T R O U B L E D C O M P A N Y R E P O R T E R Thursday, January 4, 2007, Vol. 11, No. 3 Headlines AB LIQUIDATING: Court Moves Claims Objection Deadline to July 30 ADVANCED MARKETING: Case Summary & 40 Largest Unsecured Creditors AVITAR INC: BDO Seidman LLP Raises Going Concern Doubt B-FAST CORPORATION: Withum Smith Raises Going Concern Doubt BIOVEST INTERNATIONAL: Aidman Piser Raises Going Concern Doubt CALA CORP: Earns $55,780 of Net Income in Quarter Ended Sept. 30 CARBIZ INC: October 31 Stockholders' Deficiency Rises to $3.4 Mil. CERADYNE INC: Gets $133 Million Body Armor Order from U.S. Army CERADYNE INC: Gets $3.8 Million in Total Orders for HUMVEE Armor COLLINS & AIKMAN: Wants Solicitation Process of Amended Plan Fixed COLLINS & AIKMAN: Inks Fifth Amendment of DIP Loan with JPMorgan COMPLETE RETREATS: Court Okays Fairfax as Panel's Forensic Advisor COMPLETE RETREATS: Wants to Sell 3 Real Properties for $3.14 Mil. CWALT INC: Fitch Puts Low-B Ratings on $5.4 Million Class Certs. CWMBS INC: Fitch Rates $2.082 Million Class B-3 Certs. at BB DELPHI CORP: Moody's Rates $2.49 Bil. 2nd Priority Loan at Ba3 DELTA AIR: Official Committee Taps Gordon Bethune as Consultant DELTA AIR: Can Amend and Assume SAP Software License Pact DURA AUTOMOTIVE: Trustee Appoints HSBC Bank to Creditors' Panel EASTMAN KODAK: Inks Agreements with Sony; Ends Patent Dispute ENTERGY NEW ORLEANS: Court OKs Stipulation with Bank of NY, et al. EUROPEAN REINSURANCE: Chapter 15 Petition Summary FLYI INC: Court Approves Stipulation on Kerry Skeen's Claim FOAMEX INT'L: Court Approves FMXI's Conversion Into Delaware LLC FOAMEX INT'L: Foamex LP Inks Stipulation Resolving Alcazar Action FORD MOTOR: U.S. December Sales Down 13%; Full 2006 Sales Down 8% FREEDOM PACKAGING: Case Summary & 20 Largest Unsecured Creditors GALAXY MINERALS: Voluntary Chapter 11 Case Summary GENERAL MOTORS: U.S. December Sales Down 9.6%; 2006 Sales Down 9% GLOBAL POWER: Wants to Reject Executory and Lease Contracts GLOBAL POWER: Wants to Removal Period Extended Until March 27 GRANITE BROADCASTING: Equity Holders Want Own Committee Formed GRANITE BROADCASTING: Wants to Assume CBS/WB Settlement Agreement INCO LIMITED: Shareholders Approve Merger with Itabira Canada INDYMAC MBS: Fitch Rates $4.7 Million Certificates at BB J.P. MORGAN: Moody's Rates Class M-10 Certificates at Ba1 KAISER ALUMINUM: Names Martin Carter as VP in Common Alloy Unit LASALLE COMMERCIAL: Fitch Puts Low-B Ratings on $15.2 Mil. Certs. LB-UBS COMMERCIAL: Moody's Puts Low-B Ratings on 6 Cert. Classes LEHMAN MORTGAGE: Fitch Puts Low-B Ratings on $4.7 Million Certs. LEVEL 3: Completes $744 Mil. Cash Acquisition of Broadwing Corp. LUMTRON TECH: Case Summary & 20 Largest Unsecured Creditors MSGI SECURITY: Amper Politziner Raises Going Concern Doubt MUSICLAND HOLDING: Court Extends Plan's Effective Date to Feb. 28 MUSICLAND HOLDING: Tracy Kirkman, Et al. Want 2 Classes Certified NORTH AMERICA STEAMSHIPS: Chapter 15 Petition Summary NVF COMPANY: Wants Exclusive Plan-Filing Period Moved to Feb. 16 OWENS CORNING: Court Okays Stipulation Resolving Mayer's Claim OWENS CORNING: Wants Burchfield Whitmire Settlement Approved PIEDMONT/HAWTHORNE: Moody's Rates Proposed Credit Facility at B1 PSIVIDA LIMITED: Lender Agrees to Forbearance on Defaults RESIDENTIAL ACCREDIT: Fitch Puts Low-B Ratings on Two Class Certs. ROUGE INDUSTRIES: Wants Plan-Filing Period Extended to Jan. 19 SAINT VINCENTS: Can Assume and Assign Queens Tower Lease SAINT VINCENTS: Exclusive Plan-Filing Period Extended to Jan. 19 SERACARE LIFE: Files Amended Disclosure Statement in California SIRICOMM INC: BKD LLP Raises Going Concern Doubt SMART PAPERS: Sells Assets to Plainfield & Emerges from Chapter 11 SOUNDVIEW HOME: Fitch Rates Privately Offered Class Certs. at BB+ SOUNDVIEW HOME: Moody's Cuts Rating on Class M-3 Certs. to Ba2 VISANT HOLDING: Moody's Revises Outlook to Developing WHX CORP: OMG Buys Fastener Biz from Illinois Tools for $26 Mil. WINN-DIXIE STORES: Balks at Internal Revenues' Claims WINN-DIXIE: Court Okays Coca-Cola & VR Global Settlement Pact * Thacher Proffitt Appoints Cullen, Barbiere and Oloko as Partners * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* AB LIQUIDATING: Court Moves Claims Objection Deadline to July 30 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California, San Jose Division, gave AB Liquidating Corporation fka Adaptive Broadband Corporation until July 30, 2007, to file objections to claims and interests filed in its chapter 11 case. The Debtor asked for the extension to prepare objections which may be required if there is a distribution to shareholders. The Debtor's deadline for filing objections to claims expired on Dec. 31, 2006. Headquartered in Sunnyvale, California, AB Liquidating Corp. fka Adaptive Broadband Corporation provided technology for the deployment of broadband wireless communication over the Internet. The Company filed for chapter 11 protection on July 26, 2001 (Bankr. N.D. Cal. Case No. 01-53685). David M. Bertenthal, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP represents the Debtor in its bankruptcy case. Cheryl Jordan, Esq., at the Law Offices of Murray and Murray represents the Official Committee of Unsecured Creditors. The Bankruptcy Court confirmed the Debtor's chapter 11 Plan on Feb. 28, 2002, and the Plan took effect on Sept. 6, 2002. ADVANCED MARKETING: Case Summary & 40 Largest Unsecured Creditors ----------------------------------------------------------------- Lead Debtor: Advanced Marketing Services, Inc. 5880 Oberlin Drive San Diego, CA 92121 Bankruptcy Case No.: 06-11480 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Publishers Group Incorporated 06-11481 Publishers Group West Incorporated 06-11482 Type of Business: Advanced Marketing provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people Worldwide. See http://www.advmkt.com/ Chapter 11 Petition Date: December 29, 2006 Court: District of Delaware (Delaware) Judge: Christopher S. Sontchi Debtors' Counsel: Chun I. Jang, Esq. Mark D. Collins, Esq. Paul Noble Heath, Esq. Richards, Layton & Finger, P.A. 920 North King Street P.O. Box 551 Wilmington, DE 19899 Tel: (302) 651-7700 Fax: (302) 651-7701 Estimated Assets Estimated Debts ---------------- --------------- Advanced Marketing More than More than Services, Inc. $100 Million $100 Million Publishers Group $1 Million to $1 Million to Incorporated $100 Million $100 Million Publishers Group $1 Million to $1 Million to West Incorporated $100 Million $100 Million Debtors' Consolidated List of 40 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Random House Trade Debt $43,347,815 1540 Broadway New York, NY 10036 Attn: Bill Sinnott Tel: (410) 386-7480 Fax: (410) 386-7439 Simon & Schuster Inc. Trade Debt $26,457,886 1230 Avenue of the Americas New York, NY 10020 Attn: David England Tel: (212) 689-7022 Fax: (212) 698-1258 Penguin Putnam, Inc. Trade Debt $24,614,829 375 Hudson Street New York, NY 10014 Attn: Michelle Cangialosi Tel: (201) 767-2916 Fax: (201) 767-5162 Hachette Book Group USA Trade Debt $22,569,624 dba Hachette and Time Warner Publishing Three Center Plaza Boston, MA 02108-2084 Attn: Steve Mubarek Tel: (617) 263-1949 Fax: (617) 263-2978 HaperCollins US Trade Debt $18,029,249 3030 Robinson Road Jefferson City, MO 65111 Attn: John Shearer Tel: (570) 941-1244 Fax: (570) 941-1590 Publications International Trade Debt $12,546,943 7373 North Cicero Avenue Lincolnwood, IL 60712-1613 Attn: Jeff Coyle Tel: (847) 329-5355 Fax: (847) 329-5810 VHPS Trade Debt $9,597,108 175 Fifth Avenue 20th Floor New York, NY 10010 Attn: Peter Garabedian Tel: (646) 307-5451 Fax: (917) 302-7466 Andrews McMeel Publishing Trade Debt $8,658,324 4520 Main Street Kansas City, MO 64111 Attn: Thom Thorton Tel: (816) 932-6700 Fax: (816) 932-6735 John Wiley & Sons, Inc. Trade Debt $6,030,223 One Wiley Drive Somerset, NJ 08875-1272 Attn: Dean Karrel Tel: (201) 748-6275 Fax: (201) 748-8641 Leisure Arts Trade Debt $4,685,334 80 Willow Park Road Menlo Park, CA 94025 Attn: Rich Smeby Tel: (650) 324-5505 Fax: (650) 324-1532 Workman Publishing Company Trade Debt $4,403,889 225 Varick Street New York, NY 10014-4381 Attn: Phil Gerace Tel: (212) 614-7565 Fax: (212) 254-8098 Rich Publishing LLC Trade Debt $4,380,171 6611 North 64th Place Paradise Valley, AZ 85253 Attn: Sharon Lechter Tel: (480) 607-1940 Fax: (480) 949-6085 Chronicle Books Trade Debt $4,344,797 275 Fifth Street San Francisco, CA 94103 Attn: Jack Jensen Tel: (415) 777-7240 Fax: (415) 777-8887 Meredith Corporation Trade Debt $4,333,958 1716 Locust Street Des Moines, IA 50309 Attn: Ken Zagor Tel: (515) 284-2282 Fax: (515) 284-3947 Houghton Mifflin Trade Div. Trade Debt $2,564,958 222 Berkeley Street Boston, MA 02116 Attn: Gary Gentel Tel: (617) 351-5927 Fax: (617) 351-1185 Avalon Publishing Group Trade Debt $2,297,489 1400 65th Street Suite 250 Emeryville, CA 94608 Attn: Susan Reich Tel: (510) 595-3664 Fax: (510) 595-4228 United States Playing Trade Debt $2,015,057 Card Co. 2510 Reliable Parkway Chicago, IL 60686-0025 Attn: Amy Bruno Tel: (800) 542-7430 ext. 7507 Fax: (513) 396-5878 Zondervan Trade Debt $2,002,239 5300 Patterson Avenue, SE Grand Rapids, MI 49530 Attn: Verne Kenney Tel: (616) 698-6548 Fax: (616) 698-3313 Global Book Publishing Trade Debt $1,747,737 Level 8, 15 Orion Road Lane Cove, NSW Australia 2066 Attn: Cheryl Perry Tel: (+612) 9425-5800 Fax: (+612) 9967-5891 Cook Illustrated Trade Debt $1,483,506 17 Station Street Brookline, MA 02445 Attn: Demee Gambulos Tel: (617) 232-1000 Fax: (617) 232-1572 Client Distribution Service Trade Debt $1,443,775 378 Park Avenue South 12th Floor New York, NY 10016 Attn: Tom Allen Tel: (212) 340-8130 Fax: (212) 340-8105 National Book Network Trade Debt $1,137,465 15200 NBN Way Blue Ridge Summit, PA 17214 Attn: Jeff Harris Tel: (717) 794-3807 Fax: (717) 794-3804 New World Library Trade Debt $1,122,419 14 Pamaron Way Novato, CA 94949 Attn: Munro Magruder Tel: (415) 884-2100 Ext. *8+21 Fax: (415) 884-2199 Grove/Atlantic Trade Debt $1,079,889 841 Broadway, 4th Floor New York, NY 10003-4793 Attn: Eric Price Tel: (212) 614-7907 Fax: (212) 614-7886 Hugh L. Levin Associates Trade Debt $1,029,831 9 Burr Road Westport, CT 06880 Attn: Hugh Levin Tel: (203) 227-6422 Fax: (203) 227-6717 Good Books Trade Debt $969,723 P.O. Box 419 7195 Grayson Road Intercourse, PA 17534 Attn: Merle Good Tel: (800) 762-7171 Ext. 250 Fax: (800) 762-7171 Amber-Allen Publishin Inc. Trade Debt $957,356 68 Mitchell Boulevard Suite 215 San Rafael, CA 94903 Attn: Karen Krieger Tel: (415) 499-4657 