Asahi Tec, Heartland Investors, and certain other affiliates. The purchase of Metaldyne by Asahi Tec is not expected to have an immediate near-term impact on Metaldyne's operations. Metaldyne will be a restricted subsidiary of Asahi Tec and will continue to function as a standalone company. Metaldyne will not benefit from any guarantees from Asahi Tec nor will Metaldyne be permitted to make distributions to Asahi Tec. As such, the ratings reflect Metaldyne as a standalone company. However, the new ownership should provide beneficial strategic opportunities in the long-term for Metaldyne to improve sourcing, increase access to Asian OEMs, and generate additional product offerings. While the equity infusion from Asahi Tec will provide Metaldyne with additional financial flexibility to address its operating issues, the ratings and outlook reflect the challenging industry conditions of lower Big-3 North American production, rising commodity prices, and the company's continued high leverage which constrain Metaldyne's credit metrics. The automotive supplier industry is expected to continue to experience pressures from reported production volume decreases from US OEMs in the near term. These ratings were assigned: * Metaldyne Company LLC: -- B2,LGD3, 34% rating to the $420 million guaranteed senior secured term loan; -- B2, LGD3, 34% rating to the $60 million Synthetic L/C Facility; -- Ba3, LGD2, 11% rating to the $150 million guaranteed senior secured revolving credit facility); These ratings were raised: * Metaldyne Corporation: -- Corporate Family Rating to B3 from Caa1; -- Probability of Default Rating to B3, from Caa1; -- $150 million of 10% guaranteed senior unsecured notes due Nov. 2013, to B3, LGD3, 49%, from Caa2, LGD4, 69%; and, -- $250 million of 11% guaranteed senior subordinated notes due June 2012, to Caa2, LGD5 87%, from Caa3, LGD6, 92%. The ratings for the company's existing bank credit facilities, which are being refinanced by the new facilities, are withdrawn. For the last twelve months ending October 1, 2006, Debt/EBITDA approximated 7.7x and EBIT/cash interest was 0.6x. Free cash flow for the LTM period ending 10/01/06 was approximately $13 million. The company's availability under its revolving credit and securitization facilities at October 1, 2006 of approximately $82 million was limited to $21.5, based on leverage covenants. With the acquisition by Asahi Tec, the new equity proceeds and the bank facility refinancing will facilitate a reduction in overall leverage and improved interest coverage. Moreover, with expected availability under its new borrowing base bank credit facility at closing, Metaldyne should have greater flexibility to pursue an operational turnaround. Pro forma for the transaction, Debt/EBITDA is expected to be approximately 5.4x and EBIT/interest expense is expected to be approximately 0.7x. Future events which would be likely to result in a rating downgrade include deterioration in operating performance that erodes free cash flow generation or reduces the company's liquidity position, or failure to achieve the expected debt reduction from the net proceeds of an institutional offering Asahi Tec. Consideration for a lower outlook or rating could arise if any combination of these factors would result in Debt/EBITDA deteriorating above 7.0x or if EBIT/interest were not to recover to levels approaching 1.0x. Future events which would be likely to result in an improved outlook include consistent positive free cash flow generation and deleveraging from operations, debt reduction through additional equity infusions, or increased diversification of the revenue base or product offerings resulting in improved margins. Consideration for a higher outlook or ratings could arise if any combination of these factors would result in the Debt/EBITDA decreasing below 5.0x or EBIT/interest coverage improving to 1.5x. Metaldyne Corporation, headquartered in Plymouth, Michigan, is a manufacturer of highly engineered products for the global light vehicle market. Metaldyne designs, engineers and assembles metal- formed and engineered products used in transmissions, engines and chassis of vehicles. The company's annual revenues currently approximate $1.87 billion. METALDYNE CORP: Asahi Deal Cues S&P to Hold Credit Rating at B -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Metaldyne Corp., including its 'B' corporate credit rating, and removed them from CreditWatch with developing implications where they had been placed on Aug. 21, 2006. The outlook is negative. At the same time, Standard & Poor's assigned 'BB-' bank loan rating and a recovery rating of '1' to subsidiary Metaldyne Company LLC's proposed $150 million senior secured revolving credit facility, indicating expectations for recovery of 100% of principal in the event of a payment default. The 'B' bank loan ratings and recovery ratings of '2' were also assigned to the proposed $445 million term loan facility and the $60 million synthetic L/C facility, indicating expectations for substantial recovery of principal in the event of a payment default. In addition, recovery ratings of '5' were assigned Metaldyne Corp.'s existing $250 million and $150 million senior notes. Standard & Poor's will withdraw its ratings on Metaldyne's existing bank facilities upon the closing of the proposed bank facilities. The rating actions reflect the pending purchase of Metaldyne by unrated Asahi Tech Corp. A cash equity infusion from Asahi Tech, resulting in modestly lower debt along with completion of the pending bank facilities, will sufficiently bolster Metaldyne's financial profile to retain the current rating, although business challenges remain intense. Metaldyne will become a subsidiary of unrated Asahi Tech, but is expected to operate independently, and there is no guarantee of support from Asahi Tech for Metaldyne's debt. Asahi Tech is a public company in Japan, and is controlled by Ripplewood Partners. MICHELEX CORP: Sept. 30 Balance Sheet Upside-Down by $4.7 Million ----------------------------------------------------------------- Michelex Corp. reported a $508,103 net loss on $676,660 of net sales for the third quarter ended Sept. 30, 2006, compared with a $66,486 net loss on $829,717 of net sales for the same period in 2005. Revenues decreased as a result of the company's inability to secure sufficient financing to meet working capital requirements. In 2005 Wells Fargo canceled the company's credit line and demanded full payment of the term loan, totaling approximately $3,900,000. At Sept. 30, 2006, the company's balance sheet showed $4.6 million in total assets and $9.3 million in total liabilities, resulting in a $4.7 million total stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $1.8 million in total current liabilities available to pay $5.7 million in total current liabilities. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?1671 Going Concern Doubt As reported in the Troubled Company Reporter on Nov. 14, 2006, Seligson & Giannattasio LLP expressed substantial doubt about Michelex Corp.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's significant recurring losses and dependence on its ability to meet its future needs and the success of its future operations on the realization of a major portion of its assets. About Michelex Corp. Michelex Corp. provides precision products manufactured with state-of-the-art equipment. Michelex Division manufactures, imports and distributes Optical Media Packaging products. It also produces, imports, and distributes a complete line of plastic injection molded multimedia packaging products. Michele Audio Division replicates services for the spoken words industry. It also owns a large catalogue of music which the company intends to market. MICROHELIX INC: Working Capital Deficit Tops $1.2 Mil. at Sept. 30 ------------------------------------------------------------------ microHelix Inc. earned $34,086 of net income on $3.9 million of net revenues for the three months ended Sept. 30, 2006, compared with $9,730 of net income on $2.8 million of net revenues for the same period in 2005. At Sept. 30, 2006, the company's balance sheet showed $6.6 million in total assets and $6.1 million in total liabilities. The company's Sept. 30 balance sheet also showed strained liquidity with $3.6 million in total current assets available to pay $4.8 million in total current liabilities. As of Sept. 30, 2006, the Company had a $2,000,000 line of credit for working capital, secured by accounts receivable and inventory. As of Sept. 30, 2006, there was $1,390,874 outstanding on the line of credit and the availability on the line of credit was $609,126. The line of credit expires on April 7, 2007. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?167e Going Concern Doubt Stonefield Josephson Inc. in Los Angeles, California, raised substantial doubt about microHelix Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's operating losses since inception, and accumulated and working capital deficiencies. About microHelix microHelix Inc. (OTCBB: MHLX) -- http://www.microhelix.com/-- designs and manufactures cable assemblies for original equipment manufacturers. The company's products are used in medical ultrasound probes, patient monitoring devices, aerospace components and video surveillance assemblies. MILLS CORP: Selects Four Nominees for Election to Board ------------------------------------------------------- The Mills Corporation and Gazit-Globe Ltd. have agreed on a slate of four nominees for election to The Mills' board at its Annual Meeting of Stockholders to be held on Dec. 29, 2006. The slate will include two new independent directors originally proposed by Gazit, Jon N. Hagan and Keith M. Locker, each of whom has extensive experience in the REIT industry. Mark S. Ordan, Chief Executive Officer and President of The Mills, will also be nominated to the board. S. Joseph Bruno, a current Mills director and the chairman of The Mills' audit committee, will be re- nominated as part of the agreed slate. Gazit and The Mills also reported that Gazit will enter into a confidentiality agreement with The Mills that includes a standstill provision that will last through March 30, 2007, subject to early termination upon the occurrence of certain circumstances. That confidentiality agreement will be filed with the U.S. Securities and Exchange Commission. Gazit has agreed to discontinue its efforts to nominate and solicit proxies to elect its own slate of directors to The Mills' board. "The Mills is very pleased that we were able to reach this agreement with Gazit and I look forward to joining Jon Hagan and Keith Locker on The Mills' board," said Mark Ordan. "The Mills' board and management are committed to completing the strategic alternatives process and finding the best solution to maximize value for all of The Mills' stockholders." The agreement to nominate the above slate of directors was part of a settlement approved by the Delaware Chancery Court Tuesday. The Court also ordered The Mills to hold its annual meeting on Dec. 29, 2006, and that the shares of stock represented at that meeting, either in person or by proxy, shall constitute a quorum for purposes of the meeting, notwithstanding the quorum requirement of The Mills' bylaws. About Gazit-Globe Gazit-Globe is a real estate investment company listed on the Tel Aviv Stock Exchange as part of the TA-25 Index. Gazit-Globe, directly and through subsidiaries and affiliates acquires, develops and operates income-producing properties including shopping centers, retirement homes and medical office buildings in growth urban areas in North America, Europe and Israel. With total assets (in market value) of over $8 billion, Gazit-Globe has interests in 474 properties. This includes 22 properties currently under development that consist of approximately 46 million square feet of gross leasable area. About The Mills 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. MORGAN STANLEY: Fitch Lifts Rating on $8 Million Class K Certs. --------------------------------------------------------------- Fitch upgrades Morgan Stanley Capital I Inc.'s commercial mortgage pass-through certificates, series 1999-CAM1, as: -- $14.1 million class G to 'AA+' from 'AA'; -- $14.1 million class H to 'A+' from 'A'; -- $6 million class J to 'BBB+' from 'BBB-'; and, -- $8.1 million class K to 'BBB-' from 'BB'. In addition, Fitch affirms these classes: -- $165.3 million class A-4 at 'AAA'; -- Interest only class X at 'AAA'; -- $26.2 million class B at 'AAA'; -- $26.2 million class C at 'AAA'; -- $12.1 million class D at 'AAA'; -- $20.2 million class E at 'AAA'; -- $8.1 million class F at 'AAA'; -- $6 million class L at 'BB-'; -- $6 million class M at 'B-'; and, -- $3.5 million class N remains at 'CC/DR4'. Classes A-1, A-2 and A-3 have paid in full. The upgrades are due to increased credit enhancement as a result of additional paydown since Fitch's last rating action. As of the November 2006 distribution date, the transaction's aggregate principal balance has been reduced 60% to $315.9 million from $806.5 million at issuance. The pool remains geographically diverse with the largest concentration of properties in California. Three loans have been identified as Fitch loans of concern. One asset is currently in special servicing and real-estate owned. The asset is an industrial/warehouse facility located in Lewisville, Texas. The property remains 100% vacant with no prospective tenants at this time. The special servicer continues to market the property for sale. Losses on this asset will be absorbed by class N. NORAMPAC INC: Domtar Sells 50% Stake to Cascades for CDN$560 Mil. ----------------------------------------------------------------- Cascades Inc. will buy Domtar Inc.'s 50% interest in Norampac Inc. for CDN$560 million or $491 million in cash, Frederic Tomesco writes for Bloomberg. According to the source, the purchase deal, which will close by Dec. 31, 2006, covers CDN$360 million in debt and CDN$200 million in equity, including subscription receipts that are convertible to common stock. Bloomberg relates that Norampac's partner, Domtar, will use the proceeds to reduce debt as part of its merger with Weyerhaeuser Co.'s paper unit. As reported in the Troubled Company Reporter on Aug. 24, 2006, Domtar Inc. signed a definitive agreement to combine with Weyerhaeuser's fine paper