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/raid1/www/Hosts/bankrupt/TCR_Public/061222.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, December 22, 2006, Vol. 10, No. 304 Headlines A21 INC: Revenues Up Nearly 190% to $5.9MM in 2006 Third Quarter ADALBERTO GONZALEZ: Case Summary & 15 Largest Unsecured Creditors ADELPHIA COMMS: Judge Gerber Defers Decision on Plan Confirmation AIR AMERICA: Court Okays Mahoney Cohen as Committee's Accountant ALLIANCE ATLANTIS: Exploring Strategic Alternatives Including Sale ALLIANCE ATLANTIS: S&P Places BB Rating on Developing CreditWatch AMERICAN SKIING: Selling Steamboat Resort for $265 Million AMERICAN TOWER: Board OKs Stock Option-Related Remediation Plan ANVIL HOLDINGS: Oct. 28 Balance Sheet Upside-Down by $140 Million ASARCO LLC: U.S. Government Wants Judgment Entered in Its Favor ASARCO LLC: Wants Deposition of Three Mineral Park Personnel AUTOCAM CORPORATION: Fails to Make December 15 Interest Payment AUTOCAM CORP: Interest Non-Payment Cues S&P's Default Rating BEAR STEARNS: Fitch Assigns Low-B Ratings on $40.1 Million Debt BENROCK INC: Ct. OKs Streetman Meeks as Trustee's Special Counsel BOMBARDIER INC: Closes EUR4.3 Billion Letter of Credit Facility CARRINGTON MORTGAGE: Fitch Rates $20.6MM Class M-10 Certs. at BB+ CATHOLIC CHURCH: Classification & Treatment of Claims Under Plan CATHOLIC CHURCH: Portland, et al., File Joint Reorganization Plan CKE RESTAURANTS INC: Earns $9.5 Million in Quarter Ended Nov. 6 COLLINS & AIKMAN: Seeks Approval for IHDG Litigation Trust Accord COLLINS & AIKMAN: Becker Fights Lease Decision Period Extension CONEXANT SYSTEMS: Posts $122.6 Million Net Loss in Fiscal 2006 CONSTAR INT'L: Equity Deficit Widens to $43.6 Million at Sept. 30 COUDERT BROTHERS: Taps McGrigors LLP as Special Counsel DAIMLERCHRYSLER: Truck Unit Eyes $300 Million Plant in Mexico DELPHI CORP: Asks for SEC's View on Foreign Currency Issues DELPHI CORP: Secures $4.4-Bil. DIP Loan Pledge from JP Morgan DELTA AIR: Accepting Pilot Applications to Exhaust Furlough List DEUTSCHE FINANCIAL: Fitch Holds Junk Rating on Class B-1 Certs. DEVELOPERS DIVERSIFIED: Declares Class H and Class I Dividends DURA AUTOMOTIVE: Gets Court's Final OK on Insurance Financing Pact DURA AUTOMOTIVE: Court OKs Hiring of Ordinary Course Professionals EASTMAN KODAK: Renews Management Pact with Nortel for Three Years EXCEPTIONAL TECH: Shareholders Approve Plan of Liquidation FEDERAL-MOGUL: Bankruptcy Court Okays Ernst & Young as Advisors FEDERAL-MOGUL: Trizec to Serve on Asbestos Claimants Panel FIRSTLINE CORP: Hires Gordon Brothers & Davis as Sales Consultant FOAMEX INTERNATIONAL: Wants Thomas Chorman's Complaint Dismissed FORD MOTOR: Expects to Become No. 3 as Toyota Gains No. 2 Position GEOKINETICS INC: S&P Holds Junk Rating on Second Priority Notes GLIMCHER REALTY: Increases $300 Mil. Credit Facility to $470 Mil. GLOBAL POWER: Committee Hires Schulte Roth as Counsel GLOBAL POWER: Hires Alvarez & Marsal as Financial Advisor GOODING'S SUPERMARKETS: Court Confirms Amended Chapter 11 Plan GS MORTGAGE: S&P Pares Rating on Class K-PR Certs. to BB- from BB+ HANOVER COMPRESSOR: Redeeming $20.8MM of Conv. Junior Debentures HOVNANIAN ENT: Posts $117.9M Net Loss in 4th Quarter Ended Oct. 31 INTERACTIVE MOTORSPORTS: Sept. 30 Equity Deficit Widens to $3.8MM INTERSTATE BAKERIES: Four Parties Object to Board Constitution INTERSTATE BAKERIES: Creditors Transfer 99 Claims Totaling $17.3M J2 COMMS: Stonefield Josephson Raises Going Concern Doubt JACUZZI BRANDS: Extends Tender Offer for 9-5/8% Senior Notes JORDAN IND: Equity Deficit Narrows to $228.7 Million at Sept. 30 KIMBALL HILL: Amends $500-Mil. Sr. Revolving Credit Facility KIRIT PATEL: Voluntary Chapter 11 Case Summary KOLORFUSION INT'L: Sept. 30 Balance Sheet Upside-Down by $541,705 LITHIUM TECHNOLOGY: Sells 20,060 shares of Series C Pref. Stock MARTHA ORTEGA: Voluntary Chapter 11 Case Summary MERIDIAN AUTOMOTIVE: Assumption of 43 Contracts & Leases Approved MERRILL LYNCH: Fitch Holds Rating on Class G Certs. at B- MESABA AVIATION: In Talks with Northwest for Possible Acquisition MGM MIRAGE: Fitch Rates $750-Mil. Senior Unsecured Notes at BB MICHAEL FOOTE: Case Summary & 8 Largest Unsecured Creditors MICHAEL ZAMANI: Case Summary & 9 Largest Unsecured Creditors NATIONAL CONSUMER: Hires Lipkin & Associates as Consultants NAVIOS MARITIME: Completes $300-Million Senior Notes Offering NORTEL NETWORKS: Eastman Kodak Renews Three-Year Management Pact NORTHWEST AIRLINES: In Talks to Acquire Mesaba Aviation NVE INC: Wants Exclusive Plan-Filing Period Extended to January 16 PERFORMANCE TRANSPORTATION: Court Confirms Plan of Reorganization PINNACLE CBO: Fitch Cuts Rating on $6.5-Mil. Senior Notes to B PREFERRED CARRIER: Case Summary & 20 Largest Unsecured Creditors PRESIDENT CASINOS: Sells St. Louis Biz for $31.5 Mil. to Pinnacle POWER INTEGRATIONS: Expects Shares to be Delisted From Nasdaq RENATA RESORT: Judge Killian Confirms Plan of Reorganization REUNION INDUSTRIES: Atlas Partners Orchestrates Real Estate Sale REVLON INC: Prices $100 Million Rights Offering RIM SEMICONDUCTOR: Inks Master ASIC Services Pact with eSilicon ROGER BENCKE: Voluntary Chapter 11 Case Summary QUEBECOR WORLD: Closes Private Offering of $400-Mil. Senior Notes SAINT VINCENTS: Agrees on Timetable for Filing Monthly Reports SAINT VINCENTS: Settles OMIG'S Medicaid Overpayment Claims SANKATY HIGH: Fitch Holds Rating on $22-Mil. Class E Notes at B SEW CAL: Posts $1.3 Million Net Loss in Fiscal Year Ended Aug. 31 SERVICE WEB: Case Summary & 20 Largest Unsecured Creditors SIERRA INTERNET: Case Summary & 13 Largest Unsecured Creditors SKYEPHARMA PLC: Disclosed Total Voting Rights at December 18 SMART PAPERS: Wins Court Approval of Business Reorganization Plan TANK SPORTS: Appoints Dealer Services as Dealer Funding Source TIER TECHNOLOGIES: Posts $9.5 Million Net Loss in Fiscal 2006 TITAL GLOBAL: Aug. 31 Balance Sheet Upside-Down by $8.3 Million TOWER AUTOMOTIVE: Files $250 Million Restructuring Term Sheet USEC INC: Board Appoints Joseph Doyle as New Director USG CORP: Makes Final $3.05 Billion Payment to Asbestos Trust VALASSIS COMMS: Amending ADVO Merger Agreement and Settling Suit WASTE SERVICES: Issues 9.9MM of Common Shares to Kelso Affiliates WEIGHT WATCHERS: Launches Self-Tender Offer for 8.3 Million Shares WEIGHT WATCHERS: Sept. 30 Balance Sheet Upside-Down by $103 Mil. WINN-DIXIE: Court Approves XL and Marsh USA Insurance Settlement WINN-DIXIE STORES: Issues New Common Stock to Unsecured Creditors WOODWIND & BRASSWIND: Hires Adelman Gettleman as Bankr. Counsel * BOOK REVIEW: Wildcatters: A Story of Texans, Oil & Money ********* A21 INC: Revenues Up Nearly 190% to $5.9MM in 2006 Third Quarter ---------------------------------------------------------------- a21 reported its financial results for the third quarter ending Sept. 30, 2006. Revenue for the third quarter of 2006 was $5.9 million, up nearly 190% from the $2.1 million revenue reported for the same prior year period, primarily due to contributions from the company's ArtSelect and Ingram acquisitions. Net loss for the third quarter of 2006 was $1.4 million compared to a net loss of $1.3 million for the same prior year period. Included in third quarter 2006 results were approximately $400,000 in non-cash amortization and depreciation charges associated with the ArtSelect and Ingram acquisitions that the company did not have in the third quarter of 2005 as well as higher corporate legal and audit costs. Additionally, the company recorded a one- time, non-cash deemed dividend of $336,000 associated with a beneficial conversion feature of the convertible preferred stock issued as partial consideration for the ArtSelect acquisition. The deemed dividend was recognized during the third quarter as a result of the share authorization contingency being met during the quarter. "The third quarter was a period of progress in the transition of the company's business and leadership," said Phil Garfinkle, Executive Chairman of a21. "This past quarter we solidified our new leadership team, completing a transition for a21 that included raising capital to support our growth initiatives and expanding our business through a major acquisition. Now, with both the leadership and resources to support our growth in place, our energy will increasingly be focused on leveraging our strong brands and industry experience to capitalize on the growth opportunities throughout the online digital media marketplace." At Sept. 30, 2006, the company's cash position was $6.2 million and working capital $6.5 million. Cash used in operations for the third quarter of 2006 was down significantly on a sequential basis from cash used in operations during the second quarter of 2006. Thomas Costanza, Vice President and Chief Financial Officer of a21, stated "With the capital raised during 2006 and the contributions being realized from our combined businesses, we are in good position to drive further operating improvements through revenue growth and operating leverage. In the third quarter, we reduced cash used in operations. We aim to further strengthen our financial position and operational results to create significant value for our shareholders." At Sept. 30, 2006, the company's balance sheet showed $37.5 million in total assets, $30.1 million in total liabilities, $2.3 million in minority interest, and $5.1 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?176b Going Concern Doubt BDO Seidman LLP, in Charlotte, North Carolina, raised substantial doubt about A21 Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's working capital deficit and losses from operations. About a21 Inc. a21 Inc.(OTCBB: ATWO) -- http://www.a21group.com/-- is an online digital content marketplace for the professional creative community. Through SuperStock Inc., a21 provides creative professionals worldwide a library of nearly 1,000,000 images. Together a21 and SuperStock provide image access to the best photographers, artists, photography agencies, and customers in the business. ADALBERTO GONZALEZ: Case Summary & 15 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Adalberto Castro Gonzalez Mariaelena Robles Gonzalez 6141 North 34th Place Paradise Valley, AZ 85253 Bankruptcy Case No.: 06-04115 Chapter 11 Petition Date: December 6, 2006 Court: District of Arizona (Phoenix) Judge: Redfield T. Baum Sr. Debtor's Counsel: Donald W. Powell, Esq. Carmichael & Powell, P.C. 7301 N. 16th St., #103 Phoenix, AZ 85020 Tel: (602) 861-0777 Fax: (602) 870-0296 Total Assets: $1,777,050 Total Debts: $2,778,550 Debtor's 15 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Robert Smith $26,000 Mindies, Too 241 North Roosevelt Avenue Chandler, AZ 85226 Helson Pacheco-Serrant $13,000 125 Camino Barranca El Paso, TX 79902 Wells Fargo Card Services $8,927 P.O. Box 30086 Los Angeles, CA 90030 Capital One Bank $8,157 Aspire $7,008 Troy Shackelford, CPA $5,815 Chase $4,877 Providian $4,671 Bank of America $4,164 United States Trustee $3,400 Mayu Valladolid $3,000 Nordstrom Bank $2,846 Vistana Spa Condo Assoc., Inc. $1,962 Citibank $1,635 Quinta Del Golfo $659 ADELPHIA COMMS: Judge Gerber Defers Decision on Plan Confirmation ----------------------------------------------------------------- The Honorable Robert J. Gerber, the United States Bankruptcy Judge for the Southern District of New York overseeing the Adelphia Communications Corporation reorganization case, disclosed additional information on the timing of a decision regarding the confirmation of Adelphia's First Modified Fifth Amended Joint Chapter 11 Plan of Reorganization. Judge Gerber noted that a decision regarding confirmation would not be rendered by Dec. 22, 2006, the deadline for the Effective Date contained in Section 12.2(c) of the Plan. Judge Gerber further noted that a decision may not be rendered by Dec. 31, 2006. The Judge requested that the Settlement Parties let him know whether they will execute a waiver of the deadline for the Effective Date contained in Section 12.2(c). As reported in yesterday's Troubled Company Reporter, the company filed proposed changes to the Plan with the Court on Dec. 19, 2006, marked to show changes against the version filed with the Court on Dec. 12, 2006. The proposed modifications reflect additional discussions with the interested parties as well as certain changes resulting from the hearing to consider confirmation of the Plan. The Plan is subject to approval of the Bankruptcy Court. The Confirmation Hearing commenced on Dec. 7, 2006 and ended on Dec. 19, 2006. Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. AIR AMERICA: Court Okays Mahoney Cohen as Committee's Accountant ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave the Official Committee of Unsecured Creditors of Air America Radio, aka Piquant LLC, permission to retain Mahoney Cohen & Company, CPA, P.C., as its accountant and financial advisor, nunc pro tunc to Nov. 16, 2006. Mahoney Cohen will: a) assist the committee in the analysis of financial operations of the Debtor from Oct. 13, 2006, as necessary; b) assist with the analysis of the financial information of the Debtor before Oct. 13, 2006, as necessary; c) assist analyzing transactions with vendors, insiders, and affiliated companies, subsequent and before Oct. 13, 2006, as necessary; and d) perform other services that may be necessary in the role of accountant/financial advisors to the Committee or that may be requested by the Committee or counsel to the Committee. The customary hourly rates for the firm's professionals are: Designation Hourly Rate ----------- ----------- Shareholders $390 - $545 Managers and Directors $290 - $390 Staff and Senior Accountants $135 - $290 Charles M. Berk, CPA, a shareholder at Mahoney Cohen, assures the Court that his firm does not represent any interest adverse to the Debtor and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Berk can be reached at: Charles M. Berk, CPA Mahoney Cohen & Company, CPA, P.C. 1065 Avenue of the Americas New York, NY 10018 Tel: (212) 790-5700 Fax: (212) 398-0267 http://www.mahoneycohen.com/ Air America Radio, aka Piquant LLC -- http://www.airamerica.com/- - is a full-service radio network and program syndication service in the United States. The network features discussion and information programs reflecting a liberal, left wing, or progressive point of view. Air America filed a voluntary Chapter 11 petition on Oct. 13, 2006 (Bankr. S.D. N.Y. Case No: 06-12423) Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for bankruptcy, it disclosed total assets of approximately $4.3 million and total debts of over $20 million. ALLIANCE ATLANTIS: Exploring Strategic Alternatives Including Sale ------------------------------------------------------------------ Alliance Atlantis Communications Inc. disclosed Wednesday that it is exploring strategic alternatives. As part of that process, the company, together with Southhill Strategy Inc., the company's controlling shareholder, have recently sought expressions of interest from selected potential buyers as to their interest in purchasing the company. Southhill Strategy is owned by Michael MacMillan, Alliance Atlantis' Executive Chairman, and Seaton McLean. Southhill has informed the company that no decision to sell Southhill's controlling interest in Alliance Atlantis has been made and that Southhill may decide not to sell its interest. If Southhill decides not to sell its interest, a sale of the company is unlikely to occur. A Special Committee of the company's Board has been formed for this purpose and is comprised of Robert Steacy as Chair, Anthony Griffiths and Barry Reiter. The Company also says it has engaged RBC Capital Markets as its financial advisor and Bennett Jones LLP as its legal advisor. Alliance Atlantis -- http://www.allianceatlantis.com/ -- offers Canadians 13 well-branded specialty channels boasting targeted, high-quality programming. The Company also co-produces and distributes the hit CSI franchise and indirectly holds a 51% limited partnership interest in Motion Picture Distribution LP, a leading distributor of motion pictures in Canada, with motion picture distribution operations in the United Kingdom and Spain. The Company's common shares are listed on the Toronto Stock Exchange - trading symbols AAC.A and AAC.B. ALLIANCE ATLANTIS: S&P Places BB Rating on Developing CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'BB' long-term corporate credit rating, on Toronto-based Alliance Atlantis Communications Inc. on CreditWatch with developing implications. Developing means that the ratings could be raised, lowered, or affirmed, depending on the outcome of our review. "The CreditWatch placement follows Alliance Atlantis' announcement that it is exploring strategic alternatives, namely the possible sale of the entire company," said Standard & Poor's credit analyst Lori Harris. Alliance Atlantis has engaged RBC Capital Markets to act as financial adviser in this process. Should management pursue the selling option, the ratings on Alliance Atlantis could be raised, lowered, or affirmed, depending on the business and financial strength of the acquiring or new company. Standard & Poor's will evaluate the impact of a transaction or strategic plan on credit quality when it is announced. Alliance Atlantis is an operator of Canadian specialty television networks through its broadcasting business and a producer and distributor of television programming, predominantly the hit television franchise CSI, through its entertainment business. The company also holds a 51% limited partnership interest in Motion Picture Distribution LP, which operates in Canada, the U.K., and Spain. Management recently completed a review of the Motion Picture Distribution asset and said it is considering selling some or all of it. S&P expects this process to be independent from the possible sale of Alliance Atlantis as a whole. AMERICAN SKIING: Selling Steamboat Resort for $265 Million ---------------------------------------------------------- American Skiing Company has entered into a definitive agreement to sell Steamboat Ski & Resort Corporation to Steamboat Acquisition Corporation, an affiliate of Intrawest ULC, for $265 million. The reported sale follows the review of strategic options for the resort announced in July. "In light of favorable market conditions and considerable interest from prospective buyers, ASC decided to pursue a sale of the resort" American Skiing President and CEO B.J. Fair, said. "The proceeds of this transaction will reduce outstanding debt and allow us to focus on opportunities in our portfolio of resorts and their related real estate." "We look forward to working with the entire Intrawest team to ensure a smooth transition and a continued outstanding resort experience for our guests," added Fair. The transaction is subject to customary closing conditions, including Hart-Scott-Rodino antitrust approval and consent of the United States Forest Service, and is expected to close on or before March 31, 2007. The purchase price of $265 million includes approximately $4 million in assumed debt, and is subject to working capital and seasonal earnings adjustments. After closing, it is anticipated that net proceeds from the sale will be used to repay all existing senior debt and outstanding revolver balances under American Skiing's senior credit facility and certain other indebtedness. Included in the sale are the resort and all resort-owned operations, all of Steamboat's resort-owned real estate assets, the commercial core of the Steamboat Grand Hotel & Condominiums and the company's interest in the Walton Pond Apartments complex. "Though it's only December, Steamboat is off to a terrific start for the winter season with a number of new improvements, such as a new high-speed lift in the resort's Sunshine area and renovations of the two main on-mountain dining facilities" said Steamboat's President and Managing Director Chris Diamond. "As the resort makes the transition to new ownership, the Steamboat team will remain focused on the same qualities that make Steamboat the West's favorite family resort: providing the best possible vacation experience for its guests." Bear Stearns and Main Street Advisors acted as financial advisors to American Skiing Company in connection with the transaction. Goodwin Procter LLP acted as legal advisor to American Skiing Company and Skadden, Arps, Slate, Meagher & Flom LLP and Jacobs Chase Frick Kleinkopf & Kelley LLC acted as legal advisors to Intrawest. Headquartered in Park City, Utah, American Skiing Company -- http://www.peaks.com/-- is one of the largest operators of alpine ski, snowboard and golf resorts in the United States. Its resorts include Killington, Pico and Mount Snow in Vermont; Sunday River and Sugarloaf/USA in Maine; Attitash in New Hampshire; Steamboat in Colorado; and The Canyons in Utah. * * * At Oct. 39, 2006, American Skiing Co.'s balance sheet showed a $425,249,000 stockholders' deficit compared to a $379,930,000 deficit at July 31, 2006. AMERICAN TOWER: Board OKs Stock Option-Related Remediation Plan --------------------------------------------------------------- The Board of Directors of American Tower Corporation has approved the remediation plan presented by the Special Committee that conducted a review of the Company's historical stock option granting practices and related accounting. The company had reported the Special Committee's key findings, including that there were a number of deficiencies in the company's stock option granting practices in November. These deficiencies contributed to the restatement of the company's historical financial statements, which were filed with the Securities and Exchange Commission on Nov. 29, 2006. At that time, the company reported that the Special Committee was preparing a remediation plan to address the issues raised by its findings. The following is a summary of the key aspects of the remediation plan approved by the Board: -- The Company has requested, and each of its present senior officers and members of its Board of Directors has agreed, to eliminate any benefit received by such individuals from options having been granted to them at prices below the fair market value of the Company's Class A common stock on the legal grant date, as determined by the Special Committee. This will be accomplished by increasing the exercise price of unexercised options to such fair market value and, for exercised options, by such individuals compensating the Company for the amount of such benefit, after reduction for any taxes paid, either through a cash payment or canceling vested options having an in-the-money value equal to the amount of the payment. The aggregate value of eliminating the benefit for the eight individuals with options subject to such remediation is approximately $7.5 million, prior to any adjustment for taxes paid. -- The Company plans to take steps to similarly eliminate any benefit received by certain former officers from the grant to them of options at below fair market value. The aggregate value of eliminating the benefit for the three individuals with options subject to such remediation is approximately $7.6 million, prior to any adjustment for taxes paid. -- The Company's Chief Executive Officer will continue the assessment and re-evaluation of the Company's management organizational structure, focusing on the capabilities of the legal, human resources and accounting functions, including whether the responsibilities of any members of current management should be modified. -- The Company's revised procedures for approval and administration of stock options, which were approved by the Compensation Committee in August 2006, will be independently evaluated for adequacy and then monitored for effective implementation and compliance as part of the internal audit function. -- Additional training will be put in place with respect to governance, risk management and compliance, including as to stock option administration policies and procedures and compliance with the Company's code of conduct. -- The Company will evaluate and enhance its risk assessment activities and the adequacy of its administrative resources and communication of roles, responsibilities and accountability. The Company will also assess, with Board- level oversight, the organization's attitude toward a culture of compliance and an effective internal control environment. The company is continuing to cooperate with both the Department of Justice and the Securities and Exchange Commission in their respective inquiries regarding the Company's historical stock option granting practices. Resumption of Stock Repurchase Program As reported, the company temporarily suspended its stock repurchase program in May 2006 in connection with the review of its stock option granting practices. Now that the Special Committee has reported on its findings and the Board has approved a remediation plan, the Board has approved the resumption of the Company's stock repurchase program. "We are pleased to have completed the review of the Company's historical stock option granting practices" Jim Taiclet, American Tower's Chief Executive Officer stated. "By resuming our stock repurchase program, we are renewing our commitment to return cash to shareholders in accordance with our long term financial and operational strategy." Under the repurchase program, announced in November 2005, the Company was authorized to repurchase up to $750 million of its Class A common stock during the period November 2005 through December 2006. Prior to the suspension of the stock repurchase program, the Company had repurchased a total of 11.8 million shares of its Class A common stock for approximately $358.3 million. The Board has authorized the Company to repurchase the remaining $391.7 million under this program through the end of February 2007. The company expects to complete the remaining $391.7 million under the program by the end of February 2007, utilizing cash from operations, borrowings under its credit facilities and cash on hand to fund the repurchase program. Under the program, management is authorized to purchase shares from time to time in open market purchases or privately negotiated transactions at prevailing market prices. To facilitate repurchases, the Company's Board has authorized the Company to make purchases pursuant to a Rule 10b5-1 plan, which will allow the Company to repurchase its shares during periods when it otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. The Company expects that it will evaluate the size and timing of future share repurchases prior to or upon completion of this program. Headquartered in Boston, Massachusetts, American Tower Corporation (NYSE: AMT) -- http://www.americantower.com/-- is an independent owner, operator and developer of broadcast and wireless communications sites in North America. American Tower owns and operates over 22,000 sites in the United States, Mexico, and Brazil. Additionally, American Tower manages approximately 2,000 revenue producing rooftop and tower sites. * * * As reported in Troubled Company Reporter Dec 13, 2006, Moody's Investors Service placed the ratings of American Tower Corporation' corporate family at Ba2 under review for possible upgrade. ANVIL HOLDINGS: Oct. 28 Balance Sheet Upside-Down by $140 Million ----------------------------------------------------------------- Anvil Holdings Inc.'s balance sheet at Oct. 28, 2006, showed a stockholders' deficit of $140 million. At Oct. 28, 2006, the company's balance sheet also showed $116.8 million in total assets and $256.8 million in total liabilities. Anvil reported a $6.1 million net loss on $42.2 million of net sales for the quarter ended Oct. 28, 2006, compared with a $14.8 million net loss on $41.4 million of net sales for the same period in 2005. The decrease in net loss is primarily due to a $3.7 million provision for asset impairment and a $5 million provision for income taxes in the fiscal quarter ended Oct. 29, 2005. In addition, interest expense on borrowings was $698,000 lower in the current period than the corresponding prior year's period. Net sales for the quarter ended Oct. 28, 2006 increased $761,000, or 1.8%. Total units sold in the current quarter were approximately 3% more than the same period of the prior year, while average selling prices declined by approximately 1%, due primarily to an increase in promotional allowances. Full-text copies of the company's consolidated financial statements for the quarter ended Oct. 28, 2006, are available for free at http://researcharchives.com/t/s?176a Chapter 11 Bankruptcy Protection On Oct. 2, 2006, Anvil Holdings Inc. and its subsidiaries Anvil Knitwear Inc. and Spectratex, Inc. filed voluntary petitions for Chapter 11 bankruptcy protection under the United States Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York. The U.S. Bankruptcy Court for the Southern District of New York approved the company's Modified First Amended Plan of Reorganization On Dec. 5, 2006. The Plan provides that holders of Anvil Knitwear Inc.'s 10.875% senior notes due 2007 would receive 99% of the equity of the reorganized company and that holders of Anvil Holdings Inc.'s preferred stock would receive the remaining equity, and warrants. Secured creditors and general unsecured creditors of the company would be paid in full or otherwise unimpaired under the plan, while holders of the common stock of Anvil Holdings would not receive any consideration and such securities would be cancelled. The Official Committee of Unsecured Creditors appointed in the bankruptcy case supports confirmation of the Plan. DIP Financing At Oct. 28, 2006, there was $27.9 million outstanding under the DIP Financing bearing interest at 8.5%. At Oct. 28, 2006, there was $2.9 million available for additional borrowings under the DIP Financing. 10-7/8% Senior Notes On Mar. 14, 1997, Anvil issued $130 million Senior Notes due Mar. 15, 2007 and received proceeds of $126.1 million net of debt discount of $3.9 million. Interest on the Senior Notes is payable semiannually on March 15 and September 15. No interest has been paid on the Senior Notes since Mar. 15 2006, and the company is in default under certain terms of the indenture relating to the Senior Notes. About Anvil Holdings 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. ASARCO LLC: U.S. Government Wants Judgment Entered in Its Favor --------------------------------------------------------------- The United States of America, on behalf of the Department of the Interior asks the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to enter a judgment in its favor and against ASARCO LLC. ASARCO is seeking to disallow the U.S. Government's Proof of Claim in connection with reclamation obligations mining and milling operations at the San Xavier District of the Tohono O'odham Indian Nation. The government argues that: (1) ASARCO LLC's complaint fails to state a claim on which relief can be granted; (2) the Court lacks jurisdiction over the subject matter because ASARCO failed to exhaust administrative remedies before commencing the Adversary Proceeding; (3) the Adversary Proceeding is not ripe for adjudication in as much as it seeks declaratory relief concerning claims the character and allowability of which are subjects of other pending proceedings, namely the administrative approval process of ASARCO's Mine Plan of Operations, the corresponding National Environmental Policy Act process and ASARCO's objection to Claim No. 10744; and (4) ASARCO has failed to join indispensable parties under Rule 7019 of the Federal Rules of Bankruptcy Procedure, including the lessor landowners who are parties to the Mining and Business Leases. As reported in the Troubled Company Reporter on Nov. 1, 2006, ASARCO LLC asked the Court to: (a) disallow the U.S. Government's Proof of Claim; (b) determine that ASARCO has no obligation to backfill or revegetate Tract I and, by implication, Tract II; (c) deny the claim of damages relating to Tract III; and (d) disallow the claims of unpaid royalties, rents, interests and penalties for Tracts I and II. In 1959, Asarco Inc., predecessor in interest to ASARCO LLC, and the Department of Interior entered into two Mining Leases and 12 Business Leases with the San Xavier District of the Tohono O'odham Indian Nation and certain members of the Nation holding trust patent allotments on the Reservation. The Leases facilitate ASARCO's mining and milling operations on portions of the Mission Mine: * The Mining Leases allow ASARCO to mine and mill ore, and deposit the alluvial burden, unmilled waste rock and mill tailings on portions of the Reservation designated as "Tract I" and "Tract II," in exchange for paying the Nation and Allottees royalties on the ore production and rent for the land. * The Business Leases allow ASARCO to deposit waste rock and tailings from portions of the Mission Mine "on or adjacent to" the Reservation onto portions of the Reservation designated "Tract III," in exchange for paying the Indians rent for the land. On July 28, 2006, the United States Government, on behalf of the Interior Department and the Indians, filed Claim No. 10744 against ASARCO LLC, asserting a $5,334,000 reclamation obligation for Tract I. The Claim Amount includes: -- $3,245,000 for "earthwork," which presumably includes backfilling, and -- $836,000 for "revegetation." In addition, the U.S. Government reserves its right to make future reclamation claims on Tracts II and III for different amounts because the Mining and Business Leases for those tracts remain in effect. About ASARCO LLC Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). (ASARCO Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Wants Deposition of Three Mineral Park Personnel ------------------------------------------------------------ To complete discovery in advance of the expedited trial setting, ASARCO LLC contacted Mineral Park Inc. in November 2006 to schedule depositions, including those of Raymond Lee, Craig Smith, and Jim Tompkins. ASARCO also asked Mineral Park to provide available dates for depositions during the weeks of November 27, December 4, or December 11. Mineral Park, however, refused to provide available dates for any of the six deponents ASARCO identified. Instead, Mineral Park offered to make time "in the new year . . . for any remaining depositions." Mineral Park also indicated its preference that no further discovery be conducted until the U.S. District Court for the Southern District of South Texas decides on its appeal of the Bankruptcy Court's preliminary injunction. Mineral Park has not suggested that the trial date should be continued. ASARCO believes that delaying depositions of the three witnesses until January 2007 would significantly prejudice its ability to complete discovery and present its case at trial the following month. Thus, ASARCO asks the Court to compel Mineral Park to produce Messrs. Lee, Smith, and Tompkins for depositions. Mineral Park Responds Patricia Reed Constant, Esq., in Corpus Christi, Texas, relates that Messrs. Lee, Smith, and Tompkins are working diligently to mitigate the resulting disruption of the Court's preliminary injunction to Mineral Park's operations and planning. In the immediate term, that critical work demands their concerted attention, especially given the recent decline in copper prices. Ms. Constant adds that ASARCO has failed to explain why three short depositions must be taken during this important time for Mineral Park. Without justification, ASARCO has insisted steadfastly on completing the depositions by December 15. Simply stating that Mineral Park's "position is incompatible with the current trial setting" does not make it true, Ms. Constant says. The two deposition days can easily be scheduled for early 2007 without compromising trial preparations. More importantly, Mineral Park has sought leave to appeal the Injunction Order. The appeal to the District Court concerns whether the South Mill must be assessed at fair market value or may be judged on a "going concern" value. Ms. Constant contends that resolving this key legal issue will save the Bankruptcy Court and the parties significant time and resources at trial and, perhaps, facilitate a pretrial business resolution. Thus, Mineral Park believes that it would be more prudent and efficient to delay the depositions for now. Accordingly, Mineral Park asks the Court to deny ASARCO's request. About ASARCO LLC Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). (ASARCO Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AUTOCAM CORPORATION: Fails to Make December 15 Interest Payment --------------------------------------------------------------- Autocam Corporation, in a regulatory filing with the U.S. Securities and Exchange Commission, disclosed that it failed to make the semi-annual interest payment of $7.6 million due Dec. 15, 2006, under its $140 million of outstanding 10.875% senior subordinated notes due June 2014. The company says that the non-payment of interest due on the Notes triggers a 30-day grace period during which payment can be made before triggering an event of default under the indenture governing the Notes and cross-default provisions under agreements covering its senior secured credit facilities and its second lien credit facility. Noteholders' Proposal The company says that on Dec. 14, 2006, it received a proposal signed by the holders of 85% of the Notes concerning the terms of a possible recapitalization of Autocam. As part of the proposed recapitalization, the company's Noteholders would purchase $85 million of newly issued equity securities in the form of a payment-in-kind preferred stock and convert the Notes into 100% of the common equity of Autocam. As of Dec. 14, 2006, the company had $108.1 million in borrowings outstanding under its senior secured credit facilities and $77.6 million in borrowings outstanding under its second lien credit facility, including accrued paid-in-kind interest. The proposal anticipates that the indebtedness under the company's second lien credit facility will be repaid in full with proceeds of the PIK Preferred Equity and any excess would be used to satisfy expenses of the transaction and increase working capital. It is also anticipated that the company's senior secured credit facilities would be reinstated or refinanced on market terms. After completion of the recapitalization, it is anticipated that the company would have approximately $110.0 million of funded secured indebtedness. The company relates that the proposal would significantly enhance its financial strength and operational flexibility, which would benefit all of its stakeholders. The recapitalization would improve short- and long-term liquidity on a global basis, allowing the company to better serve its customers, meet its debt service and working capital requirements and fund capital expenditures for new programs. The company discloses that the proposal is subject to approval by its board of directors and equity holders and is subject to final negotiations, documentation and customary conditions of closing. About Autocam Corporation Autocam Corporation, headquartered in Kentwood, Michigan, is a manufacturer of extremely close tolerance precision-machined, metal alloy components, sub-assemblies and assemblies, primarily for performance and safety critical automotive applications. Revenues in 2005 were approximately $350 million from operations in North America, Europe, and Brazil. AUTOCAM CORP: Interest Non-Payment Cues S&P's Default Rating ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its 'CC' corporate credit and 'C' subordinated note ratings on Autocam Corp. to 'D'. At the same time, the 'CC' rating and '2' recovery rating on the senior secured credit facilities were withdrawn, because the company reported that it expects to reinstate or refinance its senior secured credit facilities. In addition, all ratings were removed from CreditWatch with negative implications where they were placed on Nov. 22, 2006. The ratings actions follow the company's failure to pay its semi- annual $7.6 million interest payment due on Dec. 15, 2006, on its $140 million senior subordinated notes. Following the nonpayment of interest, Autocam received a recapitalization proposal from the note holders under which they offered to purchase newly issued PIK preferred equity securities and convert their notes into 100% of the common equity of Autocam. Indebtedness under the company's second-lien credit facility would, under the proposal, be repaid in full with proceeds of the PIK preferred equity. The senior secured credit facilities would be reinstated or refinanced. BEAR STEARNS: Fitch Assigns Low-B Ratings on $40.1 Million Debt --------------------------------------------------------------- Fitch rates Bear Stearns Commercial Mortgage Trust's commercial mortgage pass-through certificates, series 2006-PWR14, as: -- $114,700,000 class A-1 'AAA'; -- $170,700,000 class A-2 'AAA'; -- $68,900,000 class A-3 'AAA'; -- $125,050,000 class A-AB 'AAA'; -- $950,942,000 class A-4 'AAA'; -- $297,407,000 class A-1A 'AAA'; -- $246,815,000 class A-M 'AAA'; -- $222,132,000 class A-J 'AAA'; -- $1,234,071,304 class X-1 'AAA'; -- $1,207,287,000 class X-2 'AAA'; -- $1,234,071,304 class X-W 'AAA'; -- $46,278,000 class B 'AA'; -- $24,682,000 class C 'AA-'; -- $37,022,000 class D 'A'; -- $21,596,000 class E 'A-'; -- $24,681,000 class F 'BBB+'; -- $24,682,000 class G 'BBB'; -- $24,681,000 class H 'BBB-'; -- $9,256,000 class J 'BB+'; -- $6,170,000 class K 'BB'; -- $9,256,000 class L 'BB-'; -- $3,085,000 class M 'B+'; -- $6,170,000 class N 'B'; and -- $6,171,000 class O 'B-'. The $27,766,608 class P is not rated by Fitch. Classes A-1, A-2, A-3, A-AB, A-4, A-1A, A-M, A-J are offered publicly, while classes X-1, X-2, X-W, B, C, D, E, F, G, H, J, K, L, M, N, O, and P 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 250 fixed rate loans having an aggregate principal balance of approximately $2,468,142,608, as of the cutoff date. BENROCK INC: Ct. OKs Streetman Meeks as Trustee's Special Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Arkansas authorized Richard L. Cox, Esq., the appointed Chapter 7 Trustee of Benrock Inc.'s bankruptcy case, to employ Streetman Meeks & McMillan as his special counsel. The firm will represent the Debtor to pursue several pending litigation cases. Papers filed with the Court did not disclose the firm's compensation fee. Thomas S. Streetman, Esq., a member at Streetman Meeks & McMillan, assured the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Streetman can be reached at: Thomas S. Streetman, Esq. 302 Main Street, P.O. Drawer A Crossett, AR 71635 Tel: (870) 364-2213 Fax: (870) 364-6500 Headquartered in Benton, Arkansas, Benrock Inc. provides marine equipment & supplies. The Company filed for chapter 11 protection on December 1, 2004 (Bankr. E.D. ARK Case No. 04-24405). James E. Smith, Jr., Esq., represented the Debtor. The Debtor's chapter 11 case was converted to a chapter 7 liquidation proceeding on Oct. 31, 2005, and Richard L. Cox, Esq., was appointed as the Chapter 7 trustee. When the Debtor filed for protection from its creditors, it estimated assets and debts between $1 million and $100 million. BOMBARDIER INC: Closes EUR4.3 Billion Letter of Credit Facility --------------------------------------------------------------- Bombardier Inc. signed a EUR4.3 billion Syndicated Letter of Credit Facility agreement on Dec. 18, 2006, with a group of leading international financial institutions. The facility is set up in Europe for the benefit of Bombardier Inc. and all of its subsidiaries. It will replace existing syndicated North American and European facilities. Bombardier attained its objective of securing availability for an extended term, while at the same time reducing considerably its issuing costs. This is a clear indication of the banks' support for Bombardier's business plan. Calyon, BNP Paribas, Deutsche Bank and J.P. Morgan, who have jointly arranged the facility, as mandated lead arrangers and joint book runners, were joined by five banks as mandated lead arrangers and sub-underwriters and 16 additional banks joined in the general syndication. This closing completes the refinancing plan undertaken during the third quarter of fiscal year 2007, which included tender offers of certain notes and a new issue of senior notes. About Bombardier Headquartered in Valcourt, Quebec, Bombardier Inc. (TSX: BBD) -- http://www.bombardier.com/-- manufactures transportation solutions, from regional aircraft and business jets to rail transportation equipment. * * * As reported in the Troubled Company Reporter on Nov. 1, 2006, Dominion Bond Rating Service confirmed the ratings of Bombardier Inc. and Bombardier Capital Ltd. The Senior Unsecured Debentures of both Bombardier Inc. and Bombardier Capital Ltd. are confirmed at BB, and Preferred Shares of Bombardier Inc. at Pfd-4. All trends are Negative. In October 2006, Fitch Ratings downgraded the debt and Issuer Default Ratings for both Bombardier Inc. The Company's issuer default rating was downgraded from BB to BB-. Other rating actions include, Senior unsecured debt revised to 'BB-' from 'BB'; Credit facilities revised to 'BB-' from 'BB' and Preferred stock revised to 'B' from 'B+'. The Rating Outlook is Stable. Also in October 2006, Standard & Poor's Ratings Services affirmed its 'BB' long-term corporate credit rating on Bombardier. At the same time, Standard & Poor's assigned its 'BB' issue rating to Bombardier's proposed issuance of up to EUR1.8 billion seven-to- ten-year multi-tranche senior unsecured notes. Bombardier Inc.'s proposed EUR1.8 billion in new senior unsecured notes carry Moody's Investors Service Ba2 rating. CARRINGTON MORTGAGE: Fitch Rates $20.6MM Class M-10 Certs. at BB+ ----------------------------------------------------------------- Carrington Mortgage Loan Trust, series 2006-NC5, is rated by Fitch Ratings: -- $842 million classes A-1 through A-5 certificates 'AAA'; -- $67.6 million class M-1 certificates 'AA+'; -- $64.7 million class M-2 certificates 'AA'; -- $21.8 million class M-3 certificates 'AA'; -- $31.8 million class M-4 certificates 'A+'; -- $24.1 million class M-5 certificates 'A'; -- $16.5 million class M-6 certificates 'A-'; -- $20.6 million class M-7 certificates 'BBB+'; -- $12.9 million class M-8 certificates 'BBB'; -- $17.6 million class M-9 certificates 'BBB'; and, -- $20.6 million class M-10 certificates 'BB+'. The 'AAA' rating on the senior certificates reflects the 28.40% total credit enhancement provided by the 5.75% class M-1, the 5.50% class M-2, the 1.85% class M-3, the 2.70% class M-4, the 2.05% class M-5, the 1.40% class M-6, the 1.75% class M-7, the 1.10% class M-8, the 1.50% class M-9, the 1.75% class M-10 and the 3.05% initial overcollateralization. All certificates have the benefit of monthly excess cash flow to absorb losses. In addition, the ratings reflect the integrity of the transaction's legal structure as well as the primary servicing capabilities of New Century Mortgage Corporation. Wells Fargo Bank, N.A. will act as trustee. As of the cut-off date, Dec. 1, 2006, the mortgage loans have an aggregate balance of approximately $1,216,634,845 as of the cut-off date after application of scheduled payments due on or before the cut-off date whether or not received and subject to a permitted variance of plus or minus 5%. Approximately 23.60% of the mortgage loans are interest only. The weighted average mortgage rate is approximately 8.272% and the weighted average remaining term to maturity is 358 months. The average cut-off date principal balance of the mortgage loans is approximately $226,942. The weighted average original loan-to-value ratio is 80.80% and the weighted average Fair, Isaac & Co. score is 616. The properties are primarily located in California, Florida and New York. CATHOLIC CHURCH: Classification & Treatment of Claims Under Plan ---------------------------------------------------------------- Under the Joint Plan of Reorganization filed by the Archdiocese of Portland in Oregon; the Tort Claimants Committee; David A. Foraker, the Future Claimants Representative; and the Parish and Parishioners Committee, all Claims against Portland, other than Administrative Claims and Priority Tax Claims, are divided into nine separate classes. The Proponents believe complies with the requirements of the Bankruptcy Code. Estimated Class Description Total Amount ----- ------------ ------------ N/A Administrative $6,000,000 N/A Priority Tax Claims $5,935 1 Non-Tax Priority Claims $2,920 2 Umpqua Bank Secured Claim $313,700 3 Perpetual Endowment Fund Secured Claim $4,974,348 4 Key Bank Guaranty Claims $4,000,000 5 General Unsecured Claims $525,000 6 Allowed Known Tort Claims $40,700,000 7 Future Claims unknown 8 Retiree Benefit Claims $404,000 9 Donor and Beneficiary Claims N/A The holders of Allowed Claims in Classes 2, 3, 4, 5, 6, 7, and 9, which are impaired, are entitled to vote on the Plan. Classes 1 and 8 are not impaired and are deemed to have accepted the Plan without voting. Except for Class 9, the rest of the classes will get 100% recovery. Hamilton Rabinovitz & Alschuler, Inc.'s revised forecast of Future Claims projects that there likely will be asserted against the Archdiocese approximately 37 Future Claims, which are expected to result in an aggregate liability in the range of $5,200,000 net present value to $7,400,000 net present value. However, under a variation of this revised forecast, HR&A estimates that the number of Future Claims could be as low as 11 and as high as 63, which could be expected to result in an aggregate liability in the range of $1,600,000 net present value to $12,100,000 net present value. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 75; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Portland, et al., File Joint Reorganization Plan ----------------------------------------------------------------- The Archdiocese of Portland in Oregon; the Tort Claimants Committee appointed to represent the interests of Known Tort Claimants; David A. Foraker, in his capacity as Future Claimants Representative; and the Parish and Parishioners Committee delivered a joint plan of reorganization and accompanying disclosure statement to the U.S. Bankruptcy Court for the District of Oregon on Dec. 18, 2006. The Plan Proponents expect the Plan to take effect on May 1, 2007. The Plan Proponents, the Known Tort Claimants, the Insurance Companies, and representatives of the Archdiocesan High Schools, and their attorneys, commenced intensive mediation sessions in September 2006, with U.S. District Court Judge Michael R. Hogan and Oregon Circuit Court Judge Lyle C. Velure, as mediators, to resolve all pending issues necessary to achieve confirmation of a consensual plan. The mediation sessions were largely completed in December 2006. With the effort and commitment of Judges Hogan and Velure, and the cooperation of all parties involved in the mediation, Portland, majority of the Known Tort Claimants, the Tort Claimants Committee, the Future Claimants Representative, the Parish and Parishioners Committee, and representatives of the Archdiocesan High Schools were able to resolve the majority of the pending disputes and reached agreement on a joint plan that had broad support. The Plan Proponents disclose that portions of the Disclosure Statement describing Portland's financial condition have not been subjected to an independent audit, but prepared from information compiled by the Archdiocese from records maintained in the ordinary course of its operations. Thus, despite reasonable efforts to accurately prepare all financial information, the Proponents cannot guarantee that the information is without error. Moreover, the Plan Proponents point out that the contents of the Disclosure Statement should not be construed as legal, business or tax advice to creditors; creditors should consult their own legal counsel or tax advisor on any questions or concerns about tax or other legal effects of the Plan on them. Key Plan Provisions The key provisions of the Joint Plan are: * The insurance litigation between Portland and its Insurance Companies regarding coverage to pay Tort Claims has been settled. The Settling Insurance Companies have agreed to pay an aggregate of $51,750,000. This payment, however, is contingent upon the settlement agreements being approved and the Settling Insurance Companies obtaining a release from any and all further liability under their insurance policies with the Archdiocese. * As of December 18, 2006, approximately 143 of the Known Tort Claims against Portland have been settled for approximately $40,700,000. These Claims will be paid in full, with agreed interest, upon confirmation of the Plan. * Twenty-six Known Tort Claims remain to be resolved by settlement or further litigation. The Reorganized Debtor will provide up to $13,750,000 to pay these Claims as -- and to the extent -- they are Allowed. * The Reorganized Debtor will provide up to $20,000,000 to pay Future Claims -- currently unknown Claims for Child Abuse that are asserted by a Future Claimant on or before April 30, 2030 -- as they are Allowed. * Claims will be paid from Insurance Recoveries, Archdiocesan assets, and loans secured by Archdiocesan assets. It is anticipated that no Parish or School property will be used to pay Claims or serve as collateral for any loans, and that the Reorganized Debtor will be able to provide the necessary funding to pay Claims without increasing the Parish assessments. * The Estate Property Litigation between Portland and the Tort Claimants Committee regarding the availability of Parish and School property to pay Claims will be settled and all appeals resulting from that litigation will be dismissed. * The Reorganized Debtor will, not later than one year following the Effective Date, restructure under civil law the Archdiocese, the Parishes, and the Schools into one or more charitable trusts, endowments, non-profit religious corporations, or other charitable entities that are, under Oregon law, legally separate and distinct from the Reorganized Debtor. As part of, and as required by the restructuring, the Reorganized Debtor will transfer property between and among any existing and newly created entities. The Joint Plan provides for the Reorganized Debtor to pay in full all Claims that are allowed including all Settled Tort Claims within 10 days after the effective date of the Plan. In the event the Bankruptcy Court determines that it will be necessary to estimate any or all of the Unresolved Known Tort Claims to confirm the Plan, the District Court will make the estimation. The Plan provides for the establishment of both a Known Tort Claims Trust and a Future Claims Trust to hold funds and make payment on Unresolved Known Tort Claims and Future Claims as they are resolved. The Known Tort Claims Trust and Future Claims Trust will each be structured as a "qualified settlement fund" within the meaning of Treasury Regulations enacted under Section 486B(g) of the Internal Revenue Code. Portland estimates the current fair market value, as of Oct. 31, 2006, of: -- the Unrestricted Archdiocesan Property to be approximately $21,259,879; and -- the Restricted Archdiocesan Property to be approximately $103,626,679. The Claimants Committee has asserted that these funds are property of the estate and are available to pay claims against the Archdiocese. This issue will be settled upon confirmation of the Plan. Parish and School Properties According to the Plan Proponents, the Parish and School Property includes all Parish churches, schools, and cemeteries, Central Catholic High School, Regis High School, Marist High School, and all Parish and School bank and investment accounts, including these entities' funds and investments in the Archdiocesan Loan and Investment Program and the Catholic Education Endowment Fund. The value of the cash and investments in these accounts totaled approximately $76,500,000 as of June 30, 2006, of which approximately: (a) $29,000,000 is held in Parish bank accounts and is constantly being used and replenished to support Parish and School operations; (b) $15,500,000 is held in Parish Catholic Education Endowment Fund accounts; and (c) $22,500,000 is held in Parish Archdiocesan Loan and Investment Program accounts. Portland only receives Parish financial reports annually in the fall of each year for the preceding fiscal year. The Archdiocese believes it unlikely that the stated amounts have changed significantly since June 30, 2006. Few current appraisals exist for the Parish and School real property and it would be very difficult to provide a reliable estimate of the value of the property, the Plan Proponents tell the Court. This is because much of the property can likely be used only for churches and schools without significant cost to the purchaser to demolish or convert the buildings on the property. There is only a limited market for church and school property. In addition, many of the churches and schools are in residential neighborhoods with restricted zoning which could prevent the property from being used for any other purpose. The current tax appraised value of the real property likely exceeds $400,000,000. As part of, and as required by, the restructuring, the Reorganized Debtor will transfer property between and among any existing or newly created entities. The Parish and Parishioners Committee will remain in existence following the Plan Effective Date for the sole purpose of ensuring that the restructuring transactions contemplated by the Plan, as they affect Parishes, are reasonably implemented. The Archbishop will consult the Parish and Parishioners Committee, provided that nothing in the Plan is intended to diminish the rights or alter the obligations of the Archbishop under ecclesiastical law with respect to the restructuring. Discharge Notwithstanding the Discharge provisions of the Plan, Portland's discharge will not impair or release the obligations of any Non- Settling Insurance Company with respect to the Claims. Moreover, obligations arising under any settlement agreement between Portland and any Settling Insurance Company approved by the Bankruptcy Court will not be discharged. Vesting of Property On the Plan Effective Date, the Reorganized Debtor will be vested with all of the property of the Estate free and clear of all claims, liens, encumbrances, charges and other interests of Creditors and Claimants. The Reorganized Debtor may hold, use, dispose, and otherwise deal with the property and conduct its affairs, in each case, free of any restrictions imposed by the Bankruptcy Code or by the Bankruptcy Court, other than those restrictions expressly imposed by the Plan, the Confirmation Order, or the Plan Documents. Exculpation and Limitation of Liability Under the Joint Plan, none of the Released Parties will have or incur any liability to, or be subject to any right of action by, any holder of a Claim, or any other party-in-interest for any act or omission arising out of the Case, including the exercise of their business judgment and the performance of their fiduciary obligations, the pursuit of confirmation of the Plan, or the administration of the Plan or the property to be distributed under the Plan, except liability for their willful misconduct or gross negligence. These parties will be entitled to reasonably rely on the advice of counsel with respect to their duties and responsibilities under the Plan or in the context of the Case. Injunction Provisions In consideration of the undertakings of the Settling Insurance Companies pursuant to their settlements with the Archdiocese, all Persons or Entities who have held, hold, or may hold Claims, against the Settling Insurance Companies will be: * forever barred from pursuing the Claims, whether the Claims are based on tort or contract or otherwise; and * permanently enjoined on and after the Effective Date from: -- commencing or continuing in any manner, any action or any other proceeding of any kind with respect to any Claim; -- seeking the enforcement, attachment, collection or recovery by any manner or means with respect to any Claim; -- creating, perfecting, or enforcing any encumbrance of any kind against the Parties or the property of the Parties with respect to any Claim; -- asserting any set-off, right of subrogation, or recoupment of any kind against any obligation due to the Parties with respect to any Claim; and -- taking any act, in any manner and in any place, that does not conform to or comply with provisions of the Plan, the Known Tort Claims Trust Agreement, or Future Claims Trust Agreement. Each Tort Claimant holding an Unresolved Tort Claim, will be entitled to continue or commence an action against the Reorganized Debtor pursuant to which the Tort Claimant will be entitled to a jury trial, if requested and required, for the sole purpose of obtaining a judgment as permitted by the Plan. Through this, the Tort Claimant's Claim will be liquidated and will be paid with other Unresolved Tort Claims once Allowed in the ordinary course of the operations of the Known Tort Claims Trust and Future Claims Trust, consistent with the provisions of the Known Tort Claims Trust Agreement and Future Claims Trust Agreement. The holder of any judgment will be enjoined from executing against the Reorganized Debtor, the Settling Insurance Companies, their predecessors, successors, and assigns, the Released Parties, the Known Tort Claims Trust, or the Future Claims Trust, or their assets. In the event any Person or Entity takes any action that is prohibited by, or is otherwise inconsistent with the provisions of the Plan, then, upon notice to the Bankruptcy Court by an affected Party, the action or proceeding in which the Claim of the Person or Entity is asserted will automatically be transferred to the Bankruptcy Court for enforcement of the Plan provisions. Feasibility For the purpose of determining whether the Plan meets the Feasibility requirement, Portland has prepared a 14-year projection -- from fiscal year 2006 to 2007 until fiscal year 2019 to 2020 -- showing that the Reorganized Debtor will have the resources and ability to pay those Claims that are due on confirmation of the Plan and all future obligations as they come due. Best Interests of Creditors Portland has agreed to provide funding to pay Claims which the Plan Proponents believe is more than sufficient in amount to enable the Reorganized Debtor to pay all Claims in full with interest. Because in Chapter 7, creditors can be paid no more than the full amount of their Claims, as allowed with interest at the federal judgment rate, and because Portland is committing under the Plan to provide funding which the Proponents believe will be more than sufficient to pay all Claims in full with interest at a rate greater than the federal judgment rate, the Proponents believe that the Plan satisfies the "best interest of creditors" test of Section 1129(a)(7) of the Bankruptcy Code. Confirmation Over Dissenting Class In the event that any impaired class of Claims does not accept the Joint Plan, the Bankruptcy Court may nevertheless confirm the Plan because the Plan "does not discriminate unfairly" and is "fair and equitable" with respect to any non-accepting class, the Plan Proponents assert. A full-text copy of Portland's Joint Reorganization Plan is available for free at http://researcharchives.com/t/s?177f A full-text copy of Portland's Disclosure Statement accompanying the Joint Plan is available for free at: http://researcharchives.com/t/s?1780 The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 75; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CKE RESTAURANTS INC: Earns $9.5 Million in Quarter Ended Nov. 6 --------------------------------------------------------------- CKE Restaurants, Inc., filed its financial statements for the twelve weeks ended Nov. 6, 2006, with the Securities and Exchange Commission on Dec. 12, 2006. Third quarter net income was $9.5 million versus $15.8 million in the prior year quarter. This year's results include $10.1 million in income tax expense versus $600,000 in the prior year quarter. For the first three quarters of fiscal 2007, the company's net income was $39.8 million, compared to net income of $40.3 million in the prior year comparable period. This year's results include $32.5 million in income tax expense, versus $1.7 million in the prior year's comparable period. Third quarter income before taxes grew to $19.5 million, a $3.1 million, or 19.1 percent, increase over the prior year quarter. This year's pretax results include a $2.8 million charge related to the induced conversion of a portion of the company's convertible notes. Excluding this item, income before taxes for the quarter would have been $22.3 million, a 36.2 percent increase, compared with $16.4 million in the prior year quarter. During the quarter, the company also incurred $2 million of stock compensation expense, while it incurred no significant comparable expense in the prior year quarter. Same-store sales increased 6.2 percent at Carl's Jr.(R) and 5.6 percent at Hardee's(R) company-operated restaurants, compared to the prior year quarter. Consolidated revenue for the current year quarter was $364.9 million, a 6 percent increase from the prior year quarter. For the forty weeks ended Nov. 6, 2006, the company generated earnings before interest, taxes, depreciation and amortization and facility action charges of $139 million. For the trailing four fiscal quarters, the company generated Adjusted EBITDA of $177.8 million. The company repurchased 524,400 shares of common stock during the quarter at a total cost of $10 million. During the quarter, the company's Board of Directors increased the company's common stock repurchase authorization by an additional $50 million, bringing the total authorization to $100 million. As of Nov. 6, 2006, $56.4 million of this authorization remained available for future repurchases. During the quarter ended Nov. 6, 2006, $38.4 million aggregate face amount of the company's convertible notes were converted into common stock. As of the end of the quarter, the total amount of notes converted was $89.8 million, or 85.5 percent of the original $105 million principal amount issued. Fully diluted shares outstanding for the twelve and forty weeks ended Nov. 6, 2006, were 72 million and 72.7 million, respectively. Andrew F. Puzder, president and chief executive officer, said: "We are pleased to report income before taxes of $19.5 million for the third quarter, an improvement over the prior year's result of $16.4 million. We achieved this improvement despite a $2.8 million charge associated with the induced conversion of a portion of our convertible notes. Excluding this item, income before taxes for the third quarter would have been $22.3 million, a 36.2 percent increase over the prior year quarter." "We continue to improve the financial position of the company, allowing us to return capital to shareholders. During the quarter, we repurchased $10 million of common stock, bringing the year to date repurchase total to $34.0 million. Between our common stock repurchases and dividends, we are on course to return more than $48 million to shareholders in fiscal 2007." "During the quarter, we also reduced our outstanding convertible debt by an additional $38.4 million pursuant to unsolicited offers by certain of our convertible note holders to convert their notes into common stock in return for an inducement payment. We incurred $2.8 million in conversion inducement expense during the third quarter. In total, these conversions have resulted in an $89.8 million reduction of our outstanding debt and total conversion inducement expense of $6.4 million (which is less than the net present value of the remaining interest on the convertible notes between the dates they converted and their call date in October 2008). We now have $15.2 million in convertible notes outstanding." "As previously announced, we have acquired 57 Hardee's restaurants in the Georgia market through a series of transactions, the last of which was completed in the third quarter. This most recent purchase of 14 restaurants, including land, buildings and equipment in the Atlanta area for $6.5 million, makes the company the largest Hardee's operator in the state. We believe Georgia can be an integral part of the Hardee's growth plan, and look forward to developing company-operated stores within the Atlanta market as well as increasing franchise growth in the region." "Despite our common stock repurchases, the conversion inducement expense and the Atlanta purchase, we also reduced our term loan debt by $9.3 million during the third quarter, for a fiscal year to date total repayment of $28.7 million. As of the end of the third quarter, the combined balances of our term loan and our remaining convertible debt is $85.2 million, a $118.6 million reduction since the beginning of fiscal 2007." "Both Carl's Jr. and Hardee's were able to reduce total restaurant operating costs as a percentage of company-operated revenue during the third quarter, thanks to our ability to leverage our strong same-store sales growth driven by our premium quality product strategy, as well as favorable food commodity costs." Full-text copies of the company's consolidated financial statements for the quarter ended Nov. 6, 2006, are available for free at http://researcharchives.com/t/s?176e About CKE Restaurants Headquartered in Carpinteria, California, CKE Restaurants Inc. (NYSE: CKR) -- http://www.ckr.com-- through its subsidiaries, franchisees and licensees, operates some of the most popular U.S. regional brands in quick-service and fast-casual dining, including the Carl's Jr.(R), Hardee's(R), La Salsa Fresh Mexican Grill(R) and Green Burrito(R) restaurant brands. The CKE system includes more than 3,200 locations in 43 states and in 13 countries. * * * As reported in the Troubled Company Reporter on Dec. 13, 2006, Standard & Poor's Ratings Services raised its corporate credit rating on CKE Restaurants Inc. to BB- from B+. All ratings were removed from CreditWatch, where they were placed on Oct. 24, 2006, with positive implications. The outlook is stable. COLLINS & AIKMAN: Seeks Approval for IHDG Litigation Trust Accord ----------------------------------------------------------------- Collins & Aikman Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan to approve their stipulation with the IHDG Litigation Trust. In March 1998, Collins & Aikman Products Co. sold the stock of its wholly owned subsidiary, Imperial Wallcoverings, Inc., to the Imperial Home Decor Group, Inc. As part of the sale, IHDG assumed certain liabilities associated with the business of Imperial Wallcoverings, including workers compensation and other casualty claims that arose prior to the sale. After the sale closed, C&A (a) continued to administer and pay the claims, (b) provided freight hauling services to IHDG and (c) continued to permit former employees of Imperial Wallcoverings to use C&A's Diners Club corporate cards. IHDG was obligated to reimburse C&A for all the amounts. On Jan. 5, 2000, IHDG and certain affiliates filed voluntary petitions for relief commencing cases under Chapter 11 before the United States Bankruptcy Court for the District of Delaware. On Aug. 1, 2000, C&A filed general unsecured proofs of claim for $2,571,917 plus an unliquidated amount against the IHDG Debtors. The C&A Claims were comprised, in part, of: (a) payments made by C&A for IHDG workers compensation and other insurance claims that were not reimbursed, (b) projected future IHDG workers compensation and other insurance claims that would be paid by C&A, (c) amounts owed to C&A by IHDG for freight service and (d) amounts owed for Diners Club charges by IHDG employees. Pursuant to the Amended Joint Plan of Reorganization confirmed in the IHDG Cases, a trust was created to (1) prosecute certain causes of action belonging to the IHDG Debtors and certain objections to claims filed in the IHDG Cases; and (2) distribute a certain percentage of the proceeds to general unsecured creditors. On Aug. 2, 2001, the IHDG Litigation Trust filed objections to the C&A Claims. Then, on Jan. 4, 2002, the IHDG Litigation Trust commenced an adversary proceeding against C&A seeking to avoid and recover preferential transfers for $185,814. On Jan. 26, 2005, the court in the IHDG cases approved a settlement between the IHDG Litigation Trust and C&A resolving both the objection to the C&A Claims and the IHDG Preference Action. Pursuant to the 2005 Settlement, C&A agreed to pay $120,000 to the IHDG Litigation Trust in three installments of $40,000 payable on January 14, 2005, April 15, 2005, and June 15, 2005. In exchange, among other things, the Litigation Trustee agreed to make distributions from the IHDG Litigation Trust to C&A as the holder of an allowed general unsecured claim in the amount of $2,691,917. C&A made the first two installment payments under the 2005 Settlement on Jan. 15, 2005 and April 15, 2005. The second installment payment was made on May 17, 2005, within 90 days of the Petition Date. C&A has not made the third installment payment, which came due after the Petition Date. On Dec. 27, 2005, the IHDG Litigation Trust filed a proof of claim in C&A's Chapter 11 cases for $105,814. The IHDG Claim amount is the amount sought in the IHDG Preference Action, $185,814, minus the two installments of $40,000 paid by C&A under the 2005 Settlement. Because C&A has not paid the final installment under the 2005 Settlement, the Litigation Trustee has not made any distributions to C&A from the IHDG Litigation Trust on account of the C&A Claims. The Debtors and the IHDG Litigation Trust have engaged in negotiations to resolve the IHDG Claim and provide for distribution from the IHDG Litigation Trust on account of the C&A Claims. Pursuant to a stipulation, the Debtors and the IHDG Litigation Trust agree that: a. C&A will have an allowed general unsecured claim against the estates of IHDG for $2,691,917 and the IHDG Litigation Trust will make distributions to C&A based on the claim in the same manner and, except for the distribution in November 2005, at the same time as distributions are made to other holders of general unsecured claims against the estates of IHDG; b. Within 15 business days after the approval of the Stipulation in the IHDG Cases and C&A cases, the IHDG Litigation Trust will pay $174,402 to C&A; c. The IHDG Litigation Trust will have an allowed general unsecured claim against the estate of C&A for $40,000; and d. The parties agree to mutual releases of all claims arising prior to the date of the Stipulation except for those agreed to in the Stipulation. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and US$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). COLLINS & AIKMAN: Becker Fights Lease Decision Period Extension --------------------------------------------------------------- Becker Properties, LLC, and Anchor Court, LLC, ask the U.S. Bankruptcy Court for the Eastern District of Michigan to deny Collins & Aikman Corporation and its debtor-affiliates' request to further extend until March 14, 2007, the period within which they must assume or reject the Becker Leases. As reported in the Troubled Company Reporter on Dec. 5, 2006, the Debtors want more time to decide on what to do with these leases: -- 6600 East Fifteen Mile Road, Sterling Heights, Michigan; -- 1601 Clark Road, Havre de Grace, Maryland; and -- 47785 West Anchor Court, Plymouth, Michigan. The Debtors had argues that they will be unable to determine whether to assume or reject the Leases until they have selected the highest and best offer for the contemplated sale of all or part of their businesses. Robert J. Diehl, Jr., Esq., at Bodman LLP, in Detroit, Michigan, argues that Becker will be prejudiced by an extension and will continue to be forced to postpone seeking to sell the properties or seeking replacement tenants for the properties. "Further delay is detrimental because the value of the properties continues to decline and the Debtors' payments do not compensate Becker for that decline," Mr. Diehl says. If the Debtors' fifth motion for extension is granted, the Debtors will have had 670 days to decide on the Becker Leases. Mr. Diehl asserts that the recent amendment to 365(d)(4) under the Bankruptcy Abuse Prevention and Consumer Protection Act, as to cases filed after October 17, 2005, prohibits an extension of time to assume or reject unexpired nonresidential real property leases beyond 210 days after the Petition Date in the absence of the written consent of the landlord. The granting of the Debtors' proposed extension will exceed the new statutory limit on extension by more than three times, and the initial period granted by the Bankruptcy Code by more than 11 times, Mr. Diehl says. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and US$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CONEXANT SYSTEMS: Posts $122.6 Million Net Loss in Fiscal 2006 -------------------------------------------------------------- Conexant Systems Inc. reported a $122.6 million net loss on $970.8 million of net revenues for the fiscal year ended Sept. 29, 2006, compared with a $176 million net loss on $722.7 million of net revenues for the fiscal year ended Sept. 30, 2005. The decrease in net loss is primarily due to the higher gross margin of $446 million in fiscal 2006, compared to a $228.8 million gross margin in fiscal 2005. Net revenues increased 34% to $970.8 million in fiscal 2006 from $722.7 million in fiscal 2005. This increase was driven by a 39% increase in unit volume shipments, which was partially offset by a 3% decrease in average selling prices. Gross margin percentage for fiscal 2006 was 46% compared with 32% for fiscal 2005. The higher gross margin percentage in fiscal 2006 can be attributed to the benefits of the company's product cost-reduction initiatives, as well as more stable product pricing. In addition, the company also recorded a $17.5 million gain resulting from the cancellation of a wafer supply and services agreement with Jazz Semiconductor, Inc., which was recorded as a reduction of cost of goods sold. At Sept. 29, 2006, the company's balance sheet showed $1.6 billion in total assets, $1.1 billion in total liabilities, and $510,098 in total stockholders' equity. Cash, cash equivalents and marketable securities decreased $39.2 million between Sept. 30, 2005 and Sept. 29, 2006. The decline in fair value of the company's investment in Skyworks Solutions accounted for $11.3 million of this decrease. The remaining decline of $27.9 million is attributable to net cash outflow from operating and investing activities, including the $70 million payment to Texas Instruments as a result of a patent litigation settlement, offset by net cash provided by financing activities of $88.6 million during the period. Full-text copies of the company's financial statements for the year ended Sept. 29, 2006, are available for free at: http://researcharchives.com/t/s?176f About Conexant Systems Headquartered in Newport Beach, California, Conexant Systems, Inc. (NASDA: CNXT) -- http://www.conexant.com/-- designs, develops and sells semiconductor system solutions that connect personal access products such as set-top boxes, residential gateways, PCs and game consoles to voice, video and data processing services over broadband and dial-up connections. Key semiconductor products include digital subscriber line and cable modem solutions, home network processors, broadcast video encoders and decoders, digital set-top box components and systems solutions, and the company's foundation dial-up modem business. * * * As reported in the Troubled Company Reporter on Oct. 31, 2006, Moody's Investors Service assigned a B1 rating to the senior secured floating rate notes and a Caa1 rating to the corporate family rating of Conexant Systems Inc. Moody's also assigned a Probability of default rating of Caa1, a LGD-2 rating for the senior secured notes and a SGL-3 speculative grade liquidity rating. The rating outlook is stable. CONSTAR INT'L: Equity Deficit Widens to $43.6 Million at Sept. 30 ----------------------------------------------------------------- Constar International Inc.'s balance sheet at Sept. 30, 2006 showed total assets of $526.1 million and total liabilities of $569.7 million, resulting in a stockholders' deficit of $43.6 million. Stockholders' deficit at Dec. 31, 2005 stood at $41.8 million. Net income was $1.3 million for the quarter, compared with a net loss of $23.4 million for the same quarter in the prior, primarily due to the recording of a non-cash asset impairment charge of $22.2 million to write down the carrying value of assets used in its European operations to fair value. The company reported net sales of $251.2 million for the third quarter ended Sept. 30, 2006, compared with net sales of $251.4 million for the same quarter in 2005. Gross profit was $20.7 million for the 2006 third quarter, versus $13.5 million in the 2005 comparable quarter. At September 30, 2006, there was $220 million outstanding on the Senior Notes, $175 million outstanding on the Subordinated Notes, no outstanding balance on the Revolver Loan, and $4.3 million outstanding under letters of credit. The Revolver Loan imposes maximum capital expenditures of $42.5 million in 2006, $47.5 million in 2007 and $47.5 million in 2008. These capital expenditure covenants allow for the carry forward of a certain amount of spending below covenant levels in previous periods. In 2005, Constar spent $32.6 million in capital expenditures, allowing $9.3 million to be carried over to 2006, so that the effective capital expenditure limit for 2006 is $51.8 million. Constar currently expects to spend between $23 million and $26 million in capital expenditures in 2006. The company disclosed that one of its water customers that accounted for approximately 2.1% of net sales for the nine months ended Sept. 30, 2006, has decided not to renew its contract, which expires on Dec. 31, 2006. The customer intends to begin manufacturing its own water bottles. 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?1753 Based in Philadelphia, Pa., Constar International (NASDAQ: CNST) -- http://www.constar.net/-- supplies PET (polyethylene terephthalate) plastic containers for conventional applications throughout North America and Europe. Conventional PET containers are primarily designed and manufactured for soft drinks and water. Constar also supplies PET containers designed for food, juices, teas, sport drinks, new age beverages, beer and flavored alcoholic beverages. Approximately 80% of the company's revenues in the first nine months of 2006 were generated in the United States, with the remainder attributable to its European operations. COUDERT BROTHERS: Taps McGrigors LLP as Special Counsel ------------------------------------------------------- Coudert Brothers LLP asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ McGrigors LLP as its English special counsel, nunc pro tunc to Sept. 22, 2006. McGrigors will represent the Debtor with respect to potential malpractice claims in England and general issues related to the wind-down of Debtor's London office. The firm's responsibilities will include serving as counsel of record in Norman's Bay Limited v. Coudert Brothers, in the High Court of England and Wales -- an action arising out of allegations of malpractice. The hourly rates of the McGrigors attorneys who are expected to perform services for the Debtor are: Level of Employment Hourly Rate ------------------- ----------- Partners $680 Associates $555 Assistant Solicitors $270 to $485 Trainee Solicitors $195 The Debtor owes McGrigors approximately $46,731 for services the firm rendered prepetition. Allan David Reason, a Partner at McGrigors, assures the Court that his firm does not hold any interest materially adverse to the Debtor's estate. Mr. Reason can be reached at: McGrigors LLP 5 Old Bailey London EC4M 7BA, England Coudert Brothers LLP was an international law firm specializing in complex cross border transactions and dispute resolution. The firm had operations in Australia and China. The Debtor filed for Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No. 06-12226). John E. Jureller, Jr., Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represents the Debtor in its restructuring efforts. Brian F. Moore, Esq., and David J. Adler, Esq., at McCarter & English, LLP, represent the Official Committee Of Unsecured Creditors. In its schedules of assets and debts, Coudert listed total assets of $29,968,033 and total debts of US$18,261,380. The Debtor's exclusive period to file a chapter 11 plan expires on Jan. 20, 2007. DAIMLERCHRYSLER: Truck Unit Eyes $300 Million Plant in Mexico ------------------------------------------------------------- Freightliner LLC, the truck division of DaimlerChrysler AG, plans to build a $300 million truck manufacturing plant in Coahuila, Mexico, Terry Kosdrosky writes for Dow Jones Newswires. The 740-acre facility is Freightliner's second plant in Mexico after building the Santiago Tianguistenco plant. It could produce up to 30,000 trucks a year and employ up to 1,600 production and management personnel, Dow Jones reports. The company plans to begin production of its Freightliner and Sterling trucks in the new site by early 2009. The company's announcement came after Freightliner disclosed of plans to cut up to 4,000 jobs in North America due to the expected downturn in heavy truck building, Dow Jones relates. According to the report, buyers have been prompted to push its truck orders this year as new emission regulations would go into effect in 2007, which will add costs to commercial truck production. Freightliner president and chief executive Chris Patterson wants to prepare for a surge in demand, which could come before 2010 when the next round of new emissions regulations goes into effect. "Frankly, we were not able to produce what we could have sold in 2006 due to capacity constraints," Mr. Patterson said. Truck buyers in all markets are showing hesitation to purchase trucks equipped with the new engine technology necessary to meet the diesel exhaust emissions standards that go into effect in Canada and the United States on Jan. 1, 2007. Depending on specification and weight class, Freightliner LLC vehicles are subjected to price increases ranging from $4,600 to $12,500, before application of taxes, for the new engines. It is clear that all residents of North America benefit from the cleaner atmosphere that will ultimately result, but it is equally obvious that the costs associated with this worthy initiative are borne almost entirely by the truck manufacturing industry's employees, suppliers, shareholders, and dealers. About Freightliner LLC Headquartered in Portland, Ore., Freightliner LLC -- http://www.freightliner.com/-- is a medium- and heavy-duty truck manufacturer in North America. Freightliner produces and markets Class 3-8 vehicles and is a company of DaimlerChrysler. About DaimlerChrysler Based in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DELPHI CORP: Asks for SEC's View on Foreign Currency Issues ----------------------------------------------------------- Thomas S. Timko, Delphi Corporation's chief accounting officer and controller, discloses that Delphi made a written submission to the Office of the Chief Accountant of the Securities and Exchange Commission on Dec. 18, 2006, requesting the SEC's view of the most appropriate accounting treatment to be accorded to the Foreign Currency Forward Contacts. "Once the SEC has responded, Delphi will be able to complete its analysis and determine whether a restatement of its previously issued financial statements is required," Mr. Timko relates. As reported in the Troubled Company Reporter on Nov. 13, 2006, Delphi's independent auditors, Ernst & Young LLP, identified and informed Delphi of a potential issue with the designation of hedges related to foreign currency in the middle of October. Specifically, Delphi became aware that the hedge designation for foreign currency forward contracts it had entered into to hedge exposure to foreign currency fluctuations may not have satisfied the technical accounting rules under Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended to qualify for exemption from the more strict effectiveness testing requirements. Consequently, Delphi said that its Quarterly Report on Form 10-Q for the third quarter ended Sept. 30, 2006, could not be filed within the prescribed time period because it could not complete the preparation of the required information without unreasonable effort and expense. Troy, Mich.-based Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Secures $4.4-Bil. DIP Loan Pledge from JP Morgan ------------------------------------------------------------- Delphi Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to borrow up to $4,495,820,240 of postpetition DIP financing from JP Morgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders pursuant to Sections 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1), and 364(e) of the Bankruptcy Code and Rules 2002, 4001, and 6004(g) of the Federal Rules of Bankruptcy Procedure. The Debtors relate that after reviewing the current strong conditions in the capital markets and assessing the positive momentum of their reorganization cases, they have determined that they can refinance their existing DIP facility on more favorable terms. Accordingly, the Debtors solicited replacement financing from various lenders, including the current DIP agent, John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, tells the Court. Mr. Butler notes that the Debtors limited their solicitations to lenders who have already conducted due diligence before. The Debtors expect to emerge from Chapter 11 protection in the first half of 2007 and it would take time for an unfamiliar lender to complete its diligence. After receiving proposals from JPMorgan and the other bidding investment banks, the Debtors determined, with the assistance of their advisors and counsel, that the proposal submitted by JPMorgan offered the most favorable terms. "Our new $4.5 billion DIP financing provides an appropriate foundation from which to negotiate and secure emergence financing," Delphi Chairman and CEO Robert S. Miller said in a press statement. "While there is much that remains to be accomplished in our reorganization, Delphi and its stakeholders are together navigating a course that should lead to consensual resolution with our U.S. labor unions and GM while providing an acceptable financial recovery framework for stakeholders." 3-Tranche Facility & Related Fees The JPMorgan replacement DIP facility comprises three separate tranches: Tranche Commitment ------- ---------- A $1,750,000,000 first priority revolving Commitment B $250,000,000 first priority term loan commitment C $2,495,820,240 second priority term loan commitment Up to $325,000,000 of the Revolving Facility will be available for the issuance of letters of credit by JPMorgan, any of its banking affiliates, or the other Lenders as may agreed with the Company. In return for access to the Facility, the Debtors will pay a Tranche A Commitment Fee equal to 3/8 of 1% per annum on the unused amount of the Tranche A Commitment, which will be payable monthly in arrears. The Debtors will also be obligated to pay Letter of Credit Fees equal to 2.50% per annum on the outstanding face amount of each Letter of Credit plus customary fees for fronting, issuance, amendments and processing, payable quarterly in arrears to the Issuing Lender for its own account. The Commitment Fees are non-refundable under all circumstances once paid, Mr. Butler notes. Interest Rate The interest rates are equal to the JPMorgan's Interest Alternate Base Rate plus 1.5% with respect to Tranche A and Tranche B borrowings, and 2.25% with respect to Tranche C borrowings. Alternatively, at the Debtors' option, the Interest Rates for interest periods of one, three or six months will be equal to LIBOR plus 2.5% with respect to Tranche A and Tranche B borrowings, and 3.25% with respect to Tranche C borrowings. Interest will be payable monthly in arrears, on the Termination Date and thereafter on demand. Upon the occurrence and during the continuance of any default in the payment of principal, interest or other amounts due under the Replacement DIP Facility Agreement, interest will be payable on demand at 2% above the then applicable rate. Priority of Liens The replacement financing facility offered by JPMorgan has essentially the same terms as the Existing DIP Facility save for certain key exceptions, Mr. Butler notes. Most noticeably, the Debtors' the Replacement Financing Facility increases the size of the Debtors' secured postpetition financing by approximately $2,495,000,000. "This increase is a result of the refinancing of a $2,495,000,000 prepetition credit facility with the proceeds of a second-priority DIP term loan," Mr. Butler says. The super-priority claims and liens granted to the Second- Priority DIP Term Loan will be junior to those granted to the refinanced DIP Revolver and first-priority DIP term loan under the Replacement Financing Facility. The relative priority of liens of third party creditors with respect to the Replacement Financing Facility that they have with respect to the Existing DIP Facility will be unchanged. Carve Out The Replacement DIP Facility contains a "Carve-Out" memorializing those claims and expenses that could be superior in right to the Replacement DIP Lenders. Mr. Butler notes that the Carve-Out is essentially identical to the carve-out approved in the Final Existing DIP Order but certain fees and expenses of the parties involved in the Debtors' proposed Framework Agreements are included within the scope of protection. Maturity Date The Replacement DIP Facility will terminate on the earliest of: (i) December 31, 2007; (ii) the substantial consummation of a plan of reorganization; and (iii) the acceleration of the loans and the early termination of the Commitment in accordance with the Replacement DIP Facility Agreement. Events of Default The events that will lead to the Debtors' default on the Replacement DIP Facility are similar to that of the Existing DIP Facility, Mr. Butler states. Events of default include: * failure to pay; * breach of covenants; * failure to deliver a Borrowing Base Certificate when due; * any material misrepresentation or false warranty; * conversion of the Debtors' cases to Chapter 7, dismissal, appointment of examiner or trustee; * approval of any superpriority claim, which is pari passu with or senior to the claims of the Existing DIP Lenders against the Debtors; and * termination of the use of cash collateral. A full-text copy of the Replacement DIP Financing Term Sheet is available for free at http://researcharchives.com/t/s?177c According to Mr. Butler, the First Priority Facilities will be used: -- to pay in full all obligations under Existing DIP Facility; -- for working capital and for other general corporate purposes, including, without limitation, to make pension contributions; and -- to pay related transaction costs, fees and expenses and to pay restructuring costs. Under the terms of the Replacement Financing Facility with JPMorgan, the Debtors estimate that they would save approximately $8,000,000 per month in financing costs. The savings, among other things, will preserve additional value of the Debtors' estates and will enhance the Debtors' ability to implement their transition plan and emerge from Chapter 11 protection, Mr. Butler avers. Hearing on Jan. 5 The Court will convene a hearing to consider approval of the plan investment and the plan support agreements at 10:00 a.m. EST on January 5, 2007. Objections, if any, to the agreements must be filed with the Bankruptcy Court by 4:00 p.m. EST on Jan. 2, 2007. Troy, Mich.-based Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: Accepting Pilot Applications to Exhaust Furlough List ---------------------------------------------------------------- Delta Air Lines Inc. will officially begin accepting applications for new-hire pilots in anticipation of exhausting its pilot furlough list in 2007. Interviews for new Delta first officer positions are scheduled to begin in January. "Starting the hiring process again is a significant milestone for our pilot group," said Steve Dickson, vice president of Flight Operations and a 757/767 Captain. "It signifies the likely return of our last furloughed pilot, and provides hope for growth and career advancement for current pilots." As reported in the Troubled Company Reporter on Nov. 30, 2006, Delta would need approximately 200 additional pilots during 2007 in order to meet the demands of the flying schedule due to network restructuring and international expansion. These pilots will come from a combination of pilots returning from furlough and new hire pilots. "Clearly, this announcement, coupled with our recently announced order for new Boeing 737 and 777 aircraft as well as the planned acquisition of 13 Boeing 757s, shows that Delta's plan is working and the future for the Delta pilot group looks bright," Mr. Dickson said. Delta's call for new pilots marks the first time since 2001 that the airline has accepted applications from prospective pilots. As previously reported, Delta has offered recall to more than 340 pilots, in addition to recalls of 900 maintenance professionals and 1,200 flight attendants. The company continues to hire in its Airport Customer Service and Reservations divisions. Delta continues to make significant progress in all areas of its restructuring including filing its plan of reorganization, which would have Delta emerge from Chapter 11 during spring 2007 as a stand-alone carrier. About Delta Air Headquartered in Atlanta, Georgia, Delta Air Lines (OTC: DALRQ) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. DEUTSCHE FINANCIAL: Fitch Holds Junk Rating on Class B-1 Certs. --------------------------------------------------------------- Fitch Ratings performed a review of the Deutsche Financial Capital manufactured housing transactions and has taken these rating actions: Series 1997-I: -- Class A affirmed at 'AA+'; -- Class M affirmed at 'B-/DR2'; and, -- Class B-1 remains at 'C/DR5'. Series 1998-I: -- Class A affirmed at 'A'; -- Class M remains at 'CC', and the Distressed Recovery Rating is upgraded to 'DR2' from 'DR3'; and, -- Class B-1 remains at 'C/DR5'. DFC was a joint venture of Deutsche Financial Services Corporation and Oakwood Acceptance Corporation. Oakwood Homes Corporation was engaged in the production, sale and financing of manufactured homes throughout the United States. Oakwood filed for Chapter 11 bankruptcy protection in November 2002 and the company's operations and non-cash assets were subsequently acquired by Clayton Homes, Inc. in April 2004. Clayton Homes is a subsidiary of Berkshire Hathaway Inc. The loans continue to be serviced at the servicing center in Greensboro, North Carolina under Clayton management. As of the November 2006 distribution date, the transactions are 113 and 1006 months seasoned respectively, and the pool factors are approximately 25% and 28% respectively. The affirmations affect approximately $105.96 million in outstanding principal and are the result of a stable relationship between credit enhancement and future loss expectations. The transaction is expected to fail its performance trigger for life, and therefore will pay principal sequentially, giving additional protection to the senior classes. DEVELOPERS DIVERSIFIED: Declares Class H and Class I Dividends -------------------------------------------------------------- Developers Diversified has declared its fourth quarter 2006 Preferred Class H and Class I stock dividends. -- Fourth Quarter Preferred Class H Stock Dividend: $0.460938 per depository share Each Class H Depositary Share is equal to one twentieth of a share of Developers Diversified's 7.375% Class H Cumulative Redeemable Preferred Stock. This dividend covers the period beginning on Oct. 15, 2006 and ending on Jan. 14, 2007. The declared Preferred Class H Dividend is payable Jan. 16, 2007 to shareholders of record at the close of business on Dec. 29, 2006. -- Fourth Quarter Preferred Class I Stock Dividend: $0.46875 per depository share Each Class I Depositary Share is equal to one twentieth of a share of Developers Diversified's 7.5% Class I Cumulative Redeemable Preferred Stock. This dividend covers the period beginning on Oct. 15, 2006 and ending on Jan. 14, 2007. The declared Preferred Class I Dividend is payable Jan. 16, 2007 to shareholders of record at the close of business on Dec. 29, 2006. 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. DURA AUTOMOTIVE: Gets Court's Final OK on Insurance Financing Pact ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized, on a final basis, DURA Automotive Systems Inc. and its debtor affiliates to continue financing their insurance policies' premiums throughout their Chapter 11 cases by: -- continuing the Existing Premium Financing Agreements, -- renew the existing premium financing agreements in the ordinary course of business, or -- enter into new PFAs, each without the need for further authority or approval of the Court. In the ordinary course of their businesses, the Debtors retained and maintained numerous insurance policies providing coverage for, inter alia, property, general liability, excess liability, workers' compensation, automobile liability, aviation products, aviation owned/non-owned, ocean cargo/inland marine, special crime coverage, primary fiduciary liability, excess fiduciary liability, directors' and officers' liability, and commercial crime coverage. The total annual premiums for the Policies equal $3,386,399. The Policies are essential to the preservation of the Debtors' businesses, property, and assets, and, in many cases, the coverages are required by various regulations, laws, and contracts that govern the Debtors' commercial activity, related Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware. It is not always economically advantageous for the Debtors to pay the premiums on all of the Policies on a lump-sum basis, Mr. Collins asserted. Accordingly, in the ordinary course of business, the Debtors finance the premiums on some of their Policies pursuant to premium financing agreements with third-party lenders. In October 2006, the Debtors made down payments totaling $738,000, and financed the remaining $2,648,399 of premiums pursuant to the Existing PFA. The Existing PFA presently requires nine monthly installments of $303,065 and bears a total finance charge of $79,188 on the total financed amount of $2,648,399. The annual interest rate under the Existing PFA is 7.12%. Mr. Collins told the Honorable Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware, if the Debtors are unable to continue making payments on the Existing PFA, the lenders will be permitted to terminate the Policies to recoup their losses. The Debtors would then be required to obtain replacement insurance on an expedited basis and at tremendous cost to the estates. If the Debtors were required to obtain replacement insurance and pay a lump-sum premium for the insurance policy in advance, this payment would be likely greater than what the Debtors currently pay, he said. Even if the lenders were not permitted to terminate the Policies, any interruption of payment would have a severe, adverse effect on the Debtors' ability to finance premiums for future policies, Mr. Collins told Judge Carey. The Debtors also proposed to pay any prepetition premiums related to the Policies or to the Existing PFA, to the extent that they determine in their discretion that the payment is necessary to avoid cancellation, default, alteration, assignment, attachment, lapse, or any form of impairment to the coverage, benefits, or proceeds provided under the Policies. In view of the importance of maintaining insurance coverage with respect to their business activities and the preservation of their cash flow by financing the insurance premiums, the Debtors believed it is in the best interests of their estates to authorize them to honor their obligations under the Existing PFA. Any other alternative would likely require considerable additional cash expenditures and would be detrimental to the Debtors' reorganization efforts, Mr. Collins averred. 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: Court OKs Hiring of Ordinary Course Professionals ------------------------------------------------------------------ DURA Automotive Systems Inc. and its debtor affiliates obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ ordinary course professionals. The Debtors retain the services of various attorneys, accountants, and other professionals in the ordinary course of their business operations. The OCPs provide services to the Debtors in a variety of discrete matters unrelated to the Debtors' Chapter 11 cases, including, but not limited to, general corporate, accounting, auditing, tax, and litigation matters. A copy of the Debtors' 3-page list of OCPs is available for free at http://ResearchArchives.com/t/s?1732 The Debtors sought the Court's permission to continue to employ the OCPs postpetition without each OCP having to file a formal application for employment and compensation pursuant to Sections 327, 328, 329, and 330 of the Bankruptcy Code. "Due to the number and geographic diversity of the OCPs regularly retained by the Debtors, it would be unwieldy and burdensome both to the Debtors and to the Court to ask each OCP to apply separately for approval of its employment and compensation," Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, says. The Debtors do not believe that Section 327 of the Bankruptcy Code requires court approval, but, out of an abundance of caution, the Debtors sought the permission of the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to employ the OCPs. The Debtors wanted to retain the OCPs on terms substantially similar to those in effect before they filed for bankruptcy. The Debtors represented that: (a) they wished to employ the OCPs as necessary for the day-to-day operations of their businesses; (b) expenses for the OCPs will be kept to a minimum; and (c) the OCPs will not perform substantial services relating to bankruptcy matters without the Court's permission. "Although some of the OCPs may hold minor amounts of unsecured claims against the Debtors in respect of prepetition services rendered, the Debtors do not believe that any of the OCPs have an interest materially adverse to the Debtors, their creditors or other parties-in-interest. By this motion, the Debtors are not requesting authority to pay prepetition amounts owed to OCPs," Mr. Collins said. The Debtors propose these uniform procedures for the retention and compensation of the OCPs: (a) The Debtors will be authorized to pay, without formal application to the Court by any OCP, 100% of fees and disbursements to each of the OCPs retained by the Debtors after submission to the Debtors of an Affidavit of Disinterestedness, and upon submission to the Debtors of an appropriate invoice; provided that those fees, excluding costs and disbursements, do not exceed $35,000 per month on average over a rolling three-month period while the Debtors' reorganization cases are pending. (b) Any payments made in excess of the fee cap will be subject to prior Court approval. (c) Starting Jan. 15, 2007, and on each April 15, July 15, October 15, and January 15 of every year thereafter in which the Debtors' cases are pending, the Debtors will file with the Court and serve on the Office of the U.S. Trustee, counsel for any official committees, and counsel to the Debtors' secured lenders; a statement with respect to the immediately preceding three-month period. The Statement will include the name of the OCP, the aggregate amounts paid, and a general description of the services rendered. (d) Each OCP will file with the Court and serve on the Debtors, counsel for the Debtors, the Office of U.S. Trustee, and counsel to any official committee, an affidavit of disinterestedness at least 14 days before submitting an invoice to the Debtors. (e) The Notice Parties will have 10 days to object to the Affidavit of Disinterestedness. If objections are not timely resolved by the parties, the Court will hear the Objections. If no Objection is received, the Debtors will be authorized to retain and pay the OCP. (f) The Debtors reserve the right to supplement the OCP List. Mr. Collins noted that some of the Debtors' OCPs may be unwilling to continue to represent the Debtors on an ongoing basis if the Debtors cannot pay them on a regular basis. "If the background knowledge, expertise and familiarity that the OCPs have with the Debtors and their operations are lost, the Debtors will undoubtedly incur additional and unnecessary expenses in getting replacement professionals 'up to speed.' The Debtors' estates and their creditors are best served by avoiding any disruption in the professional services required in the day-to-day operation of their businesses." 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). EASTMAN KODAK: Renews Management Pact with Nortel for Three Years ----------------------------------------------------------------- Eastman Kodak Company has agreed to a three-year renewal of an existing agreement with Nortel Networks Corporation for management of its U.S. voice network. The renewal calls for Nortel to continue managing Kodak's U.S. network of PBXs and telephone services through 2008 and also includes upgrading an existing Meridian SL-100 switch to an IP-enabled Communication Server 2100. The upgrade will allow the company to provide VoIP capability when cost-effective for requirements like worker mobility. The company disclosed that it has outsourced its voice network to Nortel since 1995 and will continue to benefit from Business Made Simple through lower capital and operating costs. Kodak will also gain an infrastructure better prepared for future technologies without sacrificing previous investments. "We will continue to provide cost savings by operating and managing Kodak's U.S. network," Nortel Global Services president Dietmar Wendt said. "And we'll work with Kodak to address both current and future needs - including migration to VoIP if and when it makes sense - without requiring them to take on the costs associated with buying, implementing and operating new equipment." Nortel provides network management and maintenance for the company's voice network, including remote fault monitoring with proactive network surveillance, customer-defined service level agreements for response and resolution, moves and changes, comprehensive customer reporting, and dedicated service management. About Nortel Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Co. -- http://www.kodak.com/-- develops, manufactures, and markets digital and traditional imaging products, services, and solutions to consumers, businesses, the graphic communications market, the entertainment industry, professionals, healthcare providers, and other customers. EXCEPTIONAL TECH: Shareholders Approve Plan of Liquidation ---------------------------------------------------------- Shareholders of Exceptional Technologies Fund 5 (VCC) Inc. unanimously approved the Plan of Liquidation of the company at a special meeting held on Dec. 20, 2006. The Plan of Liquidation, dated Nov. 17, 2006, contemplates the distribution of the company's investment assets to its shareholders, the delisting of the common shares of the company from the TSX Venture Exchange and, ultimately, the voluntary dissolution of the company. The Plan of Liquidation remains subject to such other approvals as may be required from the TSX Venture Exchange and the Administrator under the Small Business Venture Capital Act (British Columbia). As contemplated under the Plan of Liquidation, the manager of the company, Discovery Capital Management Corp., will terminate its management agreement with the company effective Dec. 31, 2006; thereafter no further management fees would be payable by the company and, in addition, the payment of the severance fee for early termination of the management agreement will have been waived by the manager. Implementation of the Plan of Liquidation depends upon the company's ability to liquidate or make distributions in kind to shareholders of its portfolio investments. Accordingly, it is not possible to predict the timing of completion of the Plan of Liquidation. Certain of the portfolio investments may not be able to be sold due to lack of willing buyers at a price the manager considers reasonable, and certain other investments (such as those held in publicly-traded companies) may be subject to other selling constraints. However, to the extent practicable, it remains the manager's intention to complete the Plan of Liquidation on or before March 31, 2007 in order to minimize costs to the company. If necessary to facilitate completion of the Plan of Liquidation on a timely basis, certain of the investments may be sold at liquidation values, or shareholders of the Company may receive beneficial ownership of residual interests in illiquid portions of the Company's portfolio investments, subject to distribution of proceeds from those interests at a later date when they become liquid. In such circumstances, it is contemplated that the manager would act as custodian (with payment of out-of-pocket costs) of any Illiquid Security Interests until such time as they became liquid and were free of any re-sale restrictions. The manager of the company is a wholly owned subsidiary of Discovery Capital Corporation. Discovery Capital owns a total of 903,193 common shares of the company, representing approximately 15.2% of the 5,949,011 issued and outstanding common shares of the Company, and will receive its pro-rata share of all portfolio assets distributed. Exceptional Technologies Fund 5 (VCC) Inc.'s (TSX VENTURE:XF) primary business objective was to achieve capital appreciation through investing in a portfolio of securities of technology eligible small businesses which qualify as "eligible investments" under the Small Business Venture Capital Act. FEDERAL-MOGUL: Bankruptcy Court Okays Ernst & Young as Advisors --------------------------------------------------------------- The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware approved Ernst & Young LLP's continued employment as the Debtors' accounting, tax, valuation, and actuarial advisors, and independent auditors. The Debtors asked the Court to clarify that the scope of Ernst & Young LLP's continued employment as their independent auditors and as accounting, tax, valuation, and actuarial advisors encompasses the services similar to what the firm has provided in previous years: -- international tax advisory services, -- individual employee tax compliance, -- international assignment services, and -- international assignment compliance advisory tax services. The Debtors also want Ernst & Young to provide their non-Debtor affiliates with certain international assignment compliance and advisory tax services, which encompass the preparation of tax returns, annual tax reimbursement calculations, tax gross-ups, estimated tax payment requests, and tax return extension requests. The services will be provided to and paid for by certain non- Debtor affiliates located outside of the United States, and will be rendered by member firms of Ernst & Young's global network. Ernst & Young has asked the Debtors to seek Court approval for those services to the non-Debtor affiliates to preclude any contention that its services somehow conferred a benefit on the Debtors that required retention under Section 327(a) of the Bankruptcy Code. Ernst & Young's fees for the Continued Services will be billed in specified amounts and at its current rates, which, in some instances, reflect ordinary course adjustments to the firm's previous hourly rates. 