Fax: (415) 499-3174 Millennium House Trade Debt $909,552 52 Bolwarra Road Elanora Heights, NSA Australia 2101 Attn: Gordon Cheers Tel: (612) 9970-6850 Fax: (612) 9970-8136 Tyndale House Publishing Trade Debt $852,719 370 Executive Drive Carol Stream, IL 60188 Attn: Everett O'Brian Tel: (603) 668-8300 Ext. 258 Fax: (630) 668-8905 Hinkler Books Pty. Ltd. Trade Debt $841,780 17-23 Redwood Drive Dingley Village, Victoria Australia 3172 Attn: Stephen Ungerer Tel: (613) 9552-1313 Fax: (613) 9558-2566 Becker & Mayer Trade Debt $818,449 11010 Northup Way Bellevue, WA 98004 Attn: Jim Becker Tel: (425) 827-7120 Ext. 111 Fax: (425) 828-9659 Banta Book Group Trade Debt $808,329 675 Brighton Beach Road Menasha, WI 54950 Attn: Stephanie Streeter Tel: (920) 751-7777 Fax: (920) 751-7799 Avalanche Publishing Trade Debt $797,215 15262 Pipeline Lane Huntington Beach, CA 92649 Attn: Ray Sharabba Tel: (800) 888-6421 Fax: (714) 898-2450 Harcourt Brace & Company Trade Debt $792,490 525 B. Street, Suite 1900 San Diego, CA 92101 Attn: Dan Farley Tel: (619) 699-6816 Fax: (619) 699-6596 Rodale Press Inc. Trade Debt $772,899 733 Third Avenue New York, NY 10017 Attn: Liz Perl Tel: (212) 573-0226 Fax: (212) 682-2237 Anness Publishing Inc. Trade Debt $763,854 Hermes House 88/89 Blackfriars Road London, England SEI 8HA Attn: Paul Anness Tel: +44207754400 Fax: 011-44-207-633-9499 Triumph Books Trade Debt $755,611 601South LaSalle Street Suite 500 Chicago, IL 60605 Attn: Phil Springstead Tel: (941) 351-5060 Fax: (312) 663-3557 Anova Books Co. Ltd. Trade Debt $734,976 Promotional Reprint Co. Ltd. 151 Freston Road London, England W10 6TH Attn: Robin Wood Tel: 39-0161/294203 Fax: 44-020-7314-1584 Gallup Inc. Trade Debt $654,050 901 F Street, Northwest Washington, DC 20004 Attn: Piotr Juszkiewicz Tel: (402) 938-6176 Fax: (402) 938-5920 Black Dog & Leventhal Trade Debt $630,127 Publisher 151 West 19th Street New York, NY 10011 Attn: J.P. Leventhal Tel: (212) 647-9336 Ext. 101 Fax: (212) 647-9332 AVITAR INC: BDO Seidman LLP Raises Going Concern Doubt ------------------------------------------------------ BDO Seidman LLP, in Boston, Massachusetts, expressed substantial doubt about Avitar Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Sept. 30, 2006. The auditing firm pointed to the company's recurring losses from operations, working capital and stockholders as of Sept. 30, 2006. Avitar Inc. reported a $3.7 million net loss on $4.9 million of sales for the year ended Sept. 30, 2006, compared with a $2.4 million net loss on $4.5 million of sales for the year ended Sept. 30, 2005. Sales for the fiscal year ended Sept. 30, 2006, increased $415,863. The results for fiscal 2006 primarily reflect an increase in the volume of sales for its OralScreen(R) and foam products of $435,000, offset in part by a decrease of $19,000 in revenue from contraband detection services. The $1.3 million increase in net loss is mainly due to the $1.3 million increase in interest expense, the $741,213 decrease in other income, partially offset by the $660,052 decrease in loss from operations resulting from the increase in sales, and $120,000 income from disposal of discontinued operations. The $1.3 million increase in interest expense for fiscal 2006 primarily resulted from interest expense on higher borrowings of approximately $255,000, non-cash interest expense of $605,000 representing the incremental fair value of warrants issued as replacement for outstanding warrants held by debt holders and higher amortization of deferred financing costs and debt discount of approximately $449,000 associated with outstanding debt obligations executed by the company in fiscal 2005 and fiscal 2006. The $741,213 decrease in other income in fiscal 2006 resulted primarily from the changes in the fair market value of embedded derivative securities and warrants. The $120,000 income from disposal of discontinued operations relates to the Dec. 16, 2003 sale of the business and net assets, excluding cash, of its subsidiary United States Drug Testing Laboratories Inc. Under the term of the settlement agreement in November 2005, the company opted to receive an immediate lump sum payment of $120,000 rather than wait for the 10 to 14 years that the company believed it would take to collect the balance of $500,000 which was conditioned on the buyer attaining uncertain future revenues from the operations of the purchased subsidiary. At Sept 30, 2006, the company's balance sheet showed $2.3 million in total assets, $7.3 million in total liabilities, $3.2 million in redeemable convertible preferred stock and convertible preferred stock, resulting in an $8.2 million total stockholders' deficit. 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?17f5 Avitar Inc. (OTC BB: AVTI.OB )-- http://www.avitarinc.com/-- develops, manufactures and markets innovative and proprietary products. Their field includes the oral fluid diagnostic market, the disease and clinical testing market, and customized polyurethane applications used in the wound dressing industry. Avitar manufactures ORALscreen(R), the world's first non-invasive, rapid, onsite oral fluid test for drugs-of-abuse, as well as HYDRASORB(R), an absorbent topical dressing for moderate to heavy exudating wounds. Avitar is also developing diagnostic strategies for disease and clinical testing in the estimated $25 billion in- vitro diagnostics market. Conditions targeted include influenza, diabetes, and pregnancy. B-FAST CORPORATION: Withum Smith Raises Going Concern Doubt ----------------------------------------------------------- Withum Smith and Brown P.C., in Princeton, New Jersey, expressed substantial doubt about b-Fast Corp.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Sept. 30, 2006. The auditing firm pointed to the company's working capital deficiency and stockholders' deficiency. b-Fast Corp. reported $483,000 of net income for the year ended Sept. 30, 2006, compared with a $1.1 million net loss for the year ended Sept. 30, 2005. The company had no revenues in both periods. The $1.6 million increase in income from a net loss of $1.1 million in fiscal 2005 to a $483,000 net income in fiscal 2006 is primarily due to the $1.8 million increase in income from the discontinued operations of the Harrisburg fixed base operation, partially offset by the increase in interest expense of $327,000. The $2.5 million income from discontinued operations recorded for fiscal 2006 includes approximately $2 million of gain on the sale of the fixed base operation, and $95,000 gain on the sale of aircraft in June 2006, with the balance of $446,000 the result of operations for the ten month period. At Sept. 30, 2006, the company's balance sheet showed $8.6 million in total assets, $29.4 million in total liabilities, and $388,000 in deferred revenues, resulting in a $21.1 million total stockholders' deficit. The company's balance at Sept. 30, 2006, also showed strained liquidity with $2.5 million in total current assets available to pay $29.4 million in total current liabilities. 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?17ec Sale of Fixed Base Operation and Aircraft On June 7, 2006, the company sold its Beech King Air aircraft that had been used for charter for $967,000 and paid off the note and accrued interest due to Cessna Finance Corporation in the amount of $877,000. The sale generated a gain of $95,000. On July 25, 2006, the company sold its remaining fixed base operation at Harrisburg, Pennsylvania to Avflight Harrisburg Corp. for $2,610,000. b-Fast Corp. (Other OTC: BFTC.PK), prior to the sale of the Harrisburg fixed base operation, supplied ground support services for general aviation aircraft at the Harrisburg International Airport located in Middletown, Pennsylvania. BIOVEST INTERNATIONAL: Aidman Piser Raises Going Concern Doubt -------------------------------------------------------------- Aidman Piser & Company P.A., in Tampa, Florida, expressed substantial doubt about Biovest International Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Sept. 30, 2006. The auditing firm cited that the company incurred significant losses and used cash in operating activities during the years ended Sept. 30, 2006 and 2005, and had working capital and shareholders' deficits at Sept. 30, 2006. Biovest International Inc. reported a $13.7 million net loss on $7.3 million of total revenues for the fiscal year ended Sept. 30, 2006, compared with an 11.5 million net loss on $5.1 million of total revenues for fiscal 2005. The overall increase in revenue was due to increased contract cell culture manufacturing and instrument hardware sales. Instrument and disposable sales increased to $4.6 million in fiscal 2006 from $3 million in fiscal 2005. The $2.2 million increase in net loss is primarily due to the $2.1 million increase in research and development expenses, the $967,000 increase in marketing, general and administrative expenses, and the $1.5 million increase in interest expense, partly offset by a $193,000 derivative gain and the $71,000 increase in other income/expense, which more than offset the gross profit increase of $2.1 million. The overall gross margin for the fiscal 2006 increased to approximately 47% from 26% in the prior year. This was due to improved hardware sales, more optimal product mix and improved production results. Included in cost of sales in fiscal 2005 was an inventory write off of approximately $400,000, representing primarily inventory on-hand in the June 2003 Accentia acquisition of a controlling interest in Biovest, and determined in the fiscal 2005 to be obsolete. Research and vaccine development expenses for fiscal 2006 increased due to increased spending for the BiovaxID Phase 3 clinical trial and continued development of the company's automated instrument, AutovaxID. Marketing and general and administrative expenses during fiscal year 2006 increased primarily due stock compensation expense of $500,000, compared to zero in fiscal 2005. The remainder of the increase in marketing, general, and administrative expenses came mostly from costs related to increased professional fees. Interest expense increased due to the issuance of the Laurus notes payable and associated discount amortization and expense associated with guarantees. The company also allocated a portion of the Laurus debt to a derivative liability. The derivative liability is valued at the end of each quarter, and adjusted accordingly. In the fourth quarter of fiscal 2006, the company recorded a $193,000 gain on change in derivative liability. At