business and related assets in a $1.35 billion transaction. The new company, to be called Domtar, will have its head office in Montreal, Quebec, while the headquarters of operations will be in Fort Mill, South Carolina. The transaction has been approved by the Boards of Directors of both companies. Shares of both companies, Bloomberg says, were cut short prior to the announcement. Cascades last traded at CDN$13.33 with a gain of 13 cents on the Toronto Stock Exchange, while Domtar traded at CDN$8.22, or 7 cents higher, Bloomberg adds. About Cascades Founded in 1964, Cascades Inc. -- http://www.cascades.com/-- produces, transforms and markets packaging products, tissue paper and fine papers, composed mainly of recycled fibres. Cascades employs nearly 15,600 men and women who work in some 140 modern and flexible production units located in North America, in Europe and in Asia. Cascades' management philosophy, its more than 40 years of experience in recycling, its continued efforts in research and development are strengths which enable the company to create new products for its clients and thus offer superior performance to its shareholders. The Cascades shares trade on the Toronto stock exchange under the ticker symbol CAS. About Domtar Headquartered in Montreal, Quebec, Domtar Inc. (TSX/NYSE: DTC) -- http://www.domtar.com/-- produces uncoated freesheet paper in North America. The Company also a manufactures business papers, commercial printing and publication papers, and technical and specialty papers. Domtar manages according to internationally recognized standards 18 million acres of forestland in Canada and the United States, and produces lumber and other wood products. Domtar has 10,000 employees across North America. The company also has a 50% investment interest in Norampac Inc., a Canadian producer of containerboard. About Norampac Norampac owns eight containerboard mills and 26 corrugated products plants in the United States, Canada and France. With annual production capacity of more than 1.45 million short tons, Norampac is the largest containerboard producer in Canada and the seventh largest in North America. Norampac, which is also a major Canadian manufacturer of corrugated products, is a joint venture company owned by Domtar Inc. (TSX: DTC) and Cascades Inc. (TSX: CAS). * * * Norampac's 6-3/4% Senior Notes due 2013 carry Moody's Investors Service's B1 rating and Standard & Poor's BB+ rating. NORAMPAC INC: Cascades' Planned Buyout Cues DBRS to Review Rating ----------------------------------------------------------------- Dominion Bond Rating Service placed the rating of the Senior Notes of Norampac Inc. at BB. Under Review with Positive Implications, following the announcement that the Company will be acquired by Cascades Inc. The rating status reflects the fact that Cascades Inc. has not stated that it will guarantee Norampac debt; DBRS awaits more information regarding Cascades intentions. DBRS is of the opinion that Norampac is a vital operating unit of Cascades; in the event that the Company obtains full support from Cascades, Norampac will assume the DBRS rating of Cascades. NORTHWEST AIRLINES: Owl Creek Wants Equity Committee Appointed -------------------------------------------------------------- Owl Creek Asset Management L.P.; Owl Creek I LP; Owl Creek II LP; and Owl Creek Advisors LLC have asked Diana G. Adams, the Acting U.S. Trustee for Region 2, to appoint an official committee of equity security holders in Northwest Airlines Corp. and its debtor-affiliates' bankruptcy cases. In a letter dated November 21, 2006, David S. Rosner, the Owl Creek Companies' representative, said there is a growing and substantial likelihood that equity holders will receive a meaningful distribution in Northwest Airlines' cases. The Owl Creek Companies described possible scenarios whereby Northwest Airlines' common stock could be worth between $19.75 and $33.50 per share. The Owl Creek Companies beneficially own in the aggregate 4,400,000 shares or 5% of Northwest Airlines' common stock. The Owl Creek Companies purchased the Shares on November 15 and 16, 2006, at prices ranging from $1.34 to $1.95 per share. "The Debtors have achieved cost savings with several labor groups and certain aircraft financiers as well as from industry-wide trends that are benefiting all airlines. These industry-wide trends include a substantial decline in the cost of oil, potential consolidation of the industry through mergers, lower capacity, and an increased ability to maintain pricing," Mr. Rosner said. Based on Wall Street analyst reports, Mr. Rosner noted that the trading markets value Northwest's legacy carrier peers -- American, Continental, United, and US Airways -- at 5-1/2 to 6 times Earnings Before Interest, Taxes, Depreciation, Amortization. Carriers like Northwest with a higher likelihood of being a merger candidate trade for more than 6x EBITDAR and carriers with a lower likelihood of being a merger candidate trade closer to 5.5x EBITDAR, Mr. Rosner pointed out. Based on similar 2007 fuel price assumptions to those underlying the comparable company valuations, the Owl Creek Companies forecast Northwest's 2007 EBITDAR to be $2,700,000,000. Given a valuation of 6.0x 2007 EBITDAR, Northwest should have a total enterprise value of more than $16,200,000,000 at the time of its expected emergence from bankruptcy protection in September 2007, Mr. Rosner suggested. With a cash build up of more than $1,000,000,000 during the remaining pendency of the bankruptcy cases, this would result in an equity value of $19.75 per share after covering all claims with interest and the preferred stock, Mr. Rosner said. Mr. Rosner also added that US Airways' hostile offer for Delta Airlines -- aside from signaling directly the consolidation trend in the legacy carrier market from which Northwest's value undoubtedly will increase -- demonstrates the inherent value, recoverable by Northwest's equity holders, that a merger of Northwest with a strategic partner will create. "US Airways announced that it expects the combination to generate $1,650,000,000 of annual synergies, which is 6.2% of the combined Delta/US Airways passenger sales. Assuming comparable proportional synergies to a Northwest merger with Continental (Continental Airlines is the most logical partner, but this analysis would be equally applicable to another carrier), then the synergies generated by a combination of Continental Airlines with Northwest would be approximately $1,250,000,000 annually," Mr. Rosner said. Valuing the company at a post-merger multiple of 5.25x EBITDAR including one half of the synergies accruing to Northwest -- the other half to the merger partner -- results in an implied stock price of $33.50 per share, Mr. Rosner noted. The Owl Creek Companies asserted that appointment of a representative equity committee is both appropriate and necessary. Mr. Rosner assured the U.S. Trustee costs associated with a Northwest Equity Committee would be negligible when compared to the value at issue in the Chapter 11 cases and the value of the shareholder interests the Northwest Equity Committee will protect. In a regulatory filing with the Securities and Exchange Commission, Jeffrey A. Altman, managing member of Owl Creek, explained that the Owl Creek Companies originally acquired the Shares for investment in the ordinary course of business because they believed that the Shares, when purchased, were undervalued and represented an attractive investment opportunity. Mr. Altman noted that acquisition of beneficial ownership of, in the aggregate, in excess of 4,450,000 shares of Northwest Airlines Common Stock requires compliance with certain notice provisions pursuant to an order from the U.S. Bankruptcy Court for the Southern District of New York. Mr. Altman said the Owl Creek Companies may, in the future, seek to acquire beneficial ownership of more than 4,450,000 shares of Common Stock, and, if so, will comply with the Notice Order in all respects. The Owl Creek Companies may, from time to time, enter into and dispose of cash-settled equity swap or other similar derivative transactions with one or more counterparties that are based on the value of the Northwest Airlines Common Stock, which transactions may be significant in amount. Northwest's outstanding shares total 87,300,393 as of Sept. 30, 2006. Owl Creek Advisors is the general partner of Owl Creek I and Owl Creek II, and has the power to direct their affairs, including decisions regarding the receipt of dividends from, and the disposition of the proceeds from the sale of, the shares. Owl Creek Asset Management is the investment manager of Owl Creek Overseas Fund Ltd. and Owl Creek Socially Responsible Investment Fund, Ltd. Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 16, 2007. (Northwest Airlines Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NORTHWEST AIRLINES: Court Disallows and Expunges 145 Claims ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York disallows and expunges 145 claims in their entirety. A schedule of the Expunged Claims is available at no charge at http://ResearchArchives.com/t/s?163e Northwest Airlines Corp. and its debtor-affiliates' objection to four claims are withdrawn, without prejudice to their right to object to the allowance of the claims at a later time: Claimant Claim No. -------- --------- Bennett, Steven 5857 Cikanek, James 11365 Johnson, Larry 4923 Kelly, Michael 2726 Judge Gropper declares that all surviving claims will remain on the Debtors' claims registry, and that the claims are neither allowed nor disallowed at this time, subject to any objection in the future to their allowance. Judge Gropper preserves the Debtors' rights to (i) object to the allowance of the surviving claims, and (ii) assert any claims, counterclaims, rights of set-off or recoupment, preference actions, fraudulent transfer actions, or any other claims against the claimants. Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 16, 2007. (Northwest Airlines Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NORTHWEST AIRLINES: Stay Doesn't Apply to RI Commission's Action ---------------------------------------------------------------- The Hon. Allan Gropper of the U.S. Bankruptcy Court for the Southern District of New York denies Northwest Airlines Corp. and its debtor-affiliates' request and rules that the automatic stay does not apply to the Action filed by the Rhode Island Commission for Human Rights. The Court order is without prejudice to the Debtors' right to raise an argument at a later stage in the Commission's proceedings. As reported in the Troubled Company Reporter on Nov. 8, 2006, the Debtors asked the Court to enforce the automatic stay against the Rhode Island Commission for Human Rights, and Patricia A. Wilson. According to Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, the Commission and Ms. Wilson violated the automatic stay extant in the Debtors' Chapter 11 cases by proceeding with an action on Ms. Wilson's behalf to recover monetary damages for alleged disability discrimination in connection with Ms. Wilson's 2003 termination from Northwest Airlines. Ms. Wilson filed a complaint in December 2003. In March 2004, Northwest filed with the Commission a request to dismiss the Rhode Island Action on grounds that the Commission lacked subject matter jurisdiction to decide the matter because it is preempted by the Railway Labor Act, or alternatively, for dismissal on the merits, Mr. Ellenberg relates. The Commission issued a complaint against the Debtors in December 2005. In June 2006, the Commission issued a decision denying Northwest's request to dismiss the Rhode Island Action. The Commission has scheduled a hearing on the merits of Ms. Wilson's claim to be held in Rhode Island on May 8, 2007. Though the Debtors have attempted on numerous occasions to advise them that the Debtors are entitled to the protections of the automatic stay, Mr. Ellenberg says, Ms. Wilson and the Commission have asserted that the automatic stay does not apply to them. Mr. Ellenberg asserts that contrary to the Commission's position, the Rhode Island Action does not fit within the narrow police power exception to the automatic stay set forth in Section 363(d)(4) of the Bankruptcy Code. In applying the limited exception to permit a government unit to exercise its police power outside of the Bankruptcy Court, courts examine whether the action primarily advances the government's pecuniary interest and whether the action has an overriding public purpose, Mr. Ellenberg notes. Mr. Ellenberg points out that Section 362 of the Bankruptcy Code prohibits the commencement or continuation of judicial proceedings that could have been commenced prepetition. He also notes that employee discrimination complaints similar to the Rhode Island Action have been stayed in the Debtors' Chapter 11 cases. Because its primary purpose is apparently to recover money damages for alleged prepetition conduct by the Debtors, and because the complaint seeks to adjudicate private rights, the Rhode Island Action is in violation of the automatic stay and is therefore void and without effect, Mr. Ellenberg contends. RI Commission Objects The Rhode Island Commission for Human Rights contends that Section 362(b)(4) of the Bankruptcy Code provides an exception to the automatic stay under which it is proceeding. Francis A. Gaschen, Esq., in Providence, Rhode Island, asserts that the automatic stay does not apply to exercises of the Commission's police powers. The Commission states that if the Court finds that the automatic stay did encompass the exercise of its police powers, the stay should be lifted to allow it to conclude its investigation. According to Mr. Gaschen, the primary purpose of the Commission's investigation into the allegations of the charge is not to recover money damages for complainant Patricia A. Wilson, but to determine if there is probable cause to believe the allegations of the charge of discrimination. If no probable cause is found, the matter will be dismissed in its entirety, Mr. Gaschen points out. He also assures the Court that allowing the Commission to proceed would not interfere with the Debtors' bankruptcy proceeding. The Commission maintains that judicial economy would be best served by lifting the stay, and that it is ready to continue its investigation and only waits for the submission of