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. 117; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). FEDERAL-MOGUL: Trizec to Serve on Asbestos Claimants Panel ---------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, appoints Trizec Properties Inc. to serve on the Official Committee of Asbestos Property Damage Claimants in Federal-Mogul Corporation and its debtor-affiliates' Chapter 11 cases. According to Andrew R. Vara, Assistant United States Trustee, two members voluntarily resigned from the Asbestos PD Committee: (a) The Hill School, effective Oct. 30, 2006; and (b) Richard Blythe, effective Dec. 6, 2006. Moxie Real Estate is also out of the Asbestos PD Committee because it is no longer eligible to serve on the committee. Moxie's asbestos property damage claim was expunged, and it is no longer a creditor by virtue of a Court order dated June 13, 2006, which sustained the Debtors' objection to asbestos property damage claims that failed to comply with the Court's Bar Date Order. The Asbestos PD Committee is now composed of: (1) Anderson Memorial Hospital c/o Speights & Runyan Attn: Daniel A. Speights P. O. Box 685 200 Jackson Avenue, East Hampton, South Carolina 29924 Tel: 803-943-4444 Fax: 803-943-4599 (2) Jacksonville College c/o Dies & Hile, LLP Attn: Martin W. Dies 1009 West Green Avenue Orange, Texas 77630 Tel: 409-883-4394 Fax: 409-883-4814 (3) Trizec Properties, Inc. c/o Philip J. Goodman 280 N. Old Woodward, Ste 407 Birmingham, Michigan 48009 Tel: 248-647-9300 Fax: 248-647-8481 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. 122; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). FIRSTLINE CORP: Hires Gordon Brothers & Davis as Sales Consultant ----------------------------------------------------------------- The Honorable James D. Walker, Jr., of the U.S. Bankruptcy Court for the Middle District of Georgia in Valdosta authorized David W. Cranshaw, the Chapter 11 Trustee of FirstLine Corporation, to employ the joint venture of Gordon Brothers Industrial LLC and Harry Davis & Company as his exclusive sales consultant. The joint venture will: a) conduct the sale of assets on an orderly liquidation sale or auction basis; b) set all operational policies and procedures for the sale of assets, including without limitation the right to determine the prices, and other terms and conditions consistent with the proposal, to be applied to the assets in the sale. The firm told the Court that the willing buyer is required to pay by wire transfer or bank check. The firm stated that no asset will be released until payment is received. The joint venture firm guaranteed the Debtor that it will receive $275,000 from the sale. In the event the sale will not exceed the guaranteed amount, the firms will pay the Debtor the difference within 10 days after the closing of the sale. However, if it exceeds the guaranteed amount, the excess amount will be distributed through: -- $50,000 as reimbursement of the firm's expenses and base fee; and -- 70% to the Debtor and 30% to the firms as incentive fee. John R. Coelho, a managing director of the joint venture, assured the Court that the firm does not hold any interest adverse to estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Coelho can be reached at: John R. Coelho Gordon Brothers Industrial LLC 1275 Shiloh Road NW, Suite 2330 Kennesaw, GA 30144 Tel: (770) 329-9761 http://www.gordonbrothers.com/ A full-text copy of Firstline Corporation's equipment for sale is available for free at: http://ResearchArchives.com/t/s?174c Headquartered in Valdosta, Georgia, FirstLine Corporation -- http://www.firstlinecorp.com/-- supplies home-building and construction materials. The company filed for chapter 11 protection on Mar. 6, 2006 (Bankr. M.D. Ga. Case No. 06-70145). Ward Stone, Jr., Esq., at Stone & Baxter, LLP, represents the Debtor. Todd C. Meyers, Esq., at Kilpatrick Stockton LLP represent the Official Committee of Unsecured Creditors. The Court appointed David W. Cranshaw as the Debtor's Chapter 11 Trustee. As of Jan. 31, 2006, the Debtor reported assets totaling $37,061,890 and debts totaling $26,481,670. FOAMEX INTERNATIONAL: Wants Thomas Chorman's Complaint Dismissed ---------------------------------------------------------------- Defendants Foamex International Inc., Raymond E. Mabus, Jr., and Gregory J. Christian ask the U.S. Bankruptcy Court for the District of Delaware to dismiss in its entirety the Adversary Proceeding commenced by Thomas Chorman. The Debtors sought the Court's authority to reject their Amended and Restated Employment Agreement dated Jan. 27, 2004, with Mr. Chorman, as published in the Troubled Company Reporter on Nov. 24, 2006. Mr. Chorman has previously resigned as Foamex International Inc.'s president, chief executive officer and board member. Foamex's board of directors accepted Mr. Chorman's resignation on June 7, 2006. On Sept. 13, 2006, Mr. Chorman commenced an adversary proceeding seeking a declaratory, injunctive and monetary relief against Foamex International, and its officers Raymond E. Mabus and Gregory J. Christian. The Debtors asserted that the allegations in the complaint are without merit. On Sept. 27, 2006, Mr. Chorman filed Claim No. 1328 for $2,486,897. Jeffrey R. Waxman, Esq., at Cozen O'Connor, in Wilmington, Delaware, asserts that Mr. Chorman's breach of contract claim seeking payment of severance and other benefits pursuant to his employment agreement should be dismissed because: (1) the Court-approved Key Employee Retention Program and Severance Plan governs the severance and other benefits to which he would be entitled upon termination of his employment, and supersedes any benefits provided by his employment contract; and (2) he cannot bring a breach of contract claim to the extent it seeks to recover damages beyond those allowed under Section 502(b)(7) of the Bankruptcy Code for claims related to the termination of an employment contract. Mr. Waxman adds that Mr. Chorman's claim for the alleged breach of the implied covenant of good faith and fair dealing should be dismissed because Pennsylvania law precludes a separate claim for breach of a duty where that claim is identical to a breach of contract claim. Moreover, Mr. Waxman asserts that Mr. Chorman's Wage Payment and Collection Law seeking amounts allegedly owed under his employment contract should be dismissed because: (a) the KERP governs any benefits to which he was entitled at the end of his employment; (b) he has received all payments to which he is presently entitled under the KERP; (c) the WPCL is preempted by the Bankruptcy Code; and (d) any amount to which he may be entitled is being determined through the Chapter 11 proceedings, and therefore, there has been no triggering event under the WPCL. The Defendants add that Mr. Chorman's claim against Messrs. Mabus and Christian for tortious interference with his employment agreement should be dismissed given that Messrs. Mabus and Christian acted in their capacity as officers of the Debtors. Since there is no third party allegedly tortiously interfering with Mr. Chorman's employment contract, he has failed to state a claim for tortious interference with contract as a matter of law, Mr. Waxman asserts. Also, Mr. Chorman's claim for tortious interference should be dismissed through the application of the "gist of the action" doctrine that precludes a plaintiff from re-casting breach of contract claims into tort claims. Since the tort claim is inextricably intertwined with and based on the same conduct as the breach of contract claim, the tort claim is barred by the gist of the action doctrine. Mr. Waxman also notes that Mr. Chorman did not plead an adequate prima facie case under Section 510 of the Employee Retirement Income Security Act. Since ERISA does not allow for a jury trial, the Defendants assert that Mr. Chorman's jury trial demand should be stricken. Furthermore, the Defendants assert that Mr. Chorman's defamation claim should be dismissed for failure to identify any defamatory communication. 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. 35; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). FORD MOTOR: Expects to Become No. 3 as Toyota Gains No. 2 Position ------------------------------------------------------------------ Ford Motor Co. expects to become the No. 3 company in U.S. auto sales as early as January 2007, according to its sales forecast. Ford has held the No. 2 position in the American car market since the 1920s. Rival Toyota Motor Corp. will gain the No. 2 spot behind General Motors as it introduces its new Tundra truck in showrooms in February, published reports say. According to its own projections, Edmunds.com, which provides advice on American car market, says light vehicle sales in 2007 will be near the 2006 levels of 16.5 million. According to ConsumerAffairs.Com, Toyota will be close to unseating General Motors as the world's biggest auto manufacturer because of high demand from Brazil, Russia, India, and China. About Ford Motor Co. 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. 12, 2006, Standard & Poor's Ratings Services affirmed its 'B' bank loan and '2' recovery ratings on Ford Motor Co. after the company increased the size of its proposed senior secured credit facilities to between $17.5 billion and $18.5 billion, up from $15 billion. As reported in the Troubled Company Reporter on Dec. 7, 2006, 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. 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. GEOKINETICS INC: S&P Holds Junk Rating on Second Priority Notes --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'CCC+' issue rating and '3' recovery rating on Geokinetics Inc.'s second priority floating rate notes due in 2012, after the disclosure that the offering will be increased to $110 million from $100 million. The 'CCC+' rating on Geokinetics' notes is one notch below the corporate credit rating of 'B-'. The '3' recovery rating on the notes indicate the expectations of meaningful recovery of principal in a payment default scenario. In addition, the company's unrated first lien credit facilities will be reduced to a $14.5 million revolver and a $6.5 million capital expenditure facility. The reduction in the first lien facilities was critical to the rating agency's decision not to lower their issue or recovery ratings, because the estimate of the recovery of principal for the second lien noteholders in Standard & Poor's simulated default remains barely over the 50% threshold required for a '3' recovery rating. While Standard & Poor's affirmed ratings with regards to the revised transaction structure, Standard & Poor's cautions lenders that our recovery rating and issue rating on the notes could potentially be lowered if Geokinetics subsequently adds any additional secured or senior unsecured debt to the capital structure without a similar or greater decrease in the amount of second-lien debt. Ratings List: * Geokinetics Inc. -- Corporate credit rating at B-/Stable -- $110 million floating rate notes due 2012 at CCC-; Recovery rating: 3 GLIMCHER REALTY: Increases $300 Mil. Credit Facility to $470 Mil. ----------------------------------------------------------------- Glimcher Realty Trust amended its unsecured credit facility to increase the borrowing availability from $300 million to $470 million. Additionally, certain financial covenants were amended, providing the company with improved pricing and enhanced borrowing flexibility under the amended credit facility. The amended credit facility has a three-year term and will expire on Dec. 13, 2009, with a one-year extension option available. Before the amendment, the existing line of credit was scheduled to mature on Aug. 21, 2008. The amended credit facility will be available to fund redevelopment, acquisition and development opportunities as well as for general corporate purposes. The initial interest rate on the amended credit facility is LIBOR plus 1.05%, but can range from LIBOR plus 0.95% to LIBOR plus 1.40%, depending upon the company's ratio of debt to total asset value. Prior to the amendment, the interest rate at the time of closing on the Company's prior credit facility was LIBOR plus 1.25%. Similar to our arrangement prior to amendment, the Company will also pay a facility fee of between 15 to 20 basis points of the aggregate commitments under the amended credit facility. The banks participating in the amended credit facility included KeyBanc Capital Markets as the sole Lead Arranger and KeyBank National Association as Administrative Agent, Wachovia Bank, National Association and Eurohypo AG as Co-Syndication Agents and Bank of America, N.A. and Charter One Bank, N.A. as Co- Documentation Agents. Also participating are Aareal Bank AG, U.S. Bank National Association, Huntington National Bank, PNC Bank, National Association, National City Bank, Lehman Brothers Commercial Bank, and Midfirst Bank. Glimcher Realty Trust (NYSE: GRT; GRT.F; GRT.G) is a real estate investment trust and is a recognized leader in the ownership, management, acquisition and development of regional and super- regional malls. At June 30, 2006, the Company's mall portfolio, including assets held through our strategic joint venture, consisted of 26 properties located in 16 states with gross leasable area totaling approximately 23.7 million square feet. The community center and single tenant portfolio is comprised of six properties representing approximately 1.3 million square feet. * * * As reported in the Troubled Company Reporter on July 12, 2006, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit and 'B' preferred stock ratings on Glimcher Realty Trust. The affirmations affect $210 million in outstanding rated preferred stock. S&P said the outlook is stable. GLOBAL POWER: Committee Hires Schulte Roth as Counsel ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware allowed the Official Committee of Unsecured Creditors appointed in Global Power Equipment Group Inc. and its debtor-affiliates' chapter 11 cases, to employ Schulte Roth & Zabel LLP as its counsel. Schulte Roth is expected to: a) assist and advise the Committee in its consultations with the Debtors, other committees, if any, and other parties-in- interest relative to the overall admnistration of the estates; b) represent the Committee at hearings to be held before the Court and communicate with the Committee regarding the matters heard and issues raised, as well as the decisions and considerations of the Court; c) assist and advise the Committee in its examination and analysis of the Debtors' financial affairs; d) review and analyze all applications, orders, operating reports, schedules and statements of financial affairs filed or to be filed with the Court by the Debtors or other interested parties in the Debtors' cases; advise the Committee as to the necessity and propriety of the foregoing and their impact on the rights of unsecured creditors, and upon the cases generally; and after consultation with and approval from the Committee or its designee(s), consent to appropriate orders on its behalf; e) assist the Committee in preparing appropriate legal pleadings and proposed orders as may be required in support of positions taken by the Committee and preparing witnesses and reviewing relevant documents; f) coordinate the receipt and dissemination of information prepared by and received from the Debtors' attorneys, accountants, financial advisors or other professionals retained in the Debtors' cases, as well as any information as may be received from other professionals engaged by the Committee and other committees; g) advise the Committee in connection with the Debtors' solicitation and filing with the Court of acceptances or rejections of any proposed plan or plans of reorganizations or liquidation; and f) perform all other necessary legal services and provide for, and all other necessary legal advice to, the Committee in these chapter 11 cases. Jeffrey S. Sabin, Esq., at Schulte Roth, discloses that the firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $580 - $800 Special Counsel $550 Associates $225 - $525 Legal Assistants $130 - $265 Mr. Sabin assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides power generation equipment and maintenance services for its customers in the domestic and international energy, power and infrastructure and service industries. The Company designs, engineers and manufactures a range of heat recovery and auxiliary equipment primarily used to enhance the efficiency and facilitate the operation of gas turbine power plants as well as for other industrial and power-related applications. The Company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The Company and 10 of its affiliates filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045). Attorneys at White & Case LLP and The Bayard Firm, P.A., represent the Debtors. The Official Committee of Unsecured Creditors appointed in the Debtors' cases has selected Landis Rath & Cobb LLP as its counsel. As of Sept. 30, 2005, the Debtors reported total assets of $381,131,000 and total debts of $123,221,000. The Debtors' exclusive period to filed a chapter 11 plan expires on Jan. 26, 2007. GLOBAL POWER: Hires Alvarez & Marsal as Financial Advisor --------------------------------------------------------- Global Power Equipment Group Inc. and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Alvarez & Marsal LLC, as their financial advisor and restructuring advisor, nunc pro tunc to the Sept. 28, 2006. The firm will: a) assist with the analysis, evaluation and negotiation of the financial terms and structure of an amendment to the senior credit facility; b) assist with finding new sources of funding if necessary; c) assist with the evaluation and pursuit of a sales transaction; d) assist with the evaluation of the Debtors' businesses, including a potential sale of certain of the assets of the Debtors and its subsidiaries; e) assist with the evaluation of the Debtors' current business plan an preparation of a revised operating plan an cash flow forecast; f) assist with the identification of cost reduction and operations improvement opportunities; g) assist with development of a restructuring and reorganization plan for the Debtors; h) assist with the preparation of financial related disclosures required by the Court, including the monthly operating reports; i) assist with information and analyses required pursuant to any debtor-in-possession financing for the Debtors; j) assist with identification and implementation of short- term cash management procedures; k) assist with the response to and tracking of calls received from supplies; l) provide advisory assistance in connection with the development and implementation of key employee compensation and other critical employee benefit programs; m) assist with the identification of executory contracts and leases and performance of cost evaluations with respect to the affirmation or rejection of each; n) assist with the coordination of resources related to the ongoing reorganization effort; o) assist with the preparation of financial information for distribution to creditors and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursements analysis, analysis of various assets and liability accounts, and analysis of proposed transaction for which Court approval is sought; p) attend meetings and assist with discussions with potential investors, banks and other secured lenders, any official committee appointed in the Debtors' chapter 11 cases, the U.S. Trustee, other parties in interest and professionals hired by the same; q) assist with the preparation of information and analysis necessary for the confirmation of a plan of reorganization in the Debtors' chapter 11 cases, including information contained in the disclosure statement; r) provide litigation advisory services with respect to accounting and tax matters, along, with expert witness testimony on case related issues as required by the Debtors; and s) render general business consulting or assistance as the Debtors' management or counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in this proceeding; The Debtors have agreed to pay the firm through: a) payment of an amendment success fee at the closing of an amendment to the senior credit facility, and at the closing of an amendment to the securities purchase agreement; b) payment of a senior refinancing success fee at the closing of a replacement senior credit facility, including DIP financing; c) payment of a junior refinancing success fee at the closing of a refinancing for junior capital raised; d) payment of a sales transaction success fee at the closing of any sales transaction, whether within the term of the firm engagement, within 12 months of the end of the term of the firm engagement if the firm meaningfully facilitated and contributed to the consummation, or later if within 12 months of the end of the term of the firm engagement an agreement is entered into that subsequent results in a sales transaction to which the firm meaningfully facilitated and contributed; e) payment of a restructuring transaction fee at the consummation of any restructuring into an agreement to effect a plan of reorganization that is also consummated. To the best of the Debtors' knowledge, Alvarez & Marsal does not hold any interest adverse to their estates or creditors. Headquartered in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides power generation equipment and maintenance services for its customers in the domestic and international energy, power and infrastructure and service industries. The Company designs, engineers and manufactures a range of heat recovery and auxiliary equipment primarily used to enhance the efficiency and facilitate the operation of gas turbine power plants as well as for other industrial and power-related applications. The Company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The Company and 10 of its affiliates filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045). Attorneys at White & Case LLP and The Bayard Firm, P.A., represent the Debtors. The Official Committee of Unsecured Creditors appointed in the Debtors' cases has selected Landis Rath & Cobb LLP as its counsel. As of Sept. 30, 2005, the Debtors reported total assets of $381,131,000 and total debts of $123,221,000. The Debtors' exclusive period to filed a chapter 11 plan expires on Jan. 26, 2007. GOODING'S SUPERMARKETS: Court Confirms Amended Chapter 11 Plan -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division, has confirmed the Amended Chapter 11 Plan of Reorganization of Gooding's Supermarkets Inc. As reported in the Troubled Company Reporter on Oct. 11, 2006, the Plan contemplates that the Reorganized Debtor will continue to maintain a centralized corporate administrative office, with low operating expenses, which shall operate the Reorganized Debtor's business. The Debtors believe cash flow from the continued operation of its business will be sufficient to meet required Plan Payments. Funds generated from operations until the effective date will be used for Plan Payments. In addition, the Debtor believes that it is highly likely that it will recover a significant amount of funds in the Celebration Litigation filed against two of its Landlords, Water Tower and Unicorp, and that the recovery will be used to supplement required Plan Payments. Celebration Litigation Water Tower Retail, LLC, leased a real property, where the Celebration Store was constructed in June 2005, to Gooding's under a Reinstated Ground Lease. Gooding's closed the Celebration Store in October 2005 and terminated the Ground Lease on Nov. 1, 2005, after the landlords, Water Tower and Unicorp National Developments, Inc., failed to cure defaults asserted by Gooding's, pursuant to a written notice, regarding visibility and signage issues required under the Ground Lease. Water Tower commenced a lawsuit against Gooding's for eviction and breach of lease agreement, while Gooding's sued Water Tower for breach of Ground Lease agreement. As a counterclaim, Water Tower sought damages and an order of eviction. Treatment of Claims Holders of all Allowed Administrative Expense Claims will be paid in full, except to the extent that the holder and the Reorganized Debtor have agreed or may agree to a different treatment. Holders of all Allowed Priority Tax claims will be paid in full in quarterly payments for six years with 8% interest. First National Bank's Claim The Debtor discloses that the Class 1 Allowed Secured Claim of First National Bank of Central Florida, totaling $1,560,000, has been satisfied through a compromise and sale of the Casselberry Store to Greater Properties, Inc. As reported in the Troubled Company Reporter on Aug. 11, 2006, the Court allowed the Debtor to sell the combination food and drug store consisting of approximately 46,000 square feet of commercial space located at 1024 E. Highway 436, Casselberry, Fla., to Greater Properties and The Greater Construction Corp., the lessors who own the real property upon which the Casselberry Store is situated. Greater Properties will pay $1.6 million for the store. The Class 2 Allowed Secured Claim of First National, totaling $2,560,000, is secured by a first priority Lien on the leasehold interest in the Celebration Store and an interest in all of the Debtor's right, title, and interest, now or hereafter acquired by the Debtor, in and to all leases, agreements of sale, or other agreements in connection with the Celebration Store and the rents, issues, and profits payable. The Debtor discloses that it recently executed a Conditional Mediated Settlement with respect to the litigation against Water Tower resolving all issues regarding First National's Class 2 Claim. If the Water Tower Settlement is consummated, First National will receive $2.3 million, in full satisfaction, release and discharge of its Class 2 Claim. Otherwise, in full satisfaction of its Allowed Secured Claim, First National will retain its Lien against its current collateral and receive monthly payments at the contract rate of interest, beginning on the effective date. First National will also receive a lien on the Celebration Litigation. To the extent of any Net Recovery from the Celebration Litigation, First National will receive 75% of any Net Recovery up to the first $2 million and then 80% of any Net Recovery above $2 million, until the Allowed Class 2 Claim is paid in full. Other Secured Claims In full satisfaction of its claim, National Commerce Bank is deemed to have a $1,550,000 Allowed Secured Claim. National Commerce's claims will be paid monthly based on a 12-year amortization and 7-year maturity with 7.5% fixed-rate interest. The Allowed Secured Claim of Ford Motor Credit, consisting of two auto loans will receive these treatments: * the $25,745.05 loan will receive a $462.01 monthly payment with 2.9% interest until fully paid; and * the $25,501.58 loan will receive a $481.04 monthly payment with 4.9% interest until fully paid. The Allowed Secured Claim of Russell Doerk, president, COO, and director of Gooding's, against the Debtor with respect to his right of setoff will be settled between the Debtor and Mr. Doerk. The Allowed Secured Claim of Crane National Vendors, totaling $52,978.05, will receive a first payment of $2,670.98 on the effective date, and subsequent monthly payments in two years with 10.5% interest. Crane will also retain its lien on certain vending machines located at the International Drive Store and the Lake Buena Vista Store. The Debtor will pay $2,700 attorneys' fees incurred by Crane through monthly payments of $112.50. Unsecured Claims Holders of Allowed Unsecured Claims, estimated between $2,500,000 to $3,000,000, will receive their pro rata share of the Gooding's Creditors Trust. The Gooding's Creditors Trust will hold, prosecute and liquidate the Trust Assets for the Benefit of Allowed Unsecured Claims, and will make distributions pursuant to the Plan. The assets of the Trust consist of: a) the Guaranteed Payment; b) the Periodic Payments; c) a portion of Net Recovery; d) Causes of Action; and e) all unclaimed property. The Trust will receive 25% of the first $2 million of Net Recovery from the Celebration Litigation. Thereafter, the Trust will get 20% of Net Recovery after the Class 2 Claim of First National is paid in full. Thereafter, the Trust will receive 50% of Net Recovery from the Celebration Litigation until the Trust has received a total of $1,500,000. CEO Jonathan Gooding, who owns 95.69% of common stock, and Company President Russell Doerk, who owns 4.31% of common stock, will retain their ownership in Gooding's. About Gooding's Headquartered in Orlando, Florida, Gooding's Supermarkets, Inc., dba Gooding's, offers catering services and operates a chain of supermarkets in Central Florida. The Company filed for chapter 11 protection on Dec. 30, 2005 (Bankr. M.D. Fla. Case No. 05-17769). R. Scott Shuker, Esq., at Gronek & Latham LLP represents the Debtor. W. Glenn Jensen, Esq., at Akerman Senterfitt represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets of $1 million to $10 million and debts of $10 million to $50 million. GS MORTGAGE: S&P Pares Rating on Class K-PR Certs. to BB- from BB+ ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on five classes of commercial mortgage pass-through certificates issued by GS Mortgage Securities Corp. II's series 2005-GSFL VII. Concurrently, the rating was lowered on one class from the same series. At the same time, the ratings on five classes from this transaction were affirmed. The upgrades reflect increased credit enhancement levels resulting from loan payoffs, as well as Standard & Poor's analysis of the remaining loans in the pool. The downgrade reflects the decline in operating performance of the Renaissance Pittsburgh hotel, which secures a loan accounting for 10% of the pool's outstanding principal balance. The raked K-PR class derives 100% of its cash flow from the Renaissance Pittsburgh hotel. The largest remaining loan, the Sands Expo and Convention Center loan, has a trust balance of $59.1 million and a whole-loan balance of $90.9 million. The loan is secured by a 966,400-sq.