Sept. 30, 2006, the company's balance sheet showed $8.4 million in total assets, $15.4 million in total liabilities, $3.6 million in variable interest entities, and $6 million in non controlling interest in consolidated subsidiary, resulting in a $16.5 million total stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $4.3 million in total current assets available to pay $13.3 million in total current liabilities. Full-text copies of the company's financial statements for the year ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?17f9 Laurus Financing On Mar. 31, 2006, the company closed a financing transaction with Laurus Master Fund Ltd. whereby Laurus purchased from the company a secured promissory note in the principal amount of $7.8 million and a warrant to purchase up to 18,087,889 shares of common stock at an exercise price of $.01 per share. The proceeds of the transaction were placed in a restricted account requiring Laurus' consent before release and was intended to be used in connection with NMTC related financings. On Apr. 26, 2006, $2.5 million of the restricted funds was released in connection with the first NMTC transaction and on Aug. 2, 2006, an additional sum of $2.5 million was released pursuant an amendment to the Restricted Account Agreement and Side Letter Agreement. The final $2.5 million was released in connection with a second NMTC transaction in December 2006. About Biovest International Biovest International Inc. (OTC BB: BVTI.OB) -- http://www.biovest.com/-- develops advanced individualized immunotherapies for life-threatening cancers of the blood system. In addition, Biovest develops, manufactures and markets patented cell culture systems, including the innovative AutovaxID(TM), which is being developed as an automated vaccine manufacturing instrument and for production of cell-based materials and therapeutics. Biovest's therapy for follicular non-Hodgkin's lymphoma is currently in a Phase 3 pivotal clinical trial at more than 20 major centers in the U.S., and is being conducted under a Cooperative Research and Development Agreement (CRADA) with the National Cancer Institute. Biovest is a majority-owned subsidiary of Accentia Biopharmaceuticals Inc. CALA CORP: Earns $55,780 of Net Income in Quarter Ended Sept. 30 ---------------------------------------------------------------- Cala Corp. reported $55,780 of net income on $13,952 of sales for the quarter ended Sept. 30, 2006, compared to a $223,093 net loss on zero revenues for the same period in 2005. The company derived revenue purely from rental income. The company's net income consisted of $91,337 income from continued operations and a loss $35,557 from discontinued operations for the quarter ended Sept. 30, 2006. The discontinued operations relate to two restaurants subleased to two separate entities on Aug. 1, 2006. The $91,337 income was realized in view of the capitalization of previously expensed ship design costs of which $128,950 was expensed in the current quarter. This resulted in selling, general and administrative expenses of $99,209 for the quarter ended Sept. 30, 2006, compared to $223,093 for the same period in 2005. At Sept. 30, 2006, the company's balance sheet showed $1.2 million in total assets, $1 million in total liabilities, and $184,305 in total stockholders' equity. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $34,830 in total current assets available to pay $462,169 in total current liabilities. 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?17ee Going Concern Doubt George Brenner, CPA, in Los Angeles, California, expressed substantial doubt about Cala Corp.'s ability to continue as a going concern after auditing the company's financial statements for the year Dec. 31, 2005. George Brenner pointed to the company's recurring losses, negative cash flow from operations, and net working capital deficiency. Cala Corporation, fka Magnolia Foods, Inc.'s, sole industry segment was the business of owning, operating, licensing and joint venturing restaurants. The company sublet its San Ramon location for the monthly lease cost of $6,000 per month for nine years plus $1,500 per month for 60 months. The company is liable for the primary lease in the San Ramon location until the lease expires which is in 9 years. CARBIZ INC: October 31 Stockholders' Deficiency Rises to $3.4 Mil. ------------------------------------------------------------------ Carbiz Inc. disclosed that stockholders' deficit as of Oct. 31, 2006, increased to $3,410,376 from $2,403,162 as of Jan. 31, 2006. The October 31 stockholders' deficit resulted from total assets of $1,024,768 and total liabilities of $4,435,144. As of Oct. 31, 2006, the company had negative working capital with $751,817 in total current assets available to pay $4,074,183 in total current liabilities. For the three months ended Oct. 31, 2006, the company reported a $3,295,956 net loss on $804,241 of total sales, compared with a $344,776 net loss on $1,029,489 of total sales for the three months ended Oct. 31, 2005. Other Financial High Lights As of Jan. 31, 2006, and Oct. 31, 2006, the company had $119,735 and $79,615, respectively, in cash and cash equivalents. During the nine months ended Oct. 31, 2006, the company decreased its accounts payable and accrued liabilities by $8,835, which totaled $1,276,367 at Oct. 31, 2006. The company also made debt repayments and capital lease payments totaling $239,348, which includes $156,546 repaid through issuance of securities. The company has continued to rely on private placements to meet its cash flow requirements. Operationally, the company has not generated the necessary revenue to cover its operating expenses. On Oct. 17, 2006, the company issued 129,776 common shares pursuant to the exercise of options issued to its employees at an exercise price of CDN$.10 resulting in proceeds of $11,576 (when converted to US$ at date of conversion). Effective Oct. 3, 2006, approximately $1.3 million in debentures related to the company's debenture financing which closed on Apr. 6, 2006, were converted into 13,842,027 common shares, 14,472,753 class A common share purchase warrants and 7,236,355 class B common share purchase warrants. Each class A common share purchase warrant and each class B common share purchase warrant is exercisable for one common share expiring from Oct. 6, 2009, through April 6, 2011, at an exercise price of CDN$0.12 per common share. The conversion occurred as a result of the quotation of the company's shares on the U.S. Over-The-Counter Bulletin Board and the delisting of its shares from the TSX Venture Exchange. In its quarterly report filed with the Securities and Exchange Commission, the company's management noted that should the company's operating revenues fail to increase to provide sufficient cash flow to fund operations, the company may require additional financing. Based on nine month results and an assumption of meeting business projections for the remainder of the fiscal year, the company's current cash flow from operations and cash on hand are sufficient to fund operations until the end of this month. "Should our operating revenues fail to increase to provide sufficient cash flow to fund operations, we may require additional financing. Based on nine month results and an assumption of meeting business projections for the remainder of the fiscal year, our current cash flow from operations and our cash on hand are sufficient to fund our operations until January 2007. Actual results that vary from projections may require the need for additional cash during that period. Our ability to arrange such financing in the future will depend in part upon the prevailing capital market conditions as well as our business performance. There can be no assurance that we will be successful in our efforts to arrange additional financing, if needed, on terms satisfactory to us or at all. The failure to obtain adequate financing could result in a substantial curtailment of our operations. If additional financing is raised by the issuance of securities, control of Carbiz may change and/or our shareholders may suffer significant dilution," Carl Ritter, the company's chief executive officer, said. A full-text copy of the company's financial report for the quarterly period ended Oct. 31, 2006, is available for free at: http://researcharchives.com/t/s?17f8 About CarBiz Inc. Headquartered in Toronto, Ontario, Canada, CarBiz Inc. provides software and services for car dealers. CarBiz's software applications cover finance and insurance, special financing, leasing, buy here-pay here, traffic management, and accounting. Related services include software training and consulting, software applications hosting, and website design. CarBiz also offers service contracts and extended warranties through Heritage Warranty and car loans. Carbiz serves more than 3,000 dealers. CERADYNE INC: Gets $133 Million Body Armor Order from U.S. Army --------------------------------------------------------------- Ceradyne, Inc., received a $133 million delivery order for Enhanced Side Ballistic Inserts from the U.S. Army, Aberdeen Proving Ground, Maryland. The new delivery order is scheduled to be shipped beginning April 2007 through November 2007. The order will be shipped against a larger indefinite delivery/indefinite quantity contract. Dave Reed, president of North American operations, commented: "This delivery order is the largest single order ever received by Ceradyne. Together with the $122.2 million in ESAPI and ESBI body armor orders announced in November 2006, we have excellent visibility into 2007. Utilizing the Lexington, Kentucky facility and the Costa Mesa and Irvine, California plants, we expect to meet the Army's quality and delivery requirements. We anticipate receiving additional orders early in 2007 for delivery in 2007." Based in Costa Mesa, California, Ceradyne, Inc., (Nasdaq: CRDN) -- http://www.ceradyne.com/-- develops, manufactures and markets advanced technical ceramic products and components for defense, industrial, automotive and consumer applications. * * * Ceradyne's $50 million revolving credit facility due 2009 carries Standard & Poor's BB- rating. The Company's credit rating is also rated BB- by Standard & Poor's. CERADYNE INC: Gets $3.8 Million in Total Orders for HUMVEE Armor ---------------------------------------------------------------- Ceradyne, Inc., received follow-on vehicle armor component orders for the M1152 HMMWV from AM General Corporation. A total of $3.8 million in orders will be