a few documents requested from the Debtors' corporate counsel. Once those documents are received, Mr. Gaschen says, scant time is required for the investigator to conclude her work and for a determination to issue. "No harm would be created to the Debtor should the investigation be allowed to continue. Clearly, there could be harm to the public should the charge not be investigated," Mr. Gaschen concludes. About Northwest Airlines Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 16, 2007. (Northwest Airlines Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ORCHARD SUPPLY: Moody's Rates $200 Million Secured Loan at B1 ------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Orchard Supply Hardware Corporation's $200 million senior secured term loan maturing 2014, and assigned the B1 corporate family rating. The rating outlook is stable. Orchard Supply Hardware's B1 corporate family rating combines a business model with critical components that are low high yield such as its small size and its geographic concentration in California and some that are investment grade, with credit metrics that are also decidedly high yield. It also considers Orchard's ownership structure with Sears, Roebuck and Co. as an 80.1% owner and financial sponsor Ares Management owning the other 19.9%, and the potential for future shareholder enhancements, its solid position within its home California market, its breadth of product and ability to sell Craftsman as well as other national brands, the competitive landscape with both Home Depot and Lowe's very active in this market, leverage that is moderate for the rating category, and the absence of any tangible support from its 80%+ owner Sears, Roebuck. Orchard remains successful as a smaller scale alternative to the home improvement superstores, focusing more on repair and maintenance projects than on the more complex home improvement "solutions" market. With its network of stores in California, it has carved out a profitable niche between the local "mom and pop" operator and the big box home improvement centers. While Orchard offers a more limited range of SKU's than the big boxes, it goes deeper within its chosen categories which results in higher margins than either Home Depot or Lowe's, and provides a compelling shopping alternative. The B1, LGD5, 73% rating of the senior secured bank term loan reflects its weaker collateral package, which includes first liens on trademarks and potentially beneficial leases, and a second lien on accounts receivable and inventory behind the first lien securing the unrated $130 billion asset-based bank revolving credit facility. Proceeds from this term loan will be used to repay a $200 million bridge loan from OSH's parent, Sears, Roebuck & Co, which emanated from the sale of 19.9% of OSH to Ares Management. The stable outlook reflects the company's consistent operating performance, and the expectation that it will continue to manage itself conservatively during what is initially a modest new store growth program. Upward rating pressure would emanate from free cash flow/debt exceeding 10%, while downward pressure would result if operating performance or liquidity were to weaken, or if free cash flow/debt were to fall below 3%. Orchard Supply Hardware Corporation, which is owned 80.1% by Sears, Roebuck and Co. and 19.9% by Ares Management, currently operates 86 home and garden stores in California. O'SULLIVAN INDUSTRIES: Hires Gary Ramey as Senior Marketing Exec. ----------------------------------------------------------------- O'Sullivan Industries appointed Gary W. Ramey as its Senior VP of Marketing, bringing over 20 years of marketing and category management expertise to the business. Mr. Ramey has been with Gold Toe Hosiery, where he held a SVP position and was key to an effective building of the brand and company turn-around. Previously, Ramey worked at Carters Childrenswear and Sara Lee Corporation in executive marketing positions. He has extensive experience growing brands, developing products and delivery programs to increase sales to big box retail and superstores, including Wal-Mart, Kmart, Target, and others. "Gary is a well-respected and accomplished marketing executive who brings a proven track record of success in managing and growing a business. His consumer marketing background, understanding of retail, and his proven skills with strategy development will be a big asset as we move forward with aggressive business plans. We are excited to have him be part of the team charged with delivering on our plans," said Rick Walters, CEO for O'Sullivan. "O'Sullivan provides an exciting opportunity for me to be part of building a great company," added Mr. Ramey. "The O'Sullivan name carries a solid base of brand recognition that we are going to build upon. This is a business with a long history of being an industry leader. We will continue that by focusing on the brand, the products and our customers." Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). Joel H. Levitin, Esq., at Dechert LLP, represents the Debtors. Michael H. Goldstein, Esq., Eric D. Winston, Esq., and Christine M. Pajak, Esq., at Stutman, Treister & Glatt, P.C., represent the Official Committee of Unsecured Creditors. On Sept. 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PNC COMMERCIAL: Fitch Lifts Rating on $7 Mil. Class K Certs. to BB ------------------------------------------------------------------ Fitch Ratings upgrades six classes of PNC Commercial Mortgage Acceptance Corp.'s commercial mortgage pass-through certificates, series 2000-C1, as: -- $26 million class E to 'AAA' from 'AA+'; -- $12 million class F to 'AA' from 'AA-'; -- $12 million class G to 'A' from 'A-'; -- $18 million class H to 'BBB' from 'BBB-'. -- $8 million class J to 'BBB-' from 'BB+'; and, -- $7 million class K to 'BB' from 'BB-'. In addition, Fitch affirms these classes: -- $409.5 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $34 million class B at 'AAA'; -- $34 million class C at 'AAA'; -- $10 million class D at 'AAA'; -- $8 million class L at 'B'; and, -- $7 million class M at 'B-'; The $1.9 million class N remains at 'C/DR5'. The class A-1 certificates have paid in full. The balance of the class O certificates has been reduced to zero due to realized losses. The rating upgrades are due to defeasance and paydown since Fitch's last ratings action. Twenty eight loans have defeased since issuance, including three of the top ten loans. As of the November 2006 distribution date, the pool has paid down 26.6% to $587.6 million from $801 million at issuance. There are currently two assets, both of which are real estate owned, in special servicing. Losses are expected on the two REO assets, however any losses would be fully absorbed by class N. Fitch remains concerned about the fourth largest loan in the pool, which is collateralized by a full-service hotel located in Henrietta, New York. The second quarter 2006 servicer-provided debt service coverage ratio based on net operating income is 0.54x compared to 0.03x at year end 2005, 0.74x at YE 2004 and 1.71x at issuance. Occupancy at YE 2005 declined to 40.4% compared to 57.8% at YE 2004 and 70.5% at issuance. The decline in occupancy and NOI from issuance was attributed to the downsizing of large employers in Rochester. The property changed flags from a Holiday Inn to a Doubletree Inn & Suites in the fourth quarter of 2005 and is in the process of being completely renovated. The increase in second quarter 2006 NOI from YE 2005 has been attributed to higher daily rates associated with the Doubletree flag. It remains unclear as to when the property is expected to stabilize. Fitch will continue to monitor the performance of this loan closely. Fitch's Distressed Recovery ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. QUEBECOR WORLD: QWUSA Offers to Buy QWCC's $125 Mil. Senior Notes ----------------------------------------------------------------- Quebecor World (USA) Inc., a wholly owned subsidiary of Quebecor World Inc., commenced cash tender offers to purchase: (i) any and all of Quebecor World Capital Corporation's outstanding $91 million in aggregate principal amount of 8.54% Senior Notes, Series C, due Sept. 15, 2015 and Quebecor World Capital's $30 million in aggregate principal amount of 8.69% Senior Notes, Series D, due Sept. 15, 2020 and (ii) an aggregate principal amount of Quebecor World Capital's outstanding 8.42% Senior Notes, Series A, due July 15, 2010 (the Series A Notes) and 8.52% Senior Notes, Series B, due July 15, 2012 equal to the balance of $125,000,000 less the total aggregate principal amount of Series C Notes and Series D Notes accepted for purchase. The Series C Notes, the Series D Notes, the Series A Notes and the Series B Notes are referred to collectively as the "Notes." Quebecor World (USA) will accept for purchase Series A Notes and Series B Notes under the tender offer on a pro rata basis after having first accepted for payment all Series C Notes and Series D Notes validly tendered pursuant to the tender offer. The tender offers are being made upon and are subject to the terms and conditions set forth in the Offer to Purchase dated Nov. 30, 2006 and the related Letter of Transmittal. The total consideration to be paid for each validly tendered and accepted Series C Note and Series D Note will be a fixed price of $1,000 per $1,000 principal amount. The total consideration to be paid for each validly tendered and accepted Series A Note and Series B Note will be a fixed price of $1,000 per $1,000 principal amount. In addition, holders of the Notes will receive accrued and unpaid interest up to, but not including, the settlement date, in respect of Notes accepted for purchase. The total consideration, which will be paid for Notes validly tendered prior to or at 5:00 p.m., New York City time, on Dec. 13, 2006, includes an early tender premium in the amount of $20 per $1,000 principal amount of Notes. Notes validly tendered after 5:00 p.m., New York City time, on Dec. 13, 2006, and prior to 11:59 p.m., New York City time, on Dec. 28, 2006, will not be eligible to receive the early tender premium. Tendered Notes may be withdrawn until 5:00 p.m., New York City time, on Dec. 13, 2006, but not thereafter, except in the limited circumstances set forth in the Offer to Purchase. The tender offers will expire at 11:59 p.m., New York City time, on Dec. 28, 2006, unless extended or earlier terminated as described in the Offer to Purchase. The settlement date is expected to be the business day immediately following the expiration date of the offers, which, assuming that the offers are not extended, will be Dec. 29, 2006 or as soon as possible thereafter. The tender offer documents are being distributed to holders. The Dealer Manager for the offers is Citigroup Global Markets Inc. Questions regarding the tender offers may be directed to Citigroup Global Markets at (800) 558-3745 (toll free) or at (212) 723-6106 (collect). Global Bondholder Services Corporation is the Information Agent and the Depositary for the tender offers. Requests for documents and questions regarding procedures for tendering Notes should be directed to Global Bondholder Services Corporation at (866) 470-4300 (toll free) or at (212) 430-3774 (collect). Quebecor World Inc. -- http://www.quebecorworld.com/-- provides print solutions to publishers, retailers, catalogers and other businesses with marketing and advertising activities. Quebecor World has approximately 29,000 employees working in more than 120 printing and related facilities in the United States, Canada, Argentina, Austria, Belgium, Brazil, Chile, Colombia, Finland, France, India, Mexico, Peru, Spain, Sweden, Switzerland and the United Kingdom. * * * As reported in the Troubled Company Reporter on Oct. 20, 2006, Moody's Investors Service downgraded the Corporate Family Rating of Quebecor World (USA) Inc. to B1 from Ba3, and moved this benchmark rating to the parent company, Quebecor World Inc. Related ratings were impacted. The outlook for all ratings is negative. QUINTEK TECH: Sept. 30 Balance Sheet Upside-Down by $1 Million -------------------------------------------------------------- Quintek Technologies Inc. incurred an $892,587 net loss on $411,728 of net revenues for the three months ended Sept. 30, 2006, compared with a $549,046 net loss on $693,359 of net revenues for the same period in 2005. The Company said that the increased net loss resulted from increased operating expenses and decreased revenues. At Sept. 30, 2006, the company's balance sheet showed $1.8 million in total assets and $2.8 million in total liabilities, resulting in a $1 million stockholders' deficit. The company's Sept. 30 balance sheet also showed strained liquidity with $342,665 in total current assets available to pay $2.6 million in total current liabilities. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?167b Securities Purchase Agreement The company entered into a Securities Purchase Agreement with Cornell Capital Partners L.P., an accredited investor, on May 17, 2006, and amended on September 15, 2006, for the sale of $2,000,000 in secured convertible debentures and warrants in order to obtain funding for our ongoing operations. The investors are obligated to provide us with an aggregate of $2,000,000 as follows: -- $750,000 was disbursed on May 17, 2006; -- $150,000 was disbursed on Sept. 15, 2006; -- $600,000 was disbursed on Oct. 23, 2006; and -- $500,000 will be disbursed upon the effectiveness of the registration statement registering the shares of common stock underlying the secured convertible debentures and warrants. Accordingly, the company has received a total of $1,500,000 pursuant to the Agreement. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 17, 2006, Kabani & Company Inc. in Los Angeles, Calif., raised substantial doubt about Quintek Technologies, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended June 30, 2006, and 2005. The auditor pointed to the Company's significant operating losses and insufficient capital. About Quintek Technologies Lyons Circle, Calif.