- ft. convention center in Las Vegas, Nevada, and is attached to the Venetian Resort. For the nine months ended Sept. 30, 2006, Standard & Poor's calculated a weighted average debt service coverage of 1.68x, and revenue at the property was up 13% from its level in 2005. The SECC loan has exercised its first maturity extension option to Aug. 1, 2007. It has one 12-month and one six-month extension remaining. The Renaissance Pittsburgh hotel loan has a trust balance of $16 million and a $1 million subordinate component. In addition to the trust exposure, there is an $11.5 million mezzanine loan. The interest-only loan is secured by the fee interest in a 13-story, 300-room hotel property in Pittsburgh, Pennsylvania. The property's current revenue per available room penetration index is 130.2, compared with 130.5 at issuance. Standard & Poor's analysis was based on year-end 2005 and interim 2006 property operating statements for the Renaissance Pittsburgh hotel as provided by the servicer, Capmark Finance Inc. The property has experienced an increase in operating expenses and a decrease in food and beverage income from the issuance levels. Given these conditions, the property has not met our initial performance expectations, and Standard & Poor's adjusted net cash flow is down 48% from its level at issuance. The Renaissance Pittsburgh hotel loan has exercised its first maturity extension option to Aug. 1, 2007. It has one 12-month extension. The remaining two loans, Hyatt Regency Bethesda and the Worldgate Plaza, both mature in 2007 and each have two 12-month extensions available. The operating performance for both loans has improved since issuance, and both loans continue to exhibit credit characteristics consistent with those of investment-grade obligations. Ratings Raised GS Mortgage Securities Corp. II Commercial Mortgage Pass-Through Certificates Series 2005-GSFL VII Rating ------ Class To From ----- -- ---- B AAA AA+ C AAA AA- D AA+ A+ E A+ A- F A- BBB Rating Lowered GS Mortgage Securities Corp. II Commercial Mortgage Pass-Through Certificates Series 2005-GSFL VII Rating ------ Class To From ----- -- ---- K-PR BB- BB+ Ratings Affirmed GS Mortgage Securities Corp. II Commercial Mortgage Pass-Through Certificates Series 2005-GSFL VII Class Rating ----- ------ A-1 AAA G BBB- X AAA H-WG BBB J-WG BBB- HANOVER COMPRESSOR: Redeeming $20.8MM of Conv. Junior Debentures ---------------------------------------------------------------- Hanover Compressor Co. calls for redemption on Jan. 4, 2007, of $20,871,000 aggregate principal amount of the Convertible Junior Subordinated Debentures Due 2029. All of the Debentures are owned by Hanover Compressor Capital Trust and the Trust is required to use the proceeds received from the redemption to redeem $20,245,000 aggregate liquidation amount of its 7-1/4% Convertible Preferred Securities and $626,000 aggregate liquidation amount of its 71/4% Convertible Common Securities. Hanover Compressor Company owns all of the Common Securities of the Trust. The Preferred Securities to be redeemed will be selected in accordance with the applicable procedures of The Depository Trust Company for partial redemptions. Prior to 5:00 p.m., Eastern Time, on Jan. 3, 2007, holders may convert their Preferred Securities called for redemption on the basis of one Preferred Security per $50 principal amount of Debentures which will then be immediately converted into shares of Hanover Compressor Company common stock at a price of approximately $17.875 per share, or 2.7972 shares of Hanover Compressor Company common stock per $50 principal amount. Cash will be paid in lieu of fractional shares. On Dec. 14, 2006 the closing price of Hanover Compressor Company common stock on the New York Stock Exchange was $20.42 per share. Alternatively, holders may have their Preferred Securities that have been called for redemption, redeemed on Jan. 4, 2007. Upon redemption, holders will receive $50 for each of their Preferred Securities, plus accrued and unpaid distributions thereon from Dec. 15, 2006 up to but not including Jan. 4, 2007. Any of the Preferred Securities called for redemption and not converted on or before 5:00 p.m., Eastern Time, on Jan. 3, 2007, will be automatically redeemed on Jan. 4, 2007 and no further distributions will accrue. Holders of the Preferred Securities should complete the appropriate instruction form for redemption or conversion, as applicable, pursuant to The Depository Trust Company's book-entry system and follow such other directions as instructed by The Depository Trust Company. Hanover Compressor Company (NYSE:HC) -- http://www.hanover-co.com/ -- is a global market leader in full service natural gas compression and a leading provider of service, fabrication and equipment for oil and natural gas production, processing and transportation applications. Hanover sells and rents this equipment and provides complete operation and maintenance services, including run-time guarantees for both customer-owned equipment and its fleet of rental equipment. * * * On Oct. 20, 2006, Moody's Investors Service upgraded the rating of Hanover Compressor Company's 8.625% Senior Unsecured Gtd. Notes Due 2010; 9% Senior Unsecured Gtd. Notes Due 2014; and 7.5% Senior Unsecured Gtd. Notes Due 2013 to B2. HOVNANIAN ENT: Posts $117.9M Net Loss in 4th Quarter Ended Oct. 31 ------------------------------------------------------------------ Hovnanian Enterprises Inc. reported net income available to common stockholders of $138.9 million on $6.1 billion of total revenues for the full year ended Oct. 31, 2006. In fiscal 2005, net income available to common stockholders was $469.1 million on total revenues of $5.3 billion. Homebuilding gross margin, before interest expense included in cost of sales, was 23.1% for fiscal 2006, a 330 basis point decline from an all-time record of 26.4% in the prior year. Total SG&A expense was 11.2% in fiscal 2006, compared with 10.0% in 2005. The company's pretax income from Financial Services in fiscal 2006 rose 29% over 2005, to $31 million. For the three-month period ended Oct. 31, 2006, revenues were $1.7 billion, compared with $1.8 billion for the fourth quarter of fiscal 2005. After charges related to inventory impairments and land option write-offs, the company reported a loss to common stockholders for the fiscal 2006 fourth quarter of $117.9 million compared with net income available to common stockholders of $165.4 million for the same period a year ago. "Overall, we are disappointed with our results in fiscal 2006," Hovnanian Enterprises president and chief executive officer Ara K. Hovnanian commented. "Although our deliveries and revenues increased over the record year of 2005, our gross margins fell 330 basis points -- as we cut pricing and offered incentives to improve affordability and remain competitive in a period of a slower housing demand. "We did not anticipate the suddenness or magnitude of the fall in pricing that occurred this year in many of our communities. Our profitability and the pace of new home sales in our markets continues to be adversely impacted by high contract cancellation rates, increases in the number of resale listings and increases in the number of new homes available for sale," Mr. Hovnanian said. The company's contract cancellation rate for the fourth quarter was 35%, compared with 25% in the fourth quarter of 2005 and a 33% rate reported in the third quarter of fiscal 2006. "Conditions in some markets like Texas and North Carolina have been holding up better than those in our other markets. Despite healthy job growth, steadily increasing GDP, strong household formation, and low mortgage rates, most housing markets have been adversely impacted by heightened inventories of both new and existing homes for sale, along with shifting consumer sentiment which has kept many homebuyers on the sidelines waiting for an even better deal on a new home," Mr. Hovnanian added. "Over the past two months, we have started to see a glimmer of hopeful indicators that the markets may be stabilizing, including modest declines in resale inventories, improving consumer confidence, particularly in the University of Michigan survey which specifically tracks consumer attitudes toward buying homes, and healthy levels of buyer traffic at many of our communities. "Thus, as we begin calendar 2007, we are cautiously optimistic that some of our more challenging markets will begin to experience decreasing cancellations and an improved sales pace. However, we may not get a good read on the market until the spring selling season begins in earnest. Until we experience an actual improvement in our pace of net contracts, we are continuing to manage assuming that current conditions remain with us for the foreseeable future," Mr. Hovnanian said. "In the fourth quarter, we decided to walk away from $141 million in land deposits and predevelopment costs and took impairment charges of $174 million," executive vice president and chief financial officer J. Larry Sorsby said. "We successfully renegotiated a number of our land option contracts in the third and fourth quarters of fiscal 2006, and we have also walked away from our deposits and predevelopment costs on many option contracts where it did not make economic sense to proceed. "Although it is painful to incur these write-offs, we believe it is much better than proceeding to build-out these communities at very low returns or losses over the coming years," Mr. Sorsby said. The company ended the year with 427 active communities, which is below its prior estimate of 440 communities as a result of walking away from certain options and negotiating delays in the takedown on other communities. As of Oct. 31, 2006, the company had 60,714 lots held under option contracts and controlled a total of 94,618 lots, a 22% decline from the peak level controlled as of April 30, 2006. "Although we are concerned with the uncertainty currently evident in housing markets, we are providing initial guidance for fiscal 2007, based on our standard practice of assuming that our sales pace and pricing in each of our communities remains as it is today and that market conditions do not deteriorate further," Mr. Sorsby continued. "On that basis, assuming that the economy remains reasonably healthy and mortgage rates remain stable, we are projecting fiscal 2007 earnings between $1.50 to $2.00 per fully diluted common share on 16,000 to 18,000 home deliveries, including 1,000 to 1,500 deliveries from unconsolidated joint ventures. "For the first quarter of fiscal 2007 we anticipate modest earning of between $0.05 and $0.10 per fully diluted share with earnings significantly weighted to the second half of the year. We believe that the overall U.S. housing market may hit the bottom in the first half of 2007. However, the housing market is likely to bounce along the bottom for several quarters before pricing and sales pace improves. "As we go forward, we will continue to exercise discipline with regard to our balance sheet. We significantly slowed our land purchases during the second half of 2006," Mr. Sorsby said. "However, we have 60 more communities open at the start of fiscal 2007 than we had available for sale a year ago. While our inventories are expected to grow through the first two quarters of fiscal 2007, for the full year we expect the net change in inventories to be close to zero. We anticipate that our average ratio of net recourse debt to capitalization will average close to our target of 50% during fiscal 2007," Mr. Sorsby concluded. "We believe the quick reaction of the housing markets to set pricing for new homes at lower levels is a significant positive that should allow us to return to a more profitable business environment sooner," Mr. Hovnanian said. "We have been through downturns in the housing industry many times during our 47 years of operation. Each time, we have emerged as a stronger and better company, with an improved market share. We are confident that we will weather the current slowdown with a similar result. Despite incurring $336 million of land-related charges in 2006, our common stockholders' equity grew by 9.1%. "We are working hard to manage our company through this period conservatively and effectively. That has resulted in some tough decisions regarding our staffing and our subcontractor base. We believe that the steps we are taking today are necessary to maintain our competitive position in the face of the current conditions, and to position us for recovery as we move through fiscal 2007 and into 2008," Mr. Hovnanian concluded. At Oct. 31, 2006, the company's balance sheet showed $5.461 billion in total assets, $3.387 billion in total liabilities, $132 million in total minority interest, and $1.942 billion in total stockholders' equity. About Hovnanian Enterprises Headquartered in Red Bank, New Jersey, Hovnanian Enterprises Inc. (NYSE: HOV) was funded in 1959 by Kevork S. Hovnanian, its chairman. The company is a homebuilder with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia. The company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Forecast Homes, Parkside Homes, Brighton Homes, Parkwood Builders, Windward Homes, Cambridge Homes, Town & Country Homes, Oster Homes, First Home Builders of Florida and CraftBuilt Homes. The company is a member of the Public Home Builders Council of America and is an adult homebuilder. * * * As reported in the Troubled Company Reporter on Nov. 14, 2006, Standard & Poor's Ratings Services revised its outlook on Hovnanian Enterprises Inc. to stable from positive. At the same time, the 'BB' corporate credit rating and all outstanding debt ratings are affirmed. INTERACTIVE MOTORSPORTS: Sept. 30 Equity Deficit Widens to $3.8MM ----------------------------------------------------------------- Interactive Motorsports and Entertainment Corp.'s balance sheet at Sept. 30, 2006, showed total assets of $2,062,989 and total liabilities of $5,955,020, resulting in a shareholders' equity deficit of $3,892,031. The company's shareholders' equity deficit stood at $3,395,501 at Dec. 31, 2005. For the three months ended Sept. 30, 2006, the company incurred a $317,585 net loss on $921,026 of total revenues, compared to a net loss of $352,998 on $920,109 of total revenues for the same quarter last year. As of Sept. 30, 2006, the company had cash totaling $229,842 compared to $353,180 at Dec. 31, 2005. Current assets totaled $566,654 at Sept. 30, 2006 compared to $868,703 on Dec. 31, 2005. Current liabilities totaled $3,532,538 on Sept. 30, 2006 compared with $3,874,457 on Dec. 31, 2005. As such, these amounts represent an overall increase in working capital of $39,870 for the nine months ending Sept. 30, 2006. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1779 Headquartered in Indianapolis, Indiana, Interactive Motorsports & Entertainment Corp.(OTCBB: IMTS) through its wholly owned subsidiary, Perfect Line Inc., engages in the ownership and operation of NASCAR Silicon Motor Speedway racing centers in the United States. It operates three NASCAR Silicon Motor Speedway stores that offer NASCAR-branded entertainment products. The Company also has revenue share agreements with third parties allowing them to use its NASCAR racing simulators and software, as well as sells and leases simulators and licenses software to third parties. It owns and operates revenue share racing centers in malls, family entertainment centers, amusement parks, casinos, and auto malls. INTERSTATE BAKERIES: Four Parties Object to Board Constitution -------------------------------------------------------------- Four parties-in-interest objected to Interstate Bakeries Corp. and its debtor-affiliates' request to constitute their Board of Directors. They are: a. Brencourt Advisors LLC b. Official Committee of Equity Security Holders c. JPMorgan Chase Bank, N.A., prepetition secured lenders agent d. Official Committee of Unsecured Creditors. The nine individuals currently serving as directors of the company are: 1. Michael Anderson, 2. Robert Calhoun, 3. Frank Horton, 4. G. Kenneth Baurn, 5. Ronald Thompson, 6. Leo Banatar, 7. Richard Metrick, 8. William Mistretta, and 9. David Weinstein. Brencourt Representing Brencourt Advisors LLC, Chris W. Henry, Esq., at Payne & Jones, Chartered, in Overland Park, Kansas, tells the Court that the Debtors have requested an extraordinary relief based on the fallacy that Brencourt's action in Delaware Chancery Court is done to hijack their reorganization process and permit Brencourt to seize control of the Board. Mr. Henry contends that after watching the Debtors' financial deterioration, Brencourt wants to exercise its legitimate shareholder rights under Delaware law and permit all shareholders to participate in the election of new directors. He adds that Brencourt is not doing this to benefit itself, but to deliver new leadership to a stagnant company and bring a fresh perspective to the Debtors' operations and their reorganization process from the top down. Brencourt asks the Court to deny the request because: (a) it has no basis but speculation and gross exaggeration designed to manufacture irreparable non-existent harm; (b) an election of directors will only take place after the Debtors' outstanding financial reports are approved by the existing Board and filed by the Company; (c) the Debtors' fear of key employee loss is not true; rather, employees would be relieved to see a new CEO who will bring in new high level employees, unlike the current lack of leadership and declining operational performance; (d) Brencourt has not acted in bad faith in seeking the shareholders' meeting and its efforts, in coordination with the Equity Security Holders Committee, do not threaten the reorganization process; and (e) besides having no long-term business plan or other information on which to base a valuation, the Debtors' assertion to extend the term of the very Board that destroyed all shareholder value, is inappropriate. Equity Committee The Official Committee of Equity Security Holders says IBC has not held an annual shareholders meeting to elect directors for the past three years, Brian W. Fields, Esq., at Sonnenschein Nath & Rosenthal LLP, in Kansas City, Missouri tells the Court. In addition, the Debtors don't have a future business plan, adequate exit financing, and a plan of reorganization. Accordingly, the Equity Committee asks the Court to deny the Debtors' request. In support of Brencourt's Delaware Action, the Equity Committee asserts that Brencourt's call for a shareholders' meeting and the replacement of members of the Board, is an exceptional opportunity to gain expertise; add value for shareholders; improve a company's competitive position; and improve a company's image as being investor friendly. The Debtors will be run more effectively and efficiently if the shareholders elect a new board of directors to exploit the Debtors' strategic and competitive advantages, Mr. Fields asserts. Mr. Fields contends that the Debtors have no evidence that Brencourt intends to "clearly abuse"; that a shareholders' meeting will impede the reorganization process; and that Brencourt's motives are self-serving. Brencourt's attempt to exercise its legal rights does not constitute an irreparable harm that the Debtors asserted they would suffer, Mr. Fields points out. Also, the Debtors cannot use Section 303 of the Delaware General Corporate Law because that section simply recognizes that a bankruptcy court can make orders effecting bankruptcy rights without the need for shareholder approval, Mr. Fields argues. The section does not provide a mechanism for the Court to abrogate shareholder rights or to entrench an existing board of directors. JPMorgan Chase Bank JPMorgan Chase Bank, N.A., agent for the prepetition secured lenders, supports the Debtors' legal position that the Court has the power and authority to enjoin Brencourt's Delaware Action to compel a shareholders meeting, and to seek a preliminary injunction. However, the Agent objects to the reconstitution of the board of directors, says Lisa A. Epps, Esq., at Spencer Fane Britt & Browne LLP, in Kansas City, Missouri. Ms. Epps contends that Delaware law acknowledged the plenary nature of the Court's power to control a Delaware incorporated debtor's corporate governance. However, while maintaining the status quo at the Board is not acceptable, allowing equity- holders, to exercise sole and exclusive control over the Debtor's corporate governance is equally unacceptable. The collective and consensus judgment of all parties-in-interest is that the Debtors need a new CEO to provide a fresh perspective, consider and evaluate all strategic and reorganization alternatives, and map a path forward, Ms. Epps relates. She adds that JPMorgan is hopeful that the Debtors will adopt the parties' agreement and seek to amend the pending reconstitution motion to be consistent with the stakeholders'. Ms. Epps asserts that allowing the Brencourt Action to proceed will delay efforts in these cases to the detriment of all stakeholders because it will certainly devolve into a morass of litigation, as the Prepetition Lenders would not sit idly as equity holders attempted to take unilateral control of the Debtor's Board. Creditors Committee The Official Committee of Unsecured Creditors asks the Court to deny the Debtors' request to constitute the board of directors, and instead grant the Committee's request to reconstitute the board. Scott Cargill, Esq., at Lowenstein Sandler PC, in Roseland, New Jersey, says that the Creditors and the Equity Committees, and the Debtors' secured lenders, met and agreed that the Debtors' board should be composed of seven specifically designated members, whom the Creditors Committee believes to be superior to the present one. Mr. Cargill asserts that this settlement and the hiring of a new CEO will provide the much-needed balance of new blood and continuity of directors, which is essential to the successful resolution of the Chapter 11 cases. Any objection that the Settlement is ill conceived, or will be overly disruptive to the Debtors' business, is entirely misplaced, Mr. Cargill contends. He notes that the board of directors owes its allegiance to the creditors and the shareholders, and that the directors should respect the decision of the parties to whom they owe their fiduciary duties. Debtors Talk Back "These parties unfairly complain in a general and conclusory fashion about the current state of the Debtors' businesses and what they view as a lack of progress in these cases, but they fail to identify any specific Board actions with which they disagreed, and provide no insight into how new directors of their choosing would do a better job handling the difficult business issues confronting the Debtors," J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom, LLP, in Chicago, Illinois, tells the Court. Mr. Ivester points out that from the earliest days of the Chapter 11 cases, the Equity Committee has been included in a transparent and collaborative process to reorganize the Debtors, as has Brencourt since it publicly surfaced some months ago. All major strategic business decisions have been fully vetted with the Key Constituents before being implemented by the Debtors, and Brencourt and the Equity Committee never took issue with any of these decisions or offered better alternatives. But now that they perceive a tactical advantage in trying to seize control of the Debtors to the exclusion of the other Key Constituents, Brencourt and the Equity Committee blame the Board for the longer-than-hoped-for stay in bankruptcy, while blithely dismissing as gross exaggeration the severe jeopardy to the entire reorganization process that a unilateral change of control would pose. Mr. Ivester argues that there is no reasonable doubt that serious adverse consequences will occur if equity is allowed to seize control of the Board without regard to the wishes of the Debtors and the other Key Constituents. "By contrast, enjoining Brencourt from proceeding in Delaware for a few weeks to allow the parties sufficient time to resolve the Board composition issues consensually harms no one," Mr. Ivester maintains. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Creditors Transfer 99 Claims Totaling $17.3M ----------------------------------------------------------------- Papers filed with the U.S. Bankruptcy Court for the Western District of Missouri disclosed that from Sept. 11 to Dec. 18, 2006, the Clerk of the Bankruptcy Court recorded 99 claim transfers in Interstate Bakeries Corp. and its debtor-affiliates' chapter 11 cases totaling $17,305,831, to: Transferee Transfers Total Amount ---------- --------- ------------ Ore Hill Hub Fund Ltd 9 $9,938,124 Morgan Stanley Senior Funding, Inc 2 5,091,434 Longacre Master Fund, Ltd. 4 1,167,271 Madison Niche Opportunities, LLC 7 254,869 Longacre Acquisition, LLC 2 142,594 Madison Liquidity Investors 6 134,986 KS International, Inc. 2 123,937 Debt Acquisition Company 50 55,547 Ithaca Partners 1 51,903 Hain Capital Holdings LLC 2 41,719 Argo Partners 1 15,000 Madison Investment Trust-Series 17 2 3,962 Redrock Capital Partners, LLC 8 124,008 Distressed/High Yield Trading 3 160,477 Opportunities Fund, Ltd. Argo Partners has offices at 12 West 37th Street, 9th Floor, in New York. Contact person is Scott Krochek. Debt Acquisition has offices at 1565 Hotel Circle South, Suite 310, in San Diego, California. Contact person is Traci Fette. Morgan Stanley Senior Funding, Inc., can be reached through Vanessa Marling or Darragh Dempsey, at 1 Pierrepont Plaza, 7th Floor, in Brooklyn, New York, with telephone number (718) 754- 7294-7288. Hain Capital could be reached through Ganna Liberchuk, at 301 Route 17, 6th Floor, in Rutherford, New Jersey, with phone number (201) 896-6100. Vladimir Jelisavcic can be contacted for Longacre Master Fund, Ltd., at 810 Seventh Avenue, 22nd Floor, in New York. Madison Niche Opportunities has offices at 6310 Lamar Avenue, Suite 210, in Overland Parks, Kansas. Contact person is Sally Meyer. Madison Investment Trust - Series 17 and The Madison Avenue Capital Group II Trust have offices at 6310 Lamar Avenue, Suite 210, in Overland Parks, Kansas. Contact person for Madison Investment is Kristy Stark while the contact person for The Madison Capital is Sally Meyer. Madison Liquidity Investors has offices at 6310 Lamar Avenue, Suite 210, in Overland Parks, Kansas. Contact person is Jesse Bever. Distressed/High Yield Trading Opportunities Fund, Ltd., can be reached through Scott Stagg at 1 Greenwich Office Park North, 51 East Weaver Street, in Greenwich, Connecticut. Redrock Capital Partners, LLC, can be reached through Craig Klein, at 111 S. Main Street, Ste. C11, P.O. Box 9095, in Breckenridge, Colorado. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) J2 COMMS: Stonefield Josephson Raises Going Concern Doubt --------------------------------------------------------- Stonefield Josephson, Inc., expressed substantial doubt about J2 Communications, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the year ended July 31, 2006. The auditing firm pointed to the company's net loss and negative working capital. The company reported a $6,859,085 net loss on $3,687,694 of total revenues for the year ended July 31, 2006, versus a $8,669,170 net loss on $3,673,442 of total revenues for the year ended July 31, 2005. Management reports that the decrease in net loss resulted primarily from nonrecurring costs, incurred during the fiscal year ended July 31, 2005, of approximately $2,600,000 which was paid to Mr. Jimirro on his separation from service, the expense of approximately $1,082,695 associated with modifying the terms of stock options and warrants, and the forgiveness of $166,000 in debt and interest. At Dec. 31, 2005, the company's balance sheet showed $3,458,445 in total assets and $4,964,203 in total liabilities, resulting in a stockholders' deficit of $1,505,758. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1781 Based in West Hollywood, California, J2 Communications, Inc., was primarily engaged in the acquisition, production and distribution of videocassette programs for retail sale. In 1991, the company acquired all of the outstanding shares of National Lampoon, Inc., and subsequent to the company's acquisition of NLI, it de- emphasized its videocassette business and publishing operations and began to focus primarily on exploitation of the National Lampoon(TM) trademark. The company reincorporated in Delaware under the name National Lampoon, Inc., in November 2002. JACUZZI BRANDS: Extends Tender Offer for 9-5/8% Senior Notes ------------------------------------------------------------ Jacuzzi Brands Inc. disclosed the results of its reported cash tender offer and consent solicitation with respect to the $380 million in aggregate principal amount of its 9-5/8% Senior Secured Notes due 2010. In addition, Jacuzzi reported that it is extending the price determination date for the tender offer at 10:00 a.m., New York City time, on Dec. 18, 2006 to January 5, 2007. Jacuzzi is also extending the expiration date for the tender offer at 5:00 p.m., New York City time, on Jan. 3, 2007 to Jan. 22, 2007. Jacuzzi had received tenders and consents for $379,950,000 in aggregate principal amount of the Notes, representing 99.99% of the outstanding Notes, as of Dec. 15, 2006, which was the deadline for holders who desired to receive the cash consent payment to tender their Notes and deliver their consents. Accordingly, the requisite consents to adopt the proposed amendments to the indenture pursuant to which the Notes were issued have been received, and a supplemental indenture to effect the proposed amendments has been executed. The proposed amendments, which will eliminate substantially all of the restrictive covenants and eliminate or modify certain events of default and related provisions contained in the indenture, will become operative when the tendered Notes are accepted for purchase by Jacuzzi. Withdrawal and revocation rights with respect to tendered Notes and delivered consents expired as of the Consent Date. Accordingly, holders may no longer withdraw any Notes previously or hereafter tendered or revoke any consents previously or hereafter delivered, except in the limited circumstances described in the Statement. The consummation of the tender offer is conditioned upon, among other things: i) the consummation of the previously announced acquisition of Jacuzzi by affiliates of Apollo Management, L.P. and (ii) the receipt by affiliates of Apollo of $985 million in new debt financing relating to the Transactions and the availability of funds therefrom to pay the tender offer consideration described in the Offer to Purchase and Consent Solicitation Statement of Jacuzzi, dated December 4, 2006. If any of the conditions are not satisfied, Jacuzzi may terminate the tender offer and return tendered Notes, may waive unsatisfied conditions and accept for payment and purchase all validly tendered Notes that are not validly withdrawn prior to expiration, may extend the tender offer or may amend the tender offer. About Jacuzzi Brands Jacuzzi Brands, Inc. (NYSE: JJZ) -- http://www.jacuzzibrands.com/ -- through its subsidiaries, manufactures and distributes branded bath and plumbing products for the residential, commercial and institutional markets. These include whirlpool baths, spas, showers, sanitary ware and bathtubs, as well as professional grade drainage, water control, commercial faucets and other plumbing products. The Company's products are marketed under its portfolio of brand names, including JACUZZI(R), SUNDANCE(R), ZURN(R), and ASTRACAST(R). * * * On Oct. 16, 2006, Moody's Investors Service placed Jacuzzi Brands Inc.'s corporate family rating at B2; $380 million 9.625% gtd notes due 2010 at B2 on review for possible downgrade to reflect the announcement that Jacuzzi has agreed to be acquired by private equity firm Apollo Management L.P. for approximately $1.25 billion. JORDAN IND: Equity Deficit Narrows to $228.7 Million at Sept. 30 ---------------------------------------------------------------- Jordan Industries Inc.'s balance sheet at Sept. 30, 2006 showed total assets of $595.8 million and total liabilities of $824.5 million, resulting in a total shareholders' deficit of $228.7 million. Total shareholders' deficit at Dec. 31, 2005 stood at $251.3 million. The company reported a $12.8 million net income for the third quarter ended Sept. 30, 2006, compared with a net income of $4.1 million for the same quarter in 2005. The increase in net income was due to the $14.6 million net gain on sale of discontinued operations. Discontinued Operations include the sale of Kinetek, Inc. to Kinetek Acquisition Corp., a subsidiary of The Resolute Fund, L.P., for $441.7 million and the sale of its ownership in Seaboard Folding Box Corporation for cash proceeds of $6.7 million. Net sales were $83.7 million for the 2006 third quarter, versus $91.7 million for the comparable quarter in 2005. Operating income was $549,000 for the third quarter of 2006, compared with $9.2 million for the comparable quarter in 2005. 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?1757 Headquartered in Deerfield, Ill., Jordan Industries Inc. -- http://www.jordanindustries.com-- thru its subsidiary Kinetec Inc. manufactures electric motors, gears, gear-boxes, and electronic controls. * * * As reported in the Troubled Company Reporter on Oct. 30, 2006, Moody's Investors Service, in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, revised its Corporate Family Rating for Jordan Industries Inc. to Caa2 from Caa3, as well as its rating on the company's 11.75% Senior Subordinate Disc. Debentures due 2009 to C from Ca. Those debentures were assigned an LGD6 rating suggesting noteholders will experience a 95% loss in the event of default. KIMBALL HILL: Amends $500-Mil. Sr. Revolving Credit Facility ------------------------------------------------------------ Kimball Hill, Inc., amended terms of its $500 million senior unsecured credit facility and disclosed financial results for the fiscal year ended Sept. 30, 2006. Kimball Hill amended these covenants in its $500 million senior unsecured revolving credit facility. * The covenant requiring Kimball Hill to maintain a minimum tangible net worth of at least $225 million plus 50% of positive net income earned subsequent to Sept. 30, 2005 has been amended to require Kimball Hill to maintain a minimum tangible net worth of at least $300 million plus 50% of positive net income earned subsequent to Sept. 30, 2006. * The covenant requiring Kimball Hill to maintain a ratio of total liabilities to adjusted tangible net worth not to exceed 2.5x has been modified to require the ratio not to exceed 2.0x (decreasing to 1.75x as of June 30, 2007 and increasing to 2.5x as of Dec. 31, 2008). * The covenant requiring Kimball Hill to maintain a ratio of total debt to adjusted tangible net worth not to exceed 2.0x (decreasing to 1.75x as of March 31, 2007) has been modified to require the ratio not to exceed 1.5x. * A covenant requiring Kimball Hill to maintain a ratio of total land (including undeveloped land, land under development and finished lots on which home construction has yet to begin) to adjusted tangible net worth not to exceed 1.5x has been added. * The covenant requiring Kimball Hill to maintain an interest coverage ratio of no less than 2.25x has been modified to require an interest coverage ratio of no less than 1.75x (decreasing to 1.5x through March 31, 2007, decreasing to 1.4x through June 30, 2007, decreasing to 1.35x through Sept. 30, 2007, increasing to 1.5x through Dec. 31, 2007, increasing to 1.75x through March 31, 2008 and then increasing to 2.25x through the remaining term of the facility). For purposes of these tests, adjusted tangible net worth is benefited by adjustments of 50% of Kimball Hill's outstanding senior subordinated debt (up to a maximum $100 million adjustment) and 100% of minority interests in consolidated entities (up to a maximum $50 million adjustment). Financial Results Kimball Hill's total homebuilding revenues for the fiscal year ended Sept. 30, 2006 were $1,163.8 million, an increase of $17.2 million, or 1.5% from the fiscal year ended Sept. 30, 2005. Kimball Hill delivered 4,079 homes during the fiscal year ended Sept. 30, 2006, compared with 3,881 homes during the fiscal year ended Sept. 30, 2005. The average sales price of homes delivered during fiscal year 2006 was $277 thousand, a 3.1% decrease from the average sales price of homes delivered during fiscal year 2005. Total gross homebuilding profit margin decreased to 16.4% for the fiscal year ended Sept. 30, 2006, compared to 24.8% for the fiscal year ended Sept. 30, 2005. Included in gross homebuilding profit for fiscal year 2006 are $25.8 million of inventory valuation charges and $8.3 million of costs related to the abandonment of projects and write-off of deposits on cancelled land option contracts. Net earnings were $41.8 million for the fiscal year ended Sept. 30, 2006 compared to $86.8 million for the fiscal year ended Sept. 30, 2005. About Kimball Hill Kimball Hill Inc. (bond ticker: KIMHIL) designs, builds and markets single-family detached, single-family attached and multi- family homes. Since its founding in 1969, Kimball Hill has delivered over 44,000 homes to a broad range of customers, including first-time buyers and first- and second-time move-up buyers. Kimball Hill has grown its business organically and now operates within 17 markets across nine states located in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. * * * As reported in the Troubled Company Reporter on Nov. 24, 2006, Moody's Investors Service affirmed all of the ratings of Kimball Hill, Inc., including the B1 corporate family rating and the B3 rating on its senior subordinated notes. The ratings outlook was changed to stable from positive. KIRIT PATEL: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Kirit Patel aka Ken Patel 104 Kay Lane Carrollton, GA 30117 Bankruptcy Case No.: 06-12375 Chapter 11 Petition Date: December 5, 2006 Court: Northern District of Georgia (Newnan) Judge: W. Homer Drake Debtor's Counsel: Paula Gordon, Esq. Law Office of Pamela Gordon 1720 Peachtree St., Suite 327 Atlanta, GA 30309 Tel: (404) 260-4233 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. KOLORFUSION INT'L: Sept. 30 Balance Sheet Upside-Down by $541,705 ----------------------------------------------------------------- Kolorfusion International, Inc., delivered its financial results for the quarter ended Sept. 30, 2006, to the Securities and Exchange Commission. At Sept. 30, 2006, the company's balance sheet showed $1,110,832 in total assets and $1,652,537 in total liabilities, resulting in a stockholders' deficit of $541,705. At June 30, 2006, stockholders' deficit was $484,809. The company reported a $58,726 net loss on $455,968 of total revenues for the three months ended Sept. 30, 2006, versus a $53,726 net loss on $489,787 of total revenues for the three months ended Sept. 30, 2005. Management reports that the decrease was partially related to the move out from the old facility into the new facility; thereby having downtime during the quarter. During the three-month period ended Sept. 30, 2006, the company incurred $510,883 in expenses and cost of goods sold as compared to the three month period ended Sept. 30, 2005 where the company incurred $529,726 in expenses and cost of goods sold, a decrease of $18,843. Gross profit decreased to 48.8% for the three months ended Sept. 30, 2006 compared to 53.2% for the three months ended Sept. 30, 2005. The decline was attributable to a different mix of revenues, such as processing versus print media sales, during the comparable quarters. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1784 Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 16, 2006, Carver Moquist & O'Connor, LLC, in Minneapolis, Minnesota, raised substantial doubt about Kolorfusion International, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended June 30, 2006, and 2005. The auditor pointed to the Company's recurring operating losses and stockholders' deficit. About Kolorfusion Centennial, Colorado-based Kolorfusion International, Inc. (OTC: KOLR) -- http://www.kolorfusion.com/-- develops and markets a patented system for transferring colors and patterns into coatings on metal, wood, glass, and directly into plastic products. LITHIUM TECHNOLOGY: Sells 20,060 shares of Series C Pref. Stock --------------------------------------------------------------- Lithium Technology Corp. reported that it closed on the sale of its securities in a private placement on Dec. 8, 2006. The Company sold 20,060 shares of Series C Preferred Stock for an aggregate of $3,009,000. Each share of Series C Preferred Stock is convertible into 2,500 shares of company common stock. At a purchase price of $150 per share of Series C Preferred Stock, the effective purchase price for each underlying common share of company common stock is $0.06 per share. This effective stock price represents a premium of 120% to the market price on the day of closing. The Company did not pay any commission to broker-dealers in connection with the sale of the Series C Preferred Stock. As reported in the company's Form 8-K dated Nov. 28, 2006, each share of the company's Series C Preferred Stock will automatically be converted into 2,500 shares of company common stock 90 days following the authorization and reservation of a sufficient number of shares of company common stock to provide for the conversion of all outstanding shares of Series C Preferred Stock into shares of company common stock. "We are extremely pleased with this recent financing because it demonstrates the confidence that professional investors have in LTC and the markets in which we operate," commented Amir Elbaz, executive vice president and chief financial officer of LTC. "We believe that our recent product and partnership announcements have proven to stakeholders that our company is progressing on all fronts, in the production as well as in the commercialization of cells and batteries to the transportation, military and renewable/stationary markets." "As reported in the Company's Form 8-K dated Dec. 8, 2006, a debenture holder converted approximately $2.4 million of debt into equity of the Company" Additionally, Mr. Elbaz commented. Issuance of the securities was exempt from registration pursuant to Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act. The shares were sold to accredited investors in a private placement without the use of any form of general solicitation or advertising. The underlying securities are "restricted securities" subject to applicable limitations on resale. A full-text copy of Lithium Tech.'s Form 8-K regulatory filing dated Nov. 28, 2006 is available for free at: http://ResearchArchives.com/t/s?1771 A full-text copy of Lithium Tech.'s Form 8-K regulatory filing dated Dec. 8, 2006 is available for free at: http://ResearchArchives.com/t/s?1773 Lithium Technology Corporation (OTC: LTHU) -- http://www.lithiumtech.com/-- produces unique large-format rechargeable batteries under the GAIA brand name and trademark. The Company supplies a variety of military, transportation and back-up power customers in the U.S. and Europe from its two operating locations in Plymouth Meeting, Pennsylvania and Nordhausen, Germany. * * * On March 31, 2006, Lithium Technology Corp.'s balance sheet showed a total stockholder's deficit of $2,840,00 compared to a deficit of $943,000 on Dec. 21, 2005. MARTHA ORTEGA: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Martha Elba Ortega aka Martha Elba Juarez 1200 Margarita Court Calexico, CA 92231 Bankruptcy Case No.: 06-03849 Chapter 11 Petition Date: December 6, 2006 Court: Southern District of California (San Diego) Judge: John J. Hargrove Debtor's Counsel: Steven A. Wickman, Esq. Wickman & Wickman 5151 Murphy Canyon Road, Suite 100 San Diego, CA 92123 Tel: (858) 292-9999 Fax: (858) 277-3456 Total Assets: $1 Million to $100 Million Total Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. MERIDIAN AUTOMOTIVE: Assumption of 43 Contracts & Leases Approved ----------------------------------------------------------------- The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorized Meridian Automotive Systems Inc. and its debtor-affiliates to assume 43 Contracts and Leases. Judge Walrath directs the Debtors to pay cure amounts in connection with their assumption of the Contracts and Leases. A list of the Cure Amounts to be paid for each Contract or Lease is available at no charge at http://ResearchArchives.com/t/s?1755 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. Judge Walrath has confirmed the Revised Fourth Amended Reorganization Plan of Meridian. (Meridian Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). MERRILL LYNCH: Fitch Holds Rating on Class G Certs. at B- --------------------------------------------------------- Fitch Ratings affirms Merrill Lynch Mortgage Investors, Inc.'s commercial mortgage pass-through certificates, series 1996-C2 as: -- $12.8 million class D at 'AAA'; -- Interest only class IO at 'AAA'; -- $28.5 million class E at 'AAA'; -- $62.6 million class F at 'BB+'; and, -- $39.8 million class G at 'B-'. Fitch does not rate the $14.4 million class H. Classes A-1 through C have paid in full. The affirmation reflects the ongoing uncertainty surrounding the Shilo portfolio, offsetting the 4.5% paydown the pool has experienced since the last Fitch rating action. As of the December 2006 distribution date, the pool's aggregate certificate balance has decreased 86.1% to $158.2 million from $1.1 billion at issuance. There are currently 47 loans remaining in the pool of the original 300. Currently, 12 assets are in special servicing, of which four A- notes and four B-notes comprise the Shilo portfolio. The Shilo portfolio consists of four Shilo hotels, which are located in various cities in Oregon and Washington. The A-notes represent the outstanding principal due on the four Shilo loans. The B-notes became effective in March 2003 as part of a loan modification and represent capitalized principal and interest advances and property protection advances on the Shilo loans. The Shilo portfolio was transferred to special servicing in August 2006 due to imminent default, and the borrower did not make the October 2006 debt service payment. The special servicer swept the reserve accounts to make the October 2006 debt service payments. The borrower has since made partial payments on the debt. The special servicer is assessing its options with regards to a workout. The largest non-Shilo specially serviced asset is a hotel located in Corvallis, Oregon and is real estate owned. The special servicer is in discussions with a potential purchaser for this asset. The next largest non-Shilo specially serviced loan is secured by an office building in Fort Wayne, Indiana and is in foreclosure. The special servicer is evaluating workout strategies with respect to this loan. Fitch has identified 19 loans as Fitch Loans of Concern, which includes the specially serviced loans and those loans with low debt service coverage ratio and declining occupancies. Fitch has incorporated the increased risk associated with these loans into its rating analysis. MESABA AVIATION: In Talks with Northwest for Possible Acquisition ----------------------------------------------------------------- Northwest Airlines Corp. is planning to acquire Mesaba Aviation Inc., a deal that would generate cost savings and protect Mesaba workers' jobs, Kathy Grayson writes for the Minneapolis/St. Paul Business Journal. Pursuant to the deal, Northwest would co-sponsor Mesaba's reorganization plan for Court-approval and acquire Mesaba through that process. Northwest CEO Doug Steenland disclosed that the proposed deal is another move in its restructuring process designed to reshape and optimize the Northwest fleet, realize competitive labor and non- labor costs, and recapitalize its balance sheet, the Business Journal relates. Citing Northwest spokesman Bill Mellon, the Associated Press reports that the acquisition would not involve a cash transaction. Northwest intends to operate Mesaba as a wholly owned subsidiary, Mr. Mellon adds. AP reports that Mesaba President John Spanjers said that the Northwest ownership would secure its core business and place the carrier for future growth. 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. About Mesaba Aviation Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. Craig D. Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. MGM MIRAGE: Fitch Rates $750-Mil. Senior Unsecured Notes at BB -------------------------------------------------------------- Fitch assigned a rating of 'BB' to the 7.625% $750 million in senior unsecured notes due 2017 offered by MGM MIRAGE. Fitch also affirmed MGM's these ratings: -- Issuer Default Rating at 'BB'; -- Senior credit facility at 'BB'; -- Senior notes at 'BB'; and, -- Senior subordinated notes at 'B+'; The ratings apply to roughly $12.96 billion of outstanding debt as of Sept. 30, 2006 and the new issue noted above. The Rating Outlook remains Stable. The ratings reflect MGM's high quality asset portfolio, strong competitive position, and adequate liquidity. Credit concerns include limited diversification, high leverage for the rating category, and significant capital spending plans. The Stable Outlook incorporates Fitch's positive view on the near-term operating environment on the Las Vegas Strip, which accounts for roughly 75-80% of MGM's cash flow. While MGM's capital spending is expected to be heavy over the next few years, Fitch believes the company has ample financial flexibility to maintain its credit profile. MGM's leverage was 5.6-5.7x as of Sept. 30, 2006 down from 6.4x at the end of 2005. The improvement is a result of expected deleveraging following its Mandalay Resort Group acquisition last year. Fitch estimates that MGM could continue to improve leverage slightly until spending for its CityCenter development in Las Vegas begins to significantly ramp up in 2008-2009. However, Fitch still expects MGM's leverage will remain in the mid-5x range over the next couple of years, while coverage is expected to remain in the mid-2x range. MGM had nearly $2.5 billion of liquidity as of Sept.30, including $344 million of cash and $2.1 billion available under its $7 billion credit revolver. Subsequent to the end of the quarter MGM amended its credit facility, paid off a $245 million note, reported $600 million in asset sales, and is issuing $750 million in new senior notes. MGM's amended credit facility included a maturity extension to 2011 from 2010 and an option to solicit additional lender commitments for another $1 billion, which would increase the total capacity to $8 billion. Growth Pipeline: Outside of operating performance, the company's credit metrics over the next few years will be primarily influenced by the timing of spending on CityCenter, the timing of CityCenter residential sales proceeds, the timing and quantity of hurricane insurance proceeds, and the level of share repurchase. The company's wholly-owned growth pipeline is solid with the: -- $765 million Detroit permanent facility set to open in late 2007; and, -- $7 billion CityCenter mixed-use project in Las Vegas scheduled to open in late 2009. Fitch believes the largest portion of the Detroit spending will be in the 2007 capital budget, while peak annual spending for CityCenter will be in 2009. Offsetting MGM's investment in these projects are: -- $2.5 billion in proceeds from expected CityCenter residential sales; -- $600 million in recently announced asset sales; and, -- potential insurance proceeds from Beau Rivage. MGM has spent roughly $440-$450 million in the last year rebuilding Beau Rivage after Hurricane Katrina, but received only $165 million so far in insurance proceeds. The $1.1 billion MGM Grand Macau, which is 50% MGM-owned through a joint venture, is expected to open in late 2007. MGM has already invested $266 million of its committed $280 million, so MGM has minimal additional capital requirements for that project. Asset Sales and Share Repurchase: Although it is not incorporated into Fitch's base Outlook, Fitch believes that additional asset sales could help to fund MGM's projects, as the demand for gaming assets remains robust. As was the case in its recent announcement of asset sales in Laughlin and Primm for $600 million, Fitch expects MGM to be selective in monetizing non-core assets at attractive prices. MGM generated roughly $1.16 billion in cash from operations over the last 12 months and spent nearly $380 million for share repurchase during that time. Current ratings incorporate share repurchase levels consistent with this recent activity, but a significant increase in repurchase activity is not. Recent Joint Venture Agreements: MGM has entered into a number of recent agreements, which indicate that MGM could be adjusting its business model somewhat. It reported yesterday it recently signed a multi-faceted agreement with the Mashantucket Pequot Tribal Nation, which was first reported in April 2006. It also expects to sign two additional agreements in 1Q07 to develop non-gaming hotels and resorts globally, initially in China, Abu Dhabi, Las Vegas, and the United Kingdom. The ultimate scale of the JVs is unclear at this point and MGM's only reported capital commitment is a $200 million loan guarantee to the MPTN JV. To the extent that these agreements reflect a strategy to leverage its brands, marketing prowess, and development capabilities into partnerships that generates fee income with limited capital commitments, Fitch views the agreements positively. Conversely, if the agreements become significant drains on capital, it could be viewed negatively. MICHAEL FOOTE: Case Summary & 8 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Michael James Foote Susan Niles Foote 6132 South West Riverpoint Lane Portland, OR 97239 Bankruptcy Case No.: 06-03869 Type of Business: The Debtor owned 100% of Foote Development Company, a real estate developer and project contractor based in Portland. Chapter 11 Petition Date: December 7, 2006 Court: Southern District of California (San Diego) Judge: James W. Meyers Debtor's Counsel: Gary B. Rudolph, Esq. Sparber Rudolph Annen, APLC 701 B Street, Suite 1000 San Diego, CA 92101 Tel: (619) 239-3600 Fax: (619) 239-5601 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 8 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America VISA Credit card $42,352 P.O. Box 15026 purchases Wilmington, DE 19850 American Express Credit card $26,855 P.O. Box 297812 purchases Fort Lauderdale, FL 33329 American Express Credit card $25,975 Purchases Bullivant Houser Bailey PC Legal fees $20,935 Harwood Properties Home Improvements $3,843 Coley Parek & Hawkins, LLP Accounting fees $3,675 Cheri L. Foote $2,550 Shaw & Hren Maintenance bonds Unknown Michael J. Foote was Guarantor MICHAEL ZAMANI: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Michael A. Zamani aka Mike Zamani aka Mike Jaffari Zamani 2214 Fruitridge Avenue San Jose, CA 95128 Bankruptcy Case No.: 06-52509 Chapter 11 Petition Date: December 5, 2006 Court: Northern District of California (San Jose) Judge: Marilyn Morgan Debtor's Counsel: Charles B. Greene, Esq. Law Offices of Charles B. Greene 84 W. Santa Clara St. #770 San Jose, CA 95113 Tel: (408) 279-3518 Fax: (408) 279-4264 Total Assets: $10,735,581 Total Debts: $4,824,985 Debtor's 9 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chase Bank NA Credit card $26,876 Bank One Card Service purchases 2001-2006 800 Brookedge Blvd. Westerville, OH 43081 Citi Bank (South Dakota) NA Credit card $21,541 P.O. Box 6500 purchases 2003-2006 Gales Creek, OR 97117 Santa Clara County Tax Real property taxes $51,074 Asssessor 4585 Stevens Creek 70 W. Hedding St. San Jose, CA 95110 Santa Clara County Tax Real property taxes $37,346 Asssessor 1860 S. Bascom 70 W. Hedding St. San Jose, CA 95110 Santa Clara County Tax Real property taxes $26,895 Asssessor 865 The Alameda 70 W. Hedding St. San Jose, CA 95110 Santa Clara County Tax Real property taxes $8,067 Asssessor 2214 Fruitdale 70 W. Hedding St. San Jose, CA 95110 Sears/CBSD Credit card $9,345 8725 W. Sahara Avenue charges 2005 The Lakes, NV 89163 The CBE Group, Inc. 2006 Satellite TV $907 P.O. Box 2635 Waterloo, IA 50704 Sears/CBSD 2005 credit card $814 8725 W. Sahara Avenue purchases The Lakes, NV 89163 NATIONAL CONSUMER: Hires Lipkin & Associates as Consultants ----------------------------------------------------------- The Honorable Erithe Smith of the U.S. Bankruptcy Court for the Central District of California gave National Consumer Mortgage LLC permission to employ Lipkin & Associates, as its consultants. The Debtor tells the Court it wants Lipkin & Associates to set up and monitor its in house accounting systems and to conduct forensic accounting. Specifically, the firm is expected to: a) review the operations of the Debtor and recommend and implement new controls and procedures at the controller, bookkeeping, banking, accounts receivable, accounts payable, loans and contract payable levels; b) provide independent controls to oversee the financial operations of the Debtor; c) screen and recommend the hiring of an accounting staff; d) ensure that books and records of the Debtor are maintained in accordance with generally accepted accounting practices; e) assist in preparation of a plan or reorganization; and f) conduct a forensic investigation regarding the monies misappropriated from the Debtor before bankruptcy protection. The Debtor tells the Court that it paid the firm $25,000 as retainer fee. Alan Lipkin, licensed private investigator and certified fraud examiner, who is also a principal of the firm, discloses that he bills $250 per hour for this engagement. The firm's other professionals are: Professionals Designation Hourly Rate ------------- ----------- ----------- Robert Warren Associate $250 Alan Dresdner Associate $150 Brendan Kertin Associate $150 Mr. Lipkin assures the Court that his firm does not hold any interest adverse to the Debtor and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Lipkin can be reached at: Alan Lipkin Lipkin & Associates Tel: (818) 888-8888 Fax: (818) 777-777 http://www.lipkintax.com/ Headquartered in Orange, California, National Consumer Mortgage LLC -- http://www.nationalconsumermortgage.com/-- is an independent mortgage brokerage that creates and processes home loans. The Debtor filed for chapter 11 protection on Apr. 3, 2006 (Bankr. C.D. Calif. Case No. 06-10429). Lorraine L. Loder, in Los Angeles, California, represents the Debtor. David L. Neale, Esq., at Levene, Neale, Bender, Rankin & Brill L.L.P., represents the Official Committee of Unsecured Creditors. John Brinco was appointed as the Debtor's Chapter 11 Trustee appointed When the Debtor filed for protection from its creditors, it listed total assets of $1,102,135 and total debts of $32,846,858. NAVIOS MARITIME: Completes $300-Million Senior Notes Offering ------------------------------------------------------------- Navios Maritime Holdings Inc. completed the sale of $300 million aggregate principal amount of 9-1/2% Senior Notes due 2014. The Notes were sold in the United States only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and in offshore transactions to non- United States persons in reliance on Regulation S under the Securities Act. The Notes will initially be fully and unconditionally guaranteed by all of Navios' existing subsidiaries, other than Corporacion Navios Sociedad Anonima. Navios intends to use the net proceeds of the offering to repay amounts currently outstanding under its senior secured credit facility. The Notes and related guarantees have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States or to or for the benefit of U.S. persons unless so registered except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable securities laws in other jurisdictions. About Navios Maritime Navios Maritime Holdings Inc. (Nasdaq: BULK, BULKU, BULKW) -- http://www.navios.com/-- is a vertically integrated global seaborne shipping company, specializing in the worldwide carriage, trading, storing, and other related logistics of international dry bulk cargo transportation. The company also owns and operates a port/storage facility in Uruguay and has in-house technical ship management expertise. It maintains offices in Piraeus, Greece, South Norwalk, Connecticut and Montevideo, Uruguay. * * * In November 2006, Standard & Poor's Ratings Services assigned its 'BB-' long-term corporate credit rating to Greece-based dry-bulk shipping company Navios Maritime Holdings Inc. At the same time, Standard & Poor's assigned its preliminary 'B' debt rating to Navios' proposed $300-million senior unsecured bonds. S&P said the outlook is stable. NORTEL NETWORKS: Eastman Kodak Renews Three-Year Management Pact ---------------------------------------------------------------- Eastman Kodak Company has agreed to a three-year renewal of an existing agreement with Nortel Networks Corporation for management of its U.S. voice network. The renewal, calls for Nortel to continue managing Kodak's U.S. network of PBXs and telephone services through 2008 and also includes upgrading an existing Meridian SL-100 switch to an IP-enabled Communication Server 2100. The upgrade will allow the company to provide VoIP capability when cost-effective for requirements like worker mobility. The company disclosed that it has outsourced its voice network to Nortel since 1995 and will continue to benefit from Business Made Simple through lower capital and operating costs. Kodak will also gain an infrastructure better prepared for future technologies without sacrificing previous investments. "We will continue to provide cost savings by operating and managing Kodak's U.S. network," Nortel Global Services president Dietmar Wendt said. "And we'll work with Kodak to address both current and future needs - including migration to VoIP if and when it makes sense - without requiring them to take on the costs associated with buying, implementing and operating new equipment." Nortel provides network management and maintenance for the company's voice network, including remote fault monitoring with proactive network surveillance, customer-defined service level agreements for response and resolution, moves and changes, comprehensive customer reporting, and dedicated service management. About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Co. -- http://www.kodak.com/-- develops, manufactures, and markets digital and traditional imaging products, services, and solutions to consumers, businesses, the graphic communications market, the entertainment industry, professionals, healthcare providers, and other customers. About Nortel Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. * * * As reported in the Troubled Company Reporter on Oct. 5, 2006, Moody's Investors Service upgraded its B3 Corporate Family Rating for Nortel Networks Corp. to B2. NORTHWEST AIRLINES: In Talks to Acquire Mesaba Aviation ------------------------------------------------------- Northwest Airlines Corp. is planning to acquire Mesaba Aviation Inc., a deal that would generate cost savings and protect Mesaba workers' jobs, Kathy Grayson writes for the Minneapolis/St. Paul Business Journal. Pursuant to the deal, Northwest would co-sponsor Mesaba's reorganization plan for Court-approval and acquire Mesaba through that process. Northwest CEO Doug Steenland disclosed that the proposed deal is another move in its restructuring process designed to reshape and optimize the Northwest fleet, realize competitive labor and non- labor costs, and recapitalize its balance sheet, the Business Journal relates. Citing Northwest spokesman Bill Mellon, the Associated Press reports that the acquisition would not involve a cash transaction. Northwest intends to operate Mesaba as a wholly owned subsidiary, Mr. Mellon adds. AP reports that Mesaba President John Spanjers said that the Northwest ownership would secure its core business and place the carrier for future growth. About Mesaba Aviation Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. Craig D. Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. 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. NVE INC: Wants Exclusive Plan-Filing Period Extended to January 16 ------------------------------------------------------------------ N.V.E., Inc., asks the Hon. Novalyn L. Winfield of the U.S. Bankruptcy Court for the District of New Jersey to further extend, until Jan. 16, 2007, its exclusive period to file a chapter 11 plan. The Debtor also asks Judge Winfield to extend its exclusive period to solicit acceptances of the plan until Mar. 15, 2007. The Debtor says it is very close to being in a position to file a Plan of Reorganization but significant steps need to be taken before drafting the Plan can commence. Product Liability Cases The Debtor reminds the Court that as of its bankruptcy filing, it was party to approximately 117 ephedra related product liability cases, pending in various courts throughout the United States. The Debtor says that as a result of its bankruptcy filing, continued litigation of the product liability cases has been stayed. Both the Bankruptcy Court and the U.S. District Court for the Southern District of New York have issued a series of Orders extending the stay to the continuation of the Product Liability Cases against certain third party defendants, including retailer defendants and Robert Occhifinto. The Debtor says after its initial bar date expired on Dec. 13, 2005, it engaged in discussions with certain representatives of the plaintiffs and representatives of retailer defendants, in an effort to assure that the universe of potential claims against the Debtor and the Third Party Defendants was fixed by a date certain. With the consent of the plaintiffs and the retailer defendants, the Debtor applied to the Bankruptcy Court for the entry of an Order authorizing a Publication Notice, Claim Supplement Procedures, which the Bankruptcy Court approved on Jan.17, 2006. The Debtor discloses that it has been successful in dismissing a number of this product liability cases and has been successful in obtaining Orders from the Bankruptcy Court expunging certain claims filed on behalf of Product Liability Plaintiffs. There are currently approximately 125 Product Liability Cases pending and the Debtor relates that the Multi District Litigation Panel has virtually transferred all of the Settled Cases to Judge Rakoff for pre-trial purposes. Mediation On May 1, 2006, the Bankruptcy Court appointed Carmin C. Reiss as Mediator and approved a Mediation process, aimed at reaching a global resolution of all claims against the Debtor's Estate. It was agreed by the parties that the initial efforts in the mediation sessions would be aimed at attempting a global resolution of the Settled Cases. The Debtor tells the Bankruptcy Court that an agreement has been reached between the Debtor, the plaintiffs and the retailer defendants with regard to the global resolution of all the Settled Cases. A Term Sheet incorporating the terms of the Settlement has been signed by the Debtor, the plaintiffs and the retailer defendants. A comprehensive settlement agreement incorporating the Term Sheet has been circulated and will be executed by the parties. The foregoing settlement with the plaintiff and retailer/indemnitees will serve as the centerpiece of a Plan of Reorganization, which the Debtor hopes to file in the near future. The Debtor further says that it has engaged in negotiations with the trade creditor representative appointed to participate in the mediation sessions, with the assistance of Mediator Reiss. While the gap between the Debtor and the trade creditors has been substantially narrowed, the Debtor and the trade creditors have as yet been unsuccessful in reaching a final agreement. Trade Claimants The Debtor also relates that it is a party to a number of significant disputes with trade claimants with regard to the validity and extent of claims filed but has submitted to the Bankruptcy Court Scheduling Orders in an effort to move the litigation with regard to these disputed claims swiftly. AdSouth Litigation The Debtor is also engaged in litigation with AdSouth Partners, with regard to what the Debtor alleges to be fraudulent overcharges of in excess of $3 million. The first mediation session with AdSouth, to be conducted by former Judge Stephen Orlofsky, was scheduled last December 12. About NVE Inc. Headquartered in Andover, New Jersey, NVE Inc., dba NVE Pharmaceuticals, Inc., manufactures dietary supplements. The Debtor is facing lawsuits about its weight-loss products which contain the now-banned herbal stimulant, Ephedra. The Company filed for chapter 11 protection on August 10, 2005 (Bankr. D. N.J. Case No. 05-35692). Daniel Stolz, Esq., Leonard C. Walczyk, Esq., Michael McLaughlin, Esq., and Steven Z Jurista, Esq., at Wasserman, Jurista & Stolz, represent the Debtor in its restructuring efforts. Derek John Craig, Esq., at Brown Raysman Millstein Felder & Steiner LLP, and David J. Molton, Esq., at Brown Rudnick Berlack Israels LLP, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $10,966,522 in total assets and $14,745,605 in total debts. PERFORMANCE TRANSPORTATION: Court Confirms Plan of Reorganization ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of New York confirmed, on Dec. 21, 2006, Performance Transportation Services Inc.'s plan to exit bankruptcy by fully repaying secured creditors in cash and shares. Approval of the reorganization plan comes less than a year after PTS and its U.S. subsidiaries filed for Chapter 11 bankruptcy protection in the Court. PTS is targeting a mid-January plan effective date. "We have a capital structure that will enable us to weather the challenges that are occurring in the industry and we have the support of our lenders and customers going forward," Jeffrey L. Cornish, Chief Executive Officer and President of PTS, said. "Our customers have really supported PTS as a company and as a vital part of their logistics supply chain. We are going to do everything we can to make that pay off for them." While operating under Chapter 11, PTS reduced debt and implemented several initiatives to increase operating efficiency, including adopting a new system to track vehicle movement. "Confirmation of the plan is the culmination of hard work by our talented employees and advisors and our new ownership," Mr. Cornish said, noting the plan is supported by all of PTS's creditor groups entitled to vote on the plan. "It has been a total team effort." Under the terms of the plan, secured creditors will be fully repaid in cash. The Yucaipa Companies LLC, which hold the majority of the second lien debt, will receive New Common Stock. General unsecured creditors will receive proceeds from a Liquidating Trust. The Trust will pursue recoveries through avoidance actions and other litigation. Holders of Old Common Stock will not receive any distributions and their equity interests will be cancelled. The company is in negotiations to replace the DIP and the Junior DIP Financing Packages with an Exit Financing Package. The Exit Financing Package will be used to repay both the outstanding current DIP facilities and provide additional borrowing capacity for the company in its private status. The company will exit bankruptcy with the management team that led its reorganization, including Cornish, Chief Financial Officer Jack Stalker and Chief Operating Officer John Richter. The company will continue to operate its three business segments -- E. and L. Transport, Hadley Auto Transport, and Leaseway Motorcar Transport. Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. PINNACLE CBO: Fitch Cuts Rating on $6.5-Mil. Senior Notes to B -------------------------------------------------------------- Fitch downgrades one class of notes issued by Pinnacle CBO Ltd. This rating action is effective immediately: -- $6,503,190 senior secured notes downgraded to 'B/DR1' from 'BBB'; and, -- $80,108,014 second priority senior notes remain at 'C/DR6'. Pinnacle is a collateralized debt obligation managed by Morgan Stanley Investment Management which closed Nov. 20, 1997. Five performing assets, primarily emerging market securities, remain in the current portfolio. Included in this review, Fitch discussed the current state of the deal with the asset manager and their expectations going forward. The downgrade is the result of undercollateralization and limited interest revenues, combined with the diversion of principal proceeds to the interest due on the second priority senior notes. Since May 2005, a total of $9.58 million in principal have been used to pay interest on the second priority senior notes. As of the most recent Nov. 27, 2006 payment date, failing senior interest coverage tests have diverted principal proceeds to pay the senior secured note principal, but once these tests were cured, principal cashflows have been used to pay interest on the second priority senior notes. Fitch expects the second priority senior note interest payments to continue to be partly funded by principal proceeds from the $9.43 million par amount of performing assets remaining. As of the Nov. 16, 2006 trustee report, the senior secured par value test was passing, increasing to 152.4% from 114% from the last review in December 2004. The senior secured interest coverage test, however, failed to pass, increasing to 113.6% from 106.4%, relative to a trigger of 142%. As a result, approximately $1.69 million of principal proceeds were used to redeem the senior secured note balance and cure the senior secured IC test on Nov. 27, 2006, and $1.36 million of principal proceeds used to pay interest to the second priority senior notes. As of the last payment date, the second priority notes have deferred a total of $24.11 million in interest. Fitch anticipates this trend to carry on for future payments, with continual leakage of scheduled principal proceeds to pay second priority note interest, compromising the long term credit worthiness of the senior secured notes. The rating of the senior notes addresses the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings of the second priority notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. Fitch will continue to monitor and review this transaction for future rating adjustments. PREFERRED CARRIER: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Preferred Carrier Services of Virginia, Inc. 14681 Midway Road, Suite 105 Addison, TX 75001 Bankruptcy Case No.: 06-35551 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Preferred Carrier Services, Inc. 06-35554 Phones For All, Inc. 06-35555 Type of Business: The Debtor provides telecommunication services. See http://www.phonesforall.com/ Chapter 11 Petition Date: December 14, 2006 Court: Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtor's Counsel: Barry Casey, Esq. Preferred Carrier Services of Virginia, Inc. 14681 Midway Road, Suite 105 Addison, TX 75001 Tel: (972) 404-5436 Estimated Assets Estimated Debts ---------------- --------------- Preferred Carrier Services $0 to $50,000 $1 Million to of Virginia, Inc. $100 Million Preferred Carrier Services $100,000 to $1 Million to Inc. $1 Million $100 Million Phones For All, Inc. $100,000 to $1 Million to $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Verizon Virginia Trade debt $3,853,601 Director - Contract Performance & Administration 600 Hidden Ridge HQEWMNOTICES Irving, TX 75038 AT&T Local Wholesale Complete Trade debt $200,493 One AT&T Plaza, Ste. 2900 208 S. Akard Street Dallas, TX 75202 Verizon Texas Trade debt $117,686 Director - Contract Performance & Administration 600 Hidden Ridge HQEWMNOTICES Irving, TX 75038 Verizon Indiana Trade debt $89,138 Department of Treasury Excise tax $55,000 AT&T Texas Trade debt $50,000 Verizon California Trade debt $42,983 Office in the Park Rent $36,432 Texas Universal Service Fund State taxes $35,772 Verizon Florida Trade debt $30,502 Texas Comptroller of Public State taxes $29,200 Verizon New Jersey Trade debt $29,020 Verizon South Carolina Trade debt $20,771 Embarq North Carolina Trade debt $20,000 Embarq Indiana Trade debt $15,000 Verizon Maryland Trade debt $14,732 Verizon District of Columbia Trade debt $13,775 AT&T Indiana Trade debt $11,441 Consumer Source Inc. Advertising $11,380 AT&T California Trade debt $7,000 PRESIDENT CASINOS: Sells St. Louis Biz for $31.5 Mil. to Pinnacle ----------------------------------------------------------------- President Casinos Inc. had completed the sale of the capital stock of its St. Louis casino operations, President Riverboat Casino- Missouri, Inc. to Pinnacle Entertainment, Inc. for approximately $31.5 million in cash, subject to certain post-closing adjustments. President Riverboat Casino-Missouri was a wholly-owned subsidiary of President Casinos, Inc. The proceeds of the sale will be placed in a distribution trust to be distributed in accordance with the bankruptcy reorganization plan previously confirmed by the court for President Riverboat Casino-Missouri, Inc. Following the sale of its St. Louis operations, President Casinos' remaining assets consist primarily of cash and certain pending litigation claims. President Casinos remains in bankruptcy reorganization proceedings under Chapter 11 of the United States Bankruptcy Code. At this time, President Casinos, Inc. has not determined whether it will liquidate or continue operations in some form, or whether any assets will be available for distribution to stockholders. Headquartered in St. Louis, Missouri, President Casinos Inc. (OTC:PREZQ.OB) -- http://www.presidentcasino.com/-- currently owns and operates a dockside gaming casino in St. Louis, Missouri through its wholly owned subsidiary, President Missouri. The Debtor filed for chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No. 02-53055). On July 11, 2002, substantially all of Debtor's other operating subsidiaries filed for chapter 11 protection in the same Court. The Honorable Judge Edward Gaines ordered the transfer of President Casino's chapter 11 cases from Mississippi to Missouri. The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No. 02-53005). Brian Wade Hockett, Esq., at Hockett Thompson Coburn LLP, represents the Debtors in their restructuring efforts. David A. Warfield, Esq., at Blackwell Sanders Peper Martin LLP, represents the Official Committee of Unsecured Creditors. Thomas E. Patterson, Esq., and Ronn S. Davids, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP and E. Rebecca Case, Esq., and Howard S. Smotkin, Esq., at Stone, Leyton & Gershman, P.C., represent the Official Committee of Equity Security Holders. POWER INTEGRATIONS: Expects Shares to be Delisted From Nasdaq ------------------------------------------------------------- Power Integrations has informed the Nasdaq Stock Market that it did not meet the Nasdaq Listing and Hearing Review Council's December 18 deadline for becoming current in the filing of its annual and quarterly reports with the Securities and Exchange Commission. As a result, the company expects its shares to be delisted from the Nasdaq Global Market as of the start of trading on Dec. 19. The company's shares will be traded on the Pink Sheets under the symbol POWI.PK. "The restatement of our historical financial statements is substantially complete," Power Integrations president and chief executive officer Balu Balakrishnan said. "We expect to complete our SEC filings in the next few weeks, and we intend to apply for re-listing on Nasdaq immediately upon issuing the filings," Power Integrations Inc. (Nasdaq: POWI) (Pink Sheets: POWI.PK) -- http://www.powerint.com/-- is a supplier of high-voltage analog integrated circuits used in power conversion. The company's EcoSmart(R) energy-efficiency technology reduces energy waste and enables power supplies in a wide range of electronic products, in both AC-DC and DC-DC applications. RENATA RESORT: Judge Killian Confirms Plan of Reorganization ------------------------------------------------------------ The Honorable Lewis M. Killian Jr. of the U.S. Bankruptcy Court for the Northern District of Florida confirmed Renata Resort LLC's Amended Chapter 11 Plan of Reorganization on Nov. 28, 2006. Judge Killian determined that the Amended Plan satisfies the standards for confirmation under Section 1129(a) of the Bankruptcy Code. As reported in the Troubled Company Reporter on Oct. 3, 2006, the Debtor told the Court that it intends to liquidate its assets, wind up its affairs, and pay the allowed claims of legitimate holders to the extent possible. The Debtor amended its Plan after Partners Property Corporation cancelled its purchase of two parcels of the Debtor's real property in Bay County, Florida. In the alternative, the Debtor proposes to sell the two parcels of the Florida property and some of its other assets to Renata KT, L.P. Treatment of Claims Under the Amended Plan, holders of General Unsecured Claims, Unsecured Claims Arising from Rejected Executory Contracts or Unexpired Leases, and Capital Contribution Claims by the Debtor's members, will receive the full amount of their allowed claim. Treatment of Sylvia Harrison's $6,360,000 claim will be determined by the Bankruptcy Court and state court. Equity Interest Holders will retain their existing equity interests in the Debtor, but will receive no distributions under the Plan on account of their interests until all Plan payments are paid. A full-text copy of the disclosure statement explaining the Debtor's first amended plan of reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=060823213227 Headquartered in Panama City, Florida, Renata Resort, LLC, fdba Sunset Pier Resort, LLC, operates a hotel and resort. The company filed for chapter 11 protection on May 31, 2006 (Bankr. N.D. Fla. Case No. 06-50114). John E. Venn, Jr., Esq., at John E. Venn, Jr., P.A., represents the Debtor in its restrucutring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtor filed for protection from its creditors, it listed total assets of $19,947,271 and total debts of $8,524,196. REUNION INDUSTRIES: Atlas Partners Orchestrates Real Estate Sale ---------------------------------------------------------------- Atlas Partners, LLC, acted as real estate advisor in the sale of two industrial buildings located at 2233 and 2303 W. Mill Road in Glendale, Wisconsin, owned by Reunion Industries, Inc. Northland Development Co. purchased the property for $1.17 million, or about $15 per square foot, according to a report by James Lutz at CoStar Realty Information, Inc. 2233 W. Mill is a 45,974-square-foot industrial building with 5,600 square feet of office space. 