delivered in 2007. The company has received a total of $5.7 million in HUMVEE(R) armor orders since its initial order in May 2006. The armor were designed in the company's Wixom, Michigan, vehicle armor prototype facility in conjunction with AM General's development team in Livonia, Michigan. The production armor components will be manufactured in the company's 80,000 square- foot Irvine, California armor facility. Marc King, vice president of armor operations, commented: "The continuing order flow of armor components for the HUMVEE(R) validates our quality and on-time delivery of vehicle armor. Mr. King added, "We are currently performing further armor research and developing new ceramic composite armor designs for additional HMMWV variations, as well as other military vehicles." Based in Costa Mesa, California, Ceradyne, Inc., (Nasdaq: CRDN) -- http://www.ceradyne.com/-- develops, manufactures and markets advanced technical ceramic products and components for defense, industrial, automotive and consumer applications. * * * Ceradyne's $50 million revolving credit facility due 2009 carries Standard & Poor's BB- rating. The Company's credit rating is also rated BB- by Standard & Poor's. COLLINS & AIKMAN: Wants Solicitation Process of Amended Plan Fixed ------------------------------------------------------------------ Collins & Aikman Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan to enter an order: (a) approving the disclosure statement to their First Amended Joint Plan; (b) fixing, subject to modification as needed, (i) the Voting Record Date, (ii) the Voting Deadline, (iii) deadlines for filing objections, if any, to confirmation of the Plan and replies to any objections, and (iv) the date for the hearing on confirmation of the Plan; and (c) approving the Solicitation Procedures and the form of certain Solicitation Documents to be distributed in connection with solicitation of the Amended Plan. Adequacy of the Disclosure Statement Section 1125 of the Bankruptcy Code requires that a plan proponent provide "adequate information" regarding a debtor's proposed Chapter 11 plan. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, asserts that the Disclosure Statement contains the pertinent information necessary for holders of claims to make an informed decision about whether to vote to accept or reject the Plan, including, among other things, information regarding: (a) the Plan; (b) the history of the Debtors, including certain events leading to the commencement of the Chapter 11 cases; (c) the operation of the Debtors' businesses and significant events during the Chapter 11 cases; (d) the Debtors' prepetition capital structure and indebtedness; (e) the Debtors' corporate structure; (f) claims asserted against the Debtors' estates and the procedures for the resolution of contingent, unliquidated and disputed claims; (g) the classification and treatment of claims and equity interests under the Plan; (h) certain risk factors to consider that may affect the Plan; (i) the restructuring transactions contemplated under the Plan; (j) certain federal income tax law consequences of the Plan; (k) the provisions governing distributions under the Plan; (l) the means for implementation of the Plan; (m) pending litigation involving the Debtors; (n) identification of causes of action belonging to the Debtors; and (o) settlement, release, injunctive and exculpation provisions of the Plan. The Debtors submit that the Disclosure Statement contains more than sufficient information for a hypothetical reasonable investor to make an informed judgment about the Plan and complies with all aspects of Section 1125. Record Date The Debtors ask the Court to exercise its authority under Rules 3017(d) and 3018(a) of the Federal Rules of Bankruptcy Procedure to establish the date of entry of the order approving the Disclosure Statement as the record date for determining: (i) the creditors that are entitled to receive Solicitation Documents pursuant to the Solicitation Procedures; (ii) the creditors entitled to vote to accept or reject the Plan; and (iii) whether Claims have been properly transferred to an assignee pursuant to Rule 3001(e) such that the assignee can vote as the Holder of the Claim. Distribution of Solicitation Notices Pursuant to Local Rule 3018-1, a plan proponent must distribute certain solicitation materials within five business days after entry of an order approving the related disclosure statement. Given the size and complexity of the solicitation, the Debtors ask the Court to waive Local Rule 3018-10 to allow the Debtors to distribute the Solicitation Documents and related notices on a date that is no more than 10 business days following entry of the order approving the Disclosure Statement. Voting Deadline The Debtors ask the Court to exercise its authority under Rule 3017(c) to establish 5:00 p.m. prevailing Pacific Time on the date that is 10 days before the Confirmation Hearing as the deadline by which Holders of Claims must accept or reject the Plan in accordance with the Solicitation Procedures. The Debtors also ask Judge Rhodes to permit them to extend the Voting Deadline, if necessary, without further Court order, to a date no later than five days before the Confirmation Hearing with notice of the extension to all creditors entitled to vote. Objection Deadline Pursuant to Bankruptcy Rule 3020(b), the Debtors ask the Court to establish 5:00 p.m. prevailing Pacific Time on the date that is 10 days before the Confirmation Hearing as the deadline by which objections to confirmation of the Plan, if any, must be filed and served in accordance with the Solicitation Notice. The Debtors request that they be permitted to file a reply, no later than three days before the Confirmation Hearing, to any objections to confirmation of the Plan. Confirmation Hearing The Debtors request that the Court exercise its authority under Bankruptcy Rule 3017(c) to schedule a hearing on confirmation of the Plan, subject to the Court's calendar, as soon as practicable on or after 25 days from the Solicitation Distribution Date, which hearing may be continued from time to time by the Court or the Debtors without further notice other than adjournments announced in open court. Solicitation Procedures To conduct an effective solicitation of votes to accept or reject the Plan, consistent with the requirements of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules and due process, the Debtors seek approval of the Solicitation Procedures. A. Duties of the Solicitation Agent The Debtors request that Kurtzman Carson Consultants LLC be authorized and directed to assist them in: (a) distributing Solicitation Documents, (b) receiving, tabulating and reporting on Ballots and Master Ballots cast to accept or reject the Plan by holders of claims against the Debtors, (c) responding to inquiries from creditors, equity interest holders and other parties in interest relating to the Disclosure Statement, the Plan, the Ballots and the Master Ballots, the Solicitation Procedures and all other Solicitation Documents and matters related thereto, (d) soliciting votes on the Plan, and (e) if necessary, contacting creditors and equity interest holders regarding the Plan. B. Record Holders of the Debtors' Securities Once the Voting Record Date is established, the Debtors and Kurtzman will contact the registrars of the Debtors' public securities and the applicable indenture trustees to compile and generate lists of holders of the Debtors' Securities as of the Voting Record Date. C. Solicitation Documents In accordance with Bankruptcy Rule 3017(d), the Debtors intend to distribute the materials to holders of claims and equity interests for purposes of soliciting their votes and providing adequate notice of the Confirmation Hearing. Specifically, the Debtors intend to serve all of the Solicitation Documents on the Core Group and the 2002 List. With respect to certain listed entities that are not in the Core Group or on the 2002 List, the Debtors will cause to be mailed, only: (a) the Solicitation Notice; (b) appropriate Ballots and Master Ballots and applicable Voting Instructions; (c) a pre-addressed, postage pre-paid return envelope; and (d) a CD-Rom containing the Disclosure Statement, the Solicitation Procedures Order, the Solicitation Procedures and certain other documents that are contained in the Plan Supplement. The Solicitation Notice will additionally instruct the parties that all other Solicitation Documents can be obtained by accessing the Debtors' Web site or by requesting a copy from the Solicitation Agent in writing or by telephone. To avoid duplication and reduce expenses, the Debtors propose to make every reasonable effort to ensure that creditors and equity interest holders who might otherwise receive multiple solicitation packages will receive no more than one set of Solicitation Documents and one Ballot or Master Ballot for each class of claims for which the creditor or equity interest holder is entitled to vote. D. Approval of the Form of Ballots All votes to accept or reject the Plan must be cast by using the appropriate ballot or, in the case of Beneficial Holders of the Debtors' Securities that are registered or otherwise held in the name of a Nominee, the appropriate master ballot. The Debtors will prepare and customize Ballots for all classes of claims that the Debtors anticipate will be entitled to vote to accept or reject the Plan in accordance with Bankruptcy Rule 3018(c). E. Form of Solicitation Notice To satisfy the requirements of Bankruptcy Rules 2002(b) and (d), the Debtors intend to send a solicitation document, which will contain, among other things: (a) instructions to creditors and interested parties on how they may view or obtain copies of the Court-approved Disclosure Statement, the Plan Supplement, the Solicitation Procedures Order, the Solicitation Procedures and all other materials in the Debtors' Solicitation Documents; (b) a disclosure regarding the settlement, third party release, exculpation and injunction language in Article XII of the Plan; (c) the Voting Record Date; (d) the procedures for the temporary allowance of claims; (e) the Voting Deadline; (f) the Plan Objection Deadline; and (g) the Confirmation Hearing date and time. The Debtors also intend to publish the Solicitation Notice to provide sufficient notice of the Plan Objection Deadline, the Confirmation Hearing and other relevant deadlines to entities that may not otherwise receive notice by mail. F. Forms of Other Notices i. Non-Voting