-based Quintek Technologies Inc. provides out- sourcing/in-sourcing services, consulting services, and solution sales. RAPID PAYROLL: Court Approves Kibel Green as Financial Consultants ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California gave Rapid Payroll, Inc., permission to employ Kibel Green, Inc. as its financial consultants. Kibel Green is expected to: a) formulate financial, management and operating plans; b) assist and prepare reports to be filed by the Debtor with the U.S. Trustee's office; c) assist financial and accounting staff; d) advise and consult with management and operating personnel with respect to operations and management of its business and business plans; e) direct or assist operating personnel with the specific activities required to implement and complete any operating changes; f) analyze and advise in areas which affect cash flow, marketing, communications and acquisition/divestiture; g) evaluate the Debtor's organization structure and areas to reduce costs; h) design and monitor systems and controls to help management control daily operations, relationships with creditors, including financial institutions; i) assist the Debtor in the formulation of a plan of reorganization and disclosure statement; and j) otherwise, assist in matters as will aid in accomplishing the foregoing. Bruce C. Conklin, Jr., senior managing director of KGI, disclosed that he will bill $495 per hour. He further discloses that Kibel Green's other professionals bill: Professional Hourly Rate ------------ ----------- Steven Green $550 Kerry Krisher $375 Other Consultants $125 - $495 Out-of-pocket expenses for travel, reproduction, printing, graphics, messenger services, overnight mail, shipping, and other third party charges will be shouldered by the Debtor. Mr. Conklin assures the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not hold or represent any interest adverse to the Debtors' estates. Headquartered in Orange, California, Rapid Payroll Inc. fka Olsen Computer Systems, was in the business of licensing payroll processing software called Rapidpay and providing maintenance, support and updates for the software to its licensees. The Company was later acquired in November 1996 by Paychex, Inc. Rapid Payroll filed for chapter 11 protection on May 4, 2006 (Bankr. C.D. Calif. Case No. 06-10631). The firm of Robinson, Diamant & Wolkowitz, APC serves as the Debtor's counsel. On June 28, 2006, the Court authorized the Debtor to hire the firm of Irell & Manella LLP as its special litigation counsel through and including August 31, 2006. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and estimated debts between $10 million and $50 million. REFCO INC: Submits Modified First Amended Chapter 11 Plan --------------------------------------------------------- Refco Inc. and its debtor-affiliates; Marc S. Kirschner, the Chapter 11 Trustee for Refco Capital Markets, Ltd.; and the Official Committee of Unsecured Creditors and the Additional Committee delivered to the U.S. Bankruptcy Court for the Southern District of New York a modified First Amended Chapter 11 Plan on Dec. 4, 2006. The Plan Proponents tell Judge Robert D. Drain that all references to the Plan administrator in the Modified Plan will refer exclusively to the administration of estates of the Debtors and Refco F/X Associates, LLC. The RCM Trustee, who will wind down the RCM Estate in accordance with the terms and conditions under RCM's settlement agreement with its securities customers and unsecured creditors, will administer the RCM estate separately. With respect to classification and treatment of claims and interests of the Debtors excluding FXA, the Modified Plan provides that any allowed Class 3 Secured Lender Claims, to the extent not paid before the Plan's effective date, will be paid in full, in cash. No holder of a Class 7 Subordinated Claim against the Contributing Debtors will be entitled to any property or interest- in-property. In addition, no holder of a Class 8 Old Equity Interest will be entitled to any property, provided that the Old Equity Interest Holders have been given rights to participate in litigation and private actions trusts. Litigation & Private Actions Trusts J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that a litigation trustee will serve as representative of the Debtors' estates with respect to the Contributed Claims. To the extent that any Contributed Claims cannot be transferred to the Litigation Trust because of a restriction on transferability under applicable non-bankruptcy law that is not superseded or preempted by Section 1123 or any other provision of the Bankruptcy Code, those Claims will be deemed to have been retained by the Reorganized Debtors and RCM, as applicable, to enforce and pursue the Contributed Claims on the Estates' behalf. However, he notes, all net proceeds of the Contributed Claims will be transferred to effective beneficiaries consistent with the remaining Plan provisions and a Litigation Trust Agreement. Mr. Milmoe states that the Litigation Trust will be structured in a manner that provides for Tranche A and Tranche B. All contributed claims recoveries, whether applicable to Tranche A or Tranche B, will be distributed pro rata according to the beneficial interests in Tranche A and Tranche B. Mr. Milmoe adds that beneficiaries of Tranche B Litigation Trust Interests will be the holders of Old Equity Interests who have made a Private Actions Trust Election. Those beneficiaries will share the Tranche B Litigation Trust Interests Pro Rate based on a number of shares held by interest holders or those previously held to the extent that the holder has asserted a claim related to those shares. No holder of Tranche A and Tranche B Litigation Trust Interests will have any consultation or approval rights whatsoever in respect of management and operation of the Litigation Trust. Furthermore, Mr. Milmoe discloses that beneficiaries of the Private Actions Trust will be holders of Contributing Debtors General Unsecured Claims, FXA General Unsecured Claims, RCM Securities Customer Claims, RCM FX/Unsecured Claims, and those Old Equity Interests that make the Private Actions Trust Election, who will be given interests in the Private Actions Trust to the same extent as in the Litigation Trust. To the extent that any Non-Estate Refco Claims cannot be transferred to the Private Actions Trust because of a restriction on transferability under applicable non-bankruptcy law that is not superseded or preempted by Section 1123, the Non-Estate Refco Claims will be deemed to have been retained by a grantor, as applicable, and the Private Actions Trustee will be deemed to have been designated as a representative of that grantor to enforce and pursue those Claims, Mr. Milmoe says. All net proceeds of the Non-Estate Refco Claims will be transferred to the Private Actions Trust Beneficiaries consistent with the other provisions of the Plan and the Private Actions Trust Agreement. In consideration of the litigation expenses and potential delay avoided by the withdrawal of Plan confirmation objections asserted by the Ad Hoc Committee of Equity Interest Holders of Refco, the Beneficiaries of Tranche A Litigation Trust Interests will be deemed to have transferred to each Old Equity Interest Holder who has made a Private Actions Trust Election a Pro Rata share of the Tranche B Litigation Trust Interests. Moreover, the Plan Proponents clarify that all BAWAG Contingent Proceeds, if any, will be treated as part of the Contributing Debtors Distributive Assets and will be shared between RCM and Holders of Contributing Debtors General Unsecured Claims pursuant to the Modified Plan. Distribution Provisions & Plan Releases The Modified Plan provides that any Contributing Debtors General Unsecured Claim Holders with an independent claim against any Contributing Debtor based on a contractual guarantee or other direct contractual undertaking may also recover once from the Contributing Debtors on that claim based on full underlying claim amount owed by that Contributing Debtor, as of the Petition Date, for which the guarantee or other direct contractual undertaking was provided. To obtain full benefits of the Court-approved RCM Settlement Agreement, including final allowance of Secured Lender Indemnification Claims at zero for purposes of the Chapter 11 cases, all Secured Lender Released Claims, unless previously made effective under the Early Payment Order, are deemed fully and forever released on the Plan Effective Date. A blacklined copy of Refco's Modified First Amended Plan is available at no charge at: http://bankrupt.com/misc/refcoincmodifiedchap11plan.pdf Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). RCMI's exclusive period to file a chapter 11 plan expires on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). REFCO INC: Wants Court to Allow 1,218 Claims as Related Claims -------------------------------------------------------------- Pursuant to Refco, Inc.'s First Amended Joint Chapter 11 Plan, a creditor is generally entitled to recover on its claim from a primary obligor, J. Gregory St. Clair, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates. Other claims asserted by a creditor arising from the same facts, transactions or occurrences giving rise to that creditor's claim against its primary debtor obligor are deemed "Related Claims" and are subordinated under the Plan. Mr. St. Clair states that claimholders are not entitled to a distribution on account of claims unless and until the time as all allowed general unsecured claims against the applicable Debtor or RCM, as the case may be, have been paid in full. After reviewing their books and records, Refco and its affiliates and Refco Capital Markets, Ltd., identified 1,218 of 14,100 proofs of claim that fall within the Plan definition of Related Claims. Accordingly, the Chapter 11 Debtors ask the U.S. Bankruptcy Court for the Southern District of New York pursuant to Sections 105(a) and 1142(b) of the Bankruptcy Code to consider the 1,218 claims as Related Claims to ensure that ballots are properly tabulated and distributions are properly calculated in accordance with the Plan. A list of the Related Claims is available at no charge at: http://ResearchArchives.com/t/s?1646 Although the Related Claims fall within voting classes under the Plan, those claims must be voted in connection with their underlying claim asserted against a claimant's primary debtor obligor, Mr. St. Clair asserts. Specifically, the ballots for Class 5(a) Contributing Debtors General Unsecured Claims, Class 5(a) FXA General Unsecured Claims, Class 3 RCM FX/Unsecured 7 Claims and Class 4 Securities Customer Claims provide that a vote for or against the Plan applies to the claim in those classes -- and also to any corresponding Related Claims. Therefore, Mr. St. Clair notes, a creditor's Primary Claim and corresponding Related Claims are all deemed to be voted in the same way based on the ballot cast with respect to the Primary Claim. Any ballots cast on account of the Related Claims will be disregarded for voting tabulation purposes, he maintains. The Chapter 11 Debtors seek that any order entered by the Court with respect to the Motion be deemed a separate order with respect to each Related Claim as contemplated by Rule 9014 of the Federal Rules of Bankruptcy Procedure. The Chapter 11 Debtors reserve the right to designate additional Related Claims and to file objections to those claims or any other claims that may be asserted against them on any grounds. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. On Oct. 6, 2006, the Debtors filed their Amended Plan and Disclosure Statement. On Oct. 16, 2006, the gave its tentative approval on the Disclosure Statement and on Oct. 20, 2006, the Court Clerk entered the written disclosure statement order. The hearing to consider confirmation of Refco, Inc., and its debtor-affiliates' plan is set for Dec. 15, 2006. Objections to the plan, if any, must be in by Dec. 1, 2006. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). RCMI's exclusive period to file a chapter 11 plan expires on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). REFCO INC: GAIN Capital Wins FXA's Customer List for $750,000 ------------------------------------------------------------- Refco Inc. and its debtor-affiliates conducted on Nov. 9, 2006, a solicitation conference in connection with their request for (i) appointment of a consumer privacy ombudsman and (ii) approval of FXA's proposed Sale of its Customer Lists to Saxo Bank, subject to higher and better offers. At the conclusion of the Solicitation Conference, the Debtors selected the bid of GAIN Capital Group, LLC, as the highest or otherwise best bid for the assets. Accordingly, the U.S. Bankruptcy Court for the Southern District of New York approves the terms and conditions of FXA's Purchase Agreement with GAIN pursuant to Section 363(b), other than with respect to matters previously addressed by an order appointing an ombudsman. GAIN will pay FXA a $750,000 upfront fee for the Customer List plus a $100 activation fee per account, payable on every account over 4,000 opened before the second anniversary of the Closing Date. GAIN will pay FXA an Annual Maintenance Fee of 1% of the average account balance of each Customer, payable on both the first and second anniversaries of the Closing Date. The sale closed on November 16, 2006. Any objections that have not been withdrawn, waived, or settled, or not otherwise resolved are overruled on the merits with prejudice. Judge Drain directs FXA to consummate the Sale transaction with GAIN. The Debtors will not transfer or sell to GAIN -- and the "Purchased Assets" will not include -- any securities, customer property, other similar instruments, futures, or cash held by Refco Capital Markets, Ltd., or Refco Securities LLC, wherever located. Nothing will constitute a determination as to any party's rights in those securities, customer property, if any, or cash. Furthermore, Judge Drain requires Forex Capital Markets, LLC, under its Facilities Management Agreement with Refco Group Ltd., LLC, to cooperate with the Sale consummation. In addition, FXCM will not solicit the Debtors' customers in violation of the FMA. The Order incorporates by reference the FMA provisions governing the Debtors' rights to their customers and prohibition against FXCM's solicitation of the Debtors' customers. All entities, including FXCM, who are presently holding some or all of the Purchased Assets in which FXA holds an interest are directed to surrender possession of the Purchased Assets either to FXA before the closing date of the Sale, or to GAIN on the