2303 W. Mill totals 33,123 square feet with 3,946 square feet of office space. The buildings sit on a combined 1.7 acres of land. Based in Chicago, Atlas Partners is a real estate consulting company that helps address commercial real estate problems faced by asset-based lenders, turnaround management consultants, bankruptcy and workout attorneys and corporations with restructuring needs. Exchange Offer in Progress Reunion Industries, Inc. (AMEX:RUN) launched a tender offer in November, offering to purchase all of its outstanding 13% Senior Notes. For each $1,000 principal amount of its 2003 Senior Notes and for each $880 principal amount of its 2006 Senior Notes, Reunion is offering $563.20 in cash plus warrants to purchase 92.78 shares of the Company's common stock. The Exchange Offer expires today, Dec. 22, 2006, unless extended. Reunion obtained a $25 million financing commitment on Dec. 6, which was a material condition of the exchange offer. The complete terms and conditions of the tender offer and consent solicitation are described in the Amended Offer to Purchase and Consent Solicitation Statement dated November 22, 2006, copies of which may be obtained from the Company by contacting John M. Froehlich at (412) 281-2111. Going Concern Doubt Mahoney Cohen & Company, CPA, P.C., in New York, raised substantial doubt about Reunion Industries' 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 loss from continuing operations, and working capital and stockholders' equity deficiencies. About Reunion Industries Headquartered in Pittsburgh, Pennsylvania, Reunion Industries, Inc. -- http://www.reunionindustries.com/-- owns and operates industrial manufacturing operations that design and manufacture engineered, high-quality products for specific customer requirements, such as large-diameter seamless pressure vessels, hydraulic and pneumatic cylinders, grating and precision plastic components. REVLON INC: Prices $100 Million Rights Offering ----------------------------------------------- Revlon, Inc., pursuant to its $100 million rights offering will distribute, at no charge, one transferable subscription right for each share of Class A and Class B common stock held by each stockholder of record as of 5:00 p.m. New York City time, on Dec. 11, 2006. Each subscription right will enable rights holders to purchase 0.2308 of a share of Revlon's Class A common stock. Fractional shares of Class A common stock will not be issued. The subscription price for each share of Class A common stock is $1.05 per share. In addition, the subscription rights include an over-subscription privilege pursuant to which each rights holder that exercises its basic subscription privilege in full may also subscribe for additional shares at the same subscription price of $1.05 per share, to the extent that other rights holders, other than MacAndrews & Forbes, do not exercise their subscription rights in full. If a sufficient number of shares are not available to fully satisfy the over-subscription privilege requests, the available shares will be sold pro-rata among subscription rights holders who exercised their over-subscription privilege, based on the number of shares each subscription rights holder subscribed for under the basic subscription privilege. Approximately $50 million of the proceeds from the rights offering are expected to be used to redeem approximately $50 million principal amount of the 8-5/8% Senior Subordinated Notes due 2008 of Revlon Consumer Products Corporation, the company's wholly- owned operating subsidiary, with the remainder expected to be used to repay indebtedness outstanding under RCPC's $160 million multi- currency revolving credit facility, without any permanent reduction in that commitment, after paying fees and expenses incurred in connection with the rights offering. The subscription rights are expected to trade on the NYSE under the symbol 'REV RT' beginning approximately Dec. 20, 2006 until Jan. 18, 2007, the last business day prior to the scheduled expiration date of the rights offering. The company disclosed that MacAndrews & Forbes Holdings, Inc., Revlon's parent, and its affiliates, has agreed not to exercise its basic subscription privilege. Instead, pursuant to a Stock Purchase Agreement between MacAndrews & Forbes and Revlon, MacAndrews & Forbes has agreed to purchase, in a private placement directly from Revlon, its pro rata share of the $100 million of Class A common stock covered by the rights offering. MacAndrews & Forbes has also agreed not to exercise its over- subscription privilege in the rights offering, which will maximize the shares available for purchase by other stockholders pursuant to their over-subscription privilege. However, if any shares remain following the exercise of the basic subscription privilege and the over-subscription privilege by other rights holders, MacAndrews & Forbes will backstop $75 million of the rights offering by purchasing, also in a private placement, the number of remaining shares of Class A common stock offered but not purchased by other rights holders. RCPC Amends $87 Million Line of Credit The company also announced that RCPC has entered into a third amendment to its existing $87 million 2004 Senior Unsecured Line of Credit from MacAndrews & Forbes, which provides that, upon the consummation of the rights offering, $50 million of the line of credit will continue through Jan. 31, 2008 on substantially the same terms. Revlon Inc. -- http://www.revloninc.com/-- is worldwide a cosmetics, skin care, fragrance, and personal care products company. The Company's brands include Revlon(R), Almay(R), Vital Radiance(R), Ultima(R), Charlie(R), Flex(R), and Mitchum(R). * * * At Sept. 30, 2006, Revlon Inc.'s balance sheet showed $925 million in total assets and $2.150 billion in total liabilities, resulting in a $1.225 billion stockholders' deficit. RIM SEMICONDUCTOR: Inks Master ASIC Services Pact with eSilicon --------------------------------------------------------------- Rim Semiconductor Company entered, on Dec. 12, 2006, into a three- year Master ASIC Services Agreement with eSilicon Corporation. Under the terms of the MSA, eSilicon will provide physical design and manufacturing services for the application-specific standard product version of the company's Cupria(TM) Cu5001 transport processor. The MSA also contemplates possible additional products and services to be provided to the company by eSilicon. The company disclosed that it issued to eSilicon on the Effective Date 3,736,991 shares of its restricted common stock for $395,000 of non-recurring engineering services to be provided by eSilicon related to the ASSP version of the Cupria Cu5001. Some or all of the Restricted Shares would be returned to the company if it cancels the NRE Services, in whole or in part, before all NRE Services have been performed. In connection with the issuance of the Restricted Shares, the company and eSilicon entered into a registration rights and transfer restriction agreement, which granted eSilicon: (i) piggyback registration rights; and (ii) demand registration rights that may be exercised only if the company is eligible to file a registration statement on Form S-3 for secondary offerings. In addition, eSilicon has agreed that, for 18 months after the Effective Date, it will not sell more than one-third of the Restricted Shares in any 90-day period without the company's consent, subject to certain exceptions. Headquartered in Portland, Oregon, Rim Semiconductor Company fka New Visual Corporation (OTCBB: RSMI) -- http://www.rimsemi.com/-- is an emerging fabless communications semiconductor company. It has made available an advanced technology that allows data to be transmitted at greater speed and across extended distances over existing copper wire. Going Concern Doubt As reported in the Troubled Company Reporter on Feb. 2, 2006, Marcum & Kliegman LLP expressed substantial doubt about Rim Semiconductor's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Oct. 31, 2005, and 2004. The auditing firm pointed to the Company's $3,145,391 working capital deficiency at Oct. 31, 2005. The Company's October 31 balance sheet showed strained liquidity with $407,512 in current assets available to pay $3,552,903 of current liabilities. ROGER BENCKE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Roger E. Bencke 23 Myrtle St. Redwood City, CA 94062 Bankruptcy Case No.: 06-31151 Chapter 11 Petition Date: December 5, 2006 Court: Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: James F. Beiden, Esq. Law Offices of James F. Beiden 840 Hinckley Rd. #245 Burlingame, CA 94010 Tel: (650) 697-6100 Fax: (650) 697-1101 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor does not have its unsecured creditors who are not insiders. QUEBECOR WORLD: Closes Private Offering of $400-Mil. Senior Notes ----------------------------------------------------------------- Quebecor World Inc. closed its private offering of $400 million aggregate principal amount of 9-3/4% Senior Notes due Jan. 15, 2015, which were sold at par. The new Senior Notes were issued by Quebecor World Inc. and were unconditionally guaranteed on a senior unsecured basis by certain of its wholly owned subsidiaries, namely Quebecor World (USA) Inc., Quebecor World Capital LLC and Quebecor World Capital ULC. The net proceeds from the sale of the Senior Notes amount to approximately $393 million and will be used to reduce indebtedness, including to repurchase up to $125 million of debt securities of Quebecor World Capital Corporation, a wholly owned subsidiary of the company, namely 8.54% senior notes due 2015, 8.69% senior notes due 2020, 8.42% senior notes due 2010 and 8.52% senior notes due 2012 under the cash tender offers commenced by Quebecor World (USA) Inc. on Nov. 30, 2006, to repay in full $150 million in 7.25% senior debentures of Quebecor World Capital Corporation due in January 2007 and to repay borrowings under the Company's revolving credit facility. The balance of the proceeds, if any, will be used for general corporate purposes. The offering was made on a private placement basis to qualified institutional buyers in the United States in reliance upon Rule 144A under the U.S. Securities Act of 1933, as amended. The new Senior Notes have not been, and will not be, registered under the U.S. Securities Act of 1933 or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. In Canada, the offering of new Senior Notes was made on a prospectus exempt basis under applicable Canadian securities laws and, accordingly, any re-sale of the Senior Notes in Canada will be made on a basis which is exempt from the prospectus and dealer registration requirements of such securities laws. Headquartered in Montreal, Canada, Quebecor World Inc. (TSX: IQW)(NYSE: IQW) -- http://www.quebecorworld.com/-- provides print solutions to publishers, retailers, catalogers and other businesses with marketing and advertising activities. Quebecor World has approximately 32,000 employees working in more than 140 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 Dec. 13, 2006, Moody's Investors Service assigned a B2 senior unsecured rating to the pending $400 million Senior Notes issue due 2015 of Quebecor World Inc., while the family Probability of Default rating remains B2 and the Loss Given Default of the new issue has been assigned as LGD4, 50%. The outlook for the rating is negative. SAINT VINCENTS: Agrees on Timetable for Filing Monthly Reports -------------------------------------------------------------- Saint Vincents Catholic Medical Centers of New York, its debtor- affiliates and the U.S. Trustee for the Southern District of New York stipulate that the Debtors' monthly operating report for: -- December 2006, will be filed on or before Feb. 15, 2007; and -- January 2007, will be filed on or before March 15, 2007. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 40 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SAINT VINCENTS: Settles OMIG'S Medicaid Overpayment Claims ---------------------------------------------------------- The New York State Office of the Medicaid Inspector General is the office of the New York State Department of Health responsible for, among others, recovering overpayments due the Medical Assistance for Needy Persons program. Each of Saint Vincent Catholic Medical Centers' hospitals renders services to Medicaid recipients and participates in the Medicaid program under provider numbers: Medicaid Provider Hospital Number -------- -------- Mary Immaculate Hospital, Queens 00243861 St. John's Queens Hospital 00244124 St. Vincent's Hospital Manhattan 00243229 St. Vincent's Hospital, Staten Island 00248820 St. Joseph's Hospital Division of CMC 00498531 St. Mary's Hospital of Brooklyn 00729373 Bayley Seton Hospital 00652328 OMIG and the Department conducted several reviews and audits of Medicaid payments made to SVCMC and found Medicaid overpayments totaling $2,733,157. Pursuant to separate Court-approved asset purchase agreements, SVCMC will sell Mary Immaculate and St. John's to Caritas Health Care Planning, Inc., and SV Staten Island to Castleton Acquisition Corporation. In this light, the parties stipulate that: (1) among OMIG, SVCMC and Caritas: * SVCMC will be primarily liable and Caritas will have successor liability for all Medicaid overpayments made under the Mary Immaculate Provider Number and the St. John's Provider Number prior to the Caritas closing date -- the Queens Pre-Closing overpayments; and * OMIG will give SVCMC the opportunity to settle any subsequently determined Queens Pre-Closing overpayments and develop a repayment plan with OMIG in accordance with applicable laws in the ordinary course. OMIG will notify Caritas of the opportunity given to SVCMC. If SVCMC fails to comply with any repayment plan, OMIG will seek to recover any overpayment by withholding its full amount from Medicaid payments due SVCMC under the SV Manhattan Provider Number and from Medicaid payments due any successor in interest to SVCMC. OMIG will not seek to recover from Caritas any Queens Pre-Closing overpayments unless OMIG notifies SVCMC of any default that is not cured immediately. If OMIG is unable to recover from SVCMC or a Successor the full amount of any Queens Pre-Closing overpayments, then OMIG will notify Caritas of the remaining amount owed and afford Caritas The opportunity to request a repayment plan before commencing recoupment of the remaining overpayment from Medicaid payments being made to Caritas for periods after the Caritas Closing Date; (2) among OMIG, SVCMC and Castleton: * SVCMC will be primarily liable and Castleton will have successor liability for any Medicaid overpayments made under the SV Staten Island Provider Number prior to the Castleton closing date -- Staten Island Pre-Closing overpayments; and * OMIG will give SVCMC the opportunity to settle any subsequently determined Staten Island Pre-Closing overpayments and develop a repayment plan with OMIG. OMIG will notify Castleton of the opportunity given to SVCMC. If SVCMC fails to comply with any repayment plan, OMIG will have the right to recover overpayments by withholding its full amount from Medicaid payments due SVCMC under the SV Manhattan Provider Number and from Medicaid payments due any Successor. OMIG will not seek to recover from Castleton any Staten Island Pre-Closing overpayments until OMIG has notified SVCMC of any default, which is not cured immediately. If OMIG is unable to recover from SVCMC or a Successor the full amount of any Staten Island Pre-Closing overpayments, then OMIG agrees to notify Castleton of the remaining amount owed and will afford Castleton the opportunity to request a repayment plan before commencing recoupment of the remaining overpayment from Medicaid payments being made to Castleton for periods after the Castleton Closing Date; (3) between OMIG and SVCMC, SVCMC will be liable for all Medicaid overpayments made to SVCMC for its other hospitals with liabilities. The parties agree that if SVCMC or fails to comply with any repayment plan, OMIG will seek to recover the overpayment by withholding its full amount from Medicaid payments due SVCMC under the SV Manhattan Provider Number and from Medicaid payments due any Successor; (4) the provisions concerning the successor liability of, among others, Caritas and Castleton constitute the only modification to the Medicaid program's usual policies and procedures on successor liability; (5) between OMIG and SVCMC, the amount of overpayments to be paid by SVCMC to settle the audit findings will be $2,186,525, which payment will be made by having OMIG withhold, on a lump sum basis, the full amount from Medicaid payments due SV Manhattan under the SV Manhattan Provider Number; and (6) SVCMC, Caritas, and Castleton waive any right to administrative and judicial review of the determinations in all of the audits. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 40 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SANKATY HIGH: Fitch Holds Rating on $22-Mil. Class E Notes at B --------------------------------------------------------------- Fitch affirms seven classes of notes issued by Sankaty High Yield Partners II, L.P. These affirmations are the result of Fitch's review process and are effective immediately: -- $347,000,000 class A-1 first senior secured notes affirmed at 'AAA'; -- $194,011,897.98 senior secured revolving credit facility affirmed at 'AAA'; -- $75,000,000 class A-2 second senior secured notes affirmed at 'AA'; -- $57,000,000 class B third senior secured notes affirmed at 'A'; -- $77,000,000 class C senior subordinated notes affirmed at 'BBB'; -- $37,500,000 class D subordinated secured notes affirmed at 'BB'; and, -- $22,500,000 class E junior subordinated secured affirmed at notes 'B'. Sankaty High Yield Partners II, L.P. is structured as a market value collateralized debt obligation that invests the proceeds of its note issuance in a diverse portfolio of bank loans, high yield securities, mezzanine investments and structured products. Founded in 1998, Sankaty Advisors, LLC is the fixed income affiliate of Bain Capital Inc. The ratings are based upon the asset pool, the advance rates applicable to those assets and the credit enhancement provided to the various rated classes of debt through subordination and unrated equity capital. The ratings are also derived from Fitch's assessment of the experience and capability of Sankaty Advisors, LLC, as Investment Manager. Fitch will continue to monitor and review this transaction for future rating adjustments. SEW CAL: Posts $1.3 Million Net Loss in Fiscal Year Ended Aug. 31 ----------------------------------------------------------------- Sew Cal Logo Inc. reported a $1.3 million net loss on $2.27 million of revenues for the year ended Aug. 31, 2006, compared with a $105,366 net loss on revenues of $2.32 million for the prior fiscal year. The net decrease in revenues is primarily due to loss of private label business as the market for headwear manufacturing continued moving to Chinese imports. The increase in net loss is primarily due to lower recorded gross profits of $183,694 in fiscal 2006, compared with $423,975 in fiscal 2005, and the $930,899 increase in expenses. The increase in expenses is attributed to the $332,128 increase in general and administrative expenses, the $128,604 increase in officer and administrative compensation, the $88,397 increase in depreciation, and the $48,887 increase in interest expense. In addition, the company incurred consulting, legal and accounting expenses of $167,883 and rent expense of $165,000 in fiscal 2006, absent in fiscal 2005. At Aug. 31, 2006, the company's balance sheet showed $1.7 million in total assets and $2.8 million in total liabilities, resulting in a $1.2 million total stockholders' deficit. Full-text copies of the company's consolidated financial statements for the year ended Aug. 31, 2006, are available for free at http://researcharchives.com/t/s?1775 Based in Los Angeles, Calif., Sew Cal Logo Inc. (OTCBB: SEWCE.OB) -- http://www.sewcal.com/-- produces custom embroidered hats, sportswear and related corporate identification apparel. Clientele includes Fortune 500 companies, major motion picture and television studios, as well as numerous local schools, shops and small businesses. * * * At Aug. 31, 2006, the company had a total stockholders' deficit of $1,162,568. SERVICE WEB: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Service Web Offset Corporation 2500 South Dearborn Street Chicago, IL 60616 Tel: (312) 567-7000 Bankruptcy Case No.: 06-16700 Type of Business: The Debtor is a commercial web printing company. See http://www.swoc.com/ Chapter 11 Petition Date: December 18, 2006 Court: Northern District of Illinois (Chicago) Judge: Carol A. Doyle Debtor's Counsel: Daniel A. Zazove, Esq. Perkins Coie LLP 131 S. Dearborn, Suite 1700 Chicago, IL 60603 Tel: (312) 324-8605 Fax: (312) 324-9400 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Case Paper Company, Inc. Trade debt $1,264,391 900 West 45th Street Chicago, IL 60609 Aflots, Inc. Trade debt $333,449 437 South Dunton Avenue Arlington Heights, IL 60005 Bradner Smith & Company Trade debt $280,094 2300 Arthur Avenue Elk Grove Village, IL 60007 Paper Recovery Loan $258,717 615 Northwest Avenue Northlake, IL 60164 XPEDX Trade debt $141,186 Pitman Company Trade debt $140,655 Spectra Color Corporation Trade debt $136,667 Norkol, Inc. Trade debt $125,360 Lindenmeyr Munroe Trade debt $119,750 Mc Grann Paper Corporation Trade debt $99,696 Finishing Plus, Inc. Trade debt $93,208 Midland Paper Company Trade debt $92,244 Centennial Bindery Trade debt $51,578 Raffin Construction Company Trade debt $51,000 United Bindery Services Inc. Trade debt $47,743 Comet Express, Inc. Trade debt $44,660 Bowater, Inc. Trade debt $38,689 Calmark, Inc. Trade debt $37,329 Uniform Graining Corporation Trade debt $37,258 Strategic Marketing & Trade debt $35,843 Mailing SIERRA INTERNET: Case Summary & 13 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Sierra Internet Services, LLC 3514 East Tropicana, Suite 7 Las Vegas, NV 89121 Bankruptcy Case No.: 06-13951 Type of Business: The Debtor provides internet services. See http://www.sierranv.net/ Chapter 11 Petition Date: December 18, 2006 Court: District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Nancy L. Allf, Esq. Parsons Behle & Latimer 411 E. Bonneville, Suite 100 Las Vegas, NV 89101 Tel: (702) 599-6000 Fax: (702) 599-6021 Estimated Assets: $10,000 to $100,000 Estimated Debts: $1 Million to $100 Million Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Airman, LLC $1,200,000 c/o Shawn W. Miller 228 S. Fourth Street First Floor Las Vegas, NV 89101 Estate of James A. Nelson All tangible and $215,000 c/o Nancy L. Allf, Esq. intangible assets 411 E. Bonneville, Ste. 100 Las Vegas, NV 89101 XO Communications $23,502 8851 Sandy Parkway Sandy, UT 84070 XO Communications $5,678 8851 S. Sandy Parkway Sandy, UT 84070 PC Helpline Computer $4,455 Support Inc. Whittier Technology Center Unit 2073375 Whittier Ave. Victoria, BC American Accounts and $3,355 Advisors 3904 Cedarvale Drive Saint Paul, MN 55122 Century/Tel Phone service $3,002 P.O. Box 6001 Marion, LA 71260 Proxyconn Inc. $2,280 4685 MacArthur Court Suite 400 Newport Beach, CA 92660 Minnesota Unemployment Unemployment insurance $2,905 Insurance P.O. box 64621 Saint Paul, MN 55164 CP Telecom Telephone Service $2,349 P.O. Box 307 Duluth, MN 55801 Amery Telcom $2,300 120 Birch Street Amery, WI 54001 Infinity Access Net $2,069 9751 Hamilton Road Eden Prairie, MN 55344 BPSI Internet $729 2402 University Ave. West, Suite 700 Saint Paul, MN 55114 SKYEPHARMA PLC: Disclosed Total Voting Rights at December 18 ------------------------------------------------------------ SkyePharma PLC, in conformity with the Transparency Directive's transitional provision 6, reported that, at Dec. 18, 2006, its issued share capital consists of 753,764,146 Ordinary Shares with voting rights and no shares are held in treasury. The company disclosed that the total number of voting rights is 753,764,146, which figure may be used by shareholders as the denominator for the calculations to determine if they are required to notify their interest in, or a change in their interest in, SkyePharma under the FSA's Disclosure and Transparency Rules. About the FSA The Financial Services Authority is an independent non- governmental body in the U.K., given statutory powers by the Financial Services and Markets Act 2000. The company is limited by guarantee and financed by the financial services industry. The Treasury appoints the FSA Board. About SkyePharma PLC Headquartered in London, SkyePharma PLC (Nasdaq: SKYE; LSE: SKP) -- http://www.skyepharma.com/-- develops pharmaceutical products benefiting from world-leading drug delivery technologies that provide easier-to-use and more effective drug formulations. There are now 12 approved products incorporating SkyePharma's technologies in the areas of oral, injectable, inhaled, and topical delivery supported by advanced solubilisation capabilities. Going Concern Doubt As reported in the Troubled Company Reporter on Aug. 1, 2006, PricewaterhouseCoopers LLP in London raised substantial doubt about Skyepharma PLC'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 uncertainty as to when Skyepharma's certain strategic initiatives may be concluded and their effect on the company's working capital requirements. SMART PAPERS: Wins Court Approval of Business Reorganization Plan ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved and confirmed SMART Papers LLC's business reorganization plan, paving the way for emergence from Chapter 11 upon the company's sale to an affiliate of Plainfield Asset Management LLC, a Greenwich, Connecticut-based investment advisor. The SMART Papers Plan of Reorganization was approved by the court on Dec. 19, 2006, in Wilmington, Delaware. The plan was accepted by an overwhelming majority of voting creditors. It is also supported by SMART Papers' secured lender, its unsecured creditors committee, Memphis-based International Paper Co. and many other important creditor groups. "We're very pleased with the court's decision," said SMART Papers CEO and President Tim Needham. "SMART Papers has benefited from the loyalty of its customers and vendors as well as the hard work and dedication of its employees. We look forward to reinvigorating and expanding our longtime customer relationships, to launching new and innovative products and to achieving significant growth through 2007 and beyond." Needham expressed appreciation to SMART Papers' creditors and to Plainfield Asset Management for their support in reaching this milestone. Needham said SMART Papers is expected to emerge from Chapter 11 in the next few days under new ownership, with a strong balance sheet, an intact management team and a solid operating platform. About SMART Papers Headquartered in Hamilton, Ohio, Premium Papers Holdco, LLC, -- http://www.smartpapers.com/-- is an independent manufacturer and marketer of a wide variety of premium coated and uncoated printing papers, such as Kromekote, Knightkote, and Carnival. The Company and its debtor-affiliates, SMART Papers LLC and PF Papers LLC, filed for chapter 11 protection on March 21, 2006 (Bankr. D.Del.Case No. 06-10269). Ian S. Fredericks, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors. When the Debtors filed for protection from their creditors, they listed unknown estimated assets and $10 million to $50 million estimated debts. TANK SPORTS: Appoints Dealer Services as Dealer Funding Source -------------------------------------------------------------- Tank Sports disclosed the appointment of Dealer Services Corporation as a primary funding source for dealers who wish to finance their inventory. "This creates a huge opportunity for our dealers to expand their inventory without depleting their normal financial resources," Mike Turber, National Sales Manager and Marketing Director, said. The company also disclosed that by signing up the agreement and being approved by DSC, TANK dealers can take up to 365 days to floor their inventory with an area of flexible payment options not otherwise available through other financing means. Mr. Turber further stated, "By forming this strategic partnership with DSC, we are showing our customers we are interested in developing a long term growth strategy to help them build their business." About Dealer Services Corporation Located in Carmel, Ind., Dealer Services Corporation is an inventory finance company with over 60 full service locations providing national coverage. Led by industry pioneer John Fuller, DSC provides flexible and cost effective inventory financing solutions to dealership operations in the areas of Salvage, Automotive, Rental, RTO (Rent To Own), Powersports and Recreational Marine. Currently, DSC has contract relationships with over 7,000 dealers nationwide. About Tank Sports Headquartered in El Monte, California, Tank Sports, Inc., (OTCBB:TNSP) -- http://www.tank-sports.com/-- develops, engineers, and markets high-performance on-road motorcycles & scooters, off-road all-terrain vehicles (ATVs), dirt bikes and Go Karts through OEMs in China. The company's motorcycles and ATVs products are manufactured in China and Mexico. Going Concern Doubt Kabani & Company, Inc. in Los Angeles, California, raised substantial doubt about Tank Sports, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Feb. 28, 2006. The auditor pointed to the company's net loss and accumulated deficit. TIER TECHNOLOGIES: Posts $9.5 Million Net Loss in Fiscal 2006 ------------------------------------------------------------- Tier Technologies Inc. reported the results for its fiscal fourth quarter and year ended Sept. 30, 2006. Revenues for the fiscal 2006 fourth quarter were $35.1 million, an increase of 3% as compared to $34.1 million in the fiscal 2005 fourth quarter. Revenues for the full fiscal year 2006 were $168.7 million, representing 12% growth as compared to $150.6 million for fiscal year 2005. The company reported a $9.5 million net loss for fiscal 2006, compared to a $1.1 million net income in fiscal 2005. Items impacting the fiscal year 2006 net loss include $8.4 million of costs associated with Tier's financial restatements, of which $1.4 million was related to the reconciliation of certain accounts for one of Tier's payment processing centers, $700,000 of additional accrued forward losses recognized on two contracts, and $900,000 of severance expenses associated with a former CEO. Additionally, Tier recognized $2 million of stock-based compensation expenses for the first time in fiscal 2006 related to the implementation of SFAS 123R, including $200,000 of expenses associated with the acceleration of options relating to the separation of a former CEO. "Tier's fiscal year 2006 top line growth was highlighted by a 39% growth rate in our Electronic Payment Processing segment," said Ronald L. Rossetti, Chairman and Chief Executive Officer of Tier. "We are pleased with the significant strides Tier has made over the past year including strengthening our leadership team, and essentially completing the restatement of our historical financial results. We are committed to creating long-term, sustainable company value for shareholders, and anticipate growing Tier profitably by leveraging our transaction processing strengths into new business opportunities." As of Sept. 30, 2006, Tier has $55.4 million in cash and cash equivalents, and investments in marketable securities, and $12.3 million in restricted investments. Tier has no short-term or long-term debt. At Sept. 30, the company's balance sheet showed $169.5 million in total assets, $35.3 million in total liabilities, and $134.2 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?1774 Segment Revenues Electronic Payment Processing (EPP) segment revenues for the fiscal year 2006 fourth quarter were $14 million, an increase of 29% as compared to $10.9 million in the fiscal 2005 fourth quarter. EPP segment revenues for the full fiscal year 2006 were $78.4 million, an increase of 39% over $56.5 million in 2005, and represented 46% of Tier's total fiscal year 2006 revenues. Fiscal 2006 EPP revenue improvement was driven by an increase in the total number of transactions processed under new and pre- existing contracts as compared to fiscal 2005. Government Business Process Outsourcing segment revenues were $11 million in the fiscal year 2006 fourth quarter, a decrease of 9% as compared to $12.1 million in the fiscal 2005 fourth quarter. For fiscal year 2006, GBPO revenues decreased 1% to $45.5 million from $45.8 million in fiscal 2005. GBPO revenues represented 27% of Tier's total fiscal year 2006 revenues. Factors impacting fiscal 2006 GBPO revenues were $7.8 million of decreased revenues due to the expiration of several contracts in fiscal 2006 and the second half of fiscal 2005, partially offset by $7.5 million of additional revenues from a five-year contract for child support processing services that commenced in the second quarter of fiscal year 2005. Packaged Software and Systems Integration segment revenues declined 9% in the fiscal year 2006 fourth quarter to $10.1 million from $11.1 million in the prior year. For the full fiscal year 2006, PSSI revenues decreased 7% to $44.8 million from $48.4 million in fiscal year 2005. PSSI revenues represented 27% of Tier's total fiscal year 2006 revenues. Fiscal 2006 PSSI revenue decline was primarily attributable to $10.9 million of decreased revenues from contracts that were completed, nearing completion or entering the maintenance phase of the project during fiscal 2006, partially offset by $8.4 million of revenues generated by new contracts entered into during fiscal 2006 and the latter part of fiscal 2005. About Tier Technologies Headquartered in Reston, Virginia, Tier Technologies Inc. -- http://www.tier.com/-- provides information technology solutions and, through its Official Payments Corp. -- http://www.officialpayments.com/-- subsidiary, delivers payment processing solutions for a wide range of markets. * * * As reported in the Troubled Company Reporter on Nov. 29, 2006, Goldman Scarlato & Karon PC, filed in the U.S. District Court for the Eastern District of Virginia, on behalf of persons who purchased or otherwise acquired publicly traded securities of Tier Technologies Inc. between Nov. 29, 2001 and Oct. 25, 2006, inclusive. The lawsuit was filed against Tier and certain officers and directors. The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that Tier issued a series of false and misleading financial statements by overstating company earnings and underreporting company losses. TITAL GLOBAL: Aug. 31 Balance Sheet Upside-Down by $8.3 Million ---------------------------------------------------------------- Titan Global Holdings Inc. filed its financial statements for the year ended Aug. 31, 2006, with the Securities and Exchange Commission on Dec. 14, 2006. At Aug. 31, 2006, the company's balance sheet showed $52 million in total assets and $60.3 million in total liabilities, resulting in an $8.3 million total stockholders' deficit. The company's balance sheet at Aug. 31, 2006, also showed strained liquidity with $19.7 million in total current assets available to pay $51.2 million in total current liabilities. The company reported a $5.4 million net loss for the year ended Aug. 31, 2006, compared with a $4.4 million net loss in fiscal 2005. Revenues for the fiscal year ended Aug. 31, 2006 were $109 million, representing a 382% increase over the previous fiscal year revenues of $22.8 million. The company also reported $7.9 million in earnings before interest, taxes, depreciation and amortization, versus an EBITDA loss of $2.1 million the previous year. The increase in sales is primarily due to the sales achieved in the company's communications division which the company acquired in August 2005 combined with an increase in sales in its electronics and homeland security division. The increase in sales in the electronics and homeland security division is primarily attributable to continued growth and market penetration in the production of quick-turn and prototype printed circuit boards. The increase in net loss is primarily due to the $3.4 million increase in interest expense due to increased indebtedness related to the acquisition of the communications division, and the $695,000 loss on extinguishment of debt incurred in fiscal 2006, versus a $1.4 million gain on extinguishment of debt recorded in fiscal 2005. An amendment to the loan agreements on Aug. 12, 2005 between the company and Laurus resulted, in part, in the cancellation of warrants outstanding to Laurus for the purchase of an aggregate of 3,500,000 shares of common stock and the issuance to Laurus of 2,500,000 shares of common stock. As a result, the restructured debt was recorded at fair value and the company recorded a debt extinguishment gain of $1.4 million in fiscal 2005. On Dec. 30, 2005, the company and Farwell entered into an agreement to issue shares of common Stock in cancellation of a note with a balance of $592,000. Pursuant to the agreement, the company issued to Farwell 9,253,414 shares of common stock at a conversion price of $0.0639 per share when the market price was $0.139 per share. This transaction resulted in the company recording a debt extinguishment loss of $695,000 in fiscal 2006 for the difference between the market price and the conversion price. Full-text copies of the company's consolidated financial statements for the year ended Aug. 31, 2006, are available for free at http://researcharchives.com/t/s?176c About Titan Global Headquartered in Salt Lake City, Utah, Titan Global Holdings Inc. (OTCBB: TTGL) -- http://www.titanglobalholdings.com/-- operates through three divisions: Oblio Telecom Inc., Titan PCB East Inc., and Titan PCB West Inc. Oblio is engaged in the creation, marketing, and distribution of prepaid telephone products for the wire line and wireless markets and other related activities. Titan PCB is a printed circuit board manufacturer providing competitively priced time-sensitive, quality products to the commercial and military electronics markets. Titan PCB offers high layer count, fine line production of rigid, rigid-flex and flex PCBs. * * * At Aug. 31,2006, the company's total stockholders' deficit stood at $8.3 million, compared to a total stockholders' deficit of $7.6 million at May 31, 2006. TOWER AUTOMOTIVE: Files $250 Million Restructuring Term Sheet ------------------------------------------------------------- Tower Automotive Inc. filed a commitment letter and restructuring term sheet with the U.S. Bankruptcy Court for the Southern District of New York. Three significant bondholders have agreed to underwrite a $250 million equity rights offering that will form the basis of a reorganization plan and Tower's emergence from bankruptcy. Funds managed by Strategic Value Partners, LLC, Wayzata Investment Partners LLC and Stark Investments, who collectively own in excess of $225 million of unsecured claims against Tower, have agreed to backstop a rights offering to eligible accredited unsecured creditors and purchase their respective pro rata shares in the rights offering, subject to the terms and conditions outlined in the commitment letter. The commitment is subject to Bankruptcy Court approval, as well as various conditions precedent and deadlines outlined in the restructuring term sheet. Under the term sheet, the senior secured debt would be refinanced and paid in full and all allowed administrative and priority claims would be paid in full. Unsecured creditors as a group would be entitled to certain cash and warrants, with eligible unsecured creditors being able to participate in the rights offering. In connection with the restructuring term sheet, Tower Automotive and the prospective investors are continuing discussions with Tower's Debtor-in-Possession lenders on a plan for the maturity of the current DIP facility, which expires on Feb. 2, 2007. "This commitment letter with its significant equity investment from our bondholders represents a major step toward completing our reorganization plan. We are proud to have been able to attract this significant capital infusion to our company and to the automotive supply industry," said Kathleen Ligocki, President and Chief Executive Officer. During the bankruptcy process, Tower has undertaken a dramatic transformation of its North American operations, closing almost half its U.S. plants, driving significant manufacturing productivity improvements, successfully negotiating settlements with all ten U.S.