Status Notices As reflected in the Amended Plan, certain classes of claims and equity interests under the Plan are not entitled to vote to accept or reject the Plan because the classes: (a) are unimpaired within the meaning of Section 1124 or (b) would receive no distribution under the Plan and, therefore, are deemed to reject the Plan pursuant to Section 1126(g). In addition, certain creditors whose claims are not classified in accordance with Section 1123(a)(1) are not entitled to vote to accept or reject the Plan. The Debtors propose that, unless specifically requested, they not be required to send Solicitation Documents to creditors and equity holders not entitled to vote on the Plan. In lieu of the Solicitation Documents, the Debtors intend to send to these creditors and equity interest holders both a Solicitation Notice and one of these notices: (a) the Notice Of Non-Voting Status With Respect To Unimpaired Classes Deemed To Accept The Plan And Unclassified Classes; or (b) the Notice Of Non-Voting Status With Respect To Impaired Classes Deemed To Reject The Plan, as applicable. ii. Causes of Action and Executory Contracts Notices The parties listed on the Nonexclusive List of Causes of Action and the counterparties to the Debtors' executory contracts and unexpired leases listed on the Plan will receive only the Solicitation Notice and one or both of these additional notices: (a) the Notice To Parties To Retained Causes Of Action and (b) the Notice To Counterparties To Executory Contracts And Unexpired Leases, as applicable. If any of these parties also have claims against or equity interests in the Debtors as of the Voting Record Date, the parties will also receive the Solicitation Documents. Voting and Tabulation Procedures The Debtors ask the Court to approve the voting and tabulation procedures in accordance with Section 1126(c) and Bankruptcy Rule 3018(a). (i) Voting and General Tabulation Procedures The Amended Plan contemplates impaired classes that will be entitled to vote on the Plan. The Debtors ask the Court to enter an order providing that only holders of claims in Classes 3 to 7 are entitled to vote to accept or reject the Plan. (ii) Master Ballot Tabulation Procedures The Plan also contemplates that certain Beneficial Holders of claims derived from, or based on, indentures issued by the Debtors will be entitled to accept or reject the Plan. The Debtors recognize that the records of the indenture trustees for the Debtors' Indentures may reflect the brokers, dealers, commercial banks, trust companies or other nominees through which certain Beneficial Holders hold the relevant Indentures rather than the Beneficial Holders themselves. For relevant materials to be fully and properly disseminated to the Beneficial Holders, the Debtors request that the Court order Nominees to: (a) disseminate the appropriate Solicitation Documents or other appropriate notices to the Beneficial Holders and (b) cooperate fully with the Debtors with respect to the solicitation process. (iii) Temporary Allowance of Claims for Voting Purposes If an objection to a claim is pending on the Voting Record Date, the holder of a claim will receive a copy of the Solicitation Notice and a Notice of Non-Voting Status with Respect to Disputed Claims, in lieu of a Ballot. The Objected-to-Claim Notice will inform the holder that (a) an objection to its claim is pending and (b) the holder cannot vote absent at least one of these events taking place prior to the Voting Deadline: -- an order is entered by the Bankruptcy Court, after notice and a hearing, temporarily allowing the Objected- to-Claim for voting purposes only pursuant to Bankruptcy Rule 3018(a); -- a stipulation or other agreement is executed between the holder of the Objected-to-Claim and the Debtors allowing the holder of the Objected-to-Claim to vote its Objected- to-Claim in an agreed upon amount; or -- the pending objection to the Objected-to-Claim is voluntarily withdrawn by the Debtors or overruled by the Bankruptcy Court. If a Resolution Event occurs before the Voting Deadline, no later than two business days after a Resolution Event, the Solicitation Agent will distribute a Ballot and a preaddressed, postage pre- paid envelope to the relevant holder of the Objected-to-Claim, which must be returned to the Solicitation Agent by no later than the Voting Deadline. If an objection to a claim is filed by the Debtors after the Voting Record Date, the Ballot of the holder of the Objected-to- Claim will not be counted absent a Resolution Event taking place on or before the Confirmation Hearing. Nothing in the Solicitation Procedures will affect the Debtors' right to object to any proof of claim on any other ground or for any other purpose. H. Returned Solicitation Packages and Notices The Debtors seek the Court's approval for a departure from the strict notice rule excuse from: (a) giving notice or providing service of any kind upon any entity to whom the Debtors mailed any Solicitation Documentation, including any notices, and received any of the documents returned by the United States Postal Service marked "undeliverable as addressed," "moved - left no forwarding address," "forwarding order expired" or similar marking, unless the Debtors have been informed in writing by the entity of its new address and (b) re-mailing the documents to those entities whose addresses differ from the addresses in the claims register or the Debtors' records as of the Voting Record Date. If a creditor has changed its mailing address after the Petition Date, the burden will be on the creditor or party-in-interest, not the Debtors, to advise the Solicitation Agent of the new address. * * * The Court will convene a hearing to consider the Debtors' request, including the adequacy of the Disclosure Statement, on Jan. 25, 2007, at 11:00 a.m. Objections are due Jan. 18, 2007, at 4:00 p.m. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and US$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) COLLINS & AIKMAN: Inks Fifth Amendment of DIP Loan with JPMorgan ---------------------------------------------------------------- Collins & Aikman Corp. and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Eastern District of Michigan to enter into a fifth amendment to the Amended and Restated Revolving Credit, Term Loan, and Guaranty Agreement, dated as of July 28, 2005, with JPMorgan Chase Bank, N.A., as administrative agent. Marc J. Carmel, Esq., at Kirkland & Ellis LLP, in New York states that the Fifth Amendment is expected to provide JPMorgan, and each of the other financial institutions, consent to the Customer Agreement and the transactions contemplated in it. The approval of the Fifth Amendment on an expedited basis will also ensure that the Debtors are able to, among other things, receive the benefits of the Customer Agreement and avoid the risks of not having the Customer Agreement while remaining in full compliance with the DIP Credit Agreement, Mr. Carmel says. The Fifth Amendment is necessary to permit the Debtors to engage in certain other transactions currently restricted by the DIP Credit Agreement, modify provisions governing the sharing of proceeds received by the Debtors from certain transactions and increase the Debtors' ability to sell, dispose of and transfer certain assets, Mr. Carmel adds. 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. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) COMPLETE RETREATS: Court Okays Fairfax as Panel's Forensic Advisor ------------------------------------------------------------------ The United States Bankruptcy Court for the District of Connecticut authorized the Official Committee of Unsecured Creditors of Complete Retreats LLC and its debtor-affiliates to retain The Fairfax Group, as its forensic advisor, nunc pro tunc to Sept. 11, 2006. As reported in the Troubled Company Reporter on Dec. 8, 2006, Diana Adams, the acting U.S. Trustee for the District of Connecticut, notified the Court that she has no objection to the retention of The Fairfax Group as forensic advisor to the Committee. Committee Chair Joel S. Lawson III related that the Committee formed a subcommittee of its members to interview and evaluate candidates qualified to perform the type of forensic accounting and investigatory due diligence services required in the Debtors' cases. After soliciting qualification materials from, and rigorously interviewing various candidates, the subcommittee recommended the retention of Fairfax as the Committee's forensic advisor. Mr. Lawson noted that Fairfax employed and has working professional relationships with some of the world's leading experts in compliance, investigations and security. Fairfax's past engagements have included rendering service in the areas of corporate internal investigations; due diligence; asset tracing and anti-money laundering; electronic evidence-gathering and preservation; witness identification and interview; documentary evidence gathering and research of corporate and individual histories. Fairfax is expected to, among others, perform forensic accounting and investigatory due diligence concerning the Debtors; the Debtors' businesses and operations; and any individuals or entities with whom the Debtors, their officers, directors, shareholders, agents and employees, have done business or may decide to do business. Fairfax is also expected to analyze all relevant information from the time of the Debtors' formation through and including the present. The Committee reserves its rights to augment or authenticate the work of XRoads Solutions Group, or any other professionals conducting forensic analysis, where it deems that the additional work is necessary to maximize the recovery of unsecured creditors. The Debtors will pay Fairfax for its services according to its customary hourly rates. The hourly rates charged by Fairfax professionals differ based on, among other things, the individual professional's experience. The customary rates for Fairfax personnel in year 2006 range from $275 to $400 per hour. Fairfax will provide a phased budget, which will contain explicit fee limitations for each phase of its investigation. The Debtors will reimburse Fairfax's out-of-pocket expenses reasonably incurred in connection with services it renders to the Committee. Michael J. Hershman, president of the Fairfax Group, assures the Court that the firm has no connection with the Debtors, their creditors, the U.S. Trustee or any other party in interest in the Chapter 11 cases. Mr. Hershman asserts that