Closing Date. FXA will not make any disbursements of funds, except for the use of Sale proceeds to pay its allowed administrative expenses incurred in the ordinary course of its business. Any and all valid and perfected liens on or interests in the Purchased Assets will attach to any proceeds of those immediately upon receipt of the proceeds by priority, and with the same validity, force, and effect which they now have against the Purchased Assets, subject to any rights, claims and defenses the Debtors' estates or the Debtors may possess. FXA will deposit all amounts payable to it under the Purchase Agreement into a segregated investment account, which may contain the proceeds of one or more Court-approved sales, but no other cash of the Debtors' estates, and the proceeds will be invested in accordance with investment guidelines. Moreover, Judge Drain permits Saxo Bank to receive a break-up fee and expense reimbursement under and subject to its October 25, 2006 Asset Purchase Agreement with FXA. If payable, the fee and reimbursement will be allowed as an administrative expense under Sections 503(b) and 507(a)(2) against FXA's estate. GAIN will adopt and honor its privacy policy effective as of November 15, 2006. GAIN's Statement Gain Capital entered into a definitive Purchase Agreement with Refco F/X Associates LLC to purchase the RFXA retail customer account information and marketing list. The Purchase Agreement was approved as submitted by the Honorable Robert D. Drain, United States Bankruptcy Court for the Southern District of New York, at a hearing on November 14, 2006. "Under the terms of the proposed bankruptcy plan for Refco Inc., and its subsidiaries, the proceeds of the sale of the RFXA Customer List will enhance distributions to be made to creditors of RFXA," Said Refco's Chief Restructuring Officer David Pauker. "We are pleased to have finalized the sale to GAIN Capital," continued Mr. Pauker. "In addition to operating within a solid regulatory framework, GAIN offers RFXA clients a reliable, full service trading solution and a commitment to the highest professional standards," said GAIN's Chief Executive Officer Mark Galant. GAIN Capital Group and FOREX.com are registered with the National Futures Association as a Futures Commission Merchant. RFXA clients will be given the option to open an account at either GAIN Capital or at GAIN's retail division, FOREX.com. On June 30, 2006, RFXA and GAIN announced they had reached a preliminary agreement whereby GAIN would acquire the RFXA retail customer account information and related assets, subject to Court approval. On July 26th, 2006, the two parties announced that the proposed Agreement had been jointly terminated because the parties were unable to reach terms on a final asset purchase agreement. On October 30, 2006, RFXA announced it had entered into an Agreement with Saxobank to purchase the customer list for $500,000, subject to higher and better offers. GAIN and Saxobank participated in an auction on November 9, 2006, with GAIN ultimately submitting the highest and best offer for the RFXA customer list. About Gain Capital Group GAIN Capital Group LLC is a leading provider of foreign exchange services, including direct-access trading and asset management. Founded in 1999 by Wall Street veterans, GAIN Capital Group is one of the largest, most respected firms in the online forex industry, servicing clients from more than 140 countries and supporting trade volume in excess of $100 billion per month. Headquartered in Bedminster, New Jersey, the company operates sales offices in New York and Shanghai. The company operates two full service web portals. FOREX.com services individual investors of all experience levels with a full-service trading platform, lower account minimums and extensive education and training. The company's flagship service, GAIN Capital focuses on the needs of professional forex traders, including hedge funds and money managers. GAIN Capital Group and FOREX.com are registered with the National Futures Association as a Futures Commission Merchant. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. On Oct. 6, 2006, the Debtors filed their Amended Plan and Disclosure Statement. On Oct. 16, 2006, the gave its tentative approval on the Disclosure Statement and on Oct. 20, 2006, the Court Clerk entered the written disclosure statement order. The hearing to consider confirmation of Refco, Inc., and its debtor-affiliates' plan is set for Dec. 15, 2006. Objections to the plan, if any, must be in by Dec. 1, 2006. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). RCMI's exclusive period to file a chapter 11 plan expires on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). REFCO INC: Wants Abadi's Multi-Debtor Claims Disallowed ------------------------------------------------------- Refco Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to disallow 27 proofs of claim totaling $1,114,798,142 filed by Abadi & Co. Securities, Ltd., that appear to assert the same aggregate liabilities of 12 other claims filed by Abadi against Refco Capital Markets, Ltd. The Debtors want the Remaining Claims allowed for $41,288,820. J. Gregory St. Clair, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that the Remaining Claims are the claims that represent cash and securities in the investment accounts of Abadi and other account holders with RCM. Abadi has admitted that the Multi-Debtor Claims were filed as protective claims to preserve its rights to recover the amounts owed by the Debtors in the event that any RCM property is wrongfully transferred to the Debtors, Mr. St. Clair notes. In the event the Multi-Debtor Claims are not disallowed, the Debtors ask Judge Drain to estimate those claims at $0 to facilitate timely distributions under their First Amended Joint Chapter 11 Plan. A complete list of the Multi-Debtor Claims and the Remaining Claims is available at no charge at: http://ResearchArchives.com/t/s?1647 About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. On Oct. 6, 2006, the Debtors filed their Amended Plan and Disclosure Statement. On Oct. 16, 2006, the gave its tentative approval on the Disclosure Statement and on Oct. 20, 2006, the Court Clerk entered the written disclosure statement order. The hearing to consider confirmation of Refco, Inc., and its debtor-affiliates' plan is set for Dec. 15, 2006. Objections to the plan, if any, must be in by Dec. 1, 2006. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). RCMI's exclusive period to file a chapter 11 plan expires on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SATELITES MEXICANOS: Appoints Raul Cisneros Matusita as New CEO --------------------------------------------------------------- Satelites Mexicanos, S.A. de C.V. has appointed Raul Cisneros Matusita to serve as its new chief executive officer, effective Nov. 30, 2006. Mr. Cisneros's appointment was made on the same day the company officially concluded its U.S. bankruptcy case. Mr. Cisneros brings to the company over 22 years of experience, specializing in turnaround strategies, asset sales and restructurings. Recently, he has been an operative partner of Advent International Corp., supervising investments in mortgage lending institutions, leasing operations and turnaround of distressed assets. He was also deputy director general of Compania Mexicana de Aviacion through January of 2006, entrusted with the successful sale of Mexico's leading airline to Grupo Posadas, and for three years, director of Asset Administration and Financial Planning. For five years, he was the chief executive officer of Consultoria Internacional, a foreign exchange trader and from 1996 to 1999, he was appointed by Banco de Mexico to turnaround or sell troubled corporations. Mr. Cisneros succeeds Sergio Miguel Angel Autrey Maza, who was designated by the company's Board as interim chief executive officer in February 2005. Mr. Autrey will continue serving as a member of Reorganized Satmex's Board of Directors. 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). On Nov. 30, 2006 Satmex concluded its reorganization efforts and emerged from its U.S. bankruptcy case. SEA CONTAINERS: Wants Collinson Grant as Human Resource Advisor --------------------------------------------------------------- Sea Containers Ltd. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to employ Collinson Grant Ltd. as their human resource consultant, nunc pro tunc to Oct. 15, 2006. Edwin S. Hetherington, vice president, general counsel, and secretary of Sea Containers Ltd., tells the Court that Collinson Grant served as the Debtors' human resource consultants since February 2006 and has thus developed a great deal of institutional knowledge, an intimate understanding of the Debtors' business, employees and employment policies and benefits. Specifically, Collinson Grant will: (a) act as temporary interim head of human resources; (b) coordinate and manage the pensions' administration; (c) maintain all major human resource systems, policies and procedures during the organizational change; and (d) provide specialist support on the management of employee claims to the U.K. employment tribunal arising from the restructuring. Collinson Grant's services will be paid based on its current hourly rates, plus taxes applicable in the U.K.: Professional Hourly Rate ------------ ----------- Directors $340 Senior Consultants $317 Consultants $258 The Debtors will also reimburse the firm for necessary out-of- pocket expenses. Andrew Collinson, managing director of Collinson Grant, discloses that the Debtors paid the firm $1,225,770 in fees and $263,000 in expenses on account of human resource consultancy services rendered within a year prior to the Debtors' filing for bankruptcy. Mr. Collinson assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code and does not have an interest materially adverse to the interest of the Debtors or their estates. 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: Panel Wants Bingham McCutchen as FIMEM Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Sea Containers Ltd. and its debtor-affiliates' chapter 11 cases and its Financial Members Sub-Committee ask the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to employ Bingham McCutchen LLP as the FIMEM Sub-Committee's counsel effective Oct. 26, 2006. The Creditors Committee has created two separate sub-committees to manage potentially differing interests between two groups of creditors: (a) the Financial Members Sub-committee, consisting of The Bank of New York, Dune Capital Management LP, HSH Nordbank AG, Mariner Investment Group Inc., and Trilogy Capital LLC; and (b) the U.K. Pensions Sub-committee, consisting of the Sea Containers U.K. 1983 Pension Scheme, and the Sea Containers U.K. 1990 Pension Scheme. Andrew B. Cohen, managing director of Dune Capital LLC, relates that that the Creditors' Committee selected Bingham McCutchen because of its extensive bankruptcy experience and knowledge. Particularly, Bingham McCutchen served as counsel to the Chapter 11 creditors' committees of Allied Holdings, Inc., Loewen Group International, NRG Energy, and Complete Retreats, LLC. In addition, Bingham McCutchen represented an ad hoc committee of senior notes issued by Sea Containers Ltd.: * 10-3/4% Senior Notes due 2006; * 7-7/8% Senior Notes due 2008; * 12-1/2% Senior Notes due 2009; and * 10-1/2% Senior Notes due 2012 Mr. Cohen tells Judge Carey that in the course of the firm's representation, Bingham McCutchen has reviewed, analyzed the Debtors' financial situation and operations. Hence, the firm is already very familiar with the Debtors' financial and operational situations, material constituencies, and issues requiring resolution to reorganize. As the FIMEM Sub-Committee's counsel, Bingham McCutchen will: (a) provide legal advice with respect to the rights, powers, and duties of the FIMEM Sub-committee or the Creditors' Committee in the Debtors' bankruptcy cases; (b) represent the FIMEM Sub-committee or the Creditors' Committee at all hearings and other proceedings; (c) advise and assist the FIMEM Sub-committee or the Creditors' Committee in discussions with the Debtors and other parties-in-interest, as well as professionals retained by any party regarding the overall administration of the Debtors' cases; (d) assist the FIMEM Sub-committee or the Creditors' Committee in analyzing claims of the Debtors' creditors and in negotiating with the creditors; (e) assist the FIMEM Sub-committee or the Creditors' Committee's investigation of the assets, liabilities, and financial condition of the Debtors and of the operation of the Debtors' businesses; (f) assist the FIMEM Sub-committee or the Creditors' Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to, among other things, formulating the terms of a plan of reorganization for the Debtors; (g) assist and advise the FIMEM Sub-committee or the Creditors' Committee with respect to their communications with the general creditor body regarding matters in the Debtors' cases; (h) review and analyze on behalf of the FIMEM Sub-committee or the Creditors' Committee all pleadings, orders, statement of operations, schedules and other legal documents; (i) prepare on behalf of the FIMEM Sub-committee or the Creditors' Committee all pleadings, orders, reports and other legal documents as may be necessary in furtherance of the FIMEM Sub-committee or the Committee's interests and objective; and (j) perform other legal services for the FIMEM Sub-committee or the Creditors' Committee that may be necessary and proper to facilitate the discharge by the FIMEM Sub- committee or Committee of its duties in the Debtors' bankruptcy cases and any related proceedings. Bingham McCutchen will be paid on an hourly basis, plus reimbursement of actual and necessary expenses incurred. The principal attorneys and paralegal designated to represent the Debtors and their current hourly rates are: Professional Designation Hourly Rate ------------ ----------- ----------- Barry G. Russell, Esq. Partner GBP525 Ronald L. Silverman, Esq. Partner $675 Tom Bannister, Esq. Partner GBP430 Abigail Milburn, Esq. Counsel GBP255 Scott K. Seamon, Esq. Associate $395 Stacy A. Lopex, Esq. Associate GBP210 Flora Ahn, Esq. Associate $255 Bingham McCutchen received an advanced payment retainer for GBP75,000 on June 7, 2006, in respect of its representation of the Ad Hoc Committee. The firm proposes to apply the remaining balance of GBP934 to fees and expenses of the FIMEM Sub-Committee. Ronald L. Silverman, Esq., a partner of Bingham McCutchen, assures the Court that her firm is a "disinterested person" as that term is defined under Section 101(14) of the Bankruptcy Code. Bingham McCutchen does not hold or represent any interest adverse to the Debtors' estates with respect to the matters it is to be engaged, Mr. Silverman says. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHIP FINANCE: Good Performance Cues S&P to Lift Rating to BB ------------------------------------------------------------ Standard & Poor's Ratings Services raised its long-term corporate credit rating on Bermuda-based Ship Finance International Ltd., a ship-owning company tied to Frontline Ltd., to 'BB' from 'BB-'. The outlook is stable. At the same time, Standard & Poor's raised its senior unsecured debt rating on Ship Finance's $580 million bonds to 'B+' from 'B'. "The rating action reflects Ship Finance's better-than-expected operating and financial performance over the past three years, the recent change to a Frontline-independent management team, and expectations of continued stable and predictable cash flows through the company's largely long-term contract-based revenue structure," said Standard & Poor's credit analyst Per Karlsson. Total debt was $1.74 billion at Sept. 30, 2006. Ship Finance benefits from relatively predictable cash flows, which are secured through long-term contracts. The stable outlook also reflects the continual favorable near-term outlook for the oil tanker segment. In addition, the $274 million charter service reserve provides significant protection against downside risk. The potential for a 20% share in Frontline's profits above certain rate thresholds could strengthen financial measures in good tanker market years. Standard & Poor's nevertheless believes that Ship Finance will maintain its high leverage, as excess cash flows are likely to be paid out as dividends or invested in additional vessels. Standard & Poor's expect that future vessel additions will be funded largely by debt and that vessels acquired will be backed by medium- to long-term charter agreements with creditworthy shipping operators, which is key to the ratings. As the company expands its vessel fleet, an adequate liquidity buffer is expected to be generated and held on the balance sheet to protect against weak market conditions and the counterparty credit risk assumed. "Further rating upside potential is limited, while downside pressure could come from lower fleet contract coverage than expected, higher leverage, or prolonged weak market conditions," Mr. Karlsson added. SOUTHPARK COMMUNITY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Southpark Community Hospital LLC 314 Youngsville Highway Lafayette, LA 70508 Bankruptcy Case No.: 06-51053 Type of Business: The Debtor provides personalized, quality, professional, and comprehensive health care services. See http://www.southparkhospital.com/ Chapter 11 Petition Date: November 30, 2006 Court: Western District of Louisiana (Lafayette/Opelousas) Judge: Robert Summerhays Debtor's Counsel: Brandon A. Brown, Esq. Louis M. Phillips, Esq. Gordon, Arata, McCollam, Duplantis, & Eagan, L.L.P. 1600 One American Place Baton Rouge, LA 70825 Tel: (225) 381-9643 Fax: (225) 336-9763 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Siemens Financial Services $2,551,158 2809 Collections Services Chicago, IL 60693 Depuy Spine Sales, L.P. $432,023 5905 Collections Center Drive Chicago, IL 60693 Young's Professional Services $172,750 204 Rue Street Barts Youngsville, LA 70592 FMC DS West Lafayette $137,035 Johnson & Johnson Health Care $113,060 Owens & Minor $104,000 Conmed Linvatec $103,033 Specialty Surgical Instruments $100,779 Datex-Ohmeda $99,877 Southern Cameron Memorial Hospital $95,813 Brasfield & Gorrie $80,729 Platinum Healthcare Staffing $75,448 American Medical Association $54,861 Beckman Coulter, Inc. $51,251 Siemens Medical Solutions $51,036 Medline Industries, Inc. $47,036 Medquest $44,333 Adams & Reese $42,866 Stryker Instruments $38,177 Acadlana Medical $37,463 SPEEDEMISSIONS INC: Earns $101,542 in 2006 Third Quarter -------------------------------------------------------- Speedemissions Inc. reported net income of $101,542 for the quarter ended Sept. 30, 2006, versus a net loss of $602,218 for the same quarter in 2005. Revenue increased by $400,031 or 19.2% to $2,484,492 in the three months ended Sept. 30, 2006 compared to $2,084,061 in the period in 2005. The increase was primarily due to a $522,502 increase in revenue from operating eight stores acquired in Utah for a full three months during the quarter ended Sept. 30, 2006 compared with operating the same stores for only one month during the quarter ended Sept. 30, 2005. The company's balance sheet at Sept. 30, 2006 showed total assets of $10 million, total liabilities of $725,468 and total stockholders' equity of $9 million. A full text-copy of the company's quarterly report on form 10-Q may be viewed at no charge at http://ResearchArchives.com/t/s?1683 Going Concern Doubt Tauber & Balser, P. C., the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statement for the year ending Dec. 31, 2005. The auditor pointed to the Company's recurring losses from operations, operating cash flow deficiencies and limited capital resources. About Speedemissions Speedemissions, Inc. -- http://www.speedemissions.com/-- operates 34 vehicle emissions testing stations and four mobile units in three separate markets, greater Atlanta, Georgia Houston, Texas and greater Salt Lake City, Utah. It has a new store under construction in both the Atlanta and Houston markets. STIEFEL LABORATORIES: S&P Rates $735 Million Senior Loans at B+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Coral Gables, Florida-based specialty pharmaceuticals manufacturer Stiefel Laboratories Inc. The rating outlook is positive. At the same time, Standard & Poor's assigned its loan and recovery ratings to Stiefel's $735 million senior secured first-lien credit facility, consisting of a $75 million revolver maturing in 2012 and a $660 million term loan maturing in 2013. The loan is rated 'B+' with a recovery rating of '2', indicating the expectation for substantial recovery of principal in the event of a payment default. In addition, Stiefel's $150 million senior secured second-lien term loan was rated 'B-' with a recovery rating of '5', indicating the expectation for negligible recovery of principal in the event of a payment default. Proceeds mainly will be used to fund the company's $640 million acquisition of specialty pharmaceutical company Connetics Corp. "Stiefel Laboratories holds a well-established position in the niche market for dermatological treatments and has a diverse product portfolio," noted Standard & Poor's credit analyst Arthur Wong. "However, the speculative-grade ratings overwhelmingly reflect the significant debt leverage incurred from the secured financing transaction." Following the completion of the acquisition, privately held Stiefel will be the fourth-largest player in the dermatology market, with more than $730 million in annual sales. The company will have a diverse product portfolio, with its top three products--Duac, Soriatane, and Olux--collectively accounting for only 34% of total sales. This percentage is relatively low when compared with other pharmaceutical companies rated in the 'B' category, which tend to be more reliant on fewer products. Pro forma for the acquisition, Stiefel's debt to EBITDA will jump to 5.1x, funds from operations to debt will be less than 10%, and EBITDA interest coverage will be 2.3x--measures that are weak for the rating. However, the company should be able to generate excess cash flows and improve its credit measures rapidly over the next two years. TELTRONICS INC: Equity Deficit Narrows to $2.3 Million at Sept. 30 ------------------------------------------------------------------ Teltronics, Inc.'s balance sheet at Sept. 30, 2006 showed total assets of $17.5 million and total liabilities of $19.8 million resulting in a total shareholders' deficit of $2.3 million. The company's Shareholders' deficiency at Dec. 31, 2005 stood at $2.5 million. For the third quarter ended Sept. 30, 2006, the company reported net income of $495,000, compare with net income of $3.4 million for the same quarter in 2005. The decline in net income was brought about by a $3.9 million decrease in other income. Other income for the same quarter in 2005 included a gain on extinguishment of debt. Net sales for the quarter ended Sept. 30, 2006 was $12.2 million, versus net sales of $10.7 million for the comparable quarter in 2005. As of Sept. 30, 2006, the Company has cash and cash equivalents of $1.1 million as compared to $1.2 million as of Dec. 31, 2005. Defaults on Senior Securities As of Sept. 30, 2006, the company is in arrears on dividend payments on its Series B Preferred Stock in the amounts of $192,000, which includes interest. The company also disclosed that it is subject to certain financial covenants under its revolving credit, term loan and security agreement, which stipulates that the company maintain a debt coverage ratio of 2.5 to 1. The company's debt coverage ratio at the end of July 2006 was slightly above the required ratio but was below the required ratio in August and September 2006. A full text-copy of the company's quarterly report on form 10-Q may be viewed at no charge at http://ResearchArchives.com/t/s?1681 Headquartered in Sarasota, Florida, Teltronics, Inc. (OTCBB: TELT) -- http://www.teltronics.com/-- provides communications solutions and services for businesses. The Company manufactures telephone switching systems and software for small-to-large size businesses and government facilities. Teltronics offers a full suite of Contact Center solutions -- software, services and support -- to help their clients satisfy customer interactions. Teltronics also provides remote maintenance hardware and software solutions to help large organizations and regional telephone companies effectively monitor and maintain their voice and data networks. The Company serves as an electronic contract manufacturing partner to customers in the U.S. and overseas. TIX CORPORATION: Earns $433,702 in Third Quarter of 2006 -------------------------------------------------------- Tix Corporation reported a $433,702 net income on $1,434,233 of revenues for the third quarter ended Sept. 30, 2006, compared with a $96,179 net loss on $740,989 of revenues for the three months ended Sept. 30, 2005. The company's balance sheet at Sept. 30, 2006, showed total assets of $1,827,646, total liabilities of $1,738,176, and total stockholders' equity of $89,470. At Dec. 31, 2005, the company had $2,399,569 in total stockholders' deficiency. The company's Sept. 30 balance sheet also showed strained liquidity with $1,250,161 in total current assets available to pay $1,406,901 in total current liabilities. During the last several years, the company has relied on the proceeds from loans from both unrelated and related parties, capital leases and the sale of its debt and equity securities to provide the resources necessary to fund its operations and develop its show ticketing business. The company has continued its efforts to raise new capital in 2006 to support the development and expansion of its Las Vegas show ticketing business. During the nine months ended Sept. 30, 2006, the company raised $1,003,000 of new equity capital through the sale of units comprised of shares of its common stock and warrants. On Sept. 13, 2006, the company repaid in full its loan obligation of $1,180,493 (including accrued interest of $297,632) by making a $101,697 final cash payment. As a result, the company recognized a non-cash gain on settlement of debt of $1,078,796 during the three months ended Sept. 30, 2006, which has been presented as other income (expense) in the consolidated statement of operations. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?1667 Going Concern Doubt As reported in the Troubled Company Reporter on Sept. 1, 2006, Weinberg & Company P.A. expressed substantial doubt about the company's ability to continue as a going concern after auditing its financial statements for the year ending Dec. 31, 2005. The auditor pointed to the company's net loss, working capital deficiency, and stockholders' deficiency. About Tix Corp. Tix Corp. conducts the operations of Tix4Tonight at four locations in Las Vegas, Nevada: South Strip at the Hawaiian Marketplace Shopping Center (which commenced operations in November 2005 and replaced the location next to the Harley-Davidson Cafe at Harmon); the Fashion Show Mall Strip entrance in front of Neiman-Marcus (which commenced operations in February 2005); North Strip across from the Stardust Hotel and Casino; and in downtown Las Vegas at the Four Queens Hotel fronting onto the Fremont Street Experience (which commenced operations in December 2005). THOMAS EQUIPMENT: Operating Entity Obtains $1.5 Million Financing ----------------------------------------------------------------- Thomas Equipment Asia Co. Ltd., a subsidiary of Thomas Equipment Inc., obtained $1.5 million of financing in secured notes provided by Laurus Master Fund Ltd. The financing was provided under the existing senior secured credit facility between Thomas and Laurus. Thomas is not providing Laurus with any additional equity consideration in conjunction with this transaction. Proceeds of the financing will be used to pay Thomas Asia's suppliers. "With the injection of additional working capital, Thomas Asia will be fully operational and commence manufacturing immediately," according to Mr. Lim Chul Jin, President of Thomas Asia. "Production will focus on the new 1500 lb class skid loaders with advanced features. Initially it is estimated that the Korean plant will have the capacity to produce 90 loaders per month. Subject to resource availability, the plant capacity will increase to 180 loaders per month." Thomas Equipment Inc. and Pneutech Inc. continue to operate under the Notice of Inquiry and Canadian Companies' Creditors Arrangement Act proceedings, respectively. Thomas anticipates developing a plan for the consideration of creditors in the fourth quarter of 2006. Thomas Asia is not a party to the CCAA proceedings