-based labor unions and winning over $170 million of new business awards. "As challenging as this journey has been, the restructuring process has allowed us to accelerate improvements needed to emerge a much healthier, leaner and stronger company," Ms. Ligocki said. Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. USEC INC: Board Appoints Joseph Doyle as New Director ----------------------------------------------------- The board of directors of USEC Inc. increased the number of directors from eight to nine and elected Joseph T. Doyle as a new director. Mr. Doyle will serve on the company's Audit, Finance and Corporate Responsibility Committee. Mr. Doyle has more than 35 years of business experience focused on finance and accounting, including service as the chief financial officer or in senior financial positions in three other businesses in the nuclear industry: Westinghouse Electric Company, General Dynamics Corporation and Foster Wheeler, Inc. He also previously served as chief financial officer of U.S. Office Products and Allison Engine Company. He spent the first 17 years of his career with the accounting firm of Peat, Marwick, Mitchell & Co. (now KPMG) where he was a partner for 8 years and the partner in charge of the audit practice in the firm's Pittsburgh, Pa. office. He currently serves on the board of directors for several companies in which he holds investments, as well as several not-for-profit organizations. For his services on the Board, Mr. Doyle will receive the company's standard compensation for non-employee directors. "We are delighted to add Joe's extensive experience and financial expertise to our board," James R. Mellor, chairman, said. Bethesda, Maryland-based USEC Inc. (NYSE:USU) is a global energy company that supplies enriched uranium fuel for commercial nuclear power plants. * * * As reported in the Troubled Company Reporter on Oct. 23, 2006, Moody's Investors Service in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the North American Metals & Mining sectors, confirmed its B1 Corporate Family Rating for USEC Inc. and its B3 rating on the Company's $150 million issue of 6.75% senior unsecured notes due 2009. Moody's also assigned an LGD5 rating to those loans, suggesting noteholders will experience a 75% loss in the event of a default. USG CORP: Makes Final $3.05 Billion Payment to Asbestos Trust ------------------------------------------------------------- USG Corporation made the final payment to the United States Gypsum Asbestos Personal Injury Settlement Trust. The $3.05 billion payment represents the final amounts due under the previously announced settlement agreement and plan of reorganization that enabled the company to emerge from its reorganization proceedings on June 20, 2006. Under terms of the company's bankruptcy plan of reorganization, USG agreed to make three payments totaling $3.95 billion to a trust that will compensate asbestos personal injury claimants. The first payment of $900 million was made on June 20, 2006. The company elected to combine into a single $3.05 billion payment the second required installment, due 10 days following the adjournment of the 109th Congress, and the third installment, due 180 days following the second payment. Accelerating the third payment permits the company to maximize 2006 deductions necessary for a $1.1 billion federal tax refund expected to be received in 2007. "We achieved the goals we established when we filed for chapter 11 protection in 2001," said William C. Foote, USG chairman and CEO. "Our shareholders' interests were preserved, our creditors are being paid in full with interest, asbestos personal injury claims have been permanently resolved and USG's operations are stronger than ever before." "We are optimistic about USG's future and look forward to continued success implementing our strategic plans, unencumbered by asbestos liabilities," Mr. Foote continued. The payment was funded using: * cash on hand, * proceeds from the $500 million senior note offering completed in November and * borrowings under the bank term loan and tax bridge term loan facilities established in August. A federal tax refund of $1.1 billion will be used to repay borrowing under the tax bridge term loan facility. New Shareholder Rights Plan USG has adopted a new shareholder rights plan with a 15% share ownership trigger. USG determined not to extend the term of the existing reorganization rights plan with a 5% share ownership trigger that it adopted in connection with the company's emergence from reorganization proceedings. As a result, the reorganization rights plan will expire on Dec. 31, 2006. The new plan will take effect upon expiration of the reorganization rights plan. Under the new plan, if any person acquires beneficial ownership of 15% or more of USG's voting stock, shareholders other than the 15% triggering shareholder will have the right to purchase additional shares of USG common stock at half their market price, thereby diluting the triggering shareholder. The new plan is similar to the rights plan that USG had in effect from the 1980s through its emergence from reorganization proceedings earlier this year. Pursuant to USG's prior agreement with Berkshire Hathaway Inc. as part of Berkshire Hathaway's commitment to backstop the $1.8 billion rights offering that USG completed in August, Berkshire Hathaway may acquire up to 40% of USG's shares through Aug. 1, 2013 without triggering the rights. The USG Board also adopted a Three-Year Independent Director Evaluation policy with respect to the rights plan. Under the TIDE policy, a Board committee composed solely of independent directors will review the rights plan at least once every three years to determine whether to modify the plan in light of all relevant factors. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. The Debtors emerged from bankruptcy protection on June 20, 2006. * * * As reported in the Troubled Company Reporter on Nov. 15, 2006 Standard & Poor's Ratings Services assigned its 'BB+' debt rating to the proposed $500 million senior unsecured notes of USG Corp., due 2016. The rating outlook is stable. VALASSIS COMMS: Amending ADVO Merger Agreement and Settling Suit ---------------------------------------------------------------- Valassis Communications, Inc., and ADVO, Inc., disclosed that they have amended the terms of their definitive merger agreement. Under the amended terms, Valassis will acquire all of the outstanding common shares of ADVO stock for $33 per share in cash, or an aggregate of approximately $1.2 billion, including approximately $125 million in existing ADVO long-term debt which Valassis expects to refinance. As part of the agreement, the companies have agreed to dismiss with prejudice their pending litigation in the Court of Chancery for New Castle County, Delaware. Valassis' obligations under the amended merger agreement are not conditioned upon obtaining financing, and there are no conditions to close other than the approval of ADVO stockholders at a special shareholders meeting. The parties expect to close the transaction during the first quarter of 2007. In the event that the closing of the transaction is delayed after February 28, 2007, for reasons other than to obtain ADVO shareholder approval, Valassis will pay ADVO stockholders interest on the $33 per share purchase price at a rate of approximately 11 percent per annum, with the rate increasing every month thereafter. Valassis further reported that, as a result of the extensive discovery proceedings in the litigation, including the continued review of over one million documents produced by ADVO and the depositions of over 30 ADVO witnesses, Valassis has determined that the evidence will not support the conclusion that ADVO or any of its directors, officers, agents or representatives engaged in any fraud or other misconduct in connection with the parties' entry into their original merger agreement. "We are pleased to have reached this amended agreement with ADVO and put the litigation behind us," said Alan F. Schultz, Chairman, President and Chief Executive Officer of Valassis. "As we have maintained since the execution of the original agreement, we believe in the strategic value of an ADVO and Valassis combination and look forward to becoming a more diversified company with the benefits it will bring." S. Scott Harding, Chief Executive Officer of ADVO, said, "We are glad to have reached an agreement with Valassis that allows us to move forward with a merger that has always made tremendous sense. We look forward to focusing our energy on creating value through combining and growing our businesses." The transaction will create the nation's largest integrated media services provider. T he combination will feature the most comprehensive product and customer offering in the industry serving 20,000 advertisers worldwide, including 94 of the top 100 advertisers in the United States. The combined company will be positioned to capture growth across the expanded product and service portfolio, delivering customized, targeted solutions on a national, regional, zip code, sub-zip code and household basis. ADVO's shared mail distribution business penetrates up to 114 million households, or 90% of U.S. homes, adding substantially to Valassis' weekly newspaper distribution of over 60 million households. The combined company will have 7,900 employees with operations in nine countries. About ADVO Based in Windsor, Conn., ADVO, Inc. -- http://www.ADVO.com/-- is a direct mail media company, with annual revenues of $1.4 billion. Serving 17,000 national, regional and local retailers, the company reaches 114 million households, more than 90% of the nation's homes, with its ShopWise(R) shared mail advertising. ADVO employs 3,700 people at its 23 mail processing facilities, 33 sales offices. About Valassis Headquartered in Livonia, Michigan, Valassis Communications Inc. (NYSE: VCI) -- http://www.valassis.com/-- provides marketing services to consumer-packaged goods manufacturers, retailers, technology companies and other customers with operations in the United States, Europe, Mexico and Canada. Valassis' products and services portfolio includes: newspaper-delivered promotions and advertisements such as inserts, sampling, polybags and on-page advertisements; direct-to-door advertising and sampling; direct mail; Internet-delivered marketing; loyalty marketing software; coupon and promotion clearing; and promotion planning and analytic services. Valassis has been listed as one of FORTUNE magazine's "Best Companies to Work For" for nine consecutive years. Valassis subsidiaries include Valassis Canada, Promotion Watch, Valassis Relationship Marketing Systems, LLC and NCH Marketing Services, Inc. * * * As reported in the Troubled Company Reporter on Nov. 1, 2006, Moody's Investors Service downgraded Valassis Communications, Inc.'s senior unsecured note ratings to Ba1 from Baa3. Moody's also assigned a Ba1 Corporate Family Rating, Ba1 Probability of Default Rating, and LGD4 loss given default assessments to Valassis' debt securities. The ratings remain on review for downgrade. WASTE SERVICES: Issues 9.9MM of Common Shares to Kelso Affiliates ----------------------------------------------------------------- Waste Services, Inc., completed the issuance of approximately 9.9 million shares of common stock at a price of $9.50 per share to Westbury (Bermuda) Limited and affiliates of Kelso & Company and Prides Capital, LLC and has exchanged and redeemed all of the 17.75% Series A Preferred Stock, all of which were owned by affiliates of Kelso & Company. The company also disclosed that Charlie McCarthy has been appointed a director of the company for a term extending until 2009. Mr. McCarthy is a co-founder of Prides Capital, LLC, a Boston based investment management firm. Prides Capital, LLC and its affiliates currently own approximately 12.7% of the company's outstanding shares. David Sutherland-Yoest, chairman and chief executive officer, stated "Proceeds from the Kelso preferred enabled us to acquire the JED landfill, the cornerstone of our growing asset base in Florida. I am extremely excited to end 2006 with that preferred stock no longer on our balance sheet and by the support of our investors who made it possible. With the continued growth in our business, we believe that our 2007 financial results will be very well received in the markets." A Delaware corporation, Waste Services Inc. (NASDAQ: WSII) -- http://www.wasteservicesinc.com/-- is a multi-regional, integrated solid waste services company, providing collection, transfer, landfill disposal and recycling services for commercial, industrial and residential customers in the United States and Canada. * * * As reported in the Troubled Company Reporter on Sept. 25, 2006, Moody's Investors Service, in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. solid waste sector, confirmed its B3 Corporate Family Rating for Waste Services, Inc. As reported in the Troubled Company Reporter on Dec. 20, 2006, Standard & Poor's Ratings Services assigned its 'B' bank loan and '1' recovery ratings to Waste Services Inc.'s proposed $245 million senior secured tranche D term loan due 2011. WEIGHT WATCHERS: Launches Self-Tender Offer for 8.3 Million Shares ------------------------------------------------------------------ Weight Watchers International, Inc., commenced a "modified Dutch auction" self-tender offer for up to 8.3 million shares of its common stock at a price per share not less than $47 and not greater than $54. The tender offer is expected to expire at 12:00 midnight, New York City time, on Jan. 18, 2007. A "modified Dutch auction" self-tender offer allows shareholders to indicate how many shares and at what price within the company's specified range they wish to tender. Based on the number of shares tendered and the prices specified by the tendering shareholders, the company will determine the lowest price per share within the range that will enable it to purchase up to 8.3 million shares. The company will not purchase shares below a price stipulated by a shareholder, and in some cases, may actually purchase shares at a price above a shareholder's indication under the terms of the tender offer. The company's directors and executive officers and Artal Holdings Sp., its majority shareholder, have advised the company that they do not intend to tender any shares in the tender offer. Prior to commencing the tender offer, the company also entered into an agreement to purchase shares from Artal, which owns approximately 55.2% of the company's outstanding shares of common stock. Under the terms of this agreement, Artal agreed to sell to the company a number of shares of common stock so that Artal's percentage ownership interest in the company's outstanding shares of common stock after the tender offer and such purchase from Artal will be substantially equal to its current level. This purchase will be at the same price per share as paid in the tender offer. The purchase is scheduled to occur 11 business days following the expiration date of the tender offer. The company anticipates paying for the shares purchased through the tender offer and from Artal and related fees and expenses with up to approximately $1.2 billion in new borrowings it is currently negotiating. A portion of these borrowings is also expected to be used to refinance the indebtedness of its subsidiary, WeightWatchers.com. The company has obtained a commitment from Credit Suisse to provide it with additional capacity under its senior credit facility to finance the purchases and such refinancing. The tender offer is not conditioned upon the receipt of financing or any minimum number of shares being tendered, but is subject to other customary conditions. Credit Suisse Securities (USA) LLC will serve as dealer manager, Georgeson Inc. will serve as information agent and Computershare Trust Company, N.A. will serve as the depositary for the tender offer. Shareholders and investors who have questions or need assistance may call Georgeson Inc. at 866-785-7396 in the United States and Canada, and 212-440-9800 for all other countries. Headquartered in New York, U.S.A., Weight Watchers International Inc. (NYSE: WTW) -- http://www.weightwatchersinternational.com/-- provides of weight management services, with a presence in 30 countries around the world. The Company serves its customers through Weight Watchers branded products and services, including meetings conducted by Weight Watchers International and its franchisees. At Sept. 30, 2006, the company's balance sheet showed a stockholders' deficit of $103,269,000, compared to a deficit of $80,651,000 at Dec. 31, 2005. * * * As reported in the Troubled Company Reporter - Europe on Oct. 19, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology for the U.S. consumer services sector, the rating agency confirmed its Ba1 Corporate Family Rating for Weight Watchers International, Inc. WEIGHT WATCHERS: Sept. 30 Balance Sheet Upside-Down by $103 Mil. ---------------------------------------------------------------- Weight Watchers International, Inc., has filed its financial statements for the quarter ended Sept. 30, 2006, with the Securities and Exchange Commission. The company reported a $50,615,000 net income on $284,753,000 of net revenues for the three months ended Sept. 30, 2006, versus a $49,452,000 net income on $257,483,000 of net revenues for the three months ended Oct. 1, 2005. At Sept. 30, 2006, the company's balance sheet showed $935,098,000 in total assets and $1,038,367,000 in total liabilities, resulting in a stockholders' deficit of $103,269,000. At Dec. 31, 2005, the company's stockholders' deficit was $80,651,000. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1777 Headquartered in New York, U.S.A., Weight Watchers International Inc. (NYSE: WTW) -- http://www.weightwatchersinternational.com/-- provides of weight management services, with a presence in 30 countries around the world. The Company serves its customers through Weight Watchers branded products and services, including meetings conducted by Weight Watchers International and its franchisees. * * * As reported in the Troubled Company Reporter - Europe on Oct. 19, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology for the U.S. consumer services sector, the rating agency confirmed its Ba1 Corporate Family Rating for Weight Watchers International, Inc. WINN-DIXIE: Court Approves XL and Marsh USA Insurance Settlement ---------------------------------------------------------------- The Honorable Jerry A. Funk of the U.S. Bankruptcy Court for the Middle District of Florida approved a settlement agreement among Winn-Dixie Stores Inc. and its debtor-affiliates, XL Insurance America, Inc., and Marsh USA Inc. Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida, recounted that in 2004, Winn-Dixie Stores Inc. required commercial property insurance to guard against a variety of perils that could harm and disrupt its business as a major retail food chain, including hurricanes. The Debtor engaged Marsh to advise it regarding the procurement of property insurance and to procure insurance meeting its needs. In the spring of 2004, Winn-Dixie instructed Marsh to procure commercial excess property insurance from XL as part of its comprehensive, multiple-layer property insurance program. Through Marsh, Winn-Dixie purchased from XL a commercial excess property insurance policy (No. US0006556PR04A). In 2004, four hurricanes caused significant windstorm and flood damage to numerous facilities of the Debtors, including retail stores and manufacturing facilities located in Alabama, Florida, Georgia, Mississippi, South Carolina, North Carolina, Virginia, and the Bahamas. In a previous settlement of the Debtors' claims for insurance coverage for losses incurred during the 2004 Hurricane Season, all insurers whose policies were implicated by the 2004 hurricane losses paid their shares of those losses, except for XL, which declined coverage and refused to contribute. The Court approved the settlement on Nov. 17, 2005. The Policy was in force at the time that Winn-Dixie suffered losses from the 2004 Hurricane Season. The Policy covers losses in excess of $50,000,000. Based upon Winn-Dixie's loss assessments, no single hurricane resulted in losses in excess of $50,000,000, but the aggregate sum of the losses from the four hurricanes exceeded the amount. Winn-Dixie tendered its hurricane claims to XL under the Policy, which gave rise to a coverage dispute. The Debtor contended that XL must indemnify it for a portion of its losses because the Policy permitted the annual aggregation of hurricane losses for purposes of exhausting the underlying coverages. XL, on the other hand, contended that it had no duty to indemnify Winn-Dixie for any portion of the hurricane losses because the Policy did not allow the annual aggregation of hurricane losses and, thus, had not been triggered. Winn-Dixie further contended that in the event it was determined that the Debtor was not entitled to the coverage it was seeking from XL under the Policy, then, alternatively, Marsh was liable to the Debtor for its failure to properly procure the necessary coverage. Marsh contended that it was not liable to Winn-Dixie. On Aug. 12, 2005, Winn-Dixie Stores commenced a suit against XL in the U.S. District Court for the Northern District of Georgia. Winn-Dixie added claims against Marsh by an Amended Complaint filed on Dec. 21, 2005. To avoid the uncertainty, cost and effort that further litigation would entail, the parties entered into the Settlement Agreement. The salient terms of the Settlement Agreement are: (a) XL and Marsh will collectively pay Winn-Dixie $7,000,000 for hurricane losses it sustained during the 2004 Hurricane Season; (b) In exchange for payment of the settlement sum, Winn-Dixie will release XL and Marsh from all claims, damages, losses, causes of action, costs and expenses that the Debtor could have asserted against them with respect to procurement of the Policy or indemnity under the Policy for losses sustained during the 2004 Hurricane Season and will promptly seek dismissal of the Action; and (c) XL and Marsh will not initiate or file any claim or action against Winn-Dixie, any of Winn-Dixie's insurers, or any other person or entity for payment or reimbursement of the settlement sum. XL and Marsh will waive any rights of subrogation they may have under the Policy with respect to the matters covered by the Settlement Agreement. Ms. Jackson asserted that the terms of the Settlement Agreement are fair and equitable and in the best interests of the Debtors' estates. The Settlement allows Winn-Dixie to recover a substantial sum, under terms favorable to it, and without the need for further expenditure of unnecessary administrative expenses, thereby preserving the resources of the estates. Ms. Jackson explained that, if XL had participated in the 2005 Insurance Settlement, its payment to the Debtors would have been about $6,200,000 -- less than the $7,000,000 that will be paid to the Debtors if the current settlement with XL and Marsh is approved. In the Action, Ms. Jackson added, the Debtors have claimed entitlement to damages totaling around $8,900,000 exclusive of attorneys' fees and interest, based on what the Debtors contended was the full value of their losses, rather than the compromise valuation previously negotiated with and paid by the Debtors' other insurers under the 2005 Insurance Settlement. However, she noted, recovering that larger sum would be contingent upon complete success on all contested liability and damages issues. In addition to disputing liability, XL also disputed Winn-Dixie's valuation of their losses, contending that if liability were established, the Debtors should be entitled to recover no more than nearly $4,400,000. Headquartered in Jacksonville, Florida, Winn-Dixie Stores Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates 527 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. The Honorable Jerry A. Funk confirmed Winn-Dixie's Joint Plan of Reorganization on Nov. 9, 2006. Winn-Dixie emerged from bankruptcy on Nov. 21, 2006. (Winn-Dixie Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WINN-DIXIE STORES: Issues New Common Stock to Unsecured Creditors ----------------------------------------------------------------- Winn-Dixie Stores, Inc. has made the initial distribution of its new common stock to pre-petition unsecured creditors entitled to receive the stock under Winn-Dixie's Plan of Reorganization. Winn-Dixie emerged from bankruptcy on Nov. 21, 2006. The new common stock currently trades on the NASDAQ Global Market on a when-issued basis under the symbol WINNV. The Company expects the stock to begin trading under the symbol "WINN" shortly. Winn-Dixie has selected American Stock Transfer & Trust Company to serve as the transfer agent for its new common stock. American Stock Transfer & Trust Company may be reached: American Stock Transfer & Trust Company Operations Center 6201 15th Avenue Brooklyn, NY 11219 Toll-free: (888) U-CALL-WD (888-822-5593) World Wide: (718) 921-8347 Headquartered in Jacksonville, Florida, Winn-Dixie Stores Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates 527 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. The Honorable Jerry A. Funk confirmed Winn-Dixie's Joint Plan of Reorganization on Nov. 9, 2006. Winn-Dixie emerged from bankruptcy on Nov. 21, 2006. WOODWIND & BRASSWIND: Hires Adelman Gettleman as Bankr. Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Indiana authorized Dennis Bamber Inc., dba The Woodwind & the Brasswind, to employ Adelman, Gettleman, Ltd., as its bankruptcy counsel. Adelman Gettleman will: a) provide the Debtor legal advice with respect to its powers, duties, rights and obligations as debtor-in-possession in the continued management of its property and affairs; b) attend meetings and negotiate with representatives of creditors and other parties-in-interest; c) assist the Debtor in the formulation, preparation, implementation and consummation of a reorganization plan and disclosure statement, if necessary or appropriate, and all related agreements or documents and take any actions necessary to achieve confirmation of the plan; d) examine and take all actions necessary to protect and preserve the Debtor's estate, including the prosecution of any litigation as may be necessary or appropriate on behalf of the Debtor's estate; e) prepare on behalf of the Debtor, including applications, motions, complaints, orders, reports and other legal papers as may be necessary; and f) perform all other legal services and provide any legal advice to the Debtor as is necessary. The firm's professionals bill: Professional Hourly Rate ------------ ----------- Howard L. Adelman, Esq. $395 Chad H. Gettleman, Esq. $395 Henry B. Merens, Esq. $395 Brad A. Berish, Esq. $365 Mark A. Carter, Esq. $365 Adam P. Silverman, Esq. $295 Nathan Q. Rugg, Esq. $245 Stanley F. Orzula, Esq. $215 Mr. Adelman assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in South Bend, Indiana, The Woodwind & the Brasswind -- http://www.wwbw.com/-- sells musical instruments and accessories. The Company filed for chapter 11 protection on Nov. 24, 2006 (Bankr. N.D. Ind. Case No. 06-31800). Chad H. Gettleman, Esq., Henry B. Merens, Howard L. Adelman, Esq., and Nathan Q. Rugg, Esq., at Adelman, Gettleman, Ltd., represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors appointed in the Debtors' cases has selected James M. Carr, Esq., at Baker & Daniels LLP as its counsel. When the Debtors filed for protection from their creditors, they estimated assets and debts between $1 million and $100 million. * BOOK REVIEW: Wildcatters: A Story of Texans, Oil & Money ---------------------------------------------------------- Author: Sally Helgesen Publisher: Beard Books Paperback: 198 pages List Price: $34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/1587982161/internetbankrupt Following three generations of Texas oilmen, Wildcatters covers the history of this field of business that had its beginnings in the late 1800s. Oil exploration, drilling, and refinement in Texas have always had the image as a rough-and-tumble business attracting the adventurous and bold. Few know much about this field beyond its somewhat mythic, larger-than-life image. Ms. Helgesen does not spoil the image. If anything, her book gives it support by her portrayals of a number of men, and a few women relations of theirs, of the different generations. In those early days of the oil industry in the United States, Texas was the "wild cutting edge of the industry." In those days before the big oil companies such as Rockefeller's Standard Oil and later Exxon and Mobil had gained control of the business, it was "open to any white man who could hustle up the money for a rig, talk a farmer into leasing the mineral rights to his land, and then maintain enough optimism or pigheadedness to drill up his leasehold until he either found oil or convinced himself that he had made a mistake." Ms. Helgesen's portrayal of the first generation of Texas oilmen connotes their characteristic energy, enthusiasm, risk-taking, and also their visions of success, which were the basis for the myth that grew up around them. The ones who did tap into deposits of oil used the profits to buy up new leases and founded a dynasty. Monty Moncrief was one such man. A good part of Wildcatters focuses on the life of Dick Moncrief, Monty's grandson. Ms. Helgesen sees a symmetry between the first generation and the third generation of Texas oilmen. The second, or middle generation, was left mainly to the task of overseeing the dynasties founded by their fathers. [This was in the middle decades of the 1900s. The oil giants such as Exxon and Mobil had looked abroad, mostly in the Middle East, for vast deposits of oil they could develop by dealing with an Arab sheik or regional tyrant instead of having to negotiate with numbers of individual farmers and other landowners as they had had to do in Texas in the first phases of the oil industry. Besides, all the easy drilling for oil had been done in Texas.] With the giant oil companies supplying the U.S. from abroad with all the oil it needed at low cost, the Texas oil business slowed down. "The young bulls of the middle generation found no terrain on which they might challenge the old bulls' achievements." [Thus this generation spent their time golfing and card-playing at the country clubs and managing the real estate and other investments their fathers had made with the fortunes they earned from drilling for oil.] But circumstances changed for the third generation. In 1973, the cartel named Organization of Petroleum Exporting Countries decided to raise the prices of their oil. This suddenly made the Texas oil fields competitive again, and also presented opportunities for developing oil fields overseas. Dick Moncrief and other third-generation oilmen throughout Texas sprang into action to pursue the opportunities that had unexpectedly opened up for them. Separated by decades in age from their pioneering grandfathers and facing government bureaucratic regulations in the oil industry, the third generation nonetheless showed something of the same initiative, boldness, enterprise, and ambition as the first generation. By finding overlooked or underdeveloped oil fields in foreign countries, forming partnerships with Mexico's state-controlled oil industry, reviving Texas's moribund oil business, and searching for new oil fields in the West, the younger generation of Texas oilmen made their mark as their grandfathers had. Dick Moncrief was the behind-the-scenes organizer of a plan to increase production at an Israeli oil field and he sought new fields in the Rocky Mountains. Wildcatters portrays representative Texas oilmen, and is a well- woven narrative about this legendary sector of American business. Beyond this, Ms. Helgesen sees the Texas oil business as exemplifying and to some degree preserving the frontier spirit of overcoming challenges with determination, ingenuity, confidence, and optimism. As she writes in her Preface, her experiences in Texas in writing the book turned her into an "optimist in regard to the American free enterprise system, and filled [her] with hope for the future of this country." Sally Helgesen works as a speaker and consultant in the areas of leadership and workplace change. She is the author of five books in these areas, one of which, THE FEMALE ADVANTAGE - WOMEN'S DAY OF LEADERSHIP, was cited in the Wall Street Journal as one of the all-time best books on leadership. Articles on her work have appeared in Fortune and other leading business periodicals. ********* 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, Shimero Jainga, Joel Anthony G. Lopez, Robert Max Quiblat, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q. Salta, 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 ***