Fairfax is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, and does not hold or represent any interest adverse to the Debtors' estates with respect to the matters for which it is to be retained. About Complete Retreats Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor-affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed $308,000,000 in total debts. The Debtors' exclusive period to file a plan expires on February 18, 2007. They have until April 19, 2007, to solicit acceptance to that plan. (Complete Retreats Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). COMPLETE RETREATS: Wants to Sell 3 Real Properties for $3.14 Mil. ----------------------------------------------------------------- Complete Retreats LLC and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the District of Connecticut to sell three real properties for $3,140,000, free and clear of all liens, claims, and encumbrances: Property Address Proposed Buyer Purchase Price ---------------- -------------- -------------- 7447 Royal Street East Ladd Tanner $1,300,000 Unit 351 Park City, Utah 4165 Kamalani Lane Gary P. Siracuse 1,290,000 Princeville, Hawaii 14 West Cottage Circle Thomas Gibbons 550,000 Bluffton, South Carolina The Park City Property includes two 1,475-square foot houses. Each of the houses has two bedrooms and two bathrooms. The Princeville Property includes a nearly 2,500-square foot house with three bedrooms, three and a half bathrooms, and a nearly 500-square foot garage. The Princeville Property is located on the Princeville Mallon Golf Course. The Bluffton Property, which includes a 2,131-square foot house with four bedrooms and four bathrooms, is located in a community resort development known as the Belfair Plantation. Amenities at the Bluffton Property and the Belfair Plantation include views of a golf course and the Colleton River, a health and fitness center, an indoor lap pool, an outdoor pool, tennis courts, a basketball court, a volleyball court, and an athletic field. Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, relates that CIT Capital USA, Inc., the Debtors' exclusive real estate advisor and disposition agent, and CIT's retained local estate brokers engaged in substantial and thorough campaigns to market the Properties. Through CIT's and the brokers' efforts, the Debtors received several offers for each of the Properties. The Debtors have determined that the offers of Messrs. Tanner, Siracuse, and Gibbons are the best and the highest. Consequently, the Debtors entered into separate Sale Agreements with Messrs. Tanner, Siracuse, and Gibbons. Pursuant to their Sale Agreements with the Debtors, Mr. Tanner paid the Debtors a $50,000 deposit, Mr. Siracuse will provide the Debtors with a $75,000 deposit, and Mr. Gibbons will pay the Debtors a $55,000 deposit. The Proposed Buyers will pay the remaining balance at the closing of each Sale. The sale of the Park City Property must close by Jan. 5, 2007, that of the Princeville Property must close by Dec. 22, 2006, and that of the Bluffton Property must close by Dec. 19, 2006, Mr. Daman informs the Court. The Sale Agreements were negotiated at arm's length and in good faith, Mr. Daman maintains. The Debtors and the Proposed Buyers are not related in any way. The Debtors propose to pay CIT Transaction Fees for its efforts in marketing the Properties. From the Transaction Fees, CIT will pay these amounts for the local brokers' services: Transaction Property Fee Broker Broker's Fee -------- ----------- ------ ------------ Park City $91,000 Jess Reid Real Estate $65,000 Princeville 90,300 Century 21 All Islands 64,500 Bluffton 38,500 Corabett Thomas Realty 33,000 The Debtors believe that the proposed sale to the Buyers will facilitate a quick and efficient disposition of the Properties for the benefit of their estates. The Properties are not popular among the Debtors' members and are not necessary for the Debtors' operations, Mr. Daman asserts. Moreover, the Debtors believe that there would be no benefit to conducting any formal auction or a further bidding process for the Properties. Mr. Daman contends that any auction or further bidding process would only generate increased administrative costs and cause an unwarranted delay of the Sales. The only party currently holding a lien on the Properties is Ableco Finance LLC, the Debtors' postpetition lender, Mr. Daman discloses. The Debtors believe that Ableco has consented, or will consent, to the Proposed Sales. The proceeds from the Sales will be used to fund the Debtors' operations and, eventually, to facilitate and enhance the Debtors' ability to confirm a potential plan of reorganization, Mr. Daman relates. Accordingly, the Debtors had asked the Court to exempt the Sales from transfer taxes under Section 1146(a) of the Bankruptcy Code. In addition, because the proposed Sales inure to the benefit of their estates, creditors, and other parties-in-interest, and are not to the detriment of any party, the Debtors had asked the Court to waive the provision in Rule 6004(g) of the Federal Rules of Bankruptcy Procedure. Any order approving the Debtors' request should be effective immediately, Mr. Daman asserts. About Complete Retreats Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor-affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed $308,000,000 in total debts. The Debtors' exclusive period to file a plan expires on February 18, 2007. They have until April 19, 2007, to solicit acceptance to that plan. (Complete Retreats Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). CWALT INC: Fitch Puts Low-B Ratings on $5.4 Million Class Certs. ---------------------------------------------------------------- Fitch rates CWALT, Inc.'s Mortgage Pass-Through Certificates, Alternative Loan Trust 2006-HY13 as: Group 1 -- $230.9 million classes 1-A-1, 1-A-2, 1-A-3, and A-R (senior certificates) 'AAA'; -- $5.5 million class I-M 'AA'; -- $2.9 million class I-B-1 'A'; -- $1.7 million class I-B-2 'BBB'; -- $1.7 million class I-B-3 'BB'; -- $1.3 million class I-B-4 'B'. Aggregate Loan Group 2 -- $619.2 million classes 2-A-1 through 2-A-7, 2-A-2X, 2-A-4X, 2-A-5X, 2-A-6X, 2-A-X, 3-A-1 through 3-A-7, 3-A-2X, 3-A-4X, 3-A-5X, 3-A-6X, 3-A-7X, 4-A-1 through 4-A-6, 4-A-3X, 4-A- 4X, 4-A-5X, and 4-A-6X (senior certificates) 'AAA'; -- $17.1 million class II-M 'AA'; -- $3.8 million class II-B-1 'A'; -- $2.5 million class II-B-2 'BBB'; -- $1.2 million class II-B-3 'BB'; -- $1.2 million class II-B-4 'B'. The 'AAA' rating on the Group 1 senior certificates reflects the 5.75% subordination provided by the 2.25% class I-M, 1.20% class I-B-1, 0.70% class I-B-2, 0.70% privately offered class I-B-3, 0.55% privately offered class I-B-4, and 0.35% privately offered class I-B-5. The class I-B-5 is not rated by Fitch. The 'AAA' rating on the Aggregate Loan Group 2 senior certificates reflects the 4.25% subordination provided by the 2.65% class II-M, 0.60% class II-B-1, 0.40% class II-B-2, 0.20% privately offered class II-B-3, 0.20% privately offered class II-B-4, and 0.20% privately offered class II-B-5. The class II-B-5 is not rated by Fitch. Fitch believes the above credit enhancement for each respective loan group will be adequate to support mortgagor defaults. In addition, the rating also reflects the quality of the underlying mortgage collateral, strength of the legal and financial structures and the master servicing capabilities of Countrywide Home Loans Servicing LP (Countrywide Servicing), rated 'RMS2+' by Fitch. Countrywide Servicing is a direct wholly owned subsidiary of Countrywide Home Loans, Inc. The mortgage pool consists of four separate loan groups. Groups 2, 3 and 4 are crossed-collateralized in terms of subordinate credit enhancement. Loan Group 1 consists primarily of 30-year conventional, fully amortizing mortgage loans totaling $245,013,285 as of the cut-off date, Dec. 1, 2006, secured by first liens on one- to four-family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average original-loan- to-value (OLTV) of 72.12%. The weighted average FICO credit score is approximately 718. Cash-out refinance loans represent 37.62% of the mortgage pool and second homes 7.45%. The average loan balance is $756,214. The states that represent the largest portion of mortgage loans are California (69.64%) and Florida (7.41%). All other states represent less than 5% of the cut-off date pool balance. Loan Group 2 consists primarily of 30-year conventional, fully amortizing mortgage loans totaling $100,407,408 as of the cut-off date, Dec. 1, 2006, secured by first liens on one- to four-family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average OLTV of 72.68%. The weighted average FICO credit score is approximately 744. Cash-out refinance loans represent 26.97% of the mortgage pool and second homes 11.57%. The average loan balance is $687,722. The states that represent the largest portion of mortgage loans are California (62.59%) and Florida (5.25%). All other states represent less than 5% of the cut-off date pool balance. Loan Group 3 consists primarily of 30-year conventional, fully amortizing mortgage loans totaling $200,855,212 as of the cut-off date, Dec. 1, 2006, secured by first liens on one- to four-family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average OLTV of 73.20%. The weighted average FICO credit score is approximately 741. Cash-out refinance loans represent 20.92% of the mortgage pool and second homes 4.37%. The average loan balance is $625,717. The states that represent the largest portion of mortgage loans are California (51.54%) and Washington (7.50%). All other states represent less than 5% of the cut-off date pool balance. Loan Group 4 consists of 30-year conventional, fully amortizing mortgage loans totaling $345,498,657 as of the cut-off date, Dec. 1, 2006, secured by first liens on one- to four-family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average OLTV of 74.74%. The weighted average FICO credit score is approximately 742. Cash-out refinance loans represent 21.70% of the mortgage pool and second homes 5.72%. The average loan balance is $622,520. The states that represent the largest portion of mortgage loans are California (56.06%) and Florida (5.18%). All other states represent less than 5% of the cut-off date pool balance. CWALT purchased the mortgage loans from CHL and deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. The Bank of New York will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. CWMBS INC: Fitch Rates $2.082 Million Class B-3 Certs. at BB ------------------------------------------------------------ Fitch rates CWMBS, Inc.'s mortgage pass-through certificates, CHL Mortgage Pass-Through Trust 2006-20 as: -- $1,001,441,979 classes 1-A-1 through 1-A-37, X, PO and A-R senior certificates 'AAA'; -- $24,984,000 class M 'AA'; -- $6,245,000 class B-1 'A'; -- $3,123,000 class B-2 'BBB'; -- $2,082,000 class B-3 'BB'; -- $1,561,000 class B-4 'B'. The 'AAA' rating on the senior certificates reflects the 3.80% subordination provided by the 2.40% class M, 0.60% class B-1, 0.30% class B-2, 0.20% privately offered class B-3, 0.15% privately offered class B-4 and 0.15% privately offered class B-5 (not rated by Fitch). Classes M, B-1, B-2, B-3, and B-4 are rated 'AA', 'A', 'BBB', 'BB', and 'B' based on their respective subordination only. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults. In addition, the rating also reflects the quality of the underlying mortgage collateral, strength of the legal and financial structures and the master servicing capabilities of Countrywide Home Loans Servicing LP (Countrywide Servicing; rated 'RMS2+' by Fitch), a direct wholly owned subsidiary of Countrywide Home Loans, Inc. The certificates represent an ownership interest in a group of primarily 30-year conventional, fixed-rate, fully amortizing mortgage loans. The pool consists of mortgage loans totaling $1,041,000,000 as of the cut-off date (Dec. 1, 2006), secured by first liens on one-to four- family residential properties. The average loan balance is $631,381. The mortgage pool, as of Dec. 1, 2006, demonstrates an approximate weighted-average original loan-to-value ratio (OLTV) of 73.05%. The weighted average FICO credit score is approximately 747. Cash-out refinance loans represent 26.94% of the mortgage pool and second homes 5.70%. The states that represent the largest portion of mortgage loans are California (36.59%) and Virginia (6.19%). All other states represent less than 5% of the pool as of Dec. 1, 2006. The depositor will also deposit approximately $226,517,892 into a pre-funding account on the closing date. The amounts in the pre- funding account will be used to purchase supplemental mortgage loans after the closing date and on or prior to Jan. 31, 2007. CWMBS purchased the mortgage loans from CHL and deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. The Bank of New York will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. DELPHI CORP: Moody's Rates $2.49 Bil. 2nd Priority Loan at Ba3 -------------------------------------------------------------- Moody's Investors Service has assigned ratings to Delphi Corporation's debtor-in-possession refinancing; Ba1 on the 1st priority tranche, and Ba3 on the 2nd priority term loan. The ratings are on a point-in-time basis, will not be monitored going forward, and as a result, do not have an assigned outlook. The ratings incorporate Delphi's significantly improved prospects for emergence from bankruptcy as well as solid collateral coverage provided by the combination of super-priority liens and the extent and value of assets pledged. Several developments are behind the increased probability of emergence. Among these are the progress Delphi has achieved to date in lowering its domestic cost structure, the establishment of an agreed framework for the transformation of the company between Delphi and General Motors Corporation, and the conditional undertaking of investors to infuse substantial equity which would facilitate the company's exit from Chapter 11. While progress has been made on many fronts, certain substantive details must still be agreed, and, importantly, an agreement with Delphi's unions on multiple aspects of an intricate transaction must be reached before court approval for emergence in accordance with the announced framework could be requested. The refinancing is not conditional upon a successful conclusion between those parties. The ratings further consider the ongoing weak performance of Delphi's domestic subsidiaries, continuing exposure to developments at GM and other N. American OEMs, and a challenging automotive market anticipated in 2007. Ratings assigned on a point-in-time basis: Delphi Corporation as a Debtor-in-Possession First Priority Revolving Credit Facility for $1.75 billion, Ba1 First Priority Term Loan for $0.25 billion, Ba1 Second Priority Term Loan for $2.496 billion, Ba3 The new facilities will replace Delphi's existing debtor-in- possession $1.75 billion revolving credit and $0.25 billion term loan (collectively the 1st priority tranche), and will refinance roughly $2.5 billion of pre-petition secured bank debt that had received adequate protection under earlier bankruptcy court rulings and was kept current on interest. The new transactions, which are being done on a best efforts basis, would create significant savings for Delphi while it remains in bankruptcy. Should the transactions not be fully subscribed, existing obligations and terms would remain in place. The new facilities have a tenor of December 31, 2007 compared to an existing maturity date of October 8, 2007 on the current revolving credit and term loan. The DIP facilities will be guaranteed by substantially all of Delphi's direct and indirect domestic subsidiaries that filed for Chapter 11 protection. All of the 1st priority tranche must fit under a borrowing base which will consist of eligible receivables and inventory, a percentage of the net orderly liquidation value of certain machinery & equipment, and a percentage of the fair market value of certain real estate. GM receivables are subject to a concentration limit. Similarly, the component of the borrowing base from fixed assets will be limited to 30% of total availability. Generally, the liens are entitled to a superpriority claim status; include first priority interests in all unencumbered property of the borrower/guarantors at the time of its bankruptcy filing as well as senior liens on assets of the obligors that were subject to liens of pre-petition secured bank credit facilities. Notably, this includes 65% of the stock of first-tier foreign subsidiaries and intercompany notes held by Delphi. Delphi's profitable international subsidiaries are not part of the bankruptcy proceedings and are not guarantors under the DIP facilities. Moody's assessment of risk for DIP facilities addresses two factors. The first is the probability of a company successfully reorganizing and emerging from bankruptcy with DIP indebtedness being paid in full. The second, should reorganization be unsuccessful, is the extent of coverage provided to DIP lenders by the liquidation value and character of their collateral. Moody's notes that, while it is now more probable that Delphi will emerge from bankruptcy, and it has already obtained agreements which have and will significantly lower its ongoing domestic wage and benefit expense, incremental improvements and further agreements between Delphi, GM and the UAW will be required. These are necessary to establish a foundation to achieve a sustainable and viable business model and for Delphi to avail the equity financing offered by more than one consortium of investors. The ratings consider the increased likelihood that Delphi will emerge from bankruptcy with full repayment of these facilities. Moody's has assessed Delphi's progress on several principal issues. Among these are establishing a competitive hourly wage and benefit structure in its U.S. manufacturing operations, lowering its corporate overheads, resolving legacy wage and benefit issues with GM without jeopardizing commercial arrangements on attractive business contracts, rationalizing its portfolio of business units to focus on core strengths and exiting less profitable segments, and addressing its under-funded domestic pension obligations. Several attrition and buy-out programs have been successfully negotiated in 2006 between Delphi, GM, the UAW and the IUE-CWA which have already, and will increasingly going forward, significantly lower the company's cost structure (e.g. approximately 20,100 U.S. hourly employees have elected to participate in the programs out of a total of roughly 29,300 who were eligible to participate). Notably, Delphi has continued to win new business awards. More recently, Delphi has executed a Plan Framework Agreement involving GM and certain prospective investors and has sought bankruptcy court approval of an Equity Purchase Commitment. The PFA establishes an understanding on how remaining issues involving GM and Delphi's unions can be resolved but will require subsequent agreements on many details among multiple affected parties. In order for the plans to proceed in accordance with the EPC and PFA, Delphi will have to deliver a business plan capable of generating $2.4 billion of EBITDA. Should everything evolve according to these plans, Delphi could have balance sheet debt at emergence sometime during 2007 (including under-funded pension obligations which could be reduced by GM's assumption of certain net pension liabilities) of circa $8 billion (any use of the DIP's revolving credit facility would need to be added to that total). Conceptually, this would imply debt/EBITDA multiples to facilitate emergence of under 2 times for the commitments involved in the new DIP facilities and less than 4 times for the total of pro forma balance sheet debt. "The ratings reflect substantial and cumulative progress on many fronts achieved through these and earlier agreements. They also recognize that further undertakings with Delphi's labor unions and GM must be reached in a relatively short period of time. The ratings continue to consider GM's financial condition and market position as these factors affect concentration concerns in Delphi's working capital and collateral valuations of its fixed assets and business units" said Moody's analyst, Ed Wiest. For the first nine months of 2006, GM accounted for 57.6% of Delphi's domestic revenues (45% on a global basis for the first half of 2006). The Ba1 ratings on the first tranche facilities flow from their priority claim on the collateral package and the benefits of a monitored borrowing base structure which provides solid coverage from Delphi's more liquid assets. Currently, the borrowing base accommodates access to the full amount of the commitments and produces more than adequate liquidity. While seasonal patterns will affect the volume of accounts receivable, generally, borrowing base availability attributable to defined eligible accounts receivable will represent around 45% of the $2 