or any other debtor protection laws. About Thomas Equipment Headquartered in Milwaukee, Wisconsin, Thomas Equipment, Inc. (AMEX: THM) -- http://www.thomas-equipment.com/-- manufactures skid steer and mini skid steer loaders as well as attachments, mobile screening plants and six models of mini excavators. The Company distributes its products through a worldwide network of distributors and wholesalers. In addition, the Company's wholly owned subsidiaries manufacture specialty industrial and construction products, a complete line of potato harvesting and handling equipment, fluid power components, pneumatic and hydraulic systems, spiral wound metal gaskets, and packing material. At March 31, 2006, Thomas Equipment Inc.'s balance sheet showed a stockholders' deficit of $31,289,000, compared with a $67,129,000 deficit at June 30, 2005. U.S. ENERGY: Earns $12.4 Million in Third Quarter Ended Sept. 30 ---------------------------------------------------------------- U.S. Energy Systems Inc. reported $12.4 million of net income on $5.1 million of revenues for the third quarter ended Sept. 30, 2006, compared with a $6.5 million net loss on $4.6 million of revenues for the same period in 2005. The increase in net income is due to the $25 million net gain resulting from the purchase accounting treatment of the acquisition of the UK natural gas reserves, a $3.2 million decrease in foreign currency transaction expense, offset by an increase in the loss from operations of $1.5 million, a $3.1 million increase in interest expense, a $5 million increase in minority interest expense associated with the UK operations, and a $3.8 million increase in expenses related to the various hedge arrangements. The gain from the purchase accounting related to the Aug. 7, 2006, acquisition of natural gas reserves in the United Kingdom. Based on a comparison of the purchase price to the fair market value of the assets acquired, the company included a $25 million extraordinary gain, net of taxes of $13.5 million, in statement of operations for the quarter ended Sept. 30, 2006. The company paid approximately $70.1 million and issued rights to acquire up to 8.1 million shares of its common stock. The financing of the transaction provided approximately $166.3 million for, among other things, the acquisition of the UK assets, for the funding of certain reserves required by the terms of the financing and for working capital to be used by the company's subsidiaries for the operation and upgrading of the UK assets necessary to increase gas production. These loans mature in 2013 and 2014, subject to acceleration or mandatory prepayments upon the occurrence of certain events, and are currently secured by substantially all of the company's and its subsidiaries' assets. For the three months ended Sept. 30, 2006, the $538,000 increase in revenues was primarily due to $435,000 of revenues associated with the UK operations which began operations on Aug. 7, 2006, and a $104,000 increase in U.S. Energy Biogas Corp. revenues from energy sales. During the nine months ended Sept. 30, 2006, cash used in operating activities was $4.1 million, an increase of $3.7 million from the $392,000 used in operating activities for the nine months ended Sept. 30, 2005. The increase was due primarily to an increase in cash utilized in the UK operations. Cash used in investing activities increased to $152.3 million for the nine months ended Sept. 30, 2006, compared to $798,000 of cash used in investing activities for the nine months ended Sept. 30, 2005, an increase of $151.5 million. This increase was primarily the result of expenditures related to the UK transaction including $49.4 million of deposits into restricted cash accounts, the acquisition of $21 million of various hedge agreements and $84.7 million of gas field and power generation assets. Cash provided by financing activities increased to $148.7 million for the nine months ended Sept. 30, 2006, an increase of $150.1 million from the $1.4 million used in financing activities for the nine months ended Sept. 30, 2005. The increase is primarily due to the financing of the UK acquisition offset by principal payments made on long term debt and the payment of minority interest distributions related to the ownership of certain U.S. Energy Biogas Corp. projects. At Sept. 30, 2006, the company's balance sheet showed $403.3 million in total assets, $332.3 million in total liabilities, $11.8 million in minority interest, and $59.2 million in total stockholders' equity. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?1677 Going Concern Doubt Bagell, Josephs, Levine & Company LLC in Gibbsboro, New Jersey, expressed substantial doubt about U.S. Energy Systems Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's operating losses and capital deficits. * * * Headquartered in New York City, U.S. Energy Systems Inc. -- http://www.usenergysystems.com/-- owns and operates energy and power projects in the United States and the United Kingdom through its two subsidiaries, UK Energy Systems, Ltd. and U.S. Energy Renewables, Inc. UNITEDHEALTH GROUP: Stephen Hemsley is New CEO Effective Dec. 1 --------------------------------------------------------------- UnitedHealth Group Incorporated's chief executive officer Stephen J. Hemsley has stepped into his position effective Dec. 1, 2006. Mr. Hemsley has been the company's president and chief operating officer since 1999. Richard T. Burke, chairman of the board of directors said, "Steve has proven himself to be the right leader for the Company at this important time. The Board is pleased with the rapid progress he is making on our recent initiatives to further improve corporate governance. Steve leads by example through teamwork, a commitment to service and his personal integrity. With Steve at the helm, supported by a very talented group of senior executives and business segment CEOs, UnitedHealth Group will continue to innovate, grow and diversify." Steve Hemsley said, "We have an exceptional leadership team in place and great employees dedicated to our mission of advancing and improving health care in this country. We serve the vital health care sector, which means we have social responsibilities that are far greater than other commercial enterprises of our size. We take these responsibilities very seriously. Our business remains strong, and we see a great opportunity before us to renew our commitment to excellence in everything we do." Leadership Changes Mr. Hemsley also reported recent changes being made in the structure of the company's executive management to address immediate organizational issues and to build leadership capacity for the future to match the scale, diversification and service responsibilities of a growing and highly complex enterprise. These responsibilities are expected to evolve over time. The executive changes, which begin immediately and become fully effective on or after Jan. 1, 2007, include assigning to executives oversight responsibility for the business segments, as well as enterprise-wide, functional responsibilities at the corporate level to focus greater attention and resources on critical areas of the Company: -- Richard Anderson, currently executive vice president of UnitedHealth Group and chief executive officer of Ingenix, will become president of the new Commercial Services Group, including Specialized Care Services, Ingenix and Exante Financial Services. On the functional level, Mr. Anderson will oversee technology efforts across the enterprise, which includes all application development, maintenance and infrastructure. Because much of the Company's successful innovation depends on technology, Mr. Anderson will also oversee the Company's expanding consumer services innovation efforts. He will also broadly oversee legal and regulatory administration until the chief administrative officer and chief legal officer positions are filled. -- Lois Quam, currently chief executive officer of Ovations, will become president of the new Public and Senior Markets Group, which will include Ovations and AmeriChoice. Ms. Quam will take the lead in developing capabilities and infrastructure on an enterprise level in communications, public relations and government affairs. Ms. Quam will also be leading efforts in and acting as spokesperson for UnitedHealth Group's corporate social responsibility programs and health care issues, which are of fundamental importance to the Company. Until the new chief administrative officer position is filled, she will also oversee Human Capital. -- David Wichmann, currently president and chief operating officer of UnitedHealthcare, will become president of the new Individual and Employer Markets Group, consisting primarily of UnitedHealthcare and Uniprise. On the functional level, Mr. Wichmann will be responsible for all consumer-facing business processes and services on an end- to-end, enterprise-wide basis. The Company's alliance organization and international business activities will also be his responsibility. Mr. Wichmann will also oversee integration activities and related efforts across the company. -- William Munsell, currently chief executive officer of Specialized Care Services, and Anthony Welters, currently president and chief executive officer of AmeriChoice, are being appointed as executive vice presidents at the UnitedHealth Group level reporting directly to Mr. Hemsley to provide greater executive oversight and direction to important and often independent initiatives, relationships and market opportunities. Mr. Munsell will deal largely with internal matters, while Mr. Welters will deal with external aspects of the business. -- Reed Tuckson, M.D., has been appointed executive vice president and head of Medical Affairs responsible for the Company's cross-segment leadership on clinical and medical practices. The Company will not be breaking down or technically changing its business segments' unit accountability framework. Mr. Hemsley said, "UnitedHealth Group has experienced extraordinary growth over the past several years. We are introducing an expanded management structure that enables our enterprise to be increasingly nimble and responsive to future market dynamics, while also ensuring that we have the executive capacity and leadership to match our scale and commercial ambitions. With this structure and with these very talented people, we will operate in a more collaborative, open fashion as a leadership team. Together, we can advance a company and culture that fosters a real commitment to care and serve, to innovate and grow and to meet the highest standards of business practice and performance." New Hiring UnitedHealth Group is proceeding with the Board of Directors' mandate to recruit a chief administrative officer, a chief legal officer, a chief ethics officer and recruit new Board members. The Company also plans to make further organizational adjustments as new executive positions are filled and in areas such as marketing and distribution, business and product development and systemic quality. About UnitedHealth Group Minneapolis, Minn.-based UnitedHealth Group Inc. (NYSE: UNH) -- http://www.unitedhealthgroup.com/-- offers a broad spectrum of products and services through six operating businesses: UnitedHealthcare, Ovations, AmeriChoice, Uniprise, Specialized Care Services and Ingenix. Through its family of businesses, UnitedHealth Group serves approximately 70 million individuals nationwide. * * * As reported in the Troubled Company Reporter on Nov. 10, 2006, Fitch Ratings is currently maintaining all ratings of UnitedHealth Group on Rating Watch Negative. Despite the company's disclosure that the restatement of earnings will be material, Fitch notes that this is a non-cash charge that does not affect overall shareholder capital or the company's ability to service its debt obligations. Although the additional taxes, interest and penalties related to the accounting adjustment will certainly have cash flow implications, given management estimates, Fitch does not consider the amount to be sufficient to significantly impede the company's ability to meet its obligations. Fitch continues to consider UNH's cash flow coverage, although adversely affected by issues surrounding the company's stock option granting practices, to be more than sufficient to justify the company's current ratings given its financial leverage. Fitch considers the company's disclosure of a material weakness under Sarbanes-Oxley 404 to be troubling. Clearly, such weaknesses in governance can tarnish a company's image, sometimes adversely affecting the company's ability to attract and retain business, and often lead to difficulties similar to those being faced by UNH's management. However, although too late to aid the company in heading off its current difficulties, Fitch views recent and ongoing changes within the company's governance practices as important in bolstering the company's governance going forward. Fitch originally placed UNH's ratings on Rating Watch Negative on August 30, 2006, following the company's announcement that it had received a notice of default from a group of persons claiming to hold certain of its debt securities alleging a violation of UNH's indenture governing its debt securities. The company has stated that it believes it is not in default. The company received a purported notice of acceleration on Nov. 2, 2006, from the holders who previously sent the notice of default that purports to declare an acceleration of the Company's 5.80% Notes due March 15, 2036 as a result of the Company's not filing its quarterly report on Form 10-Q for the quarter ended June 30, 2006. Given developments to date, Fitch is working under the assumption that this issue will be tied up in litigation for some time. USXL FUNDING: Moody's Rates $14 Million Class B Notes at Ba2 ------------------------------------------------------------ Moody's Investors Service assigned ratings to the Class A and Class B equipment contract backed notes issued in USXL Funding II, LLC's first securitization. These are the rating actions: * Issuer: USXL Funding II, LLC -- $311,000,000 Class A Equipment Contract Backed Notes, rated Aaa -- $14,000,000 Class B Equipment Contract Backed Notes, rated Ba2 The ratings of the Class A notes are based on a financial guaranty policy issued by Financial Guaranty Insurance Company whose insurance financial strength