billion in commitments. Eligible inventory amounts will represent roughly another 35%. Third party appraisals have been updated to establish net orderly liquidation values of inventory. In liquidation, the first priority revolving credit facility and term loan would be paid ratably. As a result, the ratings for the revolving credit and term loan are identical. The Ba3 rating on the 2nd tranche term loan is driven by its lower priority claim, its greater dependence in liquidation scenarios to less liquid assets whose values are more subject to developments at GM, and the ability of customers to exercise pre-petition set- off rights against post-petition amounts due Delphi. Principally, amounts eligible for set-off in accordance with the Debtor's existing DIP financing order represent warranty claims, rank behind the security interests of the first tranche, but ahead of the 2nd priority term loan. On a consolidated basis at June 30, 2006, Delphi had recorded warranty liabilities of some $340 million. In aggregate, set-off rights are estimated to be up to roughly $1.15 billion. But, the maximum amount the largest claimant may set-off in accordance with Delphi's existing DIP financing order is restricted to $35 million a month. The final amount of these set-off rights is subject to further negotiation and would be dealt with at a prospective end of the bankruptcy case. Consequently, recovery rates in liquidation scenarios on the 2nd tranche will also be impacted by amounts utilized under the 1st tranche, which will be correlated to Delphi's level of free cash flow while it remains in Chapter 11, and the extent of these set-off rights. Delphi Corporation, headquartered in Troy, MI, is one of the world's largest suppliers of automotive components and had annual revenues of approximately $27 billion in 2005. DELTA AIR: Official Committee Taps Gordon Bethune as Consultant --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Delta Air Lines, Inc., and its debtor-affiliates seeks the U.S. Bankruptcy Court for the Southern District of New York's authority to retain Gordon Bethune/gb-1 partners, as airline industry expert and consultant, effective as of December 20, 2006, pursuant to an engagement letter dated on the same date. Mr. Bethune is currently the chairman of the board of Aloha Airgroup, the parent company of Aloha Airlines. He was chief executive officer of Continental Airlines from 1994 until his retirement at the end of 2004. From 1996 until his retirement, Mr. Bethune also served as chairman of the board at Continental Airlines. Mr. Bethune currently serves on the boards of Honeywell, Sprint Nextel, Prudential Financial and the Wills Group. Prior to joining Continental Airlines, Mr. Bethune was vice president and general manager of the Boeing Commercial Airplane Group's Renton Division where he oversaw the manufacture of Boeing's 737 and 757 airplanes. Mr. Bethune began his career with Boeing in 1988, and also served as the company's president and general manager of the customer service division. The Creditors Committee tells the Court that it has a pressing need to retain an airline industry expert and consultant with broad experience as a senior executive of a major international carrier in order to consult with and advise it in analyzing and assessing any: (a) merger, acquisition, or combination transaction that may be proposed by any party with respect the Debtors' business, including the US Airways Group, Inc.'s merger bid for Delta Air Lines, Inc.; and (b) plan of reorganization proposed for Delta, including Delta's previously reported Plan of Reorganization. The Creditors Committee believes that Mr. Bethune's experience and knowledge is critical to properly assess the various issues in making decisions with respect to emergence of strategies for the Debtors' estates. The Creditors Committee assures the Court that it has carefully tailored Mr. Bethune's scope and compensation so that: (i) his services will not be duplicative of the work performed by any other professionals that it retained in the Debtors' Chapter 11 cases; and (ii) the Debtors' estates do not incur unnecessary costs as a result of Mr. Bethune's retention. As industry expert and consultant, Mr. Bethune will: (a) consult with and advise the Creditors' Committee in reviewing, analyzing and testing the assumptions behind any transaction proposal or plan of reorganization; (b) review and provide recommendations as to various strategic alternatives to any transaction proposal or plan of reorganization, and advise the Creditors Committee as to which strategic alternative would likely produce the maximum value for the Debtors' estates; (c) consult with and advise the Creditors Committee in evaluating the strengths and weaknesses of any transaction proposal or plan of reorganization and its likely effects on the Debtors' employees, management, organizational structure and organizational capabilities, and provide recommendations for improvement where applicable; and (d) provide expert advice and testimony, if required, regarding matters related any transaction proposal or plan of reorganization, including its feasibility and the likely effects on the Debtors' employees, management, organizational structure and organizational capabilities. Mr. Bethune will be paid as industry expert and consultant: -- a $250,000 consulting fee for providing the Creditors' Committee with 10 full days, or the equivalent thereof in partial days, of consulting services; and -- upon completion of the initial consulting period, a further consulting fee of $250,000 for every 10 full days, or the equivalent thereof in partial days, of consulting services to the Creditors Committee. The Creditor Committee will seek either the Debtors' consent or the Court's authority to extend Mr. Bethune's retention prior to requesting Mr. Bethune to provide ongoing consulting services, which exceed $1,000,000 in consulting fees, in aggregate. Mr. Bethune will also be paid a $250,000 retainer fee, which will be credited against the consulting fees due and payable to Mr. Bethune in connection with the Initial Consulting Period. Mr. Bethune will be entitled to reimbursement of all its out-of- pocket expenses. Mr. Bethune has not received compensation from the Debtors or any party-in-interest in connection with the Debtors' Chapter 11 cases. Mr. Bethune attests that he does not hold or represent any interest adverse to the Debtors, their estates or the Creditors Committee. About Delta Air Headquartered in Atlanta, Georgia, Delta Air Lines -- 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. (Delta Air Lines Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: Can Amend and Assume SAP Software License Pact --------------------------------------------------------- Delta Air Lines, Inc., and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of New York's authority to assume the Software License Agreement with SAP America, Inc., as amended. As reported in the Troubled Company reporter on Dec. 26, 2006, Delta Air and SAP America were parties to a Software End-User License Agreement dated September 24, 1999, pursuant to which the Debtors licensed from SAP a variety of software applications for use throughout the their logistics, supply and accounting systems. Among other things, the Debtors use SAP software for advanced planning and optimization work relating to their supply network, for business-to-business supply procurement and for spare parts management. The Debtors pay a single yearly maintenance fee for the continuing use of the software applications. Before December 11, 2006, the annual maintenance fee was $3,740,000 per year, subject to a 2% maintenance increase in 2007 and a 4% increase in 2008 for extended maintenance. On December 11, 2006, the Debtors and SAP agreed that the yearly maintenance fee that the Debtors will pay for the use of SAP software applications is reduced from $3,740,000 to $2,732,023. However, the fee will remain subject to the same scheduled increases of 2% in 2007 and 4% in 2008. After 2009, SAP is entitled to adjust the maintenance fee to conform to prevailing market rates. As part of the comprehensive settlement, SAP waives any claim against the Debtors for prepetition defaults under the Software Agreement, a Professional Services Agreement dated September 30, 1999 between Delta and SAP, and various Statements of Work issued, excluding claims for unauthorized use or disclosure of SAP proprietary information. The Debtors owe SAP approximately $1,925 in consulting fees for prepetition services performed by SAP under the Waived Agreements. SAP has filed Claim Nos. 485, 489 and 1763. Timothy E. Graulich, Esq., at Davis Polk & Wardwell, in New York, contends that if the Debtors' assumption of the Software Agreement is authorized by the Court, each Claim will be deemed withdrawn with prejudice. Headquartered in Atlanta, Georgia, Delta Air Lines -- 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. (Delta Air Lines Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DURA AUTOMOTIVE: Trustee Appoints HSBC Bank to Creditors' Panel --------------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, has added HSBC Bank USA, National Association, to the Official Committee of Unsecured Creditors in DURA Automotive Systems, Inc. and its debtor affiliates' Chapter 11 cases. The Creditors Committee now comprises: (1) Wilfrid Aubrey LLC Attn: Nicholas W. Walsh 100 William Street Suite 1850 New York, NY 10038 Phone: 212-675-4906 Fax: 212-675-3626 (2) BNY Trust Company Midwest Attn: Robert H. Major 6525 W. Campus Oval New Albany, OH 43054 Phone: 614-775-5278 Fax:614-775-5636 (3) US Bank National Association Attn: James E. Murphy 100 Wall Street Suite 1600 New York, NY 10005 Phone: 212-361-6174 Fax: 212-514-6841 (4) International Union, UAW Attn: Niraj Ganatra, Esq. 8000 East Jefferson Avenue Detroit, MI 48214 Phone: 313-926-5216 Fax: 313-926-5240 (5) Pension Benefit Guaranty Corporation Attn: William McCarron, Jr. 1200 K Street N.W. Washington, D.C. 20005 Phone: 202-326-4000, ex. 3471 Fax: 202-326-4112 (6) Johnson Electric N.A., Inc. Attn: Douglas G. Eberle 47660 Halyard Drive Plymouth, MI 48170 Phone: 734-392-5308 Fax: 734-392-5388 (7) Thompson I.G., LLC Attn: Christine Maria DeSonia 3196 Thompson Rd. Fenton, MI 48430 Phone: 810-629-9558 Fax: 810-629-8342 (8) HSBC Bank USA, National Association Attn: Robert A. Conrad 452 Fifth Avenue New York, NY 10018 Phone: 212-525-1314 Fax: 212-525-1300 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 Consult