rating is Aaa. Support to FGIC consists of 4.00% subordinated Class B notes, 7.00% overcollateralization and a non-declining reserve account of 1% of the original pool balance. Credit support protecting the Class B notes includes 7% overcollateralization and the reserve account. In addition, the ratings are based on the quality of the collateral, the experience of US Express Leasing, Inc. as a servicer, and the strength of the backup servicer arrangement. The notes were sold in a privately negotiated transaction without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A. VOYAGER ENTERTAINMENT: Posts $845,903 Net Loss in 2006 3rd Quarter ------------------------------------------------------------------ Voyager Entertainment International Inc. reported an $845,903 net loss on $598,385 of revenues for the third quarter ended Sept. 30, 2006, compared with a $474,162 net loss for the same period in 2005. The company had no revenue in 2005. Revenues during the third quarter ended Sept. 30, 2006, represent revenues contributed by Western Architectural Services LLC from Sept. 11, 2006, the date Western Architectural was acquired by the company. Before its acquisition, Voyager Entertainment had no operating history, no significant current operations, minimum cash on hand, and no profit. Western Architectural was previously owned by Tracy Jones, an officer and director of the Voyager Entertainment. Revenues consisted of sales of specialized cast products produced on site and sold either to wholesalers or directly to the contractor for delivery. The cast products are molding and facade items designed to enhance the appearance of a structure. The primary customers for the cast products are hotel casinos in Las Vegas. The company acquired Western Architectural on Sept. 11, 2006. A stock purchase agreement was entered into on April 10, 2006, to purchase 100% of the outstanding capital stock of Western Architectural. As consideration for the purchase, Voyager agreed to issue 3,000,000 shares of Voyager common stock as a deposit with a final payment of an additional 2,000,000 shares of Voyager common stock. At Sept. 30, 2006, the company's balance sheet showed $1.4 million in total assets and $5.7 million in total liabilities, resulting in a $4.3 million total stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $1.1 million in total current assets available to pay $5.7 million in total current liabilities. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?167a Going Concern Doubt De Joya Griffith & Company LLC in Las Vegas, Nevada, raised substantial doubt about Voyager Entertainment International Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The firm pointed to the company's significant net losses, accumulated deficit, and lack of revenue sources. * * * Voyager Entertainment International Inc. is dedicated to constructing the world's largest and tallest observation wheel. Each wheel will consist of 30 orbiters seating between 16 to 20 passengers depending on the configuration. Each orbiter will have its own gallery and lavatory to achieve the maximum comfort and safety for its passengers. WELLCARE HEALTH: Improved Finances Cue S&P's Rating Upgrade ----------------------------------------------------------- Standard & Poor's Ratings Services raised its counterparty credit rating on WellCare Health Plans Inc. to 'BB-' from 'B+'. Standard & Poor's also said that the outlook on WellCare remains positive. "The upgrade reflects WellCare's improved financial condition," said Standard & Poor's credit analyst Joseph Marinucci. "The improvement has stemmed from the successful execution of its growth strategy, which has enhanced operational scale and better diversified the company's business profile." WellCare now maintains an established presence in six Medicaid markets, is a leader in Florida, has extended its Medicare presence to 50 counties from 11, and is a leading Part D carrier. The ratings reflect WellCare's established overall business position in specialized health insurance market segments, good operating performance supported by profitable growth, and improving operational scale. Offsetting factors include potentially greater exposure to unfavorable regulatory/legislative intervention linked to its government funded public-sector focus, geographic market concentrations, and limited earnings profile diversity. The positive outlook reflects the potential for the rating to be raised by one or two notches if the company is able to sustain its financial performance and further strengthen its business profile by means of continued development in existing markets and prudent management of new market opportunities. Conversely, the outlook could be revised to stable if profitability and cash flow were to erode or if the company made a material acquisition or significantly altered its capital structure in a way that increases debt and decreases equity. WellCare's intermediate growth strategy is focused on building its market presence through the expansion of its Medicaid business within its existing markets, further developing its Medicare profile, and entering new markets through organic growth. Selective acquisitions are not expected in 2007 but could become a possibility over the intermediate term as the market continues to evolve. WILLIAMS PARTNERS: Fitch Rates $600 Million Notes Offering at BB ---------------------------------------------------------------- Fitch Ratings affirmed the Issuer Default Rating and senior unsecured debt rating of Williams Partners L.P. at 'BB' after the disclosure that WPZ has reached an agreement with its sponsor, The Williams Companies, to acquire the remaining 74.9% interest in Williams Four Corners LLC from WMB that WPZ does not already own for consideration of $1.223 billion. Fitch also assigned a 'BB' rating to WPZ's proposed offering of $600 million of senior unsecured notes which will be used to finance a portion of the acquisition. WPZ plans to issue equity units to finance the remainder of the transaction including the private placement of $350 million of common units completed Dec. 1, 2006 and Class B units. WPZ's Rating Outlook is Stable. The rating affirmation reflects the benefits of WPZ taking ownership of 100% of Four Corners as the transaction will further diversify the company's operations away from the hurricane prone Gulf Coast region and significantly increase cash flows and the company's asset base. With 100% of Four Corners, pro forma EBITDA for WPZ for the twelve month period ending Sept. 30, 2006 would have totaled $210 million versus $80 million without the additional interest. The transaction also eliminates the risks from the distribution policy of Four Corners due to WPZ's current minority interest stake in the entity. Integration risk for the dropdown is also viewed as limited relative to typical acquisitions given the current ownership of Four Corners by WPZ and WMB. The affirmation also considers the financing of the transaction with equity representing more than 50% of the financing and the reasonable purchase price given the run-up in transaction multiples for similar midstream assets in recent quarters. With 74.9% of Four Corners' EBITDA for the twelve months ending Sept. 30, 2006 totaling $130.3 million, the purchase price represents a multiple of approximately 9.4x EBITDA. WPZ will also continue to have close operating and financial ties with WMB including WMB management determining WPZ's strategy and distribution policy as well as the pace and potential price of future dropdowns. Further dropdowns are anticipated to occur at a pace of approximately $1.0 to $1.5 billion annually through 2008 and possibly beyond. The Stable Outlook incorporates Fitch's expectation that future dropdowns or other transactions will be financed appropriately for the rating category. WPZ also remains reliant on WMB's corporate revolving credit facility for working capital funding. Specifically, WPZ has a $75 million sub-limit under WMB's $1.5 billion corporate revolver, the borrowings under which are unconditionally guaranteed by WMB. The ratings also recognize the higher volatility of WPZ's portfolio of primarily midstream assets as some earnings deterioration is likely under a lower commodity price environment. WPZ's portfolio of largely fee based assets should, however, continue to provide some insulation against future commodity price volatility as approximately 73% of Four Corner's cash flows are be fee based. The rating also includes the inherent risks in WPZ's acquisition strategy, including the likelihood of additional dropdowns, as well as WPZ's limited track record of operating its current and prospective asset portfolio. Concerns also include the weakening of WPZ's credit ratios from current levels as the debt portion of the transaction represents leverage of approximately 4.6x the acquired EBITDA. Leverage, however, is expected to remain reasonable for the company's credit rating at below 4x pro forma for the transaction. Four Corners is an integrated natural gas gathering and processing system located in the San Juan Basin in New Mexico and Colorado. The system includes 3,500 miles of gathering lines with a capacity of 2 Bcf/d, three processing plants with a combined capacity of 760 MMcf/d, and two treating plants with a combined capacity of 750 MMcf/d. WPZ is a publicly traded master limited partnership engaged primarily in the gathering, transporting and processing of natural gas and the fractionation and storage of natural gas liquids. The partnership's current asset base includes a 25.1% interest in Williams Four Corners LLC, 40% interest in the Discovery system offshore Louisiana, midstream assets at Conway, Kansas and the Carbonate Trend gathering pipeline offshore Alabama. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent chapter 11 cases filed with assets and liabilities below $1,000,000: In re New Jersey Bonding Service LLC Bankr. D. N.J. Case No. 06-21831 Chapter 11 Petition filed November 28, 2006 See http://bankrupt.com/misc/njb06-21831.pdf In re 1757 South 8th Street, LLC Bankr. D. Colo. Case No. 06-18820 Chapter 11 Petition filed November 29, 2006 See http://bankrupt.com/misc/cob06-18820.pdf In re Dennis George Weider Bankr. W.D. Mo. Case No. 06-61227 Chapter 11 Petition filed November 29, 2006 See http://bankrupt.com/misc/mowb06-61227.pdf In re Eugene Sonnenfeld Bankr. D. Nebr. Case No. 06-41639 Chapter 11 Petition filed November 29, 2006 See http://bankrupt.com/misc/neb06-41639.pdf In re MSR, LLC Bankr. M.D. Tenn. Case No. 06-07026 Chapter 11 Petition filed November 29, 2006 See http://bankrupt.com/misc/tnmb06-07026.pdf In re Bays, Inc. Bankr. S.D. W.V. Case No. 06-50163 Chapter 11 Petition filed November 30, 2006 See http://bankrupt.com/misc/wvsb06-50163.pdf In re Carden, Inc. Bankr. M.D. Fla. Case No. 06-03218 Chapter 11 Petition filed November 30, 2006 See http://bankrupt.com/misc/flmb06-03218.pdf In re Carpet Dimension, Inc. Bankr. N.D. Calif. Case No. 06-42306 Chapter 11 Petition filed November 30, 2006 See http://bankrupt.com/misc/canb06-42306.pdf In re Curtis Auto, Inc. Bankr. S.D. Tex. Case No. 06-36599 Chapter 11 Petition filed November 30, 2006 See http://bankrupt.com/misc/txsb06-36599.pdf In re Dennis Frank Rodriguez Bankr. M.D. Fla. Case No. 06-03219 Chapter 11 Petition filed November 30, 2006 See http://bankrupt.com/misc/flmb06-03219.pdf In re J & J Ventures, Inc. Bankr. N.D. N.Y. Case No. 06-63102 Chapter 11 Petition filed November 30, 2006 See http://bankrupt.com/misc/nynb06-63102.pdf In re Julian K of Michigan, Inc. Bankr. E.D. Mich. Case No. 06-57758 Chapter 11 Petition filed November 30, 2006 See http://bankrupt.com/misc/mieb06-57758.pdf In re Maple Grove Modulars, Inc. Bankr. W.D. Pa. Case No. 06-26048 Chapter 11 Petition filed November 30, 2006 See http://bankrupt.com/misc/pawb06-26048.pdf In re Village Lawn Care, Inc. Bankr. M.D. Fla. Case No. 06-06817 Chapter 11 Petition filed November 30, 2006 See http://bankrupt.com/misc/flmb06-06817.pdf In re 5th Avenue Furniture, Inc. Bankr. D. Nev. Case No. 06-13624 Chapter 11 Petition filed December 1, 2006 See http://bankrupt.com/misc/nvb06-13624.pdf In re L. Wayne Connell Bankr. M.D. Ga. Case No. 06-52415 Chapter 11 Petition filed December 1, 2006 See http://bankrupt.com/misc/gamb06-52415.pdf In re Morton A. Goldberg Bankr. M.D. Tenn. Case No. 06-07165 Chapter 11 Petition filed December 1, 2006 See http://bankrupt.com/misc/tnmb06-07165.pdf In re Tower Employment & Management Services, Inc. Bankr. N.D. Ind. Case No. 06-12227 Chapter 11 Petition filed December 1, 2006 See http://bankrupt.com/misc/innb06-12227.pdf In re Armstrong, USA LLC Bankr. N.D. Ga. Case No. 06-75707 Chapter 11 Petition filed December 4, 2006 See http://bankrupt.com/misc/ganb06-75707.pdf In re Canton Road Land Investment, LLC Bankr. N.D. Ga. Case No. 06-75732 Chapter 11 Petition filed December 4, 2006 See http://bankrupt.com/misc/ganb06-75732.pdf In re Coulter Brothers Partnership Bankr. W.D. Pa. Case No. 06-26136 Chapter 11 Petition filed December 4, 2006 See http://bankrupt.com/misc/pawb06-26136.pdf In re D&D Flexible Packaging, Inc. Bankr. N.D. Ga. Case No. 06-12336 Chapter 11 Petition filed December 4, 2006 See http://bankrupt.com/misc/ganb06-12336.pdf In re Geri Dee Enterprises, Ltd. Bankr. S.D.N.Y. Case No. 06-36331 Chapter 11 Petition filed December 4, 2006 See http://bankrupt.com/misc/nysb06-36331.pdf In re Homer Gene Carey Bankr. D. N.M. Case No. 06-12273 Chapter 11 Petition filed December 4, 2006 See http://bankrupt.com/misc/nmb06-12273.pdf In re Lindridge Development Group, LLC Bankr. N.D. Ga. Case No. 06-75778 Chapter 11 Petition filed December 4, 2006 See http://bankrupt.com/misc/ganb06-75778.pdf In re Lydia Jean Martinez Bankr. D. Nebr. Case No. 06-41672 Chapter 11 Petition filed December 4, 2006 See http://bankrupt.com/misc/neb06-41672.pdf In re SA Eastside Housing, L.P. Bankr. W.D. Tex. Case No. 06-52502 Chapter 11 Petition filed December 4, 2006 See http://bankrupt.com/misc/txwb06-52502.pdf In re Urban Assault, Inc. Bankr. W.D. Pa. Case No. 06-26151 Chapter 11 Petition filed December 4, 2006 See http://bankrupt.com/misc/pawb06-26151.pdf In re Waterway Plumbing & Heating Supply, Inc. Bankr. W.D. Pa. Case No. 06-26135 Chapter 11 Petition filed December 4, 2006 See http://bankrupt.com/misc/pawb